tv Squawk Box CNBC May 24, 2022 6:00am-9:00am EDT
futures point to a sharp pull back from the gain yesterday we keep running into companies saying horrible things it doesn't help the stock market we will show you what is moving right now. snap getting punished. dragging down anyone else. the stock now lost 80% of the value from the record high hit back in september. what is hurting the shares like meta and others. and ceos speaking out in davos. i think the temperature must have plunged this hour we hear from the head of nasdaq and accenture. and a conversation with alex karp it is tuesday, may 24th. "squawk box" begins right now.
good morning welcome to "squawk box" here on cnbc i'm rebecca quick. andrew ross sorkin is live in davos, switzerswitzerland. yesterday with big gains across the board. we are giving all that back when it comes to the nasdaq dow up over 600 points yesterday. it is down 263 points. s&p was up 72 points nasdaq up 180 and now indicated down more than 211 points. as joe mentioned, it was concerns over snap the big deterioration. results lower than expected. we will talk about that. that is creating problems across the board. if you want to look at what is happening with treasury market
yields have come back down now talking about the 10-year yield above 2.8% 2 2.808% is the rate right now andrew, good to see you this morning. >> i hate to say it, the mood here and weather has gotten worse. so has the mood. i think it is reflective of what is going on in the markets the word "r" is on everybody's minds here it was mentioned on sunday night and i heard it now two or three dozen times since yesterday. lots of people talking on that we will talk to a lot of people today on the agenda. we will speak with the ceos of nasdaq and accenture and marriott and hedge fund titan ray dalio. and alex karp is talking about
the nuclear war and the issue with china and u.s. and what president biden said about that and what is happening in the valley we have a lot to talk about over the next three hours joe. andrew, thanks we talked about snap issuing a profit warning said it planned to slow hiring and spending shares plunging. not what you think you have to say something negative to plunge 30%, won't you? from the low levels. a range of issues like inflation and war in ukraine and privacy changes in apple resulted in sharply different forecasts from one month ago. snap said revenue and earnings would come in below projections. it issued those a month ago. snap shares fallen 80% since the new high in september of last year social stocks all falling. advertisers holding back
was this obvious should everybody have known? what does it mean for twitter? >> a lot of questions whether this is snap specific or whether this is a broader industry issue. i think so many questions unanswered last night. >> they said similar things. >> our kids used to use snap a lot. not so much. the danger with any social media net wor network is keeping up and relevant and evolving a user base other media companies in the past done that by buying more. remember instagram was bought by facebook >> elon musk going to find more spambots >> how much of the hit guys was a function of the user base in terms of what the growth looked like relative to the advertising base >> i don't know. that's what i think is unclear with the issues.
i think we like to hear more you like to hear from the other companies as well. this idea that the stocks had sold off enough and punished too much that's in question here. >> is it a separate issue? money spent on advertising is not generating from the users, then maybe stop advertising. >> so the broad economic issue -- the broad economic issue which plays straight into the advertising. you see it relatively immediately. then the other sort of snap specific issue which is operationally. do you think they are growing users the way you want do you think the tools they created for advertisers are working inw wor working? i think it is a bigger story. >> if that is the case, then i is everybody >> you think tech is not as
vulnerable to inflation as consumer products. >> one of the first things to go if you are talking about recession. andrew saying they are talking recession in davos if that is the case, then ceos are reining in advertising purchase. and zoom shares. raising profit outlook and maintaining sales few for the year first quarter beating estimates. sales rose 13% for the quarter this is coming as offices continue to reopen in so many parts of the world zoom's cfo kelly steckelberg is on at 8:45 a.m becky. andrew, thanks airbnb is closing the domestic business in china. close to two sources familiar with the matter and says the company plans to break the news
as early as today to employees all chinese listings will be taken down by the summer they face rising coming petition airbnb is supposedly refocusing on providing listings for chinese travelers ababroad that stock down 2% joe. insert company name here in this indication, buy now pay later klarna is laying off 10% of the work force. they made the announcement in the message yesterday. here is what he said maybe he looked at snap. changing business environment due to the war in ukraine, shifting consumer sentiment, inflation and volatile stock market and likely recession. insert company name here
leave it in the rundown. rival affirm lost 75% of the value since the start of the year media reports say klarna next round of funding will show a similar drop >> this is a case with the high flyers and tech names that soared and companies that did well in the pandemic, they are seeing this. they will have to layoff parts of the staff you saw it with netflix. you can put any company in there. brian moynihan saying the jobs market is strong and it will stay strong for a lopg ng time. you are looking at pockets with inflated values. those companies are going to layoff other companies are desperate to find workers >> weird uneven we will see. we're going to talk about all of this and where the economy is going
we will kickoff our coverage today here in davos with nasdaq ceoadina freedman and ray dalio and alex karp. ahead, the head of trip.com after questioning the zero covid policy we will take you live to beijing this morning you are watching "squawk box" live from nasdaq mkeart site in times square and davos, switzerland at the same time >> announcer: this cnbc program is sponsored by ibm. ibm. let's create to satisfy cravings from tokyo to toledo? so you partner with ibm consulting to bring together data and workflows so that every driver and merchandiser can serve up jalapeño, sesame, and chocolate-covered goodness with real-time, data-driven precision.
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from the most innovative company. bring on today with comcast business. powering possibilities.™ welcome back to "squawk box. let's get to the first guest in davos. the president and ceo of nasdaq. it is like coming home and seeing you on the other side of the world. >> it is >> we were talking earlier in the program. the word "r" is everywhere inflation is everywhere. the mood is terrible if i'm c candid is this a contra indicator the davos consensus, happily, if it is wrong, could be wrong?
>> there are a lot of factors making it hard to predict the future including investors. what do investors like to do to value any company or sector? predict the future how do they create the cash flow analysis with the signals that are conflicting? i say conflicting signals. that is creating a risk-off environment and natithat is the environment we're in right now we have inflation. let's see what is happening with inflation as the fed is acting you have the political unrest. we will see. >> you see the start-up companies looking to go public and you say what is the window is there a window? should we have this conversation in six snmonths >> think about it from the investors point of view. can they make a risk decision?
