tv Squawk Box CNBC April 4, 2022 6:00am-9:00am EDT
good morning tesla out with first quarter delivery numbers over the weekend. starbucks founder howard schulz is back details straight ahead. and amazon warehouse workers in staten island voting to unionize we will tell you what happens next it's monday, april 4th, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live in the nasdaq market site at times square
i'm rebecca quick along with joe kernen and andrew ross sorkin. welcome back >> i feel like i didn't get anywhere first time i had a cold. >> none of us are used to getting sick are you kidding? >> is there a thing as a cold? >> yes >> when you get it, it's, oh, no >> here we he e go again >> weird world you got nothing else for two years. >> nobody got sick for two years. kids didn't get sick >> you think, oh, no >> you don't know what's coming. >> you test and test and test and it's a false negative. then it's a cold is there such a thing as a cold? and flu, too >> it's bad. my son had flu recently. we forget. >> you have a combo test >> they have a covid and flu test the doctors now have the thick one swab you can figure it out. that's the next thing on the
market >> great >> technology. great. let's look at the u.s. equity futures it's monday morning. right now, you will see the green arrows across the board. not big advances dow up 31 points s&p futures up 76. nasdaq up by 56. if you want to look at where we stand year to date, check it out. right now, you are talking about the pressure on the averages the dow is 4% from the high for the year 5.7% from the all-time high. s&p is down 4.6% for the year. nasdaq down 8.8% from the all-time high nasdaq in correction territory transports with the roughest day since june of 2020 thereasury yields the talk was the inverted yield
curve. it happened for five minutes ten-year is at 2.397%. the crude oil prices this morning had come back down below $100 briefly this morning. right now, they are trading below $100 at $98.73 starbucks suspending billions of dollars in share repurchasing this comes as how old schoward schultz starts his first day back with the company. he announced plans for $20 billion of dividends and buybacks for the next three years. he will lead a town hall meeting at starbucks on first day back today. it will be fascinating to see
what he does and how he shifts things at the company. given the union push there and also clearly what needs to be additional investment this is part in parcel with the union. the go to stores and the line is out the door the joy of the whole thing has been a little lost because so many of the workers, many now want to unionize, they have too much to do it has become a factory floor as opposed to the third place where they used to write your names. >> artsy and stylish they were selling a lifestyle. >> now 70% of coffee now at starbucks is being taken from the store. the idea of the third place unto itself becomes complicated >> they have become more of a
factory line >> it will be interesting to see how howard approaches that one of the things howard used to talk about is the idea if a company could exceed, i love the idea, if you could exceed he can pec expectations of employees, they would exceed the heexec execs expectations of customers. >> how many drifnks? it is not like black coffee. it would be hard it would be hard to be a barista. i was reminded of a "jeopardy" question they go in and write the name on
the cup. it's marc with a "c." he got it and he got carc. this is how sad this is. we are watching friday's "jeopardy" last night. >> taped it. well done. jpmorgan chase ceo jamie dimon releasing the annual letter this morning. leslie picker joins us now with the highlights leslie, i'm writing a letter i want to get this publicity larry fink i can write with a letter. i may not talk about the same stuff. >> you could write a letter. make sure they spell your name correctly. >> right >> joe with a "j." makes sense. >> that's right. >> to your point, dimon releasing the letter to
shareholders he has a number of factors that may increase the risks ahead these factors include strong u.s. economy and high inflation and the war in ukraine his view of the economy was relatively positive. he describes the consumer as in excellent financial shape on average. consumer spending is 12% above pre-covid levels that segues into the monetary policy the stronger the recovery, the higher rates that follow i believe that this could be significantly higher than the markets expect according to dimon the stronger the quantitative tightening he believes this will cause consternation in markets the war in ukraine and the sanctions on russia at minimum will slow the global economy and it could get worse more sanctions could be added along with the unpredictable world with the commodity supply
chain. this makes for a potentially explosive situation. i think he means that word in more ways than one as for the firm, dimon is not worried about direct exposure to russia, but jpmorgan chase could lose $1 billion over time as a result guys >> that's legitimate did he say anything about globalization? that is the last thing we heard in one of the major letters from larry fink >> yup he really did echo the comments made by fink and howard marks. the idea that companies need to be rethinking their supply chain and looking at who they are doing business with and be whether they share american ideals and values and what it means for the future and potential risks. he talks not necessarily in the deglobalization station, but companies are looking into this
and there could be a fraction of supply chains opposed to what has been comparative economics >> did you search the letter for crypto or bitcoin? >> i read the whole thing. there wasn't anything about crypto or bitcoin. he did mention the competitive threat of the thintech economy and what it means for the banks and the shadow banking environment and banks getting a decreasing share of the pie as result of the innovation he expects a merger wave as a result of that >> i think jpmorgan chase will help you with bitcoin, right andrew, they will, if you need >> you get exposure through jpm. i don't know if you can buy direct leslie, you can't buy direct >> i don't think you can buy direct i do believe you can get exposure they were looking into ways to help service that.
>> which is weird. with how the ceo feels he has had evolving views? >> i think everybody had it. >> evolving views. >> i would say everybody had evolving views on cripycrypto >> thanks, leslie. tesla report the first quarter vehicle production and delivery numbers over the weekend. delivered 310,000 vehicles in the quarter. that compares to 185,000 deliveries in the same period a year ago q1 numbers fell short of the street expectations. check out shares of tesla. not reflecting any disappointment up 1.1%. separately, tesla was unable to reopen the shanghai factory as it hoped today tesla expected the first batch of workers would clear lockdown in time to resume production overnight. the plans were canceled with no
reason provided. i can think of what the reason might be the factory has been shutdown since march 28th after shanghai began the two-stage lockdown phil lebeau will join us later on tesla >> there is a video going on unbelievable >> what was it >> awesome >> the comparison of the tesla factory? >> the factory in germany and one of the drone movies where they run the drone for two minutes through the factory. under the car. over >> it shows the difference with the tesla production line versus another? >> it doesn't show you what another one might be you visualize. it is a minute before you see a human in the factory. >> that is the issue we have the playbook for inverted yield curve what do you do we will bring you portfolio options for when rates are flashing a big red warning sign
that recession could be coming. later, amazon workers at the staten island warehouse voted to unionize we talk to the president of the seiu about what comes next you are watching "squawk box" live from the nasdaq market site live from cnbc. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. ok, let's talk about those changes to your financial plan.
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we have breaking news for you. twitter shares surging right now. up 25% this because tesla ceo elon musk has taken a passive stake in twitter. the filing amounts to 9.2% of twitter common stock i don't know what you think. a week ago, here he was saying he wanted to start his own he is not doing that let's bring in dan ives from wedbush. what do you make of it >> i think there are two things. one, musk, could try to take a more aggressive stance here on twitter. you know, this eventually could lead to a buyout in terms of how he could go down the path. it is no surprise that he wanted to do something on social media.
