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tv   Squawk on the Street  CNBC  May 16, 2022 9:00am-11:00am EDT

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we don't want to be owned by somebody who doesn't want to buy us i think the merger contract does seem pretty tight. we can get into those details, but again, for investor -- >> we're -- we have to jump. it's a longer conversation we're up against a hard break, but we want to thank you this morning. we also want to thank brian for hanging out. we'll see everybody tomorrow "squawk on the street" begins right now. good monday morning, everybody. welcome to "squawk on the street." i'm david faber along with jim cramer carl has the morning off let's give you a look at futures as we get ready for another potentially tumultuous week in the markets a half hour from now. looking for a slightly down open our road map does start with, well, recession risks. and a warning for investors. goldman's lloyd blankfein, formally of goldman, calls the risk quote very, very high as
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the u.s. cuts its growth forecast plus, berkshire hathaway taking an even bigger stake in occi >> and yetblue launching a hostile tender for spirit, urging shareholders to vote against the deal with frontier yeah you didn't see it, but jim shook his hand at it we can do that we'll wait we'll wait >> give them the time of day >> we'll get it over with quickly. let's start with the markets, jim. of course, as we enter this new trading week we have a lot of paper in front of you >> a big week. >> why >> first of all, the major -- the big box retailers report they're a much better gauge of the consumer than everything we hear how weak the consumer is or not. second, i think the china -- i'm worried that china is a little more off the rails i had some soul searching this weekend about an interview i had with micron, where perhaps i was too bullish about any
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interpretation of what's really going on there with shanghai and cell phones. >> what do you nene? >> maybe there's no commerce being done and that's a huge chunk of the world where there's no commerce being done >> we did get a number out, something out of china >> i think when we look at those, we can't be glib about that at all. >> although china, they're starting to talk about rolling back lockdowns >> i think one of the reasons why it's a pivotal week is because it's so binary if they decide the lockdowns are over, you're going to say why did i not buy every single tech company. if they don't, then this is a continual bleed. we have really good analysts out today who is kind of cuts his target >> mike wilson has had the best call over the last six months. coston actually increases his
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estimates for the s&p but lowers his year end target to 4300. >> i think these are very serious people i want people at home to know when you read these people, we don't just say, well, those people are irrelevant. these are very, very good analysts >> three-month forecast equals 4,000. gains later in the year, much higher equity prices in the near term, antithetical, he says. >> a very good piece then a very good interview, andrew sorkin and the former fed chief, just saying basically that crypto, not a store of value. crypto mostly illegal. the people use it in order to do nefarious things so there's like a big upending of a lot of things we have liked over many years. same time, there's a piece this morning about salesforce saying it's the lowest multiple since 2009, and coston has a protected list of companies selling in multiples that are absurdly low. it's a pivotal week because it's so binary.
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>> so what would potentially motivate investors to gravitate towards those lower -- stocks that now are sporting multiples they have not seen the likes of in a decade. >> great question. i am going to put the emphasis on home depot, target, lowe's, and walmart. those have somewhat elevated multiples because people feel that they are still secular winners. but if they fail to hold these levels, then you get into a matt boss world this morning, jpmorgan, who slashes everything, and it makes me feel like there's a belief the consumer really could roll over. >> starting to weaken. that would be another leg down potentially. >> the enterprise is still holding in there, but when i look at what's going on in the world. and i say to myself, russia, mcdonald's, you come in and don't think, any american company still has big exposure there, and you see mcdonald's is very important >> i don't want to -- come on, they're talking about a charge of $1.2 billion.
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we're talking about mcdonald's decision to exit russia entirely >> cold war/hot war. obviously, if it's a cold war, you say all right, let's ride it out. if it's hot war, you can't do business with an enemy i think that america's hardened to the point where if you speak to its political leaders, they regard ukraine as nato, it's not nato these are all up in the air, and in the meantime, we can look at the ten-year, but that seems to me not rigorous versus all these things that we have talked about. >> yeah. well, and speaking of a lot of investors, many do through their hands up at this point have taken risk far off. i talked to still a lot of people who run what we call hedge funds, certainly they may not necessarily be right that often, but they're all very smart typically you were one of them, and right now, a lot of them are not willing to plunge in at this point. they have already suffered significant losses there's also a concern about some of the bigger names, the bigger hedge funds out there that we talk about so often,
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that chase, such incredible growth, that have large investments. not sort of able to operate as they have. will they become family offices, becomes a question that could psychologically deal another blow to certain parts of the market >> yes, but i think your world, somewhat almost fanciful bid this morning, totally misreading of the biden justice department. >> we're going to talk about jetblue. >> what i would point out is the private equity world still has money. >> we had a deal today carlisle buying mantech. all cash, $4.2 billion >> i say look, i want to pay attention to the private equity world, but i think the actual company to company world is going to be on hold. those who don't think that just have not spent enough time studying what this current antitrust division looks like. which is this antitrust -- if i want to sum up what they're saying, we have so many mergers happening that now there's not enough competition
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i'll take it one step further. the whole supply chain issue is often because there's no competition. you have a couple companies making this, we didn't have enough truckingcompanies because they all merged. >> as we head into the summer, it's finally gotten warm in the northeast. last summer was transitory or not in terms of inflation. >> very good point there that's no longer the case. now it's 8%, now recession or not, isn't it? >> it has to be. we have the lloyd blankfein take >> you want to listen to lloyd, your old friend. he was on "face the nation." >> not my friend not my friend. >> the determination is whether you ever went out or spouses ever went out. he's an associatie of mine. >> he did not do me a good turn when i did a documentary on goldman sachs which i'll never forget because i have a long memory that way. >> can we see this please. >> let's listen to what he had to say about recession because he is a smart guy. >> do you think we're headed
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towards recession? >> we're certainly heading -- it's certainly a very, very high risk factor, but, you know, there's a path, a narrow path. but i think the fed has very powerful tools it's hard to finally tune them and it's hard to see the effects of them quickly enough to alter it, but i think they are -- i think they're responding well. i think it's definitely a risk, if i were running a big company, i would be very prepared for it. if i were a consumer, i would be prepared for it, but it's not baked in the cake. >> consumer prepared for it. now, brian moynihan -- >> runs bank of america. >> -- would tell you the consumer's balance sheet is the best it's ever been. so now there was a giant leap in credit in the last month, but still, nowhere where it was. does that mean the consumer should not buy a house at 5.7% when they're paying a very high rent i'm saying the consumer is never
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going to get prepared for something when the consumer's balance sheet is so good the enterprise balance sheet, i think other than a handful of companies, they're good. >> really, we have not seen a huge back-up in the credit markets. you know, high yield has changed a bit. it does oftentimes mirror the equity markets to a certain extent, more so than broader fixed income, but generally speaking we're not talking about a credit crisis right now in any way, shape, or form. >> i think lloyd's words were measured i do think that to stop the level of inflation needs to be done now because if it does get embedded, embedded meaning we all accept the fact clorox is going to put through another price increase after july, and we all find ourselves at the supermarket saying, wow. how did that happen? and wheat is at $12. there's just too much going on that the fed really does need to do a shock >> but that's not what jay powell is interested in doing.
