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tv   Squawk Box  CNBC  March 24, 2021 6:00am-9:00am EDT

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♪ good morning stocks look for a modest recovery gain today after some fears of a delayed reopening, delayed pandemic recovering of the dow yesterday. oil helping out today, recovering from some low levels that we haven't seen, below 60 quite a bit below 60 still is the eu planning to halt exports on vaccines produced there as politicians face a backlash over that slow rollout. plus, cash, credit or crypto elon musk making the bitcoin buying experience a reality. we'll show what you he tweeted at 3:00 a.m. it's only midnight in california, so don't get too concerned. wednesday, march 24th, 2021. "squawk box" begins right now. ♪
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good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen and mike santoli. andrew is off today. mike, glad to have you again today. thanks for being here. >> good to see you, bec. >> good to see you let's check out equity futures at this hour you're getting back the ground of stocks lost yesterday the dow is up over 1 00 points but yesterday it was down by over 300 points this came on concerns over what happens with the reopening. are you going to see it or a delay. or some sort of a setback as we've seen the lockdowns that we talked about yesterday extended in places like germany oil prices had been down on that news the dow yesterday was down by just about 1%. this is coming as you awe industrials, materials stocks down caterpillar in fact was down 3.4% that was a big drag on the dow
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yesterday. the dow up by 300 points s&p futures up by about 15 points nasdaq up 121 points after losing 150 points yesterday. it was a big disappointer. as it was down by 1.1% let's take a look at what's happening with treasury yields ten-year yielding 1.6% definitely under control, relative to how quickly we had risen over the last several weeks. joe. >> thanks, bec here's a look at the "squawk" stack which is custom made for things like this gamestop down almost 12% but, you see, we're able to alternate between gamestop and tesla. but let's look at some of the others as well you can see that bitcoin is up 2.5% maybe on that musk tweet. maybe he's in texas. is that only an hour behind? that would be 2:00 a.m i don't know he lives there now, but we don't know maybe he's texas
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maybe he's in california somewhere between midnight and 3:00 a.m but with elon musk, does it really matter? it can be anytime. geniuses -- mike, you're up anytime, right >> yeah. he's on mars standard time anyway so -- >> on bitcoin. >> we should make fun of people for crazy hours, right >> exactly, we could be up -- i could be up any hour, literally. you know, we've talked about that before. but that's me. not up for a long time but perhaps long enough to look at the clock. you know, stretch my legs. the ten-year -- it was 1.6 at one point when i looked at it earlier. >> yeah, a little better right now. >> yeah, that's interesting. having that's where it was when tesla was on stabilization. people were quick to say, oh, he
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was wrong, 1.75. in a matter of months, 1.6 i wanted to bring up an oil board and today things have been keen off crude yesterday was rough. and you can see the futures were weaker in the middle of the night and early morning. and then, you can see right around there, we did see a move higher we were down to 57 and change. now, back to 59.95 and that plays into, you know, covid reopening. >> yeah. >> global economy, all of that stuff, like, santoli you were up monitoring because geniuses don't sleep, right? money never sleeps, pal. >> yeah, i check in. i have the feelers out yeah, i think it's a matter of -- it trades like a play on global growth. it's a cyclical asset. it's a risk asset. it's a risk appetite all of those things are in the mix. yesterday was interesting because we did get that backing up of treasury yields. there's a slippage in the usual
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rotation big cap growth didn't rally as a single group and oil was going down as well it's like the market -- one thing can be wrong and we can kind of account for that it's like the overall index. in general, the market's flattened out a bit over of the last two months. you've had the rolling corrections, nasdaq down 12. russell 2000 down 8% from its high so, it's not really getting at the broader s&p 500. but you're seeing a little bit of chop and you're seeing a little payback from what was an amazing run coming into this year >> you know, becky -- >> one thing i was surprise -- go ahead >> we'll get to that i was just marveling at -- other shows have mike santoli like booked in at a certain time. at a time, mike santoli is going to bring us -- we can just -- any random thought that we have, we can turn to to him when he's on this show and just say, mike -- and just, boom >> you summon one of my random
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thoughts as opposed to something that's prepared. >> but what a resource what a resource. what a -- you know, really good, really good to be able to do that now, with that in mind, what were you saying, bec >> i was just going to say i was surprised yesterday. i know we're going to talk about these comments from powell and yellen but i was surprised given how closely we parse every word that there wasn't more concerned based on a few of the things they said concerning valuations? >> in fact, are you moving me along? do you want me to read this, i guess? >> no, i actually do want to talk about this, i think it rolls into this conversation that we're having. it doesn't have to be long -- i'm just saying i think we can explain. >> i'm sure mike can, he's here. right there. one other thing i wanted to say, one other thing i wanted to say, the oil could be in the "squawk" stack. that's an option for us. but when it moves intra-day,
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that doesn't do it justice, okey. >> okay. agreed fed chair jay powell and treasury secretary janet yellen testified before the senate banking committee today. yesterday, appearing from a house hearing, both told lawmakers they still expect a strong rebound this year, because of the vaccine rollout expands, economic activity picks up but the recovery is far from complete they also agree that while valuations in parts of the market are high, that's no cause for alarm just yet >> some asset prices are a bit high, but the banking system is highly capitalized and funding risk is relatively modest the remainder is -- the remaining category is really leverage among households and businesses which is somewhat elevated but nothing like it was before the financial crisis >> i mean, both of the people that we're referring to, yellen and powell, are great at what
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they do. whether i would ever listen about valuations to either -- i'm going to go back to santoli again. you remember, janet yellen's call on biotech before >> yeah. >> before they like quintupled -- >> yeah. >> when she said -- those aren't the people that you -- i'd rather want to go to one of our average guests during the day. even a cell side guest is probably just as much -- >> when jay powell says it as the fed chairman, and he understands markets when jay powell says that as fed chairman i would say it causes more concern. he said he's not concerned with the banking systemi i ing collag lack in 2008 and 2009. >> yeah, banking systems with the stock prices going up and down, maybe it is him. >> the way he presented is a
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relatively generic nod in the direction that, sure, equity prices have come up a long way whatever other asset you want to try to point to because that's the tone of a lot of the questioning that he gets when he sits before congress however, if you're an investor, you say, what do you do about it he's absolutely not going to raise short-term interest rates for, he thinks, years to come. >> unless he doesn't care. that's what -- >> with longer term yields go up, if that's the way the market wants reprise -- re-price it. until he conditions it somewhere else between the phenomenal yield. >> if the market goes up or down by 10% or 15%, maybe that gets his attention. >> they don't mind the stock prices have cooled off a little bit because it allows them to
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stay very safe >> you say that, but every time it's happened in the past, they've acted, i guess that's my question what would they do >> the vix went up above 30 and they did nothing they just reiterated their stance i think we're in a realm where you could see some weakness in stocks and it doesn't really come, you know, with any kind of implications for fed policy, at this point, anyway >> see, he's pointing back to an exact example. >> i know. i'm telling you. i'm telliing you. >> my memory goes back seven or eight months >> i know. the realm, and using gop terms as well. i can do cultural things with you, right i can do that with you, best in show they met in a starbucks, those two people >> we do have that >> but not in a starbucks, they were catty-corner, they saw each other on their computer.
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>> i know "game of thrones," i'm not a "game of thrones" person >> why not the violence >> it's not my thing >> made up -- >> oh, the stock market is not a madeup thing -- barons just covers reality sure let's get to a developing story in egypt a massive container ship has run aground in the suez canal. it is blocking ships going both ways in the world's busiest and most important waterways at least five tugboats are looking to contain the 1300-foot container ship named "evergiven." the log jam has blocked ships so far and en route for the daily trade. officials say they'll divert traffic to the canal's older
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branch until the is ship has been freed it's pretty bad news for the already log jammed container market i have no idea if that has to do with the bump in oil prices this morning. who knows. coming up, gamestop under pressure after considering a new stock offering, going through everything that the company announced next and after the break, check out shares of viacom cbs after new stock offerings. dited wnck down in the premarket incado almost 7% we'll be right back. ♪ we made usaa insurance for members like martin. an air force veteran made of doing what's right, not what's easy. so when a hailstorm hit, usaa reached out before he could even inspect the damage. that's how you do it right. usaa insurance is made just the way martin's family needs it with hassle-free claims, he got paid before his neighbor even got started.
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gamestop shares under pressure after the company acknowledged in a filing it was considering selling more shares. earnings of $1.34 a share. fell a penny short of estimates but revenue did beat forecast. same-store sales rose 6.5% last quarter. and global e-commerce, 175%. joining us, stephanie link, chief strategist at hightower and cnbc contributor good morning, steph. gamestop a fascinating example of there's the phenomenon that is the stock and then there's the business which we got a glimpse at last night. it was a moment when the stock itself was sort of whipping around the rest of the market. that maybe has calmed down how would you view this as you
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try to reconcile with how the stock is going with how the business is going and what maybe they have planned for it >> yeah, i think the bright spot, you highlighted it in the quarter was e-commerce global e-commerce up $175. and now e-commerce represents 34% of total revenue versus 12% last year. so, they're headed in the right direction. they also closed 333 stores but they have 693 stores on the negative side, you have covid hit their stores substantially, so they had a lot of closures and then the elephant in the room is the secular headwind asking any 10 or 15-year-old, they're download games they're not going to the stores. i think the big news if they're considering the equity rates, they need it it's prudent, it's very much so needed and necessarily because transitions take time. turnarounds take time. i think they're making very good progress in terms of kind of management changes with the cfo leaving and now a cmo from amazon
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we know what the co-founder of chewy is doing and really leading the charge so i think there are some positives in place all of that instead, mike, the stocks up 864% year to date. >> right >> it's going to take time you know this is not my kind of name, but it is headed in the right direction bought we've got to be patient. >> i also think we have to just sort of set the framing at this how it's valued right now on a price to sales basis gamestop has four times the valuation of best buy which is not a company that has necessarily gotten blind sided by e-commerce. just how far the stock has come is a good reminder there meanwhile, steph, another stock that's kind of gone stratosphere before coming back, elon musk making news overnight, just after 3:00 a.m., he tweeted that, quote, you can now buy a tesla with bitcoin in a separate tweet, a source said tesla is only using
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internal software and operates bitcoins nodes of computer to verify transactions and also said bitcoin paid to tesla will be paid, and not converted to fiat techniquin technology. soaping up the market to tesla, sort of gimmick, how would you frame this >> yeah, well, it's not a surprise, mike you know last month, tesla announced they're investing $125 billion into bitcoin it's just a natural progression they would accept in the u.s. and internationally later this year you know what i think is even more interesting not so much from the tesla angle but you have other real companies, and it la's a real company, but you have other real companies embracing bitcoin as well. mastercard and bny mellon, the oldest bank in america it's here. it's here to stay. i'm not invested in bitcoin.
