Skip to main content

tv   Squawk on the Street  CNBC  May 11, 2022 9:00am-11:01am EDT

9:00 am
you're watching the s&p futures off by 40. ten-year rising again on this expectation that the fed will have to do more or that inflation will get out of control. make sure you follow your coverage on cnbc all day join us back here tomorrow see you later. it's time for "squawk on the street." >> good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber dow futures lose a 300-point gain and then some as april core cpi runs hot, up six points, even as the two-year rockets near 2.9%. we begin with the market reaction to the april cpi data jim, used cars down month on month but new cars as you suspected -- >> phil lebeau yesterday i think there's enough so that the fed keeps pushing.
9:01 am
lit turn i don't know why people felt that after you only did a certain amount that that would send the cpi over. i do feel he was wrong to limit and say not 75 he could come out today and do 75 >> you're not calling for an intermeeting -- >> no. i wish he would do that frankly because i think he has to shake things up. we're very close to pushing over a lot of different things, but they have to be pushed over. people have to say, all right, the biggest asset that's gone down is the stock market it's really hurt people. there's a lot of stocks that we thought would have the ability to survive because they had profitability and it's turning out not to be the case it's the weakest part of the uggs economy is the stock market i think it's unfortunately positive if you're the fed, it has to translate into why do new cars go up why didn't people say i don't have the money to be able to do it we have a lot of companies that are falling apart.
9:02 am
we have companies that are saying, listen, you know, people think -- we're not going bankrupt i don't want to see that, but i don't think that we're that far. i just think we need a couple more fed tightieningtighteningst of companies have come down, let's buy them everything jumps by etfs and the greed of wall street that you have the bad with the good i think you'll have to sit back and say there are a lot of companies that came public in the last 18 months that are as bad as those that came public in 2000 a lot more cash. but they'll get 23, 24, 25 numbers and there's no hope for profitability. they have enough cash to get there. they tend to be name-brand companies you say, ow e oh, all brands, look how low that is, i have to buy it, warby parker, then there's nothing, no raise on debt. a lot of companies came public
9:03 am
during this period it was very forgiving and that period is over i like that. that period is over. that's one of the principal sources of inflation, $9 trillion worth of equities and i don't want people to lose money, but i do know that when you look at something like the coin base, it's just terrible. there's a lot of people, carl, who told you things were terrible, told you that these coins that were stable coins were terrible and people just ignored them i think coin base is just another asset that is kind of -- we don't need it >> coin base platform >> coin base, they've been belligerent the whole way now. they've been belligerent, angry at their critics, but the critic is the commission. and i said over and over again, you can never criticize the commission you may hate the commission, but the commission runs -- look, elon musk hates the commission but he's never done the things
9:04 am
that coin base has done. >> there's a look at coin this morning, below 55. david, a lot of it is getting the analysts to admit to prior mistakes i mentioned piper in january, a target of 440, a top pick. looks a lot harder to get to now. >> yeah. 440 would be a good distance from here i think, guys. as you know, i have a keen sense for the obvious. yeah that would be a lot of points. jim, i don't know what you do with these things at this point. what was this, an $85 billion market value not long after it became public, if i recall to be fair, the ceo on twitter did make it clear that this new language about bankruptcy was something that they felt was required by the s.e.c. the regulars i think there was a large overreaction to that >> right, but david, look,
9:05 am
jpmorgan, the literal jpmorgan, always said if you're within your credit risk saying you're not going to go bankrupt, it's over for you i don't think it's over for coinbase they have a business but the business is terrible it's a terrible business and crypto is a terrible business but if you said that six weeks ago, there were enough people who would jump on you that would say i want to tell the truth about crypto, but david, no one wants to hear it now you're looking at these stable points and they're anything but stable, and we're all saying don't worry about that i don't have to not worry about that i can go buy an oil company. there's a big bifurcation between companies that are going to get there and companies that aren't going to get there or companies that don't care about getting there. i have roadblocks on tonight they're a good company but they have a lot of cash and want to do a great product
9:06 am
third way, you have cash flow, don't have to get profitable, but there are other companies i'm just worried about i wasn't worried about them until they told me to worry. >> understood. but to your point, a lot of them have a lot of cash >> that growth is not something right here and now and something you can count on >> but, david, you've got companies that are growth companies that come down so much that the price-to-earnings mobiles are reasonable are they supposed to be kept down -- >> no, i know. i asked the same thing >> how about toast >> we'll come back to microsoft. everybody should own microsoft because the multiple has gotten so low now >> chipotle. look at carvana.
9:07 am
should they bring down general motors only if cathie was selected. she's just the kiss of death i'm saying all the things that you wanted to say but you felt like you were constrained. she's the kiss of death. as soon as i saw she bought gm, i wanted to call mary barra and say sorry. i thought you were doing better than that. >> jim, another name how about kohl's you've been following that one closely with the guy with the proxy. everything i hear is they've lost, he's lost. kohl's has won you know, they're going to wipe him out, sweep all their directors getting reelected. not sure what that means for their sale process and whether they take their foot off the gas at kohl's. we should be hearing any moment now. that's expected momentarily.
9:08 am
>> they were so excited about the gold-toed socks and the private equity pants and stuff, i mean, the private-label pants. what happened there? >> i don't know. listen, david simons has interest there's definite interest in purchasing the company you know that. but this is a reaffirmation of investors' belief in the current management and their plan, which you've been relatively positive on >> i have been because thich cash flow, a good deal with amazon where you can return stuff to amazon. the stores look better than ever but so did best buy, and their stock is going down. bed, bath & beyond, david, that was a name, that's not done as well as i would have thought, right. >> yeah. >> i can't just sit here and say everything is bad. i'm not going to do that we have had the bad drive down
9:09 am
the good, like some sort of gresham's law where you look at situations and you'll see these stocks here's one, i'm not going to mention singularity future tech, but nasdaq listed company, the ceo on the run for allegedly operating a massive ponzi scheme, chinese company hindenburg does that say don't buy western digital? david, pro generation, david >> no. not everything is, jim you're right >> not everything is -- >> potentially buy and they aren't all oil companies, i wouldn't think. but take your life in your hands doing it right now i mean, a lot of guice came in today -- a lot of people came in expecting that number was not going to be as hot and they thought -- >> it's a long day >> -- the futures in terms of
9:10 am
that reversal. it is a long day a long week. it's been a long year so far for anybody long >> that's pretty good. >> we should mention the ten-year, although back to 3.05, is not back to 3.20. >> i have to deal with companies. i look at them and say someone in the lightning round, you have the president spending -- there could be a $30 billion package for -- >> the house just passed $40 billion. >> so raytheon is very much in the mix. should i hate raytheon should i hate lockheed martin because of upstart david, i'm not selling a technology company because of peloton. all right? >> okay. i think that's fair. i think that's fair. doesn't mean it's not -- >> that's what people are doing. they're giving up because of av avaya. they've had it because of carvana.