this is really him not just talking the talk and walking the walk i think investors will speculate. this is given what musk has been talking about from the social media perspective. >> do you think at 9.2% is a precursor to a buyout or larger withability? he wants to push for a more hands-off free speech approach that has flown in the face of the way big tech is thinking about given the regulation in washington do you think he will go at it in a different way? >> i think this is the starter musk is not going to do this just to take a passive stake he will try to really change twitter in terms of more active state or eventually could lead to a buyout. i think that is how he is going about it
it's something where this is no different when it comes to space or electric vehicles if you look at how musk looks at social media, the ground swell has been there twitter is the perfect candidate. i think this is the start of musk taking a much more active role even just for starters at twitter. >> dan, if this is true and he goes super long on twitter and changing the policies around the company, what do you think that means for truth social what's it called >> who knows >> the spac. >> this shows how hard it is to do from scratch. he said why not buy twitter. >> i think that's a good example. i think musk is someone that even though it seems like he does things spur of the moment
with the situation like this, he recognized from the ground up it is nearly impossible look at twitter. it checks every box. it is something where musk recognizes he could have the much more active role there and drive twitter strategically. i think it is one from the investor perspective that many left to the side in terms of apathy now it is going to change the story. just to be clear, this is just the start. >> this makes it a little more understandable why he is pushing back at the s.e.c. he wants to say what he wants on twitter. he signed that agreement with the s.e.c. to say he would have somebody signing off on his tweets now it makes sense why he is pushing to have that reversed. >> he has a libertarian streak in him twitter, in certain sectors, really has infuriated. you saw the quote. they were banned for a while
the leader of the taliban has been blocked because he retweeted one of the babylon tweets >> i don't think twitter blocked elon musk. >> no. they are arbitrary about who they block. >> dan >> yeah. >> here is where it gets complicated. this is a little bit of a jeff bezos scenario all of a sudden, you have a guy, potentially, and we're in pure speculation territory. either, according to you, controlling or major influence, let's say, over twitter in the future and these massive issues about free speech and very controversial issues, right? this is what jeff bezos has been blamed in cases when it comes t the washington post. you have political leaders who will sit around and say actually, you know what? elon musk, you are screwing with
me here or doing this or that. i don't like that. now i'm going to do something to you when it comes to -- do i want to give a government contract to you for spacex do i want to give a tax benefit to you for tesla if you are a shareholder in these other companies this morning, what are you supposed to think >> it complicates the situation given where they play in electric vehicles and with space and the relationship with u.s. space program. i believe this is really almost a walled strategy in terms of something where he really starts to take a much more active role in twitter, but in some way do it from a balancing act so it does not effect the better businesses bezos is a good example with the spotlight. this is has been building for years. i think it is now reached a
point where musk recognizes now or never. >> dan, i think elon musk and passive is like an oxymoron. he is not scouring the broken down tech sector for values there to try to make money oh, look that's cheap i'll take a stake here and try to make money. he makes money himself with his own company. that's why i don't think this, by definition, is not passive. he wants something from this and not profit >> that's right. >> this is not just a quick hit on making money. he wants to influence how twitter operates. >> he made a lot of money. that's not why he does it. >> joe, i would say there's a better chance of me playing in the masters this weekend than musk staying passive >> i haven't seen how you play. >> if he has to do the filing, he now owns 9.2% of the common stock. he has to file this if he were
building toward 10%. you have to file within three days of hitting that 10% who knows what he was buying last week? this has the market cap on friday close of $31 billion. based on the jump now, you are talking about a cap close to $39 billion. if he wants to buy more, do you need to buy more if you own 10%? how much of the weight do you get to throw around at that point? >> well, look. i think right now, the big question is from a filing perspective what will be the next week or two also as well as what comments musk comes out with. this is something that will start a buyer's storm in a good way and bad way. the next step is what types of filings or statements they make in the next week or days >> dan, before we let you go, technical perspective. we were talking 9.2% right now
if it wasn't a passive stake, could it be 9.2% today and 10% tomorrow >> i think that's very possible. i believe this is probably a passive where he wants to start some engagement with twitter with the board behind the scenes defen defenpending how that goes, tha depends on the conversations. >> you can't keep buying >> you can't buy 9.2% and then try to buy more. you can't file as a quote passive and then become -- i think you have to say what your intention is from the get-go >> i'm reading the s.e.c. filings. it is thin not much in it >> right i think once you declare your passive. paul -- we will bring in awe
ca couple of people paul and sylvia is here. paul, i don't know how much legal training you have in s.e.c. filings we were discussing once you sort of announced intent as a passive investor, i believe there is some period. i could be wrong about this. you can't become an active investor tomorrow. is that right? >> i don't know for sure it is more what you are saying, andrew you have to state your intentions at first and you can't change them fly pi by nigt >> can you still buy shares as a passive investor >> once you get above 10%, it is an issue i'm not 100% sure on that. don't quote me i think at this point, pecbecky, you were talking about the
market cap 9% under $3 billion. elon musk worth $300 billion it is not necessarily big stake for him. you know, if you are saying is he going to take an interest in twitter here i'm thinking about it from a tesla shareholder perspective. do i want elon musk focusing attention on twitter when i have tesla with production which has been great at the company. they handled the supply chain issues fantastically as they are growing, do you want to be taking your eye off the ball that is something first impressions of what you hear now. it gets people talking about the company. andrew, you were talking about twitter and the political perspective. take a hands off approach and let people talk and say what they want.
you have less -- you have more cover by letting it be more of a free exchange of information >> paul, that complicated part is a very -- not a libertarian view, but let things fly and see what happens the argument that i make on the other side is i think you will have political leaders who say, look, people are spewing misinformation anald lies that's what we have been talking about for the last four or five years. here is elon musk, if that is what he is supporting, i'm not suggesting that. if that was happening. they will then say we will penalize spacex or tesla in this other way. sylvia, what do you think of this >> i think it is a great point i'm not sure regulators could obviously go after his other business lines because of this
i think knowing elon musk and his reaction to things, he would file legal action against something like that. i do see your point in another way. >> have you not seen the state of georgia go after delta for voting rights or just about anything else they thought was something on the other side of them politically >> or baezos with the washington post. >> and what could happen is regulators will be more interested in twitter. they are with censorship and policing comments. having elon musk taking on more than a passive role there is getting the watch dogs on twitter. on the short-term, dan ives said it he is the king of all influencers. everybody will watch and see what happens here. if theyhe takes on a bigger rol.
i do think there will be a much bigger regulatory paying attention on twitter if he goes beyond passive here. >> i was looking at the twitter feeds of jack dorsey and elon musk elon musk on march 24th did a poll and asked, twitter algorithm should be open source? yes won by 82% jack dorsey retweeted that said the option should be open to everyone. if you want to wonder what he might be pushing twitter in one direction or another he has been talking about it openly on twitter. >> sylvia, you made the argument of the interest he is doing and this would create more interest in twitter and more interest from advertisers maybe the question i bring to dan, because he has been covering this so long. we had four years where president trump, you thought,
given the engagement and hysteria and every morning headlines. all related back to twitter. it didn't seem to actually change the dynamic of the business at all. dan? >> yup look, that's the irony from elon musk's perspective, it has been disappointing you combine that with all of the other noise there. if there is a time he is going after twitter, this is it. investor frustration builds across social media. you see what other platforms have done from tiktok to others. i think it is a new age for social media and musk recognizes there was a time to do this. >> add it or not to tesla and spacex? i argue that spacex adds something and tesla gives it
something to spacex in a weird way. twitter may be compliccomplicat. >> the sum of the parts, i agree with that. i don't think as a negative. in terms of investors, they are not worried about musk taking the eye off the ball this is in terms of what musk touches, this will be viewed as a knee jerk positively from tesla investors. not negatively >> we will leave the conversation there for now i should say we will spend a lot more time over the next three hours talking about. it th it thank you to all three of you. if inflation is up and out pacing your annual pay raise, you are not alone. your options and what you can do straight ahead we're coming right back.
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live from the nasdaq market site in times square. futures are higher barely at this point dow futures up 5 points. s&p futures still up 6 points. nasdaq up by 62. joe. ceo pay is on the rise wall street journal found median pay rose $14.2 million for the leaders of s&p 500 companies up from $13.4 million a year earlier. most ceos received a pay increase of 11% or more. nearly 1/3 received a 25 praise. pay for rank and file employees rose, too. more slowly. half the companies saider pay cs we need to know median versus
medium some skew. i doubt that is median if some earn $100 or $150 with the stock. is skews i need to know the median. it is important to know. and the raises many americans receive this year out paced by inflation. that leaves many wonders if it is okay to ask for more. joining us now is tom gimble i think with your employees, the answer is simple no get in here. work back in the office and you get nothing and you like it! we have seen you on here before, tom. that's probably overstating it >> wow i'm glad my employees are sleeping right now, joe. >> i'm kidding you are tough. you are tough on what needs to be done. >> i believe the system is based on getting in and earning your
stripes and showing what you can do and come pensated for it. this is the market show. the market sets wages. the market is based on unique skill set. you have record low unem unemployment, it is a different situation. now we have inflation. we have a real problem here. in a true democracy like this, what is happening with the average workers is they credit the government and politician when things are good and average worker blames the corporate america when things are bad. so now we have inflation going up wages are going up people are saying kudos to the politicians for getting wages up now there's inflation. that's bad because corporate america and markets are doing that neither are right. that's the challenge we face as leaders. remember this, there's only 500 ceos we're talking about the
average. we do the employee wage gains. we are talking about millions of people if millions of people had 14.5% increase in wages, you want to see inflation? this country would be gonzo right now. >> i wonder what for society, the best thing is, tom one of the things we have not seen in decades is wage price spiraling. we have the beginnings of that potentially. prices are up so much that people are going to be demanding wage increases it starts feeding on it sself now companies think we have to raise prices because we are paying employees more. it is a vicious cycle. we're heading into that. >> what is right for society is wage growth over time. what we saw is the hourly unemp unemployment the $7.50 unemployment was way
too low. you had a real minimum wage about $9 to $10 an hour in actual ty. that was too low people from $10 to $17 overnight and no interest rise the wages grew too fast. before i get the hate messages they were way too low for too long to go from $10 to $18 in two years is crazy and hard on the economy. that is the challenge we are facing now you have inflation going up. employees don't want to give up the money they earned. who wants to simultaneously, it doesn't go further than before with inflation up like this >> tom, that is all good and well, theoretically, but the reality is, every ceo i know is having trouble finding employees. it is not just ceos.
restaurants and retail sales any of those places. if you don't pay up, you won't find workers you can think it is not good to increase pay, if you don't do it, you will not service your customers. that's the reality of it >> you are 100% right, becky it is almost right now no matter how much you pay, you can't get the workers. now we have the challenge. we are almost at full unemployment unemployment used to be 40 years ago, 2.5% was full unemployment. that number is closer to 3% now. that is the confluence of events you have you can keep paying, but not get people to do it. when you do it, you were talking about it earlier in the show andrew said at starbucks, workers want more. it is hard to manage employees he can expectations people are throwing money at them it is the small to medium size companies and with the rate increase, that is impossible
that is the challenge. there is a labor shortage in the country. >> tom, it is often pointed out that the prime rate or gas prices, it seems like they spike up and then when they come down, they float down. companies are in charge and for whatever reason, you know, they like to maintain profitability as long as they can. is that the same way with wages? you see inflation and companies raise prices in they can they will not pay employees more immediately. is that different this time because it is so tight the labor market is so tight and we see it ckeep pace? >> it is people who maintain jobs when unemployment rises, their salaries never go down again you have a calibration and --
re recall brags and the rank and file are terminated because the businesses cannot afford to keep them and then lower rate the companies say gas is a great example. if the margins are not really high in gas and petroleum and what you have, then why would somebody take the risk of what the capital expense is to do it? that's where it gets lost on the layman if companies are making billions of dollars, why not pay more that is valid. i don't disagree entirely. you have to go back to the beginning. that is you only invest huge amounts of capital obviou europe ly -- usually if the returns are big.