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he wants incremental i always think that's -- >> another gentleman who is worth listening to is ben bernanke, who ran the fed during the financial crisis here's his thoughts in terms of the inflation response from the fed. >> the forward guidance overall on the margin slowed the response of the fed to the inflation problem last year. to some extent >> does that mean it was a mistake? >> i think in retrospect, yes, it was a mistake i think they agree it was a mistake. there were a number of reasons for it one of the reasons was they wanted not to shock the market they wanted to avoid -- jay powell was on my board in the taper tantrum in 2013 which was an unpleasant experience he wanted to avoid that by giving people as much warning as possible so that gradualism was one of several reasons why the fed didn't respond more quickly to the inflationary pressure in the
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middle of 2021 >> gradualism, jim gradualism >> look, it was a public health crisis i look over and over again about what's happening in china. i think we might look back two months from now and say how could china have insisted on doing no commerce during this period i just think we have to give jay powell a break over the thanksgiving weekend, we heard there was another version of covid none of us knew whether it was more serious we were ill-advised by our own government because they weren't getting the right document is jay powell suddenly a doctor who is trying to figure out if omicron is going to slow us down, and it does indeed do that in january and did we really count on putin inn invading ukraine i keep defending jay powell if only just because the series of events are so, i would say, almost science fiction science fiction meaning that a
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disease is controlling the country. >> awful lot coming at him finally, we do have jeff bezos putting on his favorite elon musk hat i guess he's competing now with musk in the twitterverse as well, feeling he has to be more outspoken, mr. bezos, so coming after president biden. perhaps deservedly so because this was kind of a silly tweet inflation and raising taxes on corporations bezos basically saying there should be a disinformation board that reviews that tweet because it was absurd. joe manchin saved them from even creating more inflation, and yeah, you want to talk about higher taxes, fine, but really you have to deal with inflation. >> a bit of a parlor game. you have bezos no longer running amazon so where do i come from? >> he is executive chairman. >> when i see that, i say please go back to amazon. that quarter is so horrible, i have to believe if you were there, you wouldn't have
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overhired. i'm doing all this work on reits. the ripple of amazon having so many more people than they needed >> an interesting question you raise, as to whether or not the leadership of andrew jassy in some way changed the approach and they screwed up. because they did screw up. >> of the major -- >> for a company we have such high expectations for in terms of nobody knows better nobody knows better than amazon. >> that's the way we always felt look, jassy, we could say he just started give him a break >> he's been at the company for a long time. >> and slipsky did a good job, amazon web services was very good it had to do with hiring, it had to do with the need. >> that print was the one that freaked people out more than anything >> what was that >> that earnings miss. more than any of them. more than any of them. >> we set our clock to amazon. and it's been like that. i remember when amazon was being attacked by the previous president. i just said, no, amazon has the
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commander. >> for so many different reasons, for the perfirm nls of the business, for the multiple, for the reflection of people's enthusiasm for the general market so important >> it became the boeing of retail >> yes that's not nice at all >> i'm not a nice person when it comes to losing money. >> speaking of let's call it airlines, boeing, you know, we'll talk about that bidding war for spirit airlines. jetblue does launch that hostile tender offer sounds exciting, doesn't it? probably won't be. let's give you another look at futures before we get started with trading 16 minutes from now. a lot more ahead for you on "squawk on the street. 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. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee
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and so much more in the xfinity app! and don't miss jurassic world:dominion in theaters june 10th. jetblue announcing it has launched a tender offer for spirit airlines. valued at $30 a share. you can see spirit's trading just a bit below that. sorry, spirit had rejected prior bids by jetblue preferring to keep a previous struck teal it has to get together with frontier the price is a bit less, but better chance perhaps of happening. and that's kind of the key here. spirit is up, but again, would point out, a $30 deal. it's still trading at almost an $11 spread here's a sampling of comments of people i spoke to this morning there's no shot in hell. i want to take it off my screen because it's just a waste of my time this is absolutely meaningless reminds me of when dollar general made that tender offer for family offer like that had a chance of
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happening either nobody i speak to in the investment community, jim, seems to think this has any shot of ever happening because it will be rejected by the department of justice. period >> i have to tell you, this is going to be the beginning of people recognizing the whole business of m&a isn't going to be much of a business. because kanter, hear me out -- >> this is special they regret having allowed deals they allowed >> let's talk about entertainment. every time i try to figure out a way out of the jam of entertainment, i think that justice will block it. every time i try to figure out a way out of technology, i think they're going to block it. anything involving materials after what we have seen with supply chain, they're going to block. there's no interest of americans in having these kinds of takeovers. and this is blatantly anti-competitive >> yes, there is a bleep that this would be truly anticompetitive, and the other deal itself has enough issues that there's questions whether
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they would allow that deal to occur. but the idea that jetblue would be able to buy spirit, again, in the investment community, those who have been around these kinds of deals for many years, and their profession is to obviously assess the risk of a deal being rejected, squarely believe there's not a chance >> right look, biohaven can get a bid from pfizer. they have a stake there. there's a seattle genetics, clay siegel was forced out because of bad things bad things -- but that company, merck owned stock. those deals can happen, but these deals where you're going to pay more for your air fare, i mean, did you go to college to get stupid >> to be fair to jetblue, they come up with a lot of reasons. they say there's more value potential, more regulatory certainly. there's a break fee they would pay. >> david, they're lawyers.