9:11 am
david's laughing when you have covid, you just laugh. when you're healthy, you can't latch. >> is that one of the side effects? uncontrollable laughter? >> yes >> that new drug for people who have -- >> i have to walk out of here, carl, to just start laughing again. it's just so contagious. >> are you even sick this is nonsense in china you'd be in, like, the icu. >> i'm not sick, thankfully, any longer i'm going to be next to you very soon, so get ready i'm not sick i'm expecting a negative test today. >> i want a hazmat suit from you because i want zero covid here >> i already am done with my antiviral and i'm feeling good i'm ready. >> good. >> some signs of progress in china. shanghai says about half of the city now has zero covid status >> there you go. >> which does make you wonder if we get those lockdowns easing,
9:12 am
then what happens to inflation >> we get the lockdowns easing and i think you might get an end to some of the inflation a lot of inflation is with freight. >> that's interesting. you think a reopening of china is a better supply story than it is a negative sort of inflationary demand story? >> yes i have too many companies that are shipping stuff that used to go by boat, but if it goes by boat, it's a slow boat from china. >> exactly >> i just think that, look, we need to -- you know, xi coming to his senses is radical into we had musk yesterday making a lot of news, but one thing he said was the chinese are lifting some of these lockdowns quickly. he's special case and will get some preference. >> all the public health scientists i deal with, and i deal with a considerable number, can not believe what's going on there, that it's so worse than what we were during the period when we were trying to figure
9:13 am
this out they have the drugs that work. they have the drugs that david managed to get they're not on the black market. and what's happened is they're going for 100% lockdown, which is something you did in march of 2020 >> you think that's the most important thing that could go right in terms of lucky breaks >> no. what could go right is putin killed that's probably -- remember stalin, deed in his bed, mao died in his bed. a lot of bad guys got through this when you go over the chechnyan war, in the end, nobody lived. that was the plan. grozny >> d.i. haynes yesterday talked about an escalatory period that we're in now, that the better ukraine does in a sense the more dangerous putin becomes. >> if it's a full-scale war, it will be difficult to beat them, but we have superior armament,
9:14 am
what we're sending over there, and we're taking it much more seriously than we did when we were giving them a couple grenades you need one of these two to go well and then -- i mean, a lot of people are being crushed by russia, but it's 2% to 3%. did you know that albert's had a considerable russian business? >> most of the suspects include mastercard, for example. >> a lot of people had two and three credit cards that's always been known and they built their own system. mastercard has come down a lot it's kind of interesting but i think that we're stuck with this -- if your company has a high price-to-earnings multiple and doesn't return capital, the stock is going down and if the company does those things lit go up david, not -- there are a lot of companies doing incredibly well-being brought doesn't by mr. etf. they've destroyed people's
9:15 am
capital and they're so to fif, it's amazing, almost like they were done by a closet fed operation on the 13th floor of the empire state building. >> really, so what the guys at unity software have to blame some etf for the fact their stock will be down 16 points come on. >> they're nice people lay off. >> look in the mirror. >> they're nice. unity had something with apple the apple product. >> right >> tracking. >> tell people about it because i'm looking at a stock that's 32 bucks. >> it was an advertising-based company that ran into the apple privacy laws and they explain that things aren't as good, so lay off them they explain things aren't that good, david, as opposed to a lot of other companies doing poorly and telling me things are good at least they had the guts to say it isn't good. >> it's true what did the upstart ceo have to say as well about things not being so good?
9:16 am
>> that was a subramoptimal conversation they ended up having loans on their balance sheet of which some aren't that good, so those of white house thought it was this terrific platform discovered they hatd a lot of what could be bad loans on their balance sheet and they couldn't syndicate the loans. they have one vintage that was almost 3%. historically that's about as high as you can get before things really roll over. now, they had very valid concepts, like you don't need fico anymore, we're using artificial intelligence, but the ai didn't work when the two-year went up dramatically >> right >> david, it was a contentious conversation i went home last night and said to my wife, i need your help, and she told me to put my big pants on and shut up
9:17 am
>> i'm glad you had the conversation i'd like to listen to a little bit of it. this was a stock as well held privately by a lot of hedge funds. it made their years last year. third point, for example, huge owner, couldn't hear enough about it now look at it we have time to take a listen to a back and forth let's do that. >> why is the average ten months of 2021 vintage 2.9% i was not born yesterday that's a really high number. >> it's not a high number, jim look, our whole goal is to predict exactly how much loans are going to default that's the notion of racing mod toll accurately predict. it's not perfect, but we've been dramatically more predictive than others. >> all right more predictive. david noticed this when you started hearing these vintages, a lot of them are good, they start going to 2.9,
9:18 am
people don't think that's bad because that means there's 97.1 that's good. but remember when it was 7% and game over? >> yes, of course. because it swamped the equity. that was it. >> you have to stop. i was begging him to get those loans off the book i said get them off the book don't put them on the book it was one of these meetings, on air, where i was just saying, listen, if you get the loans on the book, the stock will go up right now you're heavily shorted and people don't like it we're getting contentious conversations because people come on and tell us things are good we have to say to them, listen, that's just not true we're back in year 2000 mode or 2007 mode, like, look, please, come on and say, listen, we screwed up, we're going to do better that's why i like unity. we screwed up and we're going to do better. i thought that was great >> luckily, atlantic cuts to neutral today after all of this. we have that going for us.
9:19 am
we'll get to a bunch of other names this morning, sofi, oxy, even as macro has its hands on the wheel today with cpi futures are off the lows of the session. >> long day. >> "squawk on the street" is back in a minute lan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect. ♪ ♪ we all need a rock we can rely on. to be strong. to overcome anything. ♪ ♪ to be... unstoppable. that's why the world's largest companies and over 30 million people rely on prudential's retirement and workplace benefits. who's your rock?
9:20 am
this is xfinity rewards. rely our way of showingirement a our appreciation.its. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments.
9:21 am
two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. we'll see how futures continue to absorb is that cpi print. the core number hotter than all 67estimates in the bloomberg survey again, the headline number 0.3
9:22 am
is the slowest in several months and down dramatically from the prior. we'll see if we can go green when the opening bell rings in three minutes.
9:23 am
to adapt in the changing world, you could hire a professor of theoretical mathematics. we all know this equation, right? he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization. is that important? or you could use workday. the finance hr and planning system that helps cfos make better decisions faster. for a solve problems like a genius world. workday. for a changing world. (vo) everyone knows to get wireless savings, you need to be on a family pla- ...oh... for a solve problems like a genius world. (jane) with visible, i get unlimited data for as low as $25 a month. no family needed. (vo) i guess i spoke too soon. visible. single-line, unlimited data as low as $25 a month.
9:24 am
let's get cramer's "mad dash." >> you mentioned wendy's it's kind of the classic case of what we're seeing. they just say, look, we didn't do the number because of higher general administrative expense, decreasing company-operated restaurant margins, you know, the company's development cost money, higher salaries, benefits none of these things are what you want to hear however, that's what we've
9:25 am
expected do we think we get a cpi number that's hot and wendy's isn't impacted you have to find something better like chipotle that's been able to outrun the cost, take price, they have belter management, use mag sheens, robots to make chips they're better organized outfit. i keep come back to we're at rare moment in time where some companies are better than other companies but they're all trading badly. that's an opportunity, but you have to discern, you have to take the homework home 11:00, my wife says what are you reading? i'm just reading about coinbase, trying to figure out what happened here. >> we did get a bullish call today out of bofa on chipotle, speaking of which. the thing on wendy's, they talked about short-term headwinds and breakfast, which we generally use as a proxy for employment if the economy slows, things like that will begin to surface.