that keeps the engine going. >> we didn't have your counter point on >> he is probably speaking in. >> i'll speak for her. i disagree. >> i'm not an ivy leaguer. i went to colorado >> i don't know why we didn't have her on. we will have her on and you back i think paraphrasing. >> she would have been nicer to me, joe. >> she may have been kinder. tom gimbel, thank you. >> she would have come up with better words when we come back, more reaction to the breaking news of the morning. elon musk taking a passive stake of 9.2% of tigerwitter shares up 25% this morning "squawk box" will be right bac k.
i agree with dan ives. i do not believe this is the end of the elon musk involvement in twitter. it may be passive, but it is the beginning. we have seen this before we are not surprised he is taking the stake over what he said about starting his social media platform i will be curious how it shakes out. that happening on the day when people will say let's talk about deliveries for the first quarter for tesla. they came out on saturday. they were shy of expectation the company delivering 310,000 vehicles 95% were model 3 and model ys. that was expected. why has wall street reaction been positive? despite this was short of expectation? look at the challenges front and center, shanghai factory. they had to shutdown that plant four days last week with the zero covid policy in china that is the real driver of
production and deliveries for tesla. elon musk tweeted on saturday. this was exceptionally difficult quarter due to supply chain interruption and the zero covid policy outstanding work by tesla team and suppliers. save the day what do we expect from tesla for the full year? we have not seen much change in the expectation on wall street 1.45 million vehicles expected to be delivered this year. that would be a huge jump from the 936,000 that we saw last year by the way, the run rate, at this point is expected to be 2 million vehicles annually by the end of the year. it doesn't mean they will deliver 2 million this year. the production run rate. that is the expectation at this point. this is the huge week for tesla. they have the gigafactory in austin opening, officially, deliveries starting on thursday. that will be a giga-rodeo
according to elon musk coming up in two weeks on april 20th, that is when we get the q1 results. we will hear from elon musk at that time. we think we will hear from him he said in the past that sometimes he may not be on the earnings call unless he has something important to say there is a lot going on. we hope to hear from elon musk on the earnings call we're in the midst of the big period for tesla as it ramps up production back to you. >> phil, we said whether tesla shareholders should be happy about his involvement in twitter. what do you think of that? >> sure. why not? i agree with dan ives. i don't think people look at this and saying he is taking attention away from tesla. he is multitasking. >> political implications, phil, for how federal or state governments decide to treat him
depending on how twitter decides to approach information, free speech, misinformation and the like >> great you brought up a great point with delta when you said look at delta when it took a particular position and you had the legislature in georgia saying, we're not happy about that i'm not sure we should expect anything to happen in that raurd with tesla or spacex and business ak itctactivities it is too soon. >> can i go back to the delivery store? what are they with demand? how long of a backlog is there >> i don't know if you call it a bac backlog. it depends on what you order with that particular vehicle the demand is out stripping supply at this point the delivery of 310,000 vehicles production was 305,000
if you talked with some of the analysts out at the factory, they describe it as bursts at the scenes they cannot crank out vehicles fast enough. one other thing to keep in mind. the model 3, 1 out of every 4 luxury vehicles in the united states right now, is the model 3. think about that for impact. >> wow phil, thank you. see you later this morning >> you bet coming up when we return, crude prices slipping back below $100 a barrel. we will talk about the price drivers and american energy independence next.
near $100 a barrel $99.39 right now as the war on ukraine rages on and western leaders focus on rebalancing their imports away from russian supplies joining us right now with more on the push for energy independence in the united states and beyond is heidi heitkamp she's former u.s. senator of north dakota she's now the founding board member of one country project, she's a cnb contribut c contribd has an op-ed article out now we're down at $100 a barrel, but that has much more to do with the shutdowns we're seeing in shanghai and other chinese cities right now, really crimping demand. i don't know how long that will last before we get back to the push of higher and higher crude
oil prices based on high numbers. what should we be doing? what can we be doing you've been pushing for energy independence in this country we saw rough patches because they overproduced around overspent and the investors said stop it. they pulled back they had that period of adjustment during covid, and now you have to look at the fundamentals we obviously need more supply in the pipeline to replace both russian oil but also to recover from covid and the low demand amounts we have there. so now when we're looking at what is it going to take to get american oil producers to basically make those new investments, and the dallas fed just did a very important survey, i think, asking people what will it take.
and they basically said, look, we need our investors to agree that it is a time of expansion and a time of investment we know we can make money at $100 a barrel. we can make a lot of money at $130 a barrel and not overproduce and not overspend. and so we need to have a sustainable long-term energy policy that's not based on gimmicks, it's not based on, you know, the political narrative, but it's based on the fundamentals, and the fundamentals have to be that there's sustainn't government regulation, sustainable government tax policy so that's predictable to investors, and we have to look at how we're going to build infrastructure. we forget one of the big challenges in energy isn't discovering the source of the energy or producing the energy, it's moving internal and we're in a spot where it's very hard to build a pipeline. it's very hard to build energy infrastructure
and so we've got to get real about a real energy policy that builds for the future, and, yes, deals with climate, but it can't be about gaimmicks or political slogans. >> even if they wanted to drill, they would have a pretty tough time just with the issues we're talking about that everybody's faced with, the supply stain industry where you're going to have a hard time getting the steel you need for the pipes and the shortage of workers. they havemoved on to greener pastures when we saw everything go negative, everything shut down even with those factors, good luck finding the workers. >> again, if you have work in energy and you hear about the bridge field, whether it's natural gas or you're going to transition away from oil, you're thinking as a 40-year-old, is that an industry i want to be part of? i need to look at something else
that has a long trajectory in terms of public policy and in terms of being available to me to feed my family. i think what we've got to do is understand the fundamentals, again, go back and say, look, we cannot turn this economy on a dime in terms of fossil fuels and energy, but the fossil fuel industry has committed to moving their industry toward a more sustainable c02 policy that will actually reduce their climate impact let's give them a chance to show us what they can do, particularly when it comes to natural gas. one of the reasons on climate we've been able to achieve any kind of goals as it relates to c02 is because of the conversion of gas this is about sustainable investment. >> you have an op-ed on
cnbc.com you say americans are not financially literate >> we haven't been financially literate for a lot of years. when i was attorney general, i would shake my head when i would see the kinds of scams people would fall for i thought, well, we can educate elderly people, seniors, not to buy into the nigerian scam or we can start at the beginning and actually build a whole class of people who understood, you know, if it's too good to be true, it probably isn't true. how do you buy insurance, how do you file your tax returns without spending $500 to do it, and there really was not an appetite within the education system to actually build out that kind of class work, and as a result, we continued to fall further behind as we look at inflation and things that challenge family budgets, one of the ways, we
can, in fact, help families do better financially is have them make better decisions in how they spend their money, understand class value of money. one of the things i press all the time, if you're in high school, start saving now einstein once said the greatest invention of the 20th century is compound interest because eventually that early money gross into retirement security. >> it goes all the way back to ben franklin with that thought heidi, thank you by the way, folks, to read heidi's full piece go to cnbc.com/investin. you. it's an investor in akorns you should know cnbc is an investor in acorns. it's 7:00 on the east coast and you're watching "squawk box. i'm becky quick along with joe
kernen and andrew ross sorkin. former house richard fisher and cea member jarerd bernstein. the big story of the morning, twitter, elon musk, and, yes, what let's moving in the stockmarket. that's what let's moving in the stockmarket. dominic chu is watching. what do we have? 25%? >> just about. we'll take a look at this that in just a moment because it's a great way to kick off a massive conversation that's happening not just with social media but everything else in general regarding tech valuations and big characters as well let's first of all start off with headline news coming out. starbucks shares down about 2% ahead of the premarket trade
howard schultz, former ceo is back in the role of ceo. one of the first things he's doing is suspending the share buyback program. it's been a lightning rod with regard to whether or not they're the best use of cash well, howard schultz has taken a stance on this he said they're going to suspend the cash buyback program he thinks the cash is better used to help with their company and employees. remember, back in the fall of last year, then ceo kevin johnson had pledged to return $20 billion back to shareholders in the way of dividends and shares next up we've got the chinese enter net stocks because they're, again, catching a bit of a bid re, overall as an industry group, this group has lost two-thirds to three-quarters of its market value as a group over
the last year on regulatory concerns in china. now chinese regulators have signaled they may be open in working with u.s. officials and regulators, opening up the books to full audits as to the nasdaq, they're up the kraneshares is up. netease is up, baidu and pinduoduo. twitter shares are up $10 almost on the nose right now, $49.32 it's 26% gains, this after, yes, tesla founder and ceo elon musk who is one of the most widely followed folks on twitter and social media in general has disclosed an irregulatory
finding that he's taking a hit andrew, the story of the morning so far, a huge move in terms of the company, big character, and conflict going on. elon musk has taken offense to twitter policies on speech and censure and what they do >> i was just thinking the market capital of the company is about $31 billion >> for twitter, yeah. >> if you wanted to take it, do the whole thing right now wlrk he could, how much did he sell at christmas >> yes remember how he took 10% of his overall nets r net worth remember, we talked a lot about the idea that it may have been used for taxes or compensation hae gave in the form of stock options. it could be big. but, if you wanted to, i don't
