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tv   Squawk on the Street  CNBC  April 26, 2022 9:00am-11:00am EDT

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low end of the range and the stock is still looking like it's down 2 to 3% >> down 5% now. >> and so i think that tells you what you need to know about the risk to reward in this tape. you need to be careful -- >> dan, thank you, we're out of time it's great to see you. right now it's time for "squawk on the street. ♪ good morning and welcome to "squawk on the street. i'm sara eisen back with jim cramer carl has the morning off david is on assignment he's going to join us to talk twitter in a moment. not much follow through to that positive intraday turnaround yesterday where the market ended higher futures under a little pressure. s&p down 19, nasdaq down 58. we have a lot of earnings to digest and we're going to begin on that earnings from. what does it tell us about the economy?
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ups rising in the premarket. 3m also beating on both the top and bottom line in the face of what it's calling a challenging global environment and general electric moving lower. they'reciting inflation and other pressures. larry culp will be joining us later this hour. jim, for 3m and ups, the stocks are a little bit higher. could have been worse. >> 3m will show you exactly what the organic growth is. some people may object to the new method which takes it so you've got litigation risk off the table. consumer health and safety of 3.4%, i thought that was good. health care plus overall -- the overall takeaway i have is that if you want to look at 3m as a pure company without litigation, you like it,
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but is that right? do we really just asterisk litigation when you have a giant settlement -- >> this is the chemicals issue. >> ground water is the sacred issue. and there's going to be continual problems they did win the last case which is important they've lost a couple of cases but if you look at the litigation, talking about, they've had 17 cents, 18 cents, 14 cents, 13 cents there have been a series of litigation issues that make you feel like is it one-off or something you have to live with 3m mike roman doing a good job -- >> actually, the stock has turned around. it's lower -- >> i think when people look at the -- look, ground water and veterans who can't hear as well because of tinnitus -- >> terrible. >> not great. >> no. >> what about organic revenue growth it came in a little bit light according to some of the
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analysts -- >> i remember the old 3m that obviously had higher but i mean everyone has these secular issues -- i'm calling them secular now which is that you got geopolitical risk. so let's just say okay i don't want to run to get it. the balance sheet good that makes me feel a little better, given the fact that they have what i call endless litigation i like that the litigation is up front. at the same time -- and they did -- like i said, the combat arms is not all losses but if you wanted to right now, you could sign up for the combat arms litigation and they'll represent you. they're trying to get all 280,000 sold or so to me, i would rather switch to raytheon which is a little bit better, ge which obviously i'm going to have larry culp on. ge is something that's problematic. >> lower end of the range. >> lower end of the range. you can't do lower end of the range. >> even if you maintain the
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numbers, actually, the guidance. >> and raytheon i think is a good number, but there's so much black box we don't know. raytheon being so directly involved with the proxy state that has become ukraine. >> if you take a lot of these numbers in aggregate, you can make a case for the market that corporate america is in pretty good shape the balance sheets are strong. they're investing, the capital expenditures are up and they, for the most part, are -- have pricing power. they're passing it along look at ups, shipments down. but the average revenue per shipment was up. so these things are going well the problem is, is that -- is this the peak? are they taking -- >> no, i mean that's just the -- >> and then as demand softens, that's going to be a problem. >> we have china it's off the grid. we have ukraine. the reverberations -- we're going to talk about pepsico. it's from everybody. everyone has ukraine
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but, look -- raytheon, you need titanium titanium is sourced in russia. on the overall analysis, almost like a great theory. some of these ceos are really doing a remarkable job at a bad time >> even better in china. i saw that -- >> you've got service revenue whether it be more raytheon or otis and you see the price market cuts. demand was waning. i spend a lot of time with mark. this kind of things bothers me it's so lacking in rigor if you're doug from toll brothers, you're going to home depot and lowe's in order to get dishwashers and he's selling europe which he might get 5 billion. it's a very small company. he's got a 4% yield and this is
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a company where mark has put on the radar screen -- >> didn't they lower guidance? >> that's nonsense that's the kind of nonsense -- some computer generated that who doesn't know how to read second grade in second grade, i was tracked in the dumb class. >> going with inflation like everybody else here's what he told jim last night. >> covid-induced inflation, we had a pretty good sense and we dealt with it very well and we thought we had a grip on inflation. now all of a sudden you had inflation on top of the covid induced inflation. so that was the only one that caught us a little bit of surprise probably like most companies no one had war on the horizon. we're fully catching up and i think it's well digested markets and you have strong products you can sell. >> strong brands and strong
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products. >> that's the key. >> pepsico. >> nike. >> we have companies that have developed brand power. this is against bocsh. against lg, samsung, whirlpool kills. they're going to rule from alaska to patgonia, bye. >> what are they doing with europe 20% or so of the business. >> i remember when they moved into europe about 20 years ago and i knew that they -- they were going to get their clock cleaned because what happens when you move into europe, you're up against the great german companies maytag did well. they have a lot of brands. i like the stock i think it should be brought maybe even aggressive. >> it is up premarket. >> when you decide to sell a division of which you have three bidders for, i like the story. i'm pointing out something positive in a sea of red where the red is dictated by the futures. not by anyone who has done the
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granular work like you and i have. >> did you see alphabet? >> alphabet is direct advertising. a lot of people are trying to lump all of online together. unfortunately -- well, i started an online company in 1995. you want subscription or advertising and you want direct response and respond the fact is, point-blank, alphabet is the single best roi of any company in the world. no one can dispute that. >> we have breaking news seema, what have you got >> sarah, news here, carnival ceo is stepping down as ceo after nine years on the job. he will become vice chairman, the current coo will become the new ceo of carnival, the world's largest cruise line. this comes amid a tenuous two years and i will say at the last shareholder meeting, there was some pushback on the carnival
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ceo's compensation package in 2021 of $15 million. of course, he has played a leading role in fighting hard for this industry to recover and the industry is in recovery mode with carnival seeing 75% of the ships back at sea. they've been moving on pricing and putting a lot out there in terms of marketing to get more customers to book shifts this summer will be the critical season for this industry to really mark this recovery. but big news here, this is the world's largest cruise operator and arnold darnold now stepping down as ceo after nine years on the job. sarah and jim. >> you interviewed him and i defy you to be able to say that he didn't save that company in the dark days of march and april. >> he came on in the darkest of times. i called their ships a petri dish this was right after covid hit and never thought you were going to go cruising again he defended the company. >> this man is a great man i want to take on anyone who
