tv Squawk Box CNBC October 29, 2021 6:00am-9:00am EDT
twitter. why it's all about the metaverse. frid friday, october 29th, 2021 "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc happy friday i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures based on the misses from apple and amazon that joe mentioned you can see that is putting pressure on equity futures, nasdaq in particular down 131 points this morning s&p indicated off by 21 and the dow down 43. the s&p and nasdaq both set new record highs yesterday dow closed just shy of a record high talking about declines but declines from from lofty levels.
the treasure market right now, the 10 year yelleding 1.605% and the tech earnings misses that we saw yesterday, we're waiting to see what happened today. right now we have chevron just reporting its numbers, it's not a miss its earnings came in at $2.96 a share. that well beat out the share of $2.21 the street was looking for p you had revenue that exceeded analysts' forecasts stocks looks like it's up, just running through the other numbers in the release. they talk about how this is their highest profit for a quarter since the first quarter of 2013. improved market conditions, lower cost structures, you had oil prices that increased steadily through all of that time and a streamlined company that helped with the cost
structure. free cash flow, best ever and year to date, cap x spending down 22% that's the problem, the cap x spending down, so you're not going to see as much drilling and exploration as you've seen in the past that's why we have not the same amount of oil on the globe and we've not been able to fix things not going to be the case with a lot f these things because of the pressure that's come from esg as well. coming up at 8:30 eastern time we'll speak with chevron's cfo and later hearing from exxon mobile at 7:30 a.m. we bring you an interview with the chairman and ceo darin woods. let's talk about what's happening in d.c. because president biden failed to break a democratic blockade on that stalled infrastructure bill ahead of his trip to the g20 summit instead he unveiled his outline for a $1.85 trillion safety net
and environmental bill the framework includes subsidies for child and pre-k. and shifting away from natural gas and coal an income tax on multimillionaires and a 15% tax on corporations. liberals demanded a reassurance this package would survive before voting on the infrastructure bill. it's been held captive by the party's progressive wing which demanded changes to social policy and climate change. here's treasury secretary janet yellen speaking to cnbc in the last hour. >> i believe that pretty soon, hopefully next week, congress will pass both the reconciliation or build back better bill, and also the infrastructure package
there seems to be strong support for it in both houses of congress, as i say, it's transformational and i believe these will become law. >> and guys, i don't know about you, to me, obviously, there's the new approach on taxes, which we've talked about the varying approaches that have all taken place over the past week but then the most interesting thing to me in the proposal, was this tax credit to the automobile companies for evs, but a better tax credit if you're a union shop as opposed to a non-union shop so tesla, obviously the winner in this game thus far, effectively gets hurt by this relative to the detroit automakers, toyota also not a union shop so they would be impacted as well interesting to pick the companies based on whether they have union representation.
>> i was caught up in the shot of secretary yellen. beautiful, wasn't it. >> backdrop in rome, yes >> right next to that big park it's incredible, breathtaking. most of rome is like that. i was not thinking about the tax side of things i was once again thinking about the way you get to 1.85 and the journal has an interesting piece, again, i know i'm like a broken record with the journal but most of the things they're doing, they're funding it for a year or two years and you know it's never going away. if you look at the real funding it's like $4 trillion, it's not 1.85 >> that's what judd greg's point has been, once the programs start it's too popular and nobody wants to take it away. >> it's slight of hand did you see the poll now in virginia in? what happens on tuesday if that
guy does win, which would be a huge shocker you wonder about the suburban voters you had the soccer moms that were anti-trump they look at the current state of things and say, i didn't sign on for this. i can't believe virginia is going to re-elect a republican they haven't had one in 30 years or something. >> it's reminiscent of what happened with the obamacare whe that pass pd there were people in favor of it this is indicative of the idea we don't have a two-party system we pretend we do we look at areas like israel or britain where you have to cobble together a group of people that's what we have too. the democratic party -- >> it's the two party system. >> the republicans are the same, trying to get them to control the caucus when you blow off the nancy
pelosi, when you blow off the president who have come and you still have the house members saying, we can't even decide that we're going to decide to move this bipartisan infrastructure deal, it just shows you that it's -- there's not the same level of control within each of these parties there's a couple of different parties. >> we'll see if that's a real rebuke of what's going on. we'll see that on -- we'll have a good chance to see it on tuesday. excited about facebook i also was -- these two reports talk about -- remember with cramer yesterday we said look the companies we're seeing don't reflect the 2% gdp, now i'm not so sure. because you are -- we mentioned delta and it was part of it, it's not just delta here, did you see apple it's delta in southeast asia so when you talk about supply chain, you're still talking about delta as covid because it's the result of covid but you see this, apple, the
stories about apple, but then they go on to talk about whirlpool, kraft, heinz, mcdonald's, you know, all sort of being subject to some of the same constraints, whether it's wages or -- >> we say if you're big enough the supply chain doesn't matter to you. >> i think it's starting to. >> and the labor issues don't matter to you. the idea that apple lost $6 billion because of these constraints tells you a little bit about, it doesn't matter how big you are, apple and amazon in both cases are going to get caught in the same things. they may be better in working around these things but it's expensive. >> let's get to the facebook thing, because i am kind of thankful that we have a guy named zuckerberg, i'm starting to like him more he's going to spend the money to do this, tens of billions of dollars -- we said what's after social media, what's the next thing? little did we know it's going to be virtual reality and avatars
i've reserved yours already sorkin, i told you a long time ago i'm going to be ars, that's my hero name facebook changing its corporate name to meta changing its logo to one similar to infinity it's a nod to the metaverse, a term that referring to blending the real world and the virtual online world the company is going to change the stock ticker later we'll talk to reddit founder in the next hour. have you thought about what this looks like if we play in the metaverse? >> is this different than the avatar -- i remember hearing about avatars back in 2000 before that even, like 1997, talking about people's avatars. >> you have a 3d zoom meeting?
what does it look like >> this is turning out to be -- >> is this transformational. >> this is turning out to be a boomer conversation. >> okay, boomer. >> it's right. i think this is the future i'd be very long list. >> that's what i'm talking -- >> it may not be five years -- >> he's calling becky a boomer or me a boomer >> he's calling me a boomer too. both. >> both. >> i was saying i was glad he was going to spend the money to get us there how does that make me anti -- you're so far ahead on everything, andrew, it's tough to keep up, becky. we try and try it's huff to do it tell us what you mean by that. what will the world look like? >> no. i just -- look, i just think that -- >> help us >> teach us. >> help us help us old folks.
>> it's okay. >> enlighten us. >> we'll talk about it later we'll do an offline chat about it later. >> you teased us i think it's cool. you think it has anything to do with the facebook brand isn't quite as great as it used to be? >> no, i actually don't. i think that's one of the great sort of misnomers of this whole situation. there's a defensive element to it, of course, but i think that he -- i think genuinely over the past couple of years has been moving to this place and has unique ideas about what could happen in that kind of metaverse both the vr world and also ar world. did an interview yesterday where he talked about the idea you'd wear the -- in the ar world you wear the equivalent of glasses we could be talking, you could be -- it would be distracted driving you could see texts, you could respond to the text in a meeting by thinking of your
answer they have a company that looks like a wristband, we had them on the show at one point i believe, and the wristband can see what your brain is telling it so you can effectively think the sentence and the sentence would respond and we'd effectively be texting back. >>that's where we are in five years? >> i think there's going to be a lot of that stuff in the next five to ten years, yep. >> but we would be walking down the street this is what we're all going to do in five years like everyone is walking around with ear buds right now? >> ten years, yes. five maybe not. >> do you think it's worth changing the name of the company to meta and betting that much on it v venntor was the new name, and verizon, facebook has to be one of the greatest names on the planet to switch the entire name and run to meta. >> the problem right now is, to me it's a recruiting problem
he basically runs a company that has -- does have a branding problem which is that if you are, you know, really smart engineer coming out of school, facebook as a brand of all the brands he has is actually the one that people think of as the boomer brand, to be honest they think of this as an old dying brand. >> with 3 billion users. >> but facebook unto itself -- i'm saying if you're a kid coming out of stanford right now, that's not where the action is if you can be part of that, what we're showing now the metaverse. >> but the boomer brand, the idea that facebook is the boomer brand and that's what's hurting the recruiting right now, i think they have bigger problems than that. >> i don't want anyone knowing what sentence i'm thinking half the time when you said that, andrew, if they knew right now. >> keep your filters, joe, please >> yeah. i need those that's going to be a brave new world.
