Transcripts For CNBC Squawk 20240703

Turn it off, please. Lets see what happened here this weekend. This is the first time this meeting took place without Charlie Munger being here. Before Warren Buffett took to the stage, this was a stage where there was a lot of emotion that came into this here with a standing ovation for charlie at the top. Roll that back down, please. A standing ovation for charlie right at the top of the meeting after a movie that played a halfhour movie, that played his highlights over the years and funny skits they had done and a standing ovation from 40,000 people who were here at the Convention Center. Pretty emotional day. Warren buffett made news. It came out when the companys 10 q hit. People were looking to see it and it trimmed stake in apple by 13 in the quarter. It sold about 116 million shares. A lot of questions as to why and what it means. Apple is still, by far, the largest stock in its portfolio. It makes up 40 of the overall portfolio. Buffett said he was selling because he wanted to raise cash. He was asked specifically if he sold it because his view on the stock had changechanged. He said no. He was raising cash. He said part of the sale was for tax purposes. We dont mind paying taxes at berkshire. We are paying a 21 federal rate of the gains were taking in apple. That rate was 35 not that long ago and it has been 52 in the past when i have been operating it. The government owns the federal government owns a part of the earnings of the business we make. They dont own the assets, but they own a percentage of the earnings. They can change that percentage any year. The percentage theyve decreed currently is 21 . I would say with the present fiscal policies, i think that something has to give and i think the higher taxes are quite likely and the government wants to take the greater share your income or mine or berkshires, they can do it. Buffett was effusive in his praise of tim cook. Tim cook was here at tat the meeting. I asked tim cook and he said he learned about the sale the day before. Apple does remain the highest shareholder. It makes up 40 of the total equity portfolio. Buffett says he expects it to remain so when greg abel takes over. Buffett broke news on paramount. He told the shareholders that berkshire sold the entire stake of paramount. Listen in. We sold. I was 100 responsibility for the paramount. It was 100 my decision. We sold it all and we lost quite a bit of money. I think im smarter now than i was a year or two ago. I also think im poorer because i acquired the knowledge i did. I just want to be clear that we lost money on paramount and i did it all by myself, folks. Of course, that stock is down 9 year to date. The New York Times is now reporting that sony and apollo is trying to acquire the company as the exclusive talks with skydance ended. Warren buffett talked about the 360 billion portfolio as a whole and managing capital allegation once he is no longer in charge. Knowing greg, i would just leave the Capital Allocation to g greg. He understands businesses extremely well. If you understand businesses, you understand common stocks. Buffett went on to say you have to think strategically and think about big things when the sums of money are so big. That portfolio is 360 billion. Shareholders equity overall is 571 billion. Thats a lot of money. It will take more brains to figure out what to do with all that. Greg abel is the one to make those deciding factors. Well talk about this later in the show, andrew. It was quite a weekend. Becky, i didnt tell you this. I cried. I physically was crying. You did . Joe is laughing at me. During the movie . At the end of the movie. At the end of the movie, i was just on the floor on the floor crying . No. Its was a montage images of batman and robin and culture icon. The guys for the muppets in the balcony. They landed on warren and charlie at the end with the music behind it. It put me over the top. There was a moment when warren pointed out that the family had given 1 billion of berkshire shares to the Albert Einstein medical school so it would be tuition free forever. They showed a movie of the kids learning about it. It was a moment the excitement. That was emotional. They were crying, too. They would never pay tuition ever again. To the extent you can talk about business and doing things in society. It was tangible. I cried. That can be contagious. I have cried at commercials. You think i cry at the little things. American airlines commercial year ago. It was an emotionally charged room. I have been coming here for 19 years. This was different because everyone was in their seats. Usually it is more of a raucous atmosphere that goes through everything. A bit of a party. There was still a Party Atmosphere here, but there was a very tangible feeling of respect. To have an entire Convention Center that holds tens of thousands of people sitting in their seats and ready to go at the top and listening quietly. You could hear a pin drop through that place many times during it. It is something i had not seen before. I had done this for 19 years. I have not seen that level of respect and emotion. Charlie is gone and warren is aging. I use this all the time. All of us. The human condition. One of the great lines of the weekend was at the very end when warren said i hope you all come back next year and i hope im here, too. There was something poignant about it. I felt it. I dont know if you felt it, becky. I felt it in the room. It was a different atmosphere this year. Hes 93 or 94 . 93. He turns 94 in august. Can i ask one question . I was listening and trying to figure it out. You know, he pointed out a few times how hard it is to have that much money. Why raise more cash . Thats an excellent question. That was my take on this, too. He said it was to raise cash. I thought, uhoh. They have a lot of cash. More cash than they know what to do with. 182 billion at the end of the quarter. He is raising more cash. They are on track to have 200 billion in cash by the end of this quarter. You take all of that and you think you want more cash. What do you think about the markets . Do you think something bad might be coming . Is there a reason for needing more cash . That was my question, too. Im only able to ask questions from the shareholders. We got through 33 questions. A limited number of questions. I came back later and asked a question about the market being overvalued here. He didnt answer it. It makes you wonder if he sees something coming like jamie dimon or the potential for something coming like that. I thought between the lines, becky, he was worried about the economy broadly. I thought he was worried about the size and scale. He was talking about the size and scale of certain things and he was saying it in a weird way. Apple was a big portion of the entire thing. That would Say Something about apple. Tim is there. He is not somebody to criticize or say i want to get out of this. He thinks apple is a Better Company than two of the long time holdings. Cocacola and American Express in particular. You have to remember if he were to try to sell some of those companies, he has a lower base so the taxes would be higher on Something Like that. The idea of raising cash and thinking you need more cash the other point is they are making 5. 3 or 5. 4 in treasuries on the cash because it is not just sitting in a bank account. They are making money on it and getting Something Back in return. You have to compare that, too. If thereasury is at 1 , he woul still do it. Becky quick, we swwill see y in a bit. You are on everywhere, becky. I was on the treadmill. Everybody was watching it where i was working out. Lifetime . Online. On youtube. All over. Yeah. It was a different meeting. No doubt. No doubt. Coming up, tom lee weighs if on the softer than expected jobs data and the feds next move. Later, Scott Gottlieb he looks really thin to me. I asked him. No, hes not. Well find out. Esy ugjoin us in the rampup in obitdr manufacturing. And the amgen news from last week. Well be right back. grunting announcer this cnbc program is sponsored by baird. Visit bairddifference. Com. Meets bold new thinking. laughter at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. Old school grit. New world ideas. Morgan stanley. At pgim, finding opportunity in fixed income today, helps secure tomorrow. Our timetested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. Pgim investments. Shaping tomorrow today. And theyre all coming . Pgim investments. Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. When you automate sales tax with avalara, you dont have to worry about things like changing tax rates or filing returns. Avalarahhh ahhh our next guest feels investors are still too cautious, but he thinks the fear of may or the sell in may and go away will turn into buy in may. Tom lee is head of research at fundstrat and our cnbc contributor. I will never forget the call you made. It was one of many pretty good calls. It is what the s p is going to do near term based on inflation not as bad as built into the market. You are returning to that theme. I would like to know why you think that. What do you know about inflation that the market doesnt seem to understand right now . You dont think we need to be as hawkish as we are here . Yes. A lot has to do with cpi has remained stubbornly high. Powell talked about the lag in housing. Home prices arestabilizing and rents are getting back to traditional rates of growth but, it is reported in cpi at 12 . Auto insurance is nonhousing which is rising at 21 . That is because auto rates are jumping. That is not going to keep going. Once that starts to normalize, you think of median inflation of 1. 8 . I think inflation will cool dramatically. I dont know when, but it will be some time in the second half of the year. I think maybe a couple of months ago, you werent as bullish. You came on and said it might be tougher going. You did have a series of Inflation Numbers that were hotter than people thought. Yes. Yes, we did. You think thats not going to be the case as much from here . Thats right. I think going forward, i see a couple of things going forward. I think the fed is not on its heels about inflation could fall and i think that the things i mentioned with housing and Auto Insurance would start to cool. Inflation would look better. We had a big reset in april. I think it looks pretty good for now. You must agree, i guess, that the fed right now is in restrictive territory. I have been amazed at how the default position for jay powell has been for weeks and months that we need to cut eventually. He never it seems like the idea of hiking has never crossed his mind and he took it off the table last week basically. It is weird to me with the economy as strong as it was and inflation as sticky as it was, i dont know why that was his default position. I dont know why he wasnt more symmetric. He seems so sure. Hes jonesing to cut rates. He wants to and the market believes him. Every time he says it, the market rallies and gets ahead of itself. Yes. My guess is i dont think the fed is that comfortable with longterm rates at these levels. It is is quite high. As you know, it is putting pressure on regional banking. It is really hurting their balance sheet. The cost of money is quite high compared to the rest of the world. You think we are restrictive . It is quite restrictive. Whenever we return to the cuts, it looks like the Printing Press goes. It goes back to 57. It is back to 65 before you can blink. Thats right. Bitcoin is still in the early upcycle. The idea it could get to 150,000 this year is within our base case. 150,000 in 2024 . Yes. Your base case . Yeah. Go on. You know go on. Yeah. Go on. Dont stop. I think it does help that the fed is reiterating its view on the inflation and it is relatively dovish. It is more dovish than where the market is right now. That is why the markets are recovering. I know people always get mad when you say you are coming on and you are never on long enough. I Pay Attention. Can i ask one more . This has to do with what i saw in omaha with becky this weekend. One thing warren did was trim the apple piece. I think underneath a lot of the language he spoke about for five hours, there was some anxiousness about the overall economy. You dont have that anxiousness. He is in there and has this massive portfolio and sees everything. What do you think of that . I understand where hes coming from. I think if someone said what are they anxious about, then it is the fiscal deficit or size of the deficit. Im not sure it was that. He was asked about that. That was not his issue. The issue was i dont want to put words in his mouth. There is strength of the market and whether it is potentially overpriced. Hes steering a huge ship. He has to think in longer terms. To us, Earnings Growth is accelerating. Q1 earnings are up 7 . Three groups are down 20 . Energy, healthcare and materials. Energy and health care flips to positive next quarter. You know there is a lot of pentup demand. Capital spending is picking up. There is 6 trillion in cash on the sidelines. People have been cautious for more than two years. The risk reward is pretty good. I dont know if warrens lens is more ten years out. I think the next year looks good. Great. Tom, thank you. Thank you. Thank you for kicking off the show and the week. When we come back, this is interesting. Just happened overnight. Former starbucks Ceo Howard Schultz taking his advice for the Company Public via a linkedin post. He has words for what the management of starbuckiss doing. We will bring it to you right after the break. Where excellence, comfort, and electricity. Are forever in bloom. Welcome to beyond. The mercedesmaybach eqs suv. I am here because they revolutionized immunotherapy. I am here because they saw how cancer adapts to different