started the show. right now dow futures up by 110, nasdaq up by 77. s&p 500 up by 20. treasuries continue to be the same with interest rates sticking around 5% for the two-year and 4.64 for the ten-year. that does it for ustoday. join us tomorrow. right now it's time for "squawk on the street." good tuesday mornings. welcome to "squawk on the street." futures are solid and it's all about earnings today as more than a dozen s&p 500ers even affirm or raise guidance including ge, gm, oil below 81 doesn't hurt. our roadmap begins with an earnings ramp-up. pepsi crossing the tape. we'll dig into the numbers. >> tesla is on deck. the shares, by the way, at a 15-month low. investors are bracing for what could be the company's worst

results in seven years. apple's china concern, data signaling a 19% tumble in iphone shipments. the worst performance in four years for apple in china. >> let's begin with earnings as the markets look to extend yesterday's rebound rally. jim, there's a lot of big industrials we can go to. >> i know we can focus on tesla. i want to focus on mary barra. she had an unbelievable quarter. when i say unbelievable, i mean they delivered on everything she's been talking about. they only want to make cars that they make money on -- cars and trucks. they did a very, very good job. we can talk forever about elon musk because elon musk is fascinating. mary barra is workmanlike. workmanlike is what works when you're doing cars. that raised guidance, david, was extraordinary. >> as was the beat, frankly. how is it that the analysts miss it by that much?

>> is that rhetorical? >> i don't know. it feels like that's not something that should be that far off when it comes to gm -- >> i agree. i was not modeling gm, but i was expecting her to crush it. they're i.c.e. -- let's talk about jonas. jonas said what's bad for tesla is good for ford and gm, so let's give him his due. >> we'll see how the stock opens. right now looks like up almost as much as 5%. out pointed out yesterday the buyback which is not significant. >> ford had to do a buyback -- ford is languishing with all this built ford pays dividend. i really want a buyback. look how much she sopped up. she's very strong. >> great stat out of the spoke this morning, they call it a triple play, beat on the top

line, beat on the bottom line and raise. gm has done it 5 of 6 quarters. >> maybe because she's not having an existential crisis we don't care. >> the multiple -- >> you mean the lowest in the s&p. >> talk us through that, jim. it's always been the case or certainly for a very long period of time, this thing doesn't get a serious multiple. you're talking about a company that's going to have adjusted, automotive free cash flow a range of 8.5 to 10.5 billion. starting the day with a $50 billion market cap. so five times adjusted automotive free cash flow. >> david, if you felt the world was going toward i.c.e. -- away from i.c.e. and toward ev, if you thought the state of california was going to end i.c.e., which a lot of people think it might do, what do you do with that company? >> understood.

at the rate they can buy back the entire company with the free cash flow. >> i agree with you. i think the answer, david, is that it's wrong. >> okay. >> listen to me. >> i always liss sglen we have a lot of stocks misvalued here. if it makes something people think will be obviated by events, not unlike what people feel about refineries. you have mro buying back every single share. the answer is you do exactly what mary is doing and you do exactly what marathon oil is doing and you come up with a low multiple where you buy every single share and you have a stock that makes you a lot of money versus tesla which was doing well, but is not. you can flip a switch. >> implied volatility for tesla tonight i think is the highest in about 1.5 years.

9% either way. >> if he has any free cash flow, then i think that the bear is going to have to eat some crow. do bears like crow? >> you think at that level this stock is discounting a lot of the potential bad news, jim? >> i think there's two situations. i think, yes, if they have free cash flow, it's positive. it's bad news that everybody knows. if apple does 19% decline in china, it's like enough. everybody thinks wow, revelatory, 19%, vixx up by 2. honestly, why do you act as if it's news, that apple is doing poorly in china. no kidding. >> entering survey out of morgan stanley. 25% think they'll spend more next month, down nine points from january. they're citing everything from income worries to job worries.

>> the narrative that apple must adopt is that, if you look at indonesia, brazil, turkey, mexico, vietnam, you've got growth markets that will overtake china. we're fixated on china. the chinese economy is not growing. the chinese populous is not growing. india doesn't have the infrastructure to support 400 stores yet. but i think india has an edge over people levered to china. >> all of which is to say this news does not shake you -- >> i've been saying 160 for ages. it's still not there yet. when it gets there, we'll rethink it. if you want to put a 19 multiple on it and give it a haircut, you have a $135 stock. do you think the analysts in the

big institutions won't come in and buy the stock at 130where it would be valued at a market multiple on annest maet cut of about 7% which is what people are implying. >> okay. that doesn't sound like a reason to buy the stock here. >> i'm note saying -- i'm not saying buy it here. i'm saying i don't think it gets to the 19 multiple. >> i see. >> i don't. i feel uncomfortable it's selling at 24, 25, given the fact that all the data points indicate it's going to be flat. it's difficult for any analyst to say we have a stock that's flat -- >> not stock that's flat. noreal revenue growth. >> no revenue growth. it's hard to defend. we do have a new iteration coming out, and i think that someone could say, well, listen, with the coppers conference, we'll come up with something. i don't think people want it to trade down to where it would be a market multiple and earn six bucks. >> speaking of china, pepsi said china revenue up double-digit.

>> raimundo is doing something i've been waiting for pepsico to do for some time which is to flood the zone internationally. he's really smart. he came back from india, people are going to say, wait a second, u.s. is nothing special. what he's doing is i'm going for profitable growth, no longer just going for rev growth. i like the number. i've always wondered when they will be moving into china. they have a good d krfrnltc number, too. oibsz there was a recall with quaker that hurt them. i think that pepsico is becoming more of an international company that has it been. europe is very strong. >> europe is strong. >> i'm saying the stock is not up because we're so ethnocentric in this country, if you're not blowing it away in the u.s., you think you screwed up. i've been waiting for profitable

growth forever. i don't want a price war between coke and pepsi. nobody wins. >> organic up almost 3, even with volume down .5. they made up some on price. >> it was a good quarter. it's almost like people said, you know what, i'm not going to let this thing go to 170. there's a lot of stuff like that where i'm seeing stocks where people said wait a second, enough is enough. we had that with procter & gamble. we had it with american express, 212. enough is enough. >> top of the show, enough is enough. >> you and my wife don't understand. >> your point is there are hands out to catch the baby. >> that's good, too. moses. little passover stuff. >> i think we should write a show right here. >> it's a show about nothing. >> lands out to catch a baby. brown shoots is my other thing.

>> last week that was good. >> and apple, belt and road. >> and then my belt broke. jason likes my stuff. >> you've got good stuff. your material is getting better. did have anthropic? >> no, you didn't. they did it right up there, too. >> and what was i doing? brushing my teeth. >> they had perplexity and anthropic on the last hour on "squawk box." it's interesting listening, such an important -- >> if people want to learn -- >> -- competition between these large language models. >> between us and andrew. >> corporate darwinism at work. >> love him. shouldn't let him in this building, but i love him. >> -- nasdaq. >> -- >> you had an interview with the nasdaq. no way. >> we love andrew.