it is difficult. therefore, this is not the right window to try to take -- raise a lot of capital in the public markets. it doesn't mean it will be forever that way be prepared. get your control structure in po place. i can't pre-didict when it wille we have 270 companies ready to file to go public. >> where do you think we are is there 2001? is this something else >> a lot of conflicting signals. you still have consumers that have high savings rates. you have the economy starting to reopen from the services perspective and travel perspective. you have positives you have labor and market that is hot you have 1.9 jobs available for everyone person looking for a
job. at the same time, you have inflation. inflation and the geopolitical unrest in europe are the two factors making it difficult for investors to predict the future. if we see inflationary trends go down and the fed continues the program of tightening monetary policy if you see that as a positive effect on inflation, that gives investors optimism. >> crypto universe is here the blockchain house and all these places you see the trades you have a sense of this we keep asking the question what is the tail and what is the dog. is this working? it crypto coming down and was that community leveraged up completely and selling stocks in the nasdaq or the opposite and it looks like crypto and bitcoin looks like a nasdaq stock? >> i would say cryptocurrencies are one manifestation of digital asset. that is a longer term trend for
technology to continue to manifest in the financial system cryptocurrencies are not companies. they are not under pinned by an operation and revenue and future plans. they are there as a supply and demand mechanism they are created through technology innovation. i look at them as different than a company going out and raising capital. >> you see bitcoin as a nasdaq stock? >> i think cryptocurrency is related to the uncertainty of the economy. the inflation rates create changes in supply and demand investors are taking a risk-off approach cryptocurrencies are a risk-on instrument i think you are seeing that all manifesting in the same way in two asset classes. >> other debates esg and the pledges we heard about over the last several years continue in the challenge
economy. do they? >> i had the same question at the beginning of covid what will happen on the back of covid? we didn't know where the markets would go or the economy would do i thought this would be a good test for whofether or not if es is a longer part of the economy or not i have come to the conclusion it is the reason i say that is it is under pinned by a shift in money. generational shift in investors and employees and consumers. the younger generation accumulating wealth and taking jobs and buying goods. they have a voice in this. they are the ones pushing for the sustainable economy and changes in the way we operate our business that is a lasting trend even with the short-term off balance. >> i heard it here a bunch of times here now the issue of the blackrocks of the world and big funds that
control the vote -- that control the vote and this idea of whether they should be able to control the vote or individual investor should control the vote i heard a fascinating thing. if you don't let blackrock vote, you let the foreign sovereign wealth funds vote? they can vote just as much as these guys is that a good thing what is the right answer >> my general view is who is the beneficial owner of the stock? in the case of blackrock, they own the stock on behalf of the clients. to the extent the stock is a voting stock and every voting share should belong to the b beneficial owner that would accrue to the large shareholders they are there as a steward and fiduciary of a large number. >> sam zell came on the show and said this is a past investment
they are buying into the nasdaq. let the active guys make the decisions. >> my view is this a voting share is a voting share. blackrock is changing policies to allow some of the institutional owners to let them know how they like the shares to go for the asset owners. the fact is if the system is built that way i look at it from the corporate point of view and running a company with shareholders and a proxy and i have to deal with that proxy situation do i want to deal with several institutions that i can talk to or millions or millions of retail investors where it is difficult to engage with them. >> should blackrock' should actually guide? i'm not making judgment. i'm asking >> i go back to a voting share
any shareholder owns a share owns a vote. >> thank you good seeing you. we will see you back home. >> of course >> we will send it back home in a minute when we come back, exclusive interview with palantir's ceo. what he said about the president's commentsabout taiwan. and later, ted cruz will join us in the 8:00 hour always provocative things to say. "squawk box" is coming back in just a moment. >> announcer: davos 2022 is sponsored by morgan stanley. to est in c nies that have social and environmental goals. ♪ ♪ there are so many more young investors coming in and participating in the financial marketplaces today,
and that's really due to advancements in technology. there's a proliferation of innovative technology solutions to be able to interact and invest in the financial markets. younger investors today are engaging in social media in ways that we've never seen in the past. they're in forums, actively engaging with their peers on certain topics and certain investment ideas. 75% of them believe that their investment decisions can influence climate change, and 90% of them want sustainable investing options in their 401(k). they believe that they can really impact with their investment dollars more so than prior generations. i'm naeema huq abrar, and we are morgan stanley.
welcome back to "squawk box" live in davos, switzerland i spoke with the palantic ceo. we talked about the russia and ukraine war and i asked about the lesson for china. >> lesson for every big country is [ bleep ] we have been buying all this heavy stuff. if people are looking for heroes, they actually know how to operate because they have access to software and can use the data they might actually be able to beat us. >> guys, he was bleeped out because, yes, that was the word he used. yesterday, president biden said the u.s. would respond militarily if china attacked taiwan the administration tried to walk back the kmcomments
i asked alex karp about what he thinks is really happening here. >> the zeitgeist right now is this is a moment other countries that want to act in their own interest are in a different state. i think that seeps into the zeitgeist. i'm not a reader of politicians. >> what is the risk of intervention >> let me frame it this way. if russia known the combination of kinetic and hero and the edge of the things we looked at for the last 15 years is greater the institutions eaten up by tech and understood that five in
other words nerds in a basement can eat up your business, you would have a different situation. i have deeply respect for china and russia super sophisticated actucultures they understand everything i'm saying they are metabolizing it >> guys, we will have more of that with alex karp. i don't know if we have more bleeping to show you we will show you in the 8:00 hour and the potential for a nuclear war and other comments maybe on a lighter note, i think we have video. i seem to get -- you will take this tape and use it, joe and becky, for a long time >> what are you doing? >> i was learning tai chi. we got into sleep. i'm addicted to learn new ways to get better sleep. alex is a big believer in tai chi. he said i'll teach you tai chi
right now. you will get better sleep. here is us doing this. i feel like this is going to turn into that -- that picture in saudi arabia. >> you set yourself up for this, andrew >> i know. i know i wasn't sure. the producers told me they had the tape i wasn't sure if they videoed it they did now -- now, it is in a blooper real for a long time. >> a guy i used to see at 4:30 in the morning who would stand on the street outside. not too many people driving by at that point. he would stand on the street at 4 4:30 in the morning doing tai chi. on the carriage road >> did you try mypillow? >> i had a mypillow. i got a better pillow than
mypillow >> you burned it 12k >> no. i'm a side sleeper you need a bit of lift if you are a side sleeper >> can we throw the tribute to the way the government operates with strategic ambiguity with a straight face, that is our policy it reminds me of catch-22. an how do you come up with that as a matter of policy where that's what it is we will not say what our policy is we're just going to let you guess to keep you on your toes. >> that's the policy >> and i love this because then the white house came out and said as the president said, so they are totally dispelling what he said and at the same time -- >> they are walking it back. >> you get frustrated with the double speak
at least we speak plainly, guys, here on "squawk box" as much as we can, don't we is there strategic ambiguity >> sometimes. >> safer coming up -- >> alternative facts and strategic ambiguity. >> andrew, i thought you were going to do "the karate kid" move. >> i have done that. i'll not do it on the have you had video. >> he said it is like you are pushing water. >> are you sure this stuff -- i don't know i'm an old dog coming up, snap's profit warning weighing in. how about relaxium weighing in on social stocks in a big way.
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spending snap blaming rising inflation and the war in ukraine and privacy changes at apple other media stocks falling on the news let's bring in steve jiang steve, it gets concerning when we have a multiple based on -- the multiple and the under lining earning both go south and it is horrific for inn vvestors. i don't know if it is horrific for early stage guys like you. the multiples contracting and earnings going down for an 80% drop in valuation. hideous. >> the volatile nature of what is happening in consumer spending right now is having a ripple effect through snap and all of the other social media stocks with the advertising base it is a smart idea right now to
go to higher ground. focus in on core technology companies integral and core to small and medium and large companies. even consumers zoom, salesforce and aws these are not names we have been talking about. with valuation coming down, it looks like higher ground for technology investors the advertising space base, who knows? there is multiple signals with snap and conkconsumer spending. we will see in the next quarter. >> did we get hypnotized by the aura by the pandemic stocks like they would grow forever? consumer spending wasn't gang busters during the pandemic. what got the stocks to the
valuation? why did we think it would last forever and the return to normalcy is the death nell maybe people are not sitting on the screens, but it is the madness of crowds once again that we're seeing. >> well, i don't know if i agree with that. during the pandemic, i think on the higher end segments, consumer spending did go up. a lot of what was happening with stimulus and supporting a lot of the economic growth and stability at that time we just got out over ahead of our skis s we just got out over ahead of our sks in terms of valuation. we saw cloud get hit at the end of last year and this year it looks interesting right now longer term it is smart in the technology sector to stay focused on the long term that is what we do in the
venture. we invest for the 10 and 15 year outlook for new technology i think stocks like coinbase in the crypto area and i think asana in the project management space as well and cutting into microsoft's business i think those are great long-term bets those are where the younger generation of companies and employees are focused as well as consumers. >> steve, the bigger question we are trying to figure out today is how much of this is snap specific and how much is an indication of just a freeze in the advertising, on line advertising business, in general because of the privacy standards of apple what do you think? >> you know, ad supported businesses at the scale of snapchat and pinterest and twitter and meta, these businesses are a mixed bag with
consumer spending volatile especially in time of inflation. there is sentiment consumer spending declined. we see supply chain software businesses in the portfolio that consumer spending is down and fuel costs are up. supply chains are actually loosening up a bit what that caused is the spot markets where the prices have gone down 20% or 25% what is happening is we are entering in a mild recession >> steve, i think you were an early investor in coinbase >> yes >> were you making the case maybe it is at a point now where you start building a position in coinbase would you do that if you weren't sure that bitcoin had more down side and would indicate the nasdaq has more down side? is that a macro call that we're getting close to a bottom and
speculative assets >> i think the less leg to drop here feels like what is happening in online ad space i think we've gone through two quarters now of decline and haircutting on valuation the market looked to re-price and revalue all of the tech stocks due it to inflation and interest rates now the ripple effects are happening in terms of consumer spend and influence on ad spend. that is the last leg to drop from what we see in the short term >> steve jang, thanks. did t good to have you on. >> thanks. when we come back, we will talk more about what happening the ceo is banned after questioning the zero covid policy from china. a live report from beijing next. we will talk to texas
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facing backlash of the questioning of the zero covid policy of china. we are oosteunice yoon with mor from beijing >> reporter: the co- founder has the online web sites suspended he recently penned a series of articles that questions the zero covid policy he argues that china should think more broadly about the balance between protecting public health and cost to society as well as the economy he said he was able to calculate each month of lockdown takes four days off life expectancy. his point is the health of the people in china is damaged by the lockdowns. the government should be willing to entertain the idea of a higher level of tolerance when
it comes to illness and deaths this on line ban comes amid the speculation of the founder of tencent tony ma is concerned about the strain the founder appeared to repost an article that was critical of zero covid that re-post has been deleted and any discussion that sparked by the article has also been censored you know the society is intolerant about the zero covid. it was weeks ago when xi jinping sent a strong warning against anyone who doubts for denies or distorts the zero covid policy >> you would anticipate there would be push back on any
individual company leader saying things like this there have been times when people have risen to the point where changes have been made i read, and correct me if i'm wrong, what they were doing before if someone tests positive, they come in and euthanize your pets to make sure pets were not spreading it that is not taking place anymore, is it >> reporter: i would have to double check my guess is it most likely is depending on which part of china you are in because the way the regulations are enforced here is really dependant on the local factors and which part of the country you are in in terms of exactly what is happening with that is difficult to say one thing that people are anticipating in beijing is the restrictions are probably going to get much tougher. the reason for that is although today we only had 35 new cases,
the vice premier who was touring around shanghai and really was sent by xi jinping to get tough on shanghai, has now inspected beijing. since then, we had, for example, a couple of examples that really concerned people here. one is that 1800 people were round up after those cases in beijing and sent off to the part outside of beijing that hosted the olympics there have been other cases where residential compounds with 5,000 people and they have been taken to government quarantine after 26 cases those types of situations just start to alarm people here that beijing could be headed for a sha shanghai-style lockdown. >> eunice, i'm sorry to hear it.
