tv Squawk on the Street CNBC April 8, 2021 9:00am-11:00am EDT
still closed down. >> contessa, great to see you. we're coming up on a hard break with "squawk on the street" in just a moment. i'm going to kick it back over to joe. >> we don't need people sitting in traffic in vegas. they need to be at the tables. they need to be at the tables. gambling, gambling, gambling final checks of the markets quickly, we do have the real highlights of the nasdaq make sure to join us tomorrow. "squawk on the street" is next good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber futures do indicate a fresh high for the s&p at the open. nasdaq's going to get some help from a 10-year yield below 1.65 as jobless claims once again a stubborn 7 handle the second week above expectations. the road map begins with taxes, infrastructure, and the economic recovery the president says he is open to
renegotiate, or to negotiating on his corporate tax hike plan >> plus, chips and the shortage, apple reportedly postponing mac book and ipad production and quote, the financial weapon, what is behind the billionaire peter thiel's newest bitcoin bash carl >> all right, guys, let's dive in to the ongoing debate about infrastructure, jim, and the corporate tax rate in america, we've heard in the last 24 hours from the u.s. chamber of commerce, from raytheon, from the national association of manufacturers, who we're going to have on in the 10:00 a.m. hour, arguing that going back to 28 would cost a million jobs in the first couple of years. >> look, i think that the, you know, look, you put out the estimates, it always, if you're a business, going to make it sound like a lot of people are going to lose jobs and i know there is a lot of jawboning where there should be and i'm surprised that no one says, list
continue should be on the individuals because the corporations just are really humming, but maybe that's the point, carl. i think the corporations make a lot of money what's going to matter to me we have earnings season next week and i don't know how you give a forecast of what your earnings are going to be. maybe you do two different sets of forecasts david, it's going to make forecasting impossible next week, the week after, because we have no idea what the tax rate's going to be. >> well, yes, i mean that goes back to sort of that level of uncertainty and will companies choose not to make perhaps some investments they otherwise would, as a result of not being certain about what the tax rate will be. although, guys, you know, jim, i'd love, to it's what, 40 years or so, since the tax cut was passed, four years or so since the tax cut was passed and we swept an awful lot of time talking about will it lead to investment, capital investment that will create jobs, or is it simply going to lead to higher dividends and more share
buybacks, which are not quite as productive when it comes to what was that was all about, right? do we know do we know whether that tax cut truly did what at the time secretary mnuchin said it would over and over again in terms of increasing gdp in a significant way and leading to greater job growth >> well, we did get the lowest unemployment since lyndon johnson, and that was guns and butter back then and this time it was noninflationary i don't know, i think that's empirical evidence that it did work, david. i don't know what else to say. you get that kind of unemployment and yet the employment, one of the things that really was startling was minority employment got much better something that you know jay powell cares tremendously about. so i don't know how else you can say it i mean they may have bought back stock, but boy, i don't know how you get, we had below a 7 employment it does matter, david, that number is significant. >> yes, and carl, listen, i think, you know, inevitably, in these kinds of situations, you're going to have people looking at it from both sides of
the political aisle, who are going to view it somewhat differently. even though as jim say, the numbers are the numbers, in terms of what happened to employment, but you can still make different arguments about why that actually occurred >> as for the president, guys, interesting set of comments yesterday, he said he always thought 35 was too high, he argued that 28 is still the lowest rate between the periods, between world war ii, and 2017, and he said 28 is not fleecing them, referring to companies, here's what he said about the potential of settling on a number somewhere below 28. here's what he said. >> mr. president, are you willing to go lower than the 28% corporate tax rate >> i'm willing to listen to that i'm willing, i'm wide open, but we got to pay for this we got to pay for this there are many other ways we can do it. but i'm willing to negotiate that i've come forward, with the best most rational view in my view, the fairest way to pay for it but there are many other ways as
well and i'm open. >> reuters has a piece up this morning, jim, an analysis of sorts, talking to some lobbyists who essentially argue that we think 25 would be a win, in the words of one energy lobbyist, and that sort of fits in with what a lot of the street has been saying, somewhere in the 25, 26 range appears doable. >> well, look, this is a new president. what he wants is to have -- it's kind of his style, i think he wants some consensus when he says he's open to doing things, remember, that's not by fiat, we i think got used to him for a while, it's my way or the highway, and david, i think that the president is often what i regard as being something reasonable, remember, you got the filibuster issue, and david, you got to get around that, you got to make it so that you get a lot of republicans, and right now, he doesn't have it, and he certainly doesn't have even all the democrats, as you know >> right, well, that's kind of the key, because you can conceivably do this under
reconciliation, in the same way that the relief bill passed, jim, as you know, the parliamentarian i believe has allowed for that but you still need joe manchin and you still need a bunch of democratic congressmen who are going to hang on if they can to saying hey, you got to repeal the salt cap, and allow that deduction once again so it's going to be a very tight road that they have to go down it's hard to imagine they could get the 60 votes they would need in the senate to go outside of reconciliation and actually avoid a fill bust fer they tried to do that, a filibuster if they tried to do that it's funny, jim, i remember when we were day after day, talking about the trump tax cut that resulted in the 21%. 25 was where a lot of people were talking about even back then, if you recall. that that would be the number that they would come at. and then it actually surprised some coming in a good deal lower. >> 25 is good.