>> jim, what was more impressive? gm or ge? >> oh, my god, ge. larry culp. what can you say? larry culp delivered -- did you see the backlog there? >> 202. >> come on. >> raytheon, greg hayes. >> you're moving on from ge aerospace to raytheon already? >> i'm alinear and crazier. >> let's focus on ge aerospace for a moment. you were talking about the backlog related to ge, then we can do greg hayes' swan song at raytheon. >> the first quarter since the split since it's a fully independent company. >> -- >> vernova was still a part -- >> they broke it outbecause they're honest people. >> total orders up 34%. >> think about that, will you? >> 34%.

>> 34%. >> hello. >> remember, also, lauhow they' set up. they're levered to travel, to planes you have to maintain. our friends of boeing are not offering a clue how many planes they can produce. they all had to estimate how much business was going to be because of problems with boeing. believe me, they do well. they do well either way. >> pratt and whitney had a beautiful number. i'm not allowed to jump from one-to-one. >> i was going to say. it's a nice segue because pratt was up 23. >> thank you. i've got to tell you, this defense bill is fantastic for them, particularly ukraine. they're sending them the best. they already have rtx in the mid east -- >> talking about the patriot missiles? >> they actually have other

missiles as well. patriots is a million dollars -- that's a lot of money. >> the stock for quite some time was held bibi the turban fans. >> that recall was a simple recall. that didn't have as much hoopla as boeing because it wasn't as dangerous. >> who is going to become the ceo of boeing? >> i floated the idea that greg hayes should be the ceo of boeing. i got laughter. >> from greg? >> yeah. greg does not want that job because greg is going out on a high, and i'm thinking who is going to take that job. >> i don't know why culp would leave $170 billion market value for boeing. >> he's not leaving. >> i've got to take a look. >> he doesn't play for comp. >> okay.

>> mahomes didn't play for comp initially. he's the mahomes of aerospace. >> larry culp is the mahomes of aerospace. >> got it. >> he'll like that, too. >> maybe he thinks he should be the andy reid, who is now the highest paid coach in the nfl. clark hunt, good owner. >> anything else you want to talk about? >> your guy is a rich owner. >> which guy? >> the jets. >> johnson? >> yeah. >> broncos and wilson. i got that. take a look at the premarket here. we're going to dive into so many more numbers including danaher, lockheed, spotify. not all earnings stocks are up today. we'll watch xerox, sherwin williams, ups, stuff story on arc in the journal when we return.

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advertising. you didn't sound like you were going to advertise that much. but you did seem to open the way today, okay, we might consider doing some advertising. why? >> i believe in listening to sho shareholders. i was surprised by the level of enthusiasm for advertising since we haven't historically done that. there is perhaps some good logic to it in that if we're simply saying information bias, we're somewhat preaching to the converted and not reaching people that are already convinced essentially. i think they'll probably have a good point. i think it's worth a try. we'll see how effective. >> tesla ceo elon musk. that was, of course, our

interview from last may talking about the company's at least possible for ay into advertisin, something he mentioned in the annual meeting which preceded the interview. tesla is scaling back its marketing team, elon musk tweeting that the ads were too generic and could have been for any car. >> we already talked about the volatility that may result in the stock price, jim. he does seem focused. >> very much so. >> there's no rabbit out of a hat. the stock reflects a very big loss. if there's anything less than a loss, i think institutions are going to come in, not cathie wood that bought yesterday, ron baron, i'm talking about actual institutions who might come in

and say this stock is at the right level versus papal where people say i'm not going to let this thing go 19 times earnings. we've got roadmap. it looks like the initial cyber truck is better, we can do 250,000. i don't hear that. >> i know ford felt they could sell more than they have. >> again, the dynamics of the marketplace have changed. yes, there is absolutely growth. we don't mean to imply there isn't. the growth rate seems to be slowing in terms of adoption here in the u.s. you've got this enormous competition from chinese ev makers in other parts of the world, not to mention the domestic market of china itself. >> robotaxi is a dodge. >> at this point it's not about -- promises aren't going to work anymore.

>> i totally agree. people say, we thought there was going to be a big loss. therefore, carl, it's okay to step in. that's the only logic i have -- >> the award of stock that shareholders will be voting on in terms of his composition is a lot less -- worth a lot less than it was. >> good point. >> a note out of barclays an how and why musk and the company pivoted hard toward texas. that's a regulatory zone where you can take long shots on autonomous. >> i think everyone in detroit would like to go somewhere else, but they're deeply committed to detroit, and they're never going to do that because that's the home. if toyota passes tesla, can you imagine. >> then the uaw piece on cnn today looking at the victory in volkswagen, what it's doing to

the labor market in the south, southern manufacturing. >> you're going to see a boom in mexico like you wouldn't believe. you don't have pollution control laws, make $5.00 an hour, transportation right up the ksu, i don't people understand that. trump didn't like it. biden -- they're not aware. >> they're not aware. come on. >> arguing for $5.00 an hour. >> they're not aware of how you can make a car in mexico and put just enough american in it that the biden people can't fight it. >> i think they may be aware of that. >> i'm saying, if you talk with phil lebeau, he'll tell you you can play with the rules. >> yeah. >> that's all i'm eve saying. now, if you have 25% mexico, no, we'll give you a tariff. >> cramer's "mad dash" and the opening bell after the break. ve, take care of it

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got ai en thus ags with amd, nvidia on the gainer this morning along with data dog at the top as wells goes to 50, prior 130. opening bell a few moments away. you can catch us any time

ywre, listen to and follow the "squawk on the street" opening bell podcast.

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let's squeeze in a "mad dash" for opening bell. kimberly clark. >> restructuring that put the wood to a lot of people because they felt they didn't need as many. it was very tough to do. it was almost like a family environment. you saw the greatness. earnings per share looking for low teens. it had been high single-digit. revenues they were looking for high single-digit. they were looking for mid single digits, low single-digit. this is a remarkable return. >> guidance has improved dramatically along with this quarterly report. >> $2 billion free cash flow is extraordinary. he came on and announced, nobody cared at all. i said i think we -- completely

wrong. delayed reaction. this is what i mentioned about the market getting things wrong. look at that. he told you everything. >> but you've got to make sure they can actually execute. >> he's an executioner. >> let's get to the opening bell, [ bell ringing ] [ cheers and applause ] >> this is lithia and driveway, a very good company. sells at seven times earnings, talking about anything auto. brian deborse is terrific. lives in asheville. this is where my daughter bought her car. it was a fabulous experience. almost as good as carvana, david. >> almost. >> carvana has the giant vending machine car thing. you can't beat that. >> unstoppable. >> i tell you what's

interesting, jim, some of the commodity, copper worst in a week, coke co-down seven, oil below 72. >> i knew cocoa was going to crash. when you have a parabolic move in cocoa, it has always ended so badly that they obliterate the commodity. let's see if coffee gets hit. i anythink nucor, there were ths involving restructuring of internal costs. there were a lot -- in march there was a lot of weakness. i'm beginning to develop, along with my brown shoots, a march weakness theory. >> that's interesting. sherwin williams demand choppiness, a double miss. >> that was very surprising. are people selling home depot on