>> okay. we'll talk more about it coming up two big tech reports last night, two misses we'll dig into the results from amazon and apple after the break. then later digging into president biden's framework and how companies like tesla could reap the benefits. "squawk box" coming back right after this we love our house, been here for years. yeah. but there's an animal in the attic. (loud drumming) yeah yeah yeah yeah!!!! (animal drumming in distance) (loud drumming) drums! drums! aaaaaahhhh! at least geico makes bundling our home and car insurance easy. we save a lot. aaaaaahhhh! ohhh! (loud drumming) animal! aaaaaahhhh! for bundling made easy, go to geico.com. uh-oh... (vo) while you may not be running an architectural firm,
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missing expectations due to supply issues. josh lipton is with us this morning. how are you doing? >> so headed into this report apple was up about 15% so far this year. it was trading actually right around its all time highs but investors disappointed with the latest results apple's earnings did not miss estimates but just in line. first time since april 2016 that apple did not beat as for revenue first time since 2017 that revenues did miss. i spoke with tim cook he emphasized demand is strong for his products right now but supply chain problems are limiting one we had strr strong performance despite larger than expected supply constraints i asked when the chip shortage
might ease but he declined to predict that saying they linger on it is unclear cook said how long it will last it is complex, you have to know how the economy is going to be in 2022, you have to know everybody else's demand we are all competing for chips on these legacy nodes apple did not provide formal guidance but cook offered commentary about it saying we expect solid year over year revenue growth despite that cook said we are projecting year over year revenue growth to an all-time record quarter for apple back to you all. >> josh lipton, thank you for that we'll continue the conversation now, dig into the earning misses from apple as well as amazon joining us is greg branch and ann bear is here good morning to both of you. greg i'm going to start with you. let's talk about apple
the question is whether you believe that investors are supposed to look through these numbers, the supply chain problems and say, okay, that's one thing. it's going to be a lot better 12 months from now or is there a bigger issue here? >> i think it's the latter and as they admit these problems are going to be more impactful in the fourth quarter but we have to extrapolate this to the macro impact apple is one of those tech companies that is not as immune as some of their brethren to these supply shortages to, in some cases, increased labor pressure so as we go through this quarter and we start to hear more of that, and we start to see more of the impact quantified on the companies, i think that the risk appetite will decrease in the quarter, particularly when we start to add things like a tapering announcement next week
or even perhaps seeing interest rate hikes beginning next year the fed said that benchmark it looks like we'll have 4% inflation into the spring. so extrapolating what we saw from apple and amazon to buttress my cautious view into this quarter. >> ann, are you in the same place? let's mix amazon into this situation. >> yeah, i think the most interesting thing about the apple's earnings call was the lack of forward looking guidance, and amazon did this too. tim cook did not provide any sort of engine site for some of the supply chain challenges that have been bothering not only apple but others in the sector and amazon equally pointed to seeing real challenges in q4 but didn't point to improvements in 2022 or going forward. so i'm cautious on this. when i think about investing in apple and amazon i'm looking on the services side than i am in the asset intense areas so i
think ultimately their business models are interesting in return. >> in amazon how concerned are you about margin compression long term and maybe what it says about margin compression across industry. >> i think amazon is a little unique here. we looked at google, and microsoft, we saw them delivering margin expansion. microsoft at 46% google delivered 1500 bases points of operating leverage since 2020 it depends what business you're in, obviously amazon feels it differently because they are more subject to the shipping and trucking costs and the increasing pressures there more subject, obviously, to inventories, concerns and labor prices rising as well. so amazon is going to be a little bit of a different animal here being subject to all those things but again, it's a perfect
example of me being bullish long term because we saw great growth in the cloud business, 40% there and continued margin expansion there but at the same time being subject to all of these pressures that i think will have us derisking a bit into the quarter. >> greg, explain this. if you're bullish long term and the price comes down at all you think that's a buying opportunity but then you say you try to derisk over the next, it sounds like, couple weeks or months so how to think about that >> we need to get the negative catalysts behind us. that's how i think about it. we need for some of these things to be more widely accepted than they are i'm expecting to see at least 6% cpi this year and at least 5% pce this year. i don't think that's priced in the yet. i'm expecting the fed to talk about rate hikes in the spring of next year i don't think that's priced in yet. even when we look at the quarterly results, so far we've had about a third of the
companies report and about 73% have beat on the top line, that's down from 83% last quarter and i expect that number to go lower as well. as we increasingly hear about the challenges of the inflationary environment and the price pressures. and once i feel that's baked in and the expectations not the anomaly that's when i'm more comfortable. >> if you can buy apple or amazon, with which do you own? >> i buy amazon, i think 200 million prime subscribers with the ad data to track aggressively right when apple is preventing others to do so i think with amazon web services on fire, i am on amazon. if it continues down the price wise i'm doubling down and buying the stock. >> thank you have a great weekend, guys. >> thank you >> thanks. joe? a big jump in the shares of lucid motors we'll tell you why right after the break.
and here's a look at the morning's pre-market winners and losers in the s&p 500. "squawk box" will be right back live from the market site in times square destination spot injected. let's start tripping. follow route left, left, left, left, left. recalcumalating. left, left, left, left, destination place now more far away.
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shares of lucid group jumped by 31% during yesterday's session and they are up again in the pre-market this morning, another 6.5% the company confirmed that the first customer delivers of its $169 $169,000 air dream sedan will be done it's higher than february. when we return, oil prices remain above $80 a barrel. we have you covered today on all things energy. first up we have a cnbc
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good morning and welcome back to "squawk box" live from the nasdaq nasdaq the operative term, market site in times square. check out the futures and the nasdaq, which is taking the brunt of some of the selling today, moderate down 157 points after, bviously, what we saw late yesterday with some of the big tech players with some disappointing results due to maybe things beyond their control. >> yeah, things we thought that maybe theyhad a better grasp o than other companies but we're learning they didn't supply chain issues hitting everybody. there are names like alphabet and live nation posting big gains this year. but investors on the hunt for
dividends there's more names there and dom chu has that. >> the sector has been an underperformer and many of the social media companies like facebook have been under performers this year if if you look at the performance gap on the year-to-date basis, not that large, 19% for the sector overall and 22% for the s&p 500. so there have been bigger gaps at times that orange line has been above the white line and it crossed there recently so it's certainly a performance gap to watch you don't go to the sector overall for dividends specifically but the sector does pay a modest dividend yield the sector just about .8%, and the s&p 500 closer to 1.2, 1.3% these days there are places within the sector specifically with regard to individual names that many
investors turn to for those dividend-type payments names like at&t with an 8% dividend yield. volodymy verizon 5% yield and lieumin 8.5% omni come 4.1, and the standout is ipg with the 3% yield why? it's up as a stock 56% on a year-to-date basis so that stock has been going up in value but still maintains a 3% dividend yield. when it comes to dividends, the sector is not one you typically look towards overall as a big dividend payer but certain stocks may have appeal but at&t and verizon have been big laggards so far this year. >> i was going to say a lot of times when you look at big dividends it's a sign the stock has not performed well
you look at high dividends above 8% and the question is will they continue >> for lumen you mentioned they're still up on a year-to-date basis it's fallen off the last couple of weeks, couple of months here. but if you look at the picture overall for the names it comes down to whether or not there's safety in the dividends. for right now it appears many investors, looking at lumen up about 22%. for verizon and at&t specifically it will be whether or not investors feel confident that the cash flows at those two companies are able to support some of those dividend payments going forward. and specifically because of the debt loads incurred by some of the companies, namely at&t, guys >> dom, thank you. great to see you. >> like wise. we'll dig into president biden's new framework for nearly $2 trillion, and that is a moving target. we'll look into it $2 trillion of spending on
climate and social issues. later we talk to reddit cofounder alexis ohamion and reminder you can watch or listen to us live any time on the cnbc app so, should all our it move to the cloud? the cloud would give us more flexibility, but we lose control. ♪ ♪ ♪ should i stay or should i go? ♪ and we need insights across our data silos, but how? ♪ if i go there will be trouble ♪ ♪ ♪ wait, we can stay and go.
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details of his almost $2 trillion social spending plan the president says it will be fully paid for by raising taxes on the wealthiest americans and corporations joining us alexis goldstein is the director of policy at the open market since taut we were going to pair you with someone on the other side of the aisle but it's not going to happen today so you have free rein to talk about the balance between taxes and spending that we're seeing here. do you think that this latest regiment of tax increases that we're seeing we've been through a lot of different ones over the past, i don't know, six weeks or so, if you could write the bill, is this what you would have written? it looks like the billionaires are kind of getting -- escaping again and obviously carried
interest isn't in here. >> i think there's a lot of strong things in this bill as it's currently propoed it doeshave a minimum 15% corporate tax which addresses things like the fact that amazon made $20 billion in profits last year but paid a tax rate of about 4.3% it gives more resources to the irs to address the tax gap, the difference between the amount people owe and pay there's about $600 billion tax gap every year and 160 billion of that is the top 1%. but you're right the billionaire sort of tax increase it seems has currently come out i think that was good policy that's something they should consider bringing back into it but there is a new surtax on the wealthiest americans so there's a smaller version than the original proposal to tax billionaires to ensure this money they're deferring and
deferring until their death or to pass to their descendents it just sort of escapes taxation whereas ordinary people have to report all of their earnings and pay a far higher taxes than the space cowboy billionaires shooting themselves into the space stratosphere >> do we want to do the precedence of starting to tax assets we do with real estate and other things it would be complicated but it's been hundreds of years of taxing realized elcome. >> we do -- >> do you cross that rubicon and when does it stop? >> i think we passed it. we pay property taxes on real estate otherwise if you don't, so to speak, do that, people just defer taxes forever and never pay it i don't think that most americans think it's fair that
teachers, firefighters and construction workers have to pay a higher percentage of their income on taxes than billionaires who have managed to funnel most of their income into investments. i think just as we do with real estate we should do it with unrealized gains on other type of investments whether it's jeff bezos amazing money through amazon or elon musk amassing money through tesla or others. i don't think it's good to defer taxes on their income forever and i think most americans agree with that. >> democrats control both houses of congress and the executive branch talking about doing it but it's not happening here they're escaping and we're going with merely -- i mean, the people that i guess all -- that are going to be affected are
wealthy, obviously the cooperation that's a different issue entirely i guess amazon, you're not accusing them of cheating on their taxes when they pay 4 preexistin4% it's just that the deappreciation and other parts of our tax code that apply to companies like amazon allow for that tax treatment can you go back and actually change some of those things or would that have unintended consequences better to do a minimum tax >> some of that is in the bill we have the perverse incentive if you have overseas profits they're taxed at a lower rate than local and there are bills to incentivize that people aren't offshoring jobs. and there's the 15% minimum corporate tax rates for large corporations like amazon which would ensure they're not paying the lower tax rate than a firefighter, a janitor, a
teacher. so i think there's good things in this bill that would help address this issue for these giant mega corporations like facebook or i should say meta now to bring it in line with what everybody else does if you look at the way payroll taxes account for a percentage of government taxes over time versus corporate taxes corporate taxes get smaller and payroll taxes get a larger percentage look at ronald reagan, corporate taxes were 30, 40% so we're slowly perhaps making our way back to that and making sure we have a more even playing field and it's fairer for everybody else who earns their money by w-2 wages. >> it's a little frightening because the 1.75 trillion that is supposedly paid for, the actual cost likely to be, according to some, as high as 4 trillion so it's actually, i don't know where you're going to get -- that's going to be deficit
spending or there's going to be increases somewhere. we have to end it there, alexis. thank you. next time we'll have someone sitting across -- it's friday. my heart is just not in it to play the other side where my twitter account -- i did the best i could >> thanks for having me, joe. >> we'll see you alexis, bye. check out shares of starbucks under pressure now, earnings of $1 a share beat by a penny. global comp sales climbing to 17%, also missing expectations and starbucks announced it would resume its share buyback program. a lot more coming up, looking at facebook's name an, at behind it and will it ease pressure on the network, that's next that's why i have my finance team, randomly hurl things at me. it's also why we use workday.
