Transcripts For CNBC Squawk 20240703

Fed, the chair saying inflation is still too high. Weve got a big day for apple, which will report its earnings after the bell, this amid signs of an iphone slump and, of course, potential struggles in china were keeping an eye on shares of carvana. They are up as much as 40 in the premarket. Remember when that thing was close to bankruptcy . Well, this was a recordsetting quarter, and were going to talk with the ceo that will be next here on squawk on the street. Lets begin with the markets and the fed, the day after the chair delivered this message on rates. Its unlikely that the next policy rate move will be a hike. I would say its unlikely. You know, our policy focus is really what i just mentioned, which is how long to keep policy restrictive. Lot of takes today, jim bmp unequivocally dovish, you agree . Thats a hard one, because i think that b of a saying fomc meeting, wait and see. Fomc bias here, Morgan Stanley firm hold with the firm hold. Fomc stalling for time, wells fargo. I mean, i think that i like the idea that what hes really doing is saying, listen, ill stall for time, things will go my way. Hes confident he was not trapped, by the way, into saying something stupid, like, yeah, i know, i shouldnt have said what i said. David, theres a gotcha element to the media, but jay powell has been around for a long time, and he kind of knows how to speak without being trapped. Yeah, hes done enough of these that you would think he kind of knows how to navigate them yeah. We talk often, though, about at least what are these mixed pictures that we see in terms of the performance of the consumer, particularly medium to lowerend. Yeah. Reflected in any number of the earnings that weve been going over lately. I just continue to wonder how thats play for him and what and how he addressed that during the call, during the Conference Call im glad you mentioned it, because we just keep hearing the same thing strapped, strapped, strapped consumer is strapped consumer cant afford this consumer cant afford that yes and when you hear that, upgrade today, very important upgrade by ubs of tjx, evidence lab, saying, listen, when the consumers strapped, you cogo ti way. Carl, when i look at whether the consumer is strapped or not, i think that maybe the key person to talk to is a guy that, lets say, ernie garcia, because he has he has at carvana the best view i know, because that is a very fractured market hes got 1 of it, and people want used cars, because they cant afford new cars. Well get fords numbers, but i do think that garcia has the pulse of the economy well, certainly, they are relying heavily on the strength of the labor market, jim claims, 208. Looking for 211. Just continues to be robust, and well see what we get tomorrow its robust, but i think that people i dont know did they spend all the money they had did they become more frugal . Are they just more aware that everything went up in price, and they just dont understand why that happened . David, theres a mystery look, were not political, but if you were a political person, you would say, youre trying to relate why when you go to the supermarket, biden should still be president they have nothing to do with each other i mean, nothing. No. Listen, but rates are playing out through the economy. Sara talks about this all the time whether its your mortgage, whether its your car loan, whatever it might be, in terms of at least your borrowing, and if you are, you know, if youre strapped in some way, it may very well be because your monthly bill has gone up in some fashion as a result of what youre financing insurance electricity. We never talk about that electricity went up. We didnt think it would go up because theres nothing involved with other than to say nat gas being lower, but it is a quandary, and i think that the quandarys been met with things like netflix, which, again, is positive, not going out. Doordash saying that, you know, its okay. Its not theyre not spending more that way. We cant find them, for the most part we cant find where this consumer is who just had his or her Student Loans forgiven we do know that theres a bifurcation, a very rich consumer is still spending a notrich consumer will splurge on something thats experiential its like you have two economies. We have the taylor swift economy, just using something thats catchy, and you have the people who dont even want to do that and the dont even want to do that, i feel bad for them, because they are they feel like, as we learned in college, theyre lumped in prolitariate we just had a retail sales present at 0. 7 i agree i dont understand how these companies can say this stuff to me, we have unemployment thats so strong that allows you to be able to have to trade up, to get a better job. Its almost as if this is why i mentioned politics to begin with theres a negative mindset within the context of a positive economic backdrop. Meantime, oecd raises their Global Growth forecast for the entire planet and takes the u. S. From 2. 1 to 2. 6. Its a halcyon time, for heavens sake, and i think that the negativity may have much more to do with Current Events than it does with your wallet, david. Maybe i dont know i mean, im looking at ebay. Were going to have him on in the next hour. I think its poor execution ill ask him about it they are talking about Consumer Confidence being at low levels thats what you talk about when you have poor execution lowest levels since july of 2022 and navigating ongoing challenges in the Global Economy. Well, look, the ongoing challenges have not what, your pocketbook . Im just saying i dont know carls smiling well, look, im struggling with the idea that at any given time in the last 40 years, if you had job mobility like we have now, you could better yourself move up and make more money. Chipotle the managers are making 200,000 there, and theyre getting stock. Its one of the reasons they have to split the stock. There is no depression or negative thinking if you work at chipotle if you are a barista, i got to tell you, youre at tjx today. Yeah. Well talk some wayfair, where active customers, orders per customer, revenue per customer, all with green arrows. Well get to that. Ive got wayfair, and its incredible, because wayfair, theyre not making any money, but they fit the zeitgeist what about etsy does that fit the zeitgeist . For every wayfair, ill give you an etsy. Josh would admit he didnt execute well so, its execution when it comes to not a good quarter, not the economy, or not the weak consumer, and its just good execution if, in fact, you do better is that right . Yes so, starbucks, obviously, which well talk about in a bit, that was all execution yes okay. Mcdonalds price that was price. Yeah. Shack shack looks good today well, look, there are guys that you want to go spend more money. Remember, chipotle put through very big price increase and it didnt hurt them at all. I think theres a cup of coffee that can cost too much darden, we got. That was pretty okay they got not great that was a day ago thats a push olive garden is a push they had their rates priced. It didnt hurt them as much as i thought. But you know, look at mastercard, which, by the way, i think was misinterpreted, but the presumptuous of mastercard is that Consumer Spend has slowed down. The presumption of visa and American Express is that Consumer Spend is has gotten better mixed pictures in a lot of these. By the way, mike is a very good executer at mastercard i didnt think mastercard was that bad i think there was headline bad but i come back to execution when it comes to execution or price. The execution at qsr, restaurant brands, was superb and they blew away the number. When we come back, we will revisit starbucks, of course, after that interview yesterday and the stock slide with the companys ceo told us on this program. Get to a bunch of other names, qualcomm, corvo, novo, neo, with futureloinsod ts s okg lionhi thursday did i read this . Did i get eggs . Where are my keys . Memory and thinking issues keep piling up . It may be due to a buildup of amyloid plaques in the brain. Visit morethannormalaging. Com business. Its not a ninetofive proposition. Its all day and into the night. Its all the things that keep this world turning. The gotos that keep us going. The places we cheer. And check in. They all choose the advanced Network Solutions and round the clock partnership from comcast business. See why comcast business powers more Small Businesses than anyone else. Get started for 49. 99 a month plus ask how to get up to an 800 prepaid card. Dont wait call today. Speed of Service Improvements weve seen are real the opportunities that we have with the new processes that were rolling out suggest to us that we can make that even better, and the entire Leadership Team is focused on ensuring that we make improvements as we go in order to increase that speed of service even more. Well, laxman, the speed of service is real. Thats a fanciful statement. Its the exact opposite of what is happening and i dont know how you can say it on our air. Jim, the facts are, we have improved speed of Service Quarter over quarter if you look at how the processes that were rolling out, particularly around peak, what we are finding is that we have options to improve that even further with changes in processes and tools that we provide to our partners at peak. But you said that people are using the mobile app, and they are not able to get what they want because they cant. Its too slow. I think your throughput is awful, sir and i do not understand how you can say service is good and also say at the same time that throughput is awful. Starbucks chief, laxman narasimhan, with us yesterday. Company shares coming off their worst postearnings daily decline in about a quarter century. Look, im not saying im some expert just because i owned restaurants for 12 years or that i was in this business a long time ago, but there is a there are measurable people who know what theyre doing. Ron shake, when he ran panera. Most certainly brian niccol, when he runs chipotle, and they know that the key is throughput, which is getting people in and out. There was a moment where ron told me his son went into a he went into a panera and said, dad, theres a mosh pit there, people who dont know what theyre doing, theyre waiting for stuff, so he created panera 2. 