9:26 am
>> yes, they will. we're seeing lots of layoffs. >> carvana yesterday >> bad i go back to what happened with facebook, meta, where mark zuckerberg said i don't need to hire as many junior analysts i can go hire engineers. i can hire senior engineers. it was like, well, they're losing money and doing badly zuckerberg, when i talked to him, what he's saying is there's talent available again and that's going to change now, again, that doesn't happen immediately. we haven't even seen the housing start numbers be bad, but we know what the mortgage rates are. we haven't seen a company say, you know what, we don't have the demand we had a company, the stock is going to make a little comeback, but i don't see a lot of companies that are doing well in housing. i don't see a lot of companies that are making a lot of things
9:27 am
that people want again, that came public. i'm focused on grills. >> we talked about this yesterday. >> like traeger is a great grill. i like their grill it doesn't matter. you know, it's like weber. >> existing home sales, jpmorgan yesterday, running at a 12% decline on jeannie ahn yule rate over six months. >> if you heard the zillow call, maybe a benchmark of one of the worst calls of the quarter, it said the housing market stopped. really i'm list mig house at $4.5 million. is that why no one showed up at the open house >> exactly right >> it's happens do fast that the numbers can't compute it yes, it's true that rent's gone up, but if you're trying to sell your house, according to zillow, you're not going to sell your house. if you're one of these moguls and you have a big palm beach house, you're fine till
9:28 am
revolution just kidding there's no revolution. but i think a lot of companies that -- you know, a lot of companies that -- no, thank you. david, you look at the companies that have come public, that are burning cash do you think it's right to step in and say, you know what, this is the moment? >> not in this market, no. but that moment will come back at some point. i mean, you know -- >> will the companies be there >> references -- i don't know. we make references to the late '90s and 2000 where an enormous amount of business plans were funded that never should have been again, even when we were calling out the absurdity of things trading and incredible multiple, those ridiculous projections from so many spac companies that went public through a spac at the same time, jim, it's not that period as well. i mean, many of these companies do have a road to profitability that you can see and a product
9:29 am
that you can actually touch and feel as opposed to the air, i think, that 22-plus years ago we saw so often i'm not saying there are going to be those, but there may be -- >> you look at -- i have roblox on tonight, and people are unhappy with the quarter but david is a smart guy he's saying cash flow, we have a lot of cash, i know our stock is down, down 77% i don't really care. we're building a great business. do you buy roblox? there will be a time when they tear survivor. they have a lot of money a lot of institutions don't want to buy a stock that's collapsing that is a good company do i want to buy it today? no but i'm saying they're going to be around and they're not involved in bad engagement it's uplifting engagement. he doesn't care about profitability. >> ebitda was a miss but
9:30 am
bookings were in line. >> i have wow liked bookings to be better because he says that's a major indicator of how they're doing, those are the things people buy, but if you have -- [ bell ] not gm buy roblox. >> there's a look at the opening bell at the big board today, distributor of automotive replacement parts, at the nasdaq, cyngn, an autonomous vehicle company. >> would you rather have gpc good company yields 2.70. 16 times earnings. they make things they give money back i like genuine parts i've liked them far long time. it's a good company. should it be plupt edpolluted bt am i supposed to do that no i'm not going to let carvana
9:31 am
bring down genuine parts, david. david? >> okay. i'm here, jim. can't get away from that ca carvana. you're very focused on that. >> they did a secondary at 08. >> why >> they did a secretary at 80. three weeks ago. >> yep. >> now the stock is at 35 and there was no split >> no. it's true. that's not a good situation. not to mention -- >> thank you >> -- the founder put in a lot more money as well, didn't they? >> the father and son. but the father did manage to sell a lot of stock at a pretty high level >> right i did talk to aries and apollo last week at milken about it because both had invested in that -- both invested in the convert or preferred -- >> good, good, excellent opportunity. >> to provide financing for the company. i think it was over a double-digit coupon on that thing. but, yeah, i guess, all right,
9:32 am
you're right why not mention the stock that's down so much year to date? >> the amazing thing, jim and carl, that's not alone you can find quite a few other names that are down perhaps as much as 80%. so, jim, are they just done again is the question, or is this a point at which you have to sort of get brave and say you know what, this is not a business that's going away >> you raise a great question, david. i was short a company called merry- merry-go-round, and they had minus 30 same-store sales. grow generation, it went from 15 to 50, which was a good idea, grow generation, which is now at 3, it was at 40 not that long ago, oand they have some cash, s don't panic. they have some cash.
9:33 am
but they had same-store sales that were down in the 30s. so i don't know. and they delayed their queue i ought felt that's negative category grow generation is a company that allows you to be able to grow pot there's an excess in pot cannabis is turning out to be one of the worst story ideas ever hindenburg -- it was a rollout, but david, i think when off stock that went down from 52 in july to 3 today, that is what the fed might actually be happy about. >> yes it might be. maybe there will be some real demand destruction, jim. >> that's what's going to happen, david. it's not going to happen at the 34-foot boston whaler level. it will happen at the 18-foot boston whaler level.
9:34 am
>> there are some other names in the e.v. space, one is the market cap is too small to mention but it's going concern filing this morning which we may see more of. >> can you canoe >> don't out me like that. by the way, regarding coin, goldman throwing in the towel, going to neutral we still feel it represents a blue chip way to gain exposure but unlikely to return to recent levels of profitability. >> go back blue chip? like the poke rs and the reds, your mom told you the whites were bad, the reds are okay. they're plastic. blue chip. >> yeah. >> blue chip, coinbase, is it too early, david >> yes >> they said they're not going bankrupt it was a tweet >> how do i know i don't know you know, thankfully i leave that to you and you get all the -- >> look, there's a level, people
9:35 am
keep their crypto somewhere. i try to keep my crypto around so they can't find it. >> yesterday morgan stanley fascinating look at the crypto retail percentage of crypto trading was once 80% it's down to 30. their point is institutions more reliant on capital availability, more exposed to rates, that's why the correlation has got son close. >> yeah. remember the robinhood had a huge amount of people doing crypto i own crypto i own ethereum upstart said price is covered. i have the too tell you when i k at crypto, how many times did gary gensler warn you this stuff could be dangerous did people listen to him they thought he was an old fuddy-duddy. >> still haven't gotten regulation yet to be fair.
9:36 am
we haven't gotten anything, right? unless i'm missing it. >> no. david, it's innovation are you anti-innovation? is that you? >> no, i'm not anti-innovation jim, is it too early to buy -- down 36%, is it too early to bai yun ti unity software this morn? >> you cut me to the quick why don't we listen to him tonight, done there were things self-inflicted, but the problem is apple changed its algo and you have companies that were doing great during the pandemic, you have companies that got bushwhacked by apple john has been around forever i think he's going to pull it off. he does have metaverse things going, but, you know, it's not a great market to speculate.