oxygen levels and starved it. I am here because they switched off egfr gene mutation and stopped the growth of tumor cells. Theres a place thats making one advanced Cancer Discovery after another for 75 years. I am here. I am here. Because of danafarber. What we do here changes lives everywhere. I am here. Raising you was no bed of roses. Are you getting me anything for mothers day . Go to 1800flowers. Com. Oh my gosh wow gorgeous i feel like royalty. Thank you. 1800flowers. Com. Happy mothers day. Happy mothers day welcome back to squawk box. This is interesting. Former starbucks Ceo Howard Schultz speaking out about the stock miss last week. Schultz has had no formal role in the Company Since april of last year. He asked people about what should be done. He took to linkedin. He said there must be con contributions and renewed focus. He urged the Board Members to spend more time with those who wear the green apron. Make it an uplifting experience. We talked about the problems and the lack of interaction at the electronic program. The gotomarket strategy needs to be overhauled with the coffee forward Innovation Program which creates differential in the marke marketplace. If you read between the lines, he is frustrated with what is happening at starbucks. The mobile ordinering piece is something we talked about going forward. Many products developed are not coffee drinks. They are Energy Drinks and other types of drinks. There will isnt a big focus on discounting. Loyalty programs and getting a star for each time you buy a drink. I assume that is transactional. If you go into the stores and i was in a couple this weekend, becky, when i was on my way to omaha. I have to say, one one was gr. Not the spirit. The cleanliness and speed and waiting in line. Trying to get the food and then those with the mobile order. The bar wistas have turned into robots. They dont say have a great day. I dont want an experience. The reason people paid a premium for starbucks over the years. I dont want to wait. You remember mcdonalds a couple of years ago. All they did was make it faster and hotter and everything was fresher. Thats all they had to do. Thats a different business. It is. Now i go to dunkin donuts. Give me my coffee. I go in and i get the coffee and leave. Hi, joe. How are you today . Youre not into that . No. If i were them i dont think you can make the economics of it work. There are so many mobile orders and i would have a greeter like walmart. Somebody who says it is nice to see you and they know your name. You would have had your phone. You feel good about it. If you are paying 6 or 8 for a coffee, you have to get something for it. If i go in and there are eight people in front of me and after i do order, then i am waiting in the corner again. I dont care if anyone is talking to me. I want it fast. Now all i want is coffee. I dont disagree. The speed thing is a problem because the lines are too long. That is a sign of success. The problem is how much success. Its too crowded and nobody goes there any more. Thats the other problem. I dont want any of the others. I happen to like coffee. I dont buy them. Some of the new drinks they have come out with, i tried them. They are not coffee first or coffee forward. The new ceo is trying to think about the different day parts and fix the afternoon. Do you think schultz is going to come back . For him to go to linkedin and talk about this is interesting. Do you think he would step back in in any active role, andrew . Let me say i think he said it in the post. There are p peopeople inside an outside the company asking him for his thoughts on this. I dont think you go public with Something Like that unless you are frustrated and dont think whatever you are telling people inside the company are listening to you. Right. I imagine that is one of the great frustrations and conundrums and problems. The other piece of it is, it would not surprise me if an activist showed up on the door step. With howard in tow . I think the board really has to figure out what has to be done. Do you think he can show up with Howard Schultz in tow . He is frustrated because they are not listening to him internally and then he will take it public. If you dont listen to me now and ask me back, i might come back on the arm of someone who is not so friendly . I think he has struggled. I think there is the question of whether he would come back. He has come back three times. I think he is sort of done. I dont know the answer. The question is if another activist shows up. This is a challenged company for Financial Engineering purposes. Theres not an obvious thing you would do financially. You would bankrupt the company if you start doing that. This is something that needs fixing and operational fixing that will take a long, long time. The only thing people have taugd ab talked about over the years is try to spinoff the China Business the way yum brands did. It is such a representative piece of the company. It may make it less attractive for an activist. Okay. When we come back, we have more highlights from the Berkshire Hathaway annual meeting, including Warren Buffetts take on taxes. And some unspexpected guest turned up. I made a mistake. I rooted for the washington generals. I made a big mistake. I rooted for the people that i wanted. Here are the brackets. 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For nearly 160 years, pnc bank has been brilliantly boring so you can be happily fulfilled. Which is pretty unboring if you think about it. Over the weekend at the Berkshire Hathaway annual meeting, Warren Buffett weighed in on fiscal policy. If we send in a check like last year, we send in over 5 billion to the u. S. Federal government. If 800 other companies had done the same thing, no other nperso in the United States would have had to pay a dime of federal taxes. [ applause ] no Social Security taxes, no estate taxes. All down the line. Thats thats i would like i hold things with berkshire that at least we say were in the 800 club and maybe move up a few notches. It doesnt bother me in the least to write that check. I would really hope with all of america has done for you, it wouldnt bother you we do it. If im doing it at 21 this year and were doing it at a lot higher percentage later on, i dont think you will actually mind the fact that we sold a little apple this year. All right. Joining us to talk about this is Wolf Research head of policy and politics tobin marcus. Tobin, i want to say what he said just before that which is key to his thinking. He would stay with the president s fiscal policies. I think something has to give. I think higher taxes are likely. The federal government wants to take a portion of your income and should do it. When you look around in washington, where are we headed . Wha whats tax policy look like . I think it is clearly true that we need taxes to go up. As a share of gdp, we are looking at large structure deficits in a full employment economy which is rare. The mismatch with the deficits were running and state of the economy is the most concerning thing about the fiscal situation. There is no sign of improvement in the official forecast. The next change in tax policy will be to extend tax cuts. The big debate next year is trump and republicans wanting to extend the 4 trillion of expiring tax package and biden only wanting to extend 2 trillion of that. We are looking at widening the defici deficit relative to narrowing it. The Spending Plans that are already in place, you can look at that as an upstream swimming for powell and the Federal Reserve as well. Whatever powell will do, he has to look at what is happening on the fiscal side of things and realize those are the tides that are coming to figure out how to navigate. Thats right. When you look at the median turn fiscal professions, we are mostly in a regime we are facing is the opportunity cost over risk of crisis or out of control interest expense to push us into a fiscal dominance paradigm. If you look at the good modelling and what happens in the Interest Rates are higher in the long term and if inflation is higher in the medium turn, then it doesnt push us to the spiral. This is the situation where paying more in interest expense means we pay more at the margin like defense spending. It is those tradeoffs that are hard questions at this point. If you play it out far enough into the future, you are looking at those kinds of out of control and spiraling dynamics. We are not in that scenario yet. How do we know . Thats a pretty tricky question. I dont know anybody who can actually say this is the point that were going to spiral in that direction. The people who watch the markets most closely dont have any idea with the number that is suddenly okay and this is whats going to cause the bond market to say no more with bond investors. It seems like it is a great unknown. Yeah. I think when it comes to the risks of Something Like the 2022 bond market strike against the uk, that is totally right. There is a line some wwhere. You dont know where the line is in advance. We are away from that based on the continued unique status the u. S. Has with the other developed economies running a high debt burden with not a lot of alternatives. Thats the risk. If you are thinking about a crisis, the risk is you get a sudden loss of bond market confidence rather than doing the projection of what were already scheduled to pay. That doesnt take to us a crisis point any time soon. You are right. The farther we go without cutting any move to Fiscal Consolidation and we have a way to go based on washington with that risk. What are the things we should be watching in kawashington . Is it anything ahead of the election or do we wait for the election and then we wait for tax policy . Latter. The tax policy is the highest stakes thing that will come through Congress Next year with the tonche of tax cuts. The party will expend one portion regardless. That comes down pretty directly to the outcome of the election if we have divided government of any kind, we have the tax cuts at some point and in the republican trifecta, we have a wholesale. We will look at what is offset and that creates risks with the i. R. A. Repeal and republican trifecta to offset will be in the discussion this year. Tobin, thank you. Still to come, we will hear from top Berkshire Hathaway executives who rarely speak publicly. That is straight ahead. Later, we will talk to glenn hu hubbard about the jobs numbers. Squawk box will be right back. Businesses go further with 5g solutions. Thats why they choose tmobile for business. Pga of america and tmobile are partnering on 5gpowered analytics to help improve player performance. Tmobiles Network Helps aaa stay connected nationwide. To get their members back on the road. And Las Vegas Grand Prix chose tmobile to help fuel operations for one of the Worlds Largest racing events. Now is the time to see what americas largest 5g network can do for your business. Its a beautiful. Now is the time to see wha. Day to fly. Gest wooooo coming up, much more from the Berkshire Hathaway meeting and then dr. Scott gottlieb will gin us on the push to ramp up production on the weight loss drugs. We are coming back to times square this morning in just a moment. Thats right james, it isnt. Car, where are we going . Were here. surprise the future isnt scary. Not investing in it is. Car, were you in on this . Nothing gets by you james. Nasdaq100 innovators. One etf. Before investing, carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com when it comes to investing, we live in uncertain times. Some assets can evaporate at the click of a button. Others can deflate with a single policy change. Savvy investors know that gold has stood the test of time as a reliable real asset. So how do you invest in gold . 