i mean carl, i want to know how, there is a very good article in the "times" about conditions st still, about companies, that basically said look, there's still a lot of companies that are using the havenens overseas and still get the companies that are paying zero taxes. and i'm still waiting for the amt for company, where you have to pay something, because it's distorting the conversation. i don't know, carl, i mean i think that what matters is the tone of business, and if we get a number, then you don't have to put two different scenarios in, and i think we're going to get a lot of good numbers, and that's what i'm looking for next week, i'm looking for really good numbers, and regardless of the regime, and i think the street is, too. i think it's going to be a remarkable beginning of numbers, and even if you do 30, it won't cause anybody to really get hurt here. >> to david's point, an interview with gary cohen from
last summer got passed around yesterday in which he said i'm actually okay at 28, the level we got to was a bit lower than we needed to go. i always thought that a compromise rate in the mid-20s made sense we don't know how cohen's views have evolved since then but that got some attention yesterday jim, there's a lot on the vaccine front today. nice news out of -- a couple of trouble spots around the world. french open got delayed by a week and we know what france has been through and the variant, more people died in march than any month so far during the pandemic they had 4200 deaths in a single day this week which a lot of people are paying attention to. >> what a terrible situation
i know that where we are in this country is that if you catch it early enough, it's extremely unlikely that you're going to die. i do think that we're hurting because of j&j i thought that j&j would have far more, but that was emergent bio, and i think if you take a look, emergent bio told me, they were producing vials, even in the fall, what happened to those? i mean i expected johnson & johnson to have about 150 million by now and that would have been enough to be able to spread it to countries like brazil, i think, if they had had that obviously, it wasn't up to j&j, the articles about emergent bio, and it has been on the show many times, and making me feel, if i were a part of the fda, i don't think i would rubber stamp this one and say listen, we really need this drug i just don't think that is going to happen judging by the safety record >> yeah, well, you're referring of course to the manufacturing
screw-up that resulted in quite a few doses going bad. or not getting there at all, jim. still, in this country, let's be clear. april 19th, i believe is now the date at which i think the administration has said everybody will be available, doses will be available to everybody, right >> right. >> age 16. but brazil has got to be, it is certainly scary, and let's not forget, large parts of europe are still in shutdown, in the same way that they were a year ago, and then obviously, they reopened, only to close again, and reopen, and close, and that's not an insignificant economy that we're talking about. and that has got to be something that people are continuing to be aware of although here, jim, we're still doing what, over three million shots a day. >> but we have no uniform policy about what happens if you're vaccinated, whether it means you're able to go here or there. we don't know what's going on in corporations it's just a mess
we want to get everyone vaccinated in order for herd immunity, but it's just crazy. you know, by the way, carl, if you live in europe, you may have that astrazeneca be approved, but i think that the tenor of people is, you know what, i'll do better getting it than getting the astrazeneca, i think the publicity here is horrible and they better get a new vaccine over there, because i don't believe, carl, they're going to prove that all they want, i just think there is a clarion call that this thing could kill you and look, right or wrong, that's what people are saying over there, so that's one of the reasons carl, why you could have countries that are so far behind we do not have that. one of the great things about pfizer and moderna, is i've never heard anyone say anything other than the second shot moderna gets you sick for 24 hours. nothing else >> yup >> i've heard that anecdotally,
too. but yes, it's a tough run for astrazeneca, from a public perception point, jim and maybe it's difficult to put that back in the bottle. >> yes. >> so to speak that said, i know you noticed yesterday, jim, goldman sachs has a reopening index since the reopening of the pandemic, six out of ten, a new cycle high and i don't know if you noticed, search interest in the term hotel is at a ten-year high. >> i love that. >> so despite some of these boiling pots around the world, difficult times in europe and south america, our reopening as david said is definitely on track. >> look, if you're at google, there were no calls last year, and then now inventory galore, up with of great things about the web, and travel, if that's the key word, then the estimates are way too low. i mean a lot of these things that are happening in the health care market are just directly impacting stocks and we really have to relate it, because i think, if you see that the travel is that high, you
have to believe that, david talks about this, david, the regular consumer can make up for the business traveler, if the search word hotel is at a 10-year high. >> yes, for a little while but they're not going to continue to be at that level, jim. there's a great deal of pent-up demand one would expect and yes, for a period of time, it's going to be furious demand, from the leisure traveler but longer term, i continue to wonder whether you're going to see a return to the business travel, for the levels that we saw in 2019, when everybody else gets back to normal travel when we're all not feeling like i got to get out, i got to get out and we're back to traveling every so often. >> but by then, i mean jamie dimon was pretty abject about how bad he felt, in terms of getting things done. it slows things. now, typically, there's talk about internal, but look, i don't think jamie dimon is going to say, you know what, everyone's using zoom to go see
clients, so why don't we use zoom i think it's just like this, your hedge fund friends -- >> what about my hedge fund friends? >> don't people say on twitter we're friends. >> a lot of them are in new york but a bunch in florida maybe never coming back. >> i worked for the hedge funds. >> 14% state and local tax, income taxes, going to keep a lot of them, maybe some of them from never coming back but carl, speaking of coming back though, the question, and jim, you both raised it, when corporations are going to feel comfortable bringing everybody back and this patchwork of different policies is interesting to continue to hear, carl, from various companies. it doesn't feel like, at least until labor day. that seems to be the sort of the key date for so many companies right now. >> we're flying. we're going. business is going to be back sorry, david
>> yes, cibc had a report yesterday titled back to the office whether you want to or not. >> there you go. >> i think david's right by labor day, it is not going to be a lot of optionality. >> guy, take a break a lot of calls to get to including jpmorgan, a nice call on crm we will talk carnival with jim fed ex added to the focus list jorn.ofpmga
last night on "mad money," jim asked applied materials ceo what the company can do to alleviate the chip shortage. here's what he said. >> we've also been investing not only in the united states, half a billion, in our meta center investment in new york, we've been investing in our operations, our supply chain, our talent, all parts of our infrastructure, so jim, we're ready to go. but it does take time. >> now, jim, we got another headline out of nikkei that the chip shortage is beginning to impact mac and ipad production. >> this is all pretty incredible, because there's been, if you look at applied materials, a big investment, applied materials by the way is the largest and they have all of the machines you want, so it is not really them. nxp today downgraded and about the downgrade, there's talk that
they were not able to make as much, remember, nxp, morgan stanley downgrade, they don't do auto, and it says that they had a fab power outage that really cut things back. there was a fire in japan that cut things back. chinese have double and triple ordered to take more than their share. that is not unusual. and many of our companies just somehow felt like just in time, david, just in time works, if every single part is ready but given the nxp problem, given the fire in japan program, given the fact that most of the car companies did not think they would be anywhere near this run rate, you just can't turn things on, on a dime. i do think with the government, when the government does the foundry plan, it's not two years, i think it's more like three four years if the government does that so david this thing, there are some that will be alleviated but now we're starting to talk about 2022, and there's no way around
it >> yeah, you know, listen, mac books, ipads, jim, you've been following this very closely, you've been doing a great job on "mad money," on bringing on the various ceos to discuss it. >> thank you. >> is it going to get worse before it gets better? >> yes yes, it will because the back orders for companies other than applied materials, look, lam research is an unbelievable company, but i don't know, they're operating around the clock, you get out the machine, capital machine, they can't do it we have to see, i know i don't want to finger the chinese as being selfish, because double ordering is a tradition in chips, it's one of the reasons why the chips like micron are boom/bust. but we didn't double order they double ordered. and if they cancel some orders then i think we'll be okay, but they kind of have us, the chinese. they have us they were smart.
we went for no inventory they love inventory. like we used to. so the only thing it alleviated it is if the chinese decided we don't need to double order and right now, they're in such a great position they're producing so many cars there. so david, it's trade war in another way. that we don't talk about >> and it's another area of significant tension with the chinese. >> yes. >> and it's been added to what is going on to the south china sea and you can add it to the every daydrumbeat in terms of taiwan and you can add it to obviously the enormous amount of spying that they continue to do on our, and stealing of our intellectual property. >> and if you're chinese, if you want to be, if you're a china file, it is worse than ever, no love >> even as we're talking, guys, our michael, who covers auto, gm
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surprised. that's how strong this juan. literally wall street was surprised, and everybody is raising their price target and i think it looks like 362 there, and wells fargo is at 370. they are going to 400. david, here is what i think is happening. e-commerce which they had considered to be not great at and they would certainly admit that has really caught fire. and you've got e-commerce going at more than 50% rate. and so that kind of growth is going to yield some good numbers. they were up against pantry. they were up against pantry stocking and those numbering are incredible and when the pandemic is over, you know how we know when the pandemic is over, you know how we know? >> when. >> when they bring the free samples back that's the moment. >> i would assume they haven't done that yet. >> no. but that's the moment, david, when the nation is free at last.
