Transcripts For CNBC Squawk 20240703

Of strong earnings. Airline also slashing its expected deliveries amidst boeings quality crisis. And teslas asking its shareholders to reinstate elon musks 56 billion pay package. That was back in 2018. This after, of course, Delaware Court voided that compensation earlier this year. Lets begin with the markets, set to open higher after the dow ended six straight sessions of declines. S p, nasdaq, russell did extend their daily losing streaks to three. Yesterday, as you know, the fed chair suggested that rates could remain higher for a longer period. Heres what he had to say about battling inflation. More recent data shows solid growth and continued strength in the labor market but also a lack of further progress so far this year on returning to our 2 inflation goal. The recent data have clearly not given us greater confidence, and instead, indicate that its likely to take longer than expected to achieve that confidence. That said, we think policy is well positioned to handle the risks that we face. First off, jim, welcome back. Thank you. Youre a sight for sore eyes. Thanks a lot. It was great doing a little fishing. You know what, i listened to this, and i keep saying, all right, so, we have all been saying this. Weve all been saying that he is pragmatic. Weve all been saying we have a problem with inflation. So, when he verifies it, i dont think we can say, well, this is a sea change for the fed. I think that the fed has said over and over again that you have to have inflation go down, you know, at least for he wanted several in a row, and david, i think if we act surprised, were phonies. If we think its a sea change, were phonies. Okay. Because hes hes looking at the numbers like we are. He said they have to have cooler numbers. Theyre not cooler numbers. He has to wait for cooler numbers. Do you think thats, like, anything different from what a pragmatic person would do . Im not questioning the stance, no. Why . Are others . Seemed pretty straightforward. Frankly, the market did not react. It already seemed to have been getting positioned for this likelihood, right something . Right, because what happened here, when you get verification i was watching the tape because i was ruining my vacation, and i kept thinking, well, this is the chance for the people who dont know anything to react. It turned out there were a lot more people who knew than didnt know. So, i just dont want to get into this thing i dont want to get in the horse race of the fed. Jay powell said, we got to have cooler numbers, so when we dont get cooler numbers and you have people still calling for three cuts, i mean, these are people who are saying, you know what, ive looked at the situation, and i really think that the eagles are going to win the super bowl against the chiefs. I mean, what the hell do you know . What do you know . The comment, jim, that maybe was a surprise was his forecast for yearend pce at 2. 8 . B of a is saying, the base effects in for december, for example, arent that favorable, and in their words, if we take him at his word, theres a real risk the fed may not cut until march 2025 at the earliest. Oh, geez, like we have a mind meld here. I just yellowed that, because i said, well, that may be news, but again, please tell me, other than jb hunt, who is cutting price, who is in trouble and has to let things come down. I dont see that. We have a president whos calling for a tripling of the chinese tariff, one of the few things thats happened thats come down is steel. Well, lets end that. Well talk about that in a bit. Lets come back to the Broader Market. So, your thoughts are what at this point, given we have been digesting for some time the idea that there are certainly not going to be six, let alone perhaps three, let alone perhaps any rate cuts during the course of 2024. I think we need to get to the point where people dont think there are any, and then we get some good numbers. Arent we getting close to that . No. We still have like bullard was talking about three. I had that conversation with somebody this morning that said, we might get a hike and not a cut. Im like, what . If he had not said if he had not said, were done, i think he would have hiked, based on these numbers, but where hes getting now on these numbers wait, what . You think if he had not said were done, based on where we are so if hed never said were done and just said were data dependent all along, theyd be hiking now . The numbers are worse than when he said that. You have to take that. Housing prices are the least affordable than theyve been in ages. Isnt housing one of the basic rights hes looking at . I look through these numbers, and i say theyre not nearly as bad. I think if the numbers were tabulated by, i dont know, by servicenow, by salesforce, we would look at the numbers and say, wait a second, these are not that inflationary. But, you know, when you calculate the numbers as what was on the cpi, i think that you could easily make a case that the fed should have raised one more time. I dont think thats wrong. Its just that whats happening, theyre not getting the desired theyre not getting the desired effect, and i think and the reason i say that is because if you go through Morgan Stanley and goldmansachs, the windows open. People will be able to make money. The private credit is going to be able to be good again. That just says were look out for more inflation. You even tweeted this morning, if youre looking at the banks, its about the fees in an environment where ib is ascendant. Theyre all raving about how much money theyre making off people. I couldnt believe that. As much as i love charlie scharf, that was a great quarter. But the fact is that they have all these new groups that are doing business, and thats smart, so its not like the fees are, like, you were getting you were being charged 10 for whatever, now youre being charged 15. They just have more fee business because they brought in a lot more fee people. David, we want banks to get away from net interest. Ni is a sucker game. We want fees. To your point, in the institutional business, i mean, in the Investment Banking and as well for wells fargo, there were significant fee generation yeah, charlie really i thought charlie did a great job. Bank of america, yesterday, got hit, in part, because of what you just discussed, Net Interest Income, Net Interest Margin. And usb this morning. Usb this morning. And were still, you know, jpmorgan is still dealing with the significant decline its stock had on friday, jim, which you also, i dont believe, were here for. It doesnt matter if i was here for it. It was very disturbing. It was between a barracuda and a king fish. By the way, i caught the barracuda, which is trash fish. The king, we ate. You throw the brkdarracuda b . No, there are locals who like barracuda. You give it a headache. Its not for the sport of it all. No, but lets go back to jpmorgan. Sure, jim. Sure. Since i read it in realtime. Yes. And i said, okay, so, we have really good quarter, and then jamie comes on. You know what jamies a little like dr. Strangelove. I was waiting for, no fighting in the war room. He said, look, i dont know why you would ever buy my stock, the world is coming apart, inflations raging, and i said to myself, hes issuing a sell on jpmorgan. Ill try to get him to have a good hold. I mean, honestly, if you listen to that and i happen to respect jamie. I think hes terrific, but he killed the stock. Worst reaction to earnings in 23 years. Thats a long time. Lets say he had just decided to be with me on the boat, stock would be at 190. If he had just decided to come on the fishing trip, it all would have gone so much better for you. Stock would be at 198. Peter sellers did play a lot of roles in that movie. I just want to make sure were you know, there are some moments. That movies very good. Sterling hayden, blacklisted, not really, he was fabulous too. He was, he was. Remember the fluoride coke machine . Yes, of course. Essence, yes. I do think that jamie was a downer. He was just a downer. Purity of essence. That was what it was. I was with a group of people who are very sophisticated mates, ill call them. Mates . They were mates. It was a punchup. I dont understand. Theyre sophisticated in the ways of the sea . No, when i read if their seafaring abilities . Mates . Are they pirates . No, listen, mate. Im now into that too. It was very hard to ignore his burstin where he basically threw cold water on a stock called jpmorgan. I see. Do you disagree with that . No. It has been an interesting earnings season for the big banks, jim. We had jpmorgan, obviously, to your point, with some of that negative commentary to a certain extent from jamie dimon. Yesterdays earnings from bank of america, not well received. But then goldmansachs and Morgan Stanley goldmansachs, by the way, again, we dont need to go over stuff weve already discussed, but well keep an eye on the financials. Just because youre not here, doesnt mean it didnt happen. The world ended because im not here, and i restarted the world. It is your world, and were just living in it. Thanks for that. Youre welcome. David solomon delivered the quarter weve wanted from goldman for a long time. It was a great feebased quarter. Morgan stanley, ted pick, he came in hot. You either felt that james gorman had just tanked it so that he could come in hot, or he could say, listen, when hes ebullient about m a, and about ipos, i mean, david, thats your world. It is. Welcome to it. Im back no your world now. The m a world, i would not share that ebullience. Theres a level of business that will continue to get done. As we get closer to the election, i think, certainly, from the perspective of companies considering a large transformative deal, which we have seen very few, of course, harder and harder to get done. So, well see. Can i have a little comedy hour . Do you mind . Can we sneak comedy in . And i aint talk comity. The ftc apparently wants to block tapestry buying capri. Thats stupid. Thats okay. You can use the word. Yes. It will not i mean, i guess theyre looking at the 0. 