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it's very volatile i understand it and it's interesting to watch the real companies out there embracing this whole technology. and i think it's something really that's very fascinating >> stephanie, just go be back to gamestop for a second. you said it's going to take time and you understand, i guess, sort of the possible bold case i just wonder whether it's likely to play out because they minute out there's three "b"s they need to avoid blockbuster they need to avoid the fate of borders but maybe they try to embrace something like a best buy model. as best buy has done much better than others. somehow, a best buy service, you go in and they'll help you i thought best buy might go the same route but they're not going to they're doing pretty well. even if they were successfully to reach the best buy model, it's gone from five bucks to $160
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what is the best buy model if they're successful in getting there, what is that worth for gamestop is it worth 200, 300, 400? is it worth $160 >> i think best buy has done a great job in terms of turning around in transition to your point on services of being say real main focus. i actually worry about just in general about best buy can they keep the stuff on the shelves, right given all of the supply chain disruption that we're having near term, i think you might see a little blip on best buy. >> can gamestop even get there >> yeah, right. >> can it even get that successful in transitioning from online it's got unbelievable competition in that big games, why would it be gamestop >> you've got to bet on him, and the model and how successful that has been in the face of amazon, right? >> right >> so, you have to bet on him.
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that's why i've mentioned they've made good decisions in terms of bringing in the leadership the cmo from amazon that they just hired he's really pretty impressive, too. they've got to get the people in they've got to get the cash in the door and do the secondary to make all of the changes. to my mind earlier, e-commerce at 34% of total revs, actually, that's something that's kind of interesting. it was only 12% a year ago just think, i don't know if they're going best buy model i actually think they're going model. to sho they do that, they'll need a lot of cash in the door to get that model in place >> and chewy didn't start out with a lot of stores either. intel will spend $20 billion to build chains in arizona. as the new ceo pat gelsinger made first public remarks. programming note, pat gelsinger
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will be on "squawk alley." steph, what's your take on how the stock has acted under the new ceo? >> i get it. he's obviously very dynamic. he's got execution on his side he's got a fabulous reputation the stock is up on the news, right. but i'm not involved here's the story, most people thought two quarters ago when swann delivered that disappointing quarter, the old ceo, everyone thought they were going to start outsourcing all of their manufacturing to tfmc, now, they're not going to do that so that's one thing that's positive i think the $20 billion is substantial. it's going to take two or three years for them to build that out. in the meantime, they've given amvb three-year leader and by the way, they're focusing on it right now. intel is behind.
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there's no question about it that's why the stock is up in the last year. that being said, they're doing the right thing. again, this is another turnaround story which is legitimate. it's just going to take time how do i play this i play this by owning the capex, the land research and they will certainly benefit from wfe spend going higher and the buildout from intel so, i think that's the way you want to play this news today >> all right we'll see if that continues to get traction with intel and the rest of the group. steph, great to see you. thanks a lot this morning. >> thanks, mike. when we come back, it is equal payday a special report on closing the pay gap between men and women. that's coming up next. also, some news as we head to the break pretrading platform robinhood has filed an s1 with the s.e.c. for an international offering. in a blog post, it said that the
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ipo would take place after review process and cnbc is rertg atpointh it would be listed on the nasdaq. "squawk box" will be right back. all the things, all around you where you learn, work, and fly we help make them healthier. we are the people of abm. for more than 100 years, we've been a leader in making spaces cleaner, from the things you touch to the air you breathe. today, more than 100,000 of us are innovating to ensure spaces are more efficient, healthier and safer. abm. making spaces healthier for you.
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today is women's equal payday it marks how far into the new year women have to work just to catch up with what men were paid in the previous year that pay gap is about 18% for full-time working women in the united states, compared to men 25% for mothers versus fathers and it's even a wider gap for single moms. sharon upperson reports on a new
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survey that points one factor increasing that divide node. >> ice cream since you got home. >> ice cream is delicious. >> reporter: leticia brown is a single mother of two she and her ex-husband divorced six years ago. >> my husband took care of paying the bills i worked i worked full time we had compatible careers. he paid the bills, i did mothering and taking care of the house at home. since their breakdown, splitting parenting responsibilities more evenly has allowed her to reach more financial and career controls an an executive >> this was an opportunity for growth an opportunity to make more money. >> reporter: recent surveys show single moms with a 54% likely to make 100,000 with them kids with
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them full time what is holding them back? >> we know 80% of separated families where the parents live separately, 80% of those, the mom is the primary custodian that is our culture. >> reporter: today, women working in the u.s. typically certain 82 cents for every dollar a man makes >> they're not getting the support they need. and it might not just be financial support. it also could be time to focus on perhaps returning to school, professional development and even networking. >> reporter: there's not a one size fits all approach to closing the pay gap for single moms but brown says financial independence is crucial. >> recognize that even if you're not in a position where you can do it today, that maybe over time, it can be something that you strive toward.
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>> financial planner rita chang said it's not about equal pay but finding an equitable situation for single moms where appropriate. ideally that happens before the divorce, but situations can be made along the way for more ideal parenting schedules and that can create more flexibly for moms in jobs and careers and potentially enhance their earnings, becky. >> that's interesting. sharon, what's some of the factors that would actually create a more equitable situation? what are we talking about? >> one of the things that receipt sa chang says that moms should focus on is the long term, not just the short term. it doesn't make sense to keep the house even though you love that house does selling the house and moving into something smaller and saving some money does that make sense not only looking at your paycheck and your salary, but making sure you're trying to find work that has employer benefits and safety nets that would be like paid time off.
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insurance, disability, health insurance, dental insurance and retirement plans and the other factor to consider if you are self-employed or you're working mostly part time is that increase in flexibility and parenting can give you more flexibility with how you do that part-time work that freelance work. so that can enable you to potentially make more earnings along the way. >> sharon, thank you good to see you. >> good to see you, too, becky coming up, europe planning to halt exports of vaccines. we'll tell you which countries could face disruptions next. as we head to break, here's a look at this morning's premarket s&p 500 winners and losers
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♪ good morning, everybody. welcome back to "squawk box. we've been watching the markets this morning and after a down day yesterday, you're going to see this morning that the dow futures are definitely bouncing back they're up by about just under
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100 points, i think. this is a gain about a third of a percent after the dow was down almost 1% yesterday. nasdaq futures were down by even more, 1.1% and this morning up as well by 0.8% keeping an eye on bitcoin. up 2.3%. intel is higher after it says it's going to be spending quite a bit of money doubling down, building plants. that's good news not only for intel but semi conductor equipment makes, too and 1.6% >> you're ready. put that in there, gelsinger has only been there a month. focus more on outsourcing and $20 billion. trying like a hybrid, returning to its roots but not completely. right? here we go again, right, santoli? >> that's pretty much it and you know, it's also got this
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tailwind of people wondering if the government should make it easier to reassure semi production a lot coming together there. by the way, what a great entry point pour him to come into that job. stock really cheap, kind of at the end of a multi-end range >> you can confirm the dow point, too, santoli? >> yes, i can confirm that much, i can remember with microsoft, november of 1999 >> as long as you're here, i'm going to use you the european union is finalizing emergency legislation that would allow it to curb vaccine exports for six weeks. that's according to the "the new york times." the move comes in response to supply shortages in europe and a rising third wave of covid infections britain would face the biggest disruption followed by canada and israel between february and mid-march the eu allowed a company to export more than 40 million
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doses to 33 countries, while 70 million doses stayed within the box. but politicians in europe have been facing a backlash only 10% of its citizens have been vaccinated. and they let all of those vaccines go out. you know, it's a touchy subject. but you got 40% vaccinated in the uk nearly 60% in israel so these are, you know, no one's going to win with choices. but they need to be made joining us now dr. kavita patel, primary care physicians brookings and nbc news contributor, she formerly served in the obama administration. dr. patel. it's good to see you you probably have been in positions where the tough choices, tough decisions, i don't know what -- how you would justify this, or is it totally justifiable? you've got to keep it at home.
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it's almost sounds like a europe first strategy but if they're at 10% and they're exporting all of that vaccine, as a citizen there, i think i would expect it to be available to me first. >> yes so, good morning you're bringing up exactly the rub i think that when these arrangements were made -- by the way, it was very clear that the eu in particular, put an incredible emphasis on astrazeneca. just like the united states had tried to put some even bets on a number of their manufacturers. so in the case of the eu, astrazeneca was something that they, of course, the other manufacturers are in there, but a.z. was kind of the leading manufacturer to supply unfortunately between the cases and rising an incredibly rocky vaccination rollout, joe, you're just seeing exactly this rub this has happened in other not as dire situations in the united states, as to why we actually led to developing a federal
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strategic national stockpile of course, you can't do that with covid vaccines at this point in time. but i think what you are seeing the eu do, frankly, they're watching what the united states is doing with some of its arrangements to send out vaccine supplies with reciprocity that they'll get the doses back that is after the united states accomplished its goal to at least vaccinate all adults at that time by the end of may. it now looks like it could be even soon because 24 doing 24/7 manufacturing. this is a difficult situation. i've got to be honest, when you look at lockdowns which is what they're doing in eu, it makes sense to actually prioritize your country's needs first in health care, joe, we always say you have to save yourself before you save the patients around you that's essentially how the eu is acting >> put your oxygen mask first on
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in the plane yeah, it's not necessarily intu intuitive. what we want to avoid what's going on there what to do you attribute getting not enough at first, but if you look at what's happening in miami beach, things in the united states, seems like we'll be in the same boat, will we not be in the same boat because we're higher and have done better with the vaccine rollout? >> yeah, it's incredibly amazing for us to talk about how the united states is really leading the way, but it has. frankly speaking we're getting -- especially in the high-priority populations, joe, we're achieving above the age of 65, almost all adults have had their first shot, at least not vaccinated that's the driver. monday, texas, march 29th, first
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state to open up all gibleligibt for all adults doesn't mean it's easy to get a shot on monday, but where the eu went wrong, you're right the eu could have had several things wrong a case study and whatnot to do number one, not enough supply secured in advance, in terms of spreading the probabilities of success across multiple manufacturers. we've done that with 12 and counting in the united states, compared to the eu single digits and on top of that, rolling back restrictions, frankly, joe, they're finding similar to what we see in our states, that people are just fatigued despite having a pretty even testing and strategies in the beginning. remember, germany was the case we were touting in the beginning despite that fatigue, people are no we're going to travel, do what he we need to do. it's a cautionary tale
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the thing that makes it, joe, the variants we saw the testing of other variants earlier in the eu we're trying to heed that caution here in the united states not working out as much as we would hope we're starting to see cases plateauing and just in the last 74 hours cases rising, especially in 12 states across the country here >> dr. patel, that was going to be my question is we think we're doing so much better and we definitely are on the vaccine front. but does this catch up with us at some point? does the variant start to spread here as we've got the same fatigue? >> yeah, becky, i'm not as -- i know there are people who are talking about an incredible forthsurgery or fourth wave. i do think we'll see an increase in cases here's why the next six to eight weeks are going to be a little different than the eu. we have traditionally almost clock work followed the eu afternoon their trends we are doing a much better job at vaccination becky, to your point, we're also having other own experience with
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homegrown variants which do but a little bit of a boomerang. manhattan has had the rise of a variant b.1.256. when were see 40% of variants more transmissible which we think the manhattan one is, that could be exponential growth. so, i think what we're doing in terms of vaccination is actually helping us to not see the fourth wave but we are going to see an increase in cases. we're going to see an increase in hospitalizations and death as a result becky, it's a reminder this isn't the pandemic we eliminate, we just get to a level where we treat and deal with it yeah >> i just want to ask you, as a primary care physician, how much would you like to prescribe a pfizer inhibitor or regeneron news, we don't talk about those,
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but to be game-changers if there is another way, to manage the outcomes in a much better way? >> yeah, joe, huge, i've been using monoclonal antibodies for people regeneron will seek the antibody cocktail for full authorization. huge game-game-changer a 70% less in deaths i'm very excited about the monoclonal, very similar to what we're learning with hiv technology that could be an oral pill to treat covid. i couldn't be happier that we're watching therapeutics get their share of vaccines. >> think about that, dr. patel, every time there's another wave, doctor, it increases the likelihood of a worse variant. >> right, that's right >> you know, the virus needs to be able to replicate
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and if it does, then you've got more variants. >> that's right. >> so if we had, just take this. a year from now, uh-oh, here it is well, take this inhibitor. >> right >> we need to fund that stuff. dr. patel, thanks. all right. coming up, disney out with new details on summer movie plans that may include simultaneous streaming release. that story is next later, starwood's capital barry stirlick joins us to talk about bitcoin and spacs and much more or do you get up? [announcer] and this fight is a long way from over, leonard is coming back. ♪♪ ♪♪
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disney out with an update on its summer movie plans the studio announced two of its big releases will be in theaters and simultaneously on its streaming network for a $30 fee. marvel movie "black widow" pushed back from may 7th to july 9th. and "101 dalmatians" corella is july 8 and it won't get a theatrical release in most markets. becky. >> thanks, mike. when we come back, we're going to dig into intel's factory announcement
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the next analyst is a top analyst who calls it bold. street likes what it's seeing up by 5%. that stock, taiwan semiconductor down 2.4%. that would be a loser in this deal we'll have more in just a moment hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, 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 and only pay for the features they need.