have you ever been to costco have you ever had the dip? >> i told you, i don't really go i went to one once with jim senegal outside of washington. >> that's the ceo. have you been there without the ceo? >> david, you can go tation to station, and you don't need to eat, and you go there around 4:30, 5:00, you don't need to have dinner. >> i don't think you can, it's a less than one 1in 10,000 chance you can pick up the virus from surfaces bring it back, now. >> you have to open your mouth maybe you sing while you're having a simple. you can't do that. i mean sometimes you might be, you might be reduced to song, david, it's so special you go with me just go with me once you don't buy a thing. >> so many places to go. >> you and i could spend a week
going to places together and maybe we should do that. >> caymus, you know what that is democrat. >> i know it well. your wedding three different times. >> we went from baltimore to boston and every single bottle. then we had -- >> i remember. i didn't leave the bar, carl i just kept having them pour that for me. it was great >> caviar? tequila? >> i remember that, too. >> the bell is ringing >> and do you remember what the napkins said greatest day ever. >> when you invite 425, it is a testament to lisa, not me. >> anyway, carl, i was looking
at my calendar, i was looking at my card, last night from a calm of years ago, and two years ago, you, me, david, i forget who else was there, our wives, would he had dinner at your restaurant, i know you talked a lot about the complications of reopening with the city and the cdc guidance and carnival's chief talked about resaling. here's what he said. >> we are working with the cdc and the administration to come up with a practical solution the guidelines issued on april 2nd, under the conditional sale order are not particularly workable but we're confident about the conversation and in exchange, we can get to something, so we can be sailing in the summer here in the u.s. >> all right street still wrestling with this one, but stifle goes to 35 from 30 today >> i don't think there is going to be any peace here, carnival may be talking to the cdc, frank
del rio, remember, fully vaccinated, not letting children on, 60% capacity, finish all filtration, and the cdc will not talk to him. they won't take his call all he wants to know is what he has to do. here's my prediction and it's not mr. t. payne. i think there will be lults. i think they are going to sue the cdc. i think they have to the cdc's rules, they are just basically -- you can only lead to one conclusion with the cdc's rules which we're not going to let you sail until everybody has herd immunity in this country and not only that, but i got to tell you, not speaking to frank del rio? don't take his call? they don't call him? norwegian is huge. they have 7 billion in debt. all of these cruise ships have a huge amount of debt. they will have to issue more stock if the cdc doesn't come to terms with them. you know these companies have gone from being very lean balance sheets, to having
balance sheets now that maybe are among the worst in the country. >> yes, they have issued a lot of stock, they've issued a lot of debt, and now they've kept themselves alive, during a period in which they have not been doing business, it's going on, we're well past a year now, jim. >> what do they have to do, david? >> it's disturbing >> what do they have to do >> i don't know. you've been much closer. as i say, you've become the spokesman for cruising nationwide. >> spokesman i'm the spokesman for the american migraine foundation i'll have the cruise ships and i'm going to sue the cdc there you go i'm the chief spokesperson, i'm suing the cdc. >> but you're raising a larger question, which is the different barriers that businesses are going to have to go through to get back to beelk being able to do full business and/or what we were talking about earlier. which is when are people going to be fully allowed to resume
their activities in their office if they want to? even when they're fully vaccinated, it seems that there are going to be some, there's going to be some mitigation here, in terms of who is going to be allowed in and who's not it's hard to imagine, because we've all thought playing for full vaccination is what we're here for and once you get there, yo protected the most vulnerable and you protected those people who are potentially going to be sickest, you are keeping people out of the hospital, you're keeping them from getting sick, and so isn't that what we've been playing for and when we get there, shouldn't we then be able to fully reopen? >> well, look, i am convinced, carl, that if they don't come to some conclusions, i think the people who are on the fence about getting the vaccine will just say, why bother i mean i don't get a piece of paper that says i've been vaccinated, i don't get any proof, no one really cares, every state is different, carl, isn't that a recipe for saying i'm not going to walgreen's and not going to cvs or walmart and i'm not getting any incentive to go, so the hell with it. it doesn't matter anyway carl, that's the way people are
starting to think. it doesn't matter anyway so why should i have that second moderna shot and get the chills and feel awful hey, i'll skip it. that's what they're courting right now. >> that's well said, jim consumer mind sets regarding this public health thing that we've dealt with for a year is a fragile thing and you think that policy makers would have learned some tough lessons over the last 12 or 15 months. hopefully, maybe they're listening right now. i do want to get you on the degree to which tech is leading today, including some server enterprise name, jim, service now, one of the top s&p, i think it's b of a that adds now, crm, workday, cupa, to their top choices in these names. >> i think it is magnificent it's after a survey. and those companies are great cloud companies. they've been down on their luck. and then morgan stanley comes out with a piece that says look,
things are getting better. i.t. estimates need to be raised ibm, david, ibm, the price target goes, the earnings and price targets, look out, david, ibm is one that is maybe going to surprise, to the upside. >> really? >> yes >> this was katie huberty saying this not just anybody >> not just anybody. well-respected. >> yes >> she does more work than anybody. >> material positive i.t. hart wear estimates, i think she is going to be dead right, i think she is dead right all the time all the time this is big. this is big, david seagate. remember them? dell upgrade. i think this is where they're going. these stocks are not expensive relative to their friends like caterpillar. and i think these are unbelievable software and hardware pieces, and they're going to stay strong all day because they're based on survey,
and carl, wall street loves survey research. of course everybody likes the evidence lab from ubs. >> as david know, the piper team survey, man they squeeze a lot of product out of that research. >> do they call your kids, david? do they call your kids do you use the switch? what do they say >> i don't know. >> who are they surveying? do they go to the mall if you're at an american eagle outfitters, and they ask you, do you go to the american eagle outfitters, isn't it like yes? i mean what are they doing that's the one thing that i want more on the team poll. i'll tell you this, though it's been right. >> it's been right. >> guys, i want to get back to technology i want to move to what is more of a special situation this morning. >> i'll let you think about it and david, it's going to be box. >> they're getting crushed
you knew it. down 12% last i looked they announced an investment from kkr pays 3%. pay in kind. pay 3% dividend. conversion price 27. you can see. why? well, i talked to a couple of investors, or former investors this morning, in the stock, and it's like, well, listen, it grows 11%, microsoft continues to potentially be eating their lunch, and they've been hoping to find a buyer for the entire company. and it wasn't clear to me how hard they were looking but i do believe there was at least that possibility. don't forget, starboard which already had come after the board once, or at least has some direct conversations, i called jeff smith, who runs star bord and he did not return my phone call this morning and the plan is they needed the money per se and they are talking about getting 12 to 16% growth
with operating margins between 23 and 27% by fiscal 2024, jim. none of which seems to be enough to assuage the concerns who have been buying the stock in the hopes that they would succeed and selling the entire company. >> he is a very, very young fellow and can i say, it's not so bad to have kkr's vote of confidence i've been going back and forth with aaron this morning and i thought the dutch auction, which i know you'll be covering, and i know, they don't really need cash, is only part of it they're getting the cooperation of kkr, i think kkr is a good firm >> they are. they're coming on. board member as well that's right >> i think it's good look - >> does it really advance things, jim? how does it advance? what does it do? how does it truly bolster their ability to do their business in a more effective way >> maybe because it makes it so they're focused on the company
and not whether they are going to get taken over? maybe. >> kind of a distraction maybe >> you're supposed to be selling the company, isn't it? >> it's true and he's not one of the founders who owns a lot of stock at all he never had a huge payday and there were those who believed he actually would have been incented to potentially find a way to generate that by selling. i don't know obviously, that's not going to happen we'll see what starboard chooses to do. and i don't know to what if any the implications are for competitor dropbox as well you know, given their similarities in some of their business. >> starboard, maybe jeff, maybe starboard will call you back they're the ones they've got 8% they could conceivably do something, right >> right although this does translate into 11% if kkr does, when they convert, 27 again is the price, although
there are some 10-year averages -- changes of threshold prices >> do you think two million shares that levie has, well, it's not enough to do anything to try to stop it but it is meeting the payday in the people who are watching it. >> it would. today taking 10% down on that. we'll have to wait and see. another theme, again, just to come back to the whole idea of when workers are going to come back to the office, and just how many, we talk about it every day, because we should, it's such an important thing, as we take a look at shares of box. but there's another one, it's not box, i don't know how to say it, bowx, you know what company this is, right, jim? this is wework >> blank check >> this is wework. >> you know what's interesting, when we think about what wework
has gone through, right, from $40 billion valuation, and adam newman, about to go public, and maybe the worst single s-1 any of us have ever read >> any tequila in the s-1? was the tequila in the s-1. >> absurd. i forget it was. it was to near bankruptcy. softbank coming in then the pandemic. and now, their business model may actually, jim, be where you want to be in this environment because of the flexible workspace. because of the ability to refashion things >> you're so right >> right. >> perfect for hybrid. >> the company was almost invented for this moment you need an office for six months you want to be able to show up, companies can go rent space, and have no long-term lock-in, i would love this company if it were to come public, because it's perfect for what even the jamie dimons are saying. >> it is coming public that's it. it's public. >> this is one of the few spacs that i think is interesting.