7 increase in apparel over the course of the last year. But this is being blocked, i dont know, because of jimmy choo . Is jimmy choo the issue here . Or is it Michael Kohrs . Im not certain. Im aware of what youre discussing, of course, if that it has been another concern overall in the market in terms of the ftc, again, preparing to block that. But i we have to protect the price what, the jimmy choo prices are going to go up . Is that what were worried about now in america . That toe cleavage takes precedent over Everything Else . There we go. They did get thats the ftc. They did get eu antitrust approval. Because its really critical. I mean, this is its comical. Im sorry. I didnt go to law school to youre away. You just come back, and youve still got it youre all up in the bundle about the ftc. My major was antitrust, okay . Kind of major really . Soft major, yes. But i was in law school . I was friendly with all the professors in antitrust. If they ever felt that the issue was, weve got to stop the price increase in shoes that give you great toe cleavage, we were talking mostly about chevron. I mean, this is lets just say, its comical. You know what this was when i saw it . I figured it was episode 11 of curb. We should point out on that deal, its a 57 allcash deal. How great is it for tapestry . As you might expect. Tapestry is up 25 . Next quarter is bad. But david, all i can tell you is that Michael Kohrs must be preserved. If you had gone into law, you would have been in antitrust, do you think . Oh, absolutely, thats my specialty, because i made a killing on the so cal deal. Professor reeder told me, that deal will pass. I took everything i had and i bought calls. It was legal. Bingo. Paid for the last year of law school. Well done. Thats how it all began. How it all started, man. He said, i think the deal passes. He was the professor, best guy in antitrust. Bless his soul. I think he would be shocked that they brought this case. Yeah. When we come back, a lot more on whats driving the morning. Bestperforming stock on the s p. Well talk about that. Some of these misses in travelers, asml, jb hunt, got some price target cuts on tesla and other calls on urban, ge, e. L. F. And danaher. Ring. 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. I dont want you to move. Im gonna miss you so much. You realize well have internet waiting for us at the new place, right . Oh, we know. We just like making a scene. Transferring your services has never been easier. Get connected on the day of your move with the xfinity app. Can i sleep over at your new place . Can katie sleep over tonight . Sure, honey this generation is so dramatic move with xfinity. United is up sharply in the premarket. The airline posts a quarterly beat due to strong travel demand. Company also slashing its expected aircraft deliveries for the year amid boeings quality crisis. This is what Ceo Scott Kirby had to stay. Our challenges in the industry, the capacity limitations, it is remarkable. We started this year with a wave of aircraft deliveries. We knew we wouldnt get all of those. We planned for 101. Were now planning for 61. The biggest impact on that is our cost structure. We hired enough employees to fly 101 airplanes and were going to be carrying that as we go through the summer. It will catch up. Thats interesting. Theyre going to try to make up for some of that by leasing some used airbuses, jim. This continues the fiasco of boeing. He was very calm about it. I expected that he would be more agitated, but he did a great job. Terrific quarter. We always wonder why everything every plane is an extremely full flight, and david, one of the reasons why every plane is an extremely full flight is because boeing is not delivering the planes that they thought. When was the last time youve flown where there was a seat . Its rare, it seems, that there are many empty seats on a plane. Thats been the case for some period of time since the end of the pandemic, certainly, jim. But you really believe that it that its simply capacity constrain for the industry to the point where theyre missing out on potential revenue opportunity . Look, their numbers the past year revenue seat models are excellent, but i think the fact is that you would like to fly lets say you had a route structure to San Francisco. Well, i think you could easily do four more flights, and theyd all be full since nobody can get on them anyway. And i think that whats happening is that they would just insert all the, you know, on any of the runs that right now we all know are extremely profitable because we look at the bill and we cant believe it. Right. Right. And there would be more competition. I mean, now, you have ftc worried about something thats impossible. The two things that have happened here is how theseat prices go up so much, id like to look at that. Right . I mean, dont you think thats yeah. Do you have and then insurance. Insurance. Do you have an entrant in the boeing ceo sweepstakes at all . Larry culp take larry culp off. David is working on a very big merger. Take him off. Take judy marx off. She would be good. Ill get that time 100 event. Are you going . Hang out with mahomes and who else . Ma homey. Yeah. Hes hes all over me. What . Im going, okay . Hey, like, wow. I didnt say anything. Its a great event. Yeah. Its a its not the first time. Well talk more about some of the Corporate Leaders that are on the list this year. Well get cramers mad dash, countdown to the opening bell, one more look at futures. This has been the pattern here where the premarket starts strong. Well see if it holds as wree trying to snap this threeday loss. Dont go away. Old school hard work 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. All right, lets get to a mad dash. Weve got an opening bell about six or so minutes from now. We havent talked lilly quite that much. We havent. We got to talk about it today, because of the latest potential indication for a drug that seemingly can do anything. This is well, it does i mean, if youre overweight, theres a lot of things that can happen. This is an overweight study for sleep apnea. These are people, nondiabetics, obese patients. Get this, david. The placebo, i think you might have been on the placebo. They did 4. 8 . But eli lilly did this is events per hour 27. 4 , and some of these numbers, i think the Insurance Companies have to take notice. Production for the baseline in line with 50 to 60 drop. In events of no, that is actually sleep apnea, in line with expectations, to be able to stop it. To stop sleep apnea. Yeah. And i got to tell you. What this is the reason why i bring it up is not sleep apnea, necessarily. Its the growing drum beat to the Insurance Companies that you better approve this. When you have a demonstrated, significant benefit thank you, la rink in improving severity of obstructive sleep apnea, also known as osa, then you, you know, this is really or add it to the list, right . Obviously, the reduction significant reduction in weight is the key, but its also potentially positive for preventing future heart attacks and or even stroke, i think. Yes, yes, stroke. You talked about what it may mean for certain addictions as well. They dont want that which is not yet on the they dont want to do it because they think theres other reasons why people are so, they do fatty liver, and fatty liver, its been remarkable. Thats a death sentence, okay . But you know what . Its been one of the great moves in the stock in a long time. There it is. Look at that. What . So its not more to go . Yes, as each trial comes in. I cant do anything. Fatty liver is millions of people. Millions. And the mets have won how many straight . The mets have won 9 of the last 12. Now youre a happy guy. We got to go. We t goto go. Well be right back. Announcer the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. Time is out with its annual list of the 100 most influential people in the world. This years Business Leaders include nadella, mark cuban, ellison, and nvidias jensen huang. The guest contributor writing about him says, while most of the industry focused on making mobile devices, he recognized that delivering the most powerful chips would unlock the next wave of innovation. Today, most a. I. Models, everything from Large Language Models to systems for autonomous driving to systems for science and health care, are trained on nvidia hardware. You can trace this innovation back to nvidia being in a position to design modern gpus and deliver them at scale. This is going out to a broad audience, jim, much broader than ours. They are now friends. They werent always, but jensen can win over pretty much everyone, as we know from the new yorker article. I would emphasize theres a faux horse race. Theres a belief like the other day, there was an article it meta would take every chip. Whats happening is that theyre all making alphabet, microsoft, theyre all making chips in conjunction with nvidia, and nvidias actually helping them, because nvidia knows they cant produce enough, and whatants to appease these clients. This whole idea of zuckerberg making an nvidiakiller, just read that. Thats not the statement of someone whos declared war against nvidia, is it . They like each other. I mean, geez, its okay. Opening bell at the big board today, education through music, providing Music Education to underresourced schools. And at the nasdaq, its the new york chapter of the lynx, a womens volunteer organization focused on African Americans. Its a nice segue into what asml said about q1 bookings and sales. They did keep their numbers, which i found surprising, given this was much worse of a drop than people thought. I thought people would say, asmlf, they make the biggest machines, you have to have them. They didnt have the orders we thought, so nvidia is weaker. It did not happen. Just so we know, this is really about taiwan semi. Taiwan semi didnt it could be about samsung too. Taiwan semi is up, and thats nvidias play. Anyone who thought that was the case theres real buy on taiwan semi is