it is time for us to adopt a new company brand to encompass everything that we do. to reflect who we are and what we hope to build, i am proud to announce that starting today, our company is now meta. >> that is facebook founder and ceo mark zuckerberg announcing the social media giant's corporate name change to meta. it's going to begin trading under the ticker mvrs on december 1st for more on his big bet on the metaverse i want to welcome sarah fisher it's great to see you this morning. your thoughts we were having a bit of a debate earlier about whether this is a defensive move or an offensive move. >> i'd say it's a little bit of both so of course critics will say
it's defensive, right. they're pivoting away from some of the nightmare pr crisis they had in the past month around the facebook whistle-blower. but i also argue it's offensive as well, andrew. and the reason is facebook's business model is highly dependent on google and apple's operating system the reason is facebook's model is dependent on apple's system and they're trying to build out and away over that, and also signal to wall street that they're trying to pivot away from being solely dependent on advertising. right now, especially mobile advertising, it's about 98% of their business long-term there's a lot of threat to that we see how the advertising business can be during a global pandemic or quite frankly when another player that you're relying on, in this case apple, changes their terms. so it's defensive because they don't want to get caught up in a pr crisis, but definitely an
offensive move to tell wall street we're thinking about how this business can be reliable long-term. >> i was making the argument earlier it was less for investors and the public and more for recruits to try to effectively make the firm feel younger, find younger engineers to want to be part of the next great thing. but one of the challenges by going public this way that i wonder about is, are they better off doing it in public like this meaning, you know, i know there are developers who watch the facebook connect event and everything else, but there's not a lot of developer stuff that you can do yet there's not a lot of things that anybody can do with this information. >> well, on the front end that's right. i don't think they're going to be able to experience what they're calling the metaverse for a long time. they told cnbc yesterday that it won't be until 15 years until users will experience it but what facebook will argue is
they do need to put this up there for recruiting now because it will take 15 years to build they need to start bringing in a talent pipeline of engineers, developers, designers, to start getting this thing off the road. and i would say in terms of the product timeline here, andrew, facebook said they're going to start breaking out its reality lab revenue starting next quarter. the reason they're doing that, i think it's not just to lure talent and convince them there's movement, although that's part of it, it's also to give wall street a new metric by which to measure facebook on that will keep them optimistic if you start low, that number is only going to grow higher and it's going to make wall street excited. the average hype in revenue is not looking good sheryl sandberg said it's going to take at least a few years before they can figure out how to combat the changes that impacted their revenue growth quarter over quarter this year, you should expect it to continue impacting them so this isn't just about
recruits i think it's a big part of it. i also think it's about giving wall street some new form of optimism moving forward. >> what do you think washington thinks of this does this change their perception of facebook in a good way or do they say, oh, my, if they control the whole metaverse, if that's the buddigita universe we live in in the future, we need to regulate this company? >> it's definitely the latter. their argument is facebook didn't build it right the first time, how do we trust them to build it right the second way? i heard from someone on capitol hill that told me something fascinating, which is this they have the opportunity to signal to washington that they were really focused on being collaborative and building out a governance structure when it came to their digital wallet, but last week facebook launched it without the government's structure in place and to them that was a signal that they're going to move forward with
whatever their product roadmap is, even when governance isn't in place now, of course on that video debut yesterday, mark zuckerberg had their vp of global policy on for about five minutes to talk about governance and talk about things like privacy and protecting user data but the fear in washington is that that is just lip service, it's all talk, and that there's no real walk behind their actions. >> you mentioned advertising earlier, and advertising is going to be something that's going to continue, i imagine, to need to power this company for the next ten years, if not longer, to get to the other side of whatever this metaverse ultimately looks like. mark zuckerberg has talked about re-shifting the focus toward a younger generation, both for facebook, insta, for everything. what does that look like when he says that? and he says it's going to take years. >> he's right, it is going to take years and they've lost a lot of ground to competitors like snapchat and tiktok what it looks like is they're going to pay much more attention
to the user features and products that younger generations are flocking to. so facebook in august of 2020 implemented what is called reels, which is its tiktok competitor within instagram, a few months ago they brought back the facebook app and so expect them to invest a lot more in vertical video they're injecting more capital into the creator section, they said they're going to invest $150 million for metaverse creators, which is attractive to the younger generation, which is no longer following blue chip brands they're very hyper focused on younger influencers. and the last thing they're going to do to really focus on some of those young users is they're going to make sure that the other products around the facebook ecosystem, things like messenger and whatsapp, includes features that other messaging platforms already have, things like avatar, bitmoji type of
things, things like more gifs. my investing in images and videos and putting them into messaging, they're hoping younger users will use those platforms over what's currently available on i-message as well as snapchat. >> it is always good to see you. have a great weekend when we come back, president biden's new spending plan includes more in sentives for electric vehicles. tesla shares this morning sitting flat and later, full coverage of oil prices and energy company earnings we've got an exclusive interview with eonxx mobil's ceo, and finally, we've got chevron's ceo. "squawk box" will be right back.
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woods. and president biden failing to block a wing of his party. we'll tell you what janet yellen just told us about the framework and speak to energy secretary jennifer granholm. the second hour of "squawk box" begins right now good morning, and welcome back to "squawk box" right here on cnbc. we're live from the nasdaq site in time square do take a look at u.s. equity futures this hour on a friday morning. we're still about two and a half hours before the market is set to open, but we look like we're going to open down, off about 42 points right now nasdaq looking to open lower as well, about 140 points down. the s&p 500 looking to open off about 23 points. all of that a result, in part, because of apple, amazon, some
of the other earnings we're hearing about, joe >> and let's get to dom, who is looking at what is moving in the market nasdaq stocks, maybe >> maybe nasdaq stocks like you were just talking about here if you take a look at the movers this morning, a lot of the sentiment will be driven by those two stocks we'll start with apple, dow components also a very big part of the nasdaq and s&p 500 as well it should be, it's the most heavily weighted issue in the indices. apple shares down about 3.5% they did come out with high profits, but revenue fell short, and the big key was they estimate they lost out on $6 billion of additional revenue because of supply chain issues, that's what the company estimates it missed out on now, remember, this quarter does not include the release of the new iphone 13, however if those
supply chain constraints do continue into the holiday season, right now it could be a problem. so apple shares are down about 3% and by the way, they're now down about 3% from record highs with today's move, call it roughly down about 6%. still hovering close to record highs. then amazon, also a big weight there, dragged down for the nasdaq overall and s&p 500 as well it comes out with worse than expected results on its profits and its current quarter holiday shopping forecast has investors worried as well. amazon shares down about 4.5%. with amazon the key is going to be whether or not they can see some of those issues kind of work themselves out supply chain wise and of course for consumer trends during the holiday shopping season as well. and then the stock of the morning so far, this morning, has been an earnings release out of chevron the reason why it's important, it's up 2% right now on a year-to-date basis, a big surge because of rising oil prices,
rising natural gas prices, helping this company, chevron, reach record free cash flow amounts. so that has stoked some conversation within the company about whether more buybacks could be in the future because the cash flow situation is so good so chevron shares up 2%, joe, on those particular earnings reports. back over to you. >> major averages are not far at all from all-time highs, dom the latest two data points we had, i already forgot, not really, but you add in the 2% we got on the gdp, remember the last jobs report that thing was off the charts bad. so that makes me wonder, is the stock market saying this is just transitory and we'll get through this, or is it saying don't fight the fed? >> you remember, joe, for the longest time we talked about this notion that when the markets shake things off it's because of central bank policy it's been interesting because we
haven't heard as much chatter, at least i haven't these days, about, you know, pumping liquidity being the primary concern. in fact, most people are talking about this idea that the taper is going to be the issue you have to worry about. so if the markets are still shaking this off, despite the fact that you know central bank policy is going to adjust to draw liquidity out of the system, then i'm not sure what that says. it should be a cautionary tale, though right now the markets are certainly at a crossroads where you don't know exactly what's driving the act. even with a big miss from the likes of amazon and apple, if those stocks are only, and i say this tongue and cheek, only 3% in the free market, it could be a sign it's more resilient. >> big miss by apple and the country and the employment report all big misses it's an age-old paradox that somehow if growth isn't as robust as you think, then it keeps the fed involved, so you
look at that as the bright side instead of the slower growth it's always something we try to figure out, dom. >> accentuate the positive, right. >> someone said golf season started. >> does it ever end? >> it really doesn't, does it? it never ends. what do we need to put on the calendar >> i just got back from a golf trip to florida. i was down in naples for four or five days playing a lot of golf. >> your wife is a saint. maybe she likes it when you're gone i don't know. >> no, i think she likes it when i'm back at home. >> that's nice i hope so. you're married >> i am. >> all right, dom. >> joe, the picture, looking through the apple and amazon numbers, the crazy thing is it's not that nobody wants them, they're not as in demand the demand is there, they just can't meet demand. i guess the question is, do the
sales continue and the customer loyalty continue my guess with both of those companies is probably yes, with apple in particular you probably don't lose the sales >> demand is probably not a problem about the overall, the gdp number either. >> there's so much demand. it's back to yogi bear ra stephanie link made a good point earlier when she said apple is a loved stock. everybody, all the analysts have loved that stock it's priced to perfection and maybe that's part of the problem, too let's get you caught up on a few other headlines. facebook has a new name, announcing its new corporate name will be meta and that's effective immediately. the move is designed to reflect the company's expansion into other business areas the media platform will retain the facebook team. treasury secretary janet yellen
says she's hopeful congress will pass the spending proposals. she thinks that could happen as soon as next week. she said the bills are fully paid for and will not drive up inflation. house speaker nancy pelosi had hoped for a vote yesterday, but that was scuttled by progressives, even as they endorsed the president's spending framework here is the outlook for growth as the fed prepares to announce its taper. >> it's true that some of the fiscal stimulus will wear off, there will be less fiscal stimulus next year, for sure but households have amassed a lot of savings, wealth has increased, they've stashed away some of the income that they earned and didn't spend during the pandemic, and i expect consumer spending and investment spending to remain quite healthy. >> and another record high this
morning in the cryptocurrency market, this time it's not bitcoin, it is eegter. that's the world's second largest cryptocurrency it hit a record high overnight topping the prior record set back in may. when we return, the latest tax and spending proposals by the white house include new tax credits for ev makers. with tesla sitting a trillion evaluation, does the company need it and does it give them an unfair advantage versus detroit automakers >> probably not. the detroit automakers are probably going to be getting a better deal because they're union shops. we're going to talk more about it after the break "squawk box" will be right back.