0, went to charlotte, north carolina, developed new stores to fix it and didnt do it overnight. Said, listen, i got to spend a year i used to speak to him every month and say, when is it going to be ready . But he literally found a second way, and then he rolled that out, and thats what starbucks needs to do, because they have terrible throughput. I was a little surprised when you go over the numbers and the throughputs bad and things are deteriorating, you cant come on our air and say the throughput is good and things are Getting Better thats a suboptimal strategy its ill advised to come here. The numbers are the numbers, and the forecast is the forecast, to quote the great frank slootman, who used to be at snowflake. You cant do it. Its just not right. I had a bad year in 2001 at 20 and i had a bad year in 2021 if you had asked me how i did, and i said i came on and said i had a good year and you were aware of how i did heres what you would say to me. Get off my show. I dont hear you defending a level here at 75 the way you did apple. My travel trust owns it why do you still own this thing . You cant sell it after we talk about it. I told you the rules again and again. I know you do i told you the rules. Listen, its hard, man. Its hard to get all this stuff right from a stockpicking standpoint i screwed up. Im not blaming him. I screwed up i still own shares of comcast. Well, yeah, you have its the only name were allowed to own, by the way if you worked for abc, you could sell your comcast. Yes then i would own disney. Oh, geez they report next week would have been a lot actually nelson peltz, where are you please, what are you talking about . That stock is up 22 this year, and i would assume next week dont get distracted. Dont do this oh, i will get distracted dont do this alinear thinking only one of us can do that . The problem with starbucks is they have a big throughput problem. They have a mobile order, and you have to wait for it because its too crowded now, you can say, well, too crowded is a positive whithing. Im saying, it doesnt matter. When numbers are going down, you cant say that service is Getting Better because the numbers dont let you. What would i have done i would say, look, we have to rethink. The numbers are going down we had a worse quarter than the previous quarter, and were going to solve the problem but we didnt do a good job. You know what happens when you say that to me i think i just found out. I say, thank you, sir thank you. Lets figure out together how to get it better. Thats all i wanted was a recognition of what was in the Conference Call and what was in the numbers, which was the things are deteriorating and then it would have been very c convivial. Theres a way to make me a c convivial person say what you said in the Conference Call. Thats all meanwhile, were waiting for ford auto sales for april. Lets get to phil lebeau today carl, take a look at shares of ford, april auto sales falling 2. 4 , but the numbers in terms of the types of vehicles they sell, thats the most interesting thing here i. C. E. Vehicles down 9. 2 . Where are people shifting . Well, theyre clearly shifting towards green vehicles, if you will ev sales in april, more than doubled compared to april of last year, up 129. 2 hybrid sales, up 59. 5 look at the f150 hybrid, the maverick hybrid. Hybrids and evsnow make up 14 of fords monthly sales. A year ago, guys, it was 8 . Weve said this about ford weve said abit about practicaly every legacy auto maker. There is a shift toward evs but more towards hybrids that is clearly coming through in the april Sales Numbers let me just ask you, phil, they, at ford, really decided to go they really did not emphasize ev on that last Conference Call. Are they just clearing inventory at a low price is that what happened . In terms of evs or hybrids . Ev. No, hybrid, theyre doing great. Im saying, whatever they did in ev, you know, they are the evs so low now is that mustang so low that we should go buy one . Theyd make a good deal . Well, they did see that when you lower the price, as they did on the mustang mache, take a look at the april Sales Numbers for the mustang mache, more than triple chaired ompared to e they were a year ago theyre also increasing production on the mustang mache and the f150 lightning, though the lightning production is not going to be what they originally thought it was going to be pricing still is whats driving evs. Phil, let me just not just with ford but all automakers phil, i got another recall yesterday on my maverick, this time on a taillight. When are whens the quality going to get better . Well, on the last call, they talked about it. Jim farley talked about the fact that they held back on releasing the new f150 until they could reduce, dramatically reduce, the number of problems so that they would have fewer recalls they believe that theyre making progress there they are. But look, any time you get a recall announcement, you know, its sort of like, oh, here we go again but they do believe theyre making progress. I know what im doing saturday, phil im visiting my ford dealer. Were going to get to a lot of other auto news, including some news surrounding tesla. Interesting note out of Morgan Stanleys adam jonas today well get cramers mad dash, countdown to the opening bell. E reoohe afureonmo lk ret tus. Dont go anywhere. G at schwab iw powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. Get an expanding library filled with new online videos, webcasts, articles, courses, and more all crafted just for traders. And with guided learning paths stacked with content curated to fit your unique goals, you can spend less time searching and more time learning. Trade brilliantly with schwab. traffic noises the road to opportunity. Is often the road overlooked. at enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. Because we believe the more ways we all have to move forward. The further well all go. grandpa im the richest guy in the world. man 1 i have time to give. man 2 i have people i can count on. grandma and a million stories to share. vo the key to being rich is knowing what counts. In general, were not seeing the signs of strain on the consumer, but it has something to do with the segment that we pr operate in, which is digital and delivery i do understand there are some headwinds that certain merchants face when it comes to instore traffic, but when it comes to all things digital, were actually not seeing, i think, those same signs of strain that was tony xu, ceo of doordash, founder as well. Lets get to a mad dash about doordash, which is going to be down sharply look, ive got to tell you, i thought tony xu was selfeffacing, in some ways too selfeffacing. This is an example of the opposite of what i saw in starbucks. I thought it was a good quarter until i read what tony felt he should have done hes a perfectionist he was not happy by the way, david, they have a lot of stockbased compensation. Yes enormous stockbased comp. That made me feel like they havent done the big pivot that we know that the airbnbs have done but i know hes very hard on himself, and the incrementally negative readthroughs about uber eats, i thought they were okay i was surprised that the stock was down as much now, it is this was a victim of this. Okay yes its just up a lot. But when you read through it, youve got you get the sense of a great ceo, whos just saying, listen, i didnt do this, i didnt do that there were some rule changes in new york and seattle that hurt things for him he said it didnt matter that much, but i find that this man is so selfcritical, and there was so much selfremonstration in this that i thought he took the stock down interesting i think he did. I know him from the Restaurant Business he just is a perfectionist this was a quarter which just said, you know what, im still not doing my job as well as id like really remarkable conversation all right well, well keep an eye on shares of doordash well be talking a little qualcomm and apple well talk apollo earnings weve got a lot more for you an opening bell a little less than five minutes from now and by the way, dont forget, ywrecan catch us any time, anhe by listening to and following the squawk on the street opening bell podcast. iconic brands speak for themselves. We are so excited to welcome you to our community. Today is all about you. announcer the poopening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. Apple is due out with Quarterly Results after the close tonight, the Company Expected to report its biggest revenue decline in more than a year a watch is on to see what apple might say about adding generative a. I. To its iphone, as well as overcoming the sales slump in china jim, the streets hoping for some numbers on vision pro yeah, look, i always say apple, own it, dont trade it. I thought th that sacconaghis upgrade sealed the deal. When you have china this quarter, and china disappoints, which it has for every single company, then it doesnt matter. Youre bad i mean, estee lauder had its first good quarter with china this week. Any time that you can say, look, starbucks, china, eadviscerated the stock. Nike, chinas not that good. Any place where chinas not that good, it is overemphasized, almost overindexed in the brains of the analysts. So, beware that china will not be that good for apple lets get the opening bell here at the cnbc realtime exchange at the big board, it is makeawish kid luke bre brettenberger and his family doing the honors, ringing the opening bell we hope we can get a picture with him later on this morning at the nasdaq, its Israel Advanced Technology industries association. As breadth looks decent here at the open, jim. I was surprised, the last 15 minutes of the market was some sort of, i dont know, a disparity, because once powell made the point that, look, the next movement is likely going to be a cut, people just breathed a sigh of relief, and you just had many of