that i don't know. >> even ups daily down three. >> she made pledges. there are people who feel she's too optimistic. i think she made a pledge and she's going to live up to it. i actually believe in her here. >> you do? >> yes. there was no need to do it. no need whatsoever. she did not need to put herself out. >> well, the stock is up fractionally in the early going. i've got a stock up a lot more than this. >> novartis? >> no. >> keep trying. >> spotify. >> you had to do it. >> it's up 14%. it's upsetting you? >> no, it's just so good. i said go buy spotify. no one listens, no one cares. i did the show in a mirror. >> you might as well. >> no one cares. >> go down to the subway and

stand on the street and do it there. >> i would do it. >> revenues at spotify, 3.64 billion euro, a bit above the street. gross margin 27.6%. that was better than anticipated. operating margin of 4.6%. again, above at least where many analysts were at 4.2%. they did guide for the second quarter premium subscribers to 245 million. that was a little below i'm told. overall, guys, you get the picture here. margins, earnings -- >> the average revenue per user is extraordinary year-over-year. david, this is the way netflix used to be. remember when the numbers would come out and you'd say wow, how did they do that? this is the new netflix. >> remember the podcasting effort is definitely waned.

how much money they were spending on that. >> deutsche last week went to 340, they were at 260, jim, because they thought the price hike, as received -- well, there's going to be more. >> i think it's an extremely well-run company. julia boorstin spoke with dana. all i can say is this is a company that is chronically undervalued, and i don't understand it. can't people understand it's a good company? it's a subscription business. if you have a subscription business, the stock can go higher. now, netflix when they talk about the idea you can no longer multiply the person by the fee, that was so hated. >> netflix saying a year from now they're going to no longer give us apis. >> killed it. just give it to us. >> by the way, why did you need to tell us a year out other than you think they're not going to be so good? >> it was a suboptimal call.

i love netflix. that call was like let me be the bad guy. >> how about wells taking disney to 141? >> oh, my god. that was like, wow. nirvana, talk about the parks being strong. the stock has been weak since nelson didn't win -- >> the market caps are converging once again, netflix and disney. it's always interesting to watch them. netflix is still, let's call it, 40 billion, almost 40 billion bigger. >> you had to do that. the comparison is fatuous. it a fatuous comparison. >> netflix and disney? >> i'm tired of it. >> i haven't done it in years. >> having gone through the proxy, the proxy war. i don't need to hear it anymore. i think nelson could have -- >> we're still going to be hearing about this? you lost. your side lost.

>> me, i lost. you're right. >> was it rigged, jim? >> it was. i planted the nelson article in the times,you planted the nelson article in the journal. >> which one was the nice one. >> why did that wells piece come out? what was the genesis of the wells piece? >> i don't know. >> with the proxy fight over, we think management will focus on execution, sports stabilizing. >> that's why jimmy pet taro should be named the ceo. >> that is not a surprise. >> when i worked for roger ailes -- >> they're going to be focused on doing all the things they said they were going to do. wells apparently thinks they're going to be successful. moving on. >> my travel trust has a huge position -- >> -- >> -- right before the -- right behind the 6ers. >> with mcenroe, right?

>> really amazing seats. that stopped you in your tracks. >> yeah. >> you were talking -- >> -- >> wolf research this morning -- >> went to the same high school. $44 billion of gross debt up above 2024 ebitda of 9.8 billion. himar engine linear tv advertising whose decline keeps accelerating. with these exposures and the bulk of merger synergies realized, we fear ebitda peaked last year. price target $7.00. >> jesus. i guess that's the endof the knicks tickets. >> oh, i don't think so. >> comp is fine because it's based on free cash flow. a lot of the metrics -- 27 million and then the additional comp is based on free cash flow. >> i'm going to tell you

something. i am rooting for him. >> who? >> zas. >> of course. >> it said turner over earning aged nba deal. what does that mean? we already went through this yesterday where i said i think jassy would like more and jassy said no. we don't know what apple wants. >> the nba deal is going to be a p lot more expensive. here is a nice end to a game -- is that the knicks? oh, yeah. >> nba draft this week. >> stay focused. >> there's o.g. hitting the final free-throw. >> are you doris burke? >> we didn't have -- the villa nova guys are amazing, aren't they? >> you want to talk about this

capri, the ftc? >> yes, i do. it's about time we talked about that. it's an important moment again in terms of antitrust, something weave talked about so consistently for years. the ftc being more aggressive than we've seen in a long time under lina kahn. they've come after what they call the accessible luxury market. that's not a market they made up. that's, in fact, what the companies involved here have been calling this market for some time, accessible luxury handbags. they say, huh-uh. it's going to create a kol loss sass, dwarfing all other players. they go on to say accessible luxury is very distinct from what others call luxury. >> or true luxury. >> yes. these elite brands also claim affluent high-wealth consumers in contrast to the millions of working and middle class clientele who comprise a large part of the customer base for

coach, kate spade, michael kohrs. the price was 57 bucks, is 57 bucks a share. when we look at the stock, it's well below that. there's believed to be more downside if the deal were to be upheld by a court. first of all, it was a 5-0 vote from the commissioners. there are two republicans appointed by president biden. nonetheless, interesting to see a 5-0 vote from the commissioners. it's not that often that you see that, or at least when you've got two of the five are republicans. the level of redactions in the complaint itself is very high, so it's tough to gauge the level of bad documents they're relying on. bad in terms of bad for tapestry and capri because it points to a lot of different competitive things that they have been sharing. of course, they're going to contest this market definition

even though it's their own, jim. they're going to say probably, listen, yeah, together we represent 50% of this market that you're making up, even though they, of course, have made it up themselves. there's still 50% of that market that is made up of very serious competitors in all forms, although many of them, i'm told, do not have brick and mortar stores. so market definitions will be important and we'll have to wait and see. >> i'm for the ftc on this? >> are you? >> yes. a very well-written brief. >> wow. i didn't expect that. >> the most important thing is the competition between the parties benefit not only consumers but other constituents such as employees. the fact is, i have not been a big fan of the ftc because i didn't think they cared as much as the consumer as other s constituencies. these two companies, they go at

it hammer and tongs. we have consumer benefit from this. i'm with them on this. it's interesting the republicans are, too. it has to do with the consumer which is what i care about. >> they're claiming the middle class consumer who buys these accessible luxury brands -- for their part, i don't know if they had anything from the companies. they're saying there's no question this is pro competitive, pro consumer deal. the ftc misunderstand stands the marketplace and the way consumers shop. they say both companies operate in an intensity competitive and fragmented industry am moveng highly competitive brands. it will be an interesting one to watch. they have a judge who was a clinton appointee, u.s. district judge from the southern district. it's not far from here in new york. started in september of '94 and has worked on a number of important cases. let me give you a quick rundown

on codel. no antitrust opinions at least, first quick look. he did dismiss the dnc suit against wikileaks, russian campaign interference in the 2016 election. people are looking at his decisions to try to figure out where he'll come down. >> do you see numerous five. proposed acquisition will eliminate direct head-to-head competition. it's all redacted. they've got a home run here. >> so many redactions. that does point to -- it's tough to gauge -- >> i think the ftc has documents. >> yeah. the question is how many are really bad -- >> look. i've against head-to-head competition combining. that's what happened with the air linings. you can see it's a factor of the market. but this is a very well-reasoned brief. it is true the consumers benefited from head to head. i like anything the ftc does that's pro consumer i'm all in favor of.