9:37 am
back to coin, in piece by armstrong talking about, jim, the difference between a short-term rough period and what happens if it gets extended. take a listen. >> this is just like we had one-quarter where the markets pull back. i think still there will be real kind of -- something like that and i will say that our cash balance does give us a big advantage here in the sense we can actually continue to invest. in the past we've seen people get distracted we've seen people get discouraged. we've seen companies pivot and try to do something unrelated. and it's generally been a mistake. >> generally been a mistake. >> yep >> wow i want to see other nft businesses, not really expanding
9:38 am
that welp here's what i found was interesting. their head count increased dramatically 4,484 people, increased 33%. that's ill-advised when your business is getting gob smacked, you don't just start adding employees it's just not the way it goes. and i saw that and i said, okay, well, that's just kind of the opposite of what you do. maybe you're throwing good money. maybe we should be retrenching a lot of good companies don't want to do that because that indicates they're not on the path of profitability. the way to do that is to retrench they didn't care about pr profit profitability. it's absolutely true, david, that companies that have capital will get through this, but i think that -- i'm beginning to believe that jay powell's targeting the stock market >> really. well, he's doing a good job if
9:39 am
that's what he's trying to accomplish >> it's not like he's out there saying, you know, he feels bad about people owning stock. >> no. i do wonder what it's going to mean for employment over time. you raised that idea they were hiring a lot of people that's got to come to a quick end. so many of these software engineers, there were bidding wars, these private companies that were able to offer enormous amounts of stock without being public but the idea they would be that's got to come to a very quick halt, right? >> yes look at uber >> those in the technology arenas, probably gone away a great deal when it comes to their ability to garner ever-higher wages. >> there's why zuckerberg is saying this is our chance. take a look at -- the seminal quarter conference call this year may have been rh with gary freedman saying ukraine, this, that, and -- >> at the time we thought he sounded hysterical
9:40 am
>> we did. now it turns out that he was a seer david, when i say demand destruction, i'm not saying jay powell is trying to take down rh what i'm saying is people feel very insecure whether it be russia, china, or the fed, and so they're not buying a lot so you're getting gluts when you get gluts, then you get price cut, and when you get price cut you have to fire people that is what's happening to every industry i know about other than the chemical industry >> so that means things are going to reverse more quickly perhaps than we think? >> yes. >> we'll have a different conversation this summer about how things are looking >> yes >> all right >> yes >> okay. >> that's why i say it's a long -- there are a lot of companies that have enough money to be able to just creep along, unlike 2000, but, i mean, i don't know what the end game is
9:41 am
for warby parker what's the end game? 310 times 2022 earnings per share, david, i still regard as expensive. >> i know. i brought it up yesterday, the increase in prescriptions and the like from '20 to '21, but that's not necessarily seen as sustainable. it's true. you may look back at that also and say it was a beneficiary of the to pandemic. >> right i had papa john's on this is a good example they are doing better than domino's they're doing better than pizza hut. and ubs' top line measure, doesn't care that's a good situation, papa john's you can feed a family of four for seven bucks. they pivoted to what happens when the economy slows pizza has been historically a good category. what are people telling me that's what people ate during the pandemic they're not doing that anymore they're going to -- you know,
9:42 am
they're probably going to the -- well, they're not really going to danielle. >> no. but your point is a good one food away from home year-on-year, up 7.2 food at home year-on-year 10.8 it's cheaper to go out >> i'll have to talk to tony shu. people are desperate to leave their houses when you read roblox, david, they're saying listen, people aren't staying at home as much what do you think? did you think it would be better, davidsome did you think it would be better >> no, i didn't have any thoughts about it at all guys, just -- not at all give me a thought on disney. going to report after the bell, jim. it's a anymore we've talked here endlessly about. parks and attendance very strong >> are they going to take a charge on fox?
9:43 am
take a charge on fox >> a good-will impairment charge of some kind >> yeah. >> it's possible >> maybe it's time for that. maybe like a $35 billion impairment, maybe? >> you seem to be calling for that, don't you. yeah any information you want to share or -- >> no, i do not. i look at how fox is doing and question whether it's really helped the company as much as people thought it would be i don't think that governor desantis can do much more to destroy it they had a good movie this weekend. they make movies, david, and people go to them and they pay a lot of money it doesn't all go to adam, as we saw yesterday. david? >> that is true. they make movies they have great rides and thrills and theme parks and you can't get into them. and they have a direct-to-consumer business that still is probably the chief focus of many investors.
9:44 am
after that netflix quarter of course, we will be very curious to see how they did in terms of subscriber additions >> they started -- we were always concerned, carl, about how espn was doing so then they came up with a new stream, disney plus. so now all we're concerned about is how disney plus is doing. they have this core business of theme parks, which is a fabulous business they have franchise, they have this marvel -- there will be 100 movies from marvel, 100 from "star wars." it is a great, iconic company, but people hate it to me that's an opportunity. >> noose of netflix, has lost more from precovid levels than even the travel companies >> there are so many different things to watch. i was watching l.a. lakers i don't know if you do this.
9:45 am
play winning time. that's all i do. winning time is talking about -- >> it's -- michael >> he watches the show i think airbnb is launching a new one in ten minutes that stock has been down i like that company. big cash flow. >> we have some gains here dow is up 135. >> it's a long day we're separating the wheat from the chaff. david, there's a lot of chaff. >> excellent you have energy once again surging. >> you know what they do for a living >> yeah. they find oil. >> they bring something out of the ground and make a lot of money and sell it and buy back stock. the audubon society, the green coalition now? >> no, it is not
9:46 am
it's run by a very capable group of people. i've been spending a lot of time with them, believe me. >> go downthere and hope they don't give you a covid-2 >> no, there's no -- anybody's giving anybody covid i'm not going to have covid for weeks, maybe months. >> go to china you could get locked up for saying that. we have to go. >> too bad, because that was really interesting just now. apple, by the way, did hit a fresh two-month low. let's get to bob pisani. >> jim is right. we're separating the cheat from the chaff, but the problem is there's a lot of chaff on the floor. it to show you the futures because we're continuing these stunning moves intraday, before the open we moved 100 points on the futures, 444 to 3944 in a few minutes on the cpi report and bounced back going into the open, 50 points or so. you can say it's premarket,
9:47 am
doesn't matter well, we're happening intraday, too, getting these 100-point moves. look at the ek osectors. energy commodities more positive consumer staples tech is down megacap tech names, apple, everything is down in the 1% to 2% range right at the open nvidia down a little bit, apple, micron, the big megacap tech names to the downside. the important thing here, if you want to look at the other names, micron just went positive, but cathy woods' arc was down at the open we are approaching the march 2020 lows, so she closed march 20th, 2020, $37.25 we're a dollar and a half away from the lows back in 202 for that fund here that's what you call head and shoulders right there.
9:48 am
keep an eye on that. i mentioned the commodity complex. most of the high-beta commodity names -- mosaic, freeport, hess -- all up today shanghai says half the city has achieved zero covid status but restrictions are still in place. the world health organization is saying this is unsustainable, what they're doing over there. this is marginally positive, so you see the commodity complex moving up. sentiment for the trading community remains terrible if you look at some of these numbers, i like to see the str streets, sellers are getting exhausted. they like to argue that the april cpi is lower than march. it's true. wall street loves to talk about rate of change is improve, the delta improving a little bit, and i guess it is. some people are starting to already price in 350-basis point rate hikes that's what's going on and why
9:49 am
the market still has problems. the market internals are terrible the advance/decline line has been negative most of the year, 52-week lows for the nyse, half of the s&p 500 is trading below the march lows so we're not seeing any notable bounce at all. the you look at the trader sentiment, i like to look at schwab it comes out fairly regularly. these are active trade rs. this came out this morning 43% say it's a good time to invest here's really active traders that are not very bullish. i want to point out what all bird said. you want to see the problems of selling goods in the global economy? they said tumble around the world from our last earnings report impacted the performance of our international business in q1 it's expected to persist for remainder of 2022. that's one of the reasons people are concerned that earnings estimates will come down more on that next week when we talk about earnings. back to you. >> bob, thank you.
9:50 am
>> bob pisani. to let's look a look at the bond report this morning. the fen-year back below 3, which is saying something given the print this morning >> it's 9.49 and people are already decided the world has ended? not yet. >> no. >> not today, satan. energy is doing a lot of lifting here, up 3.5 we're back in a minute hey businesses! you all deserve something epic! so we're giving every business, our best deals on every iphone - including the iphone 13 pro with 5g. that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please!