know why you would want to do this and maybe not be active, right? this is a passive stake right now. we know elon musk has taken a lot of expense. >> you say you're passive until you can get in the room, try to get a meeting going, finding out what's possible, where things stand, who you can maneuver on the board, what private equity funs are out there you can work with. >> he wants the stock back up. he wants to do it to influence -- >> he's already got the stock up. >> you go in passively and you see where things are, and then it becomes more or less. >> it doesn't look like he's going to be in the masters dan ives said he has a better chance of being in the masters than this being passive. and you have a better chance of being in the masters than van nuys remember, the stake at 9.2%
doesn't trigger anything that's the only reason it's passive until it's not. we talk about the early days of wall street, late 1800s and early 1900s when cartels would form you get the bare barons to take over the railroad that's illegal these days. when you have a 9.2% stake, that's a very expensive statement. >> would you be sur pried if he took it private? do you remember 420? >> i remember 420. this is cheaper than taking over tesla. >> it was tweetedelon is going to change the characters allowed to 420 on twitter. >> i'd actually be in favor of
that i sometimes feel i need more runway what is it 250? >> 280. >> 280 a much less. >> thank you, dom. in other news, ceo jamie dimon released his annual letter this morning and it is making news leslie picker has been going through all of it, and she's got the highs. leslie. >> a closely followed letter dimon puts out every year, alt although, this year striking a more serious tone. over the course of its 44 pages, he focuses on issues plaguing the economy all while noting that the consumer is in, quote, excellent financial shape on average, but dimon set the war in ukraine and sanctions on russia at a minimum will slow the global economy, adding it could easily get worse from there. and he believes rates could be
significantly lower and that it will cause lots of consternation and volatile markets dimon said all together these factors will be different circumstances than experienced in the past and their confluence may dramatically increase the risks ahead. he shared a multi-pronged plan for what he called the russian challenge. this included increasing our military budget, direct billions of dollars in aid to ukraine, turn up sanctions, and that marshall plan for energy security that we talked about here on "squawk box," it's something he's said to have communicated to the biden administration about two weeks ago. as for the firm itself, dimon said he's not worried about direct exposure to russia, though he says they could lose about a billion dollars over time guys. >> leslie picker, thank you. appreciate it. coming up, amazon warehouse workers in staten island making
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on friday, voting for a union. let's welcome in mary kay henry. she's the president of seiu. it's the second largest union in the united states representing health care, government, and other workers. the seiu did not offer support in friday let's move but it's welcome. what do you think about amazon's unionization >> i saw that. he said this is a bfd for working people all across the service industry it inspires starbucks workers,
nursing home workers, hospital workers, everyone all across the economy to have the confidence to join together and demand unions for all workers >> you know, we have heard so much about unionization in this country, and there are so many efforts that are taking place, places where there are strikes and other places like starbucks who's trying to unionize at the same time, union levels fell to the lowest we've seen. how do you match up what we're seeing and hearing >> there's been an attack on unions from state legislatures and major corporations for the last 40 years, and i think workers are rising up after this pandemic and saying enough is enough we can do better they were demanding, respect us, protect us, pay us
we're witnessing the great resignation of workers to the day of reckoning, not quitting their job, but joining together and demanding unions. >> i guess i wonder what happens next we're talking about labor levels hitting incredibly low levels. employers are desperate to find workers. as a result minimum wage has come up significantly. it's risen dramatically. the ank amount companies are willing to pay has gone up rather sharply the last couple of years. >> how long does the chide change when you get back to a position where if you head back into a recession, jobs are harder to come by, and how lasting is this movement >> i think this historic uprising of workers is going to result in more workers joining together and bargaining for a better life by taking a poverty
wage jobto a living wage job t raise money for this kim jong-un. i think those who want to celebrate and support will fuel other workers like starbucks workers. that would inspire nursing home workers as a result of the pandemic and airport workers who are saying to american, delta, and united, now is the time for you to invest in the contracted out jobs that need to be unionized all throughout the servicing care sector. >> companies have stepped up and agreed to pay higher wages what are the main goals in terms of what you'd like to see that you're not able to get now anyway >> the higher wages have to be made permanent through a collective bargaining agreement. we've seen cases where the $15,
$18 hiring wage lasts for the first two to three months on the job and then the wage is decreased, and so the only way wages can continue to rise all across the servicing care economy in the u.s. is if people demand unions for all and are able to bargain wages, benefits, and conditions that allow them to raise their families. >> hey, mary kay, how do you weigh the higher wages on one side and investment in either stores or facilities that make those jobs work better the reason i'm asking the question is i'm thinking today is howard schultz's first day at starbucks and there's two conundrums i see at starbucks. one is the labor issue you're talking about. the other issue is simply that there are too many people in those stores right now they need to either somehow
invest in technology or other things to make that whole situation a more workable situation. no matter how many times you walk through a starbucks store these days, there's just too many people there, and you're going to have to invest in that. i could see a starbucks saying, look, if we support a unionization effort, that means more money will go to the employee side of it than necessarily in upgrading the stores or the other opponent parts that might make the employee's life easier in some other ways. >> i think the starbucks partners in those stores would take issue with how many people are staffing the stores and whether it's too much or too little that's why howard schultz on his first day at starbucks needs to decide whether to welcome the union and treat his partners as actual partners in making that company that they actually love and want to make better -- a better one through a union and that's what starbucks partners all across the country
are telling us they love the company, but they want a say on the job. it's possible to be completely union and be very successful talk to kaiser perm anyone tate or harley-davidson or other key employers in the economy who have figured out how to respect the workers on the front line through a union and pay them a living wage with derecent benefits that they can raise their families on. >> mary kay, a lot of research has been done on the decline of unions, and you mentioned a couple of things they're from your side, but there are many people who have written, and some business leaders, quoting from research, now more than ever i get it when it comes to employment relations, accelerated employment engagement, and personal development efforts the younger generations are making union representation
unnecessary. they're much slower to change. in terms of what it takes to have a success country, they need to change the market conditions very quickly and that's much more difficult than collective bargaining either one of those things do you think would play into why we've gotten down to historic lows >> no. i think it's part of the anti-union attack that has been going on if political leaders care about the quality in the u.s., they may need to figure out ways to allow workers to decide for themselves whether or not they want to join a union and not pour millions of dollars into anti-community consultants and business papers like the one you just quoted from, an recognize when workers -- when 30% of the
workforce was marketing in the '70s, wages were rising for all working people and economic ini kwault was shrinking we're going to to decide, we're going to see if we do that in this community we believe that's a key lever on inequality, and we would challenge others to let workers decide for themselves, and then let's figure out how to deal with the worst worker shortage in our lifetime because people just walk through fire and ice by showing up every day as essential workers during this pandemic and now is the time for business workers to come together and solve these problems. >> mary kay, thank you for your time today. >> thank you. the ceo of hertz is going to
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welcome back to "squawk box. it was a nightmare weekend for airline workers with nearly 2,000 flights canceled thunderstorms prompted the faa to limit flights over a large portion of florida and halt flights at several airports in the state. egg prices continue to surge because of a rapidly spreading outbreak of bird flu the agriculture department says more than 11 produciers say chickens have died from the disease. egg prices are up. there would be $10 billion in aid for covid trials and treatments and vaccines. there are aid funds that remain
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twitter shares surging -- check this out -- by about 25% this cos after elon musk said he has taken a passive stake in twitter according to s.e.c. filings. we've been looking back at some of musk's tweets, and maybe a few caught our attention on march 24th, musk put out a twitter poll asking if their algorithm could be open. jack dorsey said it should be open to everyone on march 6th he said given that twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines
democracy. what should be done? i think he has his own ideas >> i don't know if he's a good golfer, but he said he had a better chance of playing in the masters than being a passive investor. >> i'm curious whether he paid for it in bitcoin. we'll see. >> or dogecoin. >> whatever. >> doge. >> the reality is twitter never had a big shareholder. you think about the tech companies. they all have controlling shareholders, super voting stock. what's always been amazing about twitter is it's this massive global communications platform, information platform, has no controlled shareholder, certainly has had its challenges in the past. we've been making point for a long time, this company can always be acquired i mean there's lots of
opportunities. i don't if this is true or not, but i do think it understcores for investors that twitter could be acquired. given than vesters have given up on so many tech stocks across the universe, it's certainly highlighting twitter has had a lot of progress, growth, that investors have ignored because of the cost side of the equation. >> we just showed you the tweets from elon musk this is not about profits and losses and user engagement you see what it's about. >> actually i disagree i think it is. >> why isn't he scouring the broken -- all the fallen angels in techs and taking stakes in all of them? >> no, no, joe you're missing the point the reason he's making comments about open sourcing and the town
hall -- this whole way he's thinking about it is because twitter has gotten so big and so important he believes there should be different algorithms or different ways for informatinform to float to the top he does care twitter is relevant. it's the most important information platform. >> you're missing the point i'm making he's not trying to juice the stock like an activist investor. he's doing it because he wants to change the way that twitter's being run right now in terms of censorship and everything else you don't think that's what he's doing here you think it's purely an economic play? there's a lot of cheap companies out there that he's not interested in. >> 9% stake is not going to give him the ability to change the course of this company so we'll see he's got to own a lot more than 9% to have an impact on how this