>> you're nothing if not surprising sometimes, jim. let's not forget, he did go to law school. >> i didn't go to law school to get stupid. >> no. >> there you go. >> jim, skom of the biggest earnings gainers we haven't mentioned. danaher, number one s&p 500er, quest and kmv. >> -- i mentioned this to larry culp today because he did that deal. i have waited and waited for this company to have the inflection. this is the inflection. the inflection is that they do equipment that's really great for biotechs. there have been enough new biotechs, companies that came public that have money, that they're now finally doing what i thought they would do which is go to danaher, buy the equipment that you need to sequence, that you need to be able to develop really good new drugs. this stock, dare i say, this is day one of a very big move. now, it is a travel trust name. i do have my club meeting

tomorrow at 12:00. this is one where i said there's going to be an inflection point and you have to be ahead of it. if not, you won't be able to catch it. you know den her is a well-run company. renee blair is good. >> shareholders became so accustomed for nothing but incredible performance and stock price. that changed over the last couple years. >> 2.5 years, you're right. >> i would point out shares of thermo, tmo are also up. >> a doppelganger. i think david is absolutely right. my travel trust bought some danaher when it was down. it's been a huge struggle because, carl, these guys were in the never-miss category. that's why they had such a high multiple. i think this is the beginning back to the never miss because there's so much money coming into biotechs. we see it all the time now. we see deals work. it doesn't hurt they report on the same day as novartis which is pretty good.

i'm very glad these guys who have been like clockwork are back. danaher is back. >> let's get some pmis this morning and welcome back rick san santelli. >> we're looking at markets moving on this data point. s&p global pmis, we know manufacturing has been bumpy. three months above 50, not this month. we break the streak, 49.9, and interest rates have dropped about three to four basis points on the tens. the twos, of course, moving further away from 5%. 49.9, that's the first read under 50 since the end of last year when we were at 47.9. we know the service sector has been much stronger and we now have 15 above 50, that's 1-5 above 50. still a disappointment. 50.9. we were looking for a number 52 or higher. if we look at the composite, also the 15th consecutive month

above 50, but also a weaker read, 50.9 on both services and composite. 50.9 is the weakest. you have to go back to november of last year. we're watching rates drop. we have a two-year note option at 1:00 eastern, the biggest ever at 69 billion. that's going to be something to pay attention to. "squawk on the street" will return after a short break.

watch arc today. jim mentioned cathie wood buying tesla in recent days. touch piece in the journal looking at $2.2 billion in net outflows this year which more than surpasses the total from 2023.

meantime dow up 155 inching back to 50-50. just a few points shy. stop trading with jim is coming up next. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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>> i got a horse right here, it's name is servicenow reports tomorrow and i think it's going to be a blowout. i would -- i didn't want to go out on a limb other than the fact that sap had a basic quarter. really amazing quarter using a lot of ai as a servicenow. sap on tonight from "mad money" and i think you buy servicenow at 733 and -- 735 now and make money. >> master -- sky masterson or nicely nice. >> second rate. when you go out for the big one and don't get it. >> don't get it. >> just so mad. >> jim, tonight? >> okay. i have nucore missed the quarter and they had some reasons that had to do with internal but the pricing didn't hold up, cleveland cliffs -- >> we have a minute here. nucore and cleveland cliffs down, down about 8%. >> march was a bad month in this country. that's my theme. match was a weak month.

>> reiterating all the call always reasons why nippon will not buy u.s. steel. what about the overall business for nucore and cleveland cliffs. >> i'm going to challenge them. i think nucore march was not that good on a series of grades of steel. i think this is like the pmi, that rick talked about, the pmi was weak. i think the fed is going to get bailed out here. no one is thinking that. i'm going there. i would like to see the home builders, we need shelter to come down. shelter has not come down. >> morgan stanley, nice chart loogds leading indicator of shelter, second half they think will lead to more disinflation. >> and you're okay and home free and you want to buy them after we have another touch -- we had a big oversold and then bouncing back and we had another oversold. same situation last time and i think after the seconddecline down, you can -- you're going to be so tempted, you have to wait for a third decline. everything will depend on the

end in nvidia, if you listen to amazing discussion at oregon state with the president of oregon state you will realize by jensen huang is the most brilliant man in the world today, not -- >> not elon? >> not mr. 50, $56 million man. >> not any more. the compensation has come down to like 46 or even less given the decline in tesla stock prices. >> that's the problem in america. wouldn't it be great if he made 56. that's america. mr. handbag. >> i'm mr. handbag? >> mr. handbag. >> thank you. >> i'm bringing in michael kors tomorrow. you can see why the ftc is right on this one. >> jim cramer aligning with lina khan, miracles will never cease. >> khan, cantor, wu and cramer, attorneys at law. >> there's a firm, defenders. >> fighting for middle class accessible handbags. >> "mad money" at 6:00 p.m. eastern time as the s&p does reclaim 5050. don't go away.

good tuesday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with david faber and leslie picker, live at post nine of the new york stock exc exchange. sara eisen has the morning off. s&p working on its best two-day gain in a couple months now since late february as we are moving into a new chapter of corporate earnings with consumer and industrial names. yields are a bit elevated but the vix back to 16. >> and as goes those earnings season so goes the movers. here are the movers we are watching. shares of jetblue plunging right now. losses at the airline widened significantly and cut its annual revenue forecast, an oversupply in latin america weighing on those results. you can see shares down more than 11%, 11.5% right now. we'll break down the numbers with their ceo next hour on

"money movers." ge aerospace headed higher the jet engine maker reporting their first quarterly results since separating from the power business, revenues up 10% year over year and boosted guidance and the shares reacting favorably up about 4%. we're keeping a close eye on tesla. the stock trying to avoid its longest daily losing streak ever the ev maker gearing up to report earnings later today. much more on that anticipated moment a bit later in the show up 2% right now those shares. >> but before that we get economic data that crossed the tape rick santelli has it for us. rick >> yes, david. richmond fed, april, real-time, richmond fed manufacturing minus 7, six consecutive negative months in a row, not good. look at business conditions, which is the service sector, it is the minus 6 a much worse number than anticipated. haven't had a positive integer on the service sector since

august of last year. for the big number march new home sales, expected to be in the 670,000 area that's seasonally adjusted annualized units, it's better, 693,000. that is the best since september, and it does underscore with such a weak inventory existing home sales and march existing home sales being a bit lower, many expected this number to be higher and we did see a revision in the rearview mirror which takes some of the fun away, 662,000, last month becomes 637,000. for more on new home sales, let's head east to diana olick diana. >> rick, this is a surprise to the upside, but not totally unexpected because i want to look at mortgage rates specifically we know that today's buyers are incredibly rate sensitive and while in february the 30-year fixed was solidly over 7% for the month in march it was a mix. it came down, it went up a little bit and came down again we know the big builders are

buying down mortgage rates and some of them are lowering prices we saw the median price of a home sold $470,000, down nearly 2% year over year. builders pulling back on prices and offering incentives we see i want to turn to pulte which just reported earnings this morning. the third largest home builder reported a strong first quarter earnings and increased guidance and did not lower prices they raised them slightly which helped juice their margins and they are using rate buy downs saying the average buyer was getting a 5.75% starting rate as opposed to the 7% rates we're seeing now they did not -- they did note a sharp increase in first-time buyers but given the recent increase in rates to now close to 7.5% they're seeing, quote, some moderation in traffic and may have to look at lowering prices of course, we'll have an exclusive interview with pulte's ceo ryan marshal in the next hour on "money movers.