9:51 am
it's not complicated. at&t is giving new and existing business customers our best deals on every iphone. ♪ ♪
9:52 am
in two seconds, eric will realize (laughs) they're gonna need more space.. gotta sell the house. oh... open houses. or, skip the hassles and sell directly to opendoor. wow. when life's doors open, we'll handle the house.
9:53 am
got a little duel going on between the bulls and the bears. more conuponants in the dow green than red, but energy doing a lot. chevron will lead you, procter will lag more "squawk on the street" in a moment
9:54 am
you're a one-man stitchwork master. but your staffing plan needs to go up a size. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit
9:55 am
fortitude gold producing high grade low cost gold matchinin nevada usa. aiption. gold investment delivering monthly cash, dividends and substantial yield. fortitude gold. i'm dan o'dowd and i approved this message. tesla's full self- driving technology. the washington post reported on "owners of teslas fighting for control..." "i'm trying..." watch this tesla "slam into a bike lane bollard..." "oh [bleeped f***]" this one "fails to stop for a pedestrian in a crosswalk." "experts see deep flaws." "that was the worst thing i've ever seen in my life." to stop tesla's full self-driving software... vote dan o'dowd for u.s. senate.
9:56 am
what a morning so far. >> this is what i mean roblox, i have them tonight. they're doing well, the stock is up that makes sense global finedries have doubled the earnings per share they're great, they screwed up, they'll admit it themselves. i'm looking for companies that are very good, owning up to how
9:57 am
weak things could be in order to have a path toward profitability. uk give up on these companies. >> so far this week, your search for some bargains is bearing fruit? >> yes, they're there. i'm up on them, and i know -- i want david to feel better, but he looks better than all of you are, so i don't understand what the deal -- >> i don't know about all of us. >> a dose of omicron, and suddenly he as the montpelier look thing if you got the one from pfizer, maybe you could fly down to houston. >> the ten-year is flirting with three. i'm not in the mood that i fear most people are. they have given up ij looking they're in coinbase. i move my crypto every day to a new one so they can't find me.
9:58 am
we'll see you tonight, "mad money", 6:00 p.m when we come back, the chief of harley and morgan. you
9:59 am
♪ ♪ bonnie boon i'm calling you out. everybody be cool, alright? we've got bonnie right here on a video call. we don't take kindly to video calls. oh, in that case just tap to send a message. we don't take kindly to messages neither. in that case how 'bout a ringcentral phone call. we don't take kindly to no... would you can it eugene! let's just hear her out. ha ha ha, i've been needing a new horse. we've got ourselves a deal. ♪ ♪ ♪ ringcentral ♪ this is not the stallion i was imagining.
10:00 am
10:01 am
good wednesday morning welcome to another hour on "squawk on the street. i'm carl quintanilla with morgan brennan and david faber. cpi does run hot today we saw futures take a spill. the market's recovered nicely, admittedly on some energy names which are leading this morning. >> that's right. three big movers specifically that we're watching, starting with toyota. the profit could take a 20% hit due to current fiscal quarter, to a jump in raw material costs. the stock is sliding a bit on the news plus roblox posting a wider than expected loss, as expenses rise. another stay-at-home winner turned to reopening loser, though the stock is jumping now, almost up 12%, but it's down about 75% year to date
10:02 am
wendy's reporting an earnings miss, citing higher costs for supplies and labor carl >> meantime, cpi does come in hotter than expected, 8.3%, first annual deceleration since last august, marks the seventh straight month in excess of 6% markets did respond, but we have a nice push and pull between the bulls and bears. joining us today is david kellie, and ernesto ramos. good to see you both, gentlemen. there was talk about might be noise and debate, is this conclusive to you, anyway? >> no, i mean, i think the bed headline actually was this enormous 20% increase in airline fares. that added a tenth right off the bat to the numbers, but i think the real headline is inflation is still running hot, still
10:03 am
likely to cool i think what people are missing here is this massive drag being imposed upon the economy from a declining deficit. the declining deficit will tall about $1.7 trillion, there's a massive trade deficit sucking money. it didn't fade much this month people may be disappointed, but i think markets are kind of realizing that >> ernesto, you go along with that does that explain this early price action today >> largely i agree that inflation will start to decelerate the question is how fast and how much of fed will have to raise rates to get there we're in the middle of a stimulus-led market for a number of years, now fiscal stimulus is being unwound, monetary stimulus
10:04 am
is starting to get unwound it will lead to a different market, a different set of leaders in the marketplace we're in the middle of that. we would rather be defensive and stay in companies that are not exposed to much of the economy, and really insulated from the cycle, because we could tell exactly when the dust will settle on inflation. >> david, if anything, over the last 20 years we've learned that cycles are a lot shorter i'll ask the question of you, when do you start to expect to see real signs of inflation slowing? and therefore the demand destruction perhaps we're talking about coming along with it >> i think later this year, more toward september, i think we'll see it as the inflation number begins to ease off
10:05 am
the key thing here is some resolution or something in ukraine. i mean, it's a horrible, horrible situation, but at some stage you suppose vladimir putin has to cut his losses. if you can come to sort of cease-fire or something to take the uncertainty off market, that would help, but real food spending was down in the first quarter, real spending on apparel was down in the first quarter. there's a lot of low middle to lower households that don't have the money they had a year ago so i think by the fall we'll see inflation come down. i don't want the fed to overreact right now. >> i think it's pretty baked in, the idea of inflation peaking and starting to come off, in large part because tougher comps, but there's a big difference between peaking, rolling over, peaking, staying
10:06 am
elevated, so at what point do investors starred to meaningfully invest? what do you need to see in terms of data points to determine what that's actually looking like >> as david pointed out, there's expect aids that consumers are starting to slow down. the unfortunate thing is it means that economic slowdown will take place. how fast will that happen? i think the fed doesn't even know that. we are looking at the data points today we have a bit of a higher inflation than expected. that's just one side of the equation that's the demand side the supply side of the equation, when our covid lockdowns going to end how is the evolution of the war in ukraine going to impact agricultural food prices, so
10:07 am
that part is not in control of the fed, nor can easily, if at all, be predicted. the fed can only focus on the demand side of the equation and they'll have to put the brakes on hard, which they have indicated and the slowdown that was ensue. the question is, will it lead to a recession? or will they be able to finesse that infamous soft landing that's the question before they commit to the market in a more meaningful way. >> finally, david, we keep talking about demand destruction and consumers trading down, but food at home is running at a 15 1/2 annual rate you have to go back to 1980 to see something like that. how much can the consumer trade down and destroy demand when it comes to getting groceries >> it's just a sad basic process, but what people do is they trade down to cheaper cuts
10:08 am
of meat and so forth chicken prices are up, beef and pork prices are down what does that tell you? people are moving to cheaper foods. lower and middle-income households are about to get squeezed here. all this federal aid is going to go away. there's already issues with mach and eggs, but i think that will ease also, gradually i think the turn will occur around the september fed meeting, where the fed says only 25 basis points this time, and the reason is we think inflation is rolling over. if i want to pin one date, i think that's the most important date. we have an interesting summer ahead, in that case we appreciate you guys thank you. another name out with results is coinbase reporting an unexpected loss for the quarter. >> coinbase lost users in the
10:09 am
first quarter and its outlook for the rest of the year has wall street worried, after the unexpected los on eps, adjusted ebitda was barely positive net revenue was down, and coinbase expects users and that trading volume that's key to the business to decline again in the second quarter that falling user base, monthly transacting users were down 19% quarter over quarter, and to use, as they called them, are trending right below the midpoint of the original full-year guidance on the brian armstrong add addressing what he called the elephant in the room, and tech stocks and some of the riskier assets, he says coinbase and crypto is no exception the good news, as he put it, it's lived through several
10:10 am
drawdowns. the long-term plan he said is to move away from trading he talked about the nft business, but in the near term, the retch really still comes from transaction fees. that was down in the first quarter. subscription and services, that was only 13% of total revenue, so not making up a big portion of the earnings here there was also a change in the 10-q that got a ton of attention. it updated some language to say in the case of bankruptcies, assets stored at coinbase might be subject to some proceedings that had some investors worried. coinbase does have custody of the 10% of the supply. brian armstrong defending that this morning, with a tweet he says your funds are safe. he says they have no risk of bankruptcy the language is due to an s.e.c.