company is run. >> you have to start with 9% you can't start with 60%. >> rich, i've been asking the question all morning how you think it should influence or if you're an investor in a tesla or spacex you should think about this the parallel i was drawing was jeff bezos owning "the washington post" and some of the political implications that created for amazon >> you mean -- walk me through what's your big fear, andrew >> i don't know about the fear the question is if -- it's not a fear but if elon musk decides that he's going to effectively -- have meaningful influence over twitter, twitter changes the way it functions in terms of information on the service, perhaps misinformation on the surface, he has a more laissez-faire about what's on the service, what's not, whether politicians on the left or right decide that that's not okay and, therefore, decide in the same
way trump decided to take it out on amazon over the coverage he felt was not fair at "the washington post," whether some politicians decide, you know what i'm not liking how twitter is responding i'm not going to contribute to spacex or tesla. >> i guess what you're asking is bag back when bob iger was going to buy twitter, what a hotbed that would have been for disney i think it would have been amazing. i think sort of cart before the horse. 9% passive stake let's say elon musk buys twitter, takes it over it is very different running twitter and actually seeing how all of this sausage gets made every day than looking at it from the outside the problem that they're trying
to solve from an information standpoint, it's truly monumental and it's whac-a-mole. it gets worse by the day are the tools that users have to control what they see and what they don't see better than they were one, two, three, and four years ago? absolutely look twitter came out and told you just a few weeks ago, they expect user growth to accelerate from 13% the last couple of quarters to 20% over the course of the next 20 years like they are way more excited about their next two years than the market the market is ignoring and doesn't believe. e was down with a bunch of disney analysts last week. people just don't believe the management team. so we'll see if they actually can execute combined with the potential of this company being acquired, the stock is going a lot higher. >> you think bezos bought "the washington post" because he thought newspapers were undervalued? >> no. i think it's because he wanted
to have a voice in the world but it's a very different sized purchase than we're talking about. >> it's all really active. $250 million seemed like ooh lot at the time. think about how much money elon musk has right now i'm just saying. this is not a $250 million purchase this is -- you know, this is a whole other scale, but, you know, you're right, i mean, from the standpoint part of their people that want to own assets can it >> all the way back. it reminds me of what they said. [ indiscernible >> i'm watching it again and it's all about influence, rich i don't know he's never happy you know what rosebud is, right? >> yes. >> even if he doesn't buy more,
the stock has gone higher. >> all right, rich still to come, greenfield, greenfield -- stephen scherr is going to join us. >> that's next. >> golden man. >> yep later council of economic advisers jared bernstein is going to talk about president biden's budget, vi tsanghe economy, and much more stay with us adapt to change? you could hire an office full of peyton mannings. what's up, peyton? good morning, peyton. hold for peyton. they'd huddle.... welcome to the peytonverse. such a visionary. game plan... you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha! or you could use workday. omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday, for a changing world.
welcome back to "squawk box" this morning hertz and electric vehicle maker polestarare forring a partnership. joining us right now first on cnbc is hertz ceo stooern cher, his first interview on "squawk box" since becoming the executive. also thomas engel watt is here good morning to both of you. >> good morning. >> there's so much to talk about what's going on with hertz and what's going on with the marketplace. let's talk about this partnership. how did it come together >> well, it came together as part of our ambition to grow -- to become the largest electric vehicle fleet in north america,
and we're looking to do acquisitions and transactions with all oems. polestar has come forward with a really impressive automobile, one that i've driven myself. this is part and parcel of a growing fleet that really has an opportunity to bring diversification to our overall fleet and to our business where consumers and corporates and fleets, you know, can all express interests and pick up electric vehicles. >> is the second such deal thomas, how do you think about deals like this? the reason i ask the question is it may seem obvious that a carmaker would want a big rental company to buy a fleet of their cars, but there's others who have a view about the perception an image of vehicles that are part of these fleets >> i think it's a great opportunity actually for
customers to experience a polestar in a very good situation, and they have a chance to try our car over a weekend and that will definitely help polestar's brand awareness. it will helppeople to experience electrification, driving an electric car for the first time it's on if route to becoming a big player, and this, of course, is one of the steps. >> is dus that change the shift when you think about car manufacturers working in tandem with rental companies? there used to be a view, you don't want to be a rental car, but maybe it's a try-and-buy kind of approach. >> there's -- this is differenth
one-year rental deal from the past this is obviously a long-term bringing the car to different purposes, mobility services, and this definitely is a new way, a modern way of shared mobility and make ing the electric vehice acce accessible. >> andrew, it puts hertz in a different position than it was before the way oem's view it, it's different. it's not just an opportunity for people to test electric vehicles, but it opens us up to serve uber, where a fleet of vehicles can be deployed in that segment. it serves our ability to serve a corporate segment who have their own esg obligations and objectives and can, therefore, put their employees in electric
vehicles the whole mix around it has changed and hurt polestar is now in a position to sort of feed that. >> speak to what you just described in terms of an uber contrast what kind of investment is it going to take in not just the vehicles themselves but in the network. >> yeah. there's a lot there. >> the charging network. >> yeah, yeah, for sure. first, on uber and the fleet, you know, we think that we can offer and uber agrees a price point on a rental of an electric vehicle that puts a driver in a car that i think the consumer wants. they want to be in an electric vehicle. they want consistency of product where hertz can maintain clean and put that sleek out on the street i think with uber, we've hit a price point that's attractive to hertz and equally attractive to their drivers, and so that works. the second point, the second
question you raise is an interesting one. the follow-on is what plays out with respect to charging networks hertz will no doubt be a major player, having already put in place more than a thousand charging stations across our premises, and we can facilitate 80% utilization of our fleet there's a beggar discussion at play there's $7.5 billion of federal funding that's available for charging stations, and i want you to assume oems and others are going to want to get in the middle of that. >> hey, thomas, in terms of interim operability, for tesla and your own vehicles, what's that look like, and to the extent that stephen and others are going to be investing in that network, are they all going to be interoperable in the end >> definitely the overall
network will be developing it's not only the questioning of traveling in town and how do you make this network accessible it will be a question for businesses, for restaurants. it will be a question for the retailers to attract customers, to gain this precious 40 minutes of time that these customers spend, 30 minutes, 40 minutes. this will be worth it. i see a very important investment. >> andrew, if you look forward, i have to believe this becomes more of kind of quasi open-source proposition. you know, it's almost inconceivable to assume that any one proprietary network will be as available in as many geographies as is possible, and i think you'll see this start to open, you know, more and more. >> stephen, i've got to ask you two other questions.
>> sure. >> you saw the cbs news reports. hundreds of customers allegedly being falsely arrested, cars that were claimed to have been stolen by hertz, and now senators are calling for investigations into those calls. what are you doing about it? >> well, this is among the first things that i've started to look to take care of and deal with in the first 30 days i've been at the company. it's not acceptable to hertz to have any customer, a single customer sort of caught up in some of what's happened. i think it's important to put it in context, which is if you look at the number of people that were impacted -- around it's unfortunate. these are vehicles that were reported as stolen the theft reports were withdrawn after these people were caught no one customer should be put through that hertz is going to deal properly
with people who were affected. but in the same vein, we're not going to look to people who do harm for our company we've changed our policies to avoid the possibility of this happening, and i think to put context to it, if you look at the several hundred people imp impacted, we engage in 15 million transactions a year. this is 1/100 of a percent of those transactions, but, again, it should make no excuse we will do right where our customers have been negatively affected, and i'm looking to resolve that, you know, very, very quickly. >> i've got to also ask you, jeff sonnenfeldt of yale keeps a list of companies still operating in russia. hertz is one of them how are you thinking of doing business there or withdrawing? >> we are not. we have withdrawn. we had an arrangement in russia where there was some form of
quasi licensing agreement and dispatched those to the russian operator we ceased doing that about three weeks ago, so we no longer and have not been taking reservations in russia. finally, your other partner at tesla, elon musk, looks to be taking a big stake in twitter this morning, your former banker what do you think of that? >> elon, no doubt, has something in meend withind with respect t company. i haven't spoken with him about it it would be only speculation on my part as to what exactly his intentions are. >> quick question. somebody wliets in on twitter, but tongue-in-cheek, quick question do they have to fully recharge a vehicle before returning it like you do filling gas. >> yeah, they don't have to. we're obviously working through what that pricing component would be, but we're asking people to bring the cars back at least 80% charged. but we'll work through exactly how all that works
>> that's so interesting so what are you going to do? how often do you run to the gas station right before because you're trying to avoid the bigger charge? >> you don't have time for that. >> it's a lot of compensation -- >> go ahead, steve. >> here's what i would tell you. an interesting fact is if you look at the average rental that a hertz customer engages in on the individual side, 45% to 50% of them will not need to charge in the context of the distance they drive so that's a large percentage that won't deal with that apprehension, and we have ample charging stations on our premise to deal with a car once they come back. >> i just want it to be cheaper when i return it with the gas. >> they'll have to change the way they call it consider it like a rebate. >> andrew, you're not going to have to worry about that >> i always fill it.