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are their lawyers saying there's not good odds but you want to go for it people want to make money. lawyers want to make money >> lawyers get paid by the hour. >> do you think the lawyers said look, i don't think this is a really good deal, but go for it? >> probably. you have to tell them to some extent there's certainly a risk there. what it does is squarely raise the question whether they're just trying to make sure the other deal doesn't occur that would be a victory for jetblue. >> it could be >> of course, it could be. >> just trying to be subtle. >> i know what you were talking about, whether it's a netflix getting bought, seems hard to imagine, but even smaller deals. >> hell froze over >> we'll talk about that >> get ready for your mad dash, because we have that coming up ten minutes from now, we get started with trading we're ckft aerhi
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seven minutes before we get started with trading right here at the new york stock exchange time for a mad dash. i don't know anything about what's going on with energy, tell me. >>ia know i'm a big believer that america's independence on natural gas and also our natural resource independence is very important. s sempra infrastructure, what is that about let's just unpack that, so to speak. i hate that, i'm going for it. this company has an amazing series of lng facilities >> okay. >> they have made a gigantic
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deal for most of their phase two expansion selling their liquefied gas to poland, which is a great country and ally of the united states in terms of lng. this is the beginning of the energy independence that europe needs so badly and i wish other countries were as forward thinking as poland poland's needs will be set up by this you look at where poland is on the map. it's so important they be independent. >> this is a process of replacing the russian natural gas. >> exactly this is the beginning. sempra is so well run. jeff martin. we do need more people who are as visionary as he is about lng. but the idea that if you're ever going to get energy independent, you need all of europe to either recommission plans you and i may not like, coal and nuke, but also they need a lot of our lng and qatar's and australia. but i think jeff is kind of a very worldly man as is, by the way, shreve suki from tulorian, but they're
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behind we have to watch these deals because this was done by government to company. and that's, i think, what we want we want our excess lng to go to europe to make sure europe is not dependent on russia. this is very important geopolitically >> glad to have that pointed out. we have an opening bell just a few minutes from now remember, you can catch us anytime, anywhere, listen to and follow the "squawk on the street" opening bell podcast we're back in a few minutes. 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..."
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"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. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪
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. warren buffett continuing to view the energy sector as an opportunity for him to put some cash to work, according to regulatory filing. berkshire hathaway bought another 901,000 shares of occidental petroleum last week that raises its stake in the company to as much as 15%. he's liked occi for a while. he liked it on the credit side when he did that great preferred some time back he got 8% on $10 billion then.
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he's been buying the stock for quite some time. >> once he gave them that money, you knew they were going to be viable, so why not the acreage they bought was very good acreage i think the problem was obv obviously they overlevered, but he's kind of solved that for them in the meantime, energy has been an amazing bet and it will continue to be an amazing bet because it's something we have a lot of >> wasn't that long ago we were talking about the debt load at occi, that company having potential significant issues when it came to cash flows and they did the anadarko deal they paid a huge price for it, but that's long ago. $60 billion market value company, the stock is up 155% over the last year >> congratulations my problem with that deal is that the way the oil companies were doing, it's going the other way. oil companies returning capital to shareholders. in amounts that give them very high yield stocks.
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>> it has worked out quite well for those investors willing to take the plunge any period of time over the last year. here you have the applause building at the nyse you can take a look back at our real time exchange celebrating the 25th anniversary. over at the nasdaq . >> all right, jim. when our colleague carl is out, i always like to sort of bring back memories of days on the set, the old "squawk box" when i used to ask you the key to this market, you may have mentioned it earlier in terms of the earnings from the retailers, but what are you focused on? >> i see walmart is really the battleground because we're at one of those moments, did we give up the score for the worker did we decide walmart, that in order to get cheap clothes, we decided to really kind of dismantle industrial america
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and is industrial america coming back i'm doing a lot of work on the state of ohio, and the state of ohio has cheap power and a lot of major companies, tech companies, are moving there. obviously, pat gelsinger is trying to get intel to work there. >> they're trying to move chip production >> is there reindustrialization of america or are we still just walmart and we sold out our workers overseas and the reason i mention this is because of the labor that we finally have a resurgence of labor. and i think it's something we have to watch because it's been so long. we haven't ever thought about it you have a staten island facility amazon, and they have people who were unionizing or a starbucks being unionized. and these are things that ended -- people recognized the disparity in pay between ceos -- >> that's still the case >> but we're talking about it because under reagan, it was never -- >> we talked about 30, 40 years ago the disparity in terms of
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ceo versus average worker is nowhere near where it continues to be. >> biden will tweet something, and it will almost be like what i felt like in college, which is the rich were just too rich or something. and then bezos tweets something that's a little more substantive, but in the end -- >> the world's second richest man or whatever he is at this point. >> he's very wealthy >> very wealthy, i don't think that really captured bezos somebody can say you're very wealthy. bezos is otherworldly wealthy. >> palm beach recently, and i m am like, okay, enough. but the fact in our country, you can make a lot of money, and unfortunately, a lot of people make a lot of money, want to spend six months in florida so they don't want to pay our taxes. kind of absurd, there are a lot of working people who can't do that they just pay their taxes. >> sand wages have gone up
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what is going on here? more red than green on the realtime exchange. as you can see there a bit of weakness in the overall market, after a great deal of volatility last week >> did you see the way - >> hitting lows we have not seen for the year >> did you see the way moderna acted with the cfo >> i did >> very different from what i'm used to seeing a lot of debate about it i think misconduct, clay siegel at seattle gen misconduct not allowed now you have a moderna, i think they do a good job, but i have to ask u, if seattle general, who always wanted to be independent, does that automatically make it so we're thinking, will it be merck, will it be pfizer because those deals are being allowed. >> they are, and i think we will continue to see those deals. i mentioned last week when we were talking about the latest pfizer deal in part because
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there are a number of companies that one would expect potentially still could get acquired >> i think that's really important. >> biotech for its part has been crushed, as you know >> biotech has been crushed to the point where the companies that supply biotech have been crushed. when you look at the prices, the prices of the biotech deals, you realize the immense carnage. by the way, in terms of immense carnage, you see it in things like weber, seems like figs, allbirds, these companies where you like the product so you bought the stock, except you really didn't buy the company, you bought the stock >> you were talking about this last week. victor is in the old remington ads. i like the razor so much, i bought the company >> that is just horrible >> that's what i'm talking about. how about traeger. >> i remember when they went public they went public not long after each other >> what can i say? a real fry >> been horrible
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>> this is what's happened to people who are in our stock market, david. >> well, is it a reflection of simply multiple compression or is their business gone off the rails? >> it's greed. we have brought everybody public by the way, i was with a spac this weekend, can you believe we were just giving people $500 million checks and they had no idea what they were going to do with it? >> of course i can that's why i talk critically about it for a year. thankfully, i didn't lose any real friendships but when half your friends are starting spacs, you're like, really come on. >> that's what happened. hey, by the way -- >> back in a dream that was me. >> i think - >> now that dream became a nightmare. we don't hear about it anymore >> people lost a huge amount of money. hey, by the way, here's one where people lost a lot of money. morgan stanley came out on zoom. they are saying it may not be the right time >> still not the right time? still? >> zoom. >> really? >> but they're keeping it overweight they like the print.
