tv Squawk on the Street CNBC August 13, 2021 9:00am-11:00am EDT
there. >> it was super cool. >> if you liked "field of dreams" this was a special thing. >> maybe i should show the kelds "field of dreams." i want to thank you for hanging out all week. >> thank you for having us. make sure you join us next week "squawk on the street" begins right now. ♪ good friday morning. welcome to "squawk on the street." i'm here with morgan brennan and mike san tollist, live at post 9 at the new york stock exchange we get one last dose of earnings today. look out for signs of the delta vane caseload may be peaking in some key states. delighting as the company's big bet on streaming appears to be paying off
>> plus facebook announces it's pushing off reopening its offices. we've got the latest. shares of virgin galactic falling again today, sir richard branson dumping another huge stake, his third since taking it public a couple years ago now. >> rpu declined to disney plus, more skewed toward overseas. i think that will be an issue at some point, though i think expectations for the quarter had moderated, so it seemed avnet flick if it would be a general
softening. it's like 175 million subscribers, so, you know, it's not that far behind netflix. i just think it gets an enormous amount of investor credit for having made itself indispensable. espn days, you couldn't get away from it. the whole franchise model of princesses, marvel, everything, that was inescapable now there's reassurance that it's in every family home, or most. >> any day of the week, you ask my daughter what princess she wants to be when she grows up, it's a different one the parks division did return to profitability. i realize there may be questions
on what delta will look like, about, you know, delta impact, but that being said, that's certainly ticked the boxes and speaks to the value proposition. streaming might not be profitable, but they have all these other levels to pull. >> a lot of reaction from the street goldman goes to 218, morgan stanley reiterates a buy chapek last night did talk about the degree top disney is getting a more firm picture of exactly what pricing looks like in the streaming business. >> our churn rate is down, retention rate is up, we're still adding subs. so it's a perfect indication of what that price/value relationship is for the guest. i think it gives us more fuel for the future >> that's going to be key, is figuring out what people are willing to pay and how it's
going to work on the premium fees we're going to talk about scar-jo in a minute. >> they waited and waited and waited, and then they pulled the lever. remember the initial massive rally related to streaming kicked off on investor days when they set the price point they said, this is too low, but will get massive ramp and -- >> that's going to be maybe the de debate. >> they did see higher advertising revenue. now we do have to talk to
scarlett johansson. >> he didn't mention her by names, but they did work out how to fairly compensate our talent, and he said most deals have gone by, for the most part, very smoothly didn't seem to add a lot of picture as to how they'll handle this particular dispute. >> there are unique aspects to itted -- now going ahead, you know in advance, presumably for every new project how this will go and how you're going to pay people that's why i think investors don't sigh it as a big potential cost liability that sits out there. but look, the companies are also foregoing arguably a lot of box office revenue that's something you have to come to terms with as well
h. >> i think it also speaks to the fact that they're day window that was put in place. i'll be honest, maybe not as messy, but we've seen a very similar playbook here. it changed the business model, it changed the compensation model for producers and artists in that industry there's a lot of room and flexibility for create activity for some of those new deals for actors, tv, news, movie producers are concerned. >> yeah, music had live performances and merch. >> that's true. >> -- to fall back on. so it will be interesting -- it's not all universal praise
today. need many, laura martin maintains her hold, estimates are too lie. and then the work that. >> if you bleak at disney at, what, 22 times enterprise value to cash flow, if you want to look at it that way, because they do have a ton of debt still after the fox deal, that's very, very expensive to what it's traded for in the past if you say streaming is breakeven right now, it's an investment story, and then you have to back into it that way, but i think those are the concerns it really is getting credit for both a shutdown and a reopening, right? you have both those elements >> spec of which, the fda has authorized covid vaccine boosters for people with
weakened immune systems. as expected, that action came late last night. immunocompromised people can receive a third dose of the pfizer or moderna. dr. scott gottlieb weigh in earlier. here's what he said. >> this could become an annual inoculation. tucked be one us receive a third booster, patients will drive a more durable response. that doesn't mean they'll be protected in perpetuity. this may need a subsequent booster from time to time. >> and so many headlines this morning swirling around the vaccine front. new orleans and san francisco instituting all kinds of restrictions, requirements for either testing or vaccines if you go into businesses indiana university, of course, scotus held their ability to require students to get vaccinated lsu this morning tweets, once we
get approval, you can expect a mandate if you want to come back to lsu. >> here's what i don't hear having been discussed. you have mandates in private entities, when a union workforce is involved, it's a very different conversation you're seeing that play out, too, right it's part of why some companies are implementing mandates, others are making strong suggestions or mandates alongside testing, speaking to the heft of the employees base and how much leverage each side has as well. >> and also in a world of scarce labor. if you're an airline, you already have a hard time making sure you have enough staff for flights. if you step back from it, it explains in part, i think, why the market is kind of okay with where we are on this, because it
just seems as if across the board society is trying to get ahead of it, we kind of have been through it, and as much as there is maybe frustration in some circles, you're doing half a million, you know, or more a day. nobody is getting unvaccinated, right? it's incremental progress, we'll become more inured to it. >> strong signs the u.s. is starting to turn the corner. the rate of transfer now declining in 40 of 50 states, and actual caseloads declining in states like missouri, utah and alaska, makes you feel that inflections will -- >> and i believe this week on "techcheck," this has been part of the session, with the
markets, s&p and the dow reaching to evermore highs this week, though very narrow trading ranges, and whether the peak to delta has been priced in the other i would flag, oppenheimer's analyst was on yesterday to talk about moderna, which obviously has had al would ecas well. he said the name he's watching closely is regeneron as one of the next stocks that could possibly take off next today you see regeneron trending on twitter that's because in florida, governor desantis has said he's planting a rapid response initiative for early covid treatment in that state as well. those shares are up a little bit premarket right now. but another name to keep an eye on, perhaps even more so in the covid treatment landscape. look, last year before we
even had a vaccine and the market wanted to get higher, there's been a big rush to get back into it is cyclicals. it just seems like that's the kind of comfortable feeling call to make right now. >> we also had to start the week, the infrastructure deal that went through the senate at the start of this week when we return, u.s. chamber of commerce's ceo suzanne clark, with so much more. a quick look at futures right now, with about 18 minutes until the opening bell everything is indicated to open higher, s&p and dewow and nasda. more "squawk on the street" from the new york stock exchange, straight ahead yeah, i mean the thing is, people like geico because it's just easy. bundling for example. you've got car insurance here. and home insurance here. why not... schuuuuzp.. put them together. save even more. some things are just better together, aren't they?