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We are trying to still play catchup, technology is something that is unfortunately a bottleneck, but there again, we are making progress and equally importantly, we have hired people who are much better than what they inherited in terms of Data Analytics and pricing and slicing. So yes, i recognize were still behind. Were taking steps to bridge the gap, and hopefully certainly by the end of 25, we should be able to be along with the best of players when it comes to Data Analytics. That problem is something where they lagged behind progressive. It was a big part of the reason that todd combs was wrought in as ceo. Jain was asked about the florida Insurance Market and whether thats an opportunity for berkshire. The florida market both for Auto Insurance and for Homeowners Insurance has had a few tough years. The two problems we face in florida and all the risk bearers face in florida, one is the lawyers and the amount of corruption that takes place in the florida market is keeps skyrocketing making it difficult for us to price a product and make a profit. And, secondly, the amount of activity in terms of storms both the frequency and the severity is also so severe that the losses in florida tend to make it very difficult for a risk bearer to make money. Having said that, weve had a weve fortunately had a very good run at florida last year. We increased our exposure in florida as we talked about last year, and fortunately nothing bad happened. Jain went on to talk about how legislators are trying to improve the fraud situation in florida. Insurance, though, is just one berkshire business thats facing stiff regulatory headwinds. Bnsf were a big focus ahead of and during the meeting as berkshire is pushing back on regulatory attempts to in some ways almost be confiscatory. In fact, they talked about how pol policies or how situations with the regulatorsin states like oregon and california could make it to the point where they just dont want to do business there anymore. Buffett specifically said were not going to throw good money after p bad. If you dont have that compact theyve had for decades and decades with state regulators, if we invest money we will be able to get some sort of decent are return for shareholders, were not going to throw good money after bad. That leads you into the situation thats happening around the concerned, what thats going to look like with state regulation from here on out. This weekend i had a chance to talk to bertie buffy elliott. He has called her his perfect mental model. He says shes the person he thinks about when hes writing about the annual letter. Said shes the reader he imagines when hes writing to the shareholders. We played monopoly when we were and i was really little, of course, and he was a little bit older, but i remember this so distinctly, but i was so happy because i had this money, and i was saigving up the moneyn little piles in front of me. As the game went on i was landing on more and more properties and houses and hotels. Pretty soon all my money was gone, and i realized too late that it was a better strategy to buy property than hoard the money. But my joke with him about that is and we laugh about it because it is actually a joke, but that i trained him to be a winner because since he was winning all the time, playing against me, he owes his Great Success to the fact that i trained him, and he loved it so much he just kept going. Berties three years younger than warren. She did beat him once in the 1990, not at monopoly but at bridge, and warren got so upset he reached over and ate the score card. It was a joke between them. You can hear much more on our podcast, follow squawk pod and u lien anytime. Squawk box will be right back. Because sometimes the best road forward, is the one you didnt expect. what is cirkul . Cirkul is the fuel you need to take flight. Cirkul is the energy that gets you to the next level. Cirkul is what you hope for when life tosses lemons your way. Cirkul, available at walmart and drinkcirkul. Com. vo what does it mean to be rich . Maybe rich is less about reaching a magic number. And more about discovering magic. Rich is being able to keep your loved ones close. And also send them away. Rich is living life your way. And having someone who can help you get there. The key to being rich is knowing what counts. Welcome back to squawk box. An general moving forward with an injectable weight loss drug. Joining us for more on the innovation in the space, former fda commissioners Scott Gottlieb, serves on the boards of lumina and pfizerm. Explain it like im five. How does this work . This new drug. This drug a monoclonal antibody. Its different than monojoro or wegovy. They are straight peptides. They activate glp1 and gip 1. What this drug does is act vivas glip and inhibits hip. Its going to circulate longer in the blood. What theyve should be in the clinical studies so far, is that this can be dosed probably every month, maybe longer than that because its an antibody bound to thosetwo peptides. You might have to take it once a month or once every two months. Whats interesting, is that monojoro activates both gip and glp1. This drug activate glb, but inhibits gip. Theres some curiosity about what that mechanism is and why theyre seeing profound weight loss. Which do you think is more effective . Based on the phase one data, this drug did look highly effective. About 600 patients are going to read out top line data had later this year. Well get a look at how efficacious it is. Most people are expecting it to be on par with mounjaro, wegovy and perhaps better. We were talking to the ceo of eli lilly about the opportunity set for them in ternlms of puttg this into a pill. He seemed to suggest we were about two years ago. He also suggested it was only going to work on one of the the pills right now work on glp1. Probably the one thats furthest ahead is by lilly. Theyre going to have data in 2025, maybe 2026 if all goes well. Is that going to be effective then . Its an open question. I think the assumption probably not. Youre only active on one method. If you look at some of the followon drugs. Lillys working on a drug. Both injectable, both work on multiple mechanisms. In the case of the drug binovo, it works on glp1 and daca. In the case of lills drinking its glb, gip and glucogon. Its probably not going to be as effective, but then you have the convenience of everyday dosing with an oral drug, plus youre not manufacturing constraint anymore, not a supply constraint. There will be a pill, a microdose pill, and that probably would be good. Just so i dont, you know, binge on all the piece or whatever how long before i i just want something thats going to prevent me from having no discipline, when i go to the refrigerator at 10 00 at night and then start having like bowls of raisin bran, you know, with whole milk for no reason. Let me ask the question, would you prefer a weekly injection or maybe a monthly injection or a daily pill . Daily pill. Me personally . I think a daily pill, but i also id also prefer not to look like boo radialey. Thats what people look like. They look like a ghost. People stop exercising as much as they should and they dont eat enough protein, thats why their muscles even in the face. Ozempic. You almost have to force feed yourself protein. Wow, youre losing weight, are you dying . Well, thats the concern is that youre not going to keep up with a healthy diet once you go on these drugs because youre reducing the caloric intake. Thats the concern around the use of these drugs in adolescents and teens as well. The concern is theyre not going to be as vigilant. Heres the question, if youre going down from a 2,000 calorie diet a day to what some people are saying is going in half. To you know 1,200 calories a day. That means that most of your 1,200 calories would have to come from protein. They dont, they come from carbs. So you lose all your muscle. Bingo. Youre going to have to focus on having a wellbalanced diet. I think this is going to be an opportunity for food companies. If you go into gnc, they have a shelf of supplements for people on glp1. What are those proteins . What are those supplements look like . Protein supplements. Youre going to go into the food store in the future and theres going to be foods that kcater t this market. The estimate is 5 of the population will be on these drugs by 2030. Could be higher than that. I know a guy i know a guy. I know a kguy whos on this medication, this is not a friend. I mean, its not me whatever. Who went to vegas, decided to go off of it, actually, for the weekend because when youre on it he stopped a week earlier because when youre on it, you dont want to eat and thought oh, my goodness he wanted to have fun. And he said you dont like want to eat everything in sight. What do you think of that . Are there people doing this . Any other psychological side effects . J i havent heard that, but thats not a sound medical strategy. Thats what i heard. We havent seen psychological effects that might be associated with people not having as much plb from food and other vices that they might have been accustomed to before they got on these drugs. I think that was a theoretical concern. We havent seen that in the data. People seem comfortable when they go on these vacations. Same friend said he doesnt beat himself up when friend . Im not on this stuff. Im being honest. If i ever am, ill tell you. Id be very open about it. You dont need it. But id just say he says he doesnt beat himself up about eating too much either. You dont eat too much. All those emotional feelings when you talk to people who are on it, they enjoy their meal. They just feel full. They feel satisfied earlier. Theyre still enjoying their food. They just dont need as much to feel enjoyment. Come on, thats pretty good. I dont know whether thats true. But if thats if thats the thing that i dont like the idea of is like, i got to eat, tastes like sand, you know, i dont i like to eat. Obviously. I dont think it tastes like sand. But if you have no interest in food. You have interest. The interest ends earlier. People are going to have people have to be more vigilant about what they eat because they do need to get the protein they need on a daily basis. Dr. Scott gotgottlieb, thank you. I have a friend who z a personal struggle with whether to do Something Like this. You know that friend . Spl yeah, i have a friend. Everybody struggles with food in some ways. We all do. Youve got a hollow leg. I think about food, meaning i think about eating too much food. Too little. Anyway, it is just after 7 00 a. M. Its insulting when you act like you have to worry about it. Its insulting. I apologize. Im just saying you should think you shouldnt think its insulting. Everybody has to do it did issue. Its insulting, youre looking at me that should be all im thinking about then. I did not say that. Okay. It is after 7 00 a. M. On the east coast. Youre watching squawk box on cnbc. Im Andrew Ross Sorkin along with joe kernen, becky quick is in omaha, nebraska, this morning. It is 6 00 a. M. There for her. Just a little after 6 00 a. M. Joes going to try to hold his breath and see how it goes. I dont know if beckys she doesnt need to hold her breath ever. Top stories this morning, lets talk about it. Proxy Adviser Institutional Shareholder Services calling on boeing investors to vote against ceo david calhouns nearly 39 million pay package during the companys annual meeting taking place on may 17th. It amounts to a 45 increase. Former starbucks Ceo Howard Schultz calling out his own company, his former company after its latest Earnings Report and more than 16 hstock slide. Linkedin post that he made late sunday, schultz saying starbucks, quote, requires a maniacal focus on the Customer Experience through the eyes of a merchant. The answer does not lie in data but in the stores. You can read between the lines there about what he thinks is happening at the current management and board. Well talk more about that in just a little bit. Googles youtube testing ai to help users skip ahead to the best part of a video. The feature only available right now to a select group of youtube premium subscribers coming to a screen probably near you very soon. Becky quick, the star of stage and screen and the omaha weekend. Whats going on . It was a big weekend and there was a lot of news that was broken at saturdays berkshire annual meeting, Warren Buffett made public that he thinks his current successor should be in charge of the companys massive stock portfolio. My thinking on that has developed to some extent as the sums have grown so large at berkshire, and we do not want to try and have, you know, 200 people around that are million a billion, it just doesnt work. And i think when youre handling the sums we, you have to think very strategically about how to do big things. I think greg is capable of doing that. Abel said the Capital Allocation principles berkshire lives by today will continue, and he weighed in on a number of other issues where they seemed to agree, buffett and abel, especially the risks around utility regulation. So when you raised it in your letter, its a really important issue. We have to have a regulatory compact that works between if its a pick utility, it has to work in concert with the state, utah being an example, or it ultimately becomes potentially a public powered entity. Both buffett and abel were pretty clear while theyre more than willing to invest in the growth of the utility sector as demand for energy in this country cons to grow, i think buffett said theyre ready to deploy another 100 billion into this. He said they wont do it in states where regulatory compacts arent respected. Somebodys going to put up many, many hundreds of billions, maybe in the trillions, Climate Change enters into that, and it can be done through public power or it can be done through private enterprise to quite a degree, and we would be certainly good for 100 billion or more, but were not going to throw good money after that. Guys, i thought this was a really interesting point. It was one that they circled back to several times, and to me it was them kind of sending a message to state legislatures and to the regulators who are overseeing some of these things, okay, you can change things. You can push things. You can require that we invest so much in certain situations, but he literally said at one point, were not going to put throw good money after bad in scenarios where we cant make a profit, and theyll have to figure out something else. Its a really interesting time because theres so much more demand thats coming because of ai, because of the data centers that are building up. Its going to require far more energy. Also people charging evs. Its going to be requiring far more energy. Good luck trying to get private investors to put money in as a result. Weve got to think this through. We really do. Because ive been hearing from a lot of different people how much not just ai, but especially ai how much were going to need off the grid. Yeah. Keep drilling. I know i sound like a broken record. We are going to need some type of fossil fuel, and unless we go to nuclear, we can go to these little mini nuclear things. Were moving there too it feels like. Well see. There was a question from a shareholder who came out from one of the western states. I dont know if it was arizona maybe, new mexico. I think it was arizona. It brought up this question of how come youre not using solar in a place where solar shines so much . And their answer was because you cant just do solar in those areas. Even the best batteries only have storage for four hours. The sun doesnt shine for more than four hours, you cannot rely on it. Were not there at this point. Youre going to have to use fossil fuels and the traditional things set up to this point, and you want