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. >> this guy is dedicating himself to making the planet and humanity able to survive >> that was ron baron wednesday, talking about tesla's new $1 trillion market cap and yesterday the white house unveiled reconciliation framework including credits for electric vehicles. should the carmaker still be receiving taxpayer subsidies, joining us, founder and ceo of glj research
it's your big chance, gordon let's throw in the told. it's a $1,000 stock and a trillion market cap. let's go bullish it's finally time for you. let's embrace it what do you think? >> absolutely not. >> oh, no. you're kidding. >> it's insanity, right? they announced this and it's a one-time benefit to the max of probably $500 million and yesterday the stock is getting $200 billion in market company with respect to what ron baron said, without elon musk there wouldn't be evs. we disagree with that. without policies that force you to buy evs, there wouldn't be evs. without the government implementing socialist policies there wouldn't be evs. you think about the tax credit, tesla is non-unionized so they're going to get roughly $17.500 per car, however, the
unionized guys are going to get $12.5. so there's a huge benefit to buying a gm car versus a tesla looking at the benefits as per the current framework they're at a big disadvantage, not advantage. i think that's something to consider. >> right, i guess, gene, that tesla bulls would say that's not nearly enough to get people to buy a detroit ev versus a tesla to start, but it's not nearly enough given the, just the aura and i guess the performance of tesla versus, you know, its competitors. >> my sense is that the numbers speak for themselves, the deliveries speak for themselves. if we look at last quarter tesla did not have that tailwind of these tax credits. they have slowly sunseted for them they're obviously talking about bringing those back, but despite what has been in my math, a 7.5
headwind, tesla continues to move at a great clip deliveries are up 75% in the september quarter, the auto industry was down 25%. no tax credit benefit. the rest of the industry doesn't have the ev tailwind with their fleet, but i think the numbers speak for themselves if anything, this is a net positive and i would also agree with you, joe, this comes down to -- even though it's $12,500, it's a simple equation a little bit of that is one of these cars that's going to get the benefit is hybrid vehicles that have a 10 kilowatt great. that's one-tenth size of a battery than the tesla this really isn't an ev and i think consumers will recognize that i think when you put this together, the tailwind is just probably going to strengthen for tesla demand >> i've got two questions, gene.
i've got a question for you and gordon gene, my first question is, you look at all the other automakers and you look at their valuations relative to tesla. are they all undervalued >> no, i don't think so. and this is -- >> do you think they're properly valued and tesla is properly valued >> let me back up. i think that there are pockets for some of these other automakers obviously ford has done a great job. i think there can be -- there can be companies that can turn around, they can get a tailwind within this. so if you look at the broader industry, i don't think that the industry, the broader auto industry is undervalued. i think there are companies within that. i think you're going to see some companies that have been around for 100 years that will be a fraction of what they are in a decade so i think -- i'm not trying to be cute with the answer, but i think there are pockets where some will surge. but as a net i think the auto industry is going to struggle with this transition and just quickly regarding tesla
and its valuation, as someone who takes a very measured approach to valuation, it seems absurd that we're at a trillion dollars and what may seem more hard to believe, i believe this can be a $2.5 trillion company in five years, granted, it's a ways away, but it can go from $ $70 billion to $400 billion in revenue, hardware, software services, and apple is the $2,500 stock i think there's still room for upside i think we're going to be having this conversation for years to come. >> gene, i want you to react -- i'm sorry, gordon, i want to ask you a separate question. you seem to dismiss the hertz news and i think a number of investors look at the hertz news and say for hertz to do this, they're going to have to build out a lot more infrastructure, and once you get that infrastructure, you get lock-in. so it's not just a one-time story, it makes it actually much
more difficult the next time hertz has to make a decision between buying more teslas, or buying somebody else's vehicle, they pick tesla. do you not agree with that >> no, i agree with that -- i don't agree with that. let me explain why again, we don't know what the terms are in this deal typically, first of all, when an auto company sells to a rental car company, typically that's done from a point of weakness, not strength, because you have to do it as a discount and you also have to basically buy those cars back after a number of years. number two, it's only 100,000 cars, rumored. we don't know the full terms of the deal that's a one-time purchase, $500 million the company has added, $200 billion all of these charging networks are open to all cars and i think that's important and i want to address what gene said when he says look at the numbers, i would argue the same thing. in the third quarter byd sold
more battery electric cars to tesla than in china and bw sold more electric cars than tesla. tesla only sold 241,000 cars in q3 toyota sold 2.7 million. they're otalking about traditional automakers selling millions of cars versus tesla selling 241,000 cars market share, in europe, the market share has dropped from 33% to 12%, in the u.s. their market share has dropped with no competition. in china, it's gone from 23% to 11%. so when you see competition come in, they're losing market share. this idea that they have this significant upside, the numbers speak completely different to that when gene says they're going to go to millions of cars sold, the
numbers don't support that when you sell to a rental place, any automotive analysis would tell you it's a car company, not a software company their other divisions are hemorrhaging cash and have for quarters when you talk to an auto analyst, selling cars to a rental car company from an automotive perspective is done from a point of weakness, not strength so i think they do have demand problems and i think we're going to see it play out in 2022 they have no new cars and they have a ton of competition coming i don't think you're going to see tremendous growth in auto sales and i think they recognized some of those sales from hertz in q3 let's see what happens in q4. >> philosophically, you've got a trillion company and you've got the richest man, i guess, on the planet at this point so is there anything -- i don't know, untoward or kind of --
does it feel right for the government to be subsidizing something that's so successful already? and i mean, ron baron just said elon musk it was going to save the planet, but if that's your goal and the government -- we know what's in the other reconciliation bill, a lot of it is climate related and that means subsidies for clean energy, does that outweigh what looks kind of odd to be subsidizing success to that extent it almost looks like cronyism. >> it depends on the lens you're looking through. at first glance it does look like this is odd at second glance you look at the percentage of vehicles that are electric, it's still 2%, 3% of sales in the u.s., still small so i think there is an opportunity, i think the government is trying to use the evs as a percentage of sales and
you can't single out tesla and say you've been successful, therefore you don't have the same benefit so there's some selection process there that i think that they, they being the government, wants to essentially play fair. >> so none of that -- what's the word, $200 billion, none of that is from taxpayers at $7,500 a pop? >> some of it is. >> can i comment on that >> i thought you mieght, gordon. >> think about this. what's happening in europe, they have an energy crisis. why? because they shut down a lot of natural goas, nuclear plants and replaced it with intermittent unreliable solar and wind. at the same time, they're forcing people to buy evs, you're having blackouts and brownouts, et cetera what's in this bill is dump.
this isn't capitalism, this is effectively socialism, you're forcing people to buy evs, and at the same time you're taking down reliable forms of energy and you're doing that by basically incentivizing and forcing taxpayers to basically pay for $55,000 cars for rich people tax credit paid for by the poor for families that either make $150,000 single or $300,000 total, up to $55,000 for an ev the bulk of americans cannot afford a $55,000 car, so why are you forcing those americans to subsidize rich people paying for $55,000 cars this doesn't make sense. you're right in highlighting that and i think there's going to be big pushback. >> gentlemen, thanks okay, i thought you were going on thanks, gene, thanks, gordon see you guys coming up, when we return, three very big interviews you
can't afford to miss in just a few minutes exxon's ceo darren woods will be joining us and energy secretary jennifer granholm is going to be here to discuss the latest tax and spending plan from the white house, and then later the cfo of chevron is our guest it's a big friday morning on "squawk box. stick around. >> announcer: time now for today's aflac trivia question. what company owns paper brands cottonelle and scott the continues when "squawk box" continue billions of dollars to help cover unexpected medical expenses, what's the difference? coach prime. what... no smoke machine? [aflac!] looks like aflac is ready for prime time. [eh eh eh! eh eh eh!] hey, coach to coach... what do i need to do to get one of those jackets? ♪ get help with expenses health insurance doesn't cover at aflac.com tv: mount everest, the tallest mountain on the face of the earth. keep dreaming.
now the answer to today's aflac trivia question. what consumer company owns paper product brands cottonelle, scott and viva the answer, kimberly-clark welcome back to "squawk box," everybody. we're going to take a look at shares of apple and microsoft. we're doing this because of this morning's premarket decline for
apple. with the decline the two companies are virtually tied for the largest market cap company out there. shares down about one-tenth of a percent and apple shares down. we'll continue to keep an eye on the horse race that's shaping up still to come, we have an exclusive interview with exxon mobil's ceo darren woods, we'll talk about yesterday's hearing on the hill and the company's quarterly results. that interview is next then we've got energy crarseety jennifer granholm, joining us to talk about the president's latest tax and spending plan "squawk box" will be right back.
