tv Squawk Box CNBC October 27, 2021 6:00am-9:00am EDT
transports with a strong performance up year to date. for the month, up more than 13%. yesterday, got help too. ups, that stock up by almost 7%. based on the better than anticipated results we continue to keep an eye out this morning. the treasury and 10-year note yielding 1.96. that new level we've been keeping an eye on. crypto under pressure as well. down by about 5% 5.2% decline still at $58,000, $58,800. on deck at 7:00 a.m. we'll take to billionaire
investor ron baron and his investment in tesla. and the ceo of rent the runway after pricing at $21 per share with a valuation of $1.3 million and hertz' interim ceo just bought those cars from tesla was a tesla bear for some time mary barra will be with us and cfo of twitter on their earnings top shares of robinhood reporting a big miss of revenue as crypto trading dropped off. revenue fell from $233 million the company's cfo telling cnbc,
frankly, it will be impossible for us to accurately reflect revenue on a quarter per quarter basis. somebody is trading crypto this morning because bitcoin is down. we'll have more at the bottom of the hour >> classic story year-over year gain was a drop it has to grow to grow into the valuation. is it all bitcoin. they need shibu ina things >> one of the other issues that
of the dot com bubble. >> you've got rand paul saying it is the currency of the world and others saying it is worthless. an fda advisory panel authorized the pfizer covid vaccine for 5 to 11-year-olds that would bring 28 million children eligible. in the coming days, the cdc needs to sign off before shots can be administered. >> kind of weird right now, the number of new vaccines is like 130,000 a day but the number of boosters is like 300 ,000 a day which makes sense. those are the people who have made the decision. if you have vaccine hes
tennessee, you have it on the first shot >> they look at it as more controversial. i get my kids a flu shot every year i am looking forward to it because i have one child at heightened risk. and if you have grandparents around that are also at heightened risks and the idea that kids could be carriers too. i look at data in the uk, the biggest area they are seeing increases are aging 7 to 14 because those kids haven't been vaccinated you also hear the long-term effects of covid about 50% of people that have it have long-term effects of covid. >> i'm only typing right-handed today. >> did you get your shot
yesterday? >> i wasn't going to disclose it because i didn't want to tell sorkin >> you did it. good for you >> i got a half dose i'm sore i will say i was tired later in the day. i fell asleep a couple of times but i was watching cnn i don't know whether it was the shot 3:30 wakeup call combined with what you were watching >> i was not watching cnn. >> that part didn't make sense to me. >> i didn't know who to say. if i'm watching a movie, it has to be on our movie channel
if i was watching tv, it has to be in our family >> appreciate that a judge in texas temporarily blocks the southwest pilots union request to block vaccine mandate. needing to be negotiated with the union. saying requiring the vaccine would further the goal of collecting safe and reasonable working conditions for pilots. southwest must require staff to be fully vaccinated by december 8 unless they have religious or medical expansions pretty heavy lobbying to push those mandates to push those past the holidays. >> this goes to the age old question is this health versus profits?
is this the economy? >> my one read on the business groups saying this would hurt their labor position it doesn't say you have to be vaccinated it is vaccinated or agree to weekly testing i am thinking it is hard for people who don't want to pay for weekly testing i see it hard for people quitting for having to be tested weekly i think the federal law says vaccinated or tested once a week i can understand a work place saying we want to make sure we are entirely safe so we are going with a more stride enter view of that what you are hearing from retailers, we don't want to enforce this and if we do, we
want employers to pay for testing. it is not just not wanting to get people vaccinated, it is also not wanting to pay for people to get tested weekly if they don't get vaccinated >> all the things. with me, it's such -- even though i'm at a certain age and i don't get sick a lot i came this far. the last thing i don't want any of those symptoms none of them if i can take it off the table, i don't understand i can see how people say, i'm taking my chances, i'm a purist, i trust my immunity.
yesterday, it feels good to once again. i hope i got like 10 times the antibody i'm ready to fight anything. i didn't do it just for you but i knew you'd be proud. >> only got a half dose. >> that's all you need you got mod oeerna >> yes i was a little drowsy. later, here to talk tesla and spacex and more. u yoare watching "squawk box" live from time square. our retirement plan with voya, keeps us moving forward. hey, kevin! hey, guys! they have customized solutions to help our family's special needs... hey, graduation selfie!