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refewell timing, not bad don't you think we have to talk about boeing do we have a clip? there was a fellow this morning with interesting things to say don't know if we have that >> not sure if we have the clip. give them one second while they do that, let me talk about twitter, then we'll come back to boeing but i did want you to know, can't go a weekend without talking about twitter. the stock is down another 4% plus trading below $39 a share. over the weekend, i was going to say our friend, he's not our friend at all. i wish he was, elon musk i don't even know the man. never shaken his hand. but man, we talk a lot about him. for obvious reasons, because you need to. over the weekend, he just continued this sort of taking shots at the deal in a way continues to -- you could argue, being breach of the murger agreement, which says you have to use your reasonable best efforts to get this deal done. so tweeting about any sensible random sampling process is fine,
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if many people independently get similar results to figure out how many of the accounts are actually spam or fake at twitter. he's like, i'll pick 100 as a sample size. that's what they use and then he says, oh, i violated the nda by telling them what the sample size is he got a lot of people trying to figure out, does he want to own it still, does he just want a price cut, does he not want to own it at all? what will the twitter board do he's already in breach shouldn't they already sue him when will they have to sue him what are they waiting for? if they do, when they do, and it ends up in delaware court, will they ask for specific performance on the equity as long as morgan stanley is still there with the financing which appears tight at this point. you know, you through your hands up because it's musk. it's chinatown what are you going to do >> it's interesting, i was with a group of people this weekend we were speculating it about and said the same thing, there are 337 million people who would never do what he does because
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they feel that it would be violative, and he does whatever he wants >> whatever he wants >> bret taylor is the chairman of the board, right? >> a serious guy >> total serious guy a rule follower. so i mean -- >> listen, there were people who thought the board should, you know, get ready and sue him today. >> right >> just to get on the record >> they have jobs. they didn't sign on to be -- >> i guess they're going to wait until he fails to do something more egregious in some way in terms of his representations under the merger agreement >> it should stop. >> instead of this vague allegation of fraud that he keeps making about a company he's buying. i'm sorry, i can't help it i have to laugh a little bit >> people like oil >> you're moving on from this. that's it? you don't want to talkabout twitter anymore? we can't because i really enjoy talking about it >> go ahead. >> you have to get back to boeing also. >> go ahead. >> just a couple thoughts. you remember when lvmh got a
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price cut on tiffany when simon got a price cut >> that was mad. >> they had tight merger agreements too they had tight merger agreements who knows? they have a very tight merger agreement. all of it is quite strong. doesn't mean, because it's musk, that he won't figure out a way to do something here it's going to end up in court. it just seems -- >> i think that -- >> hard to imagine it won't. >> i think musk is having a great time he has a great time every day. we work really hard. he has a great time. good for him all right. good for him, he has a great time the rest of us work. okay >> okay. >> we watch our stocks go lower. >> yeah, there it is but if a deal were to actually disappear, there's still plenty of downside. that said, it's $54.20 who knows, maybe if they get a price cut -- you know it's going to end in $4.20. just don't know what the number in front will be >> what a disaster those stocks have been. they even got scott's miracle
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grow in the end. >> they got scott's miracle grow with the whole cannabis trade? >> we have drugs and drug related that does well like mckessons of the world. we have oil, which is doing incredibly well, by the way. that sector is on fire we have ad doing amazingly well. i think it's a great stock and that's really about -- >> but we did have a huge move up in a lot of these hugely beaten down names. like a rivian, which was up 8% or 10% amazon had a very strong day >> ford motor got rid of another 7 million and managed to cleverly got rid of 15 million >> 8 million right away, as soon as they possibly could on that saturday, putting that block trade together >> coston put together a list. did you have him on at 10:00 >> no. >> he put together a margin of safety list which talks to price to earnings multiples now versus
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previous stocks are cheap now we need a catalyst, and mieg wilson is going with the fire and ice thing, the fire and ice thing being we have had some of what's bad, but there's more, kind of a nuclear -- >> like a price on wilson. >> no country for old men wilson >> night at the garden, that was my night do you know the movie? on the waterfront. >> that was his night. >> yeah, the price on wilson >> a couple things that are really interesting because you do have a netflix, a pacter saying it's time that -- >> netflix, by the way, is responding the stock is up 3.6% >> amazon obviously not responding to what we said >> michael pacter cost a lot of people a lot of money for a very long time. >> he calls it the albanian army marches on, upgrading to outperform there's no irony to it at all. he does not start by saying i'm sorry i did this
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jpmorgan upgraded china, which i found ill-advised that they had -- i could never find the term uninvestable in any of the research bloomberg mentioned it, but they have gone to stage two they have stage one was bad. all right. now that was in march. now they're saying stage two, you can buy some chinese stocks. now, david, what does that mean? >> i don't know what that means. >> the regulation should begin to abate on the back of recent regulatory announcement wheres the centerpiece there, yao, and he has said things were difficult to invest in march 14th, and has since changed his mind now, maybe he just got more bullish on china, but he would be the only person out of 8 billion people who got more bullish on china in the last six weeks. >> they're talking about more pressure on alibaba. >> there's no commerce being done in two rich cities. you can't just -- struggling to
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get food, how can they get cell phones >> baba lost a quarter of its market value this year after a terrible year last year. and we saw that in the soft bank numbers we got late last week, given they own 25% of it, not to mention all of the many of the investments from the vision fund >> i'm going to give you one by the way, their numbers are trem tremendous >> who >> soft bank >> the numbers were horrible they do own arm, which is doing fairly well, and they plan to bring it public. >> the stock goes down quite aggressively lps every day at a certain point, that's a buy. >> what point would that be? >> if you -- let me be like a lot of the jerks who come on if you have a long term perspective, what is that? in 2027, if the eagles could do it, i think nvidia is going to report and it's going to be fine not going to be great because they have video game exposure,
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but their omniverse, and the other guys are beginning to do well, and no one is talking about it our metaverse friends, mark zuckerberg, they managed to be able to cut the number of people working. they're no longer hiring like banshees >> almost exactly the same, so there you go >> jpmorgan with this underweight of robinhood >> mantech mantech. >> where do you work i work at mantech. >> by the way, nothing to do with men >> it's mission critical security programs. mantech, and now it's going to be owned by carlisle, and they're paying $96 a share 32% premium to what they said was the unaffected closing price in february because there were some reports this company might get a bid. >> well, i mean, defense is certainly important. we know a lot of the money stays in the country big defense budget, it goes here david, what did you think about nucor which i have on tonight to
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acquire chi from kkr this is a deal to do - >> what does chi do? >> overhead doors. >> overhead doors? >> like garage doors >> i don't understand. nucor, the steel company is acquiring a garage door company? >> that's why i'm glad to have them on. >> will you ask him what he's doing to source anthracite they need that to make coal. they need anthracite coal to make steel >> nucor is scrap. a scrap steel company. and is, by the way, the most environmentally -- >> they use both >> they have used -- >> and rush sia was a huge exporter of anthracite i asked him last time and he didn't answer. will you ask him >> pennsylvania was the anthracite capital of the world. >> correct, still is >> one that's coming down fast >> do this and then we have to get to bob >> whirlpool, i had them on.