that energy affordable. What did you think about his comments about nuclear . Not just nuclear energy, like he has real worries about nuclear wars, i think. Oh, i mean, thats been a constant, right . He always had that cnbc that referred back to his biggers concerns, which were chemical, nuclear, biological, and cybersecurity, and i think you can add to that now ai, and well talk about that later. Just the potential threat once the genie is out of the bottle. Great things that can have wonderful advances but concerns about what the downsides are too. Hes Risk Assessment so hes always think about the down sides on those things. Those are real concerns he does have. Thank you. Were going to be back to you in just a little bit in omaha, nebraska. Jay clayton onthe upcoming president ial election and concerns over the charged political climate. Plus a preview of tonights big Earnings Report. Were going to hear in media land we get disneys numbers. Squawk box returns after this. She always thinks of others first. But for one day, its all about her. Celebrate mom and all she does with thoughtful mothers day gifts from weathertech. Treat her to lasermeasured Weathertech Floorliners and cargo liner to keep her vehicle looking like new. Keep moms phone in reach with handsfree viewing with cupfone. She can feel like shes on cloud 9 with the antifatigue comfortmat. Or pick a gift card and let her choose. Find these American Made gifts mom will appreciate all year long at wt. Com. Happy mothers day from weathertech. You ready . Showtime. Will appreciate all year long at wt. Com. This is gonna be epic. [ barking ] its what the poster said. Do you want to make out or . Nope. I meant yes. Hes a bon garcon. I give amazing spongebaths. Can i get a room . [ chuckling ] chefs kiss. Welcome back to squawk box, the weaker than expected growth in payrolls on friday was not the only downside miss. Steve liesman is here with a look at april showers and Economic Data and what they might bring for may. Steve. Yeah, andrew, theyre supposed to bring flowers, but the outlooks a little cloudier right now. The Economic Data so far from april has kind of rained on the growth parade. It was mostly showers in the economic reports last week. We had jobs below consensus, unemployment a tenth higher, the workweek and wages and jolts all below estimates. The ism services and manufacturing services, first time we had them below 50. Theyve not done a very good job of tracking the economy. Consumer confidence also coming in below expectations. Ian shepherdson writes, aprils payrolls likely mark the start of a shift to a much weaker trend. We think it will be clear by summer that the fed needs to ease quickly. The data justified the fed and powells approach to rate policy at the meeting last week. Now the question is whether the economic softness has further to go and if that weakness will have the desired impact on inflation. A bunch of companies, mcdonalds, starbucks, kraft heinz, kell nova and mondelez, price resistance from consumers, suggesting their prices or margins could be under pleasure here. The weak data did push up some rate cut probabilities. July 37 , a long way away from where it was. September a little more confidence in the market on the rate cut and november of course a little bit more. Economists just upgraded their outlook with stronger march data. We report that had a couple of weeks ago. They pushed Second Quarter estimates to around 2 to 2. 5 . Well see if the downdraft we got last week with this data releases a grayer forecast. Joe. All right, steve, thanks. Stick around. Joining us is the wall street journals greg ep, his latest piece is titled stalled inflation vexes the fed. Is it noise or a new trend. Thanks for joining us. One of the points you make and i should point out moderating inflation rate has been posited by an earlier guest we had. His whole thesis, i dont know if you saw tom leon earlier, kb greg, he says hes bullish, thinks people have gotten too hawkish on inflation and those were outliers based on insurance, Auto Insurance rates and a lagging housing market. Something like that. But you feel the same way. What i dont understand is you say the fed doesnt believe inflation is still moderating. Why do they keep talking about cuts if they dont believe it. Id put it as follows is that the january hot inflation number, people said thats noise. February they said probably still noise. March they said, maybe its not noise. Maybe theres actually a new trend. Maybe thats telling us something, and i think that, you know, the fed probably is in the same place tom is, perhaps a little less explicitly. They still think its going to head back towards 2 before long. Id say the friday payroll report, which was soft probably supports that view. But i think that their conviction on that has got to be lower. Everybodys conviction that inflation is going back to 2 has got to be lower after what weve seen. I think the real question facing us is that its absolutely true that a lot of the upside was with things like Car Insurance and Health Insurance and probably those things arent going to be repeated. What if he took that stuff out . Whats the trend youre left with . Do you think its 2 . Maybe its 3 . Ky make a case that its 3 . Even the soft wage numbers weve had to date are closer to more consistent with the 3 inflation rate than a 2 inflation rate. If thats the case, there isnt really a strong case for the fed to cut rates this year, and theres a nonzero chance they may have to raise them. Yeah, definitely, and, you know, two, three, close enough for government work, its a huge difference, and people will tell you that. That theres no way the feds moving the goal post to three. That would be abandoning, you know, all the, you know, weve canonized paul volcker and what happened back then. They want two. Theyre not steve, would they go to 2. 5 . I dont even think theyd go to 2. 5. You mean in terms of their target . Yeah. Goal post moving. I dont think so. But i want to speak on the other side of this, which i look at the numbers and where the fed is, joe, and i have very its very hard for me to believe the fed is not restrictive and that these rates are going to pull down inflation, either it works or the whole thing doesnt work at all, and i think it does work, and i think if you came into this with a you know, i dont know what you think the neutral rate is, 2 or whatever, and i think the fed believes that. I think powell believes that, and i think that the issue is one of more of time than level. If you think about it, the fed only hit the peak funds rate around july, so give it a year. Coming up this summer and i do think there is some as i just reported, a little incipient weakness in the data that bears watching here that might be the moderation that were all seeking. Greg, you think were restrictive no doubt, i still have doubts about that. I always remember 7 and 8 , and businesses did just fine, and i know were up 500 basis points, but historically it just doesnt seem like were that high. I dont know how we know for sure that this is going to do it. Three months ago, i was 100 where steve is. The federal funds rate of 5 1 4 is very restrictive. That implies a real rate of like 2 to 3 , which is pretty high judging from the last 20 years. Today im not so sure. Lets say for the sake of argument that the underlying inflation rate is 3 as we were discussing. That means the real rate is commensurately lower, therefore not as restrictive. Secondly, the restrictiveness is not just about the federal funds rate, its about everything, its about credit. Its about spreads. Its about the dollar, the stock market. You have an s p 2 from its all time high. Markets look buoyant. That doesnt look restrictive to me. Every time the data greg sorry, go ahead, steve. Greg, im sorry not to get too wonky an argument here, but what is so fundamentally changed about the u. S. Economy that you would have a double and almost tripling of the neutral rate. Thats where i get stuck. I look around, there have been changes, but its really hard for me to think that the underlying right rate for this economy is so much higher, and i mean over a long period of time. I get that you need an especially high rate to bring down inflation, but why would the run rate be so much higher . Okay, so there i agree with you. I agree that in the long run the federal funds rate will not be 5 or 5. 5. The question is where does it settle at . Whats the neutral rate, i think thats kind of where the debate is, right . It should have been three a few months ago. Im just not so sure right now. As time goes on, we need to appreciate that the period from 2009 to 2019 was the anomaly, and basically nobody wanted to borrow money, and neutral in that period of time was like 2 to 2 p. 5. I dont think were in that period any longer. I dont think were going to be going back to zero anytime in the next ten years. I think its an inflation prone world. Neutral is higher. The markets think the same thing. If for the sake of argument its actually 4, im jut putting that out, then it means we only have a percentage point of restrictiveness instead of 3 Percentage Points of restrictiveness. Putting that out as a conjecture, steve, im not asserting thats true. But i think the case for that looks stronger today than it did three to six months ago. Steve, if you want a scenario for what could get us into that horrible situation of where the fed stops only to come back later and raise again and then they stop. Remember, thats what we all worried about. Thats what happened that one other time. This is the way it would happen. Wed keep thinking, oh, yeah, inflation is just natural. Its going to come down. And it doesnt, and if it doesnt, then you got to do im not saying thats going to happen. It can happen, and i dont know, it just seems like murphys law. If its possible to screw it up, were going to screw it up. Theres another important point we cant forget. Theres a lot of confidence going on here, and for the inflation rate to come back to 2 , people really have to expect that to happen, and they have to kind of trust the fed to do the job. Heres kind of the weird thing. If the fed begins to say, oh, we think its going to go back to 2 , we dont have to do anything. Were going to cut rates. That could settle expectation, and they wontget that reduction in inflation. They kind of have to act like its not going back to 2 in order for it to go back to 2 . Okay. Theres some talk, joe, that possibly was the idea of they introduced cuts into the forecast back in december and the loosening of financial conditions last fall and winter was part of the reason why you had this spurt of inflation. I want to see the april and may inflation data, and then ill join you, greg, in your inflation pessimism. It totally juiced the markets. Yeah, it did. And it shouldnt have been because the seven rates, six rates, even, you know, not just dispelling that immediately the markets got ahead of themselves, h thats inflationary and everything else. Sure. Thanks, steve, thank you, greg epp. Thank you. Joe, whats the scientific you screw up your scientific experiment existing in the experiment . Whats the something principle . Eisenberg principle. Say my name. Say my name. Yeah. Eisenberg still coming this morning. Is my favorite quote about if youre religious, you know, one drink from the cup of Natural Science and youre an atheist but at the bottom of the cup god is waiting. I love that. He was a very smart guy, but hes controversial now too. Isnt everybody . Except for me. Still to come, former s. E. C. Chair jay clayton will join us, and later Warren Buffett cutting his stake in apple. He does make it clear that he expects berkshire will continue to hold shares for a long time to come. Were going to break down his posionn teti ithe ch giant. Its coming in a little bit. Squawk box will be right back. We put our heart into celebrating moms. We are local farmers, bakers, florists and makers who grow and create with a passion. 1800 flowers. For mom, with love. Sure, im a paid actor, and this is not a real company, but there is no way to fake how upwork can help your business. Search talent all over the world with over 10,000 skills you may not have in house. More than 30 of the fortune 500 use upwork because this is how we work now. Coming up, a progressive Civil Rights Group has a message for corporations theyre considering participating in this summers Republican National convention. Dont even think about it they say. Were going to speak to former s. E. C. Chair jay clayton about that and so much more when we return after this. 