hope you are doing okay and hanginghave more coming up from davos. the ceo of accenture is with us lllimarriott and then ray dao wi talk about the economy and markets and more "squawk box" is coming back right after this nsor a you ely get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.
most you're talking to people from all over how many employees do you have global >> 700,000 >> there's a lot of hand wringing going on here about a recession, inflation, the like do you have a more optimistic take, or do you think we're in the soup >> there's a lot of uncertainty about the economy, but there's one conversation that the spending is going to continue. as we think about our briusines, how do i use technology to save money, to create new growth opportunities through a business model, and that is continued here particularly around esgs and sustainability >> since you live in the i.t. world, how concerned are you, or maybe it's an opportunity for u all of these startup companies that may unfortunately not have enough cash to survive a
downturn, and all of these stock options which are under water, is that an opportunity for you to pick people off is that an opportunity for -- what happens? >> you know, there's a war on talent we see ourselves as being a great place, because we're doing innovation we have a business in space, right, so when you till somebody, can you come here and work on space, work on a.i., you can create the meta verse. i think we're an even more attractive employer, because we have the innovation and a lot of security >> besides recession and inflation and bitcoin that everyone seems to talk about here is the meta verse, and you are a believer m in the meta ves in a big, big way. >> we are on board of 150,000 people, the first day they are going into the meta verse. they're going to visit an animation hub and learn all
about it >> when you say you're onboarding 150,000, -- 150,000 people are doing this? what does the meta verse look like >> it's a place. >> are you talking oculus? >> we use headsets, and we use 2d, because you actually can experience the meta verse with both, 2d and 3d. only one person can talk at one time, but it's like davos. you can move around the room and we can port you. so like in the middle of the pandemic, when we couldn't take clients to our innovation hubs, i would host meetings with clients in our meta verse, take you to a hub >> are you julie, julie? or are you a cartoon character
sdp >> i'm an avatar and i get to choose my wardrobe and i have to tell you that there aren't enough choice it's so real i can come up to you in the meta verse and not hear someone else, and you almost forget that you're not physically with someone. we've actually built, i hope you go to it we've built in partnership with microsoft, we built the global collaboration village here at the forum to reimagine how we're going to collaborate as great as being here is, you can't immerse yourself in the experience if you take a tour of it, we can take to you sub-saharan african and see the effects of climate change and talk to people about it and do this across the globe. >> becky has a question for you. we're in our own meta verse, it's called the squawk verse
>> is that the end of big conferences like davos what's the difference between what you can offer versus what you're doing now in davos? >> the limitation we have here, becky is that we're not actually able to go see this. think about refugees imagine if you're taking people to a refugee camp, you're meeting the refugee, understanding the real conditions, and then you're problem solving. it's not an alternative to, but it's not the same as what you're doing here it's an immersion. science says that you have 30% greater retention in immersive learning you can't do that for hours. but there's actual learning impacts as well. >> julie want to thank you. we'll see you in the meta verse,
it sounds like it's kind of crazy that you're doing all that that's where it all is joe, back to you, sir. maybe next time it will be my animation it seems like, o something. i don't know >> how are we existing right now? we definitely aren't together, but we look together i guess it's motte that crazy. we don't understand when we're in it and when we're not maybe, maybe we're already there. i've always said, this is only a suit the way things work in life, this might be a simulation coming up, much more on the big cles odeinn social stocks. "squawk box" coming right back
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good morning from the world economic forum we've got a big lineup for through morning with some of the biggest names in business. we're going to be checking in on the pulse of lodging and find out if demand for travel is back with the ceo of marriott and ray dalio is going to join us about the markets, the fed, and where he's putting his money to work.
and a slough of reports out. we'll find out fort consumer is feeling the inflation pinch as the second hour of "squawk box" begins right now >> good morning, everybody welcome back to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin who's in davos covering the world economic forum let's take a look at what's been happening with the futures this morning, wiping out much of the gains we saw yesterday the dow was up by 600 points it's the nasdaq that is the real decliner this morning because of what we heard with snap. the nasdaq syndicated off by 198
points that's everything the nasdaq gained yesterday and then some in our headlines this morning, shares of zoom are rallying in premarket trading. zoom reported better than expected quarterly earnings it has been shiftingi its products designed for the hybrid work environment of the on the opposite end of the spectrum, snap is seeingity stock crater this morning you're going to look at that stock right now, down by about 30% after the social media said it deals with an uncertain environment. snap also say it's impacted by changes in apple's privacy policies, and people are trying to figure out what this means for the overall stricht snap shares down by 30%
that's what's putting so much pressure on the nasdaq today other social media stocks falling in concert with that and americans are keeping their cars for longer than ever, thanks to high prices and shrinking inventories. the average age of cars is now at a record high of 12.2 years we've seen this movie mayplay ot before remember after 2008 and you couldn't get financing anywhere. the average age of vehicles rose to above 11. >> sieeems old, doesn't it >> it i've driven cars longer. >> once again, because of us we have to constantly remind ourselves of that, and how blessed we are a lot of people have 12-year-old cars i lease one every couple years, so okay
>> it was only one year old, but i bought a used car in 2008. >> so you still got it >> and i trove it until a couple years ago. i drove it about 12 year >> my daughter's jean. >> a new car to drive into the city >> right right. andrew, did you splurge? do you have a vacuum cleaner in your mini van? i don't think any 12-year-old cars have vacuum cleaners, do they >> we didn't do the mini van yet. >> the cadillac of mini vans >> i remember that movie >> "get shorty." ridiculous you know why it's ridiculous because there's no, the greatest mini van is still a mini van >> i got one of those, too >> what about a black matte pacifica >> is that your, you keep coming up with these ideas.