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a look at the futures this morning on a friday, premarket nasdaq isone that's showing th most action, down about 138 points, a couple of nasdaq names last night, well known, apple, amazon, both results affected to some extent by the macro world, supply chain problems, wage issues but not much happening very close to all-time highs across the board
one all-time high in crypto -- it's certainly doing well. maybe we said that earlier, ethereum >> we've been talking about a lot of the things we've seen and the drop-down that we've seen from earnings for both apple and amazon, and obviously that's putting a bit of a crimp on things with the nasdaq this morning, down about 140 points it's been a little different story from chevron chevron came in with numbers that were much stronger than anticipated, of course that's happened as we've seen oil prices continue to climb just now we've got exxon mobil reporting earnings this morning. these numbers hitting the wire it looks like adjusted earnings came in at $1.58 a share joining us to talk more about it is darren woods. he's exxon mobil's ceo it's always good to see you. thank you for joining us this morning. >> good to see you, becky. it's good to be with you again. >> let's talk a little bit about the numbers. these are just hitting, but some
of the things within the release say free cash flow of $12.1 billion, that was used to do a lot of things, including strengthen the balance sheet, pay down debt. do you want to talk a little bit about what happened and where things stand specifically with the balance sheet right now? >> sure. as you know, prior to the pandemic we were on an initiative to change the organization, restructure, refocus on our competitive advantages and try to leverage those. the pandemic was challenge, difficult market conditions, had to leverage up to continue to support the business and keep the company position for what we knew would be an eventual return to normalcy and we're seeing that down and the steps we took in 2018, 2019 and through the pandemic, cutting our costs and becoming more capital efficient and reorganizing the businesses, are now delivering results we're basically paid off $11 billion of debt and we anticipate by year end paying back almost all the debt that we put on the balance sheet in
2020, and being back within the range of the capital we had talked about. >> return to normalcy, does that mean you anticipate oil prices will stay around the $80 a barrel we've seen here >> as you know, the oil prices move up and down so normalcy for us is getting back up working again as people's livestyles return back to normal and we're going to see the same kind of variations in margins and with crude prices based on the supply and demand balance right now we're seeing a lot of demand come back and we know supply has been constrained because of the lack of revenues in the past and the catch-up that's happening now in the industry we're planning on continued volatility and building a business to make sure we're going to be successful even in the lows of the market going forward. >> well, let's talk about that, bass as you mentioned, demand is really strong again. the supply side of the picture has changed drastically, partly
because companies like yours, chevron talked about how capex is down 22% year-over-year part of that was driven because of the push from esg investors and the thought that we want to see more movement toward the future, carbon capture and those things that leaves you in a difficult position in the meantime as you transition to the new economy. with all this demand picking up, we are now suddenly reliant again kind of on opec and the president kind of asking opec to pump more. what has happened with you is there going to be a position where you end up spending more capex on old fossil fuels just because there's such demand for it or are you kind of set in your ways and where you're thinking about things right now? >> i think that's the challenge is how do you strike the balance between continue to go meet the needs of societies around the world with today's energy system, one that billions rely on, while society tries to -- or evolves into a lower carbon
emissions future and i think that balance is critical i think what we see happening today is a function of 2019 and 2020, when, really, the industry was suffering from the impacts of low margins, low prices, and then the pandemic. and this is a depleting business, so if you're not investing, your supplies are declining. and they're feeling that now particularly as demand has picked up again. as you recall several years ago, we had a counter-cyclical approach where we were going to invest in the down cycle and we put significant capital up front during those lower periods that is now paying off with our new organization, projects organization, we're actually driving capital efficiency, we brought technology into our operations, so we're doing a lot more today with a lot less capital. in fact, if you look at the plans that we set to grow earnings and cash flow back in
2018, to double earnings and cash flow, we're basically back on track to do that, despite the pandemic, despite all the challenges we had last year. our plans going forward are going to deliver the same type of earnings and cash flow growth we had prior to the pandemic and we're doing it with a lot less capital, lower cost structure and more streamlined organization. >> you've got a lot of new members on the board after the dust-up, all those new board members who are there, are you guys all looking at the situation as its changing and determining how much capex you're going to spend on things like exploration is that fluid because things are changing around the world so drastically? >> we had three meetings now with the new board, and i'll tell you, a really, really good, constructive engaged discussion. we've got a real mix of perspectives, but i would also tell you good alignment around how we are trying to strike the balance of continuing to meet the world demand today as we think about future demand, and
making sure that we're striking that right balance so that we continue to meet our obligations to a number of our stakeholders, shareholders, obviously, and generate returns for the capital we invest. but also other stakeholders around trying to help drive and lead the industry to a lower emissions future and i think we all feel pretty good about that balance and we're doing that, less capital, able to rebuild the balance sheet. get that back to a strong position increasing shareholder distributions. generating returns on our existingportfolio. we've also announced a four-time increase in our low carbon solutions business, which is drawing on our competitive strengths and advantages and generating returns in that space. so i think the board and management here all feel really good that we're striking a really nice balance and continuing to generate returns, while driving to the lower emissions future. >> it was just reported in the last week that third point capital has taken a big stake in shell and is looking to them to
potentially break up the businesses, these new carbon businesses, carbon capture businesses versus the old fossil fuels and i was trying to get my head around what that might mean if you broke the businesses up would that make sense for a company like exxon if you were to split businesses like that or do these businesses need to be linked to make each other work >> it depends on the direction each company is taking with exxon mobil one of the things we've been doing in the reorganizations is to better leverage the synergies and the scale we get by being together if you look at the progress we've made in reducing costs, we've driven $4.5 billion of efficiencies since 2019, we've got plans through 2023 to deliver more than six in total, so we're making good progress and we see a lot more opportunities to capture the benefits across each of our businesses when you think about the low carbon future, what we've done is our strategy is to focus on the carbonized sectors and to do
that we've got to leverage the same core competencies and capabilities that have made us successful in our established businesses those play very well in the new business, so think about carbon capture and storage, biofuels, hydrogen, the skill sets and competitive advantages we spend decades building, basically play right into that portfolio. so it gives us optionality and as that transition moves forward, depending on the rate and pace, we'll shift those resources between those businesses, strike that balance, and we think have a very robust future, irrespective of what path that society ends up on and i think that would be very hard to do if we were within our company to break that part we would lose a lot of the synergies and capabilities we're relying on. >> i would think the carbon capture business at this point requires a lot of capital to be put into it. you need a lot of free cash flow
to do that, right? >> absolutely. that is a very capital intensive business and that's one of the challenges i think today's technology can start to abate high concentration co2 streams, but as you move to more delilutd sources, you're going to need more capital and to have an organization that can drive the cost of construction down, and having a technology organization that's working on technology is going to help get the cost down and having cash flows from our existing businesses generating high returns to help fund those in the early stages will be very important. >> you are also announcing a $10 billion share buyback with the news out with the earnings today. that's been one of the arenas that washington has kind of been talking around, potentially targeting. i heard it's back in the mix, the idea of taxing share buybacks as well would that change your opinion would you go forward with that buyback if washington found some way to tax you on it
>> well, obviously we're going to have to look at whatever policy gets put in place to make sure we're doing the right thing for our shareholders and for the corporation, so we'll have to see whatever changes come about. but what we're looking at today is building the business, growing earnings, growing cash flow, funding new technologies, driving to a lower emissions future and making sure we've got investments to help us do that, making sure the growth projects we're putting in place are leading the industry, and as we work to do all of that, and we drive our costs down, what we find is we're able to do all those things, pay a dividend we increased our dividend this quarter, and returned more money through share repurchases. so i think right now we're striking that balance, and as we move forward we'll continue to, i think, think about how best to strike that balance. >> one of your constituencies are your employees and it was reported that ata town hall earlier this week you talked about pay raises, maybe to keep
employees from walking out the door last year you guys were faced with a problem where you had to kind of lay off people and your plan was to get rid of about 15%. there's been reports that there are other people, it's been hard to keep talent at this point and probably that's not unique, there's a lot of companies that are having trouble keeping employees. is that the case are you going back to a position where you're offering pay raises, trying to make sure you do keep talent there >> well, obviously we give our employees pay raises every year. last year was an unusual set of circumstances with the pandemic and the challenges that our entire industry faced and our company faced as well. and so we all tightened our belt and basically held our breath to get through that downturn. i think as we come out, we're moving back into the cycle and our employees should expect pay raises that's consistent with our past and we're moving back to what i would call normalcy and what i mentioned in the town hall meeting, we're going through the process of evaluating a benchmark andfiguring out what we need to do to make sure we remain competitive in that
space. so that's what we talked about and that should be expected from our employees. of course we're going to do that. >> you are the eighth highest yielding dividend in the s&p right now. you raised by a penny earlier this week. some had wondered if it was safe, i guess your message is not only is it safe, you're going to keep raising it >> what i would tell you, you remember last year, some of our competitors cut their dividend and there was questions about whether we should do that. we felt like we were going to work really hard not to break faith with our shareholders and continue to pay that dividend that many of them have counted on and require to support their ongoing living requirements, and so we basically worked hard to do that. i think we were successful in that as you say, we've got a very attractive yield today we wanted to basically again demonstrate to our shareholders that stuck with us that we recognized it and rewarded them for that we did that on top of what is already an attractive dividend as we go forward, we'll continue
to evaluate how best to reward our shareholders through advantaged investments in capital, being more robust to a broad range of potential future scenarios, and continuing to go invest in very high return lucrative projects. >> finally, yesterday you and several other oil industry executives appeared before capitol hill just to be there, because you were kind of required to be there, you were forced to testify, i would say this was something that the committee leaders characterized as kind of digging into misinformation do you think that you were adequately heard >> i think there's a theme that doesn't resonate with what the industry is doing generally and more specifically with our company. we're very focused, and have been for many, many years, on how are we going to address the c carbonized sectors and help society move forward it is a difficult challenge.
and that was one of the key messages i tried to convey yesterday, there are no easy answers. we're going to need a lot of new solutions and you're going to need companies to have the capabilities to invest large sums of money in technologies that will be required to remove emissions as we make that transition we're very focused on how do we do that as the lowest overall cost to society and we're very engaged in the policy and making sure the policy being considered, that policymakers understand what the potential cost of that is. so we're trying to bring our experience in this very complicated global energy system to bear and help policymakers make those decisions, and while we're doing that we're trying to advance technologies, new technologies that will lower the costs so that we can be more successful in the space, and exist in existing technologies to reduce emissions today where we can. >> i want to thank you for your time today again, darren woods, the chairman and ceo of exxon mobil. >> thank you, becky. nice seeing you. >> andrew? coming up, a check on the
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welcome back to "squawk box. president biden unveiling a new framework for his social spending package the rift continues between the senate and house as the house punting on that voting structure bill yesterday the white house putting out a press release saying the plan is fully paid for by asking for more from the wealthiest
americans and big corporations joining us with more on the plan is the energy secretary. good morning, madam secretary good to see you. we're trying to understand whether we're looking at a a reality or simply another blueprint that will get riped up by a lot of folks on both sides of the aisle and especially even among the democrats themselves >> well, as you may have heard at the end of yesterday, the progressives put out a statement saying they support both pieces of the build back better agenda, including the infrastructure bill passed by the senate already and the framework that the president announced. so it's just really a question of time. >> so let's talk about that timeline what do you think? if you were betting on this, when do you think you would get your result, and do you really think it's going to look exactly as it looks today? >> well, i think it's going to look pretty close. i mean, they put out -- the progressive caucus had a unanimous vote to support the
framework last night so that's a really great sign that this is going to go forward. you know, they're looking at the language making sure that the ts are crossed the is dotted. it really is a question making sure they get assurances that the senate is going to pass the framework and that it just gets the vote and moves over. >> one of the unique features of this bill is a particular tax credit around evs for automakers, but specifically for automakers who have unionized employees effectively get a better deal than a tesla, for example. why does that make sense >> well what makes sense is pushing for workers to build cars with, where theworkers have family-sustaining wages, and the ability to unionize, and so this president, as you know, is very -- very favorable towards organized labor, because organized labor has raised the standard of living of so many
working americans, and so we want to make sure that we do everything possible to encourage that business and labor, really focus on elevating the standards for everyday americans he wants to address the wealth gap in this country. he wants to raise the middle class, as he keeps saying, he wants to have policy that builds the middle class from the bottom up and the middle out not the top down >> one of the questions i want to ask you about energy policy. we're having this debate right now about the push for esg and the climate goals as you watch the price of energy go up, up, up and some are looking at that saying that maybe we are either investing too slowly moving towards a green future, or moving too fast in disinvesting away from fossil fuels, given where we are today what do you make of that >> i -- this is what i make.