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says this guy didn't save this company. the company should have been bankrupt if you remember, he was able to do a couple of bond and stock deals. didn't get a great coupon. but that company should have gone under the petri dish should have gone under. instead, i'm ready to steal. i'm probably going norwegian >> you are why? >> i like the haven level -- >> they also faced a tough cdc which regulated them, unlike the airlines -- >> if it weren't for governor desantis, the ships would have been clean yeah, i'll sale again. >> stock isn't back to pre-covid highs. >> the music use that they did with norwegian we're going to pass on that. >> not such a cruiser. let's hit twitter. huge news when twitter accepted elon musk's $44 billion offer to take the company private the deal valuing the company at
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$54.20 it's a 38% premium to twitter's closing price on april 1st last week, jim spoke out about getting this deal done listen to what he said. >> if he wants it, again, he's got to do it this weekend. elon, listen to me, i know you don't, my offer stays at this price until friday next friday. and then it goes down to 48. it's an exploding the offer the way we had a goldman sachs you have 48, and then it's going to be 46 he's going to do that. this is really going to be great. >> actually, i didn't take that long. >> look, they had a real process. young fellow, absolutely committed to fairness. let's not forget the role that durbin played. he's the silver lake fellow who did the remarkable dell situation, michael dell's one of my heroes. you had durbin on the board,
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running process, and you had the possibility of 20 down versus 20 up would you rather be sued for 5 or 20? we had an incredible breakdown in the stocks in the period between when musk took it up and this weekend i got to tell you, this business, which we're going to see because obviously zuckerberg is going to have down numbers. everybody knows that. >> tomorrow. >> a lot of people are saying, okay, i mean you got -- you -- not bad. you've got wolf saying this, it's all over and i try to think, if you're coke or pepsi, where are you going to reach people in volume >> well, they advertise on all of them -- >> where do you buy your -- >> you think that they're still advertising potential -- >> what about amazon >> what about twitter? >> i thought siegel was going to
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break out and give them money and be able to make money. but i think there may be another view -- >> i think the aforementioned david faber joins us now couldn't miss an m &a opportuniy to miss out. >> i had to do it yesterday during your show, too, sarah in fact, you rarely see unsolicited bids that end up with a deal as quickly as this did at the price that was done the only one -- originally offered is murdoch and dow jones. it took a while to get the family in line this really didn't take a long time at all. to jim's point think about the fact that he crossed 5% on the 14th of march. of course we should have learned about it on the 24th of march. we didn't until a bit later. and now that we're at a deal where he's buying this company for 44 billion
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a couple of quick things to keep in mind here, the m&a kickoff various -- key factor sheet, so to speak, could take as long as six months because of the various regulatory approvals that will be required. when we were speaking, there had been some thoughts that it might be a bit quicker it requires multiple jurisdictions, the eu, the uk, japan. let's call it september, october before elon musk actually owns this asset we should get a merger agreement perhaps by the owned of the day. i think it's going to be the low range. let's call it somewhere around 2.5%, something like that. which means, if things were to change dramatically over the next six months and decide they wanted to own it or wouldn't cost them that much of a penalty to go ahead and do it. that's not going to happen we saw on day one, we did not expect them to accept 54.20.
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but there was likely not to be another strategic out there. we talked about that a lot salesforce, no disney, no way as for whether there will be reverse termination fee, no. he's got -- there's going to be strong language requiring him to get all the regulatory approvals and push through on those. and he's got his financing of course, the 21 1/2 billion dollars in equity that is he guaranteed does he sell tesla shares to fund it? does he syndicate his equity to other people who might have an interest in owning a stake in twitter as a private company these are all -- jim, a larger conversation as well about what this company will look like when musk is running it as a private entity as well, the world's richest man with one of the
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world's most powerful platforms. >> do you think morgan stanley has that stock in hand because this is something -- maybe -- most of us would think this is reckless, frankly. >> first, i don't think -- it's not going to be your typical margin loan, three or four times. it's going to be tighter than that you know that, jim >> right >> i think they've got it in hand they've got 13 billion that includes enormous number of banks as you know, the debt financing for it i'm not questioning any of that. i do city wonder where he's -- again, he's guaranteed the 21 and a half billion in equity how is he going to raise it? how much will it be going to other people who knows? maybe that amounts to a few billion dollars along the way or maybe it's more. i don't know that will be interesting, jim. does he have to sell some tesla shares can he do other things that will
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raise that money for him >> that's something we're going to watch okay, david, put me in the boardroom this weekend is it durbin talking, is it brad talking? who is doing the decision-making here >> that's a great question i think it's a lot of different people but certainly those two voices were very important. i reported this yesterday. there was no pushback from this board on 54.20 they got the presentation. you made the point how the market has made that 38% premium, that was on the april 1st -- look a lot better than that, right, given the comps and what it's done over the last three weeks. they knew there were no other strategics there they knew there was not really any chance, as i said, that there could be another bid mounted by so-called private equity that wasn't going to happen. and so when they look at it and thought we can get 24 times
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enterprise revenue over ebita, and he said take it or leave it, when they started talking on saturday morning, he's like i want a yes or no decision and he sort of said i'll let your holders decide or you can let them decide nonetheless, it presents to the board this possibility of, fine, you don't want to decide, just don't make a decision at all and we'll see what they have to say. but when they -- they move fast. they move fast and they said that's it. it's a rarity in so many different ways, including, of course, accepting the first -- >> he's also got another supporter in jack dorsey who has tweeted that elon is the singular solution i trust. so clearly a backer on that front. david, we talked to harvey pitt. may run into issues here it's comical that elon was going
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to have a passive oversight. what is your reporting they can have some issues but not necessarily block this deal? are there any antitrust concerns elizabeth warren has already made some noise and this is becoming increasingly a partisan issue. >> that will become a question on any -- it's very hard to imagine any possibility of them really moving to block this and succeeding but it doesn't mean that elizabeth warren or that other congressional actions somehow couldn't potentially put up a roadblock in some fashion. i can remember pfizer when they wanted to do the inversion, jim, remember, and unexpectedly treasury put up a roadblock that killed the deal. hard to imagine that will happen here but, sarah, that's the kind of thing that would need to happen. something unexpected, something outside of sort of the typical process because from a pure regulatory standpoint from an
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antitrust view right now, there's no overlaps. spacex and tesla somehow have to go to do with twitter? maybe star link. >> tweets about him. >> aren't you shocked that the board presentation for current management basically came up, let's say, two of clubs. usually the boards come out and say, i have a path to go to 90 did they not have a path or did they have a path and people felt it wasn't going to get there. >> i think you're right, jim not a path -- or in the -- >> uncomfortable reality, piper says >> yeah. yeah >> he was -- >> yeah. >> well, anyway -- >> you know -- >> thank you for calling in, man. >> parag agrawal didn't get a chance -- >> he sure didn't, did he?