carl >> thanks for that diana olick, a busy day for data. also a busy day for earnings from the awesome gm rallying on this huge beat and tesla tonight after the bell as it tries to end one of its longest daily losing streaks in its history. let's get to flzphil lebeau whos covering it all. good morning, phil >> reporter: [ inaudible ] after reporting better than expected, much better than expected earnings for the first quarter take a look at shares up more than 5% earlier today as you take a look at the stock, keep in mind that this is a company up now 4.5% for the day. their adjusted epps, 262 a share for the first quarter, the most optimistic estimate on wall street was 2.53 a share. what was driving gm in the first quarter, north american adjusted profit margin, 10.6% that's better than people were expecting. average transaction price, it hasn't fallen as much as many feared still holding at about $50,000. roughly flat compared to a year

ago. strong pickup truck demand paul jacobson on "squawk box." >> we have seen, you know, some effects on lease rates, and the leasing portfolio, obviously, where people turn vehicles faster and where we drive a lot of loyalty gm financial has continueded to trend well in that space i think it's a little bit too soon to tell, based on where interest rates are and how long they've been here, but as we've seen the customer has been really resilient as it relates to our products over this time period >> reporter: that's paul talking about the impact of higher auto loan interest rates on the consumer and as he said, they really haven't noticed a huge impact at this point and they are raising their full year eps and free cash flow guidance. shares of gm up almost 5% following much better be than expected earnings and a much better than expected forecast as they raise for the full year compare that with tesla, and this is all about what we're going to hear after the bell

today, as tesla tries to move higher after a string of days where the stock has been pushed lower. the q1 results do come after the bell, and what we want to hear, what the street wants to hear, i shouldn't say we, what the investor wants to hear after the bell in the conference call with elon musk, what's the delivery guidance for this year most have brought down their estimate for full-year deliveries to 1.9 million. they did 1.8 million last year what's the update on the model 2 and robotaxi we've only had vague references so far in terms of articles talking about what elon musk might be doing and then what does he say during the conference call and how specific does he get during that conference call? those are the things that people will be focused on, especially during the conference call, guys. i cannot stress it enough, we talk about it every quarter, saying that's what people are going to be focused on this quarter, that really is the case because no one is quite sure what the near term and

longer term outlook is for tesla. they're hoping for some guidance for elon after the call. >> phil, to turn back to gm, shares of which has eclipsed more than 5% rise, i am -- i asked this earlier, i mean, what do the analysts who follow the company miss, given it was such a sizable beat, not to mention guidance moving up. >> sure. >> is it simply -- well, let me leave it at that what did, if anything, they sort of not fully account for >> i think they failed to appreciate in north america that pricing held up a little bit better than expected remember, gm had said i want to say about six weegs ago, look for the year, pricing is going to be down 2 to 2.5% it really hasn't kicked in yet, and i think there is maybe a lack of appreciation for the fact that transaction prices have held as strong as they have, and the demand is there, david. we are not seeing a slowdown in the consumer demand, and that's manifested in both the sales numbers as well as the

transaction prices so general motors i think doing better than expected in those two areas in north america probably under appreciated by wall street. >> phil, appreciate that obviously, we're waiting to see what tesla says tonight. that's phil lebeau on a busy day for autos. wall street's take on this market as earnings season kicking into higher gear, goldman sachs chief u.s. equity strategist david kostin has kept the target of 5200 great to have you back. >> nice to see you again, carl. >> is the year playing out as you expected >> pretty much the market at a little over 5,000 would suggest maybe a couple percent appreciation from now until the end of the year, and the expectation is, what are we seeing now for the first quarter results? we're about 16% of the way through earnings season. we've seen thus far most of the companies, about 65% of the companies, have actually beat expectations on the bottom line and about a third have beat expectations on the top line that suggests to us is that

companies are able and have been demonstrating the ability to kind of squeak over a little bit of margin, margin basically hold there until a little bit higher. something i heard last week in chicago, we had dinner with 20 ceos and discussion point about who was able to raise prices the answer was not a lot of price action, but there was some, you know, desire to try to raise prices it didn't get that strong indication as a lot of inflation coming our forecast is that market rises slowly in line with expectations for - >> any reason to doubt that coming quarters will bring further improvement in margins >> there's not really necessary to doubt that the view that inflation will move lower by the end of the year and rates will come a little bit lower. that's sort of the expectation we have in our model, is that earnings will be roughly -- margins will be roughly flat and ultimately it's a little bit about economic growth will drive sales and that's largely the reason for earnings to be higher

for this year. >> i'm curious about your point about -- it feels like there is this inflection point with regards to companies' ability to continuing to pass those price increases to their customers i'm curious what you think that means for margins moving forward? in the conversations with the ceos did it feel like they would be taking additional pain themselves, rather than being able to pass that along to - >> one of the comments from one of the ceos was changing some of the terms of service as opposed to necessarily push prices and try to maintain their market share. that was really the discussion point that was interesting, a lot of consumer companies a lot of industrial companies, couple financials that were around the table and talking about business activity business activity was pretty strong their characterization of it not necessarily that they're pushed through a lot of price increases. some, but not a lot. >> are rates going to drive this market or is it going to be earnings i look at it today, we had a very positive perhaps based on what would have been strong earnings and guidance from a number of companies? >> right now it's about

earnings a week and a half ago everything was focusing on inflation and rates and the big discussion points with clients. this week and next week will be most of the conversations around earnings, margins, whether the companies can deliver on expectations or beat expectations put this in context, the expectation is 3% year over year growth in earnings it's a low bar. >> yes. >> the last four quarters, david, the actual results about 400 basis points greater than expectations so if you had that pattern persist for this quarter you would be something like year over year growth of earnings around 7%. expectation is 3 pretty low bar as i said earlier to carl, basically around two-thirds of the companies are beating their results on terms of earnings. that's pretty consistent with what you've seen in the last several quarters >> the desk -- your desk has written about lower cta liquidity, cutting exposure even on pullbacks, maybe this pullback has more to go.