10:11 am
requirement. >> yes, some key context there i want to talk about what's going on in the stablecoin you have this tera/usd situation, which people have likened it to a digital run, of sorts. talk about how it. >> it's very much a test case. those who aren't familiar, they called it a stable coin, because it's pegged to the price of a dollar it should thoirl caddy be trading one to one with the dollar that's not the case. it fell below 50 cents, so the huge test case was the trust in that asset the reason why a lot of people were rushing in to buy this thing is because there was a 20% yield as an incentive, so not only is it a stable coin they say that's supposed to be pegged to the dollar, instead of being
10:12 am
backed by commercial payment, by any short-term debt, this one was actually backed by bitcoin the whole theory when they were going to be buying $10 billion, and they have not been able to do that. they actually have been selling bitcoin into the open market they're scrambling right now, trying to figure out how to do emergency funding, come in and support this thing that was an economic experiment, and investors are worried about the effect it has on bitcoin, which it's weighing on at least investor sentiment this morning. >> kate rooney, thank you. still to come, don't miss my interview with the ceo of ha harley-davidson, and later we'll check in with art cashin
10:13 am
we have more "squawk on the street" straight ahead don't go anywhere. you'll always remember buying your first car. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. at t. rowe price, our strategic investing approach
10:14 am
can help you build the future you imagine. what's it like having xfinity internet? it's beyond gig-speed fast. can help you build and it can connect hundreds of devices at once. that's powerful. unbeatable internet from xfinity. made to do anything so you can do anything. as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today.
10:15 am
comcast business. powering possibilities.™ fresh reminder that inflation sits near a four-year high fr travel is a big reason why >> the index for airline fares continues to rise sharply, increasing 18.6% in the month of
10:16 am
april. that is the largest one-month increase since the inception of this report in 1963. the average cost of a domestic ticket is 21% above 2019 levels, international back to where it was two years ago, according to hopper the cpi report also showing that the cost of lodging has rich by 1.7% in april. commentary from hotel executives we spoke to is costs are only going up hawaii and florida are the most expensive markets maui, $601 a nice, florida keys a $519 where we are seeing a slowdown is home rentals. economists that track prices say they're expecting homes to get even cheaper as we get into the peak summer travel season.
10:17 am
if we see travelers start to prioritize, we'll see if that gives airbnb and expedia a leg up over the hotels. harley-davidson holding its investor day this week, and under the soon to be stand-alone livewire brand, unveiling a new electric motorcycle. i spoke with the ceo to discuss the multiyear plan and when he expects supply chain issues to ease >> we hope -- how to predict, because predictability is just an issue right now so we hope and anticipate an improvement, and expect the
10:18 am
second quarter to be more or less in line with the first quarter, and, you know, we will see if the supply chain eases, but certainly not before the second half. >> is this a lever you feel you can continue to pull if costs continue to remain elevated. >> yeah, we had to so far our market -- and some of the prices were, and we're trying to compensate as well as other levers that we have to be more productive. we want to look into more savings, and how manufacturing, and improvement in terms of margin by focusing on the core segments
10:19 am
well, that sounds good is there a point at which you would anticipate to see consumer pushback i ask that, because we've seen interest rates jump pretty dramatically, and harley david son, of course, has a financing arm. >> indeed, we are adjusting or financing to make sure or loyal customers are getting the bike they wounded at a good financing rate we have very strong demand. the demand for the product is very strong. >> you would say the health of the consumer remains strong? i ask that, because we're talking about big discretionary
10:20 am
items. is that demand strong everywhere or in in certain markets in? >> in our core markets, demand is very strong also in our most profitable and biggest market, nobody knows what's wrong -- that's from today's perspective, but certainly the strategy that we have initiated and started in our second year, we have created a lot of strong desirability with the brand that's helping us to also achieve a useful price for our motorcycles, you know, that we have never seen in a long period of time. we started going into the pandemic with use d prices --
10:21 am
>> to demand, we've seen a -- and in autos, amid everything that's gone on in the pandemic, saying call it two years >> the new line of evs that's beginning to slowly grow as well under livewire, so we'll be talking more about that, just a bit later this hour, in the meantime, harley is -- down 10% over the past week, but it is actually outperforming the s&p year to date down just about 2%, but keep in mind this is a company that's gone over quite a number of challenges over quite a number of years, and it's -- that you're bedin to take shape.
10:22 am
>> after all those years of trying to adjust, that is interesting. it's done relatively well. as we go to break, union software, as the company issued the weaker than expensed revenue guidance, of course, last fall, 210, don't miss the ceo tonight. dow is up 275. ♪ ♪ 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
10:23 am
if you wake up thinking about the market and want to make the right moves fast... get decision tech. for insights on when to buy and sell. and proactive alerts on market events. that's decision tech. only from fidelity. ♪ ♪ that's decision tech. connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪ it's raising capital that helps companies change the world. it's making complicated financial concepts seem simple. opportunity is making the dream of home ownership a reality... ♪ ♪ ...writing new rules and redefining the game... ...and driving the world forward to a greener energy future. (applause)
10:24 am
♪ ♪ opportunity is setting a goal... ...and charting a course to get there. sometimes the only thing standing between you and opportunity... someone who can make the connection. at ice, we connect people to opportunity. (vo) every business, big or small, coast to coast, needs internet that can keep up with its demands. verizon has fast, reliable internet solutions nationwide. so you can power your business to do more. find the perfect solution for your business.
10:25 am
our leslie picker has more on that painful story. leslie >> painful indeed, david 2022 has nobody the kind to many companies. take a look at the renaissance etf, in a market where profits
10:26 am
matter, they have notoriously little in the way of earnings, combined by -- and only 22% of the class of ipos are profitable last year's class was a behemoth, not even including the report, these deals worked for the most part for year, about you by september, sentiment shifted, and it continued into 2022 that closed the window in and out entirely shut, but almost. total proceeds are less than $4 billion, a slump of 93% from this point last year up this year's deals 21 out of 29 are trading. >> tpc.
10:27 am
>> as oy posed to those flashy profitless high-growth names of years past carl >> thank you, leslie after the break, we'll chat with art cashin, and the market response as we have the s&p 500 up almost is%, dow up 315. we're back in a couple minutes
10:28 am
[ doorbell rings ] my fellow xfinity customer! watchathon week was a resounding success! young man! [ snoring ] and, even though it's now over... you can keep watching the hottest shows all year long... ...on netflix... video... ...starz... ...and hbo max! just say “watchathon” into your voice remote to add a channel or streaming service.