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>> david faber, you can go back to your assignment now thank you. we'll let you know if we need you. >> okay. >> i just have one quick question, what does it mean for tesla? you can imagine a reality let's say snap warned a little bit of maybe a turn in the advertising cycle. let's say that gets hit hard and twitter suffers, does tesla get punished >> i don't think so. first of all, i think there's a good group of people, they just haven't had a chance to execute. remember, he does have a -- we saw that on the last tesla call, by the way, where he did in intervene. he has tremendous numbers. still to come, what warner brothers discovery said about the end of the road for cnn plus another look at futures here down 246 as we head into the opening bell s&p futures down more "squawk on the street" straight ahead
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take a look at the biggest losers into the premarket. ge right there down 5 and a quarter% the company did reaffirm its outlook. jim is going to speak with larry culp in just a few minutes right after that stock opens we'll be right back.
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the opening bell is brought to you by nuveen, a leader in income, alternatives and responsible investing. >> three minutes until the open. time for the mad dash. dr horton, not too shabby. >> david used to ask me what's the key to the market. the largest homebuilder reports
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a very good number solid, solid, solid, all the way around it's much better than expected the reason i talk about this is that donald horton says conditions remain strong despite the rise in mortgage rates let's be in jay powell's head. does he say, darn, when am i going to cool off this housing market, or does he say, i'm doing it slowly and get a soft landing. ho horton may be in the crosshairs. i would love to see moderation, but we didn't get that from the point of view that i don't want to hear that things are still red hot in housing mortgage rates have gone up a great deal the answer is, it's red hot in housing. >> it's hot in housing, but the orders were a little bit lower they're benefitting from higher prices and that's driving revenue -- it's a bubble market kind of report they raised their revenue guidance -- >> to me, that's the story here.
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>> they're doing well. and the stock was down 32% this year. >> let's get into that people who are very smart are saying, this is completely discounting 2000, 2008 and a scenario like the actually covid. the upgrade of auto nation was extraordinary. i could make that horton is similar, the valuation has never been low we know the valuation itself is never reason to buy. but d.r. horton was buying the heck out of their stock. let's keep track of it because housing is what has to stop. now, whirlpool would tell you, it ain't stopping. and remember the work from home movement is important. >> demand exceeds the supply. >> and there we have, once again, other than copper, everything is going up >> down here today.
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>> that's china. >> china was down again. >> the self-inflicted nature of the china -- we're going to look back and say -- a question about china from the state department, who lost china from china? that is what this story is going to be if they don't fix it up. >> by the way, there's the opening bell and the realtime exchange on your screen. the arbor day foundation we have a fertility benefits management company we're down about half a percent right now on the s&p 500 yesterday's big comeback was led by the growth stocks and today it's going to be somewhat of a divisive day we have alphabet and microsoft earnings, both of them have been under pressure pretty much all day long we open with gains in energy and materials. crude oil was down yesterday it's higher today. it's below $100 a barrel
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it's put some pressure on crude which is helpful, but for the wrong reason. >> oil companies have decided to go for a return. it's certainly a new thing it's going to keep a floor on oil. so i still think those stocks are terrific look, like yesterday, when i said that you want to be careful about the upside, i feel it again. think about it we all -- alphabet is going to have -- to listen to the commentary on facebook/meta is to believe that mark is selling asbestos there's something there he has if he talking about second half being able to defeat tiktok reels -- remember he went from desktop to mobile and then he went against snap. he's not a -- >> he's also spending 10 billion on the metaverse.
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>> he's not elon, but he's also -- he wasn't born yesterday. >> i wanted to hit pepsi it looks like a winner today it's been back and forth in the premarket. it's been a winner overall this year a strong quarter from pepsico and it was across the border it was frito-lay, pepsi beverages, north america, which isn't always strong, also quaker. >> frito-lay, they finally have mac and cheese doritos my wife is happy. >> it's a joke but that innovation is what has kept their pricing power strong and that's really helping. >> absolutely. we tend to not see innovation in certain places that we should see innovation i was shocked with russia, such a big part of their moe saic, ty still came through with good numbers. >> and they raised their revenue guidance, capped the earnings. they're dealing with cost pressures as they all are. but i guess the question when it comes to a pepsico is these valuations have come up pretty
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far and they're now trading at a significant premium to the market and to their historical price. can you be a buyer >> yes you buy some here and buy some lower. the ingenuity of them is extraordinary. take a look at what ge is doing. bought that for a little more than $200 million. that's going to be a -- >> it was very hard to get in new york city. finally it's back at whole foods which is very exciting in my household. it was tough to get. people go nuts for it. and now they're expanding it >> this is fizzy water and the alcohol is taking off. i don't know if you've tried the dew -- >> i haven't tried it. >> my wife forbade it because of my blood pressure. but i do like very much the fact that both pepsi and coke did well and i think that there were
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some -- when you get an 8% increase in core currency, someone wants to sell pepsi, they want to sell it for what? i don't know look at arch er daniels. >> strong across the board. >> they're in the right spot first on coke and pepsi, you mentioned the currency aspect. the dollar continues to scream higher here. it's worth watching. we're at levels back to pandemic when there was fear and people rushed into that safe haven, u.s. dollar. euro keeps tumbling. >> let me hit you with something that you know better than anyone else i know, if i look at the yen, i see a country in decline. is that the case >> if you look at their currency, it's at a 20-year low. japan is not in decline. they're just not as hawkish when it comes to raising rates. they're still battling inflation and stagnation that they've been dealing with for years and they're not going to do what jay
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powell or christine lagarde is doing because they're not dealing with those kind of inflationary environments. it's not a depressed economy it's compared to everybody else, they're not experiencing the boon. >> demographic >> demographics are terrible aging population they're going to push for a stronger yen -- >> why should -- do you think our president and his team are well aware of what's going on in terms of being able to send things over here like the old days in the late -- >> the automakers are going to complain that who faces some of the stiffer competition. >> i agree with that and they should complain they've given south korea a free pass this yen decline is something that you taught me, you got to watch it we cannot just asterisk that country. >> no. and it's -- eventually it's going to be painful because you never want to see these things moving too fast and too far.
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>> how about the ruble saving people >> they're intervening, capital controls -- >> don't you think it's amazing -- i didn't mean to interrupt. amazing that you've got raytheon technologies and you have a proxy state of ukraine which is buying a huge amount of stuff which they don't know how to use. this is kind of like afghanistan, u.s., at one point i thought it was -- u.s. versus north vietnam when the u.s. flooded with tanks and artillery. >> the global spending is up across the board it's coming from europe, coming from the u.s. and it follows a cycle where it's been lower, unusually, the last year or so. >> what did you think of that raytheon quarter did you see the -- the engines, the jet engines. that area -- if that comes back, if the aerospace guys are right, that is going to get us out of this morass.