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that's cool, but ours save us serious clam-aroonies. relax people, my wireless is crushing it. that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one upping itself. the senate, as you know, passing the $1 trillion bipartisan infrastructure bill, as it goes to the house. joining us is suzanne clark, ceo of the u.s. chamber of commerce. always good to chat with you happy friday thanks for being with us. >> good morning. >> i wonder if you were surprised at the nature of which this bill -- at least the final word in the senate, was so bipartisan were you impressed with the degree of bipartisan support >> absolutely. i mean, 69 votes in this environment is a real win, a real testament to the
negotiators who produced a thoughtful debate, asked smart questions, and were able to get something done, proving to americans that they can get something done in a bipartisan this will do a lot for our economy, for american economic growth, and now we want to see the house get it to the president's desk. >> do you agree with the view that it will be tougher sledding >> no, i've been optimistic about getting this done from the beginning. i remain optimist. one underreported fact has been what this does for clean water it literally gets the lead out of pipes in 10 million homes and 4,000 schools and childcare centers. >>. >> it obviously is running into some friction s. as manchin said earlier in the week, the level
of spending we're looking at week more appropriate for a great recession or depression. how do we get past that view >> i think it's important we separate out this crucial bill it does a lot of good work for americans and america without raising taxes from in $3.5 trillion tax-and-spending scree. these are different things we've got to fight this. this is nothing but a report tax increase on employers and investors. this is a takeover of our healthcare system, this is a real threat to our recovery and future prosperity. if we're going to worry about inflation and spending, we have to put together the biggest coalition that businesses ever put together and defeat that proposal. >> just to dig into that more how worried are you about
inflation. quite a number different industries and products, it's eye-popping. for better or worst this possibly is supposed to be addressing but how much of it is transitory >> how much would that add to the situation? >> it's exactly the right question, right? we're seeing we hope it could be transitory we think it's done a good job in a hard situation, but this type of tax-and-spend bill could make that type of inflation permanent. when you think about what we need to be doing as a country, this is exactly the wrong course to be taking one or thing, this worker shortage, really getting americans back to work, getting childcare centers open, expanding access to childcare,
making sure schools stay open, anything we can do to make will also help alleviate this price pressure. >> there's a lot of working parents out there that would like to see this addressed i realize the devil is in the details. are you behind that, or do you think it needs to be done differently? >> again, i think this is one of the big questions, which is how do we provider good, fair, affordable access to child care washington starts throwing around these trillion dollar proposals as if it's confetti, that's a really big number one thing we need to see is the vaccine numbers go up.
parents are even afraid to access the options available to them now so watching how all these topics relate, maybe it really important that we stay focused on real solutions that get us out of the pandemics, that help with the economic recovery, and don't experiment with one of the biggest, most radical pieces of tax-and-spend legislation we have ever seen not the time for that. suzanne, a lot of the chamber's commentary includes a mention, as a way to solve that problem i wonder how much of that is actively getting discussed on the hill, because it's been a fraud discussion for years, but maybe there's a point where businesses say we're looking for any solution. >> look, this week's numbers,
what was it, 10.1 something open jobs, that's almost a mill yor more than a month ago when i was on the show we know some of 245 that has to do, open job that are available, but also certainly means increasing legal immigration. we've been heartened to see conversations on the hill, on legal immigration, on having pathways to both things, i think that allows bipartisan compromise something -- what the future is going to look lie for m & a, given the fact we've gotten some pretty strong, pretty hawkish
comments from the new -- shares sold off because of expectation in the market now that that deal could be in jeopardy how are companies approaches this topic, given the fact this is an administration taking a very strong, i guess very aggressive tack toward consolidation. >> it's so interesting, as a viewer of this show we've been watching this hod m & a activity, and watching some big deals come together that have been important for the economy we're talking about infrastructure i hear from big leaders every day, who are very concerned this concept that our economy is stagnant, that we need the government to step in, help ensure a left of playing field new business starts, new
business ideas so this idea that we need the government to come in and look at 72 different industries to enable agencies to look backwards and forwards at deals is a massive overreach, something that the u.s. chamber will be fighting strongly. a lot of things on your plate, suzanne, we love having you come in to help us understand have a good weekend. >> thank you so much happy friday. taking a look at the futures tilted to the up side. disney's premarket pop good for at least 50 of that. nasdaqus jt green. more "squawk on the street" when we return.