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. Welcome back to squawk box, ncorporations may be rethinking their political donations ahead of the Republican National convention for fear of being seen as taking one side over the other. Joining us now is jay clayton, a former s. E. C. Chairman and cnbc contributor. I would say in particular that piece was referring to the idea that corporations didnt want to be giving money to the Republican National committee in advance. It wasnt just that they were trying not to choose any side. I think it was a particular side they were trying to avoid. What do you make of that . The article is very sb interesting. It said activist groups were threatening companies that if they gave to the Republican National convention they would turn out and, you know be negative visavis those companies. Thats something were seeing more and more, which is groups are using companys brands to promote their own agenda by taking a negative view. Which companies have to be cognizant of. Can i ask just a broader question. Wouldnt it be better if corporations stopped giving money at all . Stopped all of the lobbying . Would that be a better outcome or not . In a what i would say is an idealistic world, yes. Heres what i say, you know, i teach a lot. Thats something thats very active on campus. I said look at the resources that the federal government has to gather information. If you believe in the purist form of lobbying, which it is providing information to legislators to make informed decisions, our government does not have the resources to gather and analyze information. We do have to make sure when theyre getting that information, theyre getting information from many perspectives and its rigorous. Eliminating all forms of lobbying would make worse decisions. Lets take lobbying out, but what do you think about campaign donations, pacs and the like from corporations . Wouldnt it be better for the credibility of everybody involved if we just said were not doing it . Who does finance campaigns then . Individuals. Individuals . Individuals. If individuals want to donate, go with god. God bless them. But weve capped individuals. Weve restricted some individuals. We have look otherwise dont you think to the public the perception whether its real or not is that its just a corrupt system, right . Just teachers unions and other unions. By the way, im not sure i would allow unions to do it either. Thats big of you. Its not big of me. I dont think you want i dont think you want i would like corporations to make their voices heard about a lot of things, like the Capital Gains rate, like the Corporate Tax rate, like this. You let the government go unhinged on what it would like to do in somehighminded moralistic way, i want corporations to be a i bble to g them back to earth on whats kw good for the economy you and i would agree we dont agree on anything. I think jay agrees on this. All three of us are going to agree on the following we would prefer that folks in congress and the administrations have no ownership of individual stocks in their name, and the reason, i think we agree that thats a bad idea generally speaking is the perception is that then the system is either rigged or people are using information incorrectly, and its unfair and that thats a bad thing for society to believe that thats how all of this works. And i would put it and what im saying is that the donations im putting in the same category. Not the same thing. I dont fully agree with you. You dont . You dont have to. You said you did i thought we all agree. You and i agree. Weve talked about this before. Not completely. I said id like some private sector experience. This is what i advised and tried to promote, which was very limited windows in which representatives, senators could trade. The idea that you can trade on a daily basis, on a quarterly basis, thats not necessarily. You cant make people sell all their stocks, private holdings, Capital Gains when they come in, and people should be able to invest for their retirement. When you see a congressman and there was one part of the bill against tiktiktok, by default t American Public is saying whats going on here. January 1 to january 15, you can rebalance your portfolio, you can sell, you can realize, and then you have a hardship exemption if somebody for some reason needs the fixes to this that arent polar ends are really pretty easy. Let me pivot since i dont know where im going on this the Republican National Convention Issue with you. The second issue is theres a piece in the journal that talks about how the Biden Administration is trying to enact as much as they can now that cant be undone if, in fact, the Trump Administration were to win and come back. And theres an argument that effectively they saw trump get into office last time and undo a lot of obama era lawsas quickly as possible through executive actions and others, and theyre trying to make these things permanent given some of the plans that i think were reading either from heritage or are from advisers and people close to the former president. We have processes in place that if people respect them, they avoid that whipsawing. The whipsawing is really dangerous, you know. Let me give you when you say whipsawing was the whipsawing also dangerous into the Trump Administration . I know the economic era. There was no whipsawing. You know, we take volcker, for example, very political law. Right. We tweaked volcker. We fixed some of the things that in implementation prove not to be correct. But did we gut the idea . Absolutely not. I think that whipsawing is very dangerous. Lets look at Energy Policy. The biden stated Energy Policy is to be restrictive on fossil fuels, yet we produce onethird more fossil fuel energy in America Today than we did seven or eight years ago. It would be a real shame if they put in place a bunch of things that could be used to prevent us continuing to what i say follow the Energy Policy that we have in the Biden Administration for political gain. Thats something that i think is quite dangerous. Im just disturbed that theyre even admitting the possibility that that could happen. What do you mean . Theyre doing things with the possibility trump could get back in . Thats thats a come to jesus moment for those poor people. Oh, goodness. Tell me again, theyre doing things now that in case trump gets so there really is a possibility that a convicted felon, if that were to happen . Apparently. Omg. Yeah, ive seen hes being sarcastic. Please. There are people at home who are going to tell me, hes not yeah, i dont know. But one thing that does switch, not the regulations but enforcement policy does switch, and thats something i think that Everybody Needs to be cautious about. You see a very active ftc. When i was chairing the commission, we were very active on behalf of retail investors. Switching back and forth in enforcement policy, its fine. Its part of what elections are about. But forecasting, tell people what youre going to do. Be clear. Dont surprise them with the enforcement actions. How many of the things if former President Trump becomes the president , how many things do you think in the regulatory world change, meaning these lawsuits that the ftc and the doj have brought against google, apple, amazon, go down the list, do you think they disappear or continue . I think there will be a range of outcomes depending on meaning they get settled . They will all be evaluated as to whether you continue them, you continue them in whole or in part or you drop them. Fair enough. Jay clayton, always good to see you. Thanks for your insights on where we may or may not be right now in the world. What are you laughing at . I didnt really think when you say it, then i realize it might be possible and im just not have you not read a poll . Youre unsettled about this . After what you said, ill say shopping around on, you know, look ing at the e mall fee coas, im not sure where im headed. I dont think youre going to find salvation in europe. Theres Nothing Available in tuscany. I think joe is so excited he doesnt know what to do with himself right about now. Ive never seen you what was that Chris Matthews line . Youre excited. Tingle up my leg. Tingly. Becky quick, in omaha, nebraska, watching this saying what is going on at this table . Nah, its what we do, right . What we do. Anyway, when we come back, weve d prhare highlights from oma, ana eview of disneys earnings, which are out after the bell today. Squawk box will be right back. Raising you was no bed of roses. Are you getting me anything for mothers day . Go to 1800flowers. Com. Oh my gosh wow gorgeous i feel like royalty. Thank you. 1800flowers. Com. Happy mothers day. Happy mothers day so this is pickleball . Pickle ah, these guys are intense. With e trade from morgan stanley, were ready for whatever gets served up. Dude, you gotta work on your trash talk. Id rather work on saving for retirement. Or college, since you like to get schooled. Thats a pretty good burn, right . All right, guys, welcome back. Before we jump in to some of these other highlights, i should have been more quickly thinking. Im slow. You guys were talking about, oh, you know, this is whats going on on set, i just wanted to relate this one anecdote from this weekend. A guy came up to me over the weekend and said that he watches us every day and he doesnt have any idea what were talking about. Doesnt care about finances, but what he actually watches is for the interactions between us and he loves that so much. People think were getting off track a little bit. I literally have people coming up to me telling me thats why they watch us. He has no idea what were talking about, he fits in perfectly. Neither do we. Thats what i said. That was my response back, neither do we. Thats exactly what i said. But we can turn out three hours like its like with our eyes closed, almost . Hanging out, hanging out three hours in the morning. St that gs good to hear. If i was quicker i would have said it before the break, i did want to tell you that. It was a very nice thing, it made me happy. Tell him to tell his friends. Among the headlines that were here in omaha at berkshires annual meeting, the companys cash pile reached this crazy record high of 182 billion. That was up from the 167. 6 billion in the fourth quarter, no major acquisitions in sight, at least that we know of. Warren buffett said that berkshires cash and treasurys position would exceed 200 billion at the end of this quarter, thats what theyre on track for, and that theyd lov to spend it but they wont unless they find something with little risk that can make a lot of money. Heres what he said. I dont think anybody sitting at this table has any idea of how to use it effectively and, therefore, we dont we dont use it, and we dont use it now at 5. 4 , but we wouldnt use it if it was at 1 . Dont tell the Federal Reserve that, but prefer it. But the we dont we only swing at pitches we like. It isnt like ive got a Hunger Strike or Something Like that going on. Its just that things arent attractive and theres certain ways that can change, and well see whether they do. That is a lot of cash. By the way, we were using 182 billion, which is the cash berkshire has at its headquarters. Youll see below me theyre talking about 189 189 billion, thats whats quoted in a lot of different numbers. That includes the cash, i believe, at the utilities, the railroad, and some other extra places. It used to be a much smaller number. That cash is just growing at a Pretty Amazing clip, and now it really does make a difference. Buffett has already referred to the cash at headquarters. Theres a lot of cash in the couch cushions around the edges, and now that gets that number to 189 billion. The Berkshire Hathaway annual meeting, theres always a little bit of a fun feel about some things that are going on. We actually caught up with a few surprise guests like members of the Harlem Globetrotters and actor and shareholder bill murray who had a surprise role in an annual Berkshire Hathaway employee tradition, that was the 250,000 competition for the march madness bracket. This year i invited two more people to participate in this affair, and today i want to report the results. Oh, we got some results. We got the results. Here we go. Lets go to the score card. Hold the jersey. And we go to the score card, and there were approximately 64,000 employees at berkshire that entered the contest, and the winner got that entered th contest, and, becky, i am happy to report finished 29,488. Might havely above average. Mr. Murray who knows basketball and all of that sort of thing, but he came in 54,491. Wow geez so not only and where were you in it . I came in about where becky is. Well, ice didnt want to be beaten by a girl. [ laughter ] but i knew i wouldnt be beaten by murray. So, guys, bill murray explained what happened. Actually had his bracket in his pocket. It was folded a million different ways basically rooted for the teams that he wanted to win. Not the ones that he thought would win and thats why he wound up i think with 31 wins at the end. Buffett had 38 wins at the end. Just goes to show, pretty tough. Joe, i know youve been invited to participate and havent. No, i havent. Regular cbs one. Did better didnt have the tv one. Less than 100,000 out of 3 million, i think, but, bill but, bill had uconn going all the way for shoe. Uconn to win. Everything else wrong. I knew he would have. 31 right. I think. Yeah. He got 31 right. He did have the winner in the end. Just said, yeah. I put in who i wanted to win not who i thought would win. And trying to see if from his heart. Still up here. What was that . I finally had purdue. At one point, 36,000. Finished 70,000 or something. But out of a lot more we will continue talking about gambling and other things in a little bit, but when we come back, disney delivering for investors. That is the question. Were going to find out later tonight the numbers coming in. Playter, at the university of Southern California cleared out by police yesterday. It lateston camp ipres it ottss coming up. Were coming right back. Sure, im a paid actor, and this is not a real company, but there is no way to fake how upwork can help your business. Search talent all over the world with over 10,000 skills you may not have in house. More than 30 of the fortune 500 use upwork because this is how we work now. And theyre all coming . Mthose who are still fortuwith us, yes. Work grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Welcome back to squawk. Tyson foods rising in the premarket to a 15month high reporting quarterly results. Earnings adjusted 62 . 62 cents a share, should say. Better than 39 cents a share expected. Revenue 13. 07 billion dollars. Slight miss. Overall prices increasing and volume declined 1. 5 confirming revenue outlook growth. That stock up a little over 2. 