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you're talking about -- you're talking about 30% growth i mean i thought of the companies that is unchanged right now that i'm watching, the special after market, up 39% you got some 37% these are gigantic companies their biggest problem is labor because you can't find people who know how to weld >> aviation was strong in the ge quarter which we'll get to in a moment i want to hit warner discovery it's down sharply. >> everyone is hitting it. >> the cfo did comment and acknowledge, of course, the shutdown plans for cnn plus on the company's conference call this morning listen >> right or wrong, management has made a decision to invest a lot of the incoming funds into a number of investment initiatives. as i'm looking under the hood here, cnn plus is one example. i don't want to go through sort of a list of specific examples, but there's a lot of investments
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that are lacking what i would view as a solid analytical financial foundation and meeting the roi hurdles that i would like to see for major investments. >> ouch. called cnn plus a chunky investment. >> that was -- well, that was disparaging. >> not everyone was on the same page junkie, not chunky we're not trying to win the direct to consumer spending war. really trying to sound prudent on the spending game, especially in light of netflix's subscriber loss. >> didn't we think a lot of the people who got that stock would say, wait a second, what did i get? >> the direct quote was junkie. >> i think it's chunky we have a treat here i'm calling it a treat because i'm a happy guy. which is that the general
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electric, sarah, we happen to have larry culp, shares of general electric shares lower this morning and the company saying inflation, other pressures are weighing on its full-year outlook. larry, it's great to have you on the show >> good to be with you, jim. >> larry, you know what i'm going to do, i'm going to start with the compass thing which is basically what jp morgan said so we can have fun. for the stock, the dean from jp morgan on this, it was a miss plain and simple on almost all fronts profits were 12 cents below our model at the time in the february announcement says that you know what, you got to avoid this thing at all costs. let's get it out of the way and talk about how maybe that view
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is shortsighted. >> jim, i think we started the year here in 2022 pretty much where we thought we would be, where we talked about this in late january when we wrapped up 2021 we knew this would be a slow start to the year and i think that's what you saw. but i think we're encouraged by orders being up 13%, very strong demand you were talking about aerospace a moment ago, we saw that in our business and health care was also strong. that didn't read through to revenues, unfortunately, because of the supply chain constraints that we've talked about. we were up 1%, probably would have been up closer to 7 if we didn't have those challenges but we saw real strength in our revenues and services up 15%, led by aviation but power as well we were pleased with that. that's exposed to the supply
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chain constraints. and our free cash flow was up 1.7 year on year so we know this is going to be a year where improvement like many years at ge will be key. we very much over time have proven to be a second half story in many respects but the combination of that strong underlying demand led by aviation and health care and the way i think we're improving the ways in which we run the business day in and day out, despite these inflationary pressures, despite what's happening in renewables and in ukraine. i think we're on our way i really do. >> well, okay, so you have emphasized that the stock is cheap. $3 billion in authorization. is this the kind of thing when you see stock down seven, you say, this is why we have 3 billion to buy stock >> well, as you know, the board did recently put that authorization in place for a
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potential stock buyback. what we're focused on from a capital allocation is making sure we set up all three of the companies as we prepare for our two-step spin to have a strong balance sheet, to be investment grade as they prepare for their independent pass with health care going early next year and power and renewables to follow a year after that. that's what we're focused on we haven't ruled anything out. we want to make sure we stay focused on the spin path we're going to look at options, including buybacks and other ways in which we might deploy capital. there's a lot of potential, again, particularly in aviation and health care, but also as we think about renewables and all that will be required for the energy transition and ge intends to lead that energy transition, to be sure. >> everyone knows that aviation is good, we can go over it in a second everyone knows renewables have issues why are you waiting until 2023
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for a company like health care which is going -- better than phillips maybe even with seeman's and see if you can get supply issue chain solved, people might want med tech and they want med tech badly. >> i think this is going to be an outstanding independent health care company that's clear, jim in the short term, we need to work through the supply chain constraints to make sure our output matches up with our demand we have people preparing for the health care spin we just announced this program back in november there's a lot to do to prepare -- spin this company part of it is a function of the way we managed in a more centralized way over time, but we want to make sure that the business goes out on the strongest possible foundation. our relatively new ceo and his team i think are doing all the right things to position this
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company to lead an innovation, to really be at the forefront of precision health we're going to do that in a way that not only drives the top line but translates into good bottom line and cash performance. i think this is a company that people will be excited about i'm excited about my role going forward. so we need a little bit of time to complete those preparations it's probably now less as we sit here in late april, less than a year away and if we can move sooner, we will. that's our plan or record at the moment. >> let's talk about something people are not excited about power and renewables i see a race to the bottom when it comes to wind, i see not enough new orders when it comes to natural gas even though we know natural gas may be the bridge fuel. we see that from mr. curry i'm wondering why we can't put together something that says this company is an answer for what is a quickly developing worldwide shortage after russia
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in ukraine. >> that's the view that we have. we intend to lead in the energy transition i think even before the events in ukraine you've seen a much more pragmatic perspective on the ways in which the world will meet the sustainability goals we've set for ourselves. i think we're pleased that we now have a real trilemma conversation on the way. it's about affordability and reliability the world over when you think about what we do in conventional generation, we're seeing a host of different conversations today than we were a year ago you've seen some editorials recently where people who i think were skeptical about the role of gas in energy transition are now embracing natural gas. we've got customers who are very keen to understand our technology road map with respect to how we make sure our gas turbines can run on hydrogen blends and full hydrogen as that infrastructure comes online. with respect to renewables, our
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play is primarily in wind and certainly here in the u.s., we're in a soft spot in the u.s. market and that hurts because we lead here. but if we can have congress implement the tax incentives and other regulations to provide certainty with respect to the landscape and in turn customers can see how pricing is going to play out of this inflationary environment i think we can get wind back on a better trajectory coupled with what's required in grid modernization sets us up to realize those long-term aspirations that i think society has at large and, again, it's a great setup for ge in both of our power and renewables businesses. >> let's go now to the good news with aerospace quite surprised. when i look at the company, now we're down 18 points on this split up, and yet at the same time all that's happened is aerospace has gotten better and
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better and you could argue this week, this is just the beginning are you surprised given the strength in aviation that people aren't a little more turned on about the stock of general electric >> jim, i have to admit, i'm not obsessing about the stock day in and day out. >> that's my job >> what i'm focused on is making sure that we're performing and we're performing for our customers. we do that in a way that keeps this team intact and strengthening every day. if we do that, the stock will take care of itself. it always does again, when you think about the tail wind that we have in commercial aviation, the improvements that we see in our military business, all that we've touched on with respect to health care and those opportunities for as far as the high can see, again, i think the role of ge will play, there's a lot of opportunity here for us that coupled with what we've done from a lien and decentralization perspective
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sets these businesses up to be on a path to realizing their full potential we'll do that as three independent companies, not one but nonetheless, we will do that and i think time will show that to be the case. >> russia/ukraine, when i think of russia, i think of the titanium sponge. are you set up to have enough titanium to meet the orders? >> that's relevant in our aviation business and i think the short answer is yes. >> really? did you manage a stockpile ahead of this? >> well, we didn't stockpile, but we've got a range of sources. we've got visibility here over the next year or so with respect to what we need from those sources and we'll be able to diversify our footprint over time >> that's good news. i want to end on good news, because, larry, i think the breakup is bringing out value. it's a tortured time for american industrial. thank you so much, larry culp. great to have you on the show.