what was the other one, were you thinking a telluride, weren't you? the telluride fantasy? >> by the way, the telluride is a beauty that's a buelleautiful car come on. >> you're emotionally invested >> everybody here is laughing at me there is a lot of crew here and they're laughing >> and that would be different how, andrew? >> exactly >> despite the message that investors took from walmart and target earnings last week, economists are insisting the consumers aren't dead yet. steve liesman checking the pulse and joins us we've had conversations. we hear from consumers, and then we hear from snap the consumers are gone it's bifurcated or something, isn't it >> exactly, like the offerings of mini vans that are out there. economists are pushing back against the conclusion of
consumer week, which is we we'v drawn from walmart they remain in good shape, and shoppers have the means to keep spending barclays says the narrative of the demise of the u.s. consumer is highly exaggerated. the aggregate data suggests that the consumer is still spending consumers are sitting on a massive pile of cash households held an extra 24$4 trillion in bank accounts. to be sure, there are a lot of ch challenges a reverse wealth effect from the equity selloff could mean decline, but because so many people are employed, the total amount of wages paid to all
workers is rising faster than inflation. j.p. morgan writes, we think real spending is still on track for a solid increase in the second quarter, around 34rs, even anticipating some softness in may and june. huge savings won't be around forever. inflation will sap spending power. but hey, here's some relief that could be coming. some good companies overordered and may have to work down inventory. that may provide inflation relief in the months ahead and joe, that concludes what i think is the first somewhat optimistic report i've done in weeks. >> we're all sort of in the meta verse here i don't want to surprise andrew, because he's having a little snack. in davos, there's a lot of negativity so you're reignining us in a lil bit on the negativity. when is the recession coming,
not this year? maybe next year? >> nobody says it's this year. i was talking to an expert i don't know if you can have a car accident that you see coming from a moile away, know what i' saying it could work both ways. work with me on this if you see the car accident down the road you can pull over, can you slow down, you can do all sorts of things to avoid the accident if everybody cease thsees the rn coming, might they take steps? on the other hand, can you have the opposite, which leads up to concern about recession could cause the recession. soy if there's not another shock to the economy, i think we polite
be might be able to avoid the recession >> there's the saying, an accident waiting to happen you're always nice about what goes on at davos, saying people kind of kid around there's no kidding about it. that is the opposite, you get the opposite of what's going to happen when you go to davos. >> it's a contrarian indicator >> often, when has it not been just about every time we've gone >> but steve, the fed is going to try to break the back of the economy, that they have to that's the job, they have hey said that's what they want t do that's what they're going to do. >> stock market's already doing it >> that's the question >> there's breaking the back, andrew, and there's some back relief, you know i think it's a little bit
hyperbolic to say that the fed wants to break the back of the comply i think what the fed wants to do is slow the economy. if the fed could have its way t would still have low employment, maybe somewhat higher. i think what scott's probably talking about is often the fed doesn't end up doing that. ends up going too far, then you have comments from bostic from atlanta, who says maybe we don't have to go that far. maybe we have to go further, what there is now, andrew is th this conclusion of 3%, that we're reaching the idea of the peak idea. that we're going to get to 3 and i don't see the market beyond that >> okay, all right, steve, thank you. >> coming up, we've got a lot more from "squawk box. the ceo of mare yot.
we're going to talk lodging demand and money and the markets. we're going to talk to the co-cio of bridgewater founder. we're going to te aka quick check of the markets "squawk box" coning right back ♪ ♪ the lower your drag coefficient, the more efficient you become. such amazingly perfect shapes run throughout the natural world. and can now be found in the automotive one.
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overwhelmcheck this out best buy coming out with its earnings it had a smaller than expected drop in comeped sales. the stock, believe it or not is higher in the premarket action, up by 5.8% we knew that there were going to be some concerns about this. because target, in its smaller than expected earnings talked about how they were stuck with a lot of inventory, like big-screen tvs that were bulky and the consumer stopped buying as much. even with the expected slow down this year they tend to be in a fundamentally stronger position than before the pandemic from a revenue and operating in
perspective. they are excited about what's to come macro conditions worsened since we provide our guidance in march, which resulted in the sales being slightly lower than expectations as a result, they're revising their sales, not seeing much about inventory. maybe if they were expecting these things it's not as big of a deal andrew. >> thanks, becky. more people returning to hotels in a very, very big way. joining us is hairmarriott ceo the one place nobody's talking about at least yet is in your world. >> not yet what we've really seen for the
first five months of the year, the resilience of travel, the pace of the recovery has been extraordinary. >> demand is off the charts it feels like that means margins for you should be off the charts? or is all the other costs eating into that >> if you look at april, in the u.s., the revenue per room was back to 2019 levels, as were margins. and so some of the efficiencies we identified in our managed portfolio during the pandemic seemed to be holding >> why does it seem to most travelers that a room that cost $200 before the pandemic now costs $400 it feels that way. >> compression drives. the volume of pent-up demand is creating extraordinary pricing we talked on the first-quarter earn beings call, if you look at the luxury portfolio, average it was up 19% >> i will tell you, i have
talked to other ceos here who say look, the t&e-bills, you think inflation is bad, this is like out of control in your world. >> well, you know, i think there's a couple things that should cause real optimism for us number one, the u.s. represents 70% of our business. last time i looked, plus or minus $2 trillion. also cross border travel before the pandemic, about 20% of our global room nights were crossing borders that dropped very low during the pandemic end of the first quarter, we were back up to 14%. that still gives us 500 dips of international growth >> how concerned if you are, about a wave of covid either in the fall, monkeypox, is that something you think about? >> we think about all sorts of considerations that rattle traveler confidence. the thing that has been
remarkable if you looked at the first quarter. january and february we stepped back a bit because of omicron, but march came roaring back. as soon as folks got a level of comfort com comfort, about the relative severity of that variant >> labor, and how many people you need one of the things we heard from uni united, they may need 4%, 5% more people to contain sickout us, people who are out >> in the u.s., we're back to 7,000 or, 8,000 positions which is where we were in '19. they're hefry concentrated now in the markets that have recovered most quickly >> how about my points? are my points just getting devalued >> absolutely not. >> i want to know whether inflation is killing all my
points >> i think the thing you've seen with the bond boy program, we have folks like you who travel 50, 100, 150 nights a year >> i don't travel that much. >> but we've vfound other ways t connect with those consumers some of the things we've done with food delivery there are more and more ways to build up those point balances. >> just the phenomenon that is air befor airbnb is it shifting is it changing and this whole idea of people who may just want to be, not just road warriors but living in different places for different parts of the year. >> so those are good questions for my friend brian chesky for most trip purposes they want the amenities that a hotel
offers we launched marriott homes and villas, which is a platform of multi-bedroom full homes when we launched, we had 3,000 listings after two years of the pandemic, we're about 60,000 listings. for certain trip types, a full multi-bedroom home fits that >> are you seeing that in the big city >> leisure, well, even pre-pandemic, leisure was growing much more rapidly as a segment than the other two segments the thing we've seen through the pandemic is this idea of blended trip, so it's going to be increasingly difficult for us with pro signiin precision to tell you why they're in our hotel we're we're not interrogating them from the front desk. we really see it in the day of the week patterns. thursday and sunday, which used to be the weakest days have come
back very rapidly. >> in terms of opportunity, by the way, it's a view here in davos. all americans who need to get back to the united states from here are desperate to take their covid test and make sure they're covid free how long do you that i piece of the law will be in place, and how much do you think it's impacting the business in >> i think it's impacting it some, particularly for unseasoned travellers. we've been talking to the administration, the commerce secretary. >> he's here >> very focussed on this issue so anything we can do to make cross-border travel easier, and we've seen it in the bookings. you might recall last summer, the uk came out with an opaque statement that we're going to start opening. the volume of inquiries in our reservation business skyrocketed. >> thank you >> my pleasure
>> becky, back to you. >> andrew, thanks very much. we're going to talk retail, the state of the consumer, and the result interefrom best buy, abercrombie and others plus much more from the world economic forum in davos. ray dalio squlwill join us it takes a village to support society and businesses have a responsibility to support that village. ♪ ♪ i am peter akwaboah, chief operating officer for technology, operations and firm resilience. when you think about diversity, the employee network group is fundamental to any organization to provide a community and a belonging environment for the employees. they provide an avenue to support employees and ultimately it leads to retention
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still to come, bridgewater's ray dalio joins us live from davos, plus an update on the tthil sector and the streng ofhe consumer. stay tuned, "squawk box" will be right back while his clone watches the phones, dave can work on his code. and lead his team. dave trusts his clone like he trusts himself. so, in summary, we're going to sell the company. who's in favor?... perfect. but if cloning isn't an option for you, just get posh. virtual receptionists who can answer and transfer your calls, because you can't be in two places at once.