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let's get back to the major chip news this morning intel announcing it will be spending $20 billion on two new chip plants in arizona wall street and investors are cheering the news right now. that stock is up more than 5% in the pre-market, giving a big boost to the dow, as well. joining renounce to talk more about it is vivek aria, bank of
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america security senior semiconductor analyst. vivek, i'm going to throw a few things at you, because i think you have a different take than the street's reaction right now. you're looking at this a little more skeptconcept sclept skeptit you? >> we have to commend intel for thinking outside the box the new ceo comes with a lot of credibility, first-time experience in the history. and it would be really good to see a lot more semiconductor production onshore in the u.s., because it's such a critical industry but having said that, there is no evidence that intel has caught up in terms of leading edge manufacturing technology. number two, this outsourced manufacturing or the foundry business is a very different business than what intel is into right now. it's a very service-oriented business, and you already have an 800-pound gorilla, taiwan semiconductor, who controls 60% of the world's market share and probably 90% of the profits,
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because they are so good at this business and in the time frame that intel wants to develop new fabs in arizona, there will also be a similar in arizona so intel starting late in this industry that is already well developed. and third and very important reason, what was lost in all the excitement and news yesterday is that intel guided 2021 below consensus. intel is perhaps the only semiconductor company where sales are going to be down this year earnings are going to be down 14%, free cash flow is going to be down 50%. and they're attributing this to supply constraints but the entire industry is dealing with supply constraints, and yet their main competitor is able to show 37% growth this year so for a number of reasons, execution risk and just continued share losses is why we still have cautious on this stock. >> you know, one thing that makes this look a little sweeter
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to a lot of people, though, is what the biden administration is doing. they're now looking at the potential of offering incentives to companies that are willing to make chips here in the united states because of all the problems we're seeing in the supply chain right now is that something that if there is some sweetener in the pot from the u.s. government, it could change your mind >> yeah, i think that will definitely help the financial equation here. but one has to realize that developing chips for other customers is a fundamentally very different business. it's a very capital-intensive business, which is already well established with one large player who will also be in arizona at the same time and presumably, perhaps asking for similar incentives, and there are a number of other smaller players. so it's not a new industry that intel is getting into, it's a well-established industry. secondly, it's a very capital-intensive industry if i look at the last decade, intel's capital intensity has
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been about 18 to 20% of sales, right? but when i look at the foundry industry, the capital industry, even one at a high level of scale, capital intensity is close to 50% those are the reasons why i think that, u.s., u.s. government incentives would be helpful, but i don't think by themselves, for really going to make necessarily a more profitable venture than intel is in right now and then the second important part is what about conflicts of interest let's see if a customer comes to intel and says, help me develop a processor that helps me eliminate the need for your processor in the data market, how will intel manage that relationship i think a lot of those things are unknown. and finally, the payoff is 40 years. i know we're all excited, the stock is reflecting, because it's something new and exciting, but the earliest this thing would show any benefit is 2024 and beyond >> vivek, thanks for your time this morning obviously, a contrarian view
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with the stock up almost 5%, but we appreciate your time. thanks for coming on >> thank you a programming note, by the way. intel's ceo, pat gelsinger is going to be on "squawk alley" coming up at 11:00 a.m. eastern time the new ceo making these bold moves. we'll see what he has to say about all of it. "squawk box" will be right back.
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stocks sliding on the one-year anniversary of the market's pandemic bottom this morning, the futures are bouncing back. we'll take a look at what's driving the move, right ahead. br breaking ing down the president's relief plan. eric cantor talks taxes, the state of deal making, and much more plus, an exclusive interview with investor barry sternlight, we'll talk markets, his latest sp spac deal, the reopening of market as the reopening of america as the second hour of "squawk box" starts right now. good morning and welcome back to "squawk box. i'm joe kernan along with becky quick and mike santoli
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u.s. equity futures as becky just mentioned are rebounding this morning from a little weakness we saw yesterday, especially in the dow. we've got the dow up about 94 points so far this morning, in the pre-market session nasdaq indicated up 94, as well. the s&p up about 12. the ten-year is well behaved it has been the last couple of sessions it's about one sixth and change, 162 or so. but quite a bit below the 1.75 or 1.7 level also oil which has been recent sessions, as worries about renewed lockdowns or delayed reopenings due to some waves of covid resurging around the world, and mostly in europe, have thrown a little bit of a scare into demand, and things like that. oil is down at about 57.5. and it rebounded earlier today, i think back up around just under 60, 59 and change. i thought we would bring it up,
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but i guess not. so i'm just winging it >> rather look at us, instead. >> it will be on the bug in a second >> it will in the meantime, let's get you caught up on a few other headlines at this hour shares of gamestop are sliding in the pre-market trading and sliding in a big way last i looked, they were down by about 12%. the video game retailer saw both profit and revenue come in slightly below the street's forecast for its latest quarter. gamestop did not specifically address the reddit-fueled trading rally in its stock, but it did say it may sell shares to help fund its ongoing revamping this year and that's probably the reason for the sell-off. the stock down right now by about 12.8%. and popular trading platform robinhood has filed to go public that was private, but it's expected that they'll start trading in the public markets before the end of the second quarter. and it's been reported by cnbc that it's anticipated to be trading on the nasdaq. in the meantime, intel is opening to fuel a comeback and
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take advantage of growing chip demand by building two new factories in arizona it's going to be spending $20 billion on that expansion, hoping to start semiconductor production in the year 2024. the new ceo, pat gelsinger, is going to be a guest on "squawk alley" to talk about intel's plans. that's coming up at 11:00 a.m. eastern time mike fed chairman jay powell and janet yellen will testify again today, this time to the senate banking committee. steve liesman has followed all the testimony from yesterday and joins us now with more, steve, with what to expect. >> good morning, michael the monetary and fiscal duet of powell and yellen bring their show to the senate today they're expected to sing pretty much from the same songbook again, but the question is whether they get a similar repres reception from this particular audience here's the set list, one, economy's improving. two, still a long way to go. three, massive fiscal and
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monetary stimulus has been needed and they'll close the set with inflation will be temporary. on inflation, powell was asked about the impact of the $1.9 stimulus bill. he responded that while he sees prices rising, he does not forecast that it will create sustained inflation. >> our best view is that these -- the effect on inflation will be neither particularly large nor persistent and part of that just is that we've been living in a world of strong disinflationary pressures around the world, really, for a quarter of a century >> yellen said she sees the full employment, perhaps, by next year also making clear the biden administration will likely be looking to raise taxes with the next spending package they propose. and she specifically mentioned corporate income taxes >> the stimulus package, the american rescue plan was not funded with any increases in taxes. but a longer term plan that
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addresses critical -- >> it really hasn't -- >> -- in economy, probably would be accompanied by some revenue rai raises >> the duo received muted criticism on debts and deficits, especially when compared to the pushback the fed received after its policies during the financial crisis so they can hold the line without the pressure of con concerted political opposition but we'll see if that holds true in the senate today, michael >> steve, in that question that secretary yellen was answering about the possibility of tax increases down the road, it's an interesting contrast with the general tone from both powell and yellen of saying, look, we have to kind of take out all the stops, be massively stimulative, try to accommodate this economic comeback at the same time, there's a lot less, you know, evident cost at this point to having these massive deficit financed
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stimulus packages. because the question of why are we raising relatively small amounts is a relevant one behind what the overall policy and principle are. >> i think you may have hit on it, and our executive producer wrote me a note yesterday, she says the democrats want to pay taxes in part to pay for some of their programs, but also as a matter of policy this is part of what they think the way the world ought to work, redistribution and having taxes that are at a certain level for certain groups of people one of the things that yellen thinks she should be doing, she's meeting with other finance ministers from developed nations and talking with them, the oecd, about preventing this race to the bottom of on corporate taxes, which is some kind of, i don't know what you want to call
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it, but detente where they lower their taxes. that's also going on they feel like they ought to be a certain level of taxation for corporations, a certain level of taxations for wealthy people and they want to do it both to raise money, but also a matter of what they believe is the right policy >> steve, how much play did that dot change -- kaplan, i thought, was a dove i thought he was -- he just totally left the consensus do you think -- has he always been more hawkish? i don't fall him as closely as you do was that weird yesterday you think he's going to talk other people into that view? >> first of all, let me take both of those parts separately robert is a very centrist kind of guy, as far as i know he's a wall street guy i think he thinks down the road. i don't think he thinks himself necessarily as a leader on monetary policy, but i think he sees himself as a leader when it
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comes to how the finance industry itself or how the monetary policy affects wall street pardon me, and so robert has been out front on certain issues, a follower on others i don't see him necessarily hawkish or dovish. i was not surprised to hear that he was one of the folks on that because of financial reasons, one of the things he's basing his decision to raise interest rates earlier. i think he's very concerned or watches very closely how markets behave and he sees -- he didn't mention this, but when i see this thing you guys were talking about, about these nfts and that kind of -- what looks like sort of craziness when it comes to valuations, he worries about that and he worries about the effective monetary policy. >> excellent interview yesterday. got a lot of play, steve and we're glad you were here with it. we'll talk to you later, okay. >> and you guys all helped thank you. >> thank you
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when we come back, moelis company vice chair eric cantor will join us to talk about and his latest version is merging with a 3-d printing company. check it out, intel, big mover this morning on that new factory moves. up by more than 4% ten-year note, still yielding 1.268% "squawk box" will be rightac bk. this is how you become the best! [music: “you're the best” by joe esposito] [music: “you're the best” by joe esposito] [triumphantly yells] [ding] don't get mad. get e*trade and take charge of your finances today.