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welcome back we'll have the opening bell in about a minute's time. interesting week as we've wound through the infrastructure story, the delta story, vix is below 16 value will outperform for the week it makes sense that all-time highs for the vix to be compressed volumes are down, but yeah there's been more traction in the value. yesterday not so much. up about half a person on the week, so it shows you it slowed
the pace, but there's a relentless theme underneath. it suggests maybe a topping process. yeah, certainly not inconsistent with that possibility. [ bell ringing ] it's not been about momentum, not about story lines or headlines. it's been about reluctance to sell people are alows equity exposure to go up because of big picture. you're sitting on house money. >> doubling since march of last year. >> there's the opening bell, by the way,
we haven't done airbnb yet, morgan the numbers were good, though they point to some of these delta patterns. >> they're down about 3% still right now. that's despite the fact that the current quarter they are project been for a revenue it speaks to the fact there are uncertainties, something we've been parsing through all week, whether it was the southwest warning earlier this week, even disney despite magic numbers for the magic kingdom. you know, what all of this continues to look lick through the quarter, and gets back to the bigger, broader conversation was it peak economic growth trajectory how does that continue to take shape and evolve over the coming months >> i think both airbnb and doordash suffered, to some degree, from very aggressive
valuations they're basically flat since the first trade. they had the pop and then they're flat there hasn't been a huge winner on these sharing economy, gig economy, consumer apps, even the killer apps. they have scaled, to some degree, a modern e-commerce utilities. they're kind of necessary, everyone loves them, but the business model isn't following through, and people are not clear how that shapes up over time. >> and profitability tony to go the overhang here, too , which i realize, you know, posted positive ebitda, but has not yet had a profitable year. we're talking about these big, basically society-changing, disruptive toes, but what does that ultimate path to
profitability look like? >> one of the things you adjust for and add back is stock-based compensation that's one of the things that airbnb and all the rest of them have have as a headwind. you know, it's not killer, because snap was in that situation early on, and that's been a great performer ultimately i just think that's one of those things as a very large initial market cap company, is something that sort of weighs on it. >> one of the more interesting trades of the week has been the weakness it's been a couple nights since morgan stanley downgraded micron and called for a cyclical downturn, sees the market oversupplied for most of '22 at least on memory, we talked with cramer about it yesterday, who i don't think had real issues with the overall macro call. >> right. >> we'll see how much
stabilization we get today. >> within semis there's been massive differentiation. nvidia is the monster of the group. it's not necessarily in the areas that people are worried about at the moment, but i think as as general market tell, it's a bit ambiguous. it kind of broke higher, now you're slipping back below where it broke from. i think it removes one of those, you know, kind of prompts of the overall story, saying you don't want to be negative on a market when they're not making new highs. >> it is one of those other cyclical groups of stocks, to that point, speaking of cyclical groups, they tend to be very tie to the economy, let's talk about the rails. it's been a fiery week, in terms of the m & a back and forth, the
nonbidding/bidding war kansas city southern is a bit higher today stock is up 7.5%, almost 8%, this after canadian pacific swooped back in with an upped offer, not quite as high as the rival, basically pitching to investors and shareholders ahead of the expected kansas city southern meeting next thursday that, hey, listen, we offer certainly, because they have all right gone that green light to be able to create a trust for a merger process to happen, which is expected to be a very long process, if either does. thatbeing said, last night it continued to unfold. kansas city southern coming out, the boor unanimously determining that it did not, quote, constitute a proposal. that being said, it did say they don't get a -- an answer from
the stb before their meeting next thursday on whether canadian national can create one of these trust structures, which are so key to this deal being ability to move forward, that they will not hold that meeting and wait until after the stb decision, which analysts will tell you is a part of why cp put that bit out this week, when it did, on the heels of proxy season to basically help postpone that decision and that vote it's interesting, cp basically said they applaud the kansas city board of directors to delay the vote we continue to believe that should not be approved, because it's anticompetitive cn basically saying they support the decision think believe it
should be approve. it's like a slow moving train it's kind of key to an industry kansas city southern is the last of the class one railroads -- it comes in the midst of an ftc that's much more critical in a biden administration, with the executive order released last month that's much more critical, and has pointed specifically to areas like the railroads we'll continue to watch it. >> with so much focus now on inflation as a political issue and, you know. say we don't want to do this meanwhile, just bigger picture
it seems like an interesting m & a mechanics. >> moran stanley -- has a remarkable statistic, about you if you're shipping a 40-foot container from shane high to l.a., it's not ten grand it was only two a few months ago. >> and of course what we know right now is with this delta variant, you are seeing some of the busiest ports in china but shut down or curtailed to this -- so that's only going to continue to contribute to the woes, at least in the near term, but of course that's really crucial. we are coming into the holiday season a lot of the goods that moves on that will be people going to retail outlets and every
everywhere else to buy, coming in back to school and holiday season what will that look like and which of the companies will push that out to consumers. >> it's going to be important to watch for holiday season virgin galactic, a couple downgrades in the past week oar two, now reports of another sale by branson this a three-month low, i think. actually really been a rockie go of it, since sir vich ar brandon carried out the spate flight last month to your point we had earnings where they pushed back until q3 at the earliest next year now today that they are selling another 10.4 million share i
just want to bring up -- i have so many papers here but anyway, i got a statement from the company as well on this, saying this is not any kind of change in branson's own stance on space flight or on virgin galactic, but that, quote, virgin plans to use it to support the portfolio of leisure and travel service that continue to be impacted by covid-19, in addition to the development and growth of new and existing businesses that the virgin group continues to be the largest single shareholder in virgin galactic, so the sale represented just a little under a fifth of their current holdings i think at least right now in
the near term it just adds to bearish sentiment we have seen a lot of insider selling, but it goes back to some of these other areas that continue to need support. >> it does show the difference in the finances of the billi billionaire space entrepreneurs. >> bars again them, and gets new investors -- exactly exactly. so finds a way, whereas virgin, they may be working a little tighter, in terms of how they can find all the different operations. >> boeing is very much in focus right now, too we're going to be getting a
>> happy fridays, but we're halfway through the quarter, and the two main narratives remain in place take a look at sectors here. community indications service strong they're up nicely. tech holding in there, that's the big story. i'll show you that in a moment, as interest rates have moved up flattish today, energy is the big disappointment this quarter, down about 8%. we are anti-lockdown, and antilow rates at this point. they're holding up really west
alsor also rates have been rising the banks have been doing much better, hitting 52-week highs. nasdaq has been doing well t row price, consumer stocks have been split. we have the small group of super cells. they've been fantastic in the last few weeks, no decline there. we have also seen consumer discretionary stocks doing really well. why? the consumer is flush with cash, from savings, stimulus that remains strong. they're going out to restaurants, they're buying cosmetics. ultimata has been a good performer as well. broad consumer spending is still pretty strong. food and other staple names are down consumers are spending less on food at home this sort of makes a lot of
sense. these stocks had big run-ups last year and in the last several weeks they've been underperforming. the big wildcard is tech is very sensitive to higher rates. this happened in february, when tech clobbered as interest rates moved moved up. right now tech's handling, the bottom line is -- modestly higher rates europe is up ten days in a row
ten days, that doesn't happen, folks, france is at a new high right now the stock 600 is outperforming the s&p 500 this did not happen very often, folks. it's been a long dry spell for europe there you can see the s&p 500 there. a big outperformance. europe is cheap. the s.a.m. is about 20 times forward earnings, so on a relative valuation basis, it's a great call whether or not europe
will emerge quicker is not clear. but obviously some people are betting they will in spain, ireland, france, italy, it might have been something to do with it later this morning on "techcheck," don't my -- miss tony xu. let's watch treasure russ, in about 15 minutes, ten-year off a bit at 1 po 4, the vix 15.25, back in a moment. i think you're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me.