>> yes well, look, it's one of the few spraks that is actually trading well we haven't talked about spacs in a while. you can see where it is right now. >> it is a very opaque comment. >> right looking at it because of what we have been discussing now for months, and there's the whole idea of what's going to happen in terms of crushing landlords and now wework, projections jim, that's what the s.e.c. is, you know, the projections that you and i talk about so often, on 25, or 26 ebitda, or sales, or whatever it may be, carl, and they can't be relied on. >> the projections are funny. >> the projections are associated with a merger, as associated with an ipo, which have very different constrictions. >> carl, they're funny the objections they make you laugh. because they're so great >> guys, we got our s&p record high and you got the 10:00 below 1 --
the 10:00 below 1.64 bob pisani. >> s&p new high and a lot of sectors in the s&p 500 new highs. very forward mood on the street and good reason. take a look at the sectors a new high in the tech sector. and broad participation in health care doing accu-steel, reits, whenever you get tech, he health care, reits, all leading and industrials, very typical into earnings season, a little bit of a weakness in the few days before bank stocks here and if you take a look at what is moving markets now. you got to admit if you look at the incentive indicators, pretty euphoric we're not going to get a 20% tax situation for corporations maybe it will be 24 or 25% but not 28 and manchin is against getting rid of the filibuster. so tax hike fears that have been around for months no you are diminishing a little because obviously there's going to be something. but not anywhere near the worst case scenario. as for earnings, we're expecting a lot more guidance. a lot more guidance.
not, we don't have visibility. people are expecting ceos to give some indication of what is going on and investor sentiment iseuphoric here is the aaii weekly sentiment indicators 56% are bullish. the highest since january 2018 and this is the old school retail investors not necessarily the reddit crowd. old school retail investors are really optimistic right now. really bullish and not very bearish overall here most s&p sectors are near new highs. we've been saying this for a long, long time. the key point here is the s&p, financials, tech, nasdaq 100, 1% away and so are transports here. what's not, is there are pockets that have not rallied big and for very good reasons. one of them is the thematic tech etfs, everyone loves solar and clean erge and the ark funds but look how far off they are from the 52-week highs. what they have in common, big moves up in interest rates in mid february hurt these stocks because higher rates reduce the present value of the future cash flows for these companies. so they've been struggling to sort of come back.
as you take a look at some of the high growth companies that are in these etfs here, they have very common characteristics, too again, they all peaked with teladoc, roku, tesla, in mid february, as interest rates started moving up, and most of them were very much associated with cathie woods and her four or five funds that she's had so keep an eye on the interest rate situation they've been flattish in the last few weeks, there already has been some significant damage to the high growth sector of the marks, but overall, right in the middle, the s&p 500, record highs there. carl, back to you. >> all right, bob, thank you very much. also nasdaq, seven-week high this morning let's get to rick santelli hey, rick. >> good morning, carl. indeed, everybody's watching of course, as interest rates kind of drift a little bit here and watching the nasdaq, it doesn't seem to be having the effect i would have thought, maybe the nasdaq would have popped higher, but it did open higher
look at a two-day chart of 10-year notes and what you will see is we're really falling here and yesterday's yield low, outsider time zone, before 8:30 eastern, was 1.62. so you really want to pay attention to that. because as soon as we start to trade under there, not only would of course that put us right at the best support on the charts, right around 1.60, 1.61, but it's also going to really test the meddle of saying that the interest rates will remain firm and the setbacks really small, look at the year to date of 10-years. this is fascinating. the right side of the chart, which amounts to april, less volatility, smaller ranges, so this is something that is real, it's just not a lot. only 11 basis points off the highest closing yield that we've had since we had the a basis point all time low and that of course was in august let's look at foreign exchange
these are three one-month charts and quite important because i think covid plays into this to some extent. if you look at the one month of the oeuro versus dollar no doub it is starting to turn and it seems that parts of europe are starting to get their act together each with intense closures the u.k. a different story look at the pound versus dollar. definitely more side ways to soft, not turning and of course, we know 57% of the dollar index with the euro currency so one month of the dollar index clearly showing we're losing some of the recent momentum to the upside, part of that may have something to do with rates going a little bit guns cold here, at least over the last four sessions. jim, david, carl, back to you. >> all right, rick, thank you very much. that is one reason why financials and energy are underperforming here techs carrying some water. nasdaq near a two-month high we have the s&p record high as we said. and the vix at 16.5 this morning. we're back after a break
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even though i'm sort of a pro crypto, pro bitcoin m maximalist person, i wonder if bitcoin should be thought of as a chinese financial weapon against the u.s. it threatens money, but it also threatens the u.s. dollar, and china wants to do things to weaken it. >> that's peter thiel speaking out on bitcoin and china. texas a&m is having a conference, they will talk to bill miller, rob kaplan of the fed, and i bet you this question is going to come up again. >> i think there's a lot of opaque really kind of lack of
knowledge about what can happen. if peter thiel says this can b used as a weapon, perhaps he has sources in china, about what he can do it's being used, david, it's the planning gold as a way that people are trying to preserve assets, but could the chinese destabilize the dollar, don't you think they want to destabilize the dollar isn't that one of the things they want to do? >> they're coming at it from a lot of fronts. i don't think there's any doubt about that this continues to be a relationship that has to be watched ever so closely by investors and by everybody else, carl we know that and jim's point's a good one the gld is up 1% today, gold has not made the move that would be typical in an environment in which people are concerned about inflation. >> by the way, bitcoin, the best performing asset of q1, up 103%. number two was energy at 30%
just massive returns to start the year by the way, get ready for a new program coming to cnbc beginning on monday at 11:00 a.m. eastern time tune in for the premiere of tech check where we will cover bitcoin, crypto, mobility, you name it, all things technology uber ceo dara khosrowshahi will join us and we hope you will too. monday morning, 11:00 a.m. eastern. we're back in a moment the world of investment will never be the same. the old guard swept aside by tech innovators who can't stop asking “why not?" why not direct indexing? or crypto? fractional shares? or digital clearing?