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>> good to get him to defend some of the negativity out there. the stock is down almost 9%. it's outperformed the broader market this year. >> i think that larry is doing a terrific job under incredibly difficult circumstances. let's not forget, he wasn't given a good hand. the supply chain problems with health care are extraordinary. remember, they dominated mri and cat and it's just -- they can't make them. you can't make -- you can't profit from them >> mike roman saying we expect supply chain problems to persist for the foreseeable future. >> one day, we're going to say, yeah, the supply chain. >> remember that crisis? >> yeah. >> before we head to break, time for the bond report, though. i want to take a look at treasuries and see how they're fairing this morning they're getting bought again second day in a row. we're seeing some yield reprieve 2.74 seemed to help some of the growth stocks yesterday. we'll see if that changes today.
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we're down 244 on the dow. be right back on "squawk on the street."
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there's some pockets of strength there, merck, verizon, home depot kind of a mystery there, and amgen 3m and visa, along with boeing, so most stocks are lower he.er financials are the biggest losers on the s&p. we'll be right back.
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time now for trading. >> two companies decided to split into three one is ge, one is j&j. ge's stock is down johnson & johnson is just a juggernaut all three divisions are doing well i continue to think the stock will go 20200. >> what is the market's problem, then >> what you want about pepsico. >> it's gone enough? >> yeah.
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>> 2% growth to 8% growth. larry culp's division not great. >> jim, what do you have on "mad money" >> i have callaway golf and chipotle brian is terrific. how about the fact their stuff is better, like pepsico? have you tried the g >> oh, the gatorade. >> purple g diet "squawk on the street" will pick it up on the other side of the brk.ea we're down 300 right now thank you, jim.
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[sound of helicopter blades] ugh... they found me. ♪ ♪ nice suits, you guys blend right in. the world needs you back. i'm retired greg, you know this. people have their money just sitting around doing nothing... that's bad, they shouldn't do that.
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they're getting crushed by inflation. well, i feel for them. they're taking financial advice from memes. [baby spits out milk] i'll get my onesies®. ♪ “baby one more time” by britney spears ♪ good to have you back, old friend. yeah, eyes on the road, benny. welcome to a new chapter in investing. [ding] e*trade now from morgan stanley. rick santelli here with breaking news. our april read on consumer confidence, expected to be up at 108, a bit of a miss, 107.3. and that sequentially follows 107.2, so very close until we get a revision the present situation, 152.6
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versus 153 what lies ahead on expectations, i still don't see that out yesterday. richmond fed expecting a read of 9, came in at 14, the highest read of the year, and on new home sales, a seasonally adjusted rate of 786,000 comes close to that at 763,000 seasonally adjusted annualized units. that's down a bit over 8.5%. 763,000, is kind of the lightest of the year, but not by much 763,000 takes us back to november last year when it was 753,000, and consider that we had s&p core logic housing prices, always a month in arrears, we see housing prices are holding up very well considering, and these numbers seem to be holding very well as
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well for more detail on this number, let's turn east to diana olick diana? >> yeah, rick, i'm not seeing as much of a positive sign as you might be remember, these are home sales recorded as pending sales in the month of march that's signed contracts, people out shopping for homes in mortgages, the average on the 30-year went from 3.9%, to 4.78%. that's a full percentage point higher then you see the drop in home sales. also year over year down 12.6% this is march, the beginning of the busiest season for the housing market we also saw the inventory, the supply of homes for sale up to a 6.4-month supply, continues to rise as home builders are not seeing as strong sales we did see prices increase up 21% year over year the case-shiller numbers still very strong, for existing homes, but we're seeing that pricing
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power appeared dr horton noted that they still do have considerable pricing power out there because of price of demand while it beat on earnings, because of higher prices, they actually missed on the number of sales. sales down 10%, new signed contracts. they also lowered guidance for the next quarter they said some buyers are actually going to be priced out of market. they did say there's a lot of buyersb hind them, that's because there's such low supply on the existing side we are seeing a drop in new home sales and the inventory increasing not a great sign for the builders right now, morgan. >> diana olick, thank you. good tuesday morning, welcome to although hour of "squawk on the street. carl has the morning off, david is on assignment just getting a quick check of the markets. all major averages are trading down lower the dow is also down 231 pints
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and the nasdaq is down about 2.25% in what is another busy earnings day in the busiest week for the earnings season. we're 30 minutes into the trading session. we are going to start with three big industrial movers we are watching we're going to start with dow component 3m, adjusted full-year guidance remaining the same. organic revenues up. those shares are trading down 33% right now. similar scenario for general electric fueled by the recovery in aviation, even as the renewable energy business is a drag for the company. the company also confirming the previous full-year profit guidance, but warning it's currently trending toward the low end of that range.
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covid, russia, china, all having an impact. shares down 9% finally, a transportation and trade bellwether that's bucking the trend -- well, not anymore u.p.s. beating on top and bottom lines. higher shipping rates helping with average revenue per package, even as volumes fell more than 3.5% you saw strength particularly in domestic and supply chain segments, also unveiling -- buybacks to around $2 billion. of course, mike, those are not the only names reporting, but although industrial we're watching very closely, very similar issues impacted by the macro, like a ge, like a gm, is raytheon you saw that company beat estimates, but the defense company also cut its full-year sales forecast, which are tied to the commercial area other space and and i have yates
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business nonetheless, supply constraints, so defense much softer, but offset by the higher commercial after-market sales that helped to power that beat, but similar situation. you've got the russia/ukraine conflict playing out, covid, supply chain issues and inflation. it's all of these pillars we talk about that are now showing up on a more micro level for these companies. >> there's not a lot of clean reports, and u.p.s. is probably the exception there in terms of really just the fundamentals coming through as promised the estimates had gone up and they beat them, and reaffirming guidance, but aside from that it's a hostile environment dollar surging, that would be a pressure point on estimates for the coming quarters and current
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one. in general looking at less than 2% year-over-year growth that's better than nothing, but it shows a lot of give-and-take. >> the days of peak earnings and earning reports beating by such a wide margin versus expectations certainly seems to be over. >> it's a good test of exactly how low expectations have gotten earlier people spoke of whirlpool, and really the stock had been in bad shape. then it's gotten some relief on a decent report. >> shifting gears, as you may already know, twitter has agreed to a buyout from elon musk what happens next? julia boorstin has that for us she stands outside of twitter hq no >> i am not outside of twitter hq, but here's the thing, morgan
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twitter has been allowing its employees to work remotely there aren't even a lot of employees in twitter hq today. but there are plenty of unknowns about what twitter is going to look like after elon musk completes the purchase, including who will be running this company, but what we do know is elon musk is very much focused on free speech, making the platform open global town square known for plenty of talk about an edit button, he wants to make it open source to make transparent the -- he also want to authenticate more users and eliminate spam bots, and in his push for unfettered free speech, he could remove moderation other than what is legally required in other countries. then there's the question of how
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much it will -- musk has praised the subscription services and warned, quote, the power of corporations to dictate policy is greatly enhanced and twitter depends on advertising money to survive, perhaps a hint of what he's thinking about, but meanwhile, brands are closely watching when it reduces content moderation and whether it makes it problematic for ad. the twitter advertisers are likely to move to platforms like facebook, youtube and snap, with facebook probably the biggest beneficiary. he expects those to shift into digital ad companies, but, of course, there's still so many unknown as how musk will change the company, not just for employees, but also in terms of ripple effect across the ad industry guys >> yes, julia, so many questions, for sure. thank you very much.