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as a result, they should consider opposing deals outright shares of aerojet rocketdyne are down another 1% right now. lockheed slightly lower on the day so far this morning too. but it speaks to what we've been talking about all hour and an administration that's taking a much tougher stance whether it's the former performance group deal that is looking to move forward and what they're going to do with that it's been a rough year for mma it is overloaded and because they don't issue a second request to companies looking to merge, within the 30-day window
i believe is required or maybe 15 days, that basically merge at your own risk. >> yeah. >> so, we'll see something to watch >> fewer deals more buybacks because companies are going to do something with a lot of the accumulated cash. >> take a look at this week's top-performing sectors materials and financials do lead the pack "sawk t squonhetreet" continues in a moment.
♪♪ we have, of course, been focusing on the trade, including airlines and hotels. one travel related group that is getting a boost. thank you, contessa. >> reporter: in part, it's because a slew of countries require it and then we just heard from a couple cruise lines this week, saying ships leaving from florida will also require nonvaccinated passengers to carry extra coverage square mouth, an online travel broker says sales were up 67% in
july, compared to 2019 and the biggest travel insurers, aig and on a second quarter earnings call, he says, look, premiums are moving higher and he told us interest has risen 15% in those products. but get this, planes have risen 75% from prepandemic levels. that was a significant cost headwind the less ones for tourists in this pandemic is stuff happens and now travellers are reading through the fine print >> i specifically remember reading through it to make sure it would cover housing, if we had to quarantine because of a positive test. it also covered evacuation if you were really sick and needed to medically transport but i was more concerned with the cost of having to stay an extra ten days during a quarantine >> she's an accountant
so, she's accustomed to looking at those details it's worth reviewing your insurance documents. a cancel for any reason policy will cost 40% more than a basic policy but it means it could cover up to 70/80% of your cost and without that, you shoulder the whole thing. >> really good insight as we keep an eye on the market. a lot of dislocations because of covid, for sure. pretty steady opening on this friday morning nasdaq lags. we're back in a moment all the things, all around you... where you learn, work, and fly... we help make them healthier. we are the people of abm.
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and now we know the answer a lot. 70.2 this is a miss times ten we're looking for a number on the august preliminary sentiment closer to last month's final number at 81.2 current conditions, expecting 83.5 sekwengsally following 84.5 and on what lies ahead, 65.2 and that's following 79. big misses but unfortunately, even though confidence has fallen, inflation levels have fallen much more slowly if we look at one year, it's at 4.6. last month's 4.7 was a 13-year high and in terms of five to ten-year, well, it moved back to 3% and why is 3% important our last look was 2.8. prior to that, it was 2.8.
if you go back to may, when it was 3.0, that was a 10-year high so, we've moved back up. inflation, whether one year, five to ten, all the other metrics, a freefall for the preliminary look for this month. morgan, back to you. >> how long does that storm stay with us? thank you. we're 30 minutes into the trading session. here are three of the big movers we are watching. there are a number of them today. we're going to start with airbnb losing 11 cents per share. smaller than analysts were anticipating nearly quadrupling from a year earlier as domestic travel reb rebounded from pandemic lows delta shares are down about 1.5% plus t has been a rough week for virgin galactic. those shares are under pressure
again with sir richard bransen's group selling another stake, worth about $300 billion that money's going to some of the other business is investments within the virgin group umbrella nonetheless, down about 20% since monday we got analyst ratings as well in there plus, lastly, doordash gross order volume up 70% from a year ago do not miss the ceo tony shoe, next hour on tech check. those shares are down 3.5% >> and another big earnings mover today, the big mover is disney, surging after being on both the top and bottom lines. the ceo was on "mad money" last night to discuss the vaccine and mandates
>> we have a tremendous relationship with the governor of florida and while we see the whole obligation of being vaccinated and mask wearing differently, he's given us the degrees of freedom we need to protect our staff and stay in business >> joining us now to dig more into disney's quarters, allen, good morning certainly we'll talk about the outlook and story. first impressions of the quarter obviously well received. a lot of reassurance with the disney plus subads what stood out to you? >> thanks for having me on clearly the key issues are one, the streaming subads are bigger than expected. and the company also beat on revenue and profit profits stronger than expected obviously the domestic theme parks turning profitable, even
slightly profitable is a huge milestone in covid and the linear networks are declining more rapidly than anticipated. >> and i know you have, based on your look for 2022, that the park's business will get above revenue levels it's presumed right now. is there anything going on right now lead you to question that or does it seem like it's on course >> if we look through the numbers, it looks like, by our calculations, domestic parks have about two-thirds of business they did in the june 2019 quarter, which, to me, is pretty good. obviously, we're concerned what the impact of the delta variant is going to be they have gone to mask wearing indoors. it is a mostly outdoor experience the advance booking seems strong i realize those can change at a moment's notice.