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still to come, richard fisher will join us. check out twitter this morning elon muffing has taken a 9.2% passive stake in the social media platform check it out the stock is up bybo aut 23% this morning we'll have much more in a few minutes "squawk box" will be right back quickbooks can help. an easy way to get paid, pay your staff, and know where your business stands. new business? no problem. success starts with intuit quickbooks.
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the economy added 431,000 jobs in march bringing the unemployment rate to a new pandemic low, but will it prompt the fed to raise rates more aggressively let's bring in richard fisher, a senior adviser to barclay and is a cnbc contributor richard, it's good to see you. >> thanks. >> we've been saying the going could get a little tougher with where we are right now and with maybe a lot of the rebound from the reopening and jobs could be tougher to come by and i guess
to induce people to come back to work, you might see some wage pressure that could also add to inflation, which the fed doesn't want. >> well, you're already seeing that, joe. one of the key data points here, continuing claims for unemployment are at a 50-year low. i mean we have -- through february, we have been reaching economic nirvana and then we had two tectonic shifts that took place in march. the first is the land w.a.r. in europe, russia/ukraine now that's rippling through already, sebbing european economies into recession we'll see what the data shows as we get through the second quarter. the other is the shift in fed policy, no longer extending the balance sheet and starting to raise rates. this is just settling and it should, of course, slow things down, but when you think about
the unemployment rate, it's 6.2% i remember giving a speech when 6% was considered a noninflationary break-even point. so we've got a lot of air cover here, i'd like to say, and the fed's going to have to move. inflation, joe, is like -- it can take over. they're going to have to be forceful and continual we'll see what comes out in the meetings the minutes will be released from the last meets this wednesday. both are going to be important events. >> compared to europe, maybe we should feel great. i'm trying to think of what that means some of you go into a recession and you're paying how much to heat your home and that's like a -- that sounds like a description of horrific stagflation. >> remember, i used to always
say, joe, we were -- the u.s. is like a blue factory. we're secretariat at belmont in 1969 we're 63 years ahead however, what happens in europe can roll over and infect us we have to be very careful. the rest of the world is slowing down china is slowing down. europe is slowing down we will start to slow, but, again, we've been at almost a perfect point in terms of e employment and now wehave to deal with this inflation dragon and it has a to be slayed. there's a lot of room to act, to do the rate thing. there's a lot of room to act here, and i think the yield curve's already priced this in and they have air cover. we'll see. >> what's your -- we talk terminal rates -- that's a
terrible term. >> terminal. >> it's not for whom the bell tolls, we know that. it tolls for all of us but is it really that much lower than it's been historically? in your view, we'll get there, it will be fine, and the world will be -- you know, we'll all be in sync at that point it seems like it could be -- it's much lower than it has been historically, especially with where inflation is. >> joe, when i joined the fed, we were under allen greene span, 17 or 19 moves we started at 1% and took it to 5.25 we did it in 17 to 19 moves, if memory serves. only after that did we see the inflation curve bend it takes a lot of monetary policy to operate on the economy. it operates with a lag it doesn't operate instantaneously. i think there's quite a lot of room to g here, and i think
they're going to have to be consistent, and my guess is they're going to have to lift it up significantly right now, with the funds at 0 to 50 basically or 25 to 75, and with the curve shaped as it is right now, significantly discounseling moves. there's a lot of uncertainty now, a lot of volatility so i think they have a ways to go i wouldn't be surprised to see fed funds over 3% next year at the beginning of the year or the end of this year we'll have to see that and we'll get a 50 at some point we've got to, go rich, but we'll get a 50 basis-point increase. >> yeah. >> next time or the time after >>. >> pardon? >> next one? >> we'll see jay powell has left that door open for the upcoming meeting, the next meeting >> thanks. see you later. ♪
this is "squawk box" live from times square. i'm andrew ross sorkin along with joe kernen and becky quick. nasdaq up 65 points, the s&p 500 up about 85 points we've got a lot of headlines cryptocurrencies is attracting a wave of investors. gemini, a global survey showing half of the crypto owners were first-time buyers in 2021. 41% in each country. that compares to just 20% in the united states. and ark invest cathie wood saying the fed is making a mistake raising interest rates she said inflation is killing purchasing power and consuminging sentiment she said, quote, u.s. consumer sentiment as measured is lower today than it was at the depth
of the coronavirus crisis. it has entered 2008-'09 territory and is not far from the all-time lows in the '80s when inflation and interest rates hit double digits. she goes on to say, quote, the fed seems to be playing with fire." >> she doesn't agree with growth >> i remember sitting with her last september and she thought inflation was not going to be an issue. deflation was her argument her argument was technology was going to create a deflationary environmental. >> is she rethinking her stock plays? >> i don't think so. but she's doing all of this on twitter where her other friend elon musk is spenling his time that is correct. twitter shares are surging this morning. a new s.e.c. filing shows tesla ceo elon musk buying a 9.2% passive stake in the company no comments as of yet from
either twitter or musk on this twitter shares have hit an all-time high. they're up 21% right now mike santoli joins us with more. there's a movie to make those mean stocks. >> becky, one of the reasons a mere $3 billion or so can buy a 9% stake in twitter is it's stagnated since it's been a public company facebook is at scale before today let's move, it's a little over a $30 billion market cape, 1/20 is even after facebook's big slide since it first traded in late 2013, it's been more or less flat, but volunteer within i i do want to point out this little blip right there. in 2016 when the company was said to be in play when salesforce was thinking about
buying twitter, it has happened every couple of years that some strategic or other minded investor decided if this is the place where the global conversation is happening and the company has not been able to match my valley of that or run it correctly, that was a very short-lived thing. you had salesforce state it's not interested in it anymore it points up something else. this is not one of those 2010's era silicon valley's companies that has a dual class share situation where you have the founder controlling it this is just a single class, therefore, you can have somebody like elon musk come in and buy 9% plus perhaps and get a little say in what's going on. >> that's what we're trying to figure out this morning, what his intentions are lots of interesting nuggets he's left alog the way in his twitter feed mike, thank you. we'll see you a little bit later. member jared bernstein is going to join us to talk about president biden's budget, the
economy, and so much more. plus, tesla has delivered a record number of vehicles despite issues [ indiscerblnie >> stay tuned. "squawk" will be coming right back client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. (vo) while you may not be a pediatric surgeon volunteering for a prospectus cyour topiary talents at an. children's hospital — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you give back. so you can live your life. that's life well planned.
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the latest jobs report shows the unemployment rate at a new low, the new report underlining the fact the labor department is strained and they might tighten monetary policy more quickly than previously thought. joining us to talk about this and much more is jared bernstein. jared, it's always good to see you this morning good morning to you. >> you as well. >> let's talk about what we're seeing the economy is hot corporations are on fire with these things they're moving along you've got tax receipts that are coming in incredibly strong, but the question everybody is asking, can it continue? what comes next? do we run out of jobs? get hit by inflation what do we think >> i think the important
indicators from that report -- i moon you very accurately mentioned the strong jobs gains number by the way, we're heading into something historically unprecedented. in an 11-month run, we've posted more than 400,000 jobs a month you were very accurate to top that there's another authentic. there's an increase in labor force participation. it's so important. the participation rate for prime age workers, people aged 25 to 54, that rose 0.3% so that's a good bump last month, however, we're very careful of the council to not simply look at one month if you look since the president took office, that metric, labor force participation for that core group of workers is up 1.4 percentage points. in fact, we're into the strongest labor force participation rate increase in any of the last five or six
expansions so that's a good -- >> jared, let's be honest about this a lot of it came because we were talking an global pandemic that shut things down across the board. we had people staying home who couldn't come to the work force. we want to get them back out you're talking a strong economy where there's a lot of demand. the question is will the workers be able to come in and will they keep up with the demand and what will employers have to pay to get them to do that. >> that's a key question one of the reasons i understand score that, we want to get a one way bip for bop. we see not only an increase in the labor force but somewhat of an acceleration. yes, it's something we're going to have to look at carefully it's one of the best ways to realize labor demand not to chop jobs but to bring up the supply side. >> we worry about inflation. once you get to the idea of wage inflation and wage inflation has
come up pretty significantly once you get into that fly wheel of wage increases and companies have to raise what they're charging people as a result, you don't want to get into that spiral of inflation. do you worry about that tanging off? >> this is definitely on our watch list, of coursing like it is at the federal reserve. it's one of the reasons that every time the president talks about the current economy -- i mean every speech. you can't find one where he doesn't talk about the challenge to american households posed by elevated levels of inflation, and, therefore, he has detailed his staff to do everything we can to help on the supply side part of that we've talked about. when you're creates 562,000 jobs per month over the last two months -- that's the average, you're going to pull a lot of people in. that's helping on the labor supply sigh. we're working at the ports, going ship to shelf as
efficiently as possible. we're working on the competitive agenda to help ease prices at the pump we're doing everything we can to also help on the supply side of the economy. >> in terms of what to do about inflation, most people say it's the fed that has to do something. i've heard president biden say that himself nobody likes to see them raise rates because it can lead to a recession. >> we stay out of the fed's lane and respect their independence, especially relative to the last regime that was here you did hear the president when the fed began to pivot say that he believed that was the appropriate stance for monetary policy given as you said the fed is the first and foremost institution when it comes to easing inflationary pressures. he has also, by the way, stressed the importance of congress confirming his slate of fed nominees i think that should happen as
soon as possible but, again, while the fed is the first line of defense, i've never -- look, we've talked for a long time, becky i have never been part of a white house that has been doing more to try to help american households by easing the pressures in the near term and long term. near term we talked about, going into the reserve, helping families with their gas prices, ship to shelf. medium term, the president has proposed me yacht relief lower premium drug costs, child care, health care, education that should help relieve the capacity. >> obviously you don't know what the president wants on this, but let me just ask. in your experience as an economist who's been watching this for a long time, would you cheer the fesd raises rates?