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jim, you've got some big news makers on the show tonight. >> three of my favorites, we're going to talk about safety in the casino and how well they're doing. levi and then constellation they had to close a gigantic plant that they built in west cali i cannot wait to do this show tonight. >> it's going to be good some of those comps are getting tough in the liquor business. >> good look on the new show at eleven i can't wait to see that. >> i'll see you tomorrow we can talk more about it before monday >> okay, very good >> we'll see you at 6:00 p.m
"mad money" request jim cramer good thursday morning, welcome to another hour of "squawk on the street," i'm carl quintanilla with morgan brennan and david faber. nasdaq at a two month high and within 2% of a record close as tech leads the charge. yields back below 164. our road man begins with the taxman cometh, warning the tax hikes are the next big risk to the market >> and ev charging stocks filing, which names, if any, are right for your portfolio >> and then the national association of manufacturers with a warning for the white house. higher corporate taxes will mean fewer american jobs. ceo jay timmons is going to be joining us this hour. >> investors may be focusing interest to rising tax rates, saying he's willing to negotiate on the proposed corporate tax rate. >> mr. president, are you willing to go lower than the 28% corporate tax rate
>> i'm willing to listen to that i'm wide open, but we got to pay for this we got to pay for this there's many other ways we can do it. but i'm willing to negotiate that i'm come forward with the best, most rational view, the fairest ways to pay for it there are other ways as well i'm open. >> chief u.s. strategist. >> we have the s&p at another high this morning. some of the adjectives describe this marketings as super bullish, how do you see it right now at these levels, especially as we are having these bigger conversations now about that corporate tax rate and also, i think, broader global tax implications >> well, we're pretty close to our mid year target, 4,100 on the s&p, end of this year looking around 4,300 we're looking at relatively
modest gains in the very near term, and single digits through the balance of the year. you raised an excellent question, which is the prospect for tax reform and keep three numbers in mind, morgan if you take our earnings model, and you assume for a moment the current tax law, to be applied to 2022, next year's earnings. you look around 12% earnings growth we assume that there's going to be an increase in tax rates, and therefore we're looking around 9% earnings growth, and the third number to think about was a full application of the proposal by the biden administration would lead to earnings growth next year of around 2%. so 2%, 9%, 12%, somewhere in that range is likely to be where the earnings growth ends up being in the market in 2022, and make no mistake about it, all of the conversation with clients now are about the prospects for profits in 2022.
unfortunately, lots of times as the president said in the clip crow played remains to be negotiated exactly what the specifics will be, and they will be matter, whether it's more on the international exposure, the statutory rates, all of those things, but it is a big focus of portfolio managers, and in fact, the idea of trading this is probably a little too early because the specifics do matter. >> yeah, i mean, i realize there's a lot in flux, you just said it, trading this, still a little early but looking at your price targets over the coming 12 months, is it safe to say you probably or could potentially be bringing those down depending on the details? >> well, the risk to our earnings, i would estimate, is probably for the downside as opposed to the up side we are assuming in our forecast, that the statutory rate raises, say, to around 25% the risk of course could be higher could also be lower but the baseline risk would probably be the up side on tax rates, downside on earnings
three big issues, taxes are one, margins are the second and the third is interest rates, and over the last month, really year, over the course of the last couple of months, those discussions with clients have shifted in terms of the prioritization of those topics we start in a big way kicking off the first quarter earnings season next week, and the pivot will be to margins we know there's been a lot of increases in supply chain, prices and rising and the question is really how much and which companies, which industries will be pushing through increased prices to their consumers, if you will, ultimately to the individual consumer, and therefore has some implications on broader inflationary trends. that's the topic that most fund managers and investors will focus on with management in the conference calls and year over year growth in the first quarter will probably look something in the vicinity of 20% at the aggregate level median stock, which is probably more relevant for stock pickers
is around 9% 9% year over year growth in earnings is what people are expecting as you come into the quarter. the last couple of quarters, no one paid for positive surprises. really what they're focusing on is what's the likelihood you saw kimberly clark announce earlier that they were going to be raising prices on their goods between mid to high single digits you have seen other companies make these announcements well, that's a question of how durable are the margins likely to be. who has pricing power, who doesn't. i think that's the pivot for t then it pivoted to taxes, which was kind of the last couple of weeks, we have been focusing on that, and now i think it's going to at least for near term, focus on margins and pricing power >> david, it's david you know, i was talking in our last hour about the 2017 tax cu because it's bound to come up now in the debate in terms of
how effective it was and i know you did a lot of work on it. i remember we had a lot of conversations around how much will really result in investment, how much will be difr dividends and buy backs. give me your take. did it result in what was promised >> well, it resulted in more cash flow for corporates it's an excellent question, david. it's definitely been coming up people in washington and otherwise. so the effective tax rates for u.s. companies went down by around 7, 800 basis points, something in the vicinity of 26% down to around 19% so basically, david, there was a lot more cash that companies had, a lot more money to spend and uses of cash across all priorities actually increased. so there was increase in money in capx, there was increase in money spent on buying back stocks, in paying dividends, sort of all the different priorities that companies had. now, the priorities typically,
the largest dollars spent by companies consistently have always been in terms of capx and so the sort of prioritization capx is first, and research and development dollars and depending on other growth initiatives, the m and a activity, those traditionally is where the growth is taking place, and absent of opportunity sets, companies then pivot and return cash to shareholders. some different forms, buying back stocks or paying dividends. to answer your question, david, the biggest increase dollar wise was actually a lot of companies were investing for growth. but the way the structure worked in 2017, was there was a kind of one time, and a lot of companies repatriated money on their money that had been earnings, that had been permanently reinvesting overseas and brought back to the country. some of that on an initial basis did go to buying back stock. the two initiatives, buying back stock, more importantly with capx, those were the two big
winners in terms of incremental spending. >> to wrap this up, given the conversation we're having, talk about three key risks to the market right now, where do investors put their money. we have been talking about small caps as sort of this proxy for this reopening trade i would imagine it's those small stocks that are going to get dinged the hardest, talking about higher corporate tax rates, rising costs, et cetera >> morgan, the number one trade this year, are focused on bitcoin up 100%. the number one trade this year, has been duration. short duration stocks up 25% year to date long duration, those big growth stocks we all talk about, those were down roughly 3%, year to date that's 28 percentage points of out performance. in the context of higher inflation concerns and largely rates that are moving higher, that would be a continued argument in favor of shorter duration stocks. that's more cyclical, near term growth that's, i think, likely to be the next couple of months.
as you look out later, there's a pivot back towards more secular growth as rates stabilize, and people look for where's the real growth into 2022 that would be my take on it going forward. >> thank you for joining us. still to come this morning, ev stocks taking a bit of a tumble we're going to break down what names look good. soatjay timmons of the national asciion of manufacturers on a higher corporate tax rate, and what it could do to the number of american jobs, when we come back ? actually it's for both new and existing customers. i feel silly. but i do want nationwide 5g. i want nationwide 5g. are we actually doing this again? it's not complicated. only at&t gives new & existing customers the same great deals. like the samsung galaxy s21 5g for free when you trade in.