just saying, look, even though taiwan orders were down, just believe in some sort of interreg in the numbers will come back. Our government doesnt like them going to china because they make the theyre the most sophisticated, so people think its all nvidia. But i feel with taiwan semi up, what that says is taiwan semi doesnt need them now, but they will. When they need them, fine. Speaking of china, you briefly mentioned the president speaking to the steelworkers in pittsburgh today. Hes going to call, we think, for a tripling in tariffs on chinese steel and aluminum, an effort to shore up support in pennsylvania and ohio. Lets go over what he said versus what should have happened here. One of the great things one of the few things that has come down under biden, and it really doesnt have a lot to do with biden, but im sure if youre from the other party, you think that. Hot rolled steel, 318 for the increment that you worry about in march of two years ago. And now, its down to 191. Coldrolled, down to 396. Aluminum, down to 2,559. Rebar, down substantially. Thats the what you would use if youre building a building. So, the one one of the things thats really happened is the prices have gone down, even though, david, its counterintuitive. This is one of the things, like, this is score one for powell, but no. The president wants to make it its also more performative than anything else. Its more for show, jim. Chinese imports are incredibly small. Right. Even through mexico. They just dont account for much of anything in terms of steel. They gave up. Being consumed in this country. They gave up. So, it yeah, to your point, its more for show. I would note, as well, that as part of todays announcements, there was another mention made of u. S. Steel, which, of course, as you well know, i follow it closely in terms of nippon steels 55 a share deal to acquire the company, but heres the press release. Heres what theyre saying. Iconic American Steel company, vital for it to remain an American Steel company that is domestically owned and operated. That would continue to seem to say, nippon, youre not going to be able to own this. There was a time now, cfius is the only way, potentially, through which they can really effectuate that occurrence, because there wouldnt appear to be any other obviously, japan is our significant ally. Nippon has agreed to invest in the assets here in the u. S. , but has run afoul, so far, of the unions. Well, not since roth do we think that u. S. Steel is a big company. True, true. But it has certainly been one thats been a focus because, of course, as you see, if this were to change direction and or you were to see the u. S. And the president back off in terms of its seeming opposition to said transaction, we got a lot of stock, a lot of points you can make up very quickly here. Oh, yeah. 40 to 55. Right. This thing will be out there probably until the election. Who knows . A lot of them are just wait until the election and see if things change, although trump has said similar, if not even more draconian things when it comes to this. I come back to the fact, this is not a chinese company. This is nippon, a japanese company, that is considered a great ally, that was just visiting the white house the Prime Minister was just visiting. If there werent a commitment to keep it, basically, unionized, then i could understand. From the president s a union president. Hes said that like a gazillion times. Hes gotten support of that union. Clevelandcliffs has been extremely effective in terms of galvanizing the opposition to the transaction, even though they would not necessarily appear to be a potential buyer overall, given their own real antitrust concerns. Anyway, just wanted to mention that was part of the announcement on the chinese tariffs. You could argue, carl, that the chinese wiped out u. S. Steel effectively. Its only 9 billion company. I would say that a nonunion company, new corps, took a ton of business from them, and new core is a fantastic operator, and u. S. Steel is historically highcost. How this became a battleground is beyond me, given the fact that there isnt anything that say they would be hurt. The regulatory authorities are fighting the krogeralbertsons, even though theyve committed to be union. So so, i dont know what they want, other than to put on a show. Its Mickey Rooney and judy garland here. Yeah, kind of goes with election years, jim. Oh. Thats what theres a lot of show. Its an election year. Yes, it is. How how poignant. Yes. A lot going on with an election year. What else . Paramount . Were just getting started. Do they care about paramount in the election . I dont know. Well get to that in a minute. How about lvmh . One of the big luxury providers of all sorts of goods. Im trying to see where the stock is. It looked up. It was a 3 organic Revenue Growth for the company, 20. 7 billion euros. There it is, up almost 5 . You see it there. And yet the headlines were that it was a bad quarter. Give me a break. A number of analysts weighing in. B of a, worst is now behind us. Luxury sector going through a temporary period of normalization, they say, following abovetrend postcovid demand, and this was confirmed by the First Quarter result group from lvmh, but not worse than any worse than was expected. In fact, sort of in line in terms of that organic revenue number, and stock has pulled back. You see it right there. The end of that chart, about 10 . So, again, better, perhaps, at least, than the market had been setting up for in some way, jim. Right. Overall, good enough, is the Morgan Stanley note on it as well. So, generally, not raising more concerns about previous weakness in the luxury market. Im wondering if theres a readthrough to some of the companies that have been crushed by shortfall in china. Nike. Apple. Right. Maybe. Now, this is theres you know where tim cook is or was . Hes in indonesia . Yeah. Indonesia. I think hes putting together a basically, a coalition of the countries that have, say, 200 Million People that are great markets instead of the colossus that is china that is no longer a great market, and i think its something to watch. Yep. So, im you know, you put a factory in place because you want business. Indonesia is a huge company. People dont understand how big indonesia apple is crushing it in indonesia. Hes in jakarta today, was in hanoi the last couple days, talking about commitment to suppliers there. Musk is expected to go to delhi in a little bit, where sources tell reuters it could be another 3 billion investment. Take to listen to what cook said about some of these countries, exchina. We talked about the president s desire to see manufacturing in the country, and its something that we will look at. I think the investment ability in indonesia is endless. I think that theres a lot of great places to invest, and were investing. We believe in the country. So, are we looking at a giant supply chain hedge . Not just yes, but also i think that what hes saying is, we recognize that you are a huge country, and we are number one in your country. Look, brazil has 215 Million People. Number one in brazil. These countries, if you add up five of them, and their growth is so much faster than china, i think we have to start thinking that theres a mosaic of business where were going to say, you know what . All these analysts were just totally focused on china. They wont see whats happening in these other countries where theres a commitment. Its almost like theres a a belt and Road Initiative by china, and wherever they go, they give money, and suddenly, theres a lot of business with china. Hes doing an apple belt and road, and i think it makes all the sense in the world, because these other countries count. Were so chinacentric, we dont realize that there are a lot of people in indonesia. David, theres a lot of people in brazil. Thats why the eagles first game is being played there. Is it really . Yeah, friday night game. In brazil, did you just say . Sao paolo. I wasnt informed. Are you being sarcastic . No, i dont follow the eagles. Its more of a nor do i follow the band, eagles, frankly. Theres a lawsuit involved with glen frey. Not the eagles, man. Anyhow brazil as 215 Million People. Yes, brazil. Yeah. And indonesia has 200 Million People also. Yeah, so you put together this mosaic of places, and they equal china, and five years from now, they will exceed china. Its a mosaic play. Got it. I want to hit tesla, guys, because we mentioned it at the outset. Obviously, on squawk box, they covered in depth sort of the move by the company to put it all to a vote. That is, all, being that enormous compensation package for ceo elon musk that was agreed to by the same shareholders or at least the Shareholder Base at the time back when it was voted on in 2018, but a Delaware Court said, no, were not you know, its wasnt arrived at properly in terms of some of the influence of Board Members and the like, so theyre putting it back to them, and high likelihood would be theyll approve it. It was all stockbased comp, of course, based on what, at the time, seemed like incredibly difficulttoreach targets that were reached for the said stock price. Lately, though, if you have any targets that involve the stock going up, jim, they arent being hit. This thing is down 37. 