i am so bullish on this economic growing around investing in this clean future which is what this framework in the build back better is all ab's we're seeing high prices is because we haven't gone fast enough, haven't put more alternatives on to the grid. haven't put more technology into the vehicles to make it affordable for everybody so we've got to continue to put our foot on the accelerator to build, build, build. we can't build clean energy fast enough we have to double the size of our transmission grid. we have to add three times's amount of renewables on to that grid in order to meet the goal of a clean energy future so that requires investment. that's why the tax credits associated with incentivizing the private sector to get off the sidelines on clean energy investment are so important in moving that forward. so i am totally bullish on this $23 trillion global market will be there by 2030, and that the
u.s. can really have a share of that instead of standing on the sidelines. >> madam secretary, there is a question of the transition cost, and as we're watching inflation. >> total, total. >> and calm around us, wti crud, $83. try to go fill up your car and it costs a lot more than it did 12 months ago. >> yep yeah, of course. and you know the reasons why you guys have talked about it. demand very low last year, obviously. better to compare what 2019 was, but it's still high and doesn't alleviate pain at the pump to say it was, you know in 2019, it was a better year to compare it to it is clear we have to look at this as a transition it is not a switch that you flip on and off oh, yes. we will still be relying on fossil fuels for several years going forward, and we have to make sure that people understand that the transition cannot hurt everyday citizens which is why
you have to build the positive side while we transition. >> madam secretary, always good to see you thank you for join ug this morning. >> great to see you, too thanks. >> thank you. much more still to come. "squawk box," talking to reddit co-founder oh lexus o'hannan, crypto and so much more. plus chevron out with numbers. stay tuned "squawk box" will be right back.
good morning a gusher of oil earnings new quarterly numbers from exxon/mobil and chevron, speaking live with chevron's cfo, but then -- we're going to talk about last night's big tech earnings. something we haven't seen in quite a while. revenue misses from two industry giants nasdaq dragged down this morning. bringing you all the details he's not megaman he's metaman virtual reality changing the name facebook to simply meta talk about what that means for the company and for tech's next chapter with reddit's ceo alexis o'hannan at "squawk box" begins right now.
good morning and welcome to "squawk box" here on cnbc live live from the nasdaq market syce i'm joe kernen along with andrew ross sorkin and becky quick. in the red a little bit.ut 4jus. moving around. nasdaq taking the worst brunt of the action this morning. down a little. nothing to write home about necessarily. down 131 points after a couple of tech stalwarts reportedly revenue that disappointed the street, and a lot of it has to do with the macro world that we're living in, and i'm talking about the entire world things in southeast asia and what happens with covid over there can affect what happens at
apple and then supply chain issues you can imagine with amazon think about drivers, fuel, think about anything the macro economy is facing right now, and you get a pretty clear picture don't forget that gdp number 2% treasury yields, though, probably helping treasury yields, not the yields, helping principle, helping the bond, but back to 1.6% becky? >> joe, to your point. i think apple specifically said that all of the issues with the supply chain not being able to create as many goods as demand for costed about $6 billion during the quarter in lost sales and amazon said it sent billions of dollars in additional money on things like salaries and -- and for labor. labor costs and trying to get things dliv other hand time. talking about billions and billions of dollars in each case. >> rocket fuel. >> that, too. >> big expense. >> i don't any on that line. that's the other company. >> yeah. caught up on other stories
investors will talk about today. exxon/mobil out with third quarter earnings posting a profit revenue based on a far few number of analysts expectations out there. the company talked about free cash flow $12.1 billion that used a lot of that free cash flow to pay down its debt saying it's anticipating paying off the debt put on 2020 by end of this year and announce add $10 billion buyback. you can see now stock up by about 1.1% exxon ceo darren woods joined us earlier on the show. >> the steps that we took in 2018, 2019 and through the pandemic cutting our cost, becoming more capital efficient, reorganizing the businesses are now delivering results we're planning on continued volatility building the business to make sure we're going to be successful even in the lows of the market going forward. >> chevron also reporting earning is this morning. that company beat analysts expectations by a wide margin.
chevron reported adjusted earnings of $2.96 a share. street booking for $2.21 you can see now that stock up by 1.8% and later in the hour talking with chevron ceo pierre breber stay tuned and janet yellen weighing in on what's affected so many company's earnings the secretary spoke on worldwide exchange about u.s. bottlenecks and shortages. here's what she said to sara eisen. >> i think they are holding our economy back somewhat. we saw that this quarter with slower growth of gdp up know, i think gdp growth will pick up, but we do have shortages of semiconductors. >> yellen said companies are responding trying to boost supply, but that, she said, will take a while joe? >> and apple and amazon. talked about it earlier. all day. reporting earnings late last night, or after the bell yesterday.
a rare revenue miss from apple and top and bottom line miss from amazon. shaving millions of dollars off the company market cap dom chu joins us. >> it highlights now, joe, whether or not we will see the most valuable company in the world in today's trading session. it could limit to interesting story lines along that front if you look at the market caps right now in the pre-market trade, given the fall we are seeing in apple shares, and also the slight fall we're seeing in microsoft shares, apple right now currently has a market cap just around, just shy of 2.41. 2.41 trillion dollars given 3.75 decline for apple shares 2.41 the number we're watching for apple. look at microsoft shares showing signs of down side as well just about flat. but 2.435. cap of microsoft higher than apple. most valuable company, if these
trading results and these trading moves hold into regular cash session trading after the opening bell at 9:30 a.m. eastern time microsoft will become the world's most valuable company pending any strange pre-market trading in apple shares between now and then also highlighting a few earnings movers chevron, mule brands, conglomerate think sharpie's, armor's glue and doing well. although citing cost pressures affecting this going forward drug side, better than expected results there. humira arthritis drug continues to perform and newer drugs helping. abbvie shares up and to the down side, charter, and a media company, charter communications, maybe concerns echoed by some traders around
the broadband subscriber additions. down in the pre-market trade and a check on the most popular ticker searches from our full session yesterday on cnbc.com our website. ten-year treasury note yield, by the way, falls to number four on the list, because of so many stock-specific stories ford in top ten. up half percent. lucid, autos and evs dominating and facebook on the meta name change and digital corporation, trump link spac down 4% of the pre-market now rest of the top ten on twitter at the domino and top 50 as well send it back to you. >> big college -- becky, on tuesday are you going to vote for me to be able to vote on rutgers in state >> no. like i told you. we don't want you as a fan we don't want you rooting for us every team you like -- >> if i bet against them, you'll win. >> probably should, every time you bet? >> i would have up to this
point, probably, with them being -- dom, georgia/florida? big, dom are you doing anything this weekend? dom's already gone how about tonight? back to atlanta. they can't cancel it it's in atlanta. nothing they can do. three games. andrew >> well, we told you just a moment ago about treasury secretary janet yellen's supply chain comments earlier this morning on worldwide exchange. weighing in on president biden's spending bill and companion hard infrastructure bill and janet yellen is hopeful they can pass both in congress next week, but it's unclear whether the current pay-for the in the current bill will stick just learned yesterday about new taxation plans for high earners. for that, who else to bring us the story but robert frank robert frank, good morning >> reporter: good morning, an andrew a lot of ideas and proposals that did not make it in this plan, but the new tax framework
is still a $1.2 trillion traax hike on top earners and highest rates in over 40 years biggest change, the surtax extra 5% on income over $10 million, and 8% on income overs $25 million. all in all, top margin's rate goes to 48.3%. highest since 1986 now, look at new york city's top earners, combined city, state and federal tax would be 63. % california looking at 62.1% and new jersey, 59.6%. millionaires' surcharge also applied to capital gains sell a family business or investment you could face a top capital gains of 31.8% that is also highest in 40 years. since many states treat capital gain as ordinary income, if you look at new york and california,
the combined rate per capital gains would be over 45%. there are only about 24,000 taxpayers who report income of more than $10 million. really just talking about the top 0 .2%. these account for more than a third of capital gains realizations are by those over $10 million. andrew >> do you expect a lot more moving among those folks that you just mentioned >> i mean, the big unknown here is what's going to happen to the s.a.l.t. we heard yesterday different people saying different things going to include s.a.l.t do this maybe two-year horizon for s.a.l.t. so we get more s.a.l.t., then more s.a.l.t., then less s.a.l.t. then more is the is the again depends on s.a.l.t no change in s.a.l.t. absolutely for the hedge fund, private equity, big investors who live in new york and california,
rates of over 60% over 63% in new york city. absolutely that's going to cause more pressure on these people to move to lower tax or no-tax states. >> so interesting. robert, before you go, so when you think about the representatives in congress, people and the senators from states like new york and california, obviously pushing for s.a.l.t.s, but are they in favor of these tax changes otherwise? >> reporter: yeah. i mean -- what we've heard from josh scotthymer and some of the people in the s.a.l.t. caucuses, they want to see how it all sort of fits together so if you have rate hikes on one hand but then giving back a little on s.a.l.t. to the ultra high earners, then i think they're fine with the rate hikes. we'll see what they all say. if we had the rate hikes and no change in s.a.l.t., that's going to be tough to go to their constituents the other hand you're talking
about even in new york, even in california, a tiny fraction of the sliv of ter of the top over0 million. >> but a huge portion of the revenue. complicated quickly. >> reporter: absolutely. and taxes. >> yep >> talk about -- yeah. talk more about this with someone we have on when we need some real analysis here. how the president's tax plans could affect things. joining us now is jason trenor, chairman and ceo of baird company, strategic partners. trying to look at some of the bright side. even the "journal" today, kind of laughing. they said bad as this is, think of what it would be without manchin and sinema a lot to -- probably thank them for, but still pretty bad. but not as bad, jason, capital gains. suddenly that's not -- wasn't that the overall tax rate margin some of these things, 15% on
corporations doesn't take us back necessarily, a minimum. 26.5, is that going to be gone now? some of these things positive just because they're unable to get the progressives onboard >> i think, joe that's a good -- from a market perspective, this is not nearly as bad as we had feared as our shop for the past nine months. it doesn't mean it's good policy i'll make that proviso i think it's hard to feel good civically in watching this process, but i would say from a market perspective, this is turning out to be better than what we had expected, in terms of corporate tax rate. in terms of big pharma you know, there are some pr provisos for the guilty tax, alternative or minimum corporate tax, but generally speaking i think you're right from a market perspective it's
better than what we had feared. >> would you have -- you're not a billionaire, i don't think i know you don't -- >> no. >> but would you have had a problem with some type of, you know, moving it from just taxing income to taxing unrealized gains or some type of wealth tax? would that have hurt, do you think, innovation or the economy overall? >> you know, joe, i'm not -- i don't know, but i just know it's bad policy and i think -- i feel -- >> just the principle. >> in principle. exactly. >> a principle, nobody's safe after do you that. who know where is it ends when they really get going. >> alternative minimum tax introduced in the '60s, i believe initially supposed to hit something like 200 wealthy families. >> next thing you know ---ants wound up hitting 30% of taxpayers. so, you know, the u.s. tax code is made up of 3.5 million works.