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musk's acquisition of twitter sets the stage for regulatory oversight ahead as well. joining us to discuss is former fcc chairman, now a partner at searchlight capital. maybe we can start from a pretty brought level. what role, if any, now that there's a deal agreement, would the fcc have to review the transaction or to maybe set any standards for how twitter is treated? what really is the regulatory regime that has something to say about this, if any >> there would know and certainly should not be any regulatory review from fcc there's no transfer of a license that would predicate fcc review. more at the ftc or doj, elon -- there shouldn't be any horizontal, as they say, antitrust concerns in terms of vertical integration, even if he used it to promote tesla or spacics,
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that's not the type of thing that antitrust authorities would concern themselves about really the only question is if some of the regulatory bodies abroad or state by state rue view, and i would expect it to be relatively pro forma. >> so a loy of the broader issues that keep getting churn up, in fact because elon himself said his motivation is based on the commitment to free speech as he defines it, maybe different standards for moderating or not moderating content where does that leave things it's not as if there's no licenses, it's not about a company granting any kind of public air waves or exclusivity. so what are we talking about when we see the intersection of policy and what twitter does
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>> free speech, as elon pointed out yesterday, says it's one of the bedrocks of a functioning democracy, and one would think everyone would agree with that, and its commitment to that core value has been called into question even though you may hear in complaining in certain quarters about what it means, i think the value of free speech is the public square function is one that elon is right to focus on there's some business issues as well that are going to be more difficult to sort out. jack dorsey said, solving the problem of twitter being a company is something he trusts elon singularly with the absolute for so we'll see on you things play o
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out. >> to get back to the policymaking side of it e. section 230 has gotten a lot of attention and the debate by lawmakers to try to adjust, change our update that section when you see a deal like this man manifest, what does it do to those potential regulations? does it make lawmakers move more quickly? does it make lawmakers back off this debate? >> it's a great question certainly section 230 has generated a lot of interests on both sides of the aisle. i think that will only continue. the president, for example, still making the epps that section 230 should be repealed there's various vehicles to change it, but i think one of the reasons why elon's approach is one that can take a lot of
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heat out of this issue, is if you embrace the idea of a social media platform like twitter, where everyone can participate, so long as you're not engaging in violating the laud, that's something people can embrace in i think that could take a lot of sting out of this issue. really a lot of these social media companies don't explain their work they don't explain why people are kicked off or down voted and the like i think this could help address some of those issues >> well, transparency, perhaps could help on that, and he's been promising perhaps to makes those algorithms more publicly transparent. you mentioned harassment a lot of people will agree there
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are certainly guardrails that perhaps should be maintained what about, though, this idea of misinformation, and part of the content moderation role that these companies either had placed on them or placed on themselves we want to prevent the promotion, the virulent of misinformation is that a value approach >> certainly on any given issue in america today, you'll see people embracing views that may not necessarily have a sound baz in fact, but the problem becomes when you either, one, have the government or a corporation put pen to paper to detail exactly what that is part of the problem is misinformation is often in the eye of the beholder. and so i think the better approach is to have a digital public square, where everyone can share these, as long as it's not violating the law, and allow
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free speech to be combatted with more free speech, as opposed to censors views that might be in disfavor, or be seen as unfounded. once you go down that road, it becomes all too easy to essentially use it as a facade for censors your opponents. >> this is going to be one of the fronts of debate for a while. ajit, thanks for your take. >> thanks for having me on. here's a look for our road map. beijing trying to contain the latest covid outbreak. we'll bring you a live report from china. plus it's one of the world's largest pharma companies don't miss the ceo of novartis we have an exclusive with michael saylor we have a lot more "squawk on the street" straight ahead
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holding pepsico. despite higher costs, also raising revenue guidance the stroke is slightly up. with michael saylor, we'll be talking at things bitcoin and elon musk. we'll be right back. stay with us ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq
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welcome back the first retirement planner t allow investors to put option into their 401(k)s microstrategy will be one of the first employers to offer it in the retirement plan. michael saylor, chairman and ceo. great to have you back on the show. >> yeah, thanks for having me. >> the news certainly does seem like a big deal, fidelity, the first major provider is taking a
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move like this how do you see it in terms of next steps to bitcoin and bitcoin adoption >> it's less risky that stocks, bonds, than real estate, gold. it's kind of built for this. most people buying bitcoin want to give it to their grandchildren or great-grandchildren. there's 80 million americans that currently own or have owns digit at assets. 30% of institutions want to own it a 401(k) plan is a common thing for millions of workers to save. this will fill an important vacuum. >> technically a tech company, but also the la
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large. >> yeah, there's been a lot of demand for this. it's a -- and fidelity has overcome that, so really delighted to offered it to our employees. >> it was just last month that the u.s. labor department published guidance causing to consider -- the fact there's so much hesitancy, and it's been tied to historically in the price of bitcoin, what is it going to take, from your viewpoint, for the government to perhaps better understand or align itself.
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>> there's a lot of urn certainty when electric vehicles, planes and others when this arrived it's going to require a lot of education, and i think that, as regulators and the society at large gets more educated, they'll get more comfortable this is a much better way to do this than the 20th century technique. irr you men ned it's trading after a massive serve before that, and it's been so what's the take on what's happening there? >> there's three types of a. and the mac mallists are buying the
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stuff to get to -- and they're all in already the technocrass -- when they're feeling bullish on technology, they're buying when they're feeling bearish, they're selling. the trader think it's a correlated or uncorrelated asset, depending on their mood right now they think it's correlated to risk, so if they're selling risks, they're selling bitcoin. it's obviously not a tech stock, it's the ultimate risk-off assets in the time of four, five years, everyone figures it out, but right now the traders and technocrats control did.