but looks like the park, both for disney and universal, the parent company, seem to be doing quite well >> and how are you thinking of the valuation of the company, as it stands now? they have the huge boost in valuation related to disney plus the fox asset and, of course, considered to be a winner of the pandemic with streaming. and at this point, still, you're saying 220 is your share, 12 times above the all-time high. how do you get to that, based on fundamentals >> disney is going through a major business change. therefore, you cannot value the way you did in the past. you have to look at comps to look at disney plus. we look at 2024 estimated subs about $750 a subon disney plus it also matches our dtfs there and on the core business, we put
about a 19 multiple, which is a higher multipleel for the parks in studio and a lower multiple for the declining linear network. >> it's morgan the big shift to streaming, especially for established players in media right now from linear to streaming, everybody's trying to crack that code and find that magic place of profitability. who's doing it or closest to executing on the best and how do you expect this to continue to shake out and evolve >> in terms of the winners, clearly netflix has won. i think disney's going to be a default service. hbo probably has some of the best programming interesting to see how it operates under an entertainment executive once it gets moved and clearly, apple peacock and paramount plus also competing and smaller services how many services will the
consumer take? i think three or four. one thing about disney, they have always had the greatest brands and franchises. and they've sort of moved the business mautdal where they can maximize the value of the brand. started as a park company, then a movie company. and in the '80s and '90s, became mostly a home entertainment company. and they're moving it to streaming. the success is undeniable they've had so far >> in terms of the the atrical window, we heard viacom talk about 35 days. at least disney's going to consider that in one high-profile case this year. is that turning out to be the magic number >> sounds like 45 days is where the industry is going to i think other thing you're going to see is a lot of smaller films may go straight to the streaming division and not have to spend the releasing and marketing
costs on it. they clearly need a big demand at the box office. i think 45 days is going to be where it shakes out. i will say it's a bit of a negative for the theatrical business this is one business where there has been a structural change due to covid and that's the tightening of the exclusive theatrical window. >> just to drill a little bit inat the per subvaluation for the streaming business, you mention $750 comparable to what netflix is doing disney plus average revenue is maybe half globally right now. $750 is 12 years worth of the subrevenue per user on a global basis. does that sound right? >> and disney has 76% of the subs the difference is disney
anchored this market with a very low price to get large penetration. i think it was the right strategy the r-code was a little over 4 bucks and netflix is over $11. even disney's stronger mark ltsz, nonhostile markets, i think you're going to see disney aggressively raising prices, as they can produce more content, once covid is behind us. more content is available. and they probably, as a bundled star in disney plus, in some of the international markets. probably do a similar bundling in the u.s. after the issue gets resolved with comcast. and i think you'll see a bundled product not that much different than netflix >> netflix providing that pricing umbrella, as they say. thank you very much for your time this morning. good to see you. >> thank you meanwhile, the dow and s&p
posting more highs busy week of data, including the big key inflation met rx the rise in price appears to be good so far. hi, steve. >> hey, carl still wearing the tie, huh join the revolution here, buddy. pressure could be joining on company bottom lines inflation showing consumer prices moderating but wholesale prices continuing to serve if prices can't be passed along to consumers, margins could suffer. and writes after the ppi report, increasing producer costs are pressuring businesses in every nook and cranny of the economy up until now, companies have been able to mostly pass along their higher costs to consumers and then some. question is how long can companies keep raising prices? starbucks saying in a call last month, while we're thrill would the margin performance in q 3,
we expect to moderate slightly in q 4, couple would incremental investments critical to our continued growth and this shows the cpi rising faster than the ppi the last several months and that explains how companies have boosted their prices cpi moderated in july, while the wholesale price accelerated. they said they think the inflation problem lingers into 2022 they were also confident they could pass on rising costs "we're confident that our brands have strong pricing power. companies can offset price cuts or with the buying power but eventually something's got to give. either income costs start to rise, if not, profits will be hurt carl >> thanks very much. as we go to break, take a
look at the roadmap for the rest of the hour, including an interview with stacey cunningham and we'll speak to the world's largest social trading platform on how regulators should be over seeing the crypto craze. and a closer look at restaurants trying to rebound from lows. we have consumer data from the country's covid hot spots. it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style.
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and watch all the rewards float in. our thanks. your rewards. welcome back to "squawk on the street." we continue to keep an eye on cryptocurrencies as we close out the week been a strong week for cryptocurrencies so, how are investors approaching the asset class? founder and ceo of trading platform, e torro, joins us now. given the fact we do have bitcoin back above 46,000 this week, either above 4200 as well. even as there is all of this regulatory uncertainty out there, including in the u.s., as we see the infrastructure bill with the questionable, or i guess i should say, very general language around the definition of a broker, in the house right now.
how do you see it? how do you see this regulation taking shape and what does it mean for an asset class company such as yours? >> first of all, great coming back and great to see crypto coming back as well. just two weeks ago everybody was asking are we in crypto winter i think it's very clear we're not in crypto winter i think in general, regulations and the recent infrastructure dialogue has raised significant awareness around the mainstream adoption of cryptocurrency, which generally is a good thing because etoro is a registered company, we're able to see different regulators in different countries and how, basically, they approach the cryptocurrency industry. in general, obviously, as crypto are getting more mainstream, regulators need to regulate
industry, protect customers. that's their role. i think generally what's important is that we have regulations that really understand the technology and that promote innovation. because we are seeing mindblowing innovation within the crypto industry and we need make sure that new regulations don't basically block this industry from progressesing to where it needs to progresses >> i realize that this is still a moving target right now. but in terms of what that regulation looks like in the u.s., again, as part of this infrastructure package, does it accomplish that? >> i think, again, the original language, there has been a lot of debate around it. there's a lot of misunderstanding, i think, of decentralization you can't really regulate bitcoin as bitcoin because it's decentralized.