5 for the year as we pointed out yesterday, falling below that half a trillion market value for the first time in quite some time, and right near 52week levels. It is a stunning decline. You can pick on cathie wood for coming on and saying its the greatest. There are price targets of 25 or 27. I think thats a little facetious. But david, cybertruck i caught enough i caught you saying that you saw one. I did. One bombing down broadway the other day. Really catches your eye. Wow. Yeah. Thats i mean, thats what it does. But apparently, its harder to make than we think. We know that. Its not commercial. Its not a commercial thing. Its a boutique thing. They would have been better off focusing on lowerend cars as opposed to the cybertruck. Thats where im going. This is fascinating note out of barclays today. They cut to 180, reiterate equal weight. They think is quarter is going to have a gross margin miss and a headline miss and maybe negative Free Cash Flow, but jim, the Biggest Issue is what theyre calling this binary bet. Do you go lowcost car, or do you go full autonomy . We are hard pressed to think of any other precedent of a company of teslas size basing its path of success on such binary bets. Yeah, its just do you want to sell it down here . I dont know. If they suddenly hes capable of issuing any press release that could indicate that hes got a car that we dont know about, but trying to claim the middle cgm has a good piece. Key themes, mega binary. I mean, every day, theres something, and it starts reading like pornography. Its prurient. Enough already. The Free Cash Flow is bad. Its not thats not what we it was in the, you know, the cars. We didnt think that ev would suddenly become something that a pariah. No, i wouldnt call it that either. Why not . I like that. The focus the Company Wants is out towards the robo taxi, towards the new entrants in the market as they combat the chinese ev makers in particular. Thats the point of the times piece yesterday. Davids piece, called has tesla peaked . Its more about tesla getting separated from the market. I think that tesla didnt have a new model. In the end, it is a car company. And you know, you got to refresh. I mean, if we had, lets say, if farley were sitting over there, which i wish he were he ascends this, in a sense. Farleys just, over and over, saying, you got to have something fresh, something new. The f150 is killing the cybertruck. Yep. Its the 35th anniversary of cnbc. And i hope you know that. Are you going to ring the bell this afternoon . I dont think ill be here for that, but i do remember 30 years ago, when i was a fledgling reporter here you were 30 years old. Thank you. The first story that i covered in depth was the fight for paramount, and here i am again doing it all over. It was Sumner Redstone and barry diller. Of course, redstone prevailed, viacom buying it for 10 billion, by the way. Value above the current market value for paramount, which also includes cbs at this point, as well as viacom, which became a far larger company. Here we are again. I have to admit i find it fascinating yet again. Let me give you a quick update because we have been covering it for some time. First of all, this period of exclusivity that the ellison camp, skydance, red bird, kkr also a part of that right now, are in right now in terms of negotiating with the special committee of the board. That is going to end early may. Theyre not going to have a deal done by then. I dont think the market expected that would be the case, but certainly worth mentioning. Every indication i get from people on all sides is its going to take more time than that. They are negotiating in full right now. There are obviously, as you might expect, conversations between the advisors to the special committee and the skydance camp as well. But its going to take more time than that, and it may be more twists and turns from here. Youve got a special committee that has its hands full in terms of trying to deliver value and or what the value really is for the shareholders here, and its not just determining the value of skydance. Remember, because the transaction that is currently contemplated both pays a premium for national amusements, the control shareholder, but also involves paramount coming up with an Exchange Ratio to buy the skydance studio and bring it in a merger with paramount studio, and then, as i pointed out many times, in addition, the issuance of new shares, many of which would be purchased by larry ellison, for example, and other members of the skydance group. Red bird, kkr. Whats skydance worth . Its a private company. You cant necessarily just do it on where they last raised capital. Its not the easiest thing to determine. Its something they will be able to, but it may take time. Youve got to figure out what the status quo would mean for paramount. Its not just u, if we do this deal, but what is the status quo like if we do nothing and paramount paramount stays out there . Youve got to deal with the control shareholder in shari redstone, and youve got to make sure that the numbers youre hearing from the skydance group, in terms of synergy, really costcutting, and i want to make it clear here in terms of previous reports, are real. I reported on synergies that could be as high as 3 billion. What i really should have said, and what should have been communicated more clearly was, thats mostly costcutting. The actual revenue synergies are smaller. 200 billion bucks, perhaps. The potential for significant cost cuts, that is major. Floor of a billion is what im hearing to as high as 3 billion from any number of areas. You know, whether youre talking about the nielsen contract, the fact that the window on paramount movies to paramount plus, where it is, so many different areas, at least, that they believe, jim, there would be significant ability to cut costs. So, a lot to go here, and then there will be the question as to what happens at the sort of towards the end of the negotiating. My expectation in some ways is this special committee is going to look for some sort of compensation for the b shareholders beyond the prospects of a company that will be able to grow, deliver more Free Cash Flow, but will they want them to deliver something in the near term in some way in terms of value . Maybe its an enhanced stock buyback . I dont know what it would be, but i think theres got to be an expectation as things get one more turn before they figure out whether they can get there or not. Do they ever talk about the incredible presence that paramount has in live sports . For instance, if you want to watch international football, theyre the one. Yeah. And i think thats worth a fortune to anyone, including our network. Now, of course, if theyre going to block the capritapestry deal the relationship to the likes of the nfl is important. Other sports. Redbird, by the way, has very important partnerships overall with the likes of the nfl. They have to close everything, except for the sports, it would be an incredibly attractive property. Thats the update for today, 30 years after we reported on the battle for paramount. Yeah. And dont forget, cnbcs going to ring the closing bell to celebrate 35 years today. As we go to break, not a lot of data or fed speak today, although mester and bowman later on tonight. Big events will be the 20year bond auction at 1 00, and beige book at 2 00 p. M. Might be interesting. Dont go away. Announcer the bond report is brought to you by pimco. Watch the airlines today. Wow, near 12 pop in ual as they raise guidance and cut q1 delivery forecast and both united and american the number one and two gainers at the moment as were back to 50. 67. Dont go anywhere. Do you charge forward . Freeze in your tracks . or, let curiosity light the way. At t. Rowe price, were asking Smart Questions about opportunities like clean water. And how clean water advances can help transform our tomorrows. Better questions. Better outcomes. T. Rowe price from pep in their step to shine in their coats, when people switch their dogs food to the farmers dog, the effects can seem like magic. But theres no magic involved. dog bark its just smarter, healthier pet food. Its amazing what real food can do. People couldnt see my potential. So i had to show them. Ive run this place for 20 years, but i still need to prove that im more than what you see on paper. Today im the ceo of my own company. Its the way my mind works. I have a very mechanical brain. Why are we not rethinking this . I am more. Im more than who i am on paper. Youre probably not easily persuaded to switch mobile providers for your business. But what if we told you its possible that comcast business mobile can save you up to 75 a year on your wireless bill versus the big three carriers . You can get two unlimited lines for just 30 each a month. All on the most reliable 5g mobile network nationwide. Wireless that works for you. For a limited time, ask how to save up to 830 off an eligible 5g phone when you switch to comcast business mobile. Dont wait call, click or visit an xfinity store today. Okay, looking at first horizon, bryan jordan will be on. 4 yield or capable of thought going out at 25 because there was a bid from a canadian block, did not go through. Was blocked. Hes a straight shooter and he will tell us how its doing. We need to know. I think were all looking for stuff thats going down so that the fed has an easier job. If not the president. Hes not helping the situation. Were just glad we got you back because earnings season without you is tough. Thank you. Im glad to be back. David, i know youre glad to see me. Excuse me . Sorry. So happy. Are you kidding . Thanks, mate. I know. Im so happy you had fun with your mates. Yes, well, i was with a lot of mates. Just trying to make carl and i jealous. Thats what its like to be living a dream. Right here at the desk. Thats what that is. You look exhausted. Oh. [ laughter ] yeah, yeah, its just like the tri athlon. D moy,mane 6 00 p. M. Dow up 188. Back in a moment. But what if they didnt . [ominous background sounds] this is what it feels like when cyber criminals breach your network. Dont risk the health of your business. Crowdstrike. We stop breaches. New projects means new project managers. You need to hire. I need indeed. Indeed you do. 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. Good wednesday morning. Welcome to another hour of squawk on the street. Im sara eisen with Carl Quintanilla and david faber from the new york stock exchange. Stocks, were in rebound mode. Its broad. Every sector higher except for real estate right now who is leading materials, utilities up almost a full percent and financials up half a percent, a little more. Communications Services Strong too. Nasdaq composite up 0. 2 . For the week were tracking sharply lower. For the nasdaq. Dow is almost unchanged. As for treasuries offering relief potentially to equities today as theres buying, and yields go lower for a change and the tenyear note, 4. 