can you get that granular on it? >> that's sort of a tactical view that would suggest to us the -- suggest to me is that earnings season is really going to drive the story and saw the example with gm. positive results stocks go higher the idea most of the companies thus far coming in better than expected for earnings season has been a key area. another big area in focus of discussion on how companies will spend their cash for this year, about $3.7 trillion of money will be spent, cash spending, over a trillion dollars spent on investing for growth, capex and r&d. if the economy continues to grow, companies that prioritize that as a source and a use of cash will actually be rewarded. >> david, we'll see, we're just getting into it as you say 16% in good to see you. >> thank you. >> david kostin from goldman sachs. let's get to steve covac with breaking news on apple this morning. >> hey there, carl may 7th there's going to be an apple event. this is going to be a virtual event streamed on apple.com,

probably youtube as well and we're expecting this one to be new ipads. this is important, carl, last year all of 2023 was the first year i can remember that apple didn't put out a new model of ipad as a result, sales have been way down from the covid highs that we saw people just snapping up, all those ipads and mac books and expecting this, carl, to be a significant revampp of the ipad lineup, including the ipad pro, bloomberg and others have reported there's going to be significant updates to the screen and things like that. also some lower end models of the ipad as well but look, today we got that headline out of china saying sales of iphones in that country were down about 19%. that is what everyone's really focusing on more than the ipad business, can the iphone business turnaround especially in china >> we always try to read the tea leaves behind the announcement what do you think let loose means? >> i don't know what let loose means but there's an apple

pencil the stylus for the pen on there. this is going to be an ipad event. >> well hopefully it's not too loose that you lose it. >> it does attach with a magnet and i think it's okay. >> yeah. for most people. we'll see. steve, thank you. >> thanks. as we head to break here's a road map for the rest of the hour new data showing apple smartphone shipments plunging in china. we will head live to beijing for the details and the fallout. plus short sellers seem to be making big bets against big tech we're going to tell you which names are in their cross hairs. >> pulte beating earnings, as the saying, there's a shortage of, quote, several million homes. we will get the pulse of the home selling season right now thheeo owi t cf compass later this hour. "squawk on the street" continues. [busy hospital background sounds] this healthcare network uses crowdstrike to defend

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busy day for earnings. pepsi beat prices. organic growth fell 2%, volume growth, driven by a slow down in beverages. the ceo spoke on the conference call saying the consumer globally is very resilient but that the lower income consumer in the u.s. is a bit stretched hanging on to gains for the year, just barely. under performing the s&p so far in '24. >> of course down about 2.8% today. we're a little over a week away from apple earnings and barclays out with a note ahead of the print saying they expect the company's guidance for the june quarter to miss estimate deuce to softening hardware and iphone

demand let's get to eunice yoon in beijing with new data on apple eunice >> reporter: thanks so much, leslie apple, as you said, had its worst quarter in terms of iphone sales in china since the start of the pandemic. a research says that in terms of market share apple slid from first to third place, losing out mainly to local rival huawei whose market share has risen by 70%. in terms of the overall smartphone market, the research firm said that in q1, the market expanded by 1.5% the drop coincides with the ceo tim cook's charm offensive when he came here, visited the flagship store and spoke with state media really talking about how important china is, critical, he says, for its supply chain it also comes as a period when the chinese tend to actually

spend a lot more because of the lunar new year holiday it's seen as a big time when people like to flash out cash, however because of the overall environment here with the downturn, people have been a lot tighter with money in terms of tis counts, apple has been trying to offer lower prices to get more people to buy their iphone 15. these are the sale prices as of today. down by schs as much as 20% because of the concerns about people not buying enough apple does have, of course, other challenges that it faces some quite specific to apple and -- as well as other foreign devices. broader restrictions on these devices at state firms and agencies and also, of course, that tougher competition that i mentioned from the local rivals, including huawei, huawei has just last week come out with

another lineup of high-end -- phones this is the 70 series after, as we talked about a lot, the 60 last year was rolled out and was really seen as huawei's comeback and ability to overcome the u.s. challenges, controls, and other restrictions on its chips. guys >> eunice, you know, the resurgence of huawei itself is interesting. i mean, for so many people here in the states what they may remember is essentially the u.s. government almost putting it out of business in terms of export restrictions what has been behind that? how have they rebuilt the company and the product to the extent that it can now really compete effectively with the iphone >> reporter: well, i mean, with huawei, they have said that they are focused very much on their technology, so it's always been a mystery as to exactly what's

behind the 60. they haven't outright said that they were using any of 5g chips. all we know is that the speeds are as close to 5g as possible that's really been pumped up by huawei and people have been buying the phones. when the phones have come out, there have been people lining up to get them for this pure 70 series people were saying that they wanted to be able to get their hands on them. you have to line up just to get the reservation and there was no guarantee you would be able to get this phone they have been really able to get people excited about their phones, and then there is a bit of a nationalism line where there are folks who do think that they should be making -- buying made in china phones, phones that are not only made in china, but made by a chinese company. >> that explains some of cook's travels to china recently. thank you. eunice yoon, important story regarding china and apple.

meantime still ahead short sellers making big bets against big tech anju h metg they're targin d stowuch they're making after this how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now.

. welcome back take a look at shares of spotify up nearly 13.5% right now. the music streaming company beat earnings estimates despite slowly than expected user growth revenue climbed 20% and active users rose 19% from a year ago to 615 million, short of its previous guidance. today's gains pushing the stock up more than 60%, about 65%, this year. got to wonder where taylor swift and beyonce fit into this momentum here as well. carl >> meantime, cathie wood's once high flying ark innovation etf continues to struggle in '24 down around 15% this year under performing the s&p four of the top five holdings for the etf are negative on the year led by tesla. the group's largest holding by weight coinbase the only outperformer among those names. the shares struggle leading investors to pull money out of cathie wood's funds. investors have pulled $2.2

billion from her six funds this yearan >> yeah. secretion of value the key play for winners investors when comes to ai. we can remember the period of time when we were talking about

arc every day, back in '21 and '22, almost -- you knew that watching assets accrue that quickly, to that strategy, after she had had, obviously, some very strong -- >> although some of her macro calls are still up in the air whether or not technology will lead to deflation and the cost of batteries and robots going to fall dramatically, we'll see. >> yeah. obviously, her tesla call from way, way back, was -- but still very much so meanwhile the magnificent seven stocks are seeing a bit of an uptick, this in short interest ahead of their earnings. kate rooney joins us now and she has more on what the bears are betting on and just how much kate >> hey, david. last week marked a record windfall for bears betting against big tech, short sellers in the magnificent seven, saw a weekly profit of $10 billion that was an all-time high during the nasdaq selloff according to the data firm. the tech giants for the most part report earnings this week and they are the most shorted stocks in the market according

to s 3 partners. nvidia number one followed by microsoft, apple, tesla, meta and amazon and alphabet. there has been some enough sentiment around these companies as you guys have been talking about. tesla, for example, but short interest may be more about downside protection, so s-3 tells me investors are using mega cap tech as a way to hedge, more efficient than going long materials and energy these stocks are pretty cheap to borrow and short because they're liquid he described them as a hedge with serious afterburners since they get the biggest kick in the teeth if the market goes the wrong way for them aside from last week, shorting big tech has been less profitble. nvidia shorts are down 35% this year, meta shorts down 27% according to s-3 and amazon, microsoft and alphabet bears they're all in the red of the magnificent seven it has only been profitable to short apple and tesla. shorting tesla, though, has been risky over the years the bears have lost a total of