the Major Companies weve been looking at, and we are thinking about google, amazon, microsoft, really shoot up, and they just those were the bellwethers yesterday. They were great. Yeah. Theres some discussion about a failure once again at the 50day for the s p. I know. Last few minutes. David, i know you dont hold to the technicals, but there are people who just say, all right, bounced off, didnt make it, thats enough, and i think both you and i agree that thats a little too glib, that there are companies that are doing very well, and they yesterday, after powell was done, they were rewarded microsoft had been below where it was after that great when they announced that great quarter. That seemed yeah, right the stock is up about 6 this year microsoft is up right now. Lets talk a little apple, can we, guys stock is up over 1 . I guess hopes well get the quarter tonight. Well obviously be talking a great deal about it tomorrow everyones excited. Their own capex, given the enormous numbers weve seen from microsoft and amazon and meta and alphabet and so much of that devoted towards a. I. , generative a. I. , you know, the hyperscalers, its a little different than meta spending the money in the way it is, but an apple as well. Not a hyperscaler. How much will they be spending will there be the inclusion in a very significant way of generative a. I. On the next iphone will it bring a wave of upgrades can it be that seems to be the enthusiasm can it be selfstyled do they have to rely on a google, or do they have to finance themselves no ones allowed to mention apple who is a supplier now. We said yesterday that skyworks was all bad. Skyworks saw an inflection at the bottom qualcomm, looked like business as usual well get to qualcomms numbers in a minute, because the stock is up. But on apple, youve said consistently, own it, dont trade it, for the longest period of time. Exactly you know this quarter is not conceivably going to be a strong one i said the stock could go to 160, and i would still like it, but im betting that its the next iteration of the phone could be very were getting closer to the june meeting, in which were going get more details absolutely. We need to see that. And i have been saying, listen, lets make the vision pro both consumer and businesstobusiness they have always studiously avoided any businesstobusiness product at apple right and the vision pro, you guys may have been talking about it, i can barely hear during the bell there, but thats not really doing much of anything right now. No. But maybe they can reignite it, and we want to see, of course, more companies right for it. The more you i know, youre a believer in the enterprisein terms of what that could mean. You came away from the nvidia meeting as a believer in what you can do if you can put everybody in one of those things if you talk to the hyperscalers, and were talking about the magnificent seven, theyll tell you, listen, were on allocationfor nvidia. We have good relationships with nvidia meaning, basically, hat in hand, but we also have to develop our own chips, simply because were not going to get enough, because nvidia cant provide them. Amd has a very good alternative, and people will be going to the mi300, but if you look at taiwan semi, the stock has made a really big recovery, and thats because it turned out, you know what, things are a little better than expected in the semi world, and i just think people are too negative. I even think everyones dutmpin on corvo today they had a quarter gap bit of a sentiment split between qualcomm and qorvo today, although apple is the topperforming down name at the moment any time you come in hot, and you have china, its just a mistake. Tesla also up lets talk qualcomm, because the company did, you know, i looked at a couple of notes here. Generally seen as good results for qualcomm, and you are getting a followthrough in the stock market, at least amongst investors, stock up almost 9 right now. This is 183 billion market value company. Well, they had good auto. And not bad handset they had good handset im reading a citi note that says, the handset markets good, but were not a believer in a. I. In handsets yet. While the printand guide were solid, meaning the earnings and the guidance were solid, we believe the handset cycle driven by a. I. At the edge is a year away, given the lack of a killer app. That gets you back to the conversation we just had, in part, about apple. But overall, qualcomm, more or less, delivered, and the guidance certainly didnt scare anybody away they didnt there are Ten Companies that write on it and ten price target increases of all different variations but the theme is that business has gotten not just strong but very strong. Very quickly and i also think that theyre getting some credit for automotive i mean, we talk so much about automotive remember i mean, my god, i remember christiane, im talking about auto, auto, auto are they finally getting somewhere . It was a lot of promise. They not yet no . No. Not yet. I do think that people by the way, ed breen had a call yesterday, and nobody paid attention to it. We talked dupont yesterday. A plolot of that was because theyre seeing handset recovery, and thats what qualcomm is seeing after two years low handset recovery, a lot of companies in the handset business, and thats very positive news. It can reverberate all the way to texas instruments, which didnt have a bad quarter last time ed breens the comcast director did you know that . Thats a philadelphia things. I was looking through the proxy yesterday. Its philadelphia is that what it is . Philadelphia theyre not that hometown but ed breen is a look, ed breen is fabulous. Ed breens been around a long time at this point hes like the same year as me stop it. He played at council rock. I played at springfield. I think we crushed them. Not delco, monco i want to i crushed it. I want to go to the alternative Asset Managers and take a look at shares of apollo as i work my way down here through my own list. Up 1. 3 . Let me quickly take a look i also mentioned it because on monday, marc rowan will join me. Its going to be the annual event, the big one from l. A. , and we always have an interesting sitdown, obviously talking about apoll os earnings not to mention the private markets and private credit, where they are enormous. 40 billion, by the way, was the inflows overall. You know, some of the research here, fre was in line, more or less doesnt seem to be that much enthusiasm in terms of the actual numbers, but that said, gross inflows of 40 billion. Theyre now 670 billion of assets under management, most of that in private credit call them alternative Asset Managers they used to be known as buyout guys that is far from what they are these days they have 5,000 people originating loans, essentially, for private credit most of it, Investment Grade thats incredible an insurer, which insures peoples retirements, is a key part of the company. Hundreds of billions of assets there, 95 of their assets there are fixed income i think 5 hybrid equity so much to talk to rowan about looking forward to that interview on monday, but did want to give a little bit of a preview here generally, a positive review for the numbers. Again, the assets in particular. Because, in this environment, the returns you can get with private credit, and again, marc will tell you, its Investment Grade, the world is changing is what he would say and has said in any number of interviews in terms of the available number of public companies, the lack of price discovery. He really questions why you need daily liquidity. Hes all about the private markets. Well, whats really incredible, david, we were lets say you have blackstone here what they would say is, we run a large number of companies. They would not say, we are about to put this company in ipo and this companys going to be sold. No they are company runners right well, thats also thats their portfolio companies. What i would point out is that the trillions, ultimately, that are that are now that have moved away from the banks, so to speak, in terms of loans, in terms of credit that are now in the hands of these private lenders is a sea change. The large bankers, when you get them off the desk, they always say, the dangerous thing is these guys. They want to say that because they claim that theyre obviously not under the same regulatory regime. At the same time, of course, theyre not levering things up the same way the banks do, and theyre not taking deposits. Right theyre not fooling around with our money. No. Its not our money rich people let them fend for themselves jim, commodities, worst backtoback days of the year. Cocoa, we know, is broken. We got oil still below 80, and with that, the requisite headlines about opec potentially extending voluntary cuts i think that when we talk about whats happening with commodities, why dont we say, look, commodities could be coming down in part because the fed has been a little more restrictive. I think the commodities spiked because we had a war premium that seems to be going well. Thats a tricky one. Copper was ev, so the spike in copper was very late, because evs we heard what phil said theyre selling inventory of evs. So, there really was no reason for a commodity spike. We know that from the railroads that all talk about the commodities. I dont know it got out of hand and i think its getting back, and its a good its good for fed. Well see we got cpi coming up on the 15th you mentioned evs. Lot of news on tesla, on potentially pulling back on giga casting, more handwringing about the ev charging pullback this is california data, california q1 sales of cars, all passenger cars, tesla went from number one to number three, now behind the honda civic and the camry. Hybrids in california right well, phils been on the hybrid case better than anyone hes been saying over and over again thats what people like. Fords got the most hybrids. David, im surprised you have not said, jim, why are you in that ford for your travel trust . That would be a good one to make fun of me. Ive done that already. Thats never stopped you from mentioning it multiple times