let's say 50 basis points this time, next time, maybe four time this year? is that a move you think would address things would you be in if favor of it. >> it's interesting. as a pundit, i would lay into it with a great alacrity. at the white house we don't get into that at that level. again, the president has said this himself, very much appropriate given the outlook we've had here you've heard chairman powell emphasize a soft versus hard landing. obviously that's a critical point. when you have an unemployment rate that's 6.3%, when you're providing these kinds of labor market opportunities, an, of course, most families, especially nonretirement
families, depend on the labor mark for their income, that's a very, very strong tailwind, is up poring economic growth in the immediate year and next year. >> let me take one more bite at this apple you said in your own life when you were a pundit, you would have gone after it with alacrity what would have been your argument against doing that? >> we have to be care tofl stay out of the fed's lane. history is absolutely -- look, i'm not trying to be cute here, and this is a fachlkt history has been limited with economists who have been brown to their knees because the executive branch has compromised the banks. i'm not here playing games this independence of the federal reserve is such an important value to us in no small part because we realize how important that independence is for them
with that challenging moment not only that said, the president has explicitly said that this pivot that they're involved in is inflationary. >> what are you watching this week we've got inflation numbers, fomc minutes what do you think will be the next data points that matter >> every inflation report is super important to us. we get under the hood, get into the guts try to take a look at the cea twitter thread, we also do an extensive analysis of all of those points the thing i'm watching the most, there's a lot of headwinds in this economy we haven't talked about the invasion in ukraine. obviously this not only a
humanitarian issue of huge and tragic import. economically this has been an important disruption particularly in commodity pricings i'm looking at the relationship between headwinds and tailwinds. again, the labor markets are so important -- in fact, what i did this weekend was dug into the relationship between commodity price bites and strong labor markets. and when you have the buffer, the strong tailwind of the labor at your back, households are strong that said, we have to do everything we can to relieve the pressure. >> very quickly, jared, i heard an economist on our show four agos go. i have a hard time buying that because of what you just sauz after the ukrainian invasion do you think it's peaked yet
>> i've been hesitant to call it a peak or say inflation is rolling over this month or next month. what i have said and what i fwleeb be the case, if you look at virtually every forecast, by the end of this year, inflation is grow ing now. the forecasts have been marked up they used to be cpi year over year, 2 1/2% it's still well below where with are now. >> jared bernstein from the white house counsel of economic advisers good to see you. >> joining us, jon mcneill plus jason trennert and the playbook the money market is on the way when "squawk box" comes back.
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box. dow up 25 points, nasdaq up 51 points, s&p up about 9.5 points. howard schultz said he'll work on the share buyback program and they'll invest more on their people. baristas and new york city's roastery said they'll vote in favor of a union he'll going to travel around the country. he's going to be taking over as interim ceo following the retirement of the previous ceo you have a lot of folks looking at the price they're getting paid on an hourly basis and they're saying, look, you're kicking all this money back to shareholders you're not investing in the stores or people alt least it changes that dynamic temporarily. and the question is what do they do on a more permanent basis
>> not an easy guy who has done this and done this again. >> this is the second time around. >> right, right. >> it's going to be interesting. the transports as freight rates drop frank holland joins us with more frank, on friday, the dow transports had their worst day since june of 20 >> good morning, becky a lot of concerning this let's start with trucking rates overall. we've seen their year-over-year growth fall by more than 80% from the start of february to the start of april, a dramatic turnaround as some people see as a potential indicator. as we look at the numbers more closely, in february, you see trucking rates were 29% higher year over year demand, it was more than double year over year you look at the start of april the rate's only about 6% higher. demand, only 22% lower year over year jim cramer, he's spotted that trend as they worry about the economic slowdown. on "mad money" on friday they
talked about the increases coming up we get a fresh read on retail inventories the last read, it was from january, the numbers were historically low however, jonathan chapel said that number's going to rise a lot over prepandemic levels because spending is now schisting from goods to services and travel now, last week as you mentioned, they finished the week in red. but trails and truckload shipping, those are two areas expecting to see volume and revenue increases. and old dominion and sigh ya both upgraded by deutsche due to their buying power and also coal demand is up some weakness in freight and
transports, but analysts say there are opportunities for people looking into businesses, their models, and their pricing power. hey, frank, what do you hear from some of the pricing companies? i know you cover it quite extensively. is this a surprise to them, or as you mentioned, it was the workers coming in and easing the tension. >> i think there was a sense rates were at an all-time high they had to go down at some point unless there were supply chain disruptions. there with due to the russian/ukraine war and also the chip supply chain has slowed down the manufacturing of trucks but the speed at which it happened, demand going from double yoor over year what we saw at the start of february to 22% lower in april i don't think a lot of people expected thereafter. one impact is tin flux of drivers. the question is are people
really shifting their spending from goods to services and travel it will take two months to get a better read on that, but it's something that everybody in transport is watching closely. >> frank, thank you. frank holland. when we come back, we're going to go inside what elon musk called tesla's exceptionally first quarter. new deliveries are out. the former company's sales president will join us next. plus much more on tesla's elon musk's twitter stake on twitter. don't gonyer awhe. "squawk box" will be right back after a quick break. this broker is your man. let's open your binders to page 188... uh carl, are there different planning options in here? options? plans we can build on our own, or with help from a financial consultant? like schwab does. uhhh... could we adjust our plan... ...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab.
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we've been talking all morning about elon musk's newly revealed passive stake in twitter, but there were some other musk-related news over the weekend. tesla reported first quarter deliveries, they were up significantly over last year, although, they missed expectations a little bit. on twitter musk said it was an exceptionally difficult quarter thanks to supply change issues and china's policy changes joining us now, former tesla global sales president jon mcneill. i'm trying to think historically if supply chain issues should deal long term as long as demand is surging,
doesn't it just -- doesn't demand just wait until it can be satisfied and we'll work out the supply problems down the road or is it something to worry about near term in terms of financing and margins and everything else? >> i think you raise a good point. demand is very strong at tesla the cars are now -- if you're going to buy a tesla, it's got a six- to 12-month lead time and so demand is very, very strong for them i don't think you have to worry about tesla supplies in the long term they're the only ones making the chip shortage like a nonevent. i don't think the understanding why is understood. their designs focus first on hardware and then you figure out how to write the software for those chips. tesla is software first, meaning they've got an ability to mold
their software with whatever chips are available, and that's proving to be very, very valuable they're growing while others are shrinking. not by a little. ford and gm are shrinking a lot every year and tesla is up 67% and that's before the berlin and austin facctories really get rolling. you're right in the long term. this is a demamtd story and the short-term supply issues don't appear to be a huge issue for them either. >> if the company or stock was eventually going to be -- if people were going to gauge the profitable of tesla and margins and the like and it was a recurring problem again and again and again with problems with supply and it had hurt margins quarter after quarter after quarter, could that -- when would that be a problem, and what will -- what will the next report look like -- earnings that tesla reports?
will they be affected by the near-term supply issues? >> they took pricing increases of 5% to 10% in march. the cheapest tesla is now $47,000. so each quarter they've grown gross margins, and their gross margins are over 30% that's double the gross margins for ford and gm. so if it hurts tesla, it hurts them less. that's largely because they have a lot of recurring revenue in their model. they're not just selling cares they're selling insurance, infotainment subscriptions, things that are very sticky and very predictable, and their prioritizing profits, their lead times are shorter for their highest performance cars and longer for their lower margin cars. >> you know elon what's happening as an aside what do you think is going on with twitter what do you think he's trying to accomplish here?
what's his motivation? >> i think he's discovered that buying a social network may be cheaper than building one and certainly a lot less headache, and in twitter's case they're cheap and it's largely because they haven't executed. i think elon looks at that company and he's proven one thing if he hasn't proven anything else. he can execute and drive teams to execute across multiple companies. so i think he looks at twitter and says this is an undervalued asset. it has a shipped product, which has been the main contract sichl of twitter at a pace that it's needed to in years. he thinks he can probably fix that and then maybe provide himself a platform to really have some significance influence. >> that's the last part is the part i'd like to -- i guess we're trying to figure out the very first thing you said is it might be cheaper than starting one, than starting his
own. why does he want to start one? i bet you he could find a lot of tech companies -- if elon musk took a good look at a lot of different companies that were underperforming, he could certainly come in and shake things up and make them a lot more profitable and make a lot of money but this is a social media platform he had an interest in before twitter, so i don't think it's about -- is it about running the company more effectively or about changing the censorship or the way that twitter's being run right now, open source, whatever you want to call it it seems like -- you know, he's tweeted about that can't we take it at face value that he doesn't like the way twitter's being editorially run? >> i think you can take it at face value i think it's at both ends. you've got to take him at his word he wants to change the policies at which they're playing their editorial license on twitter it's a platform he loves, like
his traffic over the weekend he loves this as a platform for himself. he engages in twitter at a tremendous rate and contributes to it. i think he wants to open the platform and freedom of speech you have to take him at his word. back to the supply chain before we let you go, jon, is there anything tesla could do in-house to minimize the issues it has with the supply chain from around the world, other suppliers? >> i think you've seen it. they're talking about supply chain, and yet they're delivering roughly the same amount of cars that they delivered in q4, which is a record quarter what they do is they go look for chips that are available, an then they've got incredibly capable software engineers that can write hardware for the chips. i think they're going to do
that i they've complained about the dumbest chips on cars, like the capacitor that makes your seat go back and forth. they're having trouble locating those, but they've got a very capable supply chain that's continued from time to time to pull rabbits out of his hat. i don't know. >> maybe that's the next thing he decides to buy. thanks >> coming up, we're going to reartes rkts with straga sech partners chairman chasen shreve trenn eckrt. you're watching cnbc ♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage.