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now for a look at the biden tax plan, infrastructure, and other d.c. policy goals that will impact the markets and the economy, let's welcome eric cantor, former congressman of virginia, who served as house majority leader. he's now vice chairman and managing director at moelis and company. so we're going to forget you're a republican in congress just for a minute and talk about your job at moelis. and i like when people say, give me an honest answer, because they're so used to the person not -- like, be honest with me this time, eric. we've been talking about corporate rates going to 28, and we just talked about it again, when people who rant to raise the rates, they talk about, we're not going to get into a
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race to the bottom but we had tom farley on yesterday, he said you go back to 28, you will see a less competitive landscape here there'll be less money coming back here that we did start seeing, although people will say it was used for buybacks or whatever but you can also see more inversions you can see it be less attractive, even if it's only six or seven points, less attractive at attracting global capital in the united states as a moelis guy, is that correct? >> i absolutely grew with tom farly on the competitive aspect of our tax code right now. and if the democrats get their way, i can tell you, our clients at moelis are all looking to se what actually is going to happen you're hearing, though, this plan that was put out during the
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campaign that then candidate joe biden talked about a tax, a 15% minimum tax on corporations. he talked about raising that corporate rate back up to 28%. talked about increasing the capital gains rate, basically taking it into parody. all of that does not speak very positively to economic growth that and why our clients deal activity is robust across sectors. there is this sense that the market have that everything is coming back. if they're able to deliver on what joe biden talked about, which is a big question, if they're able to do that, what they're going to do is counteract all of this sort of positive momentum that's building up in the marketplace and i think stifle the economic growth and the job creation.
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>> is the plan to go back to 38.6 on the margin, and for people over 38,000, is thattted good or bad as they'd try to make it at this point. and there are some other things where you do see the money kind of get overlooked, a lot of money, whether it's through long-term depreciation or some of these things that are in the tax code that have been there forever, that can generate a lot of money without raising marginal rates or taxing capital gains or things like that. are there ways to raise real money by changing some of this, where games can be played legally, by people >> sure, but you've got to remember, i think the incentives that are in place in the tax code, there are a lot of loopholes, a lot of preferences that have been put into the tax code along the way in 2017, congress tried to go and simplify somewhat, but as
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you suggest, those types of preferences are still in the tax code but i think what the democrats and joe biden has been saying, is very much based in a populist view that we have to tax the wealthy. and we continue to and i think that's when you get in the way of businesses trying to transact, continuing to invest and we're going to see a slowdown in this anticipated of the economy. and you talked about the and that's a very attractive position, because those wealthy people, they're making too much and so i suspect if they're able
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to get the democrats to go along with this, they've got a real problem in the senate. they've got to get unanimity among democrats, all of them, including joe manchin to go along with whatever they're going to do. and you end up snuffing small business that's not a good place for him to be in >> so eric, there are republicans okay with the $1.9 there will, i don't know if the $3 trillion is going to be okay. but there's not a whole lot of pushback on that so even republicans would acknowledge that we need to start paying or cut into that somehow. what is the way to do it, because there is -- there is some money that's sitting there not moving, that's never going
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to move. in terms of income inequality. how do you get at it without it being unintended consequences for the overall economy or business or gdp, things like t t that and is it fair to confiscate it now over many cases, it was earned over a period of years by paying taxes on it in the first place. >> first of all, they've got to put the brakes on spending this is extraordinary and i think this talk of another $3 trillion and that's why republicans mitch mcconnell and others in the senate are coming from this notion that somehow or another the democrats and joe biden are going to put together a $3 trillion package, expect the republicans to go along with authorizing the spend and the
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democrats will come back around to raise taxes to quote/unquote pay for that spending. but if you want to get at those issues that you talk about, about wealth disparity, about income and what i really believe is an opportunity disparity situation and there is an opportunity gap, that's not necessarily all about money. that's about trying to go in and affect policy when it comes to education and access to health care and these kinds of that doesn't take direct spending but the parties have become so planted in their positions, any bipartisan effort is few and far between right now. >> certainly i was up watching you, hearing about d.c. statehood you listen to the rationale -- you listen to the rationale, that it's the last bastion of taxation without representation, but couldn't you just make -- if you really wanted to do
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something for representation, couldn't you make it part of maryland and if you do make -- if you do give d.c. statehood, it goes back to 1790 if you do give it statehood, that's a guaranteed two more democrat senators. just -- >> no question about it. but remember, there is a problem that the democrats face in all of this, and that's the filibuster and that's why, i think, as we look forward to anticipate what's coming in the rest of the year, and as the business community, i know from -- in our standpoint at moelis and our clients, we're looking to see, how does that filibuster fare? because if that dam breaks and you see a free for all, you'll forever change the nature of this country so the d.c. statehood question is one that would have to acquire them to get rid of the filibuster and you know, then come in the likes of the more centrist and moderate democrats and you've already seen what
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they've done look at the minimum wage vote. there were eight of them that voted against the minimum wage hike of $15 an hour. and i think that is indicative of the fact that at least for now, that pressure needs to build on the democrats in order to allow them to get rid of the filibuster and then we could maybe begin to talk about what it means to see d.c. statehood but it's still not that easy puerto rico may be easier than d.c., given the constitutional aspects of d.c. and the requirement that you have a constitutional amendment >> crazy stuff we're talking about. but, we're staring right at it and seeing it. eric, thank you, moelis and eric cantor, moelis and company vice chair. you you'd to have some other job, you're just purely, objectively a business job now >> it's truth and honesty now
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before, who knew >> be honest with us, eric finally. coming up, president biden's wealthiest cabinet officials new disclosures show how some of his key advisers are worth millions details after the break. and starwood capital's barry st sternlicht talks taxes, spacs and the impact on businesses and much more. time now for today's aflac trivia question. this scottish veterinarian and inventor was granted a patent for the first tire in 1888 who was it e answer when cnbc's "squawk box" continues aflac! what a day of upsets. jill's certainly upset with that unexpected bill from her back surgery. aflac! let's see that one more time. (beep sound) oooh, right in the wallet! ouch! aflac! aflac would have paid jill cash directly to help with expenses health insurance doesn't cover. hold on, i think she's trying to give us a side-eye...
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john dunlop. >> i did not know that recent financial disclosures revealing the wealth accumulated by the biden administration officials and the stocks that they're holding. kayla tausche joins us right now. she's got more details on that front. kayla, what did you learn? >> well, becky, there seems to be a skbrgenerational wealth die according to these filings where younger aides have lots of student loans, obama alums have robust portfolios. and among the most widely held holdings by a lot of those officials is facebook held by aide evan ryan and her husband, the secretary of state, national security adviser jake sullivan, lieu luis louisa terrel and jeff zions. there are broad bets on big tech like amazon, apple, alphabet, microsoft, and also beckshire hathaway and visa.
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domestic policy chief susan race has many of those and other investments that could raise eyebrows, given the white house's policy agenda. he holds at least $30,000 in pfizer stock and at least $1 million in johnson & johnson, two key vaccine makers the former u.n. ambassador married to a wealthy canadian native also holds between $1.6 and $53 million in shares of canadian banks and more than 5 million shares in companies tied to crude oil drilling and transport, including one rail company set to benefit from the cancellation of the keystone pipeline finally, some oddball and safe hain trades. president biden's scheduling director disclosing a sizable boyne bet. steve ricchetti holding a tranche of treasuries, and jeff zients with millions of dollars in gold bars those are current holdings, not including what members of the administration liquidated an many to say expect recusals from
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matters involving a lot of these companies. we'll be following up to make sure those recusals happen as they become relevant >> kayla, there had been a lot of talk about -- there constantly has been, for years, about pushing for more than just disclosure, pushing for divestment by not only administration officials, but congress that doesn't seem to be going anywhere anytime soon, does it >> it doesn't. we should know that there are a lot of footnotes in these filings suggesting that these members will be divesting of positions that they haven't already. some of them were tapped fairly late in the game to join the administration and they are blackout periods associated with when some of these positions can be sold. but of course, we saw that in the trump administration, as well, where many positions that were planned to be divested for one reason or another, were not. so even though there are a lot of best-laid plans, sometimes it doesn't actually come to fruition, which is why it's important not only to get this first wave of filings, but to
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get them on a regular quarterly or perhaps even more regular basis, as some of this activity happens. >> thank you, kayla. we know that you'll be watching, and we will too. thanks still to come on "squawk box," starwood capitol chairman and ceo barry sternlicht on stimulus, the reopening of business and his latest spac deal that's just minutes away and here is this morning's squawk stack we don't have a spac yet, we do have a stack, though you can see that we've put gamestop back there again. 12% is a pretty big number on a $170 stock the company did report late yesterday, there were some positive things, but also, obviously, some negatives in that report. the ten-year, as you can see, at 162. adds we head to break, march is women's history month skband we spotlighting some of our pivotal
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welcome back to "squawk box. i'm dominic chu, here with your market minute. we want to keep an eye on what's happening with the semiconductor industry overall you've been talking all morning about the intel news check out what's happening with the rest of the sector in the s&p 500. applied materials up almost 5% lamb research up 4.5%. kla corporation up 4%, as well and analog devices showing some gains here, as well. keep an eye on the other parts of the s&p 500 energy sector, specifically semiconductors. and one of the big etfs that tracks it is showing some gains as well. up roughly 1% here in the pre-market trade, still sitting just about 10% below the record high we saw over the last month or so. watch that semiconductor etf, as well other things to keep an eye on
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in the pre-market trade. take a look at what's happening at some of the other portions of gamestop and that trade there. down 12% in the pre-market trade. up 746% year-to-date global ecommerce sales up 175% but the hint of a possible share sale weighing on those shares on the negative side of things. and bitcoin, tesla, elon musk saying you can now buy a tesla car with bitcoin bitcoin prices up about 2.5% remember, 61,490, thereabouts, was the record high according to one coin-based metrics there keep an eye on bitcoin prices as well coming up next on "squawk box," investor bare sternlicht joins joe, becky, and mike for an interview exclusive keep it right here "squawk box" returns after this quick break.