637 after hitting the highs of the recent cycle overnight, the twoyear yield below 5 . 30 minutes into the trading session. Here are three movers were watching. Shares of travelers dropping after missing profit and revenue forecast. The insurer seeing a sharp rise in catastrophe losses tied to all the weather events. U. S. Bancorp under pressure cutting Net Interest Income guidance for the year and shares of j. B. Hunt plunging after its big earnings miss and demand for its domesticfreight Transportation Service was softer than expected and trucking volumes fell, as well, more on that ahead. Guys, the story that everybody is talking about this morning in macro is the comments that we got from fed chairman powell yesterday afternoon and how differently he sounded than he has recently. Have a listen. The recent data have clearly not given us greater confidence and instead indicate that its likely to take longer than expected to achieve that confidence. My take on this one, guys, powell just marked to market where the market was in terms of expectations that the recent data, i. E. , inflation, have not given him and the fed enough evidence and confidence that inflation is moving down to their 2 target. Remember, he kind of brushed off january, february, but after another month of march and weve heard this from other fed officials and have seen it in the rates move, the thinking was fewer rate hikes, fewer rate cuts wouldnt come as quickly this year and that they would need more time and reiterated that so in a way it was not surprising but it did mark a change which is notable and i think youre seeing the reaction in treasuries this morning, the fact that theyre getting bid and yields are coming down, a lot was already in the market, david. Yeah, that seems to have been the case. The market was already positioned for comments like that from powell even though we hadnt actually heard the comments. Exactly, exactly. Because it was notable that we did not sell off dramatically in the s p and did not see a significant move in the bond market after those comments. You could imagine a different time when comments like that would have rocked the market. Because it was way ahead of him. He caught up and gave the market what they expected to hear and what they knew they were going to hear and said it very plainly and succinctly and didnt go farther. He wasnt more hawkish and say maybe well have to raise rates but could have taken it to another level and did not do that and said we can stay as long as needed at these levels. No wonder, the atlanta fed tracker, updated based on input did another update yesterday based on Housing Starts and Industrial Production continues to move up. Its the top line and what you can see and the bottom line there, the one that is sort of stable and not moving is the wall street consensus so it hasnt moved as much. So atlanta fed is definitely stronger and so this is a tracking for the First Quarter gdp. We dont get that till the end of the month. One more update in a week. Now the expectation is 2. 9 growth versus 2. 8 the day earlier which was already revised up because of retail sales so the numbers feeding into growth just continue to look better. That coupled with a bit firmer inflation readings and no wonder powell is changing his une. The other one is uk inflation. I dont know if you saw that overnight but it slowed which is good but it came in higher than expectation, both the headline at 3. 2 , a little bit higher and core a little bit higher than expectations, but, again, you want to see these numbers coming in at expectations or below expectations, because the market is very sensitive to inflation data. Yeah, 3. 2 looking for 3. 1. Nice ecb at 2. 4 and 2. 9 on core was helpful. A lot are starting to compile threads of things that maybe look more pernicious like occupancy rates at Budget Hotels or air traffic or African American unemployment or auto sales declining outright, certainly auto pricing, signs that maybe things are not as hot as we think. Its lumpy. Its not necessarily an all inclusive reacceleration in the economy, Brian Moynihan was on yesterday with me after earnings and i always like to get his sense of the consumer. They see a lot of deposits and credit card data. Heres how he characterizes it. Consumer has slowed down their spending so went from 10 year over year growth, early last year, to 5 last fall and now running 5 , a little less than march, april a little stronger. What that means, that Growth Movement of money across 4. 5 trillion on an annual base out of the bank of america accounts is consistent where we were in 17, 18, and 19. The consumer is still spending but slowed down and 5 growth is not too shabby. Christine lagarde said it, the u. S. Consumer consumes. Chinese consumer saves. They save a lot. They have a 30 savings rate but, again, and j. B. Hunt spoke to this, as well. The fact theyre the big trucking and logistics company. Its different in different categories. They cited, for instance, furniture as a soft spot which we know and have seen that in the inflation data. Demand is overall for big and bulky products remains mixed, soft demand in furniture and stable demand in appliances and exercise equipment. Overall we are modestly encouraged by our pipeline and we continue to see new brands with our team. The weak spot is pricing and thats what hurt recent earnings and have seen it with shipping prices. Meantime, what this all means for the stock market remains an open question. Bob diamond is here from Atlas Merchant Capital and joins us for a discussion. Welcome back. Sara is right. It is lumpy but if you go 30,000 feet can you make broad calls about where the economy is and where its going right now . The economy feels very good right now in the u. S. I think its much to the surprise of everyone around the world looking at the u. S. That it was a year ago that svb hit, you know, deposits were guaranteed. Special Bank Lending Facilities were put in. People were worried about the economy, you know, a very, very High Percentage and what happened . The fed raised another 75 basis points, and people were calling for a recession and easing and i was here in january with you, and we said then there are going to be higher, longer, not because the fed should ease, but because it would be almost irresponsible with the economy still strong, inflation not quite where they want it to be, that our feeling is and it continues to be that the only mistake the fed could make here is to act too quickly on easing. Will hes see how the economy plays out. We felt in january it was unlikely we would get a rate cut in the first half. It could be one toward the end of this ear. I think well see how the numbers come. It could be none, but i think that, you know carl, if i go back in history, since 2008 before the rate increases and fed funds were averaging below 1 , right . We all got used to that and it was kind of free money. Prior to 2008 for decades and decades and decades fits fund averaged, what, above 4 . Where we are today is not abnormal. In many ways its probably a more normal Interest Rate structure and environment for risk taking than what we saw when rates were below 1 . What about the fact that the company, first of all, if you listen to earnings, its not like everything is peachy. It varies by sector, by demographic, if youre in services and doing better than if youre in goods, but the commentary so far from earnings and saw it last quarter as well hasnt exactly been a 3 or 2. 9 intell gdp economy. You said the risk is then cutting too early. You dont think theres a risk of them cutting too late . I think theyll see the data, sara, but i think in addition to its been sticky getting down to the 2 target. Whats happened recently . China is growing faster than we thought. Christine lagarde, you did a great interview with her yesterday. Thank you. Is ready to ease. The bank of england is ready to ease. Uk and europe look like theyll get a little more growth so actually theres more things out in the macro environment that are positive, positive is the wrong word, but, you know, more in favor of inflation is going to stay a bit sticky, so, you know, the Slower Economy in china was certainly beneficial to a lower rate of inflation, and i think the surprise is going to go the other way a little bit, so data dependent is important, sara. If we do see a weakening u. S. Economy, i can see the reason for easing, but, boy, we havent seen any sign of weaker u. S. Economy. Bob, given your history, of course, having run a large financial institution. Just love to get your take on earnings season that youve been through, particularly with the bigger banks in which you competed against, the goldmans, morgans, mixed picture this earnings season, jpmorgan, stock went down dramatically after earnings and bank of america not great but goldman and morgan quite strong quarters. What do you think . I would say underlying all of it is counterintuitively, higher rates are good for financial institutions. B of a is a deposit machine. They and morgan have hoovered deposits for years even more postsvb and at 5. 