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box," everybody. we've been in the green most of the morning. the dow did turn negative for a little bit right now it's up by 13 points s&p up by 7 and the nasdaq up by 42 this is the second we'll see how it goes. coming up, jim cramer's first take on the aforementioned trading day. that's ahead and much more on elon musk's newly revealed stake in twitter. stay tuned you're watching "squawk box" on cnbc
i think for 2022, it's going to be really hard to go to recession mainly because the labor market is tight. there's a lot of savings between consumers and corporations, and the fed just started tightening. monetary policy is extraordinarily easy i would say this year it's hard to get a recession i would say the odds for a recession for next year are going up i think yield curve in my opinion is an extremely important indicator. it's not a sure thing that you get a recession, but the fed takes it seriously, and i think investors should take it seriously as well. the hardest part about the yield curve is it can tell you the likelihood of recession. it's not particularly great in terms of timing. i do think we have to give it a little bit of time. >> as you say, jason, it's a terrible indicator of time if anything, so what do you do? >> listen, andrew. my opinion is that you --
investors should stay closer to shore. there is a little but of a -- there's still a little bit of a tina aspect, which is to say equities are probably the best alternative. they're probably not the only but the best alternative right now. i think in an area of qe, quantitative easing, alternatives are good when it comes to bonds it's going to be higher quality stocks, what we call shorter duration equities, stocks that buy dividends or can buy back stock. those are going to be the better alternatives there are stocks that have never had earnings that fill the ranks of some of the indices and in my opinion, those companies are going to continue to have trouble. there's a little bit of a comeback in march in some of those names, but i would still be quite careful i would, again, stay close to shore with higher quality companies. >> are you short anything right now? >> well, i can't short anything.
you know, i would be very careful. i would be say i would be underweight on consumer discretionary. i think obviously the impact of higher gasoline and food prices is going to have a meaningful impact despite the labor markets are tight. i would be careful of utilities because i think long-term interest rates are likely headed higher so i would be careful. i would be careful there again, i would be very careful with companies that haven't had earnings you know, that should. be news to anybody, but in the qe era that you've probably wanted to buy the companies that didn't have earnings, i think now it's a little different. >> i love getting your opinions on the hot headlines of the moment, and the biggest this morning is elon musk taking a stake in twitter what do you think of that and what do you think shareholders of twitter and spacex should think about that >> listen. this is my own personal opinion that's a political opinion
i think it's overdue i think you have -- president trump has his own spac i think there are many people, conservatives -- many people just in general that think that if you have a public -- so-called public square, public forum, that it's hard to pick -- it gets very hard to pick and choose despite what people's best intentions might be. i think -- frankly, i think it's a brilliant move on the part of elon musk. i don't think he's going to lose money. clearly it ooh is a very good move so far. the market hasn't even opened. but i think there's a hunger for true free speech and open markets. >> jason, i don't know if you can see the screen digital world acquisition corps which is the trump spac is down today about 13% on this news what do you make of that >> that would make sense i think the trump spac made a
lot and still makes a lot of sense because it provided a potential competitor to really quazi monopoly in terms of its messaging. i don't even have a twitter account. so i'm the last person that should be talking about this but it seems to me that for someone with elon musk's means, this makes an awful lot of sense, and i think that's partly due to the management of twitter, that they left themselves wide open here for people with deep pockets that might have a different point of view as to what the company looks like, and, again, whatever political side you're on, again, i think it's hard to have it both ways. you either have a public square that's open to everyone or you don't, but you can't claim that you do when you really don't to me that's really what's at issue here, and elon musk is nothing if not a free spirit, and it would strike me that there's going to be some -- it's
going to be hard to compete with twitter head-to-head, but it can be changed from inside. >> he is a free spirit and so are you. jason, we appreciate it. always good to see you. >> thank you, andrew, thank you. let's get down to the new york stock exchange and check in with jim cramer. i've been waiting to talk about you. this is a passive stake, 9.2%. tracks a paid track where you have to use your name. then a free speech track and say whatever the heck you can.
this can be advertiser supported. he seems want to the second track. i hope he wants the first. i believe he's so high end he may not have experienced the program i get. i know i'm unfortunately a top ten most hated person. been there before. i think it would be terrific to have him shake them up some people are saying the numbers aren't that bad. i look at the numbers and think of what they could be. not versus expectations of wall street but what the site could be worldwide i think a lot is too scat logical. too many people drop out because the attacks are so horrible. >> yeah. i think it comes with how big of a following. >> i don't think sodomy has a
place. >> not going to take the other side of that argument. i know you have a big guest coming up this morning lisa su amd. so interesting with what we've watched with amd shares and wall street is heading. >> yeah. i think we'll hear a different story than what we heard from sanjay i think lisa su has high-end computing. gaming is strong not worried about a slow down. there's going to be different from what we heard and what stocks have been doing also, the combination of this new merger and what she's done it's going to make it about 50% at amd by the way, she's never going trash intel. she's too polite and politics. i'm not. [ laughter ] gelsinger makes ten times more than she does. pat is doing great in terms of pay and he's incredibly nice.
>> i've been listening to you. the idea you can love what the company is doing in terms of trying to be bringing manufacturing back to the united states and fixing our supply chains but you don't want to own the stock is your point? >> no. i think it's a college or a university you're rooting for them. you know, like a sports team like unc gel singer is like unc in the meantime you have jamie dimon who is more serious and professional about what has to happen i think they have to get with dimon. cut their pays figure out a way and become more competitive. in the meantime, lisa su will figure out how to make a lot of money. as far as i'm concerned, that's a more impressive thing. but, you know, i'm a narrow-minded fellow. >> unc are you quitting twitter >> i'm about to -- i don't want to hear apes attacking me from behind it's just not what i thought i would be at this age.
>> come on, jim. >> we would love to have a kinder, gentler world. >> yeah. i mean, you know, andrew, maybe the apes love you in a different way. >> trust me, they don't love me. i'm very familiar with the lack of love. >> but you're the good guy i'm the bad guy. we're bad guys together. we're bad guys together. >> all right. >>well, then maybe that's good i'm from philadelphia. i like being a bad guy. >> all right. >> jim, any day. >> yep philadelphia -- >> i was going say can't take people from philadelphia anywhere. >> will smith is from west philly we're better behaved like michael rubin by the way, we want to remind you about the cnbc investing club sign up to find out more at c cnbc.com/jointheclub or point your phone at the
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wealth well. phil lebeau and robert frank maybe you have some more thoughts, phil we'll start with robert. what do you make of it, robert >> look, today's reminder not just that of the size musk's wealth but the power the take of under $3 billion is less than 1% of his total wealth or about 1%. he's still the richest man in the world worth about $273 billion. if you look over the past three weeks, he added $50 billion in stock fwrelt tesla this is an easy lift for him relative to andrew's question earlier, last year he sold about $16 billion in stock so 11 of that goes to pay the federal tax bill maybe 2 to 3 to pay the california bill. he has about $2 to $3 billion in cash left probably 23r last year's stock sales. >> phil, when talking earlier,
have you been think abouting this is it all you can think about? are you obsessing? >> or the of [ laughter ] yes. nonstop. the other thing is elon musk is not like warren buffett in terms of taking stakes in companies and parlaying it and selling it at some point when he's like, okay, i made a nice profit off this he's never done that there's been chatter out there people saying, wow, he bought twitter at a great price he can ride it for awhile and sell it. that's not how he operates.
>> he's an activist not to make money. >> right. >> influencer. >> the midterm is coming up, too. >> yeah. we've got to go. we'll talk about it. maybe we'll know by tomorrow what is going on make sure you join us because we might have the answer. "squawk on the street" is next good monday morning. welcome to "squawk on the street." i'm carl quintanilla david faber and jim cramer we'll get fomc minutes, vix is steady around 20 road map begins with elon musk and his twitter surprise taking more than 9% stake in the social media company shares are soaring on the news howard schultz returns to starbucks. the company suspending the share repurchasing program
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