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our next guest focuses on ev charging companies it's been a volatile group lately you can take a look at names we follow closely and what they're doing, joining us now is gabe dowd, a senior energy analyst at cowen. what are you looking for in terms of some of these companies when you're considering whether or not they're worth buying, not just from the perspective of how they're valued in the stock market but where they are in terms of their technology and what you can believe because so many of these companies do seem to be fairly early stage >> david, good morning, and thanks for having me to your point, it is certainly early days in the overall ev adoption, and electric mobility theme. but we do think over the next
several years and moving throughout the dade, you should see ev penetration accelerate, and grow at a 30% through 2030 that will certainly necessitate charging infrastructure, and there are a number of companies that are fairly new and have come to market pretty recently, just over the past three to six months, there's been a number of new privates e nmerge, and i thk for us, what we like to look for is growth margin potential, and can they ultimately deploy charging infrastructure profitably and earn a return that could ultimately benefit shareholders so that's certainly something we're looking for. no doubt, it's a top line growth story. over time, we would like to see gross margin improvements. >> and so how do you sort of try and understand in terms of the money that may be coming into the sector as a result of the infrastructure bill, if in fact, it passes, i mean, you can imagine it's an avalanche of potential money, which would be beneficial to all, but again, you know, where do you see it
really going >> yeah, david, we do think the infrastructure plan could somewhat be a tide that lifts all boats so to speak. obviously president biden is keenly focused on winning and evs, as you laid out last week, earmarking about 174 billion to the sector, and within that, he does plan on, you know, providing grants to support the build out of 500,000 chargers by 2030 so certainly, a pretty big influx of funds that will go toward the sector, and help support the ecosystem, and from a company specific standpoint, i think that's one thing that we will continue to monitor, assuming the bill passes you mentioned just specifics around timing and specific power levels of charges. there's multiple charging solutions out there, an ultra fast charger, so we'll be l
looking for more specifics around how this will be deployed, but no doubt, it's certainly a pretty positive tail wind for the sector overall. >> morgan, i have to comment on this shot. it's like the light at the end of the tunnel when we're talking to you here. you got to love the remote interviews >> yeah, yeah. totally. i'm curious how you gauge and assess the quality of the financials of these companies. many of them went public via spac many of them are still really young and barely generating revenue. there's a lot of question marks in general what the longer term economics and business models are going to look like, especially when you factor in ev adoption by consumers, electricity costs, et cetera, how do you go about doing that >> it's something we think institutional investors are trying to figure out themselves, largely a new sector, a lot of companies have come public in the past three to six months via
spac in terms of financials, it's certainly early days a lot of companies generate little in terms of revenue they're negative on the gross margin perspective it's a hockey stick like growth story that should accelerate as you move throughout the decade, and evs accelerate and on the back of that, infrastructure accelerates. as you mentioned, the economics today are probably a bit challenged just think about the number of evs on the road today, still quite a small percentage of the overall vehicle fleet. overtime, there's utilization on the charging ports increase, that should lead to a pretty nice improvement in utilization, and economics that over time will start to show up in the financials, to your point, it's certainly still very early days. >> gabe, i wonder, you know, you got these two huge buckets, one is sort of retail consumer-led use. the number of teslas you see on the road, the product
introductions out of gm, and ford, versus say the commercial development, and the instant scale you get from large bulk purchases. i wonder, between the two, what's going to be the better proof of performance as people consider whether to adopt. >> yeah, carl, it's definitely a great point. obviously there's been a number of new passenger vehicles or fully electric models that have been introduced over the past couple of years, and obviously over the next several years you'll see a number of new models potentially the more attractive charging opportunity could lie on the commercial side, and as commercial vehicles continue to electrify and even ride sharing companies continue to electrify, i think that will ultimately drive a pretty nice increase in utilization. so companies like lyft and uber, they obviously have sustainability goals themselves and as those fleets continue to electrify, we think that's where potentially from the owner/operator business model, which again is predicated on a
new piece in utilization, that's where we think the nice and bigger potential could be as we move throughout the decade. >> gabe, it's an area we'll be continuing to follow closely appreciate your taking some time, thank you. >> thank you, everyone take care. >> well, it's now time for our etf spotlight, the invesco, s&p 500 equal weight consumer discretionary etf, ticker rcd. one sector in particular that's helping to continue that out performance, cruise lines, norwegian, carnival, all up 16%. carnival threatening to pull ships from the u.s., over travel restrictions and push for vaccinated passengers to be able to sail, and coming up tomorrow, we're going to talk with the chairman of viking, the uicrse line it will open summer sailings in june we've got a lot more "squawk on the street" straight ahead with the s&p at record highs.
>> las vegas is betting, of course, on the return of travel. con contessa brewer is live on the ground there, it's been a while for sector you cover so closely. contessa, what have you got for us. >> it feels great to be back i'm kind of up in the air to get this beautiful skyline behind us the weekend business is back midweek is really lagging because there are no conventions, the first city wide convention is confirmed for june, the world of concrete. normally that brings in more than 60,000 people, but nobody anticipates that kind of attendance this year still caesar's, mgm, wynn, all have brand new conference facilities they're eager to show off. the las vegas convention center is unveiling a billion dollar expansion, and the second half convention calendar for the city
looks promising. there's big challenges here. hotels aren't fully staffed. services are limited bars and restaurants are still closed down in some cases and those that are open can't really get to the 50% capacity because of the requirements for social distancing i asked nevada's governor about lifting those restrictions >> hopefully we will be able to lift some of the social distancing requirements ahead of that the key is getting more vaccinations in people's arms. the more people we can get vaccinated, the better off we are. >> more of that interview on cnbc.com the governor will hand over control of the counties on may 1st, but the casinos tell me, look, they need time to prepare, to rehire for load workers, to accommodate these convention crowds and that's a challenge, too. up and down this strip, i have been told, it's tough to find enough workers to clean the rooms, press the food, and by the way, even uber and lyft are in short supply here, why? i'm told a lot of people couldn't wait out the furlough,
and they found other work. for instance, for amazon by the way, we're going to talk about this return to business for las vegas, with caesar's ceo tom reid in an exclusive interview today on "the exchange." you won't want to miss that. morgan. >> that is must watch tv, contessa it's great to see you there and sort of capturing what the sense is and what it feels like on the ground we're seeing more space just this week, new york, north carolina, making moves to legalize sports gambling and online betting is that something that could also have an effect on vegas, especially as the city tries to bring in more foot traffic >> you know, what's interesting is that the fact that people can gamble anywhere now is something that means that gaming revenue becomes less and less important in las vegas people don't need to come to las vegas to gamble. most americans live within an hour or two of a casino and can gamble there new york, for instance, they're going to try and move to
legalize online sports betting that might keep sports betters closer to home in new york rather than coming out to las vegas to bet on the super bowl or whatnot that's what's interesting about these conventions. they are so important to fill the hotel rooms sunday night through thursday night, and getting them back in here in a way that makes sense economically is super important. it's just crucial for these companies. >> yeah, certainly in vegas, contessa, and anywhere that monday through thursday is going to be a huge area to watch. it's great to see you back there, contessa, we'll talk in a bit. contessa brewer in las vegas when we come back, quote, america can't afford that, especially now, why the ceo of the national association of manufacturers says a higher corporate tax rate could cost a million jobs over the next couple of years. our new show "tech check" emrepries monday with myself, 11:00 a.m. eastern time directly