5 now. Joe . Disney Second Quarter results out before the market opens tomorrow. For a look at the companys outlook and streaming landscape and more we bring in jessica, senior u. S. Media and entertainment analyst with bofa securities. Where are we in the, is it a turnaround at disney . What are we calling it at this point . Theyre on a path. On a path . A path for growth. The right ay . I think so. Remember, just came out of a brutal proxy fight, and spent the last year restructuring with bob iger. Restructuring. Now the focus is on growth. The most important number that youre watching, you definitely dont want to disappoint. Some type of profitability for streaming or ads or what . Streaming should be profitable in the fourth quarter. Not the second. I think sub numbers important. The kquarter where the charter deal takes effect. A nice sub number. Profitability is very, very important. Parks very strong. Really . University parks, people pointed to . May be to benefit of disney. One of the things comcast said on their Earnings Call was that cruises were very strong, and disney, of course, has a new cruise shim and multiple ships down there and may benefit from that. And i think another thing thats going to be very important is free cash flow. The newish cfo has given guidance for cash flow earnings. All of that will be important. Whatever diller is on, he says stops neglecting legacy assets. Theyre very valuable. How are things with the legacy disney . Hes right. Generating tons of cash, which is being used to invest in other areas, but hes absolutely right. The Cable Networks are important. What they say, if the nba news c comes out we all expect disney to renew nba and very important for growth going forward. How concerned are you about what it could mean to Warner Brothers, if they dont get it . And how happy, or not, would you be if parent company, this company, Nbc Universal gets it . Thats a horse of another color. Okay. If Warner Brothers discovery does not get it, that would its almost a nowin for them at this point. Either they pay a lot more money or they lose it. If comcast gets it, nbcu gets it, that changes the game. Changes the game. Its a game changer. So its worth it . See a twoplus billion handle on it, valuable. Worth it . Nba sold out, its so important. Should zaslav bid up . Problematic if they dont get it. Problematic if they do get it at that price, though . Thats the flip side. Right. Weve written about this. Almost a no win. Ether pay up and effects 16 have to bring numbers down again or dont get it. Numbers come down because their affiliate will get torched. Talking about paramount . What do you think . Its a little bit of a mess, but our view is that it will take a while to work out. The sony apollo deal has its difficulties. Ultimately, very patient. You think something happens . Ultimately. What does ultimately look like . Probably not in the near term. So this could go on for months and months. Okay. More content then, for us. Right. And when do we know who takes over for iger . Never . You know, this is not a great time for him to leave. Again, i think nelson pelsen, theyre going to come back if the stock doesnt perform. He has a couple years to really drive the company to a different level. Good. Thank you. Thank you. Thanks. Oh oh. Still me. Programming note. Dont miss our interview with disney cfo Hugh Johnston tomorrow. Right on the show here. Yep. First quarter results. Well see, tomorrow. It is 8 00 a. M. On the east coast. If youre interested. Youre waging squawk box on cnbc. Im joe kernen along with becky quick and Andrew Ross Sorkin. Becky reporting you know by now probably from omaha, nebraska. 7 00 a. M. There. Yes. Following the, did that so fast. So fast. Unbelievable. Didnt say its 9 00 a. M. You knew didnt say 7 00 p. M. Berkshire hathaway shareholder meeting. Speaking of that apple, American Express and a Company Called aww when greg takes over this place. That, you probably know, Warren Buffett, singing praises of some of his companys top Stock Holdings. Although berkshire revealed this weekend it cut its stake in apple by 13 . It get into that story later this hour. Other things were talking about. Watching the New York Times reporting. Talk to jessica, whos still here. About that bid. Global paramount decided to open deal negotiations with Sony Pictures and private equity firm apollo. Exclusive talks with Skydance Media ended friday. And Howard Schulze weighing in publicly on starbucks. Worse than expected quarterly results. And resulting stock plunge and a linkedin post he said the Company Needs to focus more on Customer Experiences. Not just transactions. I came up with something and its kind of pithy. Whats that . Queen what . Clean, quick and caffeine. All i want. Clean, quick, caffeine. Clean, quick, caffeine. I dont want it dirty. You know . Your bathroom open to every Single Person on theplanet. I want it to be fast. So not one of those lines, and i dont want some fu fu, weird concoction. I want caffeine, and i want it now hows that . All right. Pretty good. Quick sounds like you can spell quick kwik. I want more than that. If im paying. Can i have your autograph . What do you want . No. Becky has a cup of starbucks actually has her name on it. Did you see that . I saw it. I didnt go down there. Yeah. Its here. Somebody did. And like i want the fullon. I dont want the qr code on my cup. How about this . How about we say clean, quick caffeine and so much more. There. Fixed. There. Thanks. Everybody onboard . Yep. Okay. All right. A look at futures this morning. You see now they are indicated higher. Dow futures up by almost 150 points. Nasdaq indicated up 50. S p up by about 20. For more on the markets now we bring in our own mike santoli. Hey, mike. Made it back. Safe travels. Mike here all weekend, too. I was. Yes. Felt like we accomplished what we needed to do out there, becky. I am back here at the new york stock exchange. Where the markets are set up for the week. S p 500. Relief last week. Yields coming down. Earnings worked through pretty well. Some of that moderate Economic Data. What weve been doing for a while in a pullback going back to areas of february and march when everybody embraced a soft landing, thought rate cuts, a Strong Economy. Piling up. Challenges. Yields higher. Maybe the feds waiting longer. Obviously priced in some of those good earnings. So far doing okay. Right at the 50Day Moving Average for s p. See if we jump over that we early premarket look to the upside. Banks have been a very strong area of this market. I think suddenly outperformed recently. Oneyear basis. Now ahead of tech. One year ago just coming out of the Silicon Valley bank disaster. Clearly a depressed moment to start counting how theyve done. Over two years, trounced banks. The high, you see the blue line. Obviously something generally encouraging when banks are outborming. Br berkshire, unique company. Ways to compare to component part peers. Traded very closely over the last year. Kie insurance etf. Treated largely as an insurance company. Geico, massive profits latest and last year. Held up here, too. Apple way ahead of what apples done. Trimmed that position over two years apple has sort of switched boxes with ump. The iversification, by design or good luck actually worked to benefit of berkshire here and apple still 40 of the investment portfolio, of course. Its not insignificant. Berkshire diverged in terms of price performance, becky. Talked a lot about that. Came as a surprise to us when we saw the 10k saturday morning. Scrambling trying to figure out, a. , how much theyd sold. What it meant. Then trying to get the answer on why. Im not sure we entirely understand. Mike, stay here while we talk a little more about this. Berkshire hathaway actually sold another 116 million shares of apple. That is its Largest Holding as of the latest quarter. The change may be a bit of a surprise. Buffett called apple berkshires second most important business after insurers and took time to reassure shareholders the berkshire portfolio will hold these very a very long time. End of next year i think it extremely likely that apple is the largest common Stock Holding we have. Now, we can buy really Wonderful Companies in the market as businesses. We cant buy all of them. I mean, all of the shareholders, we cant buy 90 or 80 or anything like that. When we look at others in apple we look at them as businesses. Theres differences in techs, factors, management, responsibility, a bunch of things. In terms of deploying your money, we always look at every stock. Every stock as a business. And we dont we have no way, to attempt made to predict markets. No attempt made to to pick stocks. Mike, still not entirely sure what he did with the apple stake. Why he sold it. Sold out about 30 billion. Guessing. We dont know what price he sold at through the course of the quarter. Looking at price end of the quarter, that suggests about 30 billion that theyve sold. He said still going to likely be the largest stake end of the year, but it should be. Unless they sell a ton more. Yeah. I think 40 of the portfolio. Second runnerup bank of america. Only 10 of the portfolio. Have to celtsell a lot for it nt bes he did say in the meeting he anticipates, unless something goes really haywire, it will be one of their Major Investments for years to come, when greg able takes over the portfolio along with American Expression and cocacola. You and i tried to figure out on as a saturday, selling this to raise cash, you see a target . Something you really want tobuy when you already have over 180 billion in cash or because worried whats to come and think maybe turbulence in the markets or Financial System that creates opportunities . Yeah. I do think that warren, even there, took pains to say it was not some kind of new reassessment of apples worth as a business. I would look at it from a portfolio perspective saying apple shares were up over 40 in calendar year 2023. That made it a very large portion of the common stock portfolio. 43 or something at its peak. A general orientation really not minding having a lot more cash around. Seems to want to have a huge financial cushion. Seems like 5 Treasury Bill rates are a high hurdle for new investments and did give a nod in the direction maybe corporate Capital Gains taxes go up, but as i said over the weekend. The embedded profits in American Express and cocacola are a lot higher. You only sell now to get a better tax rate if you think you eventually might sell the stock anyway at a higher tax rate. I guess the takeaway is simply that it got really big as part of the portfolio and if you have a general orientation of maybe, you know, husbanding cash here, might make some sense. Who knows if there was a kind of, oh, apples hitting a growth lull or Something Like that. Interestingly, the amount he probably sold, berkshire probably sold First Quarter is roughly equivalent to how much apple bought back in the quarter. So yeah. That system continues to work. Yeah. He did take pains to, to praise tim cook, and to say that he thought apple was still a Better Business than most of the other businesses that they owned. Right. Yeah. Anyway, mike, thank you. Great work over the weekend, and its really good to see you. Joe . Coming up, bitcoin has been rallying recently. Actually just pulled back a little bit. Up above 65,000, but it is back above 64,000. Caulking currencies next. Then much more after the Berkshire Hathaway annual meeting, including why the conglomerate is reducing its stake in apple, which just finished. lbeig bk. what took you so long . Im sorry, there was a long line at the thai place. You get the sauce i like . Of course youre the man i wish. The future isnt scary. Not investing in it is. Nasdaq100 innovators. One etf. Before investing, carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com with gold and copper prices pushing towards alltime highs, investment objectives, u. S. Gold corp is advancing its environmentally friendly gold and Copper Mining project and creating american jobs in mining friendly wyoming. With a Proven Management team and board, a tight share structure, and a solid cash balance, u. S. Golds portfolio of worldclass assets are creating American Growth and homegrown Strategic Metals as the us moves towards an electrified future. U. S. Gold corp. Welcome back to squawk box. Its been a couple weeks since bitcoin and pricing of cryptocurrency, well, volatile, maybe the word. More on that in equity markets bring in founder of pomp investments. Good morning to you. Good morning. So the having happens. Its been volatile. I dont think we can put up the price right now but a period of time. Lowest came down to at one point . 57. 