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through some of the movers google parental fa bet higher than the 2,348 expected. and at 43% up from $47 billion youtube ads rose cloud revenue shourt of estimates. you own alphabet, don't you? >> i do, joe i think the stock expectations were so high other names are cheaper. revenue beat earnings. margins expanded 608 basis
points the slightly negatives are youtube grew only and cloud deselled to 45% growth you compare that to microsoft at 48%, a little shy. a couple of knitpicky things they needed to blow it away. they did on a lot but not all avenues. >> microsoft and the cloud people have windows. remember the denies of microsoft. it never, ever happened. beating estimates by nearly 20%.
also beat estimates. they have a great cloud business in azure you see that at 20%, it makes me think how did this guy selling books online figure this out did we know when the pandemic was starting that it would be such a boon this isn't jft a boost. this is a pull forward 10 years in the way they do business. it is incredible
that it was like 50 or something. it was safer it became new tech microsoft in the last five or six years it turned into it is rare i do think there is a chance ibm could catch up they are working to transform themselves too they have a ways to go and all of that to proof that they can do it. >> you think they can proof it >> yae
it's nowhere near. >> is that the value sector you are speaking >> they are doing a ton of business working top had. the trade is air cheap multiple. i'm not seeing it is going to be microsoft but there's a shot that this transformation actually can work over time. i like showing pictures of my dogs twitter jumped roughly in line with estimates reported 211 million active
users. total ad engagements i still get mad when i'm not following someone and i think, who are you? i click on the thing that says i don't like this ad then it goes away. >> i think twitter was good enough the stock was up 14% on the year they have less exposure. ad revenues are up this stock has lagged. the social crowd and the faangs. i don't own it
you've got activist groups and microsoft and alphabet, it pails in comparison. >> why is it here? is that okay >> i try not to click on things. >> 29 most awkward family photos we've ever seen. then you have to skrol through >> you just block tla, joe taken too much of your time. vi selective of who i follow talking twitter, we've got the company cfo live later to break down the company's
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mexico they hinted it might be able to address the two-tiered system. that has been a major sticking point. >> not the only place where we are seeing union strikes a moment for workers where they are flexing their own muscle with a lot of power. when we come back, we'll take you live to washington where democrat's new tax proposals are take shape that's next. >> and billionaire investor with his take on tesla, and more. when we come back, winners and losers
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good morning, everybody. welcome back to "squawk box. we've been watching futures. the dow has turned positive. now indicated up about 14 points nasdaq off by about 14 this comes after modest advances democrat tax proposals starting to take shape in washington. with more on all of this i guesses that a relative term, beginning to take shape, right >> we have information about two new key proposals that democrats are floating in order to pay for social spending. that would impose capital gains tax for anyone with $100 million in assets. they could wind up paying
sense step this is so con voe looted when you look at taxing unrealized gains back in 1894, income tax was only for people making over $700,000 the idea for people who have spent time saving up and putting money away the way to prosperity for many if they are able to tax unrealized gains saying your tesla shares went up 100%. what if they go down 80 and they
can't get that back. i get it if they want to use constraints for loans to live off of the idea to tax off those is a crazy one. >> you would be able to carry for losses indefinitely. a limited ability to look back on three years the ups and downs of the markets are accounted for. right now, they are saying this is only directed at the billionaires, the flesh hold for having to pay this tax was not moving down. you are right. the original version of this plan came out two years ago and had a much lower threshold
there were carve outs for 401 k, your home, farm, et cetera the threshold is not so high once the threshold is set, the concern is that it could be lowered in future tax debates. those losses now are useless they are $3,000 a year a grand total of $3,000. you do run out of guys like him eventually >> then you have to move to the next level and the next level. >> they made a point we are all familiar with. if you've ever gotten stock options. he says when he gets paid and
society. because of the resist tense of a handful of democrats raising rates. to raise that rate back to 58% you are left with going back to some unforth document proposals to raise that revenue. >> let's make it 52 people and not some small group of rebels not going along with it. they are like keystone cops. it could all collapse. >> vi a more cynical view about all of this. more cynical >> what's the chance that they don't even want to actually do this they constantly say they want to
raise taxes on the wealthy when they get to the moment they have the opportunity to do so. they say, actually these details don't work we've been crying for carried interest for 10 years. we can't do that isn't there something wrong here >> what is this. do democrats want to do this billionaire tax. the senator wants to do this he's been putting this together. do democrats want to raise the annual ased rate one of the reasons it was lowered for the first place is because there would not be the salt tax do they want to do these things
individually, the answer is yes. they are realizing if they don't do something, they would have been derrict >> make sure there is an amt so there is a minimum shore up the irs to make sure no one is cheating. do that first. you don't want corporations not paying anything. you don't want billionaires paying tig the irs also running into problems we'll have more conversations about all of this. thank you. it is good