it hasnt, but i try to keep you upright during the course of the show i dont want to beat you too hard, you know okay. Thats fair. Im going to lay off on that. I appreciate that starbucks is another issue. Why you didnt sell that, i dont know i thank you for getting me out of boeing. Youre welcome. Youre welcome i appreciate you saying that guys, lets we just looked at oil. Lets talk a little about exxon, pioneer. Scott sheffield lets get to hess as well Scott Sheffield is the greatest well, the exxon acquisition of pioneer is going to close tomorrow its going to close tomorrow you can take a look at exxon shares and pioneer shares. It is not going the the board of directors of exxon will no longer include mr. Sheffield as a director thats a deal they reached with the ftc in which the ftc at least alleged that the pioneer ceo tried to collude with opec on oil prices. Now, that, you know, so, the ftc says his past conduct makes it Crystal Clear he should be nowhere near exxons boardroom, American Consumers shouldnt pay unfair prices at the pump to pad a Corporate Executives pocketbook as you might expect, mr. Sheffield and pioneer strongly dispute that read of the situation and believe that the ftc complaint completely misreads his actions but hes stepping aside from being on the exxon board and exxon says, in response to the ftcs concerns, we wont add him to the board we will be closing the deal tomorrow we look forward to implementing the integration plans they said theyve jointly developed with pioneer over the last six months again, from milken on monday, im going to be joined by darren woods, the ceo of exxon, and were going to talk about this deal and what his expectations are for that integration plan, perhaps in more detail and my guess is well also talk about something that he was talking about with becky on squawk box last friday after the Company Reported earnings, namely, that continued dispute with chevron over the joint operating agreement that they have with hess and whether, in fact, exxon has the right of first refusal, because it is a change in control. It really may come down to as little as 11 words in that joint operating agreement, having to do with the carveout for the change of control. But theyre going to arbitration. The icc, thats going to potentially, yes, its uk law. Gets complicated c nook is also involved. They own 25 of guyana exxon owns 45 , and hess owns 30 . Hess bought that stake for 30 million bucks. Wow 30 million john did that yeah. And its worth 40 billion now good for john not bad, right . Of course, the value of guyana, given what we heard from exxon and its most recent earnings, where theyre up to 600,000 barrels of production a day, there are hess shareholders who argue, if hess was actually not getting bought by chevron, the stock would be higher. Stock would be higher because guyana is so strong. Because he did an atmarket deal, john hess, he is stepping on the board of chevron. He wanted to do this deal with chevron. Thats where he wanted to be only talked to them, never talked to exxon. But there are a number of shareholders who are unhappy with it. By the way, they can write letters. I think they are writing letters. They can say, hey, chevron should be paying more. It doesnt appear, though, an actual proxy fight, which would basically have to be filed by monday or Something Like that to actually get this thing in front of iss and everybody else is going to happen. Will you speak to darren . I will on monday. They paid a good price for pioneer. Right whereas this argument that hess didnt do as well as it might have they didnt particularly given the strength of guyana, back to this really unusual dispute between hess and exxon, chevron, its so interesting. I just say mr. Sheffield taught me everything, but you know, talking about natural gas, mr. Sheffield taught me a great deal about oil, and i hate to see this happen, because hes a great man. He led in terms of environment and he has been the dean of the group, so that would be a black mark we havent gotten to peloton, jim. Barry mccarthy stepping down as ceo. Hes going to remain a Strategic Advisor through the end of the year couldnt pull it off. They guide lower. A couple Board Members are going to be coceos, and i think we have some sound from them. Take a listen. We do want to reiterate that barrys done a tremendous job stabilizing the business he came in at a very challenging time, and he has been really relentless in rightsizing an aggressive buildout that was not uncommon for Many Companies during the pandemic. He had to navigate a lot of curveballs thrown his way, and hes done some incredible work in rearchitecting the cost structure, and a really big highlight. I want to highlight that under barrys leadership, we achieved one of his primary goals, which was Generating Positive Free Cash Flow this quarter and we do expect to do that for the full year with the business more stable, the board decided to pivot to a leader whos going to architect and lead the next phase of growth for the company cutting about 15 of global head count its going to be about 400 jobs i had high hopes that barry could pull this off. If he couldnt pull it off, i dont know who can it sounds like its stable, but believe me, barry is one great operator somebody buy this thing, put it out of its misery what, like, a dying horse or something . Yeah. Okay. I mean, who is there anybody who can just pick this thing up and get it over with . You mean, like, turn it around no, just get it over with . You know what im saying. I dont know a better panera what possibly growth plan could there be for this company . I told you, if barry couldnt pull it off, then nobody can pull it off. Barry is fantastic you were very enthused when he took over he was at netflix i mean, the guys a miracle worker fitness is always tough its a shame the product remains very strong. This is one of the few subscription businesses that hasnt worked. Yeah. Peloton was supposed to be i thought it would be like spotify and netflix. Didnt work out that way no. Neither did go pro. Fitbit did. That was during the period the dark days of google where you never knew what they were up to now, google is very transparent. Remember, you were like, whats g google doing they have two health care departments. Meanwhile, trying to hold on to initial gains following that rally that fizzled a bit yesterday. Busy day for bonds q1 productivity was light on a quarterly basis, but year on year, goes from 2. 7 to 2. 9 discuss about decent trends on that front back in a moment [thunder rumbles] the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . [thunder rumbles]. We havent gotten to novo. Wegovy more than doubles they raise the guidance, but expectations must have been high, jim. The stock hasnt been able to they were i think lilly has enough product. Thats whats going to happen. Interesting. The the its five fold increase in people using the drugs. The number of factories. You have they bought all the stuff from catalent. They will make more of it. 25,000 u. S. Patients are starting it every week, up from 5,000 in december. I just look, it look, the stock was at one be point up up, down, a dollar, its a question who can produce it fast enough. Its going to become relevant when people eat and dont eat. Klavaelno, fantastic numbers. Steve kay ling coming on next hour. Is . Yeah. I love him. At corient, Wealth Management begins and ends with you. We believe the more personal the solution, the more powerful the result. We never lose focus on the life you want to build. Its time for Wealth Solutions as sophisticated as you are. Its time for corient. Happy mothers day some things never change. Like a mothers love. Get something as timeless as a mothers love at harryanddavid. Com. Life is a gift. Share more. Jim, whats on media tonight . Weve got draftkings, doing exceptionally well best in show, brinker, they put together if you execute well they will come and you will make a lot of money executing at the highest form right now. Fascinating Restaurant Business right now just crazy so many desperate signals. Brinkers the largest seller of margaritas right before cinco de meo this sunday. See you tonight speaking of which, when we return a wideranging check on the pulse of the consumer. Well talk with the ceos of carvana, ebay and kellanova after a break. Welcome to the roots of our legacy. Where excellence, comfort, and electricity. Are forever in bloom. Welcome to beyond. The mercedesmaybach eqs suv. Good thursday morning. Welcome to another hour of squawk on the street. Im sara eisen with carl quintanilla, and david faber, live as always from post nine of the new york stock exchange. Stocks, the day after powell, coming back a little bit with the dow up 119 points, s p up 0. 3 nasdaq gaining 0. 6 after that crazy reversal yesterday late in the day. The 10year note yield firmer, 4. 6 so treasury selloff continues. This hour weve got a special squawk on the street hat trick. Well talk with three major consumer facing companies the day after the fed held rates steady ceos of carvana, ebay and kellanova will join us to break down the inflation and rates impact of their respective businesses, what theyre seeing from the consumer and, of course, Quarterly Results. Speaking of earnings, 30 minutes into the trading session here are three movers were watching. A host of news out of peloton. Ceo Barry Mccarthy stepping down, the company cutting global head count by 15 , announcing new Cost Reduction efforts alongside Third Quarter results that showed wired losses than expected stock down 2 . Its taken a long beating. Novo nordisk in the red despite beating expectations and raising its outlook reporting a 28 jump shares of the drug wegovy more than doubling in the quarter wegovy now has 130,000 weekly prescriptions in the United States and then doordash after wooigds wired losses than expected the mid point of their shortterm profit outlook also falling short of estimates lets gets factory orders on a busy day for data with Rick Santelli hi again, rick. Hi, carl. We have factory orders fresh march numbers and durble goods if we look at 1. 