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he was saying that he felt he could sell europe. he wants to get rid of europe, not doing well there are a number of companies, south korea, chinese this stock just is in free fall, and we know that it's $9 billion company, they might be able to sell europe for $5 billion why i'm mentioning this is housing is considered to be the blast zone of what jay powell is doing. no one will even touch this stock. i like it. so you have -- the reason i mention this, you have nucor getting the overhead door. you have whirlpool just hanging out there, but they're housing i know some are saying, i always find uncomfortable ever since i took over the show with you, but i will, i'll obey that >> good. we have to let bob tell us what's going on in the broader market >> i didn't mean anything. i thought it was important >> pisani, are you out there take it away >> we're good. we are drifting lower, unfortunately. about even on the advance decline line at the open but we
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broke 4,000 on the s&p 3930 was the old thursday low. we'll see if we hold right there. take a look at sectors we had generally positive comments out of china over the weekend. that's helping some of the energy markets a little bit. metals are up a little bit here, although nucor is down oil is holding around $110 you see the banks a little weaker industrials. tech, though, drifting a bit lower. the new high list is not much on the new high list, but it's largely oil stocks, refiners like marathon, mpc hitting new highs. one loan defensive name, merck, on the high list the important thing is where mega cap tech is, opened lower and moving lower still that's what you want to watch. people keep asking where a bottom is. i say the simple thing to watch here is growth stocks, and the simple way to watch that is to watch the s&p growth sector. the etf there, ivw is that we hit a new 52-week low on
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thursday and as you can see here, there's no real buying interest right now. there's no new increase in shares outstanding so in terms of flow, in terms of technicals, it's not there and still not there right now. two things that have been moving markets, three things really the ukraine conflict, but that's not a big story at the moment. first is the risk of recession and second is the covid lockdowns inchina. how extraordinary it is. goldman sachs, blankfine over the weekend saying a very high risk factor for the u.s. into a recession, but david kostin, the equity strategist, says our new baseline forecast assuming no recession and applies the pe ends the year unchanged at 17 times forward earnings number one, extraordinarily difficult to call this a recession. two very bright people, slightly different opinions, but kostin is talking about no multiple compression, and he raised his earnings estimate. this is where the divide is now.
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do you think estimates are going up or down kostin raised his to 8% from 5%. other people think it's going to go in the other direction. this is the real dividing line for stock situation. just on china, to show you what the covid lockdowns have done to china. these numbers were extraordinary out over the weekend industrial production down 2.9%. the estimate was down 0.4% that's an enormous miss, even bigger miss on retail sales, down 11% they were expecting down 6%. you know, david, this is a real serious problem now. this goes to the problem of the reopening of the markets here. here's the mixed situation for the hang sang. down about 16% or 17%. some positive news over the weekend, they're reopening some malls in shanghai, so hopefully we're at a bottom, but those numbers were just extraordinary and amazing how much they missed the expectations >> yeah, no, we were talking about that at the top of the
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show one of the key questions for the week as well, as you point out, whether shanghai does start to open up. ographer we head to break, let's give you a quick look at the bond market. do a bond report how treasuries are faring this morning, you ask well, yields are right there, g this morning yields are right there 2.875. a little over three on the 30-year bond we'll be right back.
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there is s&p gainers you can see commodity related. >> ag and oil. we're back after this. stomers al on different systems. you need to pull it together.
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blood pressure you put it on and see if you have it. they bought a company that's well out of whack too which is audio equipment. good morning good to see you. >> you too i'll be out on assignment for the next cuouple of days. i'll miss you. then i'll be back. still to come, eli lilly ceo david ricks. important diabetes drugs keep it here the pursuit is on. the pursuit of outperformance at pgim.
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we are live. quick look at markets. you see we are down on the s&p by .7%
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the nasdaq still worse performing >> we're 30 minutes into the trading session. here are some big movers jet blue launching a $30 per share sending that stock higher. we'll have a lot more on the take over bid this hour. phil is here rallying after forecasting significant quarter earnings for 2023 the company detailing plans to cut costs. this thing is down around 80% for the year mcdonald's will sell all of its restaurants in russia since being there f or 30 decades. >> looking for a buyer locally but obviously the name will go oi away >> which is significant. boll symbolically >> 30 years.
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>> i think it's complicated to untangle some of these relationships. after near 20% drop and modest relief. the market could reach some down side targets but plenty to wor -- worry about. mike has more for us this morning. good morning >> yeah, david pretty much always plenty to worry about. maybe seems more now than typical. we're talking about the 20% decline. the key determining factor as to whether or not the market goes down much many ore than 20% the fed interplay with that, the fact the fed summer seems pretty well scripted at this point in terms of the two half point hikes next couple of months. maybe the market feels a bit
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capped because there's not going to be a will the of relief on that front for now now, there's also a lot of chatter the 30% decline in the nasdaq might be the deflation of something bigger some greater valuation something that resembles the 2000 to 2002 decline the market had a lot more air under it in 2000 valuations much more severe. there is a nagging sense there's still more reckoning to go in terms of the premium coming out. did we see enough worry, enough panic. people recognizing the fears enough at the lows last week we did get a pretty good flush lower. that's kind of thing you can see with a follow through to the upper side if this bounce is to have it. that would imply we have already taken accountable out of this bad news >> what about catalyst i know we'll get a lot of retail earnings this week
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for a market focused on fed, it feels like a lot are behind us we'll have to wait a few weeks for that >> the known catalysts are not really there maybe some inflations numbers will be coming we have an options expiration coming you would have thought that could have been a catalyst today. i think it's more about the context. if you're down this much in a given year, it's not straight down, typically. did people over shoot with the selling the less bad news is what you need. >> we're down almost another% here mike, thank you. for more on the market let's bring in ubs private analyst good morning to both of you. >> good morning. >> what are you telling your clients as far as whether this market is over sold and just over shot on the downside? >> it feels bad.