$52.5 billion shorting tesla since its ipo. you can see there only two years have been profitable for short sellers. this is on track to be one of them shorts are up about $9 billion guys >> that trade finally paying off there, kate. interesting stuff. thank you. speaking of the magnificent seven, tesla shares trying to avoid their longest losing shares ever ahead of earnings tonight. we'll get you ready with one analyst warning of more pain ahead. strap in we'll get you ready. we're back after this. ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim:

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welcome back to "squawk on the street" i'm bertha coombs with your cnbc news update new york judge in donald trump's hush money trial will consider today whether the former president violated his gag order in the case. the hearing today will focus on whether trump attacked likely

witnesses on social media. he faces 34 counts of falsifying business records related to an alleged hush money payment to adult film star stormy daniels trump has pleaded not guilty. secretary of state an tony blink been departed for china this morning his first trip since june he's expected to raise concerns over tensions in the south china sea the russian war and the crisis in the middle east. and nasa's voyager 1 spacecraft is transmitting data once again after going dark last november the space agency announced that the 46-year-old probe, which is more than 15 billion miles from earth, is once again sending engineering updates. the next step is to get science data transmitting again. voyager one and two are the only spacecraft to ever fly in interstellar space. >> they found the one chip that was the problem and they

reworked it with a new code update. >> fascinating i love it when you talk space. bertha coombs this morning. >> we'll get you ready for tesla in a moment and still to come one of the largest home builders out with a warning about the housing market and get a read from the ground with the ceo real estate firm compass on pace for the best day in more than a month stay with us

checking the markets on this tuesday. close to session highs with 1% gain on the s&p. nice day for tech and industrials up more than 1.5%. we got some relief in commodities like the metals and other names like cocoa that have

been going parabolic in recent weeks. we'll see what happens, of course, big earnings continues tonight. >> they do we'll start off now with a company that just reported, gm, and you see that stock is up over 5% after over what was a big beat on the top and bottom lines. strong north american operations the automaker raising its 2024 guidance tesla will report results after the bell in what has become one of the more important earnings calls in that ev maker's history. the shares, of course, down more than 40% so far this year up today but close to 52-week lows. here to help us break it all down, carl is wells fargo's auto and mobility analyst, underweight rating on tesla, $120 price target. and that's been the right call to have had this year. but before we get to tesla, just give me a quick read on gm, and, you know, your thoughts about what, obviously, seems to be quite strong numbers,

particularly in north america. >> yeah, sure. i i mean gm had a very good quarter and they reported 3.8 billion in adjusted, better than consensus of $3 billion i think volume seem to have come in better and pricing for them has held pretty well it seems to be bucking the trend for the data we see for the industry that said i think inventory levels look high full-size pick-ups is weak in q1 and that's a huge money makers and factors that probably mean risks for the rest of the year in my opinion, and i'm cautious on all the detroit three awesome automakers, we see pricing and ev headwinds of the regulations and the profitability there and we are concerned and watching closely [ inaudible ]. >> your concern extends to tesla where, as we said, you have not been particularly aggressive on the stock at all has it already discounted to a

certain extent given that move down this year 41%p, the expectations coming into this quarter? >> that's a good question because i think almost every investor i spoken to really expects a miss in the quarter. i would agree. i think the fundamentals are very poor in q1. i think what i've warned investors about in the very short term on the call is that they do have a history of razzle-dazzling investors. they're probably going to hype up full self-driving and robotaxiand it can dislocate from fundamentals. after the call after the excitement that might be building on low expectations heading in, i think the fundamentals matter again. you'll have pretty weak deliveries, price cuts, and i think the question of when will robotaxi actually hit becomes an important concern. >> what does that razzle-dazzle -- is it enough to razzle-dazzle at this point, so to speak because we've heard promises on r robotaxis and full self-driving. they have a new iteration of it

that relies, you know, on sort of a different underlying what is it neural networks in a way they hadn't previously but is it going to be enough -- neural nets in this case to get people excited, given what we've seen in the past? >> i guess to be clear i think there's a risk that there's some short-term excitement. we saw very poor q1 deliveries the stock fell and traded back up we've seen a dislocation in the very recent near term from fundamentals we saw news about model 2 which was an important launch, and questions about what the outlook for that model is, and we saw the stock actually trade back up after that it can dislocate from fundamentals we saw in the last week the fundamentals do matter i do think there's some expectation here they have a -- it's a new system i've been in it. it is significantly improved it's pretty impressive for how long it's been out, and i'm sure they're going to be hyping the rate of change of improvements of that system i still fundamentally don't see it being a robotaxi any time soon and a lot of work to be done, but i think they're going

to be talking about the rate of change there, and how, you know, building excitement about maybe that coming sooner than people are expecting and might be enough to get the people who are bullish on the stock to buy more. >> based on your -- colin, i'm curious based on your experience covering the stock what is it that kind of shifts investor focus from the fundamentals to what you described to be, you know, razzle-dazzle hype and so forth? what is it that the average person can be looking for on the call that would suggest a shift like that is taking place and they should be kind of mindful in how they're trading the stock today and tomorrow >> i mean, to be clear, i'm just talking tonight post earnings the reaction i can see a risk that it pops. i still think the fundamentals matter and we've seen the fundamentals overweight over time and i think over the month after we're going to see the fundamentals matter. i do think, you know, people are clearly looking at the long-term story. if you're a buyer of the stock, you're looking at the robotaxi and market opportunity there and considering the low expectations

that investors have into the quarter, i don't know that the setup in the short term is great for the bears. i think fundamentally when deliveries come in, price cuts continue, i think the story works again. >> we'll be paying close attention. appreciate your insights thank you, colin. >> all right thanks for having me on. one earnings name seeing some gains is pulte, one of the nation's biggest home builders home sale revenue up 10 year over year and up 11 and demand remains strong on the new side due to limited inventory take a listen to the company's ceo last hour on the conference call. >> the supply of available housing remains tight. we have the long-term structural issue resulting from a decade of under building that has the country short of approximately 4 million housing units. at the same time, the available inventory of existing homes for sale continues to be low as homeowners remained locked into their low interest rates

life happens so we're seeing additional homes come to market but the numbers remain well below historic rates. >> and don't miss pulte's ceo next hour on "money movers" beginning at 11:00 a.m. eastern. and new home sales rose more than expected in march to the highest levels since september and the biggest monthly gain since december 2022. meanwhile reffkin reporting home affordability is on the decline with 40% of homeowners saying they don't believe they could afford their home if they were to buy it today. compass co-founder and ceo robert reffkin joins us now here at post nine thanks for being here, robert. let's talk about housing affordability, especially as it pertains pertains to owning a home, representing an apartment. i've been parsing through the regional bank data which suggests multifamily housing is reaching this inflection point as well in terms of its supply-demand dynamics how do you see housing affordability at this stage in the cycle? >> i think housing affordability