when something is decentralized, it's impossible to regulate because you can only regulate its centralized entity so, again, there's the gate keepers, the financial institutions you can regulate that and obviously, what they've been trying to do is expand the definition to capture potentially software developers, minors, hardware, wallet manufacturers. and i think generally that does hurt innovation. software developers should develop software they shouldn't necessarily deal with transaction, monetary or reporting. i think the nuances of how to define it is what's important. but again, we see this go around the world, regulators are trying to do what they think is best. they don't necessarily understand the technology or how -- what is the best way to get to that point.
>> yeah. and certainly it's complicated it's been a really interesting couple of weeks for public investors where cryptocurrencies are concerned. whether it's robinhood going public, everything happening in that stock volatility still continues to be the word that gets used and is in play for the companies that have any kind of touch or exposure to cryptocurrencies what are you seeing on your side >> they're probably here to stay there's no gravity in the markets. so, we think crypto falling down 50% from may to july and now crypto up 50% from midjuly to now. so, i think it's here to stay. and anything related to crypto, by definition, will be a proxy to that volatility and at etoro every time we see a
crypto rally, like we're seeing right now t has a direct impact on the level of customer interest worldwide that are interested in crypto retail investors usually react very quickly to price movements, to upward price movements and they start buying when the markets are starting to go higher >> so, very quickly. when is your staff merger going to close and etoro become public back in march we said we expected qt closing. >> right okay thank you for joining us >> perfect thank you very much for having me as we go to break, take a look at some of the biggest gainers on the s&p for the week. as we did see the dow decline and the nasdaq's gone positive for d a f t wk.itayndorheee we're back in a moment
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it's time for our etf spotlight. looking at how volatility is helping rally. >> a balmy 85 degrees could be the av*erage temperature in august, as heat waves are making it hotter than normal. wall street's weather man says his models are similar, with more heat coming they're partly why utilities are in a hot streak. up 6.5% over the last month. the best performer over that time, electric providers like next era, eversource and southern companies some of the best performers. work from home because of the delta variant. that could be another catalyst for utilities. 46% of electric generation went to residential customers this year the numbers increased to 49% often referred to as cni.
>> the margins that you're capturing for residential customer for utility can be $20 to $25 per mega what hour, verses $5 for a cni customer or less >> the five biggest by market cap all announcing plans to increase emissions one of the most ambitious plans also had recent decline in bond yields the five biggest have a dividend higher than a 10-year yield currently. enbridge with the largest, almost 7%. >> we're having a heat wave. frank collins, thank you for wrapping that up for us. after the break, we'll speak with stacey cunningham, lktaing everything from the ip mark toot vaccine mandates
we're about an hour into the trading session. the dow dipped a little in the negative after that weak consumer sentiment number. s&p 500 just above the flatline. a & d having a pretty good run actually over taking disney as the leading stock in the s&p 500. disney responding to the strong earnings report. let's take a look at the laggards at this point there have been some travel-related stuff in there. actually apache, the old apache. norwegian cruise line, as well as best buy and diamond back energy you have the yields compressed after the sentiment. just a little covid concern in the air, even if it's not an acute warning. >> you have all the concerns
around delta variant and what that's going to mean in the near term conism isson. you're continuing to see draw downs but not as large as had been anticipated and yet, in the midst of all of this with opec begin beginning to up its production levels and we talk about inflation and how transitory it is, you have biden administration saying opec needs to do more, even as we curtail and regulate that sector in the u.s. definitely one to watch. time for a news update >> good morning everyone and here's your cnbc news update the taliban are in control of a gan stan's second largest city the march on kabul is expected in days or weeks the white house says president biden is firmly focussed on bringing u.s. forces home and
does not regret his decision to end military involvement they say britain's worse mass shooting since 2010 is not related to terrorism a man fatally shot five people, including a 3-year-old girl before killing himself in online videos, he talked about feeling beaten down and defeated by life in florida, a woman was accidently killed during a zoom call after her child found a gun and shot her in the head and 440 students are quarantining after a covid outbreak in compliance with an executive order by the state's governor, parents have been able to opt out of the mask mandate the new york stock exchange announcing it will require full covid vaccination for trading for access beginning september 13th joining us to discuss that move with motivation behind it is nyce president, stacey cunningham
>> nice to have this conversation live and in person. we want to keep it that way. that's the goal. >> so, this made news, in addition to othercorporate announcements from companies this week. >> our policy is focussed on the trading floor. given the dynamics and people interacting in close quarters, we started saying we want it open we have seen the reduced volatility we can deliver to our customers, which is critical and as we opened to guests on the trading floor, we required guests to be vaccinated before coming on the floor because it was an optional visit. we weren't requiring those that earn a living on the trading floor or our employees to be vaccinated we've been using incentives to get people vaccinated, which has been really efeckive it's already over 75%. but given what we're learning around delta breakthroughs, our