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what i'm telling my clients is crazily enough i've been through 15, 10% corrections and 8 to 20% corrections. what you do at this point in time is you wait you wait and see you upgrade your portfolio i think there's three things we call them the three rs that we need some sort of clarity around in order to have people come in and really buy here. you have to have some clarity on rates, how far are we going. recession, are we still going to see growth and some clarity on the general risk in the market whether that is intentional, shut down to be continue or geo political tensions that create further bottlenecks. >> i feel like you have been an optimist throughout all of this and have been buying the sell off which hasn't exactly worked to this point. is that still your advice? >> yeah, it's a lot of fun to come on the show and talk about
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being to be stocks at some point the best offiense is a good defense. we're tilting a little under weight in stocks we still have the view that we're not going into a recession over the next 12 months. i think the biggest thing that caught or attention last week was not cpi. that debate would not be settled last week. that debate will be settled as we get through this year the biggest thing that caught our eye was the s&p down over two, interest rates were lower so the negative correlation between stock and bonds return last week, which is really, really good for the balance investor i think with the vxx making a will the of headline, it's up 40% from last year the bigger story is the move index which measures interest rate volatility that's up 70%. if there's one thing we're looking at, i think you control the narrative is do we find a
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home, a ceiling around rates which will make every one feel better because there year there's been nowhere to hide and that has to change >> a lot of times if you have active management then you have to think about it or if you're in fund then you're experiencing a loss as opposed to market. i think that's why you're seeing so much panic and a ground for liquidity now. think about how long it's been since a balanced portfolio was down. people are not used to this
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level of impairment to a portfolio. what i keep of reminding people when you have this much recession risk priced in, we're looking at 40% recession priced in, you have this binary view of the future 4 4 50% of time if you don't get a recession, you get 12% pounce e bounce. a lot of market neutral hedge funds. >> that's working now. you have energy and health care. defensive and commodity. i get your point that rates have
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stabilized and are coming down we're seeing that again today. it could be happening as slow down fears over take inflation fears. that wouldn't help the equity market >> that's great point. i'm still a optimistic but around the balance fund instead of a view on equity. the fact that the balance fund is working or will work in that environment, yeah, nobody is hoping for recession that's not a good environment for stocks really critical, corporate credit still looks good for us buying diversified forms
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it makes sense in this environment. it's a lower risk ray. >> lot of good ideas thank you. as we head to a quick break, a look at our road map for the rest of the hour, including the latest around elon musk bid to buy twitter after saying twitter's legal team told him he violated an nda. mp i don't know eli lily david ricks on how the company is combatting inflation. warren buffet buying freeze. well tell you which names. a lot more on "squawk on the street." don't go away. you're focused on what's happening right now. and thinkorswim® is right there with you. to help you become a smarter investor. with an innovative trading platform full of customizable tools. dedicated trade desk pros and a passionate trader community
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and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™ stocks continue to slide lower. the stock is up more than 60% over the last year of trading. it's far out pacing the s&p. joining us now for an exclusive interview, chairman and ceo david ricks. good to have you this morning. nice to see you. your off earnings not that long ago. you mentioned supply chain head winds. we're still trying to sort of gauge the importance of them as everybody in this marketplace. what are you seeing and have things improved even in the near
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term >> thanks for having me on it's such an exciting time for lilly and our company. we did comment there were some cost pressures due to labor inflation, pretty much everywhere and a little bit on transportation our industry is based on i inventing new things these effects are rather modest in the pharma sector versus others we responded with increases, pretty healthy increases for our hourly employees who come to our plants >> you have a lot of new drugs i want to talk to you first about your covid treatments and the new antibodies which i think address omicron and the current wave we're experiencing with the
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numbers going up i'm wondering whether they are being used you and some others have come out with the antibodies really early in this fight. i feel like it was never quite used appropriately or the stockpile by the government. how is that being implemented right now. are people using it correctly and is it helping? >> thanks for asking we're concerned about the rising waves of covid but our tools are so much better when we first launched the antibodies. lily lilly launched the first medicine for covid as the virus changes, these are like laser guided medicines. as the target shift, we need to shift the medicines. the latest one is really the last one standing right now. all the others are inactive against this strain.
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there's quite a bit being used people who have high risk for covid infections are getting our medicine probably the biggest issue is having enough for the midterm. right now the government buys from us directly and dispensing at a pretty healthy rate right now. i think people worried about the fall that's still infused, correct? >> it's infused. just 15 minutes or less. it's pretty easy and can be done in a lot of held care settles and is widely informed now saving lives and keeping people
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out of hospital beds we have great tools and they are being used we just need to fund more of them so in the fall we're okay >> are they ever going to be able to be used in a situation where you're exposed to covid and you don't want to get it right now they are being used to treat covid. is that where we're going? there's got be something that can prevent it after the endless exposures that we keep getting >> another company has done the studies with an antibody the strength is like laser guided they do an outstanding job in killing the virus. as the virus changes it deflects the laser using that analogy you need to redesign a new one we have not done that study with the current active against omicron. we have not done the studies
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yet. they are challenging to do that's been out there during the pandemic and probably an important one for 10 or 15 million americans who are f permanently immuno compromised we also look at whether we should conduct that experiment >> we'll ask you about your new treatment for type two diabetes. there's also an indication -- not indication it also induces a lot of weight loss wonder what your expectations for prescribiing it for that or purely for type two. >> thank you it was approved on friday. it's the first in a new class of medicine it also reduce appetite and weight in a pretty profound way.
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incredible control that's so necessary. many, many people with diabetes in the united states and around the world don't control their sugar well it does it also by reducing th their weight it can be a bad indicator. we tested it in people without diabetes but suffer from obesity or over weight people lost up to 52 pounds in 72 weeks that's never been seen we're studying this drug in all those things and hopefully in a little while out we will promote it for obesity as well just one study in. we'll start with diabetes and
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hopefully expand through time to treat really what is a primary driver of bed health outcome and costs in the united states which is obese te. >> you're looking to actually prevent, to replace the surgery, the gastric bypass surgery >> i think that's a responsible expectation that people would use the medicine before surgery. it's probably safer. a lot of data shows that patients would prefer that to treat in their own homes and get their weight under control prior to now, the medicine for obesity just didn't work well enough to be a legitimate option for people who suffer from obesity and have very high bmi, body mass index. to get people under the threshold for obesity, you had to have surgery. now you might be able to use the medicine that's such a profound impact on their lives personally but also on health outcomes one out of three health care dollars in the united states is tied to obesity management
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consider the impact of such an innovation it's an exciting time. >> sadly, huge market. david, i want do ask you something in your world, i know you don't make baby formula but some of your competitors like abbott labs do i was curious your take on why this was happening and how this oligopoly got formed and whether it's a regulatory issue. the fact that moms are having trouble accessing formula. >> i'm pretty familiar with it my wife is a pediatrician and works in a hospital. >> i didn't know that >> patients can get access to formula now but not in retail stores
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it's a supply chain problem. i don't know all the details about that situation there's a parallel to pharmaceuticals in that we hold sterile product production to a very high standard i think every one would want their medicine and formula to be as pure as it can be running a plant under those conditions is not easy sometimes people wonder why the products are expensive you have to run clean room conditions in large scale manufacturing. that's not easyto maintain through time when there's a problem, sometimes the fda comes in and inspect and stops production sometimes it's difficult to restart that i think that's what's occurred here we've had parallels in the pharmaceutical sector like this as well. one of the reasons there's few players is it's very expensive it's difficult to maintain those conditions the goal of the very clean safe supply chain is why there's few people in it when we lose one due to a
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problem, it's less resilient than we would hope we work hard at lily every day to keep our plants running and maintaining a very high standard i'm sure the other companies in this space do to >> appreciate your insight on that and the other topics. thank you. >> great to be on. thank you. mpbl the crypto crash continues we were below 26 last week down in the super. coinbase getting caught up in the sell off now down 20% in the past week and almost 45% so far in pay may. we'll be right back.