10:29 am
the senate's bill is
10:30 am
expected to fail today the democrats plan to use the issue to rally voters in the november midterm elections. israel's military says at this point it doesn't know who killed a prominent al jazeera journalist who was shot dead she is a 51-year-old u.s. citizen, being mourned across the middle east. israel said initially it had indications she was killed by palestinian gunfire during the raid. a uk group says a cad cardinal, a singer and two others have been arrested in hong kong, reportedly accused of working with foreigners to endanger china's national security. about an hour to trade, the markets are try to go rally on the back of that cpi print not too far behind on the s&p,
10:31 am
the vix coming down. art cashin joins us today, director of floor operations, who wrote a lot about the number going into it, and i wonder what you make with core running hot, the stablecoin blowup, how impressed should the bulls by this morning >> well, i think the stablecoin might be the more serious of the lot. i think what happened was the cpi number came out a bit hotter than people had hoped for, then i think after some initial pull-down in the market, they began to realize, listen, we didn't get what we hoped for, but we got what we expected. now we'll have to look to tomorrow's inflation number and see where that is. but i think you very aptly bring up stablecoin, because i think by reflection, you recall we had a pretty ugly-looking sell-off
10:32 am
on monday, and it looks like a liquidity squeeze. a lot of us were trying to figure out where was the liquidity squeeze coming from, i guess maybe it was coming from currency little did i realize it might be coming from cryptocurrency so i think that's a new -- we have a new thing to look at here, you know, people were talking about the weakness in bitcoin seemed to come with a weakness in the high-cap text, but i think traders will have to watch any sudden weakness in the cryptocurrencies will have people recoil and get very defensive in here. so we want to be careful i think we want to watch tomorrow's number of the influence of the ten-year yield has become a good deal more elastic than it had been two or three days ago
10:33 am
the dow would be up to about 5 to 600 points, so that's become more elastic i think you hit the nail on the head when you said the new surprise is in the cryptocurrency area. >> right on china, if we were to get some of these lockdowns easing, in your view, art, is that dovish because of better supply or is it hawkish because of renewed demand? i think creators will be checking more and more about the shipping delays in the major ports. that shanghai shutdown has seemed -- all of the transitory.
10:34 am
that is certainly something that frustrates the fed, as much as an influence that is, it's something that interest rates can change you know, they've got to see that loosen up that will be a clear picture i think the initial reaction would be dovish, and then they reassess and see how much of a difference it's really making.
10:35 am
>> i think what happens, and what a great many young people don't realize is if the stock market is kind of like a living entity, it gets the levels, and then it rechecks itself. it's as if you are running or walking from somewhere, and you seemed a little shorter breath than you thought you would be, so it raises some concerns, so you go back and see if you can walk that block and a half again. so the market keeps retesting itself the next thing that the
10:36 am
viewers -- is on any weakness taking out yesterday's lows. you know, you go from a level, that becomes a milestone in the back of your mind, so any pullback, i think the bounce we're feeling, that they did break the previous day's lows, but they did not go into any trap door selling. that gives you the market of -- i guess i made it past that. i think i can do that again. that's where we are today. 15th. >> though, art, we talked a couple days ago, and you expressed interest in seeing a 90% down day coupled with a big surge in the vix we didn't quite get there, but you're hungry for that >> yeah, i think that would be a true washout
10:37 am
what happened, the selling was -- it may have been 9 to 1, but the selling was ugly, but not vicious. it's a vicious, carl, when you look and it's almost this bleak, you know the greatest disbelief i could call was in the crash of '87 it became surrealistic, looking at the prices on your pad thinking, that could be right, i can't by there it becomes vicious when you look at it and say, my goodness, where are we going how can this be happening? i don't think we have reached that extreme the other point was the vix popped, but actually closed off its high of the day. i would love to say -- they don't often giving you this -- if you can get an ugly 9 to 10 end, and get a vix up around 40, then i would say, you can have my wallet, here we go. >> art, appreciate that.
10:38 am
always good to talk to you art cashin >> my pleasure thank you. still to come, a lot more from my sit co-down with the ceo harley-davidson. as we head to break, a message from a wall street reporter, as cnbc remembers asian america and pacific i islander. >> one thing my mom and dad emphasized was education i know that was one of the big reasons they moved to america, was to give me and my sister access to the best education possible i watched them, you know, while i was growing up, move to a totally new country, not knowing the language, not knowing anyone, and kind of having to build up their lives from rah. i've carried those lessons with me throughout my life.
10:39 am
your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit
10:40 am
10:41 am
10:42 am
welcome to "squawk on the street", harley-davidson, the ev division being spun out, the delmar is the second product, a middle-weight class motorcycle, costing about half of the price of the first model brought to market, and geared toward urban riders i spoke with the ceo, and the plans to take livewire public via spac. >> it's a very similar dynamic the great thing, the components in-house, building the product, the motorcycle up from scratch, you know, the pourertrain, manufacturing, the harley-davidson factory, just for the leaders in the auto space, but the constraints
10:43 am
overall for supply are the same. >> how do you expect the trajectory of growth to emerge and take shape for livewire over the coming years, given the fact that the second motorcycle goes into production in a meaningful way next year, but this obviously seem like such a big future growth opportunity. >> yeah, we see a rapid acceleration from a few hundred bikes to over 50 thousands bikes we have the best product at a competitive price. we believe we can shape that market and grow that market as a leader of the segment. >> the last time we spoke, you were announcing that harley was going to mergeling livewire with a spac this year is that still the game plan? >> weapon hope to close in june,
10:44 am
the second quarter, and our plans to go public >> have you seen regulatory crackdowns of spac, the market turmoil -- that have come from them, that goldman sachs this week, any of that give you pause? >> it doesn't. we are doing this for the right reasons. we want to set up livewire as a separate company with a separate management team that's able to capitalize on the strength that harley brings to the table this is really helping overall to give livewire the freedom do operate while using the synergies with both companies. that's also investing. so we believe this is the right thing to do. we're not doing this primarily to raise additional funds. these are separate dynamics, separate brands, different
10:45 am
products, and it makes more chance to give it the opportunity to grow very fast, comparison, so -- >> so for the full interview, go to but david, you followed the spac markets. so i have afeeling you have thoughts on that reaction there, because obviously we have seen the pipeline dry up pretty considerably these are seeing these crackdowns from the s.e.c. but, yet, they're moving forward with this at harley, just trading below $10 a share right now. >> yeah, i mean, there are still going to be some deals that get done obviously we won't see many spacs underwritten, but there are still many looking to do their deals. this is one that got their deal and are going to move forward with it. the structure makes sense for certain companies. i think what was clear from the
10:46 am
period we've been through the last couple years, particularly when we're talking about it endlessly, what, a year, year and a half ago, it became adopted by everybody off the backs of retail investors. as you well know, spac has become a dirty word. >> in the meantime, i did also ask him about manufacturing synergies between evs and the more traditional combustible engine based harley bikes. he said there's been a lot of synergies. so we'll see how all of that continues to play out, too, as they continue to roll out the new ev model that's at a lower price point. as i mentioned there, in a meaningful ray, ramping up production, and they're sold out literally in minutes
10:47 am
there does seem to be a market, at least the beginning for these new electric motorcycles one to watch, for sure >> some are saying the biggest concern is getting chips out of the china for things in the ev space. coming up next hour on "techcheck," a lot more on coinbase today, and we'll talk with sofi's ceo after the company released the report a little early yesterday, as we're close to session highs, dow's up almost 400 i could've waited to tell my doctor my heart was racing just making spaghetti... but i didn't wait. i could've delayed telling my doctor i was short of breath just reading a book...