old and new testament's about 800,000. this is insane it's absolutely -- it causes such enormous frictional costs for businesses and for regular people that are trying to figure out the tax code as opposeds to investing in their businesses, or focusing on their families. >> jason -- >> it's crazy. >> let's talk 2% gdp, last jobs report a big disappointment. we see that delta and covid is still having an effect globally and the supply chain, and you know, still a damper on where economies are based on covid, but you know, as far as energy prices and some of this inflation, do you think any of the, what you would, i'm sure, think are ill-conceived moves by the biden administration, and any of that already coming home to roost in terms of, i don't know, overregulation of the energy industry? i don't know what happens if
this goes through with the infrastructure bill? i think a lot could come home to roost in terms of hurting gdp, but is it already happening, or is this basically covid causing these disappointing numbers? >> joe, i think it's policy. i think the great irony, to be honest, particularly as ---ants policy what >> electric vehicles subsidies for electric vehicles and green energy extremely good for oil stocks and basic material stocks so the trump administration loved fossil fuel industry and wound up being terrible for the stocks in many ways, because it -- it bled into a lot of their worst instincts in terms of just punching holes in the ground here you have the biden administration, hates the fossil fuel industry, and it's great for the stocks and you also need, probably also need much higher energy prices, oil prices, to make renewables interesting. or -- or financially feasible.
so i think the higher oil prices are directly policies we have and ev, the electric vehicles, are enormously dependent upon extracted materials, commodities, lithium, cobalt and all the rest of it i'll quite bullish on those two sectors but it's ironic, because i'm bullish on those sectors mainly because of the green energy agenda of the administration so i don't see these prices going down anytime soon. >> right okay jason -- stay tuned. vote next week we'll see. we'll see what happens in virginia, too. >> yeah. i'll be one of the ten people voting for him on tuesday. >> vote being able to bet on rutgers, too. >> okay. when we come back, facebook's big bet on the meta
verse and it's options for fixing its image after a devastating series of news reports over the past few weeks. and reddit co-founder alexis ohanian joins us to talk about this and a lot more including a very interesting twitter debate he got into this week. and break down what the oil executives got yesterday with the chief financial officer. stay tuned you're watching "squawk box," and this is cnbc. it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. only comcast business' secure network solutions give you the power of sd-wan and advanced security integrated on our activecore platform so you can control your network from anywhere, anytime. it's network management redefined.
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and save money while you're at it with special offers just for movers at xfinity.com/moving. coming up right after this, we are going to be live with reddit co-founder alexis ohanian. a lot to talk about him. facebook, and it's been hell talking about his new corporate identity, plus a new era for bitcoin wit launch of that future spaced etf. stayun ted you're watching "squawk box" on cnbc.
probably heard the news by now. facebook going meta. refocusing on the metaverse. news of the name change, teased for a while comes as a report of internal investigation over potential harmful products of facebook joining us, metaverse itself, alexis ohanian, founder of seven seven six and co-founder of reddit and somebody who knows social media very, very, well. >> great to be here this morning. >> your voice is deep. what happened? >> extra boost from the new amp. >> thank you thank you very much. alexis, let's jump in on the
metaverse and talk about this. name change for facebook, focusing on the metaverse, good idea, or what? what do you think is happening >> i think it is a master stroke in diversion and distraction, right? perfect time for a rebrand look, i think this should not be underestimated, and right now there is this amazing bottom-up movement to create the metaverse. you see a lot of this happening in the crypto community. seeing a lot of people building what i think is what most of us hope will become a much more organic type of world, rather than a sort of top-down, facebook-imposed one, but we'll see. they've got -- they've got no shortage of great engineers and developer, but i'm betting on the davids here to build the metaverse better and sooner than the goliath.
>> what we've seen in the past, facebook started losing out to younger visitors, younger viewers, whatever you want to call them. i mean, you saw zuckerberg pivot, turn and buy instagram. is that something that they would do potentially in the future, or do you think too much pressure from washington to be able to do that again? >> yeah. i think the governing bodies will be paying way too close attention now to their acquisition moves. frankly, i think it's a very different environment. if you look at how the whassup founders and instagram founders have really distanced themselves from facebook's actions over the years, it sends a cautionary message to other successful companies tracking well to make it easier for them to turn do you, say, $1 billion acquisition offers's i don't think they'll compete that way and i think -- my bet, my hope for that future metaverse is it's not governed by one company but rather, you know, sort of the people and by the people. >> what do you think of the
metaverse in general this idea of avatar has been around a long time i remember talking about this in the '90s. >> second life. >> yes movies played on this. >> uh-huh. >> gone through time where do you think this is headed how is this changing is now the moment? >> so, look, this is, metaverse itself is a pretty meaningless word end of the day, we're talking about sort of all of us being able to go online and occupy digital spaces much the same way we do physical today so you're right. kniss has existed, look at video games, e world of warcraft" or "fortnite" early steps towards this we sit typically on a phone or computer, engage it through a screen, and it's text based, image based. the idea here is, yeah, you occupy the form of an avatar and you experience maybe with vr goggles maybe it's ar. so many different ways i think
to engage it, and ultimately, you know, now that broadband is ubiquitous, you have a very different phenomena. now that people have been convinced. i spent 15 years trying to convince people leading reddit that people would care about online connection, just as much or more than off-line connection but now i think everyone sort of takes it for granted we fall in love online, make some of our best friends online. we -- get into stocks together online through anonymous communities. i think that dynamic combined with broadband ubiquity and the rise of crypto really working gives people a sense of ownership in this new world so that the assets you buy in the metaverse are just as real in the off-line world subtle distinction but makes a big difference. >> betting on davids rather than
the goliaths, but how do you describe the software or hardware, infrastructure piece to traeting this and to the extent you think facebook will have advantage oculus and buildout of that product, control lab, risk based neurolink effectively, almost like a mind-reading system, that based off -- can put text on a screen. >> uh-huh. >> those types of things typically require serious capital either to acquire or create that's different than some of the software stack things i think, talking about nfts, trying to build what a different room looks like, or things like that >> yeah. look, no doubt the oculus is impressive hardware i do think consumers today in 2021 are a little bit more hesitant about allows facebook into their brains, and as intimately into their lives, as
we were, say, 10 15sh, 15 yearso so that matters. in a lot of ways you can think of web 3, whatever, this new way of using the internet, is not too dissimilar thinking about the distinction going online or america online they create add great wall garden environment, aol did back in the day to experience sort of their version of the internet. i would say that's probably the best equivalent for facebook's ambitions. yes, today in the short term they have advantage, certainly in the hardware front. the software one is for sure a level playing field. in fact i give some advantages to david because of rate of execution and the fact billions of people connected overt world can be much more creative than a few in one office. i think you know, with the amount of money that's flowing into venture right now, start-ups that can get competitive on the vr front, they can get funding the bigger things here are going
to be more foundational software that's the stuff that's going to be built in the next five years, and actually make it worth it for you to spend time. right now the competition is watching netflix playing "fortnight." scrolling through your phone we're still not going to all wake up in the metaverse tomorrow this is a gradual thing. i think it's going to come all at once. >> alexis, let's talk a little about a squirmish kind of dr dredged up on twitter. a little back and forth in debate it started with a tweet about -- joe rogan making comments on pete buttigieg taking timeoff on paternity leave. joe rogan a guest on the show responded. tweets he put out. first of all he said, joe lonsdale, he says, wow great for fathers to spend time with their kids to support moms but any man in an important position that takes six months of leave for a newborn is a
loser. old days men had babies and worked harder to provide their future the correct masculine response doubled down said if a man's work is part of ap important mission having a positive impact lifting up lives of thousands of people, six full months off for a newborn is inane if you have a crappy job, use add different word, aren't key to securing, abandon it. imagine as a father take six full moss off to prove you got your newborn got you fired up and you responded in twitter something you have really kind of led the way with making sure that you took off time for your kids and as a leader wanted to inspire others to do it. what did you think about this? where do things stand? just this national debate taking place right now? >> sure. i don't know joe i think -- one of the reasons it was so important to take -- i don't about six months, but read four moss of paid family leave and the reason why i took all four months of it was because i wanted to give confidence to men
like joe, because -- taking this time off is time that you're never going to get back. it's something that, you know, i've been -- gosh, gone to vc with dads who had to choose literally between staying with their wife in the icu and new born in the nicu because they didn't have paid leave for a country that believes in family values as much as we do that is unconscionable i wouldn't want to put anybody through that choice and it's deeply unfair most americans actually have to make that decision beyond that, look, what's very clear is there is a new wave of ceos the kind of folks who actually have built multibillion dollar companies or are really building a different kind of career for themselves, because it's not one that's at odds with being great
husbands or great dads it's one where, you know, we want to be the best what we do at work, but the same way we want to be the best as what we do at home and i have yet to meet a -- a billionaire who sat me down and said you know what i wish i'd spent less time with my children. not a single one of them has ever said that to me so i've met all of these career men, wildly successful, who have all said to me, in their sort of waning years, i wish i had that time back. i wish i had more time pup have no idea how important that is or what you're advocating for whether it is, would go dads who don't have the privilege of paid family leave or whether it's some of the most successful among us, every one of us shares the fact that we'll end up on a death bed one day and when we're looking back on a life well lived, the things that we are going to be smiling about, the things we're going to be most
proud of are inevitably going to be the people we care most about spent time with. this is gutted from the latest bill i don't think we're done with it you'll hear from a lot of americans including myself that think it's despicable one in four american women are back to work two weeks after giving birth. so we're going to get something. absolutely going to get something, and look, like i said i will continue to advocate for this continue to lead by example. i hope it gives confidence to men like joe and -- you know -- >> not joe kernen. >> no, no. not joe kernen. >> yeah. oh, an droop got a quick question go ahead, so, look i -- i'm in your camp very much so, and i was, in terms of trying to give people the opportunity to spend as much time with their kids as possible the question i think joe