57. Moved back, but obviously not to the heights. Whats happening here . I think having price actions should have expected. Historically runs up in the month before only goes up 1 or 2 in the month after. Seeing about that. Last week i think bitcoin sold off because people realized, maybe the u. S. Economy isnt as good as thought. Not getting cuts. Now down to one. Not getting rate cuts is that bad for assets that trade in a risk environment . When we see that, though, all of a sudden retraced the entire selloff. Right. Right back. One of the most Interesting Data points is gbtc, saw 78 days straight outflows. Once approved. Friday first day of influx. About 63 million. That doesnt mean all selling is gone. 78 Straight Days people took money out of the fund and friday started putting it back and price rallied. What does that say about the overall scheme with bitcoin and more importantly the etf world . Yeah. So whenever you see the etfs get approved, right, everyone was reik, oh, the institutions are waiting to pour capital in. Takes time. Investment committees, talk to clients, go through their processes. Fortunately or unfortunately some are bureaucratic and going to take time. Now seeing flows persistent and were excited about it. Another data point really important is bitcoin although volatile day to day, the 200 Day Moving Average just hit an alltime high. Crossed over 50,000 first time. Over the long run bitcoin continues to trend upwards. Even though on a daytoday basis prices last week blackrock saying seeing increased institutional interest in crypto. In bitcoin. How much, how many pension plans, for example, have bitcoin now . Got to be single digits. Right . Its really not adopted widely by fiduciary types. Is that coming . Youve got to explain the definition what falls into that bucket . Raas definitely buying it. Large wall street firms buying it. Blackrock, fidelity, others nonbitcoin funds into ap etf. Calpers . I dont know if theyre doing it yet. Sovereign wealth funds definitely. Go around the world trying to get into mining, exposure to this asset. Play us out, but quick, ethereum, this lawsuit effectively accuses fcc considering security and then sort of, bait and switching everybody. What do you think of that . And what do you think long term means . United states of america has an Amazing Court system and weve seen over and over again. S. E. C. And maultiple players go to court. Simes s. E. C. Wins, sometimes dont. I think jumps withink judges wi out. No answer. I dont think anybody knows. When we come back, talking about the oncampus protests here in the United States. Youre watching squawk box and this is cnbc. Ameritrade is now part of schwab. Bringing you an elevated experience, tailormade for trader minds. Go deeper with thinkorswim our awardwining trading platforms. Unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. And sharpen your skills with an immersive Online Education crafted just for traders. All so you can trade brilliantly. You know whats brilliant . Boring. Think about it. Boring is the unsung catalyst for bold. What straps bold to a rocket and hurtles it into space . Boring does. Boring makes vacations happen, early retirements possible, and startups start up. Because its smart, dependable, and steady. All words you want from your bank. For nearly 160 years, pnc bank has been brilliantly boring so you can be happily fulfilled. Which is pretty unboring if you think about it. Welcome back to squawk. Israels army ordering tens of thousands in the Southern City of gaza to evacuate from the area. Israel needs to invade in order to defeat hamas. Yesterday hamas fired rockets from an area injury three israeli soldiers. Here in the u. S. Tensions still high on College Campuses among the latest flash Points Police cleared a propalestinian encampment at usc over the weekend. Joining us to try to make sense of all this, dan senor, former policy advisor in the Bush Administration and host of a podcast, call me back. Talk first whats happening in rafah or about to happen in rafah. Yeah. What you think the imp flo implications mean for security . Not terrible concerned about this but eliminating hamas, israel is. Hamas leadership likely in rafah. A lot of hostages likely in rafah. The israeli consensus probably just in israel, struck by this, from right to left. Most israelis are is, this war cannot end until the threat of hamas is removed. So these crazy kids taking over College Campuses are unnerving and quite depressing, actually, to watch from afatr, but they cant let that affect what they do in rafah. Basically theyve found since middle of march israel is pulling back. Removed most ground forces. Engaging in negotiations, not putting military pressure on hamas and right now no resolution. No hostage negotiations. What exists of hostage negotiations feels on cusp of collapse and feel nothing for it including, under more pressure here. Saying we lose no matter what. Lets finish the operation. What do you make of the argument, one of the arguments made on campus and one argument made by the Biden Administration thats putting pressure on netanyahu that it is almost impossible to eliminate hamas, and that, in fact, this, that these efforts are creating additional members of hamas, if you will . Yeah. An argument that the Administration Made to the israeli leadership from the beginning. You cant eliminate and idea. Its and idea, always young palestinians acceptable to radicalization and youre radicalizing more of them. That may or may not be true. One thing hamas can do, use territory to wage war and territory to terrorize jews. When you remove their capacity to have a home base and build a military infrastructure, tunnels and still do, unchecked and launch operations from gaza. Remove that base of operations you dont eliminate hamas as an idea. You reduce impact of a threat. Make the same argument of the u. S. Kbagainst isis. Still jihadis running around the world . Yes. Does that mean u. S. Should have confronted them . Of course. Removed base of operations. Nazi sympathizers around the world still waving tiki torches got a Bed Bath Beyond but dont have germany in which to wreak havoc. The other side, charlottesville reportedly pushing back against antisemitism probably a lot of people on College Campuses right now talking about look, i find it the same people. Antifa. Theyre what is professional so frustrating to me is i actually understood the outrage against what happened in sharlsh charlotteville in 2018. And many bad people. On both sides. Joe biden said one of the reasons he ran for president what he saw in charlottesville and many of those voices today are, at best, silent about whats happening on klCollege Campuses. At worst providing cover expressing sympathy and sold da solidarity. I dont say good people. Bad people on both sides in charlottesville. Let me ask you this, though. Do you think at this point that biden, chuck schumer, are they talking the talk or now i see some ammo might not go to israel. Fine for biden to say both sides. Heard him say thats people dont understand what israels doing or what the palestinians are doing. Did a both sides a couple weeks ago. Is that real or does he have to say it to try to win michigan . Whats really behind it . And schumer . What was that. The first part. The administration has a twopronged strategy. One hand more or less providing israel with supplies to fight this war. There are reports you refer to holding back some munitions that the administration hasnt confirmed that. Reporters trying to figure out if that was true and bure bureaucracy. Dont know that. Need to fight the war. Providing munitions. The other side publicly pressuring israel, at the u. N. , green lighting that u. N. Security council resolution, bad resolution that passed in march. Schumer speech the administration knew about. What was that . A way to reduce military pressure. And President Bidens state of the union address. Problem with the strategy, giving israel weapons they need same time pressuring publicly. The leader of hamas watching, why do i node to cut a deal with israel . Pressure is mounting on israel. And ask about College Campuses in context. Guys, in the control room, get hims and hers. Did you follow ceo of hims and hers. The ceo took to twitter saying more courage greater than College Degree if youre currently pro testing against the genocide of palestine people and for your universitys divestment from israel, keep going. Its working. Plenty of companies the ceo is eager to hire you regardless of university discipline. Effectively saying he wants to hire them. Stock, by the way, um p this morning but took a tumble friday. What do you make of that . Highly irresponsible for leaders in our society at elite high schools, private schools were seeing it. Youre seeing it at elite kl College Campuses getting into the activist pimm. Encouraging fermenting activism among young people. Its going to backfire. Certainly backfiring on american campuses right now. A catastrophe for these universities and google had to fire Something Like 30 employees protest google doing business with the israeli government. And there are Companies Ready to hire them. Exactly. Corporations and universities should not, theyve been there have been, playing with the dials to get these activists students. They want them. I think it is, like, blowing up in peoples faces. Do you think the federal government should defund the universities . I dont think they should defund all the universities but i think use the lever of federal funding as relates to research and other areas for universities that are fermenting and engaging incitement of violence. This is not subtle political activism. Right . They are using language on College Campuses like kill the jews putting up signs saying hamas, next target pointing at students. Globie ize intefadeh. Using military response against students. Its happening on campuses. Administration and universities not doing anything about it. As relates to this, today is holocaust remembrance day. 10 00 hour in israel this morning the whole country stops two minutes there is silence. The whole country takes a moment of silence. Right now, right at this moment, there is a guy named alex dancy, and hes one of four residents, either killed or taken hostage. He is sitting in a dungeon in gaza. Been there over 200 days. Was born by Holocaust Survivors in 1948 in warsaw. Moved to israel, made his life there. His family are Holocaust Survivors and hes now being held hostage by people who use the same rehetoric as the nazis. A day of rage being organized. People will stand up, including here in new york city against businesses here in new york city. Against jewishowned business. Its the language of crystalknock, of lawsuitsinazis now. The idea that the federal government shouldnt take action against universities and ceos of company shouldnt think twice about the rhetoric they use. They are playing with fire. It is a very scary time. Dan senor thank you for being here. Always appreciate talking to you and you trying to help us through this. The only answer they could come up with for hakeem je jeffries, why has israel been ins inscrim nant. Fighting around of fronts. Coming up, former Economic Advisor get to say that. Can not only change the channel but Say Something on the air about it and register my own displeasures is that okay . Former counsel of economic adviser Glenn Hubbard joins us onset r a fowideranging conversation. Hakeem was good. He was great. Youre watching squawk box on cnbc. D. D, they have to be hardworking. Its very simple. Wherever you are in the world, when you come to a different culture, you meet people of very different backgrounds, but you find out that they have the same ambitions and the same fears just like yourself. Im so sure that travel is good for the world. Its really the best to engage with the locals and the destination. And i think travel helps broaden the human mind and makes us kinder. And thats fantastically valuable. 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When you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. Visit indeed. Com hire and get started today. Check out shares of robinhood. Company says it received a wowomen womens notice recommending enforcement action. Robinhood says disappointed s. E. C. Issued the notice represented to its crypto business. Looking a the that stock off close to 4 now. Keep our eyes on it. Price of bitcoin as well sitting at about 63, 64,000 dollars, and we will keep our eyes on that one, too. Our next guest argues growth and productivity need to be front and center on the campaign trail. In the 2024 president ial election, but he says politicians are anxious about the disruptions that frequently accompany growth. Lets welcome former white House Counsel of Economic Advisor Glenn Hubbard. Now Columbia University professor of economics and finance. His latest piece for the wall street journal is titled put growth back on the political agenda. And its good to have you here. Thanks. Rhetorically i ask the question, when i hear about the, when you do hear some people pause at the miracle of the biden economy, so what do you attribute, if it is a Strong Economy in terms of growth, and unemployment tell me where the progrowth policies that youre talking about. Where were there . I must have missed them. Because there havent been any. Theyre not there. We are potentially on the growth of a miracle potentially because of a. I. You wouldnt know it on this side. President biden mixed up industrialism and pro policy. The reason politicians do that, though is growth requires disruption. They dont have an answer for that. There are answers. They just dont have them. When you hear a republican talk about progrowth policies you think tax cuts. Or getting rid of a lot of overregulation, which is certainly something you could argue we need at this point, but what else . What does progrowth mean . We need both of those things, joe, but we need two more things. One, push the research frontier. More public support for basic research. How do you cut taxes and provide more money for research . Going to get there. Second thing we need is address the disruption of people being left behind. There are a lot of very inexpensive things we could be doing in education and training in helping communities. We need to rationalize the spending we do in the economy on entitlements. We also need to be raising defense. Another subject. You think former President Trump, if in office, would actually deal with entitlements . 