goal is to keep the floor open we're applying the same strategy that we've been applying since the beginning. using the information we have at hand and using the local conditions we decided everyone needs to be vaccinated >> it sounds mere proactive than reactive >> absolutely. we haven't seen -- everything has been really effective for us over the past year and part of the reason why we've had such success is because you can resume gathering, if you're careful and thoughtful about it. we heard from disney today that they were really effective in managing their policies. we want to make sure that, not only are they vaccinated but others know they're interacting with people who are vaccinated so we can continue to gather in close quarters >> so, for all the hr managers
having to make their own decisions about this in corporate suites all over the world, did you get blowback on this was this a fraught decision on your part? >> obviously any decision you make on this front is going to not necessarily have uniform support but overwhelmingly it's been very positive and people who are vaccinated want to know they're around other vaccinated people too. the more people we get vaccinated across the country is good for the country, every business leader needs to make their own decision based on their own specific circumstances. in this environment where people are gathering together in close quarters, it was the right decision >> upstairs, corporate office work, you were planning on a september return >> we're working on a september return but obviously making our decisions based on what the local conditions are we've been doing that since the beginning and wrer not going to stop right now >> stacey, it's good to see you from the other side of the stock exchange floor right now
just to shift gear as little bit here it has been an incredibly robust year for ipos and companies going public in general. what's your outlook, especially as some of the largest offerings we've seen have not necessarily performed very well once they went public? >> 2020 was a record year and 2021 is already proving to be another record year. they're being discerning not all deals are created equal. but the pipeline remains to be really strong, especially for operating companies looking to go public. what's been interesting about the 2020 and 2021 dynamic is how it's crossed sectors health care, we've seen really all sectors be really very active and we're starting to see spacs big up again as we had another one this morning >> and how companies are structuring their offerings as well we've had more direct listings
but even the more traditional ipos have been doing things like allotting to retail investors and not necessarily be subject to the same type of lock-up periods. >> it's such a great trend for companies and their investors to have more choice and flexibility. anytime you disrupt a market, you start to challenge the status quo and that's what we're seeing it led people to think about their lock ups and structures. so, right now companies have more control over how they want to go to market and how they want to structure that offering. some might choose a direct listing, which prioritizes reducing the cost to capitol and as we've seen the rise in retail trading, it's encouraging to see them get the same access on day one for a public listing and an ipo, they're looking at what do those lock ups look like and what's that structure. there's more flexibility than
has ever been before, which is good because there's so many companies coming to market >> there's been so many that there's been reports there aren't enough bells to satisfy all these new clients. you've had to make different ways of celebrating on the floor. >> they're not new there's nothing more sacred than the 14 square feet on the bell podium in finance the first trade bell -- and i'm sure it disrupts your broadcast in the middle of the day and you're trying to talk and you hear the cheering in the middle of your sentence because that represents the first time a company is open for trading. that first trade bell is really a unique moment, which is why it breaks into your broadcast >> on a more serious note. china and the way they're thinking clearly about capital markets on an international scale. >> certainly companies coming
from china and their investors are thinking of those dynamics and how they've changed. what's important to focus on is u.s. regulators need to have audit ability. i'm hopeful we can find a solution to make sure that they do get that audit oversight. because we should look at the trends the seven years leading up to alibaba, the largest ipo in the u.s. five of the largest top ipos appeared in the u.s. and only one in hong kong in the seven years since baba, only one and investors are still finding their ways to those opportunities. you want to make sure it happens on transparent exchange said here in the u.s., rather than driving those dollars off shore. >> lastly to covid and the vaccines, it does sound like you feel, in aggregate, companies
are finding a way to deal with this, long term. not just fighting fires in the living room, so to speak >> it's very well managed. we've learned a lot more, how to protect ourselves. mask quality matters we were talking about put on whatever mask you can get because n 95s and surgical masks ar aren't widely available. they are now and having that information and having that knowledge was really helpful in protecting ourselves. so, i think companies are able to use information we have out there to keep our workplaces safer. >> you got to remember this conversation a year ago was unthinkable. so, we have to think about the progress we have made. >> yeah, the vaccines are working, which is really important. and huge shoutout to all the health care professionals that have gotten us to where we are today. >> thanks. good to see you. morgan as we head to break, shares
of sofi sinking. the ceo will join tech check in the next hour. shares are down 13.5% right now. a quick programming note, tonight, 6:00 p.m., don't miss a special edition of "fast money." how are americans spending their hard-earned cash we're going to cover all of ghhe o eteting 6:00 p.m.asrn rit ren cnbc u're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪ that building you're trying to sell, - you should ten-x it. - ten-x it?ging world.