lonsdale was raising was whether six months, is the appropriate amount of time it really has moved. i think a conversation about, as you said, getting more than two weeks, then moved to three months in some cases turned into six months what he was suggesting in fairness was that 23 yif you're leader either of a company, an organization, a government leader, the pete buttigieg thing was about, which is there are other things, responsibilities, and is there ways to do it so you are able both to spend time with your kids and to actually still play a role in some of these things i know twitter's not great for n nuance, as you read the full scroll that's what was going on there. >> look, so i appreciate the nuance you know, here in the united states we're working from zero so we're the last developed country to -- we have absolutely no paid family leave in place. so even if we got to three
months, i would consider that a big win. one of the things that -- you know, i wan even aware of until kaitlyn holloway now my founding culture and others from reddit brought it, one of the things she brought to the company, i didn't realize until i was taking leave was that i didn't have to take the time all at once one of the things i stress especially to the nen my office, look, take the time. especially some have had a couple of kids look, alexis, i'm good we've got a plan a system i don't need all the time. i say to them, look, take the first month. just get the -- get the homefront secured, get everything settled feel good. come back in and work out a plan to use the rest of your time whatever way makes sense for your family. it it means taking off just every friday, until you use you up a that time great. that actually is better for me as a manager, as a leader, because i know, no one's going to miss you that day you're out
of the office. be honest. we're living in an age devices keep us connected in times of emergency. and i would also say that for leaders building organizations, if you can't take even a month away from your company -- you've got serious problems in that you have not built an organization that's resilient enough to deal with an absence even for a short period of time nap actually says more about your management skills than anything else. >> alexis, one of the reasons we always have you on we like to hear what you're investing in, things you're thinking or big moves for the future we'd like to talk about an opportunity used in the private markets. led with your stomach for this one but investing in the plant-based food sector. bring ceo of eclipse a plant-based ice cream company you've been invested in for a while. alexis, again, plant-based is one thing. heard about o, you're talking
ice cream made from oat and also potatoes how did you find it? what happened? >> you know, i'm in a household that we try to go easy on the lactose, and finding an ice cream product that not only was milk-free also allergen-free was a really big deal and i met alon as a demo day and triedalities bit of the soft serve. got really interested. spent time with him and his co-founder thomas and saw how expert they were at food science and impressed by the proposition. a handful of ingredients any one of us can find on a grocery shelf, and just had to invest. >> so alon, talk where things stand now. this is a company that has really taken off started out in california, but now available in far more markets. i think just about everywhere in the country, some major markets. but it's something that, it's kind of hard to keep up with supply, just like we've seen with so many other companies flavors sold out what do you do at this point
>> so it's great to be back on here, and signs was last here we've had a lot of growth, as you're saying. seen 1,400% growth in the retail arena. going from being just in california to nationwide, and we definitely faced supply chain issues, labor issues, every sort of issue happening in the market we've seen and in part that's why i'm really proud of the team for being able to continue that growth going from -- going from where we were, which was a pretty small brand, to now working with kind of the best of the best moved to portland and chicago and one of the best in the national channel and also working with the biggest names in the instant delivery space. just launching now with ten cities -- and then a lot of
really exciting national accounts, like household names that we'llnnouncing in the coming moss all in the backdrop of a lot of challenges needed to execute in away to instill that growth. >> and a lot of companies are dealing with this no matter what size they are. aylon and alexis, thank you both sorry we don't have more time. aylon, lurch to have you back and alexis, thanks for joining us. >> thank you. >> thank you. three moss, like can i do it like when they're 2? >> yes up to2 years old. >> no. i want to do it, like, at 2. like the first six, let somebody else -- know what i mean what do they do? they sleep they eat. >> require lots and lots of attention. >> all that other stuff. yeah so cute at 2 coming up, chevron cfo joins us on a big quarter for the oil
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welcome back, everybody. chevron reporting earnings and revenue earlier this morning that came in well above what the street was expecting quarterly profit was chevron's high nest eight years. back to the first quarter of 2013 to see a higher number. joining us now is pierre breber. chevron's cfo. you can see stock up by 1.6% this morning pierre, i think people have known that the numbers were going to improve drastically, but maybe wall street didn't figure it out quite by how much. what did wall street miss? i think we're having a problem with pierre's mic. give us one second i think we can fix this. looking at chevron shares this morning, up by 1.6%. heard similar improvements from exxon, stronger than expected number shares up higher, too. this after a long period of real troubles for big oil companies because oil prices, as you know,
went to negative levels during the worst part of the pandemic oil prices going up and talking about the supply side of the picture. not just the demand side if we can get pierre back up we're talk about that in just a moment still having issues? okay we're going to take a quick break. make sure we get pierre's mic fixed. audio problems fixed with that and be back with more when "squawk box" comes right back. go to flexshares.com for a prospectus containing this information. read it carefully.
we want to get straight down to the new york stock exchange, where jim cramer joins us now. should we talk apple, amazon >> yeah, sure. >> what do you do? some of the most widely held stocks. >> i'm going to defend them, from the point of view that amazon was barely 5% going into this thing i don't think it should be that overwhelming apple is a quandary, because you wonder how much they'll miss, what tim cook called as perishable if i have to hear supply chain one more time, andrew, you know, chain of fools, that's how i feel everybody got fooled
it's just terrible, the lowest end kept apple back, and apple could have had an amazing quarter, but now, i don't know, will people do something else for the holidays these products -- you can't get them. >> that's my question. what's your bet there? do you try to look through this and say 12 months later, you believe jamie dimon, the supply chain issues won't exist >> exactly that's my view. that's how i feel. though amazon i'm less confident. they have to built so many warehouses, so many trucks, their warehouses and trucks, they're the third rail of this quarter. we could do a whole conference on this, andrew. i actually would love to see it -- appeared starbucks suddenly labor is very powerful
now. >> labor is powerful >> right we should be talking about it in the context of when was the last time labor was this powerful, like during the afl-cio days >> this is it. it's a new age, and we should be talking more about it. jim, we will be watching you talk about it and more in just a bit. back to becky, who has news on chevron. >> we do pierre, i'm sorry for the technical difficulties before, but chevron came out with earnings that were quite a bit stronger than the street was expecting. what did the street miss there >> we're a better company than just a few years ago our costs are lower, production is higher, much more capital official, and we have a clear strategy, the outlook is positive, demand is strong, we expect more recovery as office commuting, international and business travel pick up, and we
raised our buyback to the capital range. >> 6.7 billion is the best number, yet cap ex is down a lot of that is back investors were kind of signaling they didn't want to see more money put into oil and exploration numbers for oil. they didn't want to see things going to other places. maybe they wanted to see renewable futures. you think that's still the case with oil prices above $80? >> we can do all of those things our production was up 7% this quarter versus, and our capital will go up in the fourth quarter and next year. we expect at least 20 percent higher next year we haven't announced our budget yet. we've announced a tripling in renewable fuels.
hydrogen carbon capture. as we pay down more debt and we're fast approaching a comfortable debt level, we'll be able to increase the buyback range. >> i haven't announced cap ex spending, but it will be about 20% above where it wasagain, w can do both. we're going to and faster growing in renewable fields. >> there have been so many questions asked. we know for oil prices at $80, a lot of that is the demand picture, but it's also the
supply picture do you think lower supply than we've been used to is going to continue for several years to come >> deman decreased really quickly. it's increasing rapidly this year so you're see the price senate work, and we expect that to happen over time >> what do you get the sent of from just investors, and wanding esg, wanding moves to see things moving away from fossil fuels. is it still the same sense when oil was stuff you had to give away, basically? >> this is a sector, indices for any time period, so we have worked to do our message of higher returns, lower carbon, we think is a winning -- low growth, high
return, delivers energy, and for many years to come, while growing faster, the new lower carbon solutions that will be a bigger part, we think that's a winning one for our shareholders >> what do you think of the plans from washington you've heard so far on the money spent on climb cate change when you look at the things -- i know it's a lot of moving pieces, there's a different story that comes out every day, but when you're talking about bill yonls you have to spend on cap ex, you probably have to watch -- >> well, it is moves quickly there's hundreds of pages to read through we're getting more ambitious around what we can do with lower carb technology is also moving quickly. we're trying to contribute to
all of them. we support the paris agreement but, again, there's a lot that's going on in this space, and it's moving pretty quickly. we have announced an aspiration of net zero by 2050, we've also announced a new carbon intensity target that includes our scope 3 emissions. that's in part because things are moving in the right direction in terms of apology technology we're investing in new technology companies to lower the cost of removes carbon and storing it in the ground >> are you watching to see what comes out of washington in terms of how much you'll investing in it and in what ways? >> well, one of the things that's proposed is a tax on buybacks we're going to increase our buybacks in the fourth quarter we do it as a fourth financial priority after pays the different, investing in the business and maintaining a strong balance sheet it's catch in excess of that
and we should return it. so we don't think it's a good policy to discourage companies from returning cash to shareholders there's also a minimum tax on booked earnings or global earnings or global income. we have some concerns that could discourage invest in the u.s. or make u.s. companies less competitive. it's too early to assess. >> if the share buybacks were taxed, would you instead give more money back -- >> it's too early to assess. the proposed tax is 1% we need to see the final rules and we'll do what we think is in the interests of our shareholders. >> pierre, thank you again for your time today. final check on the markets, futures right now, as you can see, down about 51 points. how long now, bec? >> 30 seconds.
>> now 25, take a look at the ten-year note which has been back above 1.6% or so. >> still got 20 seconds. >> halloween is coming up on sunday you know what also that is penelope's birthday. >> i think it's kiki hoffman's birthday. >> just really fun i like it. i'm not sure what's allowed anymore. i don't want to get canceled "squawk on the street" is next. >> bye-bye good friday morning. welcome to "squawk on the street". final trading day of okctober it's actually a shade light. amazon and