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welcome back to "squawk box," joining us to talk about market trends, ray dalio, bridgewater associates, also a member of the bridgewater board. good morning >> morning >> so we keep asking the same question of everyone what do you think? what do you think's going to happen to this crazy economy of ours what do you see happening here >> three major theme tass we
havthemes too much debt. number two, is the internal conflict populism of the left and the right, and what that is doing both politically and economic considerations and number three is the rising of great powers to challenge the existing great power in the existing world order if you bring those things down, here we are having a monetary policy okay where are we in the monetary policy if you want me to answer that. >> that big question is, account fed effectively reduce demand without breaking the back of the economy? >> okay, and rather than just jumping to the answer, i like to deal with the mechanics of the answer and i think the answer is no, but here's the reason why
one man's debts are another man's financial assets, and they have to balance both of those things so they will not be able to raise interest rates to a high-enough level to adequately provide real return to investors. so, if you think about the rising rates, and we say 3% as in interest rate or 4% in the interest rate, that is not going to be an amount of money adequate to compensate for the inflation rate and we're nin a paradigm shift. something happens for ten years, and at the end of that ten years, people believe everything that happened in the prior ten years, and then they get a surprise and then they start to change. and something like, for example, do i leap. cash is a safe investment, or bonds are a safe investment.
after a 40-year bull market there's going to be a supply demand balance most importantly, the federal reserve is going to sell individuals are selling. foreigners are selling, and the u.s. government is selling, because it has to fund its deficit. so there's going to be a supply demand problem, that means at that it produces a squeeze because so much money was put out at such cheap rates and so much financing was taken that it will be difficult to achieve at that balance >> so i remember when you would tell us that cash is trash is cash still trash? >> of course cash is still trash. do you know how fast you're losing buying fpower for cash >> i feel it in frinflation eve
day. >> the question is what's going to give you a real return. so we've shifted into an environment where assets that do well, rm almost like in the '70 are the best investments i think the world swrong here's the dynamic everybody's long equities and so on and everybody wants everything to go up and the federal reserve wants everything to go up. so what they do is they give you money and credit lots of money and credit that helps hyping it. and the more they hype it, the more it becomes somebody else's financial asset they're holding. so the world shoeis holding all these financial assets you can't have that. so you're going to have an environment of negative real returns. so as you think about how you diversefy your portfolio or short those things, everything can't go up all the time
ra sythat system won't work tha way. >> if were you jay powell, you would tell him what? >> i would tell him the supply and demand for money and credit is very important, now as you're trying to navigate this middle world. i think that you've gone from a policy that as been way too easy to a policy that will prove to be way too tight pay attention to the supply and the demand for money and credit. because the biggest risk is not, you know, when inflation rises, there are two types of inflation. and then there's a monetary inflation. and that has to do with how the money moves between those two thing, between money and goods and services so to pay attention. to try to achieve the middle road in that and i think the period's going
to be quite like the '70s and how you try to find that middle road >> if you owned equities in the '70s, by 1980, you were either nat flat or it lost money. >> that's right. it had a negative 54% return the world is not dealing adequately, i think, with the part of the portfolio that should be inflation hedge assets >> most individuals can't or don't short the market so if you were going to be long had this new universe, it would be what? >> inflation hedge assets in various forms, and also think about, you know, where that asset, those assets are. different countries. different places >> one of the things we've talked about a lot over the
years years s years cryptocurrency i'm curious how you think about it now in terms of were that's an inflation hedge or maybe it isn't. >> let me clarify. i think cryptocurrencies, i think block compchain's great. let's think of it as digital gold something in the interest of diversification has a little spot relative to gold and then relative for the asset but i think that we're in an environment that we're now going to ask what is the new money, okay so meaning fiat currency you hold currencies in the form of a debt. so, when i say cash is trash, what i mean is that all currency in relationship to the euro, in
relationship to the yen, all of those currencies, like in the 1930s, will be currencies that will go down in relationship to goods and services and we're in an environment where we're going to be looking at what are those assets, what is the type of money you can move between countries that is a medium of exchange and store wealth bitcoin has made a tremendous achievement. it's a tiny percentage of my portfolio. i think you have to look at the broader set of assets that serve that purpose >> you talked about different country. you are relaceasing what's calld the global power score tell us what that is and maybe walk us through it a little bit. >> okay. measurement. to be able to see things
objectively is so important. particularly in this time. and so when i, as you know, to understand what is going on now i wrote a book changing world order dy i did a video, youtube video power means strength in various ways, and it showed 18 measures of countries, andthere are 24 countries that are measured. we can see those things directly policymake policymakers can judge are they going to make better health or worse health they rlead to economic policy. objective measures that one can
l look at. >> unit ed states is number one, china is number two. do you think those two reverse? >> i don't know the answer to at that question. for a long time, they're going to be somewhere near comparable and it depends on the things, and we're living thisin that wo. and one these think about thousand navigate that do you have a take on the ukraine-russia situation >> i think like all wars, no one knows how they transpire, and it's very interesting to see how they transpire there are three main questions right now that exist that we're
going to find the answers to over the next few months, and those answers will direct us but first, does putin and russia win or lose? i define win as being control of the eastern part of the ukraine. have pnot having an economic contraction that's intolerable if gdp falls by 15%, that's tolerable. if it falls by 40%, that's intolerable. i think it's a difficult question if he doesn't get those things, i worry.
military power is no longer as unique as it was or dominant as it was as we sit back, we're going to see the power and cost of sanctions. the power of sanctions is in, does it have those effects creating change, and the cost of it is change the fatunature we could see, as things are trance transpiring which sides everybody's in the bigger conflict is really much more important china. because china is, in terms of size and various ways of power a more comparable power. we're going to see those things over the next few points if that is not resolved easily, and i don't see any way of resolving it easily. i may be wrong there may be a good resolution
i worry about an escalation. an escalation. so that could mean sanctioning china. that's a bigger thing. imagine if we in a situation that the situation with china is very much similar to the situation with russia. the intertwinedness of those two economies is so much greater 22% of our imports of manufactured goods come from china. so the interdependency we're at the edge offes though in the infectnext few months, l find the answers to those. >> you think we could be sanctioning china? >> i think there are certain of mos certain moves that are in the works. you could look at the bills in congress in the nature of
severing those economic relationships, and the cause of that will be much greater, i mean the economic cost but we're in a different world, a andrew we're if a world in which draujs a drive economics, not the other way around the we used to live in a world of economics, if something could be produced cheaper somewhere it would be. we're now in a different world you're at the point now where drojs and politics, both internationally and even domestically, like, you know if we look at disney and florida. so that's the new world we're in >> you want to handicap pennsylvania >> flip of the coin. i don't want to handicap pennsylvania >> joe, back to you.
coming up, senator ted cruz on gas prices, energy independence and so much pour. alex carp sounding off on u.s.-china relations and so much at dosav, switzerland. you're watching squawk right here on cnbc and thanks to voya, i'm confident about my future. voya provides guidance for the right investments. they make me feel like i've got it all under control. [crowd cheers] voya. be confident to and through retirement.
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a number of retailers reporting earlier this morning cour courtney reagan sheer. sh is here there's so much happening at this point >> there s lis abercrombie's tanking. inventory up 45% shares down 22%. petco shares are higher on stronger earnings. stronger revenues and comp sales. it's reaffirming its forecast and says that the pet category continues to surge
and like walmart and target, best buy missing on earnings but be betting on revenues. comparable sales fell 8%, and on top of a 37% comp growth rate on the same quarter last year best buy is lowering its forecast it expected pressure when it guid guided in march. best buy shares are higher in reaction they've lost some traction, but only about 2%. now it seems investors have the benefit of time and perhaps under un understand being the few nuance that weren't so clear last week. >> the consumer patterns are
changing so rapidly. >> yeah. >> for many of these retailers, it all happened in the month of april. maybe it was cold weather, maybe it's a huge shift and it's not coming back. if some of the best operators can't figure out what's coming next from the consumer, how can you possibly estimate where the stock's going to be a year from now, six months from now >> is the consumer strong? is the consumer weak it does seem clear that retailers are worried about consumer behavior, and certainly to your point, ter' hey're havi tough time operating it's interesting how cory berry lays it out.