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the spac frenzy of 2021 is still going strong investor and real estate mogul barry sternlicht announcing this week that one of his spacs is set to merge with vello 3-d. joining us is barry sternlicht of course, you know, he is starwood capital chairman and
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ceo. barry, it is always great to see you. we talk these days about how everyone has a spac, but you've got six spacs, count them, six so we can call you the king of spacs at this point. >> i have three that have been completed and three that i have filed. so not quite six done. >> okay, six that you've started and that we have going forward this latest one, let's talk about what you're doing with this vello 3-d, what is it, why this acquisition, and what do you think about the company's prospects? >> thanks, becky it's a really exciting company, but i'm going to back up when we approached the spac market, for me that was diversification, and i'm running these out of my family office with a dedicated team, not involving starwood capital group, really. but the focus has been finding small businesses in big markets, large, addressable markets that we're going to grow despite any economic climate and despite political headwinds and currency
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situations or trade wars so the first deal we did with jaws was for a company called cano health care it does medicare advantage it serves the poor and the underserved. it's a great company it's going to grow in any economic climate the second investment we made in vello 3-d is 3-d printing. and this business will be gigantic the product will be made cheaper, better, stronger, with 3-d printing than it is than with conventional manufacturing. so we have a giant market, almost $200 billion for vello 3-d, and a part of that market, almost $20 billion, that they're the only company they can serve. the second thing you need is some motes and in cano's case, they serve hispanic communities and communities with no health care. in vello 3-d, they have 48 patents and the guys that supply engines or make engines for spacex our lead investor in the pipe was ron barron, because he knows
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all things eli does, how particular he is and how meticulous he is about suppliers. elon wanted to buy vello 3-d, they didn't want to sell, so we had an opportunity to take them public the third thing would be the management team. and in cano's case, we have marla hernandez, an immigrant who's passionate about his business and totally committed to winning and in vello 3-d, you have benny cooler he won an award in israel at the age of # 29, the top security gy and he's passionate about his business and has great a built team and every due diligence team we've made talked about, this is the tiffany of 3-d printing. you've seen three other companies come public in spacs this is a company, our company is profitable today at the grows margin level, because they do high value-added parts we're very excited about their future
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they couldn't even get acquired, because they are probably the leader in their field and in an area that only they can serve. so we're super excited that was the spitfire spac, the second spac that announced that deal yesterday and thanks for allowing me to talk about it. >> barry, let me ask you this, the rub on spacs, the reason people have taken a skeptical view of some of these vehicles is because the people who are involved, when it's a spac, before it goes public, before it merges, at times can get out of it afterwards. they make their money up-front and it doesn't matter what happens to the company and all of these rosy projections that have been made, they're not going to be around to live or die by them so do you plan on staying invested in these public companies for how long >> yeah, i don't want to sell, so personally, yes you know, i'm committed to these companies. i think they're great companies. we're fiduciaries by nature. i've done that for 30 years in starwood capital group, so our reputation is really important to me and screening these deals.
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i wouldn't say that's true of all spec sponsors. this is a free option for people and you can't compete against stupidity. we lost several companies the weeks before, one in particular where we wanted to do, you know, 60 days due diligence and the competitors said they would do 3 days due diligence i can't compete against that i'm not going to do that so three days due diligence is you check the letterhead and make sure the company exists it's a little -- no, a lot out of control don't expect wall street to regulate the launch of spacs they're making too much money. if you can walk, you can do a spac and i think about the sponsors today in the business, some of the people that were either failed money managers, retired executives they have no experience doing transactions and we've done over 150 investments in my family office and so we see, we know these people but some people, i'm amazed, everyone is doing a spac, because if wall street can sell it, they'll sell it. now the market has changed the discipline is now coming
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from the buy side. and you've seen all of these spacs recently, i guess there were ten yesterday that all trade below par. that's not the discipline. because the deals got done the discipline is coming from the fidelities and the wellingtons and and the t-roes and blackrocks who are saying, you're paying too much, i don't like that done i think we were one of the few pipes that got done last week. i think there were eleven deals in two banks that were restructured or went back to the drawing boards the buyers, the guys doing the pipes are saying, hey, you're paying too much, or i don't like that deal or we cut the deal so the discipline is coming from the buy side and if there are pipes that need to be done, fidelity and a few others have said, hey, we need three weeks to review these. that is new. that isn't the way -- when we did the $800 million pipe for cano health care or jaws, it wasn't that way. and for a while, because of the frenzy in the market, you know, everyone was trying to load into the pipe without even looking at the company. so the theory was that the pipe
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investors were more sophisticated, but earlier in the cycle, earlier in the spac cycle, some of them lost their discipline and they were committing to investments without having the time to do the due diligence you would expect sophisticated investors to do. the market is definitely maturing it's a little bit crazy. and in some ways, you think about the sponsors, would you give that guy or that gal money to do a fund in many cases, the answer is "no," you would never back that person and now they've got a -- you know, just because they have the money, they're going to try to do deals and how do you do deals? either overpay or do something bananas to justify your winning the deal we're not doing that i think people who back -- who come with us in case of marla with a young ceo, i've taken six companies public so he wants to be, you know, mentored and trained, with benny, the same thing. i've been running public company for a decade, three decades, you know so i think people look at us as
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an institutional sponsor and that's our competitive edge in that market. and i think it's super interesting. i think it's very valid, but the public in many cases is just plain venture capital. and like any venture capital portfolio, three will work and seven will die and hopefully if you do them all, you know, you'll make some money. but if you're careful, this is a legitimate business. this is legitimate way for companies to go public and, you know, i think -- i think that wall street, it's incredibly profitable for wall street, which is why everybody bank in the country is doing spacs. and if you see, everything's getting done it's crazy >> you say that you're going to be in these spacs. do you have a time commitment for that or is there some other measurement that determines how long -- >> i'm hoping i never have to sell, you know for me, it's not about a quick profit, it's, will my management teams, will these teams execute. and if they execute, i'm happy to -- i think cano health care would be one of the largest health care companies in the country. certainly, we have a 38-year,
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37-year-old ceo who's not going anywhere and his team is fantastic. and benny guller, he's going to expand all -- no money is coming out of the system. all of the money is going to benny and his company -- not benny, his company even the vcs aren't selling a penny. they're going to take this $500 million in cash and invest in sales and growth and distribution and a second line of products that's bigger, that can print larger products. so i think -- i think it's really an exciting opportunity for the company, and as long as they're executing, i'm in. just like you would be and if you owned a stock of any company. i'm not looking for a quick profit i've done okay financially i'm backing rate entrepreneurs and trying to make the best companies -- you know, there's a lot of interesting companies out there. i've actually been surprised, the big issue here is that pe and vc -- we're doing late-stage pe and vc in spacs companies are trading either to a spac or in one case, there's a
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peed by and a spacced by and i think what the seller will do is say, i can sell to the pe firm and cash out, or i can stay in the company and do a spac and i'll get out over time, because i love the company it's an alternative way for pe firms to go public and stay in the deal >> you kind of set out a lot of the different varieties of spacs. companies that would otherwise go ipo, but also, venture states there's this huge span of types of investing that is being displaced by spacs and just to put some numbers on it, $90 billion raised, what, barry, are the market-wide implications of all of that money with a ticking clock behind them, where they have to do a deal, a smart one or a not-so-smart one can it just remain kind of, oh, pick the good ones and set aside the bad ones or market-wide risk of something at some point >> it's interesting, we were
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joking about buying very profitable companies that are growing at reasonable rates, that the market has no interest in them. most of these companies have been theoretical companies they make no money today and hopefully in five years, they're making $8 billion. the market early on, it's the gamestop phenomenon, right it's lucid or churchill trading to $60 a chair before anyone knew if they actually were doing that deal. and what the price they were paying for it was. the market the incredibly speculative, whether it's reddit or wall street bets or wahateve it is, and that made its way to the spacs s were hot now there's so many deals that the public doesn't even know what to do in retail in retail, everyone is spending -- i think your stat was half of the people of 18 to 30 would spend their stimulus check in the market. and you're seeing that going public with a name they go up before anyone even knows what they do open door was an example of
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that the stock went up $6 before anyone even knew what open door was. but it had a name. and nobody knew what the margins were, the competitive positioning, the fact that zillow's out there and going to crush them it's crazy, it's crazy it's settling down, but there'll be incredibly dumb deals done. unbelievably stupid investments will come your way and we'll see -- what will shut the door is when the spacs redeem, when the cash and trust redeems and they get their $10 back and people feel it's not just a free lunch. right now, it's been a free lunch. there'll be discipline the markets always correct and there'll be great sponsors joe malone or -- i mean, there are great people out there doing great deals. and they're being, i think, disciplined. we compete against some of these guys, and there's crazy people it's just like, we've returned 20% compounded for 30 years at starwood capital group in real estate and we know how to
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structure deals. we know how to evaluate deals. there's a lot of rookies out there and just be aware, i hope the public isn't being led to slaughter. because some of the people are doing frankly on your show, the equivalent of bucket shop operators. they get up and espouse stuff that we actually know is not true and it's crazy and there's no regulator on it but ultimately, you'll see, one of the companies, several of the companies have already been investigated by the s.e.c., because of false statements. it will correct. it always does it's not a bad thing at the end of the day it's capitalism doing their thing. >> so when closed door, when that spac comes, is that the end, do you think? >> closed door we were joking, like we're going to form a company called cupcake and it's going to have a huge value. >> can you book anything in florida at any of your hotels right now? >> no. no let's talk about that. the recovery is well underway. the stimulus package was
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ridiculous it was conceived at a time when the slope of the recovery was not obvious. and now the nation will be -- everyone will have a vaccination may 1st. you know, and we see all of this pent-up demand coming back and i'm -- i'm -- it's going to be a frenzy this summer. i just got back from aspen and talking to friends in vegas, here in miami, you know, the restaurant use is above where it was in 2019. it's 8% higher in march of this year than it was in 2019 our hotel, the one south beach, is ahead february this year, ahead of 2019. so, you know, actually, florida has been an interesting study, because, obviously, the governor has kept the state open. and, you know, death rates last month -- last week was one, the week before was zero so i don't know what exactly is going on, but, you know, 25% of the state's already had covid, so it's kind of like, i guess we have herd immunity down here but it's interesting you can see the apartment
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market, for example, there's 5 million people living with their parents. they're all going back to the apartments as soon as their jobs are back and people will go back to the office you're seeing -- you're seeing people say they want to meet with their people in person, you know, we just signed -- one of our companies signed a $350,000 15-year lease in germany, in be berlin people are -- especially around the world, the u.s. is probably the least returning to office, if you will, country in the world, which is interesting, because we're now ahead of the world in vaccines. but in europe and tokyo, we have clients in an office in korea, in the middle east, in china, they are back in the office they are 100% back in the office so i am much more pleased. and you're seeing new study come out, there was one yesterday that said that ceos are saying, you know, 70% of them said, we'll come back now. and i think that number was 30% before it's just not -- it's life like -- i look at it like the
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movie theater. the movie theater could have gotten completely by, where you could watch a movie on your ipad the truth is, it's a social event and people will go back to the theaters and they're going to go back to the office and you have to pick the right office markets because some of them are overbuilt. new york has a serious problem in office. >> barry, always love talking to you, it's a flood of information. wish we had more time, because we still have qutis.eson but thank you very much. >> great to be with you, becky
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coming up, another big hour of "squawk box," and forr me s.e.c. chair, jay clayton. "squawk box" will be right back with all of that