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check out some of the group's biggest holdings all down sharply since april
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1st, which makes it difficult because bonds aren't a safe haven. the dollar is working. people don't diversify into their dry period of volatility >> the dollar is strong. i guess the majors, super strong china too. >> yeah. nice to have you >> i'm glad. >> we don't get to talk currency you worry about tightening financial conditions that's strong dollar will hurt earnings we're already starting to see it and exports. it will help fight inflation on the plus side. >> all right let's turn back now to airlines. shall we do that why not. jet blue is having a hostile tender off phil joining us onset. so nice to see you.
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he thinks this about trying to up end spirit and frontier getting together let mes run down the offer it's $30 a share is what jet blue is offering the shareholders at spirit they are urging those investors to reject the frontier deal. spirit board that to come back and reengage with the jet blue board. he said we've been disappointed by their lack of engagement. he's talking about the spirit board directors. we don't think they did the
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fiduciary duty considering our offers they have hidden behind the regulatory approval argument as a smoke screen have not heard from spirit they do not consider it a smoke screen they believe if there's any deal approved by the federal government, it will be spirit and frontier because they are both low cost carriers they do not think the federal government would approve jet blue getting together with spirit that's the primary reason. not the only reason but the primary reason why it was rejected the first two times you look at jet blue and share of frontier, you will see, we're going back to april 6th. that's when jet blue made the first offer to buy spirit. the vote is scheduled for june 10th.
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>> i hear the same thing and from other executives. everybody has an angle whether or not they want to see a couple of airlines get together when i talk to them, they say in this environment, i wouldn't want to be doing a merger. let alone the jet blue, spirit deal, they're not sure that spirit frontier deal will get approved just because of the administration and the stamp it's taken when it comes to these types of things. >> we should point out that spirit is up it's still $11 below the current offer. you just sated the offer could be higher. that shows the incredible -- i should say the risk and or the spread itself is reflected. >> it's not likely to happen >> i'm curious to see when we will hear from spirit. ted christy was very clear, he's not happy about this at all. he's not going to sit there and say, okay. thank you very much.
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i mean, he's being restrained so far. i think at some point he says something publicly and it's going be as strong as what he said during the earnings call last week. >> what is really going on here with robin lhays does he feel it's big threat for them >> it's a combination of things. jet blue looks at their future and the growth they have outlined and most believe there's no way to achieve that organically on their own they can get there if they combine with spirit and then you have some growth potential in a number of markets, nationwide, et cetera. that ultimately is the belief for many people. robin hayes will tell you this makes sense. we believe it's good for us, good for the consumer. the usual argument you hear from a number of people >> airline i fnflation is throu the roof a flight to cincinnati is $1,000 i've never seen it to be the cost >> it was a costly trip for me
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to change my flight and come in here last night. >> and the department of justice is not going to see to a deal. >> so good to see you. >> good to be here we'll talk twitter with the former fcc chair ajit pai. elon musk was tweeting a lot oaf the weekend. we're back in a minute ♪ ♪ 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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here is your cnbc news update at this hour. one person was kill and five others were injured. he was tied with electrical
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extension cord this follows a number of shootings over the weekend transportation secretary pete buttigieg has announced a 5 billion dollar program for cities and localities designed to address safety concerns they are aimed at slowing down cars, creating bike paths. the money will be distributed over five years under the safe street and roads for all program. there may be some relief soon for parents searching for baby formula an announcement could come as soon as today about importing infant formula from abroad it's likely that abbott nutrition will resume production at its plant in the next two weeks. back over do you david and sarah. >> thank you mpblt twitter shares down again
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this morning last week elon musk said his deal is temporarily on hold. you can help us try to figure out musk i'm not sure any of us can figure it out. you might have insight on is this contention he's making about not knowing about the numbers when it comes to bots and fake account on the service and how high the percentage really is. your thoughts. >> i think the issue he's identified is legitimate there's a question object how many daily active users twitter actually has the problem is twofold contractual. if you look at the merger
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agreement, each side has to make reasonable best efforts to consummate the transaction saying it is on hold doesn't hold a lot of water. twitter and its board have a merger condition that allows them to go for specific reforms that can force elon to provide financing. we remain committed to this agreement. it's an important statement for them to have to make. if there's an issue here, it's
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been disclosed under the merger agreement, musk has to prove this would material adverse effect on the company's earnings it's not just a question of is there an error that we can identify you have to have a material a adverse effect i think there's a problem here that doesn't allow the merger to be put on hold >> everything you say is correct. the question will continue to be, do they take him to court. they could do so now he's already not using his reasonable best effort spending the week raising a lot doufts about the very deal least involved in. the board doesn't seem to want to go down e the road yet this could end up in court
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>> i think this one of the issues eve been thinking about over the weekend the board has a duty to shareholders to maximize the value of the company that's part of the reason they accepted the offer by musk at 54.20 a share. now the price is under $30 it could be musk is saying, look, it would be great if we could reprice the deal you may be entitle to specific performance but litigation is a drawn out process. lit be complicated. i think the board has to be thinking about options to come closer to what the stock is is trading at right now
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that will compromise the value of company but it will save time and effort it's a very tricky time for twitter's board. you have to be very careful. it's a very unpredictable situation. >> without deal. dealing with one of the most unpredictable people out there if you were to get a lower price, you want a much larger reverse. nothing says they should agree to that be if i'm on that board, why should i do that. just sign this deal. in fact, he even chose not to do due diligence where he might have raised more questions about this fake account issue to begin wit with that was his choice. >> it seems clear given the general sell off of stocks the board got pretty good value for the company given where the stock price is right now the question for them has to be going forward, what are the different alternatives if it's litigation that could result in consummation of the