5 versus 1 , look at the Net Interest Margin of b of a and the amount of deposits out there, and keep in mind a year ago in the First Quarter, there was 100 billion loss in the treasury portfolio that doesnt go through the mark to market, its much better and the bank have adjusted to that rate increase and used to Interest Rates at these levels, and theyre very, very beneficial for the deposit taking institutions. The other that was the thinking going in, bob, but there were mixed reactions when the banks werent actually raising their forecast for Net Interest Income and we also found out that its lower rates can be helpful for Investment Banking and for Capital Markets so thats on the flip side. Well, weve seen the advisory and the trading bounce very, very well at Morgan Stanley and Goldman Sachs and its not lower Interest Rates so i think that environment i think the best trading firms like Goldman Sachs which b of a is a deposit taking machine then they are a trading machine and higher Interest Rates will be beneficial to Goldman Sachs as well in their commodities trading business. I would not worry about the trading operations. I think the trend thats interesting that we havent factored into all of this with the big banks is if we go back to 2008 to today, and think about the credit businesses in the banks, theyre not in credit trading, theyre not in high yield trading, its at Market Access electronically. Its at the hedge funds and now a lot of the lend something in private platforms, right . So if you think of the credit businesswrit large at the banks, trading in investment corporate, trading in distressed and the loan portfolios, a lot of that unsurprisingly with higher capital levels have moved off the Balance Sheet. Projections on Net Interest Margin, i bet you a nickel over the next quarter as we continue to see really good performance there, i think theyre being conservative. Only a nickel . Only a nickel. Were on tv. [ laughter ] the anks utilities, isnt that what the goal has been to a certain extent. Its whats been happening since 2008 and the higher levels of capital. The banks are much closer to government and much more like utilities both in a good and bad way, much safer but far more systemic than theyve ever been. Bob, thanks. Good to see you. Good to see you. As we head to break our road map for the rest of the hour, shares of one of the biggest chip equipmentmakers dropping on the back of its latest earnings and its impacting the other semis as well. Pore on the fallout. Tesla asked shareholders to vote yet again on elon musks 56 billion pay package. What is at stake for him and the company he runs. Boeing is in the crosshairs of congress today, the whistleblower hearing set to begin sometime in the next hour and get you ready as squawk on the street comes back. Trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the awardwinning trading platforms. Bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. Tailor the platforms to your unique needs with nearly endless customization. And track Market Trends with uptotheminute news and insights. Trade brilliantly with schwab. Results from one of the biggest chipmakers missing the mark having a big impact on semiconductor stocks. Kristina partsinevelos has the fallout. It has to do with bookings and sales and make the chip equipment and its very expensive. It can cost hundreds of millions of dollars and the latest Earnings Report shows customers are holding back on orders especially for top end extreme ultraviolet machines. Q1 net sales dropped 22 year over year driven by a drop in bookings specifically because terms like tsmc worked through their current stockpiles. China remains strong and contributes roughly 49 of total revenue and the strength has been prevalent over the last two quarters as the country tries to snap up older equipment before any further export controls comes into play. On the call, the management did reiterate that they expect a 15 impact to chinese sales because of new export controls from the u. S. , u. S. Is influencing the netherlands, et cetera, so that will weigh on their Chinese Business and said they expect weak sales for q2 but promise and this is a key point, they promise 2024 is a transition year and see growth in 2025. That first half weakness doesnt change their outlook for the year. That just means there will be a lot more riding on the second half. Thats the key takeaway a lot of analysts have focused on. Future growth is expected from im calling it local c. H. I. P. S. S like the United States are providing grants to firms to build manufacturing plants on local soil and that should bode well for a lot of chip equipmentmakers in the coming quarters. That was actually whafs going to ask, i mean, weve seen Gina Raimondo countless times talking about facilities in arizona and potentially texas as well with samsung. They got a lot of equipment to buy, dont they . Especially these machines. Tsm they had a party and you need several 18wheeler trucks because its such a large machine and had to bring in workers from taiwan because a lot of American Workers didnt know how to work with those machines, so it does bode well for equipmentmaker but youre seeing a negative reaction, kla, applied materials, lem, all of those are down 2 but it seems like the street reaction is, hey, you know, long term theres still a lot of strength because asml reiterated their outlook and saw growth and are positive on china as well despite export controls. They are banned from providing certain machines to china, arent they . Highend machines. That weighed on was weighed on by those machine sales. Are they subject to all the rules that the u. S. Semis are subjected to because they are a dutch company. No, thats why the United States is trying to push the Netherlands Company to be more stringent with the older equipment. China is snapping up the older equipment, not only from the netherlands but here in the United States, applied materials, lem, et cetera, to buy the mature ones, the chips that go into solar equipment, air conditioners and want to dominate that market whereas the United States is trying to focus on the advanced chip market. All u. S. Technology. Yes, thats the thing. We designed it and created it here. Why arent we manufacturing on u. S. Soil is what they want to change. See how much that works on the dutch. Thanks, kristina. When we come back, what lvmh is saying. Just a day away from cnbcs first ever changemakers event in new york city. Hear from this years leaders including principal dancer of the american ballet theatre, misty copeland, commissioner of the wnba kathy engelberg. That helps treat a. All in one. To those with migraine, i see you. For the acute treatment of migraine with or without aura and the preventive treatment of episodic migraine in adults. Dont take if allergic to nurtec odt. Allergic reactions can occur, even days after using. Most common side effects were nausea, indigestion, and stomach pain. Its time we all shine. Talk to a Healthcare Provider about nurtec odt from pfizer. Investment professionals know the importance of keeping their clients on track. Sometimes they need help cutting through the noise, to ensure fresh investment ideas keep flowing, and to analyze the market from every angle. At allspring, we deliver the unexpected, by relentlessly exploring where others dont. Allspring, follow the insight. Frankly i dont think the situation for the customers in the western part of the world is connected in any way with the offer. The question is inflation, which is taking its toll on density of this group of customers and see the same thing in the u. S. And in europe, and its quite interesting we decent see it in china. The reason why we dont see it in china, there is no such thing at least for the time being as inflation in china, so i think as long as inflation will be a factor for this group of customers we will not do miracles. That was the cfo of lmvh, Parent Company of dior. Not mincing words when it comes to the impact of inflation on consumers even at the high end. Higher sales from the companys core fashion and Leather Goods segments did offset falling sales in other divisions, particularly weak one was wine and spirits, champagne not doing too well. Jewelry also came in weaker. Samestore sales in asia excluding japan fell 6 in the First Quarter, though the company did attribute that to chinese consumers spending more as tourists outside the country. Meantime, japan sales up 32 , lifted by the weak japanese yen. Lvmh not the only one to watch. The New York Times reporting that the ftc is preparing to sue to block coachs parent tapestrys plan to buy capri sending a statement saying we cannot speculate on the ftcs intentions but strongly believe this is a deal that gee serves to clear as it is proconsumer and procompetitive. This combination involves six unique brands that compete with hundreds of others in a dynamic and constantly expanding 200 billion Global Luxury Market that delivers products in a wide range of categories across a vast price spectrum, which gives you a hint there, guys, if the ftc does move to block how tapestry would fight it. No barriers to entries when it comes to fashion brands and there is competition coming from everywhere. What i can tell you is there is this closed door meeting on the public calendar at the ftc of the commission on monday, and inside the building, what i hear, is that there is movement and effort to block the deal. And we know the history and track record of this ftc, and they often block highprofile deals. The scrutiny, what i hear under this one is over lap in customers and workers and demographics of these particular brands, michael kors and coach catering to the same middle class female buyer that wants to spend 200 to 400 on a purse but cant afford thousands for an hermes bag, that sort of thing. Thats where the discussion is going. I dont know if that would be fully defined as a market under antitrust law and to the extent the ftc has made their move on certain transactions they have run up against the inconvenience of the law itself and the fact that many judges dont agree with them in certain areas, and, again, whenever we see this, the ftc will come back and point to all the victories theyve had or point out, of course, how many deals do get done. This one has some people scratching their heads, sara, interesting to hear some idea of what they may be focused on. By the way, always would warn, always hear about the closed doors meetings. Youre never certain what theyre about. It may be its other business even many believe people believe its likely monday, and theres not a lot of precedent for blocking a fashion deal like this because theres so much competition out there, and probably not as strong a case as kroger albertsons, which is competitors everywhere. That one you can have an understanding of the basis of some of their complaint can be. Kroger is