6 expected of factory orders thats what arrived 1. 6. 1. 6 happens to be the best level since november of last year. We did see a subtle downward revision to last month which was 1. 4, becomes 2. 8 excuse me 1. 4 becomes 1. 2. Factory orders extrans, up 0. 5 more than double the expectations and up 0. 5 follows up 1. 1 . Dont see any revises as of yet. Now durable good orders, these are march finals midmonth read 2. 6, it remains exactly at 2. 6, and 2. 6 was the best level since november of last year. Extransportation, also remains exactly the same, up 0. 2 and up 0. 2, the best since november of last year. Now, lets take capital good orders nondefense exair a proxy for Capital Spending up 0. 1, which half of what we looked at in the midmonth read 0. 2. Switch from orders to shipments it is 0, unchanged it was 0. 2 mid month so that gets downgraded a bit. Of course last month was minus 0. 6, even though its unchanged its better than the previous month. You see, Interest Rates have moved a bit higher on the mid and long end of the market that makes sense the short end is looking at some of the more dovish comments that were put forth by chairman powell, growth testimony, statement, and q a sara, back to you. Okay. Thank you, Rick Santelli lets talk about all that, new data as well from this morning but the message from powell i think was consistent with what he had said going into the fed meeting, which is that he still wants to cut rates, if he can, if they continue to see more progress or do see more progress on the disinflationary front he doesnt want to talk about rate hikes, and he wants to see inflation coming back down to trend. Here are the money quotes from the news conference. I think its unlikely that the next policy rate move will be a hike. I do think the evidence shows, you know, pretty clearly that policy is restrictive and weighing on demand i dont see the stagger. Add it up, david, its what we told you, that bar is super high for a hike. He really batted away discussion of rate hike still, they kept the easing bias intact but they acknowledged that inflation has moved in the wrong direction and a lack of progress and theyre going to need to see that the big undercertainty is not w powell says, its what inflation data does, because thats why we dont know the path of rate cuts from here. If you go through some of the wall street data today, most of the economists are sticking with their forecasts and all are kind of all over the place when it comes to the first cut and how many cuts theres going to be. Goldman sachs, jan hatzius, powell offered a dovish message we have left our forecast unchanged, expect two rate cuts, july and november. Deutsche bank anticipates one rate cut in december and that policy will be gradually returning to neutral level in 2026 citigroup expects 100 basis points, four cuts in 2024. Substantially more than priced in in the Interest Rate markets and bank of america just to add in a fourth one, one rate cut in december on the idea that inflation remains stickier nobody knows, including powell, because they dont know when inflation will improve, and thats whats going to be the key, just like it has been the key the last few years for traders. All those calls basically went unchanged after the presser. The goldman call certainly the city, i think theyre looking at 100 basis points not really giving month by month calls. Stagflation where he said i was here for stagflation and basically this isnt it. No stag no flation he cites an Unemployment Rate below 4 . Stag, you have a high Unemployment Rate. He cites inflation that has come down sharply when you have inflation problems you have levels that we were seeing, say, back in the height of this cycle of inflation pce got as high as over 7 its now below 3 . There has been a lot of progress, and i think powell made it clear that hes optimistic that there will continue to be progress on inflation, and that hes watching signs of cooling in the data, including the labor market that his policy is sufficiently restrictive. Thats i think, if you were worried about a hawkish fed, that is reassuring, that powell thinks theyre restrictive and cited specifics about that maybe not everyone agrees with him on that point but thats what he thinks and thats what matters. I mean, again, as we await more data, and we head deeper into the summer and we have an election looming, doesnt it seem really possible that you wont get a rate hike. Rate cut. If any until next year or, i dont know, december. Theyre going to tune out the election they dont Pay Attention to the sflooex sure they dont. Hes right to brush off and not to Pay Attention to. They are. Independent fed, very important. At least for now. Independent fed. Exactly. As pimco pointed out every president ial year since 1980 the fed has either cut or hiked except for one, since 80. Think they want to cut. Nothing to do with the election. They want to adjust policy to try to keep the economy and rofrtsry intact. Which it very much is. Which is why all these wage and Inflation Numbers are going to be important were going to get the average hourly wages for the month of april tomorrow and the jobs report were going to watch it. The market is sensitive to all of these inflation the prices paid in ism was firm. We got to track all these data points that were getting in on inflation. I just wanted to mention really quickly we got some productivity data which we Pay Attention to some of the progress, the big gains weve been seeing in productivity, stalled in the First Quarter and that drove up unit labor costs, basically what businesses pay employees per unit of output it can be inflationary and it was 4. 7 on an annualized rate, a big jump from the fourth quarter. Its kind of noisy, but another potential problem on the inflation front. Not a game changer, but its something the fed definitely pays attention to. Finally come back to the consumer because we talk about it a lot and we were in the last hour as well going back and forth on some positives and negatives and every company it seems to be now perhaps if youre not executing properly its easy to say 100 . Things are not great and maybe that was the case with the starbucks, maybe it is the case to a certain extent. Etsy. With an etsy. Or Stanley Black and decker again according to robert hum mentioned how muted consumer and diy demand weighed on performance. No question theres weakening. And positives. Theres door dash and wayfair. Wayfair, furniture has been a weak category. People havent been spending on their homes. The ceo said the First Quarter ended on an upswing at wayfair, the category show signs of improvement in february and march. Bodes well on etsy, consumers feel pressured according to the ceo in spite of what were seeing about a generally healthy economy. Consumers are pressured, and so they are seeking value and deep discounts and deep promotions. That has been a consistent theme across retail, i would say, restaurants in particular. But youre right, its not completely universal because there are plenty of positives doordash says were not seeing any signs of strain on the consumer. It might be the segment. Digital and delivery. A beneficiary that people are not as thats part of it. Brick and mortar and eat. Meantime the question is what comes next for stocks. Fundstrat global adviser tom lee joins us with his predictions. Great to have you back i imagine you were listening just now, and i wonder if you take the desperate signals out of earnings so far, and is that just is that characteristic of a period in which the job market may be in transition . I think thats right, carl. I know investors are wrestling with a lot of questions in their minds because inflation is higher than they expected the start of the year and rates are higher and stocks are higher, theyre wondering if this is a payback period and now were hearing different forecasts for fed cuts and as youre pointing out, like, i think its been an overall good earnings season, but were hearing evidence of, you know, companies not being able to pass on price and theres some demand weakness and wage pressures i think thats part of the confusion thats taking place now, but to me, im kind of in the camp that despite all this, the its all going to come down to whether inflation improves in the next couple months or the rest of the year if it does a lot of these clouds lift and i think markets actually do quite well which is why i think the consumer weakness commentary and the weakness that chair powell cited in terms of demand for labor, at least weakening back to prepandemic levels, is important, right shouldnt that ultimately bring inflation levels down . Thats right. I mean, i would say the interview that cnbc did with starbucks was telling. The answer ultimately there they have to cut price, and if theyre cutting prices thats not reflected anymore, its a reversal of that i think were seeing consumers basically have their wallet getting squeezed because Auto Insurance and Homeowners Insurance has really sort of eaten in their discretionary dollars, thats not really an inflationary signal. I think the bar is being lowered now for the fed to cut, and i think thats something i think many people picked up. The fed stated it clearly, if the employment market even shows signs of weakness thats another reason to cut rates and well find out tomorrow. Yeah. Were looking forward to seeing what job market tells us tom, so then does the playbook short term look like mega cap, or are you in the broadening camp and want to play in the other 493 . Yesterday was a good day for market breadth thats why small caps rallied despite the s p and nasdaq being down it really comes down to what Interest Rates do. I think that theres a, you know, still a good probability rates are peaking now, and if Interest Rates are lower because we either get softer jobs or inflation weakens, thats a 493 signal and, obviously, much better backdrop for small caps thats that would be sort of what we think leads in the second half. I still like the Technology Story just because of all the Drivers Behind ai. Although quite a reaction that were getting on earnings i think i read in a goldman note its almost like its at least 3. 