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good morning . setting up fe gain at the opening bell powell and yellen say th company is not out of the woods when it comes to recovering economically and two giant corporate stories. gamestop shares dropping sharply following the company's first earnings report since the reddit rally exploded and intel pulling the trigger on billions in spending for newest-based chip production we'll bring you all the details. the final hour of "squawk box" begins right now. >> good morning and welcome to "squawk box" here on cnbc. i'm joe kernan, along with becky quick and mike santoli in for andrew u.s. equity futures this morning
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are rebounding a little bit, from yesterday, up 108 points now. got some green across the board. 108 on the dow nasdaq indicated up just under 100. s&p up 13 or so. treasury yields are not a headwind, at least not being construed that way if it goes down too much, maybe it would because you start worrying about covid reopening, et cetera but 1.62, nice and stable, about where it was two to three weeks ago when we had that call from david tepper let's show you the squawk stat this is going to be a surprise for me i don't know what's in it right now. i haven't changed anything we've got gamestop still in there. i think that's interesting to watch. down about 14%, after all the news on that company yesterday throughout the day and then later, when the company reported its results, there's bitcoin, you have that on there, because it's up 3%, and because you can now buy a car. now buy a tesla with bitcoin, in
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a 3:00 a.m. tweet with elon musk it was maybe 2:00 a.m. if he's in texas we don't know where he is. we don't keep track of him but tesla could be alternating with gamestop there as well, that's one of the futures, and we could put intel in there also, which is up about 4% on the lead story in the "wall street journal," the company going to spend about $20 billion trying to rejuvenate its business, outsource some of its chip making that has run into a rough patch for intel, at least, in the last couple of years. >> we'll get to all of that, joe. by the way, there are people that keep track of elon musk the people are tracking his jet constantly >> where is he -- >> i haven't looked this morning, but people do attempt to see where he's at at any given time and we're going to get to a lot of this. here are some of the big stories investors will be talking about today. intel, shares are up nicely in the premarket. the company says it will spend $20 billion to build two new chip plants in arizona
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it is an effort by the legacy tech giant to grab more market share. intel also said it will start fabricating chips for other companies, something it has only dabbled in in the past that is affecting shares of taiwan semiconductor, down a little over 2% this morning. don't miss the first on cnbc interview with intel ceo pat gelsinger at 11:00 a.m. eastern time today let's also show you shares of the original meme stock, that is gamestop the company missed earnings and revenue expectations in its first set of quarterly numbers since skyrocketing on reddit attention earlier this year. in a disappointment for those hoping for fireworks, gamestop did not address the reddit rally on its earnings conference call, but it did file a document with the s.e.c. saying it was considering the idea of raising money by selling shares to fund its ongoing transformation that helping to drive the stock lower after hours. you see it down about 13.5% at
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the moment and amazon naming the next head of its web services cloud unit adam selipski will take over the job from jeff jay powell and janet yellen testifying together for their first time in front of congress with an update on the covid-19 financial recovery for the house financial services committee >> the recovery is far from complete so at the fed, we will continue to provide the economy, the support that it needs for as long as it takes >> well, we're seeing signs of recovery we should be clear-eyed about the hole we're digging out of. the country is still down nearly 10 million jobs from its pre-pandemic peak. >> later this morning, powell and jyellen will be back for
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round two, this time nor the senate banking committee joining us right now is pat toomey, the committee's ranking member senator, thanks for being with us this morning. we got a warm-up act yesterday when the two went in front of the house. what questions do you still have after listening to all of that >> well, becky, i have questions for each of our witnesses, for chairman powell, i really want to get a better understanding of how they reconcile the revised forecast they have they have recently, as you know, significantly revised real gdp growth for this year getting closer to being in line with the consensus. they're at 6.5%. but they made a very, very modest, change in their projection for unemployment, and they actually project inflation to decline in recent months. that strikes me as a very unlikely combination and, you know, some could argue that that's a convenient configuration for justifying this extraordinary monetary policy that we have.
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but i'm not sure that it fits very well. so i want to explore that with the chairman >> wait a second, senator, before we move on, are you questioning their credibility on this front you think they are doing this disingenuously >> i'm not accusing them of anything i want to understand this. and my job in an oversight role is to ask some tough questions if you take your gdp projection from 4.2 to 6.5 for this year, that would normally correspond to a much bigger drop in the unemployment rate. why are they not forecasting that i'm sure they've got an explanation, but i would like to know what it is. and inflation, do most people really think that from here going forward, we're going to have a decline in the inflation rate and by the fed's preferred measure, the pce, they're projecting declines for the remainder of this year okay, that's pricing i would just like to understand why. >> it sound like you're a little
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more in line with dallas fed president kaplan, who was with us yesterday, and explained that he thinks that the fed should be hiking rates by next year. he's a little more aggressive, much more hawkish than other members. would you put yourself in that camp or are you even more hawkish than that? >> well, so, here's what i find hard to wrap my brain around the fed is projecting real growth of 6.5% this year that this year that unemployment does continue to decline and despite all of that growth, we've got basically zero interest rate environment and they're buying $1.4 trillion worth of securities this year, pumping massive amounts of money into the economy, in addition to what's already been done is this what we're supposed to expect above trend growth, declining unemployment, approaching record low -- we're not there yet, but proec approaching it over the course of next year, and those circumstances require that we pump $1.4 trillion of cash into
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the economy. that seems odd to me >> we have plenty of market watchers, including dan niles who we spoke with yesterday who would say that by may or june, we are going to have to stop buying and start the tapering process, at least, if not a rate hike, start the tapering process that it won't be necessary to continue this buying it seems like you're in that same camp, too >> absolutely. i think that's necessary and that's part of getting back to something like normal. now, i have to acknowledge, there's a problem out there, which is the massive mountain of debt that the treasury has to issue. and the fact that it exceeds the domestic savings rate and foreign buyers have recently, at some auctions, seemed to have a waning interest. that's a disturbing combination, and that's part of the backdrop here but it's not the fed's job to absorb that.
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so we'll -- and that's why i want to understand better what their analysis is. >> is there anything they could say that would sway you from their thoughts that we're going to be hitting inflation, that they should be tapering. is there something that they could potentially say that would make you rethink all of that >> yeah, possibly. look, i think you could make a case maybe that a decline in the unemployment rate is going to be more gradual we've got hopefully we're increasing the workforce participation, because that declined badly during the pandemic it may get sticky for other reasons. i'm not judging this, i genuinely want to understand better what is the analysis that gets us here >> mike? >> you know, most like, we're going to ask that question of chair powell about how they will not be proactive in trying to anticipate it and let it run above 2% for some period of
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time do you actually think that that is a sound policy here or would you push back on that in the framework? >> i'm worried about that. i think if you look at everything that the fed is doing and everything that the fed has communicated, including this idea that they're going to let inflation run above the 2% goal for an extended period of time, i think the fed is virtually telling us they're going to be behind the curve when inflation does start to kick in. and that does concern me it's not entirely obvious to me they'll be able to get this under control as soon as they wish to, if the inflation rate does start to exceed 2% significantly, which i think it's entirely possible >> in terms of questions for the treasury secretary, janet yellen, i know you've had some comments and some thoughts about the sdr's, the special draw rights that the treasury has been considering do you want to explain that? it's a little complicated. >> yeah. so as you know, the imf has the
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authority to issue these sdrs, which is basically an imf currency it's backed by the basket of the five leading currencies at which the u.s. is the dominant one the problem that i have with this issuance is, it is defended on the grounds that there are poor countries that need the money and they're in tough circumstances and if we don't do this, they may engage in risky monetary policy themselves so therefore, the imf should issue, i think the latest $600 n this is a wildly inefficient way to help a hand ful of poor countries. i think half of the issues goes to the u.s., the ah, and uk. and then the money goes to bad actors like iran, venezuela, and russia and all of it can be converted on demand to u.s. dollars. so it's a contingent liability, if you will, for the american taxpayer all because we have a handful of
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poor countries that are in a fiscal bind? maybe we ought to have direct lending to those programs. maybe they need foreign aid, in which case they should come to congress but i think this is really the wrong way to proceed secretary mnuchin, you know, exercised his veto and wouldn't allow this, but secretary yellen seems to support this policy i intend to ask her about that >> would you support foreign aid to those countries foreign aid was a much tougher negotiation last time around with congress. >> it depend on which countries and how much and what are the strings attached you know, that's another problem. at least when you're doing some kind of foreign aid, and it could be an imf loan it could be directed loans the imf does that, as well you can put some requirements that they get their fiscal house in order as a condition of the extension of credit. not the case with sdrs no strings attached, no questions asked, here's a pile of money and you can convert it all the dollars.
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doesn't strike me as the best way to do this >> sounds like you do have some tough questions, indeed we'll be watching today, senator. thanks for your time >> thanks for having me. coming up, we're going to get into some dig sports merchandising news this morning. that fanatics raising hundreds of millions of dollars in new capital and their valuation more than doubling based on what they raised michael ruben is looking over all of times square right now as you can see him right there. he's going to join us in just a few mes.mont stay tuned "squawk box" will be right back.
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so jeff, you need all those screens streaming over your xfinity xfi... for your meeting? uhh yes. and your lucky jersey? oh, yeah. lauren, a cooler?
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it's hot. it's march. and jay, what's with all your screens? just checking in with my team... of colleagues. so you're all streaming on every device in the house, what?!! that was a foul. it's march... ...and you're definitely not watching basketball. no, no. i'm definitely not watching basketball. right... ( horn blaring ) coming up, fanatics' michael ruben on his company's new 11-figure valuation. and fringy trading in gamestop has only spotlighted the need for more investor education, but what is the best way to deliver it operation hope's john hope brian and former s.e.c. chairman jay clayton both have some ideas on that ahellnd ty' join us stay tuned you're watching "squawk box" on cnbc
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[ humming ] alexa? play "ooh la la." [ "ooh la la" by cherie playing ] the moxie showerhead speaker. only from kohler.
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sports merchandising giant, fanatics, closing a $320 million funding round this morning the raise bumps the company's valuation to $12.8 billion that's more than double the previous level, from just last august joining us now is michael ruben, executive chairman of fanatics i don't think you said it, michael, but some people think this is probably the last round of financing you'll need before you do something else, like go public >> look, i think that's definitely a possibility
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i mean, right now, we're 100% focused on building the most credible company possible. i think that's an option that we talk about a lot but we focus on business but i think we're well financed and have a lot of growth capital to continue to grow. >> what are you going to use it for, exactly and you would think that given the pandemic, you wouldn't need to be a lot of investing, but you had by far your best year ever >> 2020 was incredible, even without having sports for five months our global ecommerce business was up more than 20% this year this year, ecommerce up over 30% year-to-date we're continuing to build out capabilities this week, grow that vertical commerce merchandise business we made two acquisitions since our last financing round to be able to go from verticalize apparel to verticalize both apparel, headwear and goods. that was a big set forward for us so we continue to invest in addition to growing the existing
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business >> have you got any plans to do anything with nfts they're obviously a big deal for sports do you believe in the whole concept, mike? >> yeah, look, i really do believe in the concept i think we are in like the early, early, early days and my prediction is that when everyone gets in a space, and you were asking me this so many times you had a flood of people getting into it, and a few great couplings emerged. i think it represents a big opportunity overall, and one that you could certainly capital it over time and i think in general, one of the incredible things about fanatics, we had over 80 million reachable fans and do more than 40 million ecommerce transactions this year and the ability to leverage that fan base to create other incredible business in sports something we're really excited about. and certainly, nfts is one we're spending a lot of time studying. >> so what do you do besides apparel?