saying we dont compete without our competitors, walmart, much more so. There are other brands, versace. Capri owns versace as well, jimmy choo, not necessarily direct competitors of Stuart Weitzman and kate spade which are the other brands. Tesla shares coming under pressure and now within a couple bucks of a 52week low. That hasnt happened in a while. Fourth straight day down below key support levels. Now the board wants shareholders to vote again, reality phi that pay package for elon musk struck gewn by a Delaware Court in 18. Ror mcnamee will weigh in on that when we come back. The future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. The all new godaddy airo. Put your Business Online in minutes with the power of ai. Im julia boorstin. The senate will begin the impeachment trial for Alejandro Mayorkas this afternoon. He faces two articles of impeachment refusing to comply with federal immigration laws and allegedly making false statements to congress about the Homeland Security department. The democraticled chamber is expected to vote to dismiss or table the articles. Britains foreign minister says israel has clearly decided to retaliate against iran for weekend missile and drone attacks. He made the comment during a visit to israel today. It comes after Prime Minister Benjamin Netanyahu insisted israel will do what it deems necessary to defend itself. And former u. S. Senator and Florida Governor bob graham has died. He gained National Prominence as the chairman of the Senate Intelligence committee in the aftermath of the 9 11 terror attacks and as an early critic of the iraq war. He used his opposition as a focal point for his unsuccessful president ial campaign in 2004. Bob graham was 87 years old. Sara, back over to you. Thank you, julia. Shares of apple and tesla both struggling this year. Trading below key support levels. Dom chu tracking them as well as the other tech names. Dom, paying attention to technicals. And specifically one which is the 52day moving average or 50day average price on that rolling basis, that medium term trend line some traders use as perhaps a signal about at least momentum and trade. Lets talk about alphabet, the Parent Company of google first. Its up 47 , still solidly above its 52day moving average here, so showing some signs of relative strength on that megacap side. Moving on to another one, still trading solidly above the level, which is nvidia which is down 1 today, up 220 for the last year, Still Holding above that 52day moving average. The most valuable stock out there in terms of megacap land and in the market is microsoft. That stock is interesting to watch because its trading right at its 52day moving average price so from a momentum standpoint keep an eye on it and you mentioned apple and tesla among the megacap names trading the most below there. Apple right now you can see over the last year up 3 but its still trading just around maybe 4 or so below its 52day moving average and, of course, tesla, which is the one thats seen the most relative weakness compared to its 00day trading at the Biggest Discount so megacapland is pulling back. Tesla, see if they can find footing in the coming days and weeks, david, back over to you. Yeah, well keep the focus on tesla, dom. Thank you, because that company is asking its shareholders to vote yet again on elon musks mu multibillion dollar pay package after a court voided it a number of months ago. The stock has been down 20 even since then, and you can see down some 37 plus percent for the year. Here to talk about the road ahead, Elevation Partners founder, early facebook and google investor roger mcnamee. I bet i know but where do you come down on putting this back to shareholders for a vote on stock obviously that was promised to him but not delivered because of this Court Decision overturning the will of shareholders originally who voted in favor of it back in 2018. My assumption is shareholders will vote for it again, but i think this is the real test of tesla as a mean stock because it has been so tightly associated with elon musk. Musks brand has taken huge hits over the past year, and its 50 plus billion dollars which in the context of shareholders is a real number and but i do assume theyll go for it. It would seem as though it does become a referendum on musk himself, doesnt it, in the sense of well, if i dont get this, i might leave. Thats i think thats precisely correct and thats why i mean its a test of tesla as a mean stock because if musk is no longer viewed as central to the story Going Forward, then i think tesla starts to trade like a car company as opposed to, you know, an extension of elon musk, and this vote is the test that investors get to say which way they want to go. Yeah, and overall, i mean, you say it starts to trade more like a car company. Obviously the stock is down dramatically. Its below half a trillion. That said its about ten times the market value of the likes of gm or ford. Yeah, isnt it roughly equal to the rest of the industry put together . The issue with tesla is that the valuation has been sui. Generous for years and years and theres just no telling what the thing is that brings it down but higher Interest Rates are a bad thing for stocks in general and for this one in particular, and, you know, musks behavior is a terrible thing. The problems with the cybertruck are real, and the manufacturing issues in general are an overhang for the stock so theres a lot of bad news and, you know, lets face it. Theres a different thing going on around generative a. I. And tesla is not part of that and so i think its lost a lot of are they not part of it, though, roger . In fact, their selfdriving is going to be a big part that have potentially in terms of what theyre using to power it and their hopes for it. I mean, i can remember, you know, we talked so many years ago, valuation on amazon because people were like, well, it sells books, its bigger than the entire book market, of course, they lacked imagination. Here as you well know investors are not focused on cars in part but robo taxis on robots themselves on so many of the things that musk uniquely seems able to get a company to do that others cant. David, i would push back in two ways. One, the technology that theyre using is the earlier generation of predictive a. I. As opposed to generative which is where the media is today, the second thing is, robo tax isis and selfdriv cars are a solution to a problem that doesnt exist. We dont need cars that cost half a Million Dollars each in the marketplace, and the notion that you can get a tar to make all the right decisions in a crowded situation where the training set doesnt represent all the things that come up, i just think that were maybe decades away from selfdriving cars being real. Decades, roger . Come on. I mean, my understanding, by the way, theyre training them differently and have made a significant change in terms of tesla and the underlying data set, so to speak and have more data than anybody. Decades . What are you talking about . Im talking about the situation of putting them out into traffic. Obviously if youre putting them on specific routes with beacons on anything it could run into which is exactly what you do with airplanes and large ships, in that scenario you could do it today but as a country were not willing to invest in special highways and the people running these companies arent willing to wait while that Infrastructure Investment gets made. And so i just think that its i mean, come to San Francisco. Be a pedestrian for awhile and see what its like with these things riding around. Its terrifying. So, roger, when elon writes on x, not quite betting the company but going balls to the wall for autonomy is a blindingly obvious move, Everything Else is like variations on a horse carriage. You dont really think its a contest about whether you double down on cheap cars or go full service, right . I mean, fsd is the future at least for this company . Well, he seems to think so and if hes right then it will be a huge stock. Im simply looking at it and going, wow, if i had had the advantage on electric cars that tesla had, you know, i would have focused on manufacturing, get getting the price points down and broadening my base, but now theyve got problems because they have not been as focused on their manufacturing and on their production processes as they should have been if they were really serious about electric cars. I think he has made the bet on fsd, i just think thats a losing bet. Yeah, all right. So youre afraid i mean, you know, in new york, im kind of scared of the guys the people behind the wheel who are people not to mention, of course, those crazy delivery drivers on the electric bikes. Really, youre worried. Its scaring you when you dont see somebody behind the wheel . Yes, and it should scare you too, david, because, again, think about it this way, the amount of processing you have to put in the car, the quality of the sensors you have to have, both of those things are not where they need to be for these things to be able to go into normal traffic and succeed in unexpected situations. The issue you get in San Francisco is theyre constantly blocking emergency vehicles, constantly driving places theyre not supposed to go and then every once in a while they run into somebody or something and, you know, given how few miles theyve driven, the numbers are disturbing. All right. Roger, always a pleasure. Thank you. My pleasure. See you. Public trust is going to be an issue too if there are if other people feel like oger, its going to be hard to dominate municipal approval. That too. Exactly. I thought theyd already be here based on everything we were talking about five years ago, i have an 18yearold that she didnt learn how to drive. I was like, oh, itll be fine. No one will own a car. Thats funny. Still to come, shares of citizens financial, theyre higher, near the top of the market in fact despite reporting lower profits. Its been a story with banks. The ceo joins us next to break down the numbe a ge s tlook. Ivhi 