target and walmart experienced the same thing and toes are some of the best operators in the game. what does it mean about the future how are they going to do tru the bal tru the balance of the year. the wr is rweather is really go to swing things. especially with the supply chain that is still under so much pressure so many of these retailers' inventories are out of whack they're trying to order way ahead so they don't have a repeat at the end of 2020 or the full year of 2021. but abercrombie at h4 a% >> it's a weird time joining us is oliver chen, a columbia business school professor. this is the weird thing. they're trying to order long in
advance so your goods don't get caught up and you don't have anything to deliver. but i don't know what's worse, having nothing to sell or having a bunch of stuff nobody wants. >> that's epic challenge for retail, balancing supply and demand and walmart and target really stocked up what's happening next is the consumer going toward categories su such as fashion, ruggage bi bigger, patio have faced problems. >> a certain bifurcation what we're really concerned is the lower-earning consumer the spending intentions are
lower, 70% lower at that's something to watch at the same time, on the positive side, unemployment is fairly low at 3.6% so there are cross currents, and the consumer generally behaving much more intentionally. >> i think it just depends on which side of that picture you're going to take if youly think it's the positie side and the consumer has a lot of money, you would say okay the selloff has been too extreme. if you think a recession coming then maybe not which side do you come down on >> we are cautiously optimistic. you think about companies' valuations walmart and target are very strong on the enabled business models with lots of scale. they just weren't able to turn the ships back to that
we see a rot oflot of bright spw like ulta. we like beauty luxury spending keeps on showing great peop >> which of these do you think is not worth putting your toe into the water on. i would say we're watching a lot of the retailers focussed on apparel. we from recommending macy's in terms of the valuation and a longer-term perspective. however, these discretionary categories, april, with that cooler month. >> did you buy dollar general or costco ahead of this
>> costco's a very unique retailer, which is a membership model. it also has a very nice april in terms of top line. we like that for that reason, and the margins are relatively fixed, and they've done a great job managing cost. we are bullish on cost but wry. we are. >> coming up, an interswrau alex carp plus, zoom with better than expected earnings. this probably is a company that isn't going anywhere zoom is part of our life we're going to dig through the numbers with the company's cfo stay tuned you're watching "squawk box. this is cnbc
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. good morning welcome back to "squawk box" here on cnbc, live from the nasdaq market in times square. andrew is reporting live from the world checonomic forum in davos. we are seeing some pressure across the board their this comes after a really strong yesterday with the dow up of600 points, but you heard this news from snap where all the social pe media companies are getting hit hard dow futures down by about 200 and s&p down by 42 treasury yields have come under a rill pressure. 2.85%. rhett'let's get to one of o,
the rally off the january low. off the marlch low was the best one we had people thought maybe the clear w path was ahead you talk about stabilizing, we have kind of frilirted with this 3800 to 3900 we haven't had a close at the minus. we're going to give back something like half of yesterday's pop. not necessarily unwinding it take a rdifferent look meta big is in there as well as twitter and the rest but you see that software and
semis. that's where we lie there. these stocks down 75% and not showing signs necessarily of traction it's unclear at this point yesterday banks were up big, let's say 4% look at that ba barely nosed above the s&p some of the breeleeding has stopped. >> time will tell. we say that a lot. what else that we are going to start doing a lot of, strategic ambiguities. it applies to almost anything,
know what i mean >> i haven't adopted it intentionally, but most likely, that's what i've been doing for years. >> is there any other way to talk about financial news? it's just bizarre. it never repeats it barely rhymes half the time and there's always something new, like portfolio insurance. >> it's always about probabilities. you can't, false precision, i think think is a big risk in this game >> it's also about sentiment and human emotion. if it wasn't, it wouldn't be nearly as interesting. >> at >> that's one of the things that never siegeems to change >> you know what a strategic ambiguity is >> tell me >> i see you got a haircut
you can't nail me for micro aggression i didn't say i liked it or didn't like it >> how about, wow, you look really good in person. or, wow, you look really -- either one it's like, well. >> they're both bad. >> are they both bad not what i thought >> it adds weight. it adds at least. >> 20 pounds >> yeah, definitely. wrinkles >> in the meantime, shares of snap getting slammed today the ceo warning that the social media company will miss its own targets. it will also slow hiring through year's end in a bid to try to manage expenses. since the company last issued guidance a month ago, quote, the macro macro environment has
deter deteriorated shares of snap plummeting 30%. if this holds through today, it will be nsnap's worse day ever. facebook's meta is getting hit alphabet getting hit to the tune of down about 7.5% for meta and off by about 4 % for alphabet joining us is rich greenfield. let's talk about whether this is a snap-specific problem or whether this is everybody. because investors at this point are saying we're going to shoot first and ask questions later. are they right to do that? >> look, investors were very worried that tiktok was starting to eat into snapchat and that's just actually not true tiktok is certainly having a meaningfully negative impact on
instagram, facebook. even youtube snap chat's not having an e engagement problem it's not just in the u.s th this is hitting snap all around the globe. there's a lot of d-to-c companies advertise on snap. this is across the world as you saw the pull back, you saw walmart, target, this is a real pressure on that macro environment which impacts advertising. so forget about snapchat today what does this mean for twitter? elon musk is buying twitter at an enterprise value of essentially, we're going to be close to double, 50% more than twitter. you just wonder, he's rolocked , but is he really going to move
forward at the price he committed to >> if he wants to get out of it, he's locked in he's got this contract he signed they end up in court, then what? >> he waived his right of due diligence. he can't just walk away and spend a billion dollars. it doesn't work like that as you just pointed out it feels like either he closes on his own, which certainly his tweets make it hard to brief it seems the board would have a real fiduciary duty. the board looks brilliant at $54, relative, twitter today would be well under half of where musk is buying it, if not 60% lower. >> just back to the macro
economic environment is this a situation where ceos are getting worried about the possibility for a recession and it becomes a self-fulfilling thing? and we're talking ourselves into a recession? >> are we already in a recession is the question. you're seeing across the board, there's no way this is snapchat specific we're hearing this over and over again. everyone is talking about it is it hitting some of these large companies on the mobile advertising? you also see it on connected tv. companies like roku. a slow down across tv universe tv, linear tv, connected tv. they're starting to slow meaningfully the investor fear is not so much the slow down we're experiencing now but on the other side of this if this continues, are we
talking about declines by q3, q4 how long does this last, how past ba bad does it get. there's nothing in this that appears snap chat specific the market seem the to be right seems to be right on hitting all of this growing fear >> what would be the discount that you think the board should accept meaning i agree. they have a great legal case but at some point you might say, 18 months of litigation's a lot. i'll take a discount to that what's the discount at that you think would be appropriate >> that's an interesting intellectual question, right the reality is he has a signed deal at an agreed-upon price
boards actually sue on deals that people try to get out of. opening this up any way seems problematic. you have a very experienced board. you have real, you know, you have real powerful board members. >> i'd be very surprised if they were willing to take a lower price. my guess is they literally don't try to open this up in any way and they simply try to force closing at that price and we'll see what happens >> rich, what do you do with all of these stocks? i mean, the punishment is swift. is it deserved is there a place where you say that's a little too steep of a discount or look out >> the good news with a company like meta, right, is that they j generate tons of cash.
on the flip side, the real problem, what we always focus on, becky, sis engagement. and there's no doubt that facebook, instagram engagement is suffering it's not just the macro economic they're losing time share. no one's, i don't think you're going to see a rot oflot of peo wanting to step in yes, you can find cheaper stocks elsewhere, but major headwinds on ton op. people are going to time streaming. my partner covers live nation.