5 times the normal reaction to that that stocks are having to earnings than they usually get off earnings season, what does that tell us, that the market was rich going in i mean, it could be the market was rich or the market is really grappling with trying to understand what the real narrative is between now and the end of the year. You know, on the one hand, if inflation is accelerating, then we would have a very different playbook in our head, and if demand is faltering, or if things are just fine and thats why companies who are beating are doing well i think thats the confusion but at the end of the day, i think as much as it feels bad because april was a down month, i still think [ inaudible ] it may be a month the market does well the rest of the year. Definitely leaning on some seasonality trends to get additional clues as to where we might go this summer thanks good to see you as always. Tom lee. We are looking forward to hearing from tom at the cnbc Financial Adviser summit in may 22. Scan the qr code or register at cnbcevents. Com fa for more apple is the latest magnificent seven name that will be reporting earnings. Those results coming later this afternoon after the close. Lets get over to steve covac in cupertino and, obviously, has a lot more on what we can expect later today. Steve . Hey there, david. Yeah looking to be another down quarter here for apple revenue expectations down about 4. 7 according to the street, and thats following the quarter, last quarter, december quarter, where apple returned to growth after the full year of declining sales. So whats going on here . China is really the big thing in focus. We saw in the december quarter overall sales not just iphone but sales were down 13 and since then, throughout the year, weve just gotten all this troubling data coming out of china, Counter Point esearch o note saying, iphone sales in china down about 19 and then you look at huawei here im showing you it was up 69 and were seeing just lots of evidence here that folks are in china are going towards the huawei phones instead of iphones. Also some interesting comments from qualcomm yesterday on their earnings showing 40 growth in their android handset business out there in china, also pointing to huawei another question about Artificial Intelligence, of course we heard whifs out here three months ago, a huge Artificial Intelligence announcement, expecting that to come on june 10th after a Developers Conference here in cupertino today were hanging on to any word tim cook says that could fill in the gaps and color in how apple is thinking about Artificial Intelligence. Thats a good narrative, the peers and big tech and magnificent seven, well be watching out for that. On the Positive Side we have Services Services has returned to doubledigit growth see a lot of strength in the app store, so one bright spot here as iphone sales continue to slump, and we get through this messy iphone cycle for apple. Services are growing healthy again. Steve, big piece in the Washington Post look at Consumer Sentiment around apple in china and they cite a bunch of shoppers comments on weibo, saying i wont ever buy the fruit, meaning apple again, out of vanity. Go huawei, go domestic products. I guess well look for response from apple on that kind of stuff. Yeah. Exactly. And, you know, over and over again, in the last couple quarters here, ive asked tim cook specifically about huawei what theyre doing it was to apples advantage when huawei had to stop making phones there for a couple years, apple saw an enormous benefit of people switching from huawei to iphone, now were seeing it go the other way. That puts pressure on apple in the next iphone cycle to have some really interesting features and compelling reason for people to go back to those phones its also a similar thing weve heard from the domestic carriers, carl, that people just arent upgrading their phones in the same way that they have. So thats Something Else we have to Pay Attention to, guys. Apple is having a good day so far. 1. 25 into earnings. Up 1 . Yeah. After the break, carvana tikick off our ceo special this hour, how this environment will impact the auto mark. Suat stock jumping 40 post relts. Big hour still ahead dont go anywhere. And theyre all coming . Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. And theyre all coming . Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Check out shares of carvana surging more than 30 , posting a record First Quarter is it a sign of strength in the used car market, consumers spending higher for longer in the inflationary economy lets talk to the founder and ceo of carvana, Ernest Garcia joins us its great to have you its hard to believe that this was a company on the brink. How did you turn it around so fast well, i think the first thing i have to do is thank the Team Two Years ago as you said we were in a tougher spot than today and we knew we had a comeback in front of us but a lot of work to do. I think the way the team came together and didnt wait and force it to happen was really incredible and something that well be forever grateful. To the team at carvana thank you so much. I think our results this quarter were the best weve had in our history and i think financially thats true, but more importantly, the implications for the future, thats true. I think were in a great position and weve got a huge runway in front of us. Now we have to attack that. On the profitability because that was a bright spot especially for analysts and investors, Gross Profit Per unit beating estimates, ebitda two times above consensus and guidance calls for more growth how are you driving revenue growth, but also prioritizing the profitability story . Sure. What i think theres two things that are i think the most important to building a great business over time one is you have to have an offering that is differentiated the customers love thats hard to replicate and i think weve built that out its been a ton of work but laid the foundation for that and in a great spot number two, you have to have great people that are builders that come in every day and try to make things better and when you have builders youre not making tradeoffs between growth and profit pbltsp youre finding ways to do both and thats what team has done. We have to keep doing that were in a great spot and really excited. What is driving the growth. Its not a Growth Market right now used car industry, is it so i think, you know, from 2013 to 2021 we grew at fast rates. The precovid year of 2019 we grew 100 and i think that growth was driven by two major forces one was consumers shifting preferences to wanting buy cars online in a simpler way and a shift in our direction i think two, was we were always benefitting from positive feedback as we grew our best business and inventory consumers had inventory. In 22 and 23, went the other way, car prices went up, rates up, affordability was worse and were suffering negative feedback were in a spot i think were seeing consumers come back as weve kind of stabilized and we have relatively flat inventory and relatively flat marketing spend in a stable environment, carvanas position to do well. Its david, you know, its fascinating to watch this in part because there was such an opportunity, frankly, for people to have made an enormous amount of money if they had been brave enough to step into your shares not long ago as sara said at the outset, there were talks of bankruptcy and the like what do you believe was sort of the turning point for you not just in the business, but also putting your financial house in order . Was it when apollo came in was there Something Else you could point to im just curious, because it can be a helpful lesson for people in the future . Well, you know, i think realitys complicated and narratives are simple. Simple narratives can turn quick. In 2021, we had an incredible runway and we were going to build a big company. In 2022 when things didnt go our way, the narrative switched 0 Interest Rate phenomenon and only able to grow by giving customers deals we wouldnt support with the economics of the business in the long run and i think the major turning point was people inside carvana saying, that narrative shift isnt right and its okay that world out there is going to tell that story thats not something were in control of what we are in control of is how the business actually performs we put together plans weve been running the last two years that required a ton of work from a ton of people that were dedicated, that cared, came in every day and fought and made a ton of progress and that was the turning point. I think along the way there were notable, you know, moments that were visible from the outside, but i think the most important things were things happening internally and what team was doing. Speaking of the narrative on zero rates, what are you seeing right now in terms of delinquency and pressure on the consumer because of higher rates in autos which we have tracked and gained a lot so i think, you know, we have rates clearly higher car prices higher. Everything higher. All constant strain on people. We would love to see car prices go down. As we discussed earlier the most important thing for us is a stable environment because we think weve got a great offering and a great team and we think with stability we can kind of keep marching forward. I think the toughest view from an Economic Perspective that we feel like we saw over the last couple years was Consumer Credit performance, but i think us and frankly many others, across Consumer Credit have tightened credit quite a bit in the last six to 12 months and i think the performance there looks pretty good i dont think there are signs that are super troubling right now. And, you know, were rooting for stability and whatever form it comes were going to keep marching forward. What about the delinquency rates. Are they rising . I think across most of Consumer Credit delinquency rates and chart offs were rising in 22 and 23 they were generally still at levels that were pretty good historically, but they were moving in the wrong direction and i think for most issuers, ourselves included, they started to go back in the right direction over the last six months or so as most have tightened credit a bit. Can you keep this kind of growth up . Retail units sold 16 . You expect you said to increase at an even faster pace sounds like you have confidence . Were confident and were excited. I think our goals have always been we want to be the largest, most profitable auto retailer, sell millions of cars. That sounded audacious from the perspective of when we started in 2013 or perspective of 2022 when the story was different but its the view weve always held and we have a lot of work to do but were going to do the work and make that happen. Ernie, thank you. Thank you we appreciate. Ernest garcia, ceo of carvana. Thanks. Meantime ch robinson top gainer on the s p beating estimates on the top and bottom lines despite what their ceo calls an elongated freight recession with an oversupply of capacity more on the movers you might have msed eniswh squawk on the street continues after this break. In any business, you ride the line between numbers and people. Whats right for the business and whats best for everyone who depends on it. Solving todays challenges while creating future opportunities. It takes balance. Cla cpas, consultants, and wealth advisors. Well get you there. alarm sound amelia, turn off alarm. Amelia, weather. 