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-- specifically also things like saudis considering pricing oil in yuan, so longer term aren't you believe this plays on the in favor of the maximalists? >> so people in the risk asset and risk-off business are controlling the mark in the near term bitcoin is for people who just want to store excess money for the next decade or longer. it's a savings plan for people that understand it but people with less conviction and more money than you will control the market in the near term. so let's talk about bitcoin mining and using
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it's been a maelstrom of controversy and conflicting reports. you are inteintegral to the cou putting out data just this week showing that energy use is declining. why do we see suv conflicting data and how that factors into this entire debate? >> look, most of the fud is from guerrilla marketing, promoting alternative technologies that are highly experimental. it's a difference between using real energy in cars, planes and medicines versus imaginary energy in the metaverse. the truth of bitcoin mining is bitcoin is running on 58% sustainable energy everything else in the world is running on 21% sustainable energy bit window mining is really a technology businesses.
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it's gotten 58 times more energy efficient. it surged by 63% year over year just in this quarter so people that understand it understand we're converting energy into digital property, so we can can move it at the speed of light so it would by immortal, indestruct ink and programmable those that don't understand it are easily spooked and the solution is just to indicate them. last year bitcoin mining getting a lot of attention in part because of elon musk weighing in if i'm correct, you pulled him into the council's work as well in terms of that education now the focus is on elon musk taking twitter private as well, which you've been weighing in on, too. i have your thoughts on that
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there's two issues, one is human rights and the other is malicious bots destroying the cyberspace the human rights issue is people are coming to the opinion that people with monopolies should respect our constitutional rights ra are to malicious behavior, i get attacked by a million nonperson bots every day that are launched, you know, to do malice, to commit cy-ops. the solution is bitcoin. if we allow hundreds of millions of people to get verified, we can completely eliminate all the malicious behavior in cyberspace and clean it up for women and children and, you know, and innocent people that are trying to go about their business without being attacked by some
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malicious operator >> you're a tech, software guy would open sourcing the algorithm, how profound would that be or not be where twitter is concerned >> if you open source the algorithm, people know whether or not their human rights to freedom of speech or freedom of assembly have been respected or not. i think that's pretty useful. >> michael saylor, thanks for joining us today. >> thanks for having me. all right. time now for a news update bertha coombs has been that for us. >> good morning, mike. official from more than 14 countries have come to a meeting on defending ukraine, germany announcing a major expansion of its support which would including tanks and heavy artillery. defense secretary austin said
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countries have come together. >> i would like this group to leave with a common and transparent understanding of ukraine's near-term security requirements we will keep moving heaven and earth so we can meet them. in beijing, mass covid testing has expanded to most of the city fewer than 100 cases in the last five days, but they're trying to stop a repeat of the shanghai update. back here at home, a new jersey meat processor has recalled over 120,000 pounds of ground beef due to policy e. coli contamination bertha, thank you very much. still to come, we'll talk with roger mac nammee
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comcast business. powering possibilities.™ welcome back to "squawk on the street." continues our discussion on musk's $44 billion deal, the next guest says the company has opened itself up to lawsuits. >> roger, great to have you back on the show. now that we have this deal official and moving forward, i do want your take on it. >> twitter is one of the most brilliant products ever created, something with potential to to do wildly better than it does. i think it still haus cumulative losses, the board of directors has been asleep at this company. think thought it was okay to
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have a ceo that had another full-time job, and now they're selling the company to a person, which as far as you can tell is the ceo of, what, four companies? from an investor's point of view, the questions you have to ask is, the all-time high of $73 a share was roughly, what, six, seven months ago a lot of people bought the stock there, significantly above the offering price that races some question for the s.e.c., you know, elon musk got to his position without properly registering hi shares with the s.e.c he had priefer run-ins with the s.e.c. and what is the position on his behavior. is it okay for somebody to violate the securities law what
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i find remarkable, we know essentially nothing about his plan we have the barest details in the financing. that's confusing. >> and this is moving fast, in typical elon musk fashion. he's obviously talking about free speech and enhancing the product with new features, to beating spam bots, authenticating all humans, which i think all people would be on board with, at least the humans operating on twitter i realize this is very much an evolving situation, with you is the flip side, to your point, twitter was trading on potential, potential that at least until now has not been realized in terms of shareholder consternation for the shareholders who have maybe bought in more recently or lost money on their investments up until now, i don't quite understand how we're going to
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see lawsuits. >> and there are people who are there, right and so, you know, that would be the question, whether they do that or not, but to me the important thing we have going on here is twitter is an outsized role, particularly in journalism, that effectively it's the assignment desk for the journalism industry. the notion that a single person has control of that, i do think that for journalists, this is a really important time to ask the question of, what is the appropriate role for a product like twitter for investors, i think the questions are much moor basic than that. let's imagine twitter does have more potential, because why hasn't the management team do it professor scott galloway, what,
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a years and a half ago, made a brilliant suggestion about moves the company to a subscription model, and that's something you can't have done as a public company. >> i just think at twitter, there's something wrong in management for a long time, and there's no reason for shareholders to believe this transaction is actually in their best interest. obviously the decision is made in the context and at the time that the offer was presented the date that twitter traded above 70, meta was trading at 370, twice the current price, right? i was also among those that said
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the high water market would have given twitter's board a reasonable case to seemingly, that doesn't necessarily motivate it in the end >> isn't it antithey cal, and i think isn't that conflict one of the reasons for a lacks of direction? >> well, to be clear, mike i don't think that twitter's goal of being the town square is legitimate i do i think that twitter plays an incredible role in our -- in
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my mind, the issue here, galway's proposal, the reason it was brilliant is there's three communities that depend on twitter, politicians, celebrities and journalists. they might even have limbed tweeting privileges, but the not only i think it misses a core point you you would complete twitter up, because it's not clear that those who are trying to spread harmful people are committed enough to pay what it would have cost to have a subscription remember, people in journalism
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refer to twitter as a hell site. they do, though, for really, really good reasons. credit from some people for moderation, but they've done a horrible job you know, this notion of free speech in a world where you use algorithms to amplify the things that get attention that's just nonsense those are two different issues in my mind it's all a cover for, you know, an environment where money speaks from the shareholder appointed of view, i think we'll look back on this and say it wasn't enough time. >> i'm sure more will be revealed roger macnamee, always great to have you on the show. >> my pleasure. just a bit above yesterday's lows, around 4200. the nasdaq composite now down
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welcome back to "squawk on the street." novartis reporting results this morning. shares are actually up right now, though fractionally solid sales, profit growth, sara eisen joins us with a special guest. >> good morning. i'm delighted to welcome the ceo of novartis. good to see you good 5% revenue growth. that's pretty much what the market expected. what are you telling investors going forward will be the big growth driver for this company >> hey, sara great to see you a couple things on our story first six big growth drivers, we talked about them in the past, they're all firing on all cylinders.