i think you'll see that as a beneficiary. people looking for things not advertising exposed. i think people are going to look away from advertising stocks across the board if this keeps getting, if this keeps worsening at the pace. i mean, four weeks to worsen, to have to reduce guidance separaty unprecedented for fan >> i wish i had better news. >> i do too. conming up, ted cruz. stay opportunity you're watching squawk on cnbc
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comp sales did not fall as much as analysts expected but best buy did trimi its outlook for the full year. >> earlier this year i spoke with alex carp right here. the exclusive interview hin tau voicdavo and asked him with the threat of nuclear war. >> we've had a system that's worked and people brief the system will override we system atatically underestime
the risk >> what do you think it is >> if you have a wrong duration, it's probably in the 20%, 30% range. >> how do you think this ends in >> i don't know. i tell you first of all, what's b begun now is every country in the word, will defense, offense be able to beat us every large country in the world is r roorking at this >> we also asked if there is a lesson in the ukraine-russia war, if there is a lesson for china this all this? >> the lesson for everybody is holy [ bleep ] fight to the last person, which it takes rae esolve and heroism
and they know how to actually beat us. we talked about the tokstock an asked him about whether he watches the stock price. >> really, never >> but you must look at it, given what's happened, given the collapse, and i ask because i imagine that you have employees who are looking at that tstock price. >>alantir has products in your life every time we launch a product,
people think we're crazy or insane we're in a very difficult time palantir's built for difficult times. of course i care what employees, investors are going through. our primary competition, our tartups invigorated by the vindictive fumes of dollars. that affects my business much more than any tok stock price. the people that should come to palantir and power a better world don't go to a tartup that's going to essentially build consumer products that don't help any of us that's a massive opportunity for palantir >> he took the gloves off. no holding back about what he
was speaking about there a report by morgan stanley, an analyst there that questioned whether palantir should be valued as a consulting company >> i noah they're going to say, why should i read them now. >> what are they going to say in two years in years? >> they make free cash frolow after that they will be writing about military stuff we can't talk about and our revenues will have increased. and in the end it's a hults many on revenue that's what they're going to write. >> what this morgan tanly analyst said is this is a company that should be considered a consulting company, not a software company that was in terms of the multiple how do you think about that?
>> it's clomplete idiocy the products at ththat are invo in every war effort in the world are us it's like something that people br believe, we iterate it to the point of productivity. >> carp is a long-time critic of silicon valley, and i asked him if he briefs tech is going to have a reckoning from the big, big tech, i doubt it the moderate-sized tech, a roft th these people are depressed they did their best and now they are, it didn't go as well as they thought
if you could sell some type of heroin where they could go to sleep for a number of years, their depression is going to be a rob t problem for their companies. the model of we take your asset, whether it's your data and we sell it back to you where we make all the money is highly lucrative. >> guys, and that was not all of it we've got even more. you can watch the rest on cnbc.com we'll put the rest on the podcast. there was a little humble pie. he's taking responsibility for an adversarial atmosphere, he
can heyou can hear that on the web and i believe on the podcast tomorrow. >> i took from that sooner or later we're all dead but it you go out far enough, that's depressing, 20% to 30%. we have an atomic countdown croc clock. i'm surprise you bleep out "schitt's creek. they say it all the time on network tv and we can't say "schitt's creek" it was jarring >> holy "schitt's creek. >> you just did. >> have you seen it? >> i have not seen or very seen "schitt's creek. go ahead and say it.
>> [ bleep ] >> you wear that jacket but you i wouldn't say "schitt's creek" in >> i get a lot of compliments on this jacket. >> welike it it's very fashion forward. i think it would be funny if i wore that jacket >> people make fun of you with or without the jacket. >> you get the wow, you're so young and avant-garde. i get the, it's members only >> anyway, we got to laugh when 20% to 30% nuclear war if you go out far enough, that's what he said, isn't it in. >> let's hope, let's rpray he's wrong. >> the coronavirus made moderna and biontech household names which are in railine to fight a
the stock is up as all of this fus news has come out. both of them taughthought to be potentially deployed for both. here's what we were told >> we've been inundated with calls. we're trying to work with authorities in different country. open hope hopefulry we'll be able to provide doses to some european country and are doing more it week >> they are trying to figure out all at that allocation.
now tare are therapeutics as well ciga technologies makes one at that's cleared for both. and another one. those stocks are up a lot. a very small market cap. moderna announced it is in preclinical stages of roolookint potential monkeypox viruses. we're seeing the pharmaceutical industry ramp up into action
>> over the last couple decades, i tried to summarize all the scares we had prior to covid maybe we were resulted into a false sense of security with the official stages evof covid there was bird flu, swine flu, ebola, the mosquito carried some horrible >> zika. >> zika. >> and none of them turned to a pandemic >> if parts of the word. >> pan, pandemic peens around the entire word. tare's no reason to think monkeypox. is tahere any reason to believe at that we could see the return
of covid >> to, in terms of the fnumber o people it infects. so people in the public health world are watching this closely. we eradicated smallpox in 1980 there's a concern at that as we're seeing it spread, could it get into the animal population >> all right, thank you. appreciate it. good to see you. we have such a weird job talking about monkeypox. and i'm umonitoring the jacket
comments like the seinfeld episode with george, with at that great big jacket on. it's p it's mostly positive i can't pull it off. >> you could i don't want to do a hand pea down situation >> you do. the olympic jacket >> we're going to be live with texas senator ted cruz we're going to talk surging gas prices and what if anything the government can do about them ene l th wwi be speaking with the ceo of zoom. if the last half hour of "squawk box. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it.
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facebook's products harm children, stoke division and weaken our democracy. teens blame instagram for increases in the rate of anxiety and depression. it's not great when your customers are voting with their feet and deciding to kind of walk away. facebook's parent company meta dropping more than 26% last week... that is more than $230 billion in market share value. when will there be accountability? how many more people need to be harmed
before mark zuckerberg listens? when you need help it's great to be in sync with customer service. a team of reps who can anticipate the next step genesys technology is changing the way customer service teams anticipate what customers need. because happy customers are music to our ears. genesys, we're behind every customer smile. gas price hitting yet another new record aaa says as tens of millions of americans get ready for memorial day travel, the national average is $4.59 a gallon. in california, the average is
$7.04 a gallon here to talk more about these surging prices, inflation and what moorere the government canr can't do, senator ted cruz always a pleasure to have you on just, just for the triggering potential of having you on i would do it every day if i could, because i love social media. one of the, the billings you introduce -- >> let me say, i'm sorry i'm not wearing my puff eye y jacket >> will that play in, that will play in parts of texas, i'm sure austin >>except it's 95 degrees
>> you talked about bills where the government would reduce hydrocarbon production it reminds me of social engineering or corporatism or the government getting into what the free market should be doing on its own does that go against what you would normally do, by telling companies how they should be dee my deploying? >> i want the government to get the hell out of the way. it's an amazing thing watching the white house's talking points they try to claim they have nothing to do with the skyrocketing gas prices, it has nothing to do with policies. that doesn't pass the straight face test. he said if you elect me, i'm
going to shut down drilling on federal land i'm going to shut down drilling, end it now that's what he promised. and if you look at his record, he's put in place policy after policy, after policy a relentless assault to stop production of oil in the united states, to stop infrastproducti natural gas. we've seen when biden became president, the average price of gasoline nationwide was $2.38 a gallon today, it's the numbers you have, i think are one day off. the national average is $4.71 a gallon that is a massive impact that is hurting working families across the country. and suddenly, the political operatives in the white house realize people don't like spending $100 to fill their mini van, $150 to fill their truck. now the white house is trying to
blame everyone uelse, greedy oil companies, vladimir putin, anyg anyone than who put the policies in place >> this predates the biden administration and it turns out that now the way certain executives are paid have nothing to do with production anymore that's been changed because of pressure, from esg and some of the financial institutions that have been induced or larry fink i would certainly blame it on the left side of the equation and climate hysteria, but it's
not biden. it's just, it's everywhere it's safe somew everywhere. >> i agree reqwith you does larry fink personally there's a larry fink surcharge. >> every time you fill up your tank you can thank him for the esg pressure when trump was president, i urged him to press back against esg. america being energy independent is important for the vibrancy of
our economy. on this show you cover the markets all the time they say suddenly, the oil company ceo ozs are these evil, greedy bastards. i'm not going to suggest they're altruistic mother theresas the idea that suddenly things change u change look at the decisions that biden made he start on january 20, the very first day in office. he cancels the keystone pipeline then on january 27, he halts new oil and gas leases on federal lands, february 19th, he rejoins the paris climate agreement. he takes 30% of lands off limits
for oil and gas. on june 1st, he halts drilling in anwar, the incredibly rich small area biden reverses regulations that made it easier to drill. on october 29, interior begins imposing the quote, social cost of carbon. november 15, the moratorium of oil drilling in chaco canyon. from here to here, russia had not invaded ukraine. that's all joe biden government policy. after the invasion of ukraine, yes, that had an effect, driving up prices. after that, march 1st, biden releases oil from the strategic reserves march 21st, the sec proposes the
anti-oil rule. it has been a relentless war of policy, and i point out, joe, this is what joe biden promised us in this instance, not many instances. but in this instance joe biden and kamala harris are meeting in campaign promises. >> i have the tape look at me look at me ver i have the tape we had a bleep earlier, and what did you say? they weren't a bunch of mother theresas they were ready to bleep that again. a bunch of mother trheresas. andrew, you may need a bleep now. i see you ain the monitor, you'e doing back flips >> i don't disagree with a lot of things on that chart, but from a contextual persons, so we're all on the same page, i
think there's a couple things that aren't on that chart. one of things is covid, demand that came back, what was happening in the broader economy. that was a huge reason why you saw that move in the price. >> do you think larry fink is actually that power? i think while larry fink gets a lot of credit, maybe we give him too much credit. in many ways you could say he was a follower and not a leader in that a lot of what he would talk about was that, pension funds around the world, and you could argue europe, and i know those aren't u.s. funds, were pushing in this direction and that he effectively was just sort of going with the flow but also saying given these cross currents, that's where the market is, and as a free marketeer yourself, i'm curious how you think about that here's a guy, whether you like him or not, there's a free element of, this is where the
company decided to go. maybe its what the right call, neighbo maybe it wasn't, but it's what he did >> let me take both of those and start with your second point listen, what larry fink is doing has been unprecedented in the rise of esg. i think there is a real problem with people who are voting shares of passively-invested funds. larry fink is not using his own money to vote as a shareholder if he was warren buffett, if he invested in a company he has a right to vote those shares what larry fink is doing is taking your shares and my shares and little old ladies who've invested in funds and aggregating that vast amount of capital and decided not to maximize their returns because his fiduciary duty is not to them he's decided that he's more welcomed at the new york country
club when i whe walks n in. and feven if it's hurting america. i think we should look at the managers of other people's assets to vote those shares. that is not capitalism that is abusing the market the first point you said the price increase is driven by increased demand yes, after covid, demand went up what happens normally when demand increases the market replies with enhanced supply that has not happened sufficiently here. if you look at it, a couple years ago, 2019, the high point in modern times for oil production under president trump was 13 million barrelins a day.