70 degrees and sunny today. Amelia, unlock the door. Im afraid i cant do that, jen. suspenseful music why not . Did you forget something . suspenseful music my protein shake. The future isnt scary. Not investing in it is. Youre so dramatic amelia. Bye jen. Nasdaq100 innovators. One etf. Before investing, carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. Welcome back im Silvana Henao with your cnbc news update. Donald trumps criminal hush money trial in new york began today with a hearing on the former president s gag order violations it comes after the judge fined him 9,000 on four violations, but prosecutors are trump ignoring a courtimposed order cannot attack witnesses and jurors. Arizonas governor is expected to sign a repeal ban of nearly all abortions. Yesterday two republican state senators joined democrats to push the appeal through, however a procedural step could prevent the repeal from taking effect until 90 days after the states legislative session ends unless a court steps in to speed it along. A whistleblower who came forward to accuse boeing supplier Spirit Aerosystems of ignoring defects on the 737 max has reportedly died. Joshua deans family tells the Seattle Times he passed away after a sudden infection a couple months after boeing whistleblower john barnett was found dead of an apparent suicide. David . Ill send it back to you thank you. Still ahead another read on the consumer in retail well have the ceo of ebay join us after the break shares under a bit of pressure after guidance came in a bit lower than anticipated we will talk about the numbers and have guidance about the economy broadly speaking stay with us sofi is helping me get my money right to achieve my ambitions. Wanna see . Like earning more money on my money as a head chef. Ready for service . Yes, chef and saving. To give back to local producers. Sofi can help fund any ambition youre hungry to achieve. Like investing in everyones dinner table. Bank with sofi to earn a higher apy and an epic welcome bonus. Sofi. Get your money right. Welcome back to squawk on the street. Apples results after the bell tonight. Lets get to dominic chu with a look at the technicals and where the street stands. Trying to get back above the 50 day. It is were hovering around there, just about 172 and change were talking about a stock the second biggest one in the s p 500, second only to microsoft, that has been an underperformer. The blue line over the year to date period down 11 or so, meanwhile the Technology Sector is up 1. 5 and the broader s p 500 is up about 5. 5 technology has been an under performer in some ways, but apple has been leading that downside in the overall shares for the magnificent seven. Now, the analyst take from wall streets perspective is still one where they see about 15 upside from where we are the average analyst target price on the street right now is currently 196. 84 according to data from fax set that implies 15 from upside levels the buy, hold and sell picture is murky a little over half, 57 of analysts have a buy rating the hold rating to 32 and the sell has been 11 its been this way four or five months at this stage contrast that to microsoft 95 of analysts who cover that have a buy or equivalent rating something to watch there the dynamic between apple and microsoft. And carl mentioned the technicals 172 is where the 50day average price on a rolling basis is here and you can see were hovering at that level right now. Go up to maybe around the 181 level is where the the 200 Day Moving Average sits. Were trying to figure out if theres going to be a move of some sort to get above the blue line resistance for a while. Keep an eye on that. By the way, if youre wondering, david, on where the Options Market is pricing things right now, options prices are currently implying what could be a plus or minus roughly 4 move, for apple, on the heels of earnings you contrast that with the last eight quarters worth of up and down moves where its roughly 3. 5 , so the street is expecting right now, pricing in a slightly more volatile Earnings Report this time around, david. Ill send things back over to you. Thank you dominic chu back at our headquarters. Stick with our read on inflation and the economy. Move on to ebay, the shares under a bit of pressure after the Company Reported an earnings beat it was guidance that came in a bit weaker the ceo told analysts on the call that the consumer in the u. S. Is in better shape than europe after jay powell signaled the chance any further rate hikes are, quote, unlikely joining you the ebay ceo good to have you its been a while. Lets start off with we like to focus on stocks here as you know stock is down a bit. The guidance, why was it a bit below what analysts had anticipated both for beat and revenue . Strong start to the year. We beat expectations across the board on gmv, revenues and earnings per share and reiterated what we said in february, we see us turning to positive growth in q3 or q4 of this year. So really underlying that our strategy is working. When you look at our focus categories, where were investing, david, those grew 5 this quarter, 6 points faster than the rest of the marketplace, and were Building Game changing innovations across the board. We feel great about the guidance we put out there and great about the underlying momentum were seeing in the business. Essentially saying whatever the Second Quarter brings its going to be made up in the second half of the year, but again, why, you know, the analysts get their guidance from you, they were higher than anticipated for the Second Quarter. Is there some weakness that youre seeing that had not been fully communicated no. Were exactly where we expect it to be. When you look at what we put together back in february and where wur now, we reiterated what we see for the back half of the year whats important is that yawn lying, if you look quarter over quarter for the last eight quarters weve had improving trends in our gmv growth and thats shown up and really based on our strategy that we have that were driving which is to reinvent the future of a commerce for enthusiasts great new innovations launching this quarter and excited about the future for ebay. It can give us a read on the Global Consumer as well given a lot of your business is also outside the u. S. On the call you said, again, strong q1 results. You did say we continue to navigate what you call ongoing challenges in the Global Economy and didnt elaborate can you do that here what are the ongoing challenges youre seeing . Yeah. Uk and germany those markets are softer than the u. S. When you look at ecommerce growth rates in those markets, theyre negative for this quarter which puts our result into light in terms of what were driving in gmv growth which shows you that our strategy is working in those markets. In germany we made significant changes in our c to c business a year ago and now that were more than lapping that time period, were seeing positive growth in our consumer to consumer business which is great. We launched a, bunch of new features in the uk designed around fashion, we launched new buyer features, we launched streamline selling experience, new ai based features like shopts look in that market, so were pushing forward what inside of what can be a challenging environment over in europe yeah. I did want to ask about your strategy youve been on this focused category approach looking at Trading Cards and luxury handbags because its crowded, you know etsy is getting hit. Questions about temu and shein which have entered the u. S. Market aggressively and amazon and where ebay fits and whether those categories are longterm growth categories or sort of more fatty they were popular during covid but im curious what the path looks like from here yeah. Were seeing Game Changing experience into our focus categories where we build to have the highest in those, the highest consumer satisfaction, we see gmv follow in our focus categories were growing 5 this quarter. We have big categories like our parts and accessories business for vehicles is over 10 billion, and thats growing mid single digits. Its because ebay has the benefit of massive scale 131 million buyers, 73 billion of business, and we have the benefits of crosscategory shopping when a parts and accessory buyer comes in, they not only buy 400 in parts and accessories, but 800 in categories across the site we have 30 of our business focused categories growing at 5 and we continue to invest in that gamechanging experience. Jamie, i know ai, of course, becoming more a part of your business, generative ai, as so many others. Last quarter you announced the first phase of the magical listing feature, which writes descriptions using generative