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you have novelty items what's really the big growth that's vertical? i watch these college guys and i mean, i like the 76ers, i like all the nba teams >> you like the sixers they're your team. >> okay. nine out of ten, speaking of which, are you going to do anything before thursday's trade deadline do you need to do anything >> look, i think we're really well positioned. and time will tell, but the team is in a great spot and you know, we continue to have one goal in mind, which is, how do you bring a championship to the city of philadelphia. it's the only thing that our ownership focuses on and our coach and general manager focus on that stuff is our only priority. >> you do it with the personnel now you have in your view? big win last night, but no steph curry. >> and no joel embiid. we feel like we've taken good steps forward and will continue to do everything possible to bring a championship to philadelphia >> why don't you get into
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gambling somehow for fanatics. sports fanatics. >> the first thing you i would , we have a tremendous opportunity ahead of us in our v-commerce business in that business, we're in the early days of it and you know, the 80 million fans and the 40 million transactions to get into other sports verticals time will tell people -- you know, this morning, i got a couple of texts from friends who say, this is really cool. my response to them was like, we have just started. this is like the first inning in a baseball game. so i think we've got, you know, such, you know, great opportunities ahead for us >> did you fill out a bracket? >> i did not fill out a bracket. and any did, i know i would have been out in the first round. my skills are better used on creating great experiences for our fans and not trying to win myself i would not be good. i think i probably would be somewhere -- i think i heard you
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were out in the first round as well, like many people and i have been following your gambling in the mornings it seems like it's highly -- i don't want to call it aaddictive, but a highly consumed sports gamer which i like and we need to make sure you're buying all the merchandise for these teams that you bet on >> i bet a woman's march madness game today and i'll bet on another one today. there's three or four of them. and not until tonight, there's a couple of nit games. but we're talking $3 and i really expected them to cover the spread yesterday today, i may go with alabama, though it's a -- i don't know have you been following that -- do you sell that type of -- you've got to get into that? >> yeah, college is -- i'll tell you, it's interesting. college is our second-biggest business, but it's growing incredibly fast. so we sell all types of merchandise. and i think it's probably
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long-term, should be our biggest business and when we continue to add more rights every day, and so the college business, historically, has not been, you know, our biggest business, but i think you're seeing it grow incredibly fast and the biggest one where we're growing is by adding more rights, creating a better experience for fans. anything you want, i think you're going to find, and that's what makes our experience so incredible >> what happened in -- so you've got vertical, horizontal, and global so now china is becoming important for you, too >> we just launched a joint venture in china i think you'll see us with a significant announcement in the next short part of time about a
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partner in china that will be a great partnership. one of the things that was interesting about the china announcement, when we did it so many global sport designers came to us and said, how can you help us get into the china market everyone looks at china as this incredibly valuable market that they haven't been able to succeed up until this point. i think the fanatics joint venture is going to let sports properties around the world capitalize on that market. and i think it's going to be a really significant business and one that our first dollar of revenue is going to come in the next few months. so just getting started. china is the definition of just getting started. >> valued at $1 billion in august of 2020 $6.2 in march and now $12.8. that's more than -- i think you've gone up more than bitcoin. >> we were not at $1 billion in august of '20 -- >> what were you -- what you were founded in september of 2017 is that when it was $1 billion >> i think we started at 2011
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with about $300 million. here's the most exciting thing, i promise you, we are just getting started today. this is -- you haven't seen a thing from us yet. >> when were you at -- i don't know who did this? >> $6 million last august. >> $6.2 was in august of 2020. >> yes >> so double since august of 2020 okay, good all right, michael who's counting, right? >> joe, good luck in the rest of your games i'm rooting for you. i want to see some big ws coming from you >> nobody left i've got nobody left my bracket -- >> remember, spend all of your winnings at fanatics to support the schools that came through for you. >> all right thanks, michael. coming up, some breaking durable goods data we'll try to fix it. "squawk box" will be right back. a fund that invests in the innovations of the nasdaq-100. like this artificially intelligent home system. become an agent of innovation with invesco qqq. ♪ we started with computers.
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welcome back to "squawk box. rick santelli here cmhq we're looking at preliminary reads for february for durable goods. headline number is out and it is not pretty down 1.1 we were expecting up half of 1%. so definitely throw it in reverse here and this is preliminary, so we don't have all the puzzle
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pieces it's sequentially following at 3.4 that was very robust it was the best number post-covid and if we look at ex-transportation. it's still not a good number at down 0.9 following a final read at 1.3 i don't see shipments or order -- oh, here we go. capital goods orders, non-defense aircraft, one of my favorites. and remember, we finished off last year up 0.4 get ready to extend that the orders component here is down 0.8 but we did see a revision and if we look at shipments instead of orders, it's down 1% the only number that came out, as expected. sequentially following 1.9 these are definitely on the soft side they are prelim ninary numbers n everybody will be tuning in today to see the senate side in the questioning of our treasury secretary and the chairman of the fed. and of course, credibility won't
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be an issue, becky back to you. >> rick, thank you very much let's check in with steve liesman. he joins us right now with more on this. steve, what do you think why are the durable goods orders down in such a surprising fashion? >> i think there's two reasons, becky. and i'm not concerned about them right now. you had weather issues that might have played some havoc with the shipment and the manufacturing industry you also had a huge gain in january. this is one of the most volatile numbers out there. if we strung together a couple of numbers like this, i would begin to be concerned. but i think the story remains in tact, becky, that you have a manufacturing sector that's getting its legs back underneath it, reestablishing supply chains, with some important disruptions that are out there, including the chip situation, some of the commodities that are out there. but that over time, these global and domestic supply chains will be reestablished and manufacturing will get back up on its feet. with the question of how much
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investment to do in capital equipment, for how much demand later on do they treat the coming stimulus as something that's temporary or something that caused them to invest and make supply available for i'll take this one with a grain of salt. not necessarily throw it out, keep an eye on it. but i think manufacturing is strong coming back and we should see better numbers in the months ahead. >> steve, one question durable goods orders i was trying to think it through. is that a situation where the shipping delays would slow it down but these are just orders, not del deliveries on things does this mean they don't think they need as many? >> i think it gets -- well, they don't. put yourself in their situation. >> no, no, how are durable goods orders measured? >> it's a survey it's something that they do. they survey different people they also have actual data that they use to put it together, becky.
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it's just something -- and they revise it as it goes and say, how much was ordered and how much was actually shipped, and it was the shuipping number that i believe was down 3.5%. but new orders is the number that wall street looks at for what's going to happen in the economy in the months ahead. >> i mean, i guess it surprises me, even though it's one month, even though you can point to all of these weird situations in the global supply chain. anecdotally, the ceos we talk to, the people in the ports we talk to will tell us that they can't get this stuff in fast enough and that's why retailers have been able to charge full price for all of these things. there's just not enough to go around it's amazing, the lack of sales that you've seen at the major retailers for any of these durable goods. things like furniture. things like washing machines and things you can't get your hands on these things i remember trying to get an extra refrigerator and freezer last year and it was pretty tough. >> i think those are great points, becky, but i think when you take a step back and you think about what powell is
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saying about the issue of inflation being temporary, do you really think that the global economy is going to be held back from a shortage of shipping containers that seems like a problem that we're pretty able to solve the issue of there being furniture and refrigerators. these are not high-tech problems like creating and district mrna viruses, which, by the way, we seem able to do, as well so that's the cornerstone. your very issues and specifics that you mentioned right there is the cornerstone of the temporary argument of fed chair powell on the inflation story. hey, we've solved these problems we invented the wheel. we invented just in time and we know just in time supply chains. these things will get back up and running in time. in the meantime, there are some messy stories out there. >> steve, thank you. good to see you. >> a pleasure. you too. financial inclusion. the idea of leveling the playing
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field when it comes to access to financial services is not a new concept. but the coronavirus has made it more of a pressing issue than ever before. additionally, the recent speculation. meme stocks like gamestop has put a spotlight on the need for new financial education. two thought leaders we know quite well here have put their heads together and tried to come up with a plan of action they write about it in "the american banker" magazine. and joining us right now is john hope bryant, the founder, chairman, and ceo of operation hope also jay clayton, the former chairman of the s.e.c. and the lead independent director at apollo global management he's also a cnbc contributor gentlemen, first of all, welcome. how did you two get together who wants to tell the story? >> john, i'll compliment you when i left the commission, i was interested in continuing work in the actual inclusion and i asked a mutual friend to put me in contact with john,
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because the work he's been doing over the years is just exemplary. so we connected and we've had great dialogue since, at least from my perspective. >> well, you know, becky -- >> we know -- go ahead >> you know, i love odd couples. when you come with different respectives, you tend to come up with a different product abraham lincoln and frederick douglas couldn't have been more different, but they put their head together. and dr. king, and range of other leaders have worked with people who had a range of disparate views. but they had a common ground and a common interest. and jay cares. jay cares and he's smart and i think he has integrity those are ingredients i need for -- for great change in the world, which is what i'm trying to do. >> john, this is a problem we've spoken about with you for some time now but what's this new plan of action >> well, tomorrow is the last
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day for automatic deposit for stimulus checks. and what do you want to do with it if you -- what we know is, if you invest long-term, you're going to have more winners and losers if you invest short-term, your going to have more losers and winners. and i just think that, you know, you can't get off -- jay and i were talking about this. you can't go to a car dealership and leave the dealership if you're buying a car without having proof of insurance and proof of a driver's license. and if you have insurance education -- driver education as a young person, you get a better rate i think the market should look at african-americans, as an example, as an opportunity to expand if we treat them right and prepare them, because half of black votes are invested compared to whites 30% of whites are invested 60% plus of whites are invested in the market. and for every $100 of white
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wealth, you have $13 of black wealth i think by giving more education to everybody, irrespective of race i'll just give you that one example, you deepen the bench strength, you strengthen america, strengthen markets and create more customers who trust you. and i think that's good for everybody and that's the opposite of gameification. and becky -- it sounds like a good plan, but how does it -- go ahead. just how does it work from a practical standpoint >> that's a great question that's where i was going with technology today, the cost of connecting people to the financial systems is much lower. and the cost of providing education at the point of sale is much lower. look at the cares act and the distribution of checks that john mentioned. if every child had a bank account from the day they were born or when they're 5 years old, getting checks out -- actually, we won't have checks out.