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i'm rahel solomon, and here is your cnbc covid update at this hour. india's health minister is denying there's a shortage of vaccine doses in that country after complaints that some vaccination sites had to close because they could not get enough shots cases have soared well above th country's september peak with a total of 1,300 cases india is approaching brazil, the country with the highest number of infections after the u.s. australia is recommending the use of pfizer's covid vaccine for people under 50. after european regulators found a possible link between the astrazeneca vaccine and a rare blood clot that's been seen in a very small number of people. mostly younger adults who got the shot and the start of the french open is delayed by one week, may 23rd to may 30th as cases surge in france, organizers say they will use the extra time to quote optimize
their chances of welcoming spectators, but carl, of course, as you know, france is in the midst of a third wave so it's a tricky time for them >> it sure is. and obviously we're thinking of france and hoping that that situation gets resolved quickly. thanks, rahel. the president announced that the u.s. must take bold action on infrastructure spending and he explained the various structures that this country needs to rebuild >> i'm prepared to work. i really am. but to automatically say that the only thing that's infrastructure is a highway, a bridge or whatever, that's just not rational it really isn't. i think the vast majority of americans think everything from the sewer pipes to the suewer facilities to water pipes, i think they're infrastructure >> joining us this morning to talk more about the definition of infrastructure, and of course
our rising corporate tax rate that might come as a result, jay timmons, ceo of the national association of manufacturers, great to see you again. >> good to see you >> you have been pretty supportive of a lot of the president's initiatives in this first 75 days but this idea of a higher corporate tax rate really did seem to be a bridge too far. why? >> well, interesting way to say that, a bridge too far when we're talking about infrastructure, carl look, we very much are supportive of the president's call for a bold investment in infrastructure that is absolutely necessary it has been decades, generations even since this country has invested in it so he's right on target there. the proposed way to pay for that, raising the corporate tax or raising taxes on businesses, t it's a job killer, plain and simple we want to work with congress to come up with other ways to
finance the president's proposal as soon as the congress figures out exactly what they want to spend money on, we have some proposal in our building to win proposal at the nam that focuses on user fees, and bonding and public private partnerships, and there's all kinds of ways we can pay for infrastructure we have been talking about this, again, for generations so we really need to get this done and done right in a way that doesn't kill american jobs and manufacturing jobs our study that we've produced and just put out today shows that if we raise business taxes, then we're going to eliminate about a million jobs in the next two years, almost 6 million jobs over the next ten years. we don't want to do that >> meanwhile, there are some who are trying to press on the wall and see where the soft spot might be, if there's a compromise somewhere in the 25 range. i was going to ask you about that, but in your statement you say even though who are proposing something south of 28 means america will still lose jobs and investment, just not
quite as much. does that mean nam is not open to compromises at all? >> look, i think there are a lot of well intentioned and well meaning people that know we have to make this investment in infrastructure they're just trying to figure out how to do it but the point is exactly that. if you raise taxes on job creators, you take a step back we might take a step forward when we put this investment into infrastructure right? but we don't want to take a step back i'll give you some statistics, carl, that i think are extraordinarily important. back in 2017 when tax reform took place, manufacturers said, look, we have been asking for this for a long time now we're going to keep our promises we're going to keep our promises to invest, to create jobs in america, and raise wages and benefits, and we did exactly that in 2018, in fact, the year after it passed, the manufacturers added 263,000 new jobs, and that was the best year for job
creation in over 21 years. we raised wages in 2018 by 3%. they continued to go up in 2019, and even in 2020 during the pandemic capital spending grew by i think it was 4 1/2%, and 5.7% in '18 and '19. those are tremendous numbers we don't want to go back to the rfk tax structure of the past. >> yeah, jay, it's morgan. i mean, it's been a strong couple of years for manufacturers, and certainly when you look at this recovery now, it's being led by the industrial part of the economy and by manufacturers, but just to go back to infrastructure for a minute, i mean, certainly the white house has said they're open to sugs what would you suggest in terms of paying for infrastructure, is it public/private, higher gas tax, tax exempt bonds or something else >> wow, you just laid out our whole plan that's great, morgan, thank you.
so in our building to win proposal, and people can find that at nam.org, we lay out several options for financing, and you just went through several of them, and those are important. there are others out there as well again, user fees, bonds, and public/private partnerships, but let me say one thing about that because suddenly folks have found religion about debt, and i get it, i understand the political back and forth on that but look, we just spent $5.5 trillion in the last ten months for on the spot spending. we're talking about a 2 trillion or so plan, 1.2 trillion, i think, in kind of traditional infrastructure projects over ten years. this country can afford to invest in capital projects that will make us prosperous for genera generations to come. i don't fear debt financing. we're not going to do 100% of it, but we should talk about at least a little bit of it, investing in our future. that makes sense
that's where you should apply debt and bonds >> corporations will certainly benefit in that prosperity, and benefit from the improvements that are made in the infrastructure overall shouldn't they pay some part in taxes for that investment that is going to benefit them >> hey, david, we are. right? 21%. we believe that's the corporate rate right now, and you know, the rate for individual small businesses and past entities is a lot higher, so look, i think it's important that, yes, we are paying a significant amount of taxes right now. personally, i'd like it see businesses paying less so we can invest more and hire more. i think that will unleash the spirit of america, but we are where we are, and we've sdone some really good things with tax reform over the last two or three years to build communities
and hire workers and strengthen america, during the worst of times, look at what pharmaceutical manufacturers were able to accomplish because of the great work that was done on research and development and being able to incentivize that through our tax code those are the types of things and advantages that we don't want to lose as americans, and i think we can, again, i think we can do this a different way, in a way that will be a win-win president biden gets his infrastructure investment done, which i think is incredibly important. businesses are able to keep investing and hiring and the american people win as well because we're going to have a better infrastructure, we're going to have cleaner water, safer water, we're going to have sewage systems that are up to date better airports, better inland waterways, roads, bridges, 5g, america will be on the cutting edge once again. >> jay, we got to wrap it up, but i hope you'll come back to talk not just about domestic tax
rates but potential global minimum tax rates as well. it's great to see you. thank you so much. >> good to see you, thank you. >> jay timmons. >> well, the pandemic is exacerbating inequality worldwide according to amnesty entr international's latest report. northern trust asset manager joins us now, good morning to you, welcome. >> good morning, how are you doing? >> let's break this down i know you recently wrote a letter how are you thinking about this given fact that you are a leader in business and financial community? >> well, specific to the letter you reference, most recently i felt it important to speak out against the injustice and in particular the violence that we're seeing against asian and pacific islander communities here in america, and so the thought process, though, if we span out is -- i think that's part of a broader theme. if you think about over the past
we're, the spike that we have seen and those kinds of incidents, both in terms of the number and severity, and that particular community, but also whistl we're seeing it across other community of color various ethnic minorities are suffering the same things. the bigger picture is we're seeing many of these systemic inequities, things that are laying in plain sight coming to the fore, and i think that we, particularly as leaders in government, but especially in the business community, have an affirmative role to play not only in raising our voice, because we have to acknowledge these things, but to actually use our influence, and our power to really counter act many of these things. >> words are one thing actions are another. so what does that mean at northern trust asset management, how are you putting this discussion, i guess, to work in real life within that context? >> well, there's a variety of things, and so one of the things, it starts with our senior most leadership