ai how is that working out . Is it hallucinating at all or generating accurate descriptions it is fabulous, david customers love it. Not having to write the descriptions is now live for 100 of customers across all of our service and 90 of people are using it and loving it whats even better, though, is the next stage in beta which does everything for you. Think about selling a trading card before. You would have to fill out the title, this is a steph curry card from 2009 his rookie year, warriors, write the description. The new version of what we have, you just take your camera out from your phone, hold it up to the trading card, we magically figure out everything about that card and fill in all of the items specific, write the description, tell you the best way to price and ship it so you can be done in second. This is a game changer for ebay because the average household has 4,000 of items that could be sold online and less than 20 of that is online. So were making it so easy that you can do that in seconds for a trading card or a book or a handbag that youre selling on the platform weve got this out to a small percentage of users and they say wow, this is magical and going to allow us to bring more of our listings to ebay were excited for the next version. When do you bring it in more broadly as an opportunity for all those people its 5 of users today and coming months and quarters well scale that up to everybody across ebay and its going to be a game changer for us. Maybe time for me to finally find all those baseball cards. Theyre somewhere. Jamie, thank you for the update. Always appreciate it good to see you again. Thank you, david. Were not done getting the pulse of the consumer here on squawk on the street. Up next well talk some food with the ceo of kellov tana,he spinoff of kelloggs snacks business with his read from the ground in a moment trash talk. Id rather work on saving for retirement. 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Evernorth Health Services coming up at 11 00, a round trip over the last year for investors in first solar shares turning negative on the year this morning well break down the quarter on money movers. Stocks this hour, were higher across the board not huge gains, but technology is leading along with Energy Stocks energy the best performing sector the nasdaq, thanks in part to qualcomm after earnings soaring 9 apple higher ahead of earnings, nvidia a comeback. Amazon higher too. Well be right back on squawk on the street. Thats right craig. A team thats highly competent. Im just here for the internets. At t its superfast. Reliable. You locked us out . arrggghh ahhhh solutionoriented. [jenna screams] and most importantly. Is the internet out . Dont worry, we have at t internet backup. The next level network. I sold a pillow as an independent financial advisor, i stand by these promises. As a fiduciary, i promise to be the financial steward that you and your family need. 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Kellanova shares rallying after a by higher prices althou it saw 5 decline, noting soft category demand in the region on the call the ceo joins us to discuss the quarter. Good to have you back, as always. Great thanks for having me, carl were definitely on watch for signs of a priceweary consumer, but taking five points of price in north america doesnt sound too bad. No, you know, unfortunately, its the continuation of price that we had to take when commodities really soared over the course of the last 18 months i think the worst is behind us when i say worst, the necessity price. The consumer is under a lot of pressure this time last year they had snap benefits they dont have anymore. This time last year gas was cheaper. Everything is more expensive now. So, other focus is on affordability and making our programs work very hard and not to have to take any more price. So, that kind of rhymes with a lot of what weve heard in the fast food business the last couple of days i guess my question would be, do the next couple of quarters look promotional and what does marketing spend do if you have to communicate that new message . Yeah, were back to levels we were almost prepandemic when it comes to merchandising quality activity our advertising is actually up and will continue to be up part of getting on of to a strong start this year really gives us the ability to continue to lean into our investments were leaning more into the Digital Investments were making were leaning much more into the advertising investments into consumer promotions that really add value because, again, we think about our consumer first and foremost and delivering value with brands they love is our job you think we graduate into a period where we Start Talking about price wars, at least in different categories i dont think so, carl. Everything that we see, you know, really suggests a continued rational level of performance. You know, consumers love our brands they love to buy our brands because of the types of messaging that we put out there. So, it doesnt have to be price wars when youre really adding value to the consumer at the start. And, you know, when you look back at periods of high inflation coming off high inflation, weve never really seen the type of price degradation that would suggest a price war happening in the past. No guarantee it doesnt happen in the future. In terms of our brands, we look to add value with the consumer, with everything thats in the box in terms of delighting them with the actual product itself and the type of messaging we have out there so they can continue to engage with our brands in meaningful ways. With pressure on the consumer and your price is elevated, steve, are you seeing consumers trade down to more generic, you know, private label brands i noticed just this week, walmart, the largest grocer in the country, is offering new private food brand theyre clearly looking to gain share. Yeah, sharara, its a very g question you mentioned walmart are Getting Better and better at promoting and putting really good products out there for their consumers. Thats wonderful in our categories we see a very low level of penetration in private label and we really have not seen meaningful change going all the way back to 2019 when we look at our brands its not to say that across other categories you dont see meaningful rises in private label, but for us, you know, were in a period now where we have good share momentum, actually, coming out of increased investments in our brands were seeing that across our pringles brand, our poptart brands, many of our brands. Steve, there was a report out shortly ago from reuters citing sources about a firm called toms capital taking a significant position maybe a top five shareholder, from what i understand theyve been in campbells in the past, they did work on colgate, trying to get them to separate the company im curious from a point of view you may have an activist in your shares, there are those that argue your stock underperformed by a significant amount, they think you deserve a higher multiple, and that you, you know, have not been able to perform and execute as well as others have. How do you respond to that if, in fact, this becomes more of a fight . Yeah, david, you know, im not going to comment on any individual share owner, obviously. We talk to all of our share owners as they show interest in speaking with us what i would say is some headlines you just referenced, we can go back and share the data with you in terms of how we would perform versus center of store, food peers and we perform very well. When you look at how we perform versus what we would call our snacking peers, not so well. We did the transformation of the company where we spun off our north american cereal business yes, you could argue our multiple had a a gap between where we are today and where those snacking peers are, which is exactly why we did what we did. When you think about today, the share price is performing well today because we did exactly what we said we were going to do there was a number of analysts and investors who said, kellanova is a show me story and we did that last quarter, we did that again this quarter in terms of growing our top line at ways that are exciting, growing our margin in ways that are exciting and doing more than the market expected us to do. In fact, more than we expected ourselves to do. When we look at the rest of this year, and i talked about it in our call today, we got off to such a good start that we have meaningful ability to continue to make investments to ensure this is an exceptional year from a top line and a bottom line. Why not raise guidance . You said you were doing better than you expected. Why not raise guidance given this First Quarter came in above plan we could raise guidance or take a prudent approach and say there are still threequarters left not raising guidance gives us the Financial Flexibility to do things like i just mentioned, which is really invest even more in our brands to make sure this virtual cycle we find ourselves in continues ill give you one example. Friday netflix is launching jerry signfields new movie frosted. Its a hilarious movie i was with jerry for the premiere we have jerry poptarts hitting store shelves right now. That wasnt in our plan. We saw the opportunity and were launching a program of millions of incremental dollars against poptarts because we have the Financial Flexibility to do that we are very, very optimistic about this year and very optimistic about our performance going forward. Any investor who got in our stock in the last six months, congratulations to you you made an exceptional choice well, if signfield does for poptarts what barbie did for the barbie brand, look out steve, well check in with you on that down the road. Thanks thanks for having me, guys. To be continued well continue to watch that story as well in terms of toms capital in the shares. As for the overall market, we have the s p up about a third of 1 . A lot more market coverage for you straight ahead vo what does it mean to be rich . Maybe rich is less about reaching a magic number. And more about discovering magic