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 . Sandstorm gold royalties is a publicly traded Company Offering a diversified portfolio of mining royalties in one simple investment. Learn more about a brighter way to invest in gold at sandstormgold. Com. Lets talk about the health of financials, citizens Financial Reporting this morning the streets generally positive on Net Interest Income, rebounding Capital Markets revenue and expense management despite a slight decrease quarter over quarter. Joining us is their ceo. The stock is up nicely, bruce. How do you characterize the quarter relative to what the market was expecting . There was a little trepidation around the regional banks going into earnings . Yeah, i think we had a solid quarter. Were still working against some of the trends with the fed having raised Interest Rates so aggressively but our Net Interest Margin was stable. Were working on the Balance Sheet to make sure we have lots of Strong Capital position and Liquidity Position and reserves for our loan portfolio, and then id say one of the real bright spots that the market liked was the Capital Markets business has rebounded in a nice way, so weve had 35 sequential quarter growth and strong in m a and bond underwriting, bank loan syndication market coming back that we think its the beginning of a trend for the year so thats a real positive. We also did a nice job on expense management. No surprises in credit, which was good, and then looking at our strategic initiatives, the private bank is off to a great start. We hit roughly 2. 5 billion in deposits so grew that by over a billion in the quarter. New york metro continues to grow very nicely and then we were number one in the middle market leverage lead tables as a testimony to the strength of our Capital Markets business. Yeah, wanted to ask about that. You seem to think that the Capital Markets activity is sustainable. Why, and where do you sit at citizens in terms of competition and market share . Yeah, so were very focused on the middle market, so we dont go all the way up to where the megabanks play, but when they come down into our space, we can win jump balls and beat them, so stay close to home, and can you have a really strong franchise. Weve expanded into some great industry verticals Like Technology with jmp acquisition and were also very focused on sponsors, because increasingly private equity owns over half of middle market companies, so we built out our overall franchise to be able to cater to the needs of sponsors. So, the Net Interest Income, this is what everybody is so focused on, down 12 on the quarter, saw it across banks. What does that look like Going Forward with now expectations that the fed wont be able to cut as much this year, more hawkish fed, should be better for profitability, right, bruce . Yeah, theres puts and takes with that, so i think, you know, the Balance Sheet position is relatively neutral for most banks now, so its hard to call what the fed is going to do so youve kind of flattened out your position so whether they cut or whether they hold higher for longer, its not going to have a huge impact. I think whats going to drive Net Interest Income over the course of the year is the amount of loan growth that we see, and so what were expecting is the first half to be somewhat soft, line utilization is low. Not seeing new money deals happening. I think that changes in the second half of the year. We should see commercial loan growth. The other wild card thats unique to us is that we have our private bank which already has 1. 1 billion in loans to go with their 2. 5 billion in deposits, and we think that will grow significantly in the second half, so the volume side should actually start to help Net Interest Income, and i think we can broadly keep the Net Interest Margin about where it is. Why i was talking about this with Brian Moynihan yesterday. Why is loan growth so sluggish in an economy thats been so resilient and outperforming expectations, and what turns that tide . Well, i think you can say its been so resilient, but if you go back six months ago, or three months ago, people were still talking about a potential for recession and maybe well get a goldilocks scenario. Maybe well see a soft landing, but there was a lot of uncertainty around that so weve been consistently surprised to the upside in terms of the strength and resilience of the economy, so i think many Business Owners seeing that uncertainty said, im doing fine, but im not going to go full on offense until i see more cards turned up on how the economy is doing, so thats one of the reasons one of the reasoy we think now that it looks like we wont have a recession and that growth is going to be higher over the balance of the year than people thought coming into the year. That should start to get the animal spirits going a little bit. So you should start to see line utilization pick up, investments in working capital, investments in capex. It will come graback gradually,t that was the concern. People just felt a huge amount uncertainty and didnt know which way the economy was going to tip. A confidence question. Bruce, thank you very much for joining us and talking through the quarter and what youre seeing. My pleasure. Coming up after the break, boeings senate whistleblower hearing just about to kick off. Were going to get you ready and tell you what it might mean for the stock, still hovering some 52week lows. Still ahead next hour, the chairman and ceo of bill ford, live from the firms ninvestor summit. The opening gains have faded. Dows up 16. Money movers coming up in ten minutes. Were Just Moments Away from the start of the senates boeing whistleblower hearing entitled, examining boeings broken safety culture. Lets go to our phil lebeau. He has more on what we can expect and what it will mean for the company. Phil . David, that gentlemen sitting there in the red tie who just grabbed some papers there, that is the whistleblower. He is the star witness, if you will, sam salapoor will be outlining his complaints today. Well hear from him and others starting in about 15 minutes, i believe. Let me give you a rundown of what we expect to happen during the course of this hearing, which will be conducted by a Senate Investigations committee. First of all, youll hear from the whistleblower, his warning about the stability or the safety of boeing aircraft, specifically 787 dreamliners. Now, yesterday, he talked with nightly news and said, there are gaps in these planes. And he could, there could be Structural Integrity questions that develop. And these planes could break apart midflight. Thats a pretty bombastic statement to make, given the fact that people, when you say a plane could fall out of the air, youre going to get their attention real quick. He also will be highlighting what he considers to be faulty protocols. We should point out, two days ago, boeing knew that this was coming. This complaint has been lodged with the faa some time ago. They did a deep dive, a technical briefing, explaining why they believe the gaps in the fuselage, where theyre brought together, are well within conformance, and they believe that theres nothing to these allegations, that these planes are safe to fly. By the way, we talked with scott kirby, ceo of united airlines. They fly more dreamliners than any other airline in the world. Heres what he had to say about these allegations. This is an airplane, there are thousands of these airplanes, flisk for decades. Millions of the flight hours. I am totally confident the 787 is a safe airplane. Take a look at shares of united, separate from all of this, that stock is on a rip higher today, up almost 12 given better than expected results yesterday. As for boeing, it continues to languish and probably will over the next couple of weeks, because were a ways from seeing some stabilization here, guys. Yeah, not to mention, of course, picking a successor to mr. Calhoun, which will be some time in coming. Hey, phil, in the last minute we have here, i know Alaska Airlines has, i believe, its a nationwide ground stop going on right now. Do we know why . Yeah, its an i. T. Issue. The system that is used to calculate weight and balance for all flights is not functioning correctly. So, you do what youre supposed to do in a situation like this. You do the ground stop. You dont want these planes taking off when youre not entirely sure about the weight and balance. You need to know that, 100 . Theyre doing the prudent thing and its a ground stop. Phil, thank you. Phil lebeau. As for our Broader Market right now, of course, you saw it moments ago, we have turned around. The s p down, nasdaq as well, adding to losses that have already taken place during the course of the week. Tesla noted underperformer yet again, down some 1. 6 . Mo le rkt a lot reivmaet coverage for you straight ahead. 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. Great job astropersons. Over. Boring is the jumping off point for all the unboring things we do. Boring makes vacations happen, early retirements possible, and startups start up. Because its smart, dependable, and steady. All words you want from your bank. Taking chances is for skateboarding. And gas station sushi. Not banking. Thats why pnc bank strives to be boring with your money. The pragmatic, calculated kind of boring. Moving to boca . Boooring. That was a dolphin, right . Its simple really, for nearly 160 years, pnc bank has had one goal to be brilliantly boring with your money so you can be happily fulfilled with your life. Which is pretty unboring if you think about it. Thank you, boring. Good wednesday morning. Welcome to money movers. Aisle Carl Quintanilla live with sara eisen. Today, Marathon Asset Management bruce richards. Why he says powell will succumb to political pressure to cut rates one, maybe two times this year. Plus, well talk why hes so bullish on apan. Then, barclays cutting its tesla price target, saying next weeks earnings print will be a, quote, negative catalyst for the stock. That as tesla asked shareholders to approve a once voided 56 billion pay package for elon