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taking a look at overall sales on a two-year basis, you can see momentum gaining in the restaurant space, according to latest data from black box intelligence by 6.8% in june and 8% in july the best number in years but in comparing those states where covid cases are growing, they're outpacing the national levels mississippi seeing 13.3% same-store sales, and florida and arkansas also seeing gains of 9% for the month of july. now, that being said, we have seen some pullbacks in certain states like florida, texas, missouri, and arkansas, but overall, it seems consumers are not shifting their behaviors, even in the case of rising cases. many pandemic winters are back to being the best performers of
the year chipotle and wingstop and more broadly, they've seen stocks pull back as cases have climbed. >> fascinating look at consumer psychology coming up on tech check today, an exclusive with ceo, steve huffman. and that begins at the top of the hour in theeaim mnte, the dow's hanging on to a slim gain. we'll be right back. do you have a life insurance policy you no longer need? now you can sell your policy, even a term policy, for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized that we needed a way to supplement our income. if you have one hundred thousand dollars or more of life
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after being cancelled in 2020, due to the pandemic, the pebble beach car auction is back on live from this year's event, where more than $300 million worth of the most expensive cars will come under the gavel. >> i know you're a fan of old trucks this could be your weekend that's because the whole business of auctioning off cars has changed. during the pandemic, we got a whole new breed of young collector that started buying cars for the first time online they went to easy-to-use online sites like, bring a trailer.com. took a lot of their cues from social media and started buying one of the more unloved corners
of the market. old broncos, old suvs. and as they work their way up the value chain, they're buying at the major auction houses like gooding and now mecum. if you look at total online and in-person auctions this year, the grand total topping $100 billion. that is up over 30% from 2019, before the pandemic. >> we went from typically about 50 internet bid rbz at an auction too, sometimes 2,000 internet bidders at an auction but more importantly they had not come to sit in the seats as we expected. 80% of them were brand new customers to mecum auctions. it became an opportunity for us to generate new clien tell >> as a result, all auctions have totally gone hybrid
the auctioneer stands up here, taking bids from the room, but online, you have bidders who are, in real time, simultaneously, placing bids online as well so, the auctioneer can see there's a bid coming online. the audience can see that as well and the auctioneer can see when a bid is coming in and whoever bids the highest, whether online or in person wins. and yesterday, the grand total at mecum was double what it in 2019 in large part because of this young crowd of online bidders. guys >> it's so fascinating to see how this is evolving, robert i want to see you hit that gavel as well. it looks kind of heavy we are having this conversation in the midst of -- or i guess on the heels of -- there we go -- on the heels of a really great interview you did yesterday with the chairman of astin marpten as well and the turnaround underway there. >> yeah, i mean, aston martin is
one of those companies where lawrence stroll came in with a $1 billion bet trying to save a british brand 100 years old, famous for james bond. shareholders not convinced there is a lot of competition. at the high end, not just the shortage of cars but the extravagance of wealth around the world is helping all these brands so far, that turnaround is working. we will see over the long term given the competition at the high end whether aston martin can truly make it. >> all right robert frank, thanks for joining us another pure play, new space name reporting its first earnings results as a public company. the ceo of astra space coming up after the break.
with our suppliers. now everyone, everywhere loves jerry. they sure do. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world. welcome back after completing its merger, astra space began publicly trading in early july and is scheduled for the first orbital launch at the end of this month. they are not -- it's the next one, i should say. they announced new key contracts, one with the department of defense, and more on this as well as the latest on
q2 results asstra founder and ce chris kemp. >> good to see you. >> let's talk about that launch window we will get to earnings in a second that launch window opens up starting august 27 and does involve the space force. it's your next flight, orbital flight what can folks expect in terms of this launch and in terms of how you are preparing for it >> well, we shipped the rocket last week. it arrives monday in kodiak. we will be unpacking and getting ready for the launch, which should be beginning november -- excuse me, this month on august 27th and we are excited about this launch because we have got a whole bunch of upgrades that we will be testing. it's a test flight with a space test freprogram from the space force. if successful, we have about a dozen more of these rockets rolling off the production line and we have also plans to launch total of three times this year and we are on track for all of
that. >> which is an aggressive cadence. even for a company that is not about to have a second attempt to orbit so given the fact that you did actually launch one time before last keys, you reached space, but didn't reach orbit, what upgrades or changes have been made to the rocket to ensure this mission is successful >> well, we have been able to tune the engines to use all of the fuel in potato of the stages, which was the primary reason we fell short of orbit last year. we have made a number of other upgrades to increase reliability and performance of the rocket. this is truly one we are excited to put into production and start launching for customers later this year. >> let's talk a little bit about your earnings results. first time as a new publicly traded company i mean, we have this conversation all the time on this show, this idea that space is hard, it's time consuming, it can be capital intensive it's interesting to see a
company such as yours come to the public markets how is that process getting on earnings calls talking to public investors? how is that different of what you experienced before this merger was complete? >> we are really just focused on tell our story we have a huge backlog of customers. we start to recognize revenue as we start to launch those customers into the orbits and deliver for them so we're focused on execution right now, telling that story when we've got the rocket shipped out on schedule, on schedule to launch this summer. >> this is the story that we have been sharing with investors all along and it's great to be on track certainly makes that easier we have a fantastic cfo who is taking two companies public already. she was by my side and it was a fantastic -- we have a lot of great investors, great analysts that are covering the company. >> last time you and i spoke i believe you said you had 50
launches in your backlog this week you have announced more commercial launch deals as well, not just the dod spire is getting ready to go public via spac next week. there is a shareholder meeting for that company today one of those new customers how large is that manifest now >> the manifest is growing and also the pipeline is growing and we are excited that many of the customers like planet and spire that we have announced are also going public and that means they will have more resources to launch more satellites and serve their customers better so space tech is really an exciting place to be right now with the number of companies that will be public here in the next few months. >> in terms of your production cadence as well, i mean, you mentioned the fact that you are looking to do three launches before the year is out, how quickly can you make the rockets now? >> we can make rockets at one per month today, and the factory is tripling in size. we started construction a few
weeks ago to increase our production rate to one per week. and that will, with the rocket that we're building today, allow us to ultimately reach a rate of one per day out of the existing production facility in alameda, california >> all right chris kemp, thank you for joining us today on the heels of astra space's first earnings report >> thanks. >> looking forward to that launch and when that window opens up later this month. just getting a check on the markets as we wrap up another hour here, mike, i mean, fourth day in a row we have seen record intraday highs for the dow and s&p. again we are hovering near the flat line. the nasdaq as well. >> so, obviously, downshifted. certain character changed after that week, consumer sentiment at 10:00 a.m., a bond rally, yields lower. recently nasdaq is higher. it is one of those days you have the nasdaq 100 doing the work right now on the week still looking to be higher finally, a tenth month in a row
august has been you have had one s&p record high. one of the longest streaks in history for that persistent rally. >> in terms of what's outperforming now, it is consumer staples it's communication services, stocks as well, disney's, obviously, a bright spot today that does it for "squawk on the street." "tech check" starts now. ♪ happy friday welcome to "tech check." big, big hour ahead here on "tech check" on earnings, ceos of doordash and sofi and first on cnbc interviews reddit now has a valuation north of $10 billion and ceo steve huffman is coming up to ta
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