100 , no. The u. S. Needed to do that. A separate question, actually. This goes to, thinking about President Biden, former President Trump. The Federal Reserve. There was an article that came out that said that one of the things that former president would love to do if he got back in office effectively end the independence of the Federal Reserve. Some say, doesnt want to do this. Advisers just sort of postures. No question he is going to be, did it last time, out there, maybe screaming and hollering how the Federal Reserve needs to lower Interest Rates. And what that will do, a. , to inflation. Curious what you think about that. And on top of that, his efforts to put tariffs on china and what that will do to inflation . Its a very hard thing, i think. By the way, for President Biden, because President Biden is not the kind of guy who goes out and screams at the Federal Reserve nor pushing for the same type of tariffs. You can be very popular doing what trump is doing, but it also has its own implications. To be clear, the backdrop, i think inflation is stuck at a level above 2 , if the fed doesnt take further action. The fed is definitely on the hot seat. I dont think President Bidens completely innocent here. Hes tried to jawbone the fed, more quietly, and pursued his own protection by his policy. I dont know what former President Trump does or does not do to the fed but i can say kpra compromising the fed is a very bad idea. And you saw the article biden people were quietly jawboning the fed. Love rates lowered too, but do you think biden would let the trump tax cuts expire . Raise taxes on how many average people . Mostly average people, taxes would go up. You think is that a progrowth policy to extend those tax cuts . I think the tax cuts, if you take the tcja tax cut and jobs act together, very progrowth. Mainly because of what happened on the business side. I dont think President Bidens proposals would raise taxes on everyone. Hes concentrated mainly on carveouts. Mainly thats about tax increases on businesses. Why is that a good idea . Its not. Its not a good a Capital Gains rate . What about taxing unrealized income . None of these all of those are bad. Capital gains not tabsed on realization means youd pay taxes on phantom income. Do you think when President Biden says he wants to tax Capital Gains same rate at income that he does that as a posturing measure, for the public . Because its never going to happen. Or does it because he genuine wants it to happen . I cant say he genuinely wants it to happen. I predict not going to happen. Traditionally preferences under both parties. We agree there. We have to go. Whether he wants to wont touch that. A headline came out about your university columbia. I dont know if you saw the news. Just canceled universitywide commencements happen may 15th. Individual School Ceremonies will still happen. Im curious as somebody who spent so much of your career at columbia what you think of all thats happening and specifically about this decision . Well, obviously a distressing situation on campus. Essential tradeoff between free speech and active freedom one hand, which are super important, and my ability to teach and learn, not be compromised by your exercise of free speech. A fine line at columbia and other universities. More distressing the rampant antisemitism. Where do you think that comes from . I wish i knew. A probing exercise in universities, because youre not talking about traditional sources of antisemitism here. Right. Do you see it, though, yourself . I definitely see it myself. I see it in listening sessions with students in our community. You remember when we first started talking about outside agitators. Kind of acted like it was almost not true. There have been theyre there. Theyre there, in a huge way, and theyre funded. And, you know, theres a reason why these things spring up simultaneously. The other conundrum. Becky, by the way, one of the first to point this out. Give her credit. The agitators are helping, but these kids are the ones letting them on to campus. Meaning, theyre not just sort of a ecosystem here. And back to what i believe. That you probably would push back. Whats that . That weve been hiring academic far left academics and College President s for 10, 15 years. Not pushing back on that. Not pushing back on that. Glenn the same time americanism hating the west and patriot, b. S. , andrew, coming home to roost in the a very bad way. A very bad way. Im not lights are on on the sorry side if you ever want to come home. Left on a very long time. And i keep replacing the bulbing because youre still not home. Get you some l. E. D. S. Thank you. My pleasure. Coming up, baaing to omaha, nebraska, where becky is. Highlights from Warren Buffett and this past weekend. Berkshire hathaway shareholder meeting. Do not go away. Squawk box returns after this. jen so we partner with verizon. Their solution for us . A private 5g network. ella we now get more control of production, efficiencies, and greater agility. marquis with a custom private 5g network. Our customers get what they want, when they want it. jen now were even smarter and ready for whats next. vo achieve enterprise intelligence. Its your vision, its your verizon. This morning weve been bringing you all the news from this weekends Berkshire Hathaway annual shareholder meeting, and this year things were far more berkshire focused than what was really happening beyond that. However, they did get a few questions about what was happening beyond just berkshire, the economy and the Federal Reserve. When it came to the fed, Warren Buffett said the Central Banks needs help from lawmakers to try to rein in the growing u. S. Deficit. The fisk the deficit is what should be focused on. Jay powell is a a not only a very good human being but hes a very, very, very wise man, but he doesnt control fiscal policy and every now and then he, he sends out kind of a disguised plea for please, please Pay Attention to this, because thats what the trouble will be. Buffetts 93 years old now and acknowledged hes slowing down some as he gets older and at this annual meeting a lot more open discussion about what berkshire will look like after buffett. Well see how the next management plays the game out at berkshire, and fortunately you dont have too long to wait on that, generally. I feel fine, but but i i know a little bit abctuarials a tables and i just well, i would say this. That i shouldnt be taking on any fouryear employment contracts, like several people are doing in this world at an age where you cant be quite that sure where youre going to be in four years. Now, buffett was onstage taking questions more than five hours. The day before, on friday, he toured the entire floor where all the vendors were set up. Some of the businesses that buse there from sees candies to fruit of the loom, clayton holmes, the squishmall lows and talked to all the employees that had come out to work for the weekend. But andrew, you pointed out that really poignant line at the end of the meeting, and that was the one that jumped out at me too, where he said, i hope yall come back next year, and i hope im here too. And that was the line where he got the standing ovation from people as well. It was it was very poignant, and i told you, i didnt cry at that line, but i cried earlier. Physically. I dont know if i should say that, but i did. If you could have hired buffett to be president when he was 77 to 81, that would have been fine. Or even 80 to 84. So, its not people age differently. Maybe its the mileage, not the it was interesting. Its genetics too. People age differently. They really do. I dont know what you thought of that, becky, because i know a whole bunch of people were talking about that particular line afterwards, and hes been very public over the years about being a democrat and supporting democratic candidates, and a whole bunch of people say they thought that was a shot more at biden even than trump. I dont know if you think that was the case. You got to read your own which part . The line where he says signing fouryear contracts . He wouldnt take a fouryear contract, and that several people are doing that right now. It was a shot for a democrat to take a shot at biden. Potentially. I dont know. Yeah. Look, i think hes been pretty clear that mentally,speaking of himself, mentally, hes still able to do all of these things. Hes glad he has a job that allows him to do that, to be able to continue to do his job as somebody who, he said, physically, he is slowing down. I will just say everybody ages differently. You remember charlies great line when he was 99. He goes, i dont have near the energy or stamina i had three or four years ago. Yeah. Its like, whoa. So, yeah. By just yeah, everybodys different. Thats for sure. Im tired right now. You know what . Someones going to take that shot of me doing that and say i fell asleep on air. Media hype. Coming up, the fake news. The oracle of omaha and big tech. Were going to talk apple with gene munster and what he makes of Warren Buffett cutting his stake in the tech giant. Stay tuned. Youre watching squawk box on cnbc. And using workday to put finance and h. R. On one platform. Tim, you are a rock star. Using responsible ai doesnt make you a rock star. It kinda does. You are not rock stars. clears throat okay. Most of you are not rock stars. Oooh. Data driven insights, and large language models. Oh, thats so rock roll. It is, right. He gets it. Yeah. [crowd chanting] they ignored your potential, and mocked your ambition. But its not the critic who counts. With every swing and block, your game plan never changed. Some still call it luck. Let them. Because you know what its always been. Inevitable. All right, welcome back, everybody. At the weekends Berkshire Hathaway shareholder meeting, Warren Buffett warning a. I. Scams could be the next major growth industry, comparing the technology to Nuclear Weapons. He mentioned an unnerving experience with an a. I. Generated Warren Buffett. If i was interested in scamming, its going to be the growth industry of all time, and its enabled in a way i obviously, a. I. Has potential for good things, too, but i dont know how you based on the one i saw recently, i practically would send money to myself over in some crazy country. I do think, as someone who doesnt understand a damn thing about it, that it is it has enormous potential for good and enormous potential for harm. And i just dont know how that plays out. Joining us right now to talk about the state of a. I. Technology is gene munster, deep Water Asset Management managing partner, and gene, there were some real thoughtful discussion about this, just the idea that a. I. Could be amazing, could unlock all sorts of potential, but its definitely going to make it a lot tougher if youre looking at scamming, if youre looking at fraud and some other issues. He said the genie is out of the bottle with that. Id like to take one step back. You mentioned earlier, warren is 93 years old, and he says he doesnt understand this. I can tell you, his views on a. I. , whether its scamming or its potential, the enormous potential, enormous risks, are absolutely spot on. And i think the first phase that were going to see that is probably going to most impact our lives in the near term, were seeing a lot of, of course, investment from the hyperscalers, but the scamming piece is something were all going to feel, and hes appropriate at identifying that. Hes also appropriate at giving the opportunity as being enormous and the potential risks, and i love how he staked out the parallel between Nuclear Weapons and artificial intelligence, and ultimately, the world has done a great job at navigating that. Thats an understatement. And so, im confident that, ultimately, this will be a force of good, but just was blown away at just how well he identified the pressure points related to a. I. Gene, what did you think about berkshires sale of apple . Sold almost 116 million shares, somewhere around 30 billion based on apples price at the end of the last quarter. Absolutely caught my attention, and as i investigated, i think that it certainly misses the point. The big picture is that Warren Buffett is the worlds greatest investor, full stop. His largest position is apple. It was years ago. It was last year, yesterday, today, based on his comments, its going to be that way through the end of 2024. And so, my sense was that despite their tax selling that he had a resounding endorsement for the investment case. This isnt about bits and bytes for warren. He talks about the consumer use cases, and i think we see that in the brand. We saw it in the numbers, even in the march quarter, despite the fact that this business has not been growingfor the past two years or if you factor in fx, maybe fractional growth. Despite that reality, the company is still generating 90plus billion dollars in cash annually, and i think that is remarkable, and i put his comments as underscoring the strength that apple has. Gene, i want to thank you. Its good checking in with you on both these points. Gene munster. Lets take a very quick final look at where the markets stand right now before we hand things over. Dow futures up by almost 170 points. The nasdaq, up just over 60 points. Been watching the treasury market this morning, too, and i think the latest numbers weve seen on the tenyear, 4. 4 . The twoyears at 4. 79 . Gentlemen, looking forward to getting back there tomorrow to be with both of you in the studio tomorrow, and well kick things off for another week. We look forward to seeing you tomorrow. See you there. Yeah. Been a while. Its been fun. Endless week. You guys know this from last weekend too. Andrews been working for two weeks straight at this point, no breaks. You got to be tired. No breaks. Its all good. We like this. It is. All right, that does it for us today. We will see you right back here tomorrow. Right now its time for squawk on the street. Good monday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer at post nine of the new york stock exchange. David faber is at the Milken Institute global conference in los angeles. Pretty steady market ahead of the open, light on data this week but plenty of highprofile earnings from disney and uber to airbnb and arm. Tenyear remains below 4. 5 . Our road map begins with berkshires boom, a 39 gain in q1 operating profit. Meantime, buffet