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there's a medicine for cardiovascular disease, so we have six big growth drivers to power us, and they emerging is the pipe did not line, about over 20 assets which we think have multibillion dollar potential. as we continue to demonstrate quarter on quarter that kind of growth, we'll be able to generate the rerating that the company deserves. >> then there's santos, the generic business, all sorts of strategic options. where are you on that? and where is the business as it relates to getting back to a normal healthcare environment post-covid are we fully there yet >> first, we're on track to give an update to the markets toward the end of this year as we continue to progress so all on trapped okay that front. most importantly the business rebounded in quarter one of course, we were looking at an
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easier comp from last year, given covid's impact we've seen a rebound in the cough and cold market, our european generic business was up 8% u.s. generics business is starting to stabilize, so we need to watch it for a couple more months, but it seems to be back on a growth trajectory. we really want a growing strong generic's business for the markets. >> rebounding in cough and cold, i feel that in my house. i know it's not a huge exposure for you, backup given the ongoing shutdowns due to covid, what is the risk from a demand perspective and supply anything that investors need to know about whether you can produce there? >> from our business standpoint, we apparently are not seeing significant impacts from the lockdowns? shanghai and other
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municipalities that have had lockdowns. of course, we have a large and growing china business we expect to be in the coming years one of the three largest multinationals in china. so it's something we'll have to closely watch. reaches out into the community hospitals, we've been able to manage the situation now from a supply chain standpoint thus far given the redundancies we have in our global supply chain, no supply chain disruptions we don't have any primary manufacturing that happens in china in terms of of our key assets, so all manageables, so far, but something, of course, we're going to have to watch carefully. certainly, some of the outbreaks in beijing, and other cities we'll have to watch carefully and see how it impacts us in the quarters ahead. >> i've asked you before about covid policy, actually in china, two and a half years ago, at davos, we were starting to talk about coronavirus. what do -- you're a doctor, and as an observer, what do you think about what china's trying
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to do? do you think they can successfully manage this omicron outbreak by locking down cities, and not ramping up vaccinations, particularly of the elderly? >> i think it's a challenging situation, certainly, because of course, many parts of the world there's been increasing natural immunity from repeated rounds of the virus, combined with multiple rounds of vaccinations, particularly within wealthier countries. you have a buildup in the immune system and in the collective immune system in these societies. i think the chinese government is trying to balance, if they open up, they could see a surge of infection of hospitalizations and deaths so they've got to get vaccinations up, while still trying to manage these outbreaks at the same time so it's a tricky -- it's a tricky blanks. i don't have the way out, but certainly something they're going to have to work through over the coming quarters. >> back to the market for a second, you mentioned santos m&a has been sleepy.
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you've been active in the past why do you think it's been so slow with deals in the pharma sector what's holding you and others back >> i think absolutely your assessment is right, but i think it's the quality of the assets out there. i think one of the things that we saw during the boom of the last couple of years is a lot of companies went out, and went public, took themselves out there. but maybe the science wasn't fully ready, and quality of science wasn't fully there yet what we have to do now is carefully parse through these companies and see where are the really attractive products and science that we want to bring in and pay a premium for. that, of course, is taking time. i also think the expectations amongst biotech investors have to adjust to this new reality where the xpi is trending below pre-covid levels as those expectations adjust, as we work our way through understanding the science, there
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could be good bargains out there. we still have to work through it and see where we find them. >> been a dig disappointment of biotech investors. doctor, great to see you always good to talk to you morgan, back to you. >> sara eisen, thank you. let's get to dom chu with a sector sort. stocks are mostly lower at this hour with the energy sector, the lone sector, as you can see in positive territory, the only speck of green out there consumer discretionary meanwhile as you can see is the worst one of the bunch so far. the travel and leisure names are the biggest laggers, in addition to tesla you talked about earlier this hour. wind resorts, also las vegas sands, caesars, the casino operators in negative territory as you can see there the cruise operators, though, also lower we got some news of course out earlier this morning of carnival where ceo arnold donald is stepping down at the beginning of august. so keep an eye on those cruise operators, and travel and
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leisure. >> dom chu, thank you. >> the ford f-150 is now electric, and it's starting production today do not miss an interview with ceo jim farley later on ""power lunch"," that kicks off at 2:00 p.m. eastern right back with the major averages, trading lower. stay with us hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee.
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welcome back, let's take a look at the markets here, slightly off the lows for the morning, but still solidly low the s&p 500 at 1.7%. the big tech stocks, nasdaq 100 is down more than it was up yesterday, it was the leader to the upside yesterday, now down 2.7% down 1.5% of the week, ahead of a big slate of earnings, obviously we have alphabet coming later today, it was a big question, morgan, whether the market would grasp on what these companies have to report to see if there was any signs that their old predictability was still impact but we're not quite getting the sign that people are confident of that right now after the facebook and netflix declines
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that we've had in the last couple of quarters. >> of course, i mean, we've talked about this so many times over so many years, mike, but just the dominance of these megacap tech stocks to help keep the s&p, for example, afloat over the last couple of years, and the rollover there, what it's don to the broader markets. it has been large based selling, earnings from so many different companies across so many different sectors. tonight will be no different you've got chipotle and chub and mondelez, and viva reporting, gm as well. >> we're a upon the 5% ahead of yesterday's low. beijing is rolling out mass covid testing. the city hopes to contain its outbreak our -- >> 20 million res can he notes,
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three times by this friday, through covid testing stations like the one behind me authorities say the latest is the result of the first round are in, and that one -- out of 3.8 million people in the biggest district, one case is a preliminary positive the city has locked down one two mile area, and a couple of buildings, and in addition to that, it's also imposed some restrictions on nonessential venues, it's shut feeders, sports venues, gyms and after school training, most schools, though, remain open. beijing is urging residents to not travel this weekend for the upcoming may day, labor day holiday. they've been urging for cautions and state immediate have said the measures are needed to ensure that beijing does not suffer a shanghai style lockdown morgan >> all right thank you for that mike, just to get a final check on the markets here, energy -- are bucking the trend interms of sectors in the
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green, but largely it's another down day, at least for now. >> yeah, very defensive tone, also buying deals down pretty significantly. you have the ten-year down below 2.8% there is a little bit of that old safety bit in there as well. >> it's been great going this hour with you mike that will do it for "squawk on the street." "techcheck" starts now happy tuesday, welcome to "techcheck." i'm john -- with julia boris ten. what that means for the company and other social media and advertising stocks tesla shares, which are plunging, they are down, i think, more than 7% today. we'll take a check on that, also look at the broader tech ecosystem. iak jack dorsey dweeting, lon is the singular solution i trust. extending the light on consciousness. more on that with julia in

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