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getting payments into people's hands so they can use them would have been incredibly efficient but at the same time, you would have grown up understanding what it's like to be connected tto you are financial system if you're not connected to our financial system, you're starting behind. and if you're not educated in how you're connected, you're going to make worse decisions, which poor outcomes amplify over time we know all of that. let's use technology to address that >> jay, just as a former regulator, would you also use regulatory powers to enforce this as well or is this something that you try to convince people to go along with or companies to go along with? >> i think it's some of both, becky. we enhance the regulation that's applicable to broker dealers at my time in the s.e.c and the staff did an incredible job looking at that transaction and adding protections around it but as john mentioned, this is good business. providing high-quality education
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that's accessible and not a big friction, it's a good thing. people ought to do it. >> well, also, becky and we can make these payments for folks. as you know, operation hope and other organizations like the national urban league and others do really robust, elegant financial education. the fdic has tools the financial education tools are everywhere and increasingly, they're digitized and you can plug them right in and embed them into your business model without slowing the train one iota we think this is a positive thing for business but with regard to regulation, i think -- the message is sort of this when you're being run out of time, get in front of the crowd like a parade. to think that there's not going to be additional regulatory pressure, some of which is useful, and some of which may not be, i think is naive and so, i think that what the smart players are, should do, is get out ahead of this and say, look, we have no problem with additional education we have no problem with reasonable disclosure.
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this has been -- you know, we are honest players and we think this is good for the marketplace. i think that's most players. i think most players are honest and have integrity they should do this voluntarily. because it's just good for everybody. it just takes a little bit of intentionality and we can help them do it in a way that's painless >> john win mean, you know i'm sitting right here i know you know i'm sitting right here so just talk -- what do you need -- fdi, first generation investors, they haven't asked you for any money. all they want is your help why would you not bring that up now? >> i think i'm on their advisory board, joe >> let's go and bring that up. i mean, is it on your website. jay, with i don't know if you know about this, but they're in like 10, 12, 15 colleges now go out and help kids set up accounts and learn how to -- learn that stocks aren't a bunch of greedy capitalists and can exhale work. i thought you might mention it, john you're on here all the time.
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and the smallest little bone >> becky, for the record i want to understand that joe and i are actually agreeing for the record >> we have a nonprofit you have a nonprofit with -- >> so, yeah, he's promoting first generation investment. but by the way, there are thousands of these groups. this is the point, there are literally thousands of these groups all across america that could be embraced and be helpful to any company that wants to embed financial education and investor education into what they do. we've done this in banking we believe it should be done on wall street, but the largest and most responsible economy on the planet, united states of america. we, everybody else should fall in our lead. we are the beacon of freedom and opportunity, and we should illustrate that, underscore that by giving our values and financial education should not be something we should have to convince folks to do >> hey, jay, before we let you go, i want to ask you about
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apollo you were named lead director there last month and just this week, we learned that leon black is stepping down now. you're now going to be the chairman of the board, non-executive chairman of the board. is that timeline expedited from your perspective >> look, the founders, when i went onboard, they committed to a transformation in corporate governance and that's ongoing i will tell you in my brief time there, the talent across the board, of course, you have josh and mark and leon, who started this incredible company, but the bench strength is -- i knew it was strong i didn't know how strong it was. so i'm excited to be part of that and i'm excited to have a governance model there that aligns interests with shareholders >> okay, jay, john, i want to thank you guys both for being with us. we appreciate your time today. >> thanks, becky >> and even joe.
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>> all right >> i'm going to work with jay, i think. i'm going to work with jay i think we're on the board together on that but anyway, jay, i'm going to talk to you, maybe we can make a little more progress here. because john didn't come up with this mike >> all right thanks, joe. coming up, jim cramer's first take on the trading day is straight ahead stay tuned you're watching "squawk box" on cnbc smp
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let's get to cnbc headquarters jim cramer joins us now. jim, i was actually kind of interested in some of your comments overnight about -- about the spac world and then we had a long discussion with barry sternlicht about spacs. and like anything else, it's not monolithic you're not saying spacs are bad. you're just saying that there's a wide continuum of spacs. but it is bringing a lot of stocks to the market and increasing the supply. that's something -- and you can't possibly know about every one of them. maybe you can. >> i can't >> you just need to look closely at each one. >> well, look, i think it is case by case i think barry sternlicht came on "mad money" when starwood, his stock was down a lot he had no mhesitation i've always thought that barry's money good he did use the term bucket shop for some of the others he was very critical i think barry is probably one of the most rigorous players in the game and i have found that if he puts
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his impropermada on something, it's probably pretty good. but i think the fact that he said that shows how genuine he really is. why not just say, listen, spacs are better than ipos, but he was very critical? if he's critical, i'm critical i just find that he'sen inspiration until figure who's done a lot right in this business >> you've heard the case made in the past that with all the buybacks that were going on in previous decades, that the supply of stock was shrinking. therefore with the demand stays the same, the market will go up. do you really think that this could be -- that you could see sort of the inverse if there's -- >> yes >> really? the market could be affected by the number of spacs that are out there. >> i think the spacs -- and when you consider that there's going to be robin hood, there'll be stripe what you talked about when you talked about ruben's valuation when that comes public, and it
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sounds like it's going to. the valuation will be very, very big. and i wonder whether there's enough money enough around to absorb all of this and we may have kind of a couple -- we've seen this before many of the different cycles, where we're overloaded, and things just kind of take it on the chin and it ruben's got great growth. and talking about china. and there's a lot of great things happening there' 's insiders happening and we have to keep track of it because the amount that is coming i don't know if we can distinguish among them and a lost newer investors seem to be fleeing so we got to be very careful here. >> i wish i had time to talk to you about gamestop, because it's so weird, it is a sell-off and announce a stock offering, and considering one, considering one, it should make the stop go up it's not trading on normal valuations and shares
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outstanding or earnings per share. >> no, it's not. i think you're very wise to talk about this stuff, joe. >> i don't know why it wouldn't be a positive if they finally decided to do that, give ryan chewy some money to do what he wanted to do. >> it is a good quarter and it is a question how much it is worth and shorting, it is definitely a mistake when it was 15, 20, 25, but i don't know. >> i know that's not his name. i think it is better though. ryan chewy. >> i like that co-founder chewy. one of greatest success stories a multibillionaire i can give you the whole rap >> thanks, jim >> we'll see you in a few minutes. >> thank you >> thanks. "squawk box" will be right back
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a little more than half an hour until the opening bell on wall street. joining us now to talk markets, greg branch, founder and managing partner at veitas financial partners greg, good morning good to have you with us this morning. >> good morning. >> how are you seeing things right now? just to set the scene, we've got a stock market that's kind of gone sideways for several week, point to point, you had a 10% correction in the nasdaq composite, disruptive tech, pulled back hard, you had the cyclical stocks doing great and now they have settled back as
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yields have as well, has that surfaced any opportunities how would you tilt with this environment right now? >> so i remain bullish with caveats. and i am particularly bullish still on the value sectors when we first started talking about this, pre-election, it was based on the deep discounts multiples. that has largely been made up over the last few months so by bullishness now, it relates to the earnings estimates being too low. in order to maintain those average multiples that we've reached, if the earnings are increasing, they're still performance heated and many of the cyclical sectors, many of the value sec, to we're seeing earnings estimates 50% or 60% pre-pandemic levels and i think we have a second path story earnings revision and earnings surprise story in the value sectors. there's select stories and groepgt that i like that gets to my caveats interest rates, we need to keep
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an eye on, and inflation, we need to keep an eye on while the fed is looking at 2.4%, 2.3%, in core inflation, it may very well be more than that we'll see. at the end of the day, the market will forecast the fed's change in posture, if we start to see those interest rates rise above that, or be more persistent than the fed is forecasting. that will obviously have an effect on yields, and when we see yields rising, that is most negative for growth in tech, as it affects their borrowing costs out into the future. and with growth in tech stocks, it is those future earnings streams that we're actually valuing. we've seen value on the other hand have a high correlation to rising rates as those input costs are passed on most importantly, the rising yields may provide an overall head wind to the entire market, because we've seen pools of money, municipalities, pension funds, that typically look for
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less risky assets, move up the risk curve and as those yields rise, the dangers that those large pools of money may recrete to their traditional typical asset classes. >> we're looking at a rebalancing and things like that and where you would expect earnings estimates to have lots of upside, which in particular would you focus most on in terms of what are financial, energy, industrials? >> right well, if we believe we're in a rising rate environment, then obviously, the banks are still an opportune sector, the net interest margin environment has been challenging rising rates, obviously, loosen that up a bit. and i would continue to focus, though, on the banks that have the diversified platforms. because if we remain in a challenging environment, those banks have proven that they have other sources of upside, other sources of profit drivers, and we've seen that they started to release a significant amount of reserves that they had put away, so they should continue to deliver strong results
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i've looked at retailers, as the economy unfolds, i think that we will see obviously a bounceback in retail, but i think the high savings rate has been really concentrated in the upper socioeconomic segments to i really like value retailers because a lot of our citizenry will be looking for value as they re-emerge into the economy. i particularly like those value retailers that are leveraging and in some cases weaponizing their e-retail capabilities. >> greg, appreciate the thoughts this morning thanks a lot. >> thanks, guys. dominic chu joins us right now with a look at some of this morning's biggest pre-market movers what do you see, don >> here's what we have the morning movers looking to supplement the squawk stack, winnebago, 11,000 shares of volume, the maker of recreational vehicles. better than expected profits and revenues there, expanding profit
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margins. winnebago winning to see strong demand for motor homes and toables. and the toable sales grew 55% higher than a year ago so watch rv makers like that. next up, gamestop shares 14% hit, and the video game retailer the darling among retail traders of the internet chat boards posted disappointing quarterly results even though e-commerce sales surged 175% during the quarter. some investors are looking for some more clarity on its business transformation plans. gamestop hinted it could look to raise capital through a stock sale at some point and those shares down 13%. we will end on fed ex. up fractionally pre-market 6,000 shares of volume the shipping and logistics company, getting help from analysts at barclay's who are calling it the top pick in transport stocks, better growth trajectories and better cash flows and a discount valuation to the markets becky, back to you >> dom, thank you very much. >> you're welcome. >> we'll see you in a little bit. we'll take a final check on
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markets before we hand things over the futures are higher this morning. dow futures up 120 that's about 20 points higher than where we started the show this morning s&p futures up by about 14 the nasdaq up by 80. and guys, i guess oil is one to watch this morning we'll be watching that, too. >> winnebago it's stay at home, because you can leave home in your home. i wish i thought of that. >> with a tow-able a haul-able. whatever done called it. see you tomorrow right now time for "squawk on the street." good wednesday morning and welcome to "squawk on the street." i'm david faber along with jim cramer carl has the morning off let's get a look at futures as we get ready for trading a half hour from now and we're looking up from all of the major averages the road map this morning, it starts with what they're calling the new intel, the ceo doubling down on manufacturing. investing $20 billion in two new


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