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deal two years from now, is that a better value that's going to be difficult to evaluate the contract gives them will the of tools in the tool box would that be able to will those tools in a time and manner valuable to shareholders i don't have an answer to that >> nor do a lot of shareholders which is one reason why you sell >> always appreciate it. thank you. >> good to be with you thank you. >> where is the fcc. they didn't go after him on the disclosure >> the 13d without a doubt that takes a while to work its way through. probably results in a fine though >> slap on the wrist
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mpblt still to come, the oracle of omaha. a lot of people pay attention to her calls on hsioung and the home builders that are out 35% from their high. we'll be right back here on "squawk on the street. stay with us ♪ ♪ imagine a community where millions share ideas and trade stocks, crypto and beyond. to the moon? in other words... etoro.the power of social investing. ♪ ♪ we all need a rock we can rely on. to be strong. to overcome anything. ♪ ♪
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warren buffet using the sell off in the market. leslie picker has more for us. >> good morning, david in the depths of the financial crisis, buffet wrote whether we're talki i ing about stocks socks, i like buying quality merchandise when it's marked down it appears he thinks certain stocks are on sale right now this month berkshire hathaway
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boosts by 7 million shares they owned about $26 billion worth of chevron as of the end of march berkshire also been buying hp. 10 million shares purchased last month bringing the ownership to 121 million shares at the berkshire meeting a few weeks ago, he said his firm ownown ed 9.5% of activision. as recently as february, buffet bemoaned the lack of opportunities out there despite spending on a near record 150 billion cash that shrunk by 50 billion or so after the firm i vnvested in stocks even still, buffet told shareholders his focus is less about market time and more about return on investing. >> we have not been good at
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timing we have been reasonably good and figure out when we were getting enough for our money >> again, we should get a fuller picture of berkshire hathaway, after the market closes today when the 13 are disclosed. we'll have to continue piecing together a picture of what they have been doing. >> thank you as we head the break, check out some of the biggest laggards on the nasdaq 100. megacap tech is getting hit. data dog continues to get slammed. the cloud software company down 7% zscaler and some of the cyber names dragged be in you have some strength in the chip stocks like amd facebook remains reseilient
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don't miss dan niles on how investors should be playing volatility in tech we'll be right back. stay with us
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stocks are drifting, though energy is the outperformer, up nearly 8% in the past week nearly every constituent is trading in positive territory, including devon, hess, and flil ips 66 they trade above $110 a barrel with wti up 8% in a week on those continued supply concerns. back to you guys, david. >> thank you, seema. well, during may we are celebrating asian american and pacific islander heritage, and featuring some of our cnbc teammates and contributors here is wheel house cio ann berry. >> my mother is from the philippines, and she was one of the early generation of nurses to move west in the 1970s. i grew up watching her, and hearing about her feel and seem to be invisible. so when i embarked on my career
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state and local pension funds seeing a weak start to 2022 with a median loss of 4% first quarter driven by market volatility and inflation joining us to discuss how he's navigating his states investments. connecticut state treasurer, sean wooden, great to see you again. >> great to see you again. >> how has all this been for you, the volatility, the double selloff in stocks and bonds, what has it done to your returns so far this year >> well, certainly connecticut, like other pension funds, we're not immune to it and so we have felt the impact of that volatility with that said, you know, we're long term investor planning over 10 and 20 year horizons.
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volatility is a natural part of market cycles. we have an exceptional amount right now but we have positioned our portfolio in a way to withstand that. >> i do feel like, for a long time, we've been speaking to treasurers like you, and other pension funds. and they have bemoaned the lack of rates, right, and returns, to meet their -- to meet their targets. so i wonder if you're seeing any longer-term opportunities, now that we are starting to see some real yields on bonds, and especially on corporate bonds, 5, 6%. >> well, sure. and a couple years ago we -- you know, we knew the run-up in the markets wouldn't last, and so we already, prior to this increased volatility, the pandemic, we started repositioning a portfolio, reducing our equity exposures, increasing our core fixed income, increasing our allocations to inflation sensitive assets, such as real
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assets, infrastructure and so forth. and moving our hedge fund portfolio to -- from away from pure alpha seeking, to risk mitigation strategy, and so all of that has started to bear fruit in this market and even within the past few months we have outperformed on our hedge funds, and done exactly what we planned for this market, with 1,400 basis points, outperformance relative to the alternatives. >> yeah, that's not bad. shawn, something else you did, it's a small allocation but you also threw some more money at private equity, private credit you mentioned roeal assets why that move? >> the -- we -- yes, private credit, we created a new bucket allocation of 5% in february of
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'20. and sometimes they say it's better to be lucky than smart. it's great when you can be both. but the move -- we saw an opportunity. and in that space. and irrespective of the pandemic, and what came shortly thereafter, there was a big opportunity in the private credit market, and we fortunately timed it to -- it worked out very well and we still see that in this market as a good asset class to be in, with less corelation. and, in fact, we'll benefit from some of the higher interest rate environment. and so we've worked very hard to think about risk, and to plan for that risk, and to be able to outperform in periods of high volatility, and downmarkets. -- of the pandemic, a lot of questions, of course, then about revenues from the state, what things would look like just give us a quick update, you
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know, how are things looking at connecticut? are you concerned at all about a coming recession, what that might mean to tax receipts >> the -- you know, always concerned about that potential, but connecticut -- connecticut is stronger today than we were four years ago, than -- you know, in going into the pandemic you know, compared to 2008, for example, going into this pandemic and economic downturn, our budget reserve fund was twice the size as it was in 2008 in the midst of the pandemic our states' credit rating upgrades took place for the first time in over two decades that was last year and so we, from a trajectory, we have turned the corner, and we are positioned for growth in our state. and that's being borne out by, you know, how we're being viewed by the street. >> good to hear. treasurer wooden, thank you for the update, shawn wooden of the
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state of connecticut. >> thank you, sara and david, good to be with you again. >> nice to have you as well. >> the nasdaq is down about 1.3%, weakness, of course r as sara mentioned in high growth names, although, you know, a mixed picture, despite the fact that we are down across the board. that's going to do it for us on "squawk on the street. "techcheck" starts now happy monday and welcome to "techcheck," i'm jon fortt with deirdre bosa carl is off. we've got to start with this market, six straight weeks of declines for tech stocks, nasdaq has lost a quarter of its value since its 52-week high, and while friday's bounce might have provided some relief, we're starting off this week, yet again, in the red. tech and consumer discretionary underperforming today. the xlk, tech sector fund, down -- let's see, how much? about 1.5% right now dee, i get the sense that -- there's got to be some bargains in here, but it's hard to know whic


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