in any cull churks the lead -- culture, the leadership is sending a signal by what we voice and what we say. what we have done is not only raised our own voices but given space to have a dialogue we're hearing from partners around our organization, and for me as a leader and other leaders, it informs us better because we're all part of connected communities. what that allows us to do is think about the power that we have, right, we can use what i call our c's, right, we have the ability to engage with our customers and clinents, we're collaborators and partners in business we have capital, which we invest if we think about how do we do that in equitable ways, and how do we hold our sales accountable in terms of how we do that we're doing that within asset management by virtue of having programs in place for dealing with more diverse suppliers and vendors, if it's who we trade with, and we're thinking about that in our own employment
practices. making sure we're doing the best job we can to increase our own diverse representation even when we have that representation, making sure they have equitable opportunities for promotion, and that's especially true when we're thinking about gender, and it's also true when we're thinking about ethnic diversity. we have very clear score cards, we have very clear targets that we're holding ourselves accountable to lastly, we think about this, beyond just charity. charity is one important way again, corporate social responsibility is a very real thing. how do we show up in the communities we're in. >> you just mentioned the score cards, that's my next question, how do you measure success, whether it's at northern trust or whether even if you span out as a business leader within the community more broadly, within society more broadly >> there's a variety of ways, first of all, if you think about first the culture that you have,
we know companies that have high trust coaches, that have higher levels of engagement actually produce better business results, and their employees have a better experience. so one of the things we actively do is we measure engagement. right, so over time if we're seeing the effect of things like what we have committed to in terms of our targets and goals, and diversity, equity and inclusion, increasing our employee engagement, it's increasing our loyalty scores, not just among our employees but actually our customers and those we do business with. that's one way to measure it we also look at what is our ability to solve problems better and bring more innovation. we know, again, diversity, equity and inclusion enhance those things there's the bottom line. this is good for business. now, we have a moral and a cultural imperative to do it, but we also see that over time, playing out in how we do as far as the economics and the value that we deliver to our shareholders. >> it's an important conversation, and we're glad you had it with us, shundrawn, thank
you for being with us today. >> thank you, morgan. up next, we're going to have a look at the best cities for first time home buyers "squawk on the street" is back ghafr is dot anywhere. the old guard e by tech innovators who can't stop asking “why not?" why not direct indexing? or crypto? fractional shares? or digital clearing? there's a place where all these things come to life. a platform where the biggest names in fintech are changing the world. so, if you've got the guts to dream, we've got the guts to make it real. apex fintech solutions the guts to change everything. i'm searching for info on options trading, and look, it feels like i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor
that's why insurers are going hybrid with ibm. with watson on a hybrid cloud they can use ai to help predict client needs and get the data they need to quickly design coverage for each one. businesses that want personalization and speed are going with a smarter hybrid cloud using the technology and expertise of ibm. nice bumping into you. many first time home buyers are entering the market, diana olick has where they should be looking or at least some suggestions for them diana. >> that's right, david first time buyers usually make up 40% of the market, but are now less than a third according to the realtors because the majority are millennials and some are sidelined by heavy competition and high prices, especially at the entry level, but there is still hope. the pandemic has created more
flexibility in where people can live and work, which benefits the same first time buyers where are the best bets for them in 2021, not surprisingly, four of the top ten best markets for first time home buyers as determined by realtor.com are in the midwest. bloomington, illinois, leads the list then iowa city, kalamazoo, michigan, great falls, montana, eau claire, wisconsin, and savannah, georgia. all of the top markets have median prices below the national medium of 370,000. kalamazoo had the lowest it is not just about price realtor.com looked at home prices relative to local incomes. the share of millennials living in the market,the availability of homes for sale, job opportunities, distance to work and amenities like bars and restaurants. if, however, home ownership is still out of reach, the best markets to find affordable luxury rental apartments are in the south, according to rent cafe several in the atlanta area, otherwise markets in alabama and south carolina back to you guys.
>> i love this map and this analysis, diana. it's really fascinating. i am curious, though, i know you have been covering the lack of inventory for so long now, when we talk about first time home buyers, they're competing against other first time home buyers, other millennials that are having kids and looking to settle down, but the other part of the puzzle is the investors and institutional buyers, right? >> yes, and that's where investors live and live in all cash, and first time buyers are generally dependent on mortgages. you do have that high competition. if you go to some of these much smaller cities, the areas they're suggesting, you're going to see less competition from investors because they're not going to see as much rental demand so they're not going to want to invest there >> diana olick, thank you for joining us. sneaker head rejoice, stock x closing a fresh funding round after seeing huge growth the ceo joins us after this quick break.
2020 for stocksx joined by the ceo to discuss the developments. scott, thank for being here. >> great to be back. >> so, scott, valuations increased 35% since just december of 2020 what do you think investors are seeing in your company now what do you think you're seeing as far as growth prock spects >> our imbastion, market driver. trends driving our business, 100% growth from female buyers 100% plus from international buyers 75x year over year in electronics as a category, 4,000% growth from collectibles as a category. we see as we expand our business internationally and across categories, it's reflected in the investor interest and consumer interest in stocksx as an ecommerce company. >> scott, talk about that record 2020 for your company. you saw record sales saw a lot of growth.
that growth continued into q1 of 2021 talking about sushcurrent cultu. part of the pandemic and stimulus checks. how big an impact has it been for your company >> we did see tremendous growth in the business in what we called stimulus one. which happened in april of last year we saw accelerating growth in our business 75% growth from q3 over 120% growth from q 4 profitable in q3 and q4. most importantly, consumer buying shifted and categories we trade on our platform are more like asset classes to this next generation, we're providing this opportunity for not only consumption of these items of current culture. also the opportunity to trade them as asset classes which had been a big driver of our growth in the postpandemic world.
>> yeah. so fascinating, scott. this is morgan talking asset classes, are there certain categories you're not currently involved in this money, this raise, enables you to get into? i ask in part because things nfts and crypto are getting a lot of attention now. >> we always viewed our platform as an opportunity to crave new asset classes out of what would typically be commodity products. for us sneakers, apparel, electronics and collectibles we do believe there's an exciting opportunity with the growth of nfts, and other digital types of products that reflect underlying assets we think we can create an opportunity for further types of trading in these underlying estates. we're really excited about these trends, these new opportunities that are unlocked by these new asset types and are a platform that will be able to take advantage of that, because that's really what people come
to stocksx for to not only find something of current value but trade buy and have that asset appreciate over time. >> scott, talk a little about your frbrand extension. handbags louis vuitton handbags on the site, play station 5s, thinking about bidding. why are you pushing into these different categories when you seem to have so much suctcess with nis brand sneakers and content focused on a lot of sneaker heads when you look at your editorial stuff >> focused on what we call the next generation of consumers that means 70% of our consumers are under the age of 35. they're focused on not only sneakers of which 31% of gen z wa call themselves a sneaker head, catered to products that cater to that type consumer. we've expanded into other
categories building on our growth in sneakers into apparel into electronics we've been trading almost a console every single minute since we launched in november. in electronics as a category trading cards, collectibles. it's been a category of enthusiasts that's been around for decades and decades and now seeing a resurgence. we launched that sass a category abcategory -- as a category about a year ago. explosive growth there focusing on the types of products that this consumer is attracted to and being a platform of choice for those consumers when making a purchase decision. >> all right scott cutler, ceo of stockx. thank you for being here. >> thank you very much. >> carl, back to you. >> great stuff, frank. thank you so much. a quick programming note for you. monday, 11:00 a.m. eastern time, a new show premieres here on cnbc "tech check we we with me, julia