will continue to be an issue because 60% of homeowners are locked into low mortgage rates at 4% or below, locking them out of selling their home. so there's structurally less inventory even before that issue and then add that, and there's more buyers than sellers and that leads to prices increasing. sale prices this year are about 5% above where they were last year. >> one thing i thought was really interesting because we think about this kind of correlation between where the rates are and what it means for housing and what it means for affordability, but you in the producer's notes are focused on all cash deals and basically this idea that as we have more appreciation in the stock market, people tend to crystallize some of those gains, take some gains from fixed new jersey as well, and use that toward buying all cash how does that dynamic affect, you know, the overall market and the implications on supply as well >> the theme of the moment is

that although mortgage rates are above 7%, you don't need low mortgage rates if your stock portfolio is at an all-time high if you're living in the bay area you're living in seattle or new york these are markets where a lot of employee base are paid in equity and then equity is nearing an all-time high also, from a buyer perspective, there's actually more inventory now than there has been in years. 30% more inventory today than there was a year ago, and the houses that are available for sale right now have more price drops than any time in the last decade there are some positive signs out there. >> in terms of, you know, those discounts and price drops, the ears probably perked up with those, is that enough to increase demand? what are you seeing in terms of buyer behavior at this point in time especially as we look at the prospect for those who aren't fortunate enough to be able to purchase a house with all cash, higher for longer, 20% odds in the options market that fed

would hike from here, which would suggest that if you do want to be taking out a mortgage, maybe now could be your time to do that if that's the case, so how is buyer behavior kind of shifting in this new world with discounts but also the prospect of a more expensive mortgage. >> we are seeing more buyer demand than this past fall this past fall in october the seasonal adjusted rate of home sales was 3.8 million. this past month 4.2 million. it is modestly moving up the mid-cycle average should be around 5.3, 5.4 million. we're far off from where we should be but the bottom is behind us. >> are you seeing more housing affordability and discussions following that settlement, that recent settlement with the national association of realtors and a group of home sellers? i saw an article that said the standard 6% commission is a thing of the past and it's going to be much more negotiated downward as much as 25%.

does that make housing more affordable and what does that mean for your business, which relies very heavily, of course, on those commissions >> so the headlines that i read are very different than the facts that i know. there is nar doesn't govern commission there is no such thing as a 6% commission they're all negotiable and they always have been what i can tell you is that more people are using buyer agents and seller agents over the last decade pretty consistently. it's at an all-time high right now. i can tell you that commissions over the last three years went up each year and those are signs that the consumer values advice from a professional agent more than a discount. there are discounts that have been out there forever there are mass discounters in every market, but people time and time again are choosing the agent that can give them the best advice. >> commissions went up on an absolute basis or on a percentage of the -- >> commissions in 2021 were 4.9%

and then went up to low 5, around 5% in 2022 and in 2023 they were up even higher. >> want to make it clear it wasn't as a result of the price appreciation and it was the -- >> the actual commission the reason that happened, it happened over the last 20 years, you can see when the market is really, really hot and it's easy to sell a home, commissions go down so that in 2005, 2006, 2007 and then they went up i in '08, '09, '10 that's when you need a good agent to had help you solve your need. in 2021, commissions were lower than they were in the last two years because it was easier to buy or sell a home back then. >> makes sense hopefully we'll have you back on in a different area of the cycle and beable to chat more. >> i cannot wait. >> we keep saying it. >> it's been over two years. two years of - >> it's going to be more years, sus isn't it >> i think it's going to end up being three years at this pace. >> not three more. one more. >> one more, exactly

in my mind, i'm thinking that we'll get to the mid-cycle at some point in the next one to two years and it should be a gradual upturn. >> so your expectations for this spring are pretty tempered i would imagine? >> my expectations for this spring are that it will be better than last year. >> all right well, robert, thank you very much as we go to break, check out some of the biggest laggards on the s&p. we've got some earnings stories in there nucor down almost seven. a bunch of other earnings movers u.p.s., lockheed and more. ctinoasestors need to kw weonnue on this tuesday. they respond to emails with phone calls... and they don't 'circle back', they're already there. they wear business sneakers and pad their keyboards with something that makes their clickety-clacking... clickety-clackier. but no one loves logistics as much as they do. you need tamra, izzy, and emma. they need a retirement plan.

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if you look at it, look at the chart, it's a six-hour chart there was another spike back to the upside after the company laid out some details related to its postal service contract for air cargo. here's what we now know about the contract from company officials on the earnings call it will be about a 5 1/2 year contract and it will have revenue minimums, which seem to boost the stock after that news was released on the earnings call the contract was previously held by fedex there were some concerns that it could actually be money losing for u.p.s. again, on the call, cfo brian newman laid out also the revenue and the profit from this contract will go to its supply chain solution segment >> adding usps air can cargo will have a higher share benefiting our u.s. domestic segment. we expect to see a benefit to operating margins this year at both the consolidated level and the u.s. domestic segment.

>> it was a mixed quarter. volume decline over 3% with air volumes falling by 8%. that postal service contract is expected to help with some shortfall when it comes it air cargo. pricing was essentially flat in the u.s. international pricing saw a very slight increase. the company also detailed the percentage of u.s. volume of small and medium sized business. announcing 29% is s&b volume higher margin to bolder and better strategy. back over to you >> frank, thank you. let's get to the defense names lockheed martin and raytheon headed in opposite directions this morning let's get to morgan brennan with more on those and why they're moving the way they're moving. >> we're fading the gains here it was a strong start to earnings, a beat for lockheed martin and rtx, reaffirming guidance strong defense demand. strong demand for commercial aerospace despite those lingering engine recall issues

now, lockheed reporting a 14% sales jump it was 5% if you stripped out extra q1 week. cfo pointing to growth in every segment as orders surge from missiles and munitions, missile defense, strength in f-16, international orders for f-35, radars and blackhawk helicopter. for rtx, defense sales are up 6% driven by missile and missile defense systems like pat troe yot. it isn't just the prime contractors. ge aerospace on the commercial side overshadowing robust defense demand for that company, too. defense sales are up 18%, profit up 26% and ge ceo larry culp telling me, when you look at the supplemental, we look at what allies around the world are doing and we're well positioned from a combat and rotocraft

perspective. the world is more dangerous, and the companies in the weapons and deterrence business are benefiting as they work through ongoing supply chain challenges. shares of ge popping up 6% lockheed and rtx both starting to move lower here at least rtx slightly lower right now. >> morgan, thank you notable, of course, that move in ge and gm, a number of earnings movers this morning seem to be powering our market higher with the s&p up some 1.1% that will do it for this hour, but our live market coverage continues right after this your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire oh no, a rash. maybe it'll go away. awww, how am i going to find a doctor i'll actually like? is that a qr code?

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good tuesday morning welcome to "money movers." i'm carl quintanilla with leslie picker live at post 9 of the new york stock exchange. today the c-suite paints a picture of the consumer and the economy. first up, the ceo of novartis raising guidance as they continue record growth. jetblue plunges. why the company is warning of a setback for full-year outlook. pulte group, on what stubbornly high mort