10:48 am
but i didn't wait. they told their doctors. and found out they had... atrial fibrillation. a condition which makes it about five times more likely to have a stroke. if you have one or more of these symptoms irregular heartbeat, heart racing, chest pain, shortness of breath, fatigue or lightheadedness, contact your doctor. this is no time to wait. - hiring is step one when it comes to our growth. we can't open a new shop or a new location without the right people in place. i couldn't keep up until i found ziprecruiter. ziprecruiter helps us get out there quickly and get us qualified candidates quickly. they sent us applicants that matched what i was looking for. i've hired for every role, entry-level technicians, service advisors, store managers. ziprecruiter helps me find all the right people, even the most difficult jobs to fill. - [announcer] ziprecruiter, rated the number one hiring site. try it for free at
10:49 am
i'm dan o'dowd and i approved this message. tesla's full self- driving technology. the washington post reported on "owners of teslas fighting for control..." "i'm trying..." watch this tesla "slam into a bike lane bollard..." "oh [bleeped f***]" this one "fails to stop for a pedestrian in a crosswalk." "experts see deep flaws." "that was the worst thing i've ever seen in my life." to stop tesla's full self-driving software... vote dan o'dowd for u.s. senate.
10:50 am
♪ ♪ welcome back to squawk on the secrete. i'm frank holland. stocks are mostly higher this hour with the real estate sector up among the leaders almost every stock in positive territory today. that includes digital realty trust and public storage but duke realty is the big outperformers up 8% after the company rejected a $24 billion
10:51 am
offer take over which they say was insufficient the real estate sector up 8% david, back over to you. >> keeping an eye on those that could go on for quite some time after the break we'll look ahead to disney. that company reporting its earnings after the bell. it's been a rough year, of course, for those shares and really anybody the direct consumer video business, as you 'rba aerhight there. wee ckft ts. (dad allen) you know when you see a great deal on a phone, and then realize it's not for you? not at verizon. (mom allen) yep, they just gave us all a brand new iphone 13. (dad allen) we've been customers for years. (dad brown) i thought new phones were for new customers?
10:52 am
we got iphone 13s, too. switched to verizon 2 minutes ago. (mom brown) ours were busted and we still got a shiny new one. (boy brown) check it out! (dad allen) so, wait. everybody gets the same great deal? (mom allen) i think that's the point. (vo) now everyone can get a new iphone 13 on us on america's most reliable 5g network. (allen kid) can i have a phone? (vo) for every customer. current, new, everyone. to show the love. ♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪ it's raising capital that helps companies change the world. it's making complicated financial concepts seem simple. opportunity is making the dream of home ownership a reality... ♪ ♪ ...writing new rules and redefining the game... ...and driving the world forward to a greener energy future.
10:53 am
(applause) ♪ ♪ opportunity is setting a goal... ...and charting a course to get there. sometimes the only thing standing between you and opportunity... someone who can make the connection. at ice, we connect people to opportunity. i'm 53, but in my mind i'm still 35. that's why i take osteo bi-flex, to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term. osteo bi-flex. available at your local retailer and club.
10:54 am
tonight the senate planning to voted on the law protecting abortion rights. plus, inside the business of the war in ukraine >> the facts, the"the news with shepard smith" disney set to report results that will be after the bell today. you can see the stock down about 30% or so so far this year joining us rosenblatt securities analyst barton prokett what's going to be front and center when you hear these numbers later today? >> i'm first really interested in the parks recovery t. parks -- the disney parks and experience segment is -- this year the theme park business in the united states is coming back
10:55 am
like gangbusters i think blowing everyone away with how strong it is. i want to see disney, the leader, share in that. that's point number one. point number two is obviously when are they going to tell us about the disney plus subscribers. are they going to do anything to shake off the concerns people have that this is an unwinnable gain, even for someone who has done as strong as disney, i expect a pretty good answer that that's going to be crucial. >> i guess that's where we focus. it would seem even if they get. >> reporter: strong numbers out of parks, investors still want to know, as you point out, what those subscriber numbers look like and then just the profitability. you mention that you expect they're going to do a pretty good job explaining that what are you expecting >> i'm expecting them to stick with their targets that they've articulated, the long-term sub targets. i expect them to talk about a step-up in content and propelling better subscriber growth over the next couple
10:56 am
quarters what we may see this quarter i expect them to stick to their story, expect it to be consistent with what we've seen with some of the other media companies which is netflix hit a wall, but the media companies were there streaming, services are not. disney also already announced a plan to put advertising in disney plus. i want to hear them talk about plans there, the rollout and what that could do for the subscriber ramp and the profitability. >> i want to get your thoughts on valuation stocks down 30% since the start of the year. to your point, we did see that valuation increase in large part because of the streaming service and comparables to things like netflix. the fact that it has so many other businesses to help keep it afloat and is moving forward with the plans for disney plus to continue to propel the path towards profitability there as well, does this valuation make sense to yu at these levels? >> i think it's too cheap. i think the company -- my
10:57 am
numbers trading at a pd against this fiscal around 23 times. but they're going to be growing eps a lot. this is a very depressed number. we're still coming back in parks. the movies are coming back those have been meaningful contributors in the past and i think we'll see that again i think dtc is in the investment stage right now, and i think that will become a contributor over the next few years. i think this could be a 20% eps over many years that i think is very ownable which is why we're recommending it saying it should be a $177 stock. >> barton, i'm curious as to what's going to be the catalyst to potentially get it moving towards that price target. >> i think the catalyst is going to have to be execution at parks, execution is dtc. we're going to have to navigate what happens in the macro.
10:58 am
people worry about recessions and impacts on something like disney themed parks. we don't see the skm acting like he's in -- disney down 30%, a lot of that dtc, and the consumer re-spending is doing things like parks really strongly if there's any hint we're not entering a recessionary term, i think disney will be a beneficiary of that. >> barton, we appreciate your time we'll be watching those results closely after the bell thank you. >> thank you morgan, i want to take a quick look at a name i used to follow closely, dish not really about satellite tv as much as it's about the buildout of a 5g network from this company, all the spectrum they had. yesterday they had an analyst meeting. the reported earnings i think last week, there's concern they
10:59 am
may need to raise perhaps more capital. you can see the reaction to the day analysts had they laid out certain targets they had they expected to be a fortune 100 company that would equate to around $31 billion in revenue. it's become a show-me story rather than a believe-it story they have to hit 20% of the service population to have it available by june. up from there, of course they've been building it for quite some time. in terms of those buildout requirements that the fcc is requiring and the square miles they have to recover around the country, do seem to have an enterprise sort of focus for much of the service in terms of what they think they can actually accomplish. it's a competitive area. you can see right now, morgan, the market is just not believing it or perhaps believing they're going to need to raise more capital to actually get to the numbers they're saying >> yeah. 14% drop just today in the stock
11:00 am
is a pretty big move for a name like dish. speaking of names, after the bell reporting results you have rivian which is trading lower, speaking of evs as well. that's going to do it for "squawk on the street. "techcheck" starts right now. >> good wednesday morning. i'm carl quintanilla with jon fortt. d dei deirdre, what's coming up. >> this event mostly streamed but we're here we're on the ground in mountainview this is where the place where alphabet makes big product announcements, where the company and trends are heading that reverberates throughout the tech community alphabet has lost a fifth of its value. what the giant says is going to matter more than ever. later on i will si


info Stream Only

Uploaded by TV Archive on