we are 1.5 million barrelis down my point is, it is joe biden's deliberate policy decision to put policies in place to drive that supply down especially cutting off capital and no exploration, cutting off equity, cutting off debt, that is having the intended effect of this administration. >> what do you have to make of this argument. there's a big debate about this blackrock issue. there are people saying something different, which is this if you take the blackrocks or american firms out of it and they're not allowed to vote their share, who then actually has the power? not individuals, because most individuals in the u.s. do not have the power the large, norway's pension
fund, the folks in the middle east they they're the ones who would control the market is that a good thing >> that may not be a good thing either, but i can tell you, having people controlling billions, hundreds of not their capital, they used to vote -- listen, ten years ago, they would have voted in a way they were trying to maximum shareholdervalue that made sense. what's changed is the rise of woke capital what's changed is too much of wall street and too many of the fortune 500 ceos are more focused on politics. i got to say, after what happened to disney in florida, that may be changing there may be a few ceos looking around going, you know, maybe we ought to focus on selling a better mousetrap and not on being the most left-wing political activist, but it is dangerous. i'll tell you in texas, i talk
with texans all the time and urge them, listen, if new york is not going to fund new exploration, the state of texas needs to stand up, create new banks, new sources of capital because what we're seeing -- i was out in midland a few weeks ago. there's an enormous desire to drill more, but one of the huge problems is, a shortage of capital because the biden administration has waged a war between the sec trying to shut off equity capital, and biden's banking appointees trying to shut off debt. the reality is, you can't drill a new well unless you can get the capital to do so, and that has become much, much more scarce in this environment >> senator, we got to end it there. i'm not sure about the whole mousetrap metaphor with disney we kind of winced with that. i don't know if mickey, you know, really needs that hanging over his -- mickey and minnie.
>> my tail >> senator, you did not disappoint i love -- i'm going to be reading this all day long. thanks for joining us this morning. hope to see you again soon "squawk box" will be right back with the cfo of zoom. your . and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create
dropping more than 26% last week... that is more than $230 billion in market share value. when will there be accountability? how many more people need to be harmed before mark zuckerberg listens? shares of zoom are higher in the premarket. the company just beat earnings estimates and raised its profit outlook, but demand for video
conferencing is waning a bit so zoom has been shifting its emphasis to that hybrid workplace and you can see right now, the stock is up by about 4.5% this morning. joining us right now is zoom cfo kelly steckelberg. kelly, you are kind of the holdout, or the good example of what's gone on this earning season where your numbers are coming in better than the street was anticipating and you're guiding higher for the year. this is coming as there is maybe some less demand or less growth in terms of what people are going to be doing for zoom but you guys have managed to really adjust. what's the message that you would be sending to investors right now on how to value zoom in the postpandemic world? >> well, we are successfully transitioning from having been the killer meetings app to being an indispensable platform that our customers use across all aspects of their business. as you said, our customers are looking to digitally transform
how work is done and to that end, we continue to innovate and our platform is expanding with things like zoom events, zoom phone, we just last quarter released zoom contact center which will continue to evolve how our customers engage with their customers and we're really excited about this we're very proud of our quarter, as you said, we have revenue of over $1.07 billion and nongap operating margins of 37% and free cash flow of 47%. >> the stock has come down we're looking at this year to date chart, down 49% this is another stock that did so well during the pandemic and obviously you guys are looking for your plan. the guidance that you're giving, better than anticipated, is that really a signal to investors that this is a bet on that working from home, or the hybrid work situation continuing? >> we believe that the future of
work has changed forever we hear from our customers that they want to ensure that their employees are productive, but employees want more flexibility than ever as well. and in order to do that, our customers are coming and looking to zoom to help them transform how they're going to work with their employees. and that means most of them need a zoom meeting license, but beyond that, even more importantly, they need things like zoom rooms. conference room solutions, so that every experience they have with someone who is in the office is inclusive. also, zoom phone which allows them to have their phone number with them wherever they go it's our cloud pdx solution. and then you combine all of that also with zoom events which is our event solution as we see not only work transforming into this hybrid environment, but also events for organization that is want to bring together their customers and employees and they want to have that in-person
experience but they want the leverage and reach that they've enjoyed over the last two years by having a virtual component to it as well >> kelly -- oh, good. >> having the opportunity to have that all natively built on a platform is so, so powerful. and that's what the future of this platform is what this company looks like >> you kept your cost under control in a tough inflationary environment. how do you continue to do that what's the biggest thing you have to get yourarms around in this environment, wages? >> well, we're actually continuing to hire we are really investing in innovation and our r&d team as well as sales capacity on a global basis but we've taken profitability very seriously we're frugal at our heart and so we focus on areas where we can invest, but doing it in really the right way. we have gross margins. we announced this last quarter of 78% and that's due to our devops team focusing on building out
capabilities in our own data centers that provide our services efficiently as possible and then we look to attract talent anywhere in the world that we can and doing that in a very effective way so that we can have the best talent, but really still contributing to our bottom line. >> only got about 45 seconds left you did say that the russian/ukraine war affected you in europe. what and how how did that happen? >> so we are seeing headwinds in europe in general, especially in the online segment of our business and i think it's coming from uncertainty in the economy there as well as we are supporting those people in ukraine by giving -- we lifted the 40-minute limit there and giving away the service for free and continuing to watch the sanctions and the impacts that they're having from a russia perspective as well. >> kelly, thanks a lot for your time this morning. the stock is higher after the earnings and we appreciate your time >> thank you let's get a final quick check on the markets the dow is down by about 172
points the futures for the nasdaq off by close to 200. that's been the real question all of the noise that came around snap, trying to figure out how that plays into the broader economy for social media stocks too that does it for us today. make sure you join us right back here tomorrow. "squawk on the street" is coming up next. we'll see you tomorrow, andrew >> see you ♪ good morning welcome to "squawk on the street." i'm carl quintanilla with david faber and mike san toli cramer has the morning off snap last night, abercrombie, and best buy today, we will hear from powell later on this afternoon. our road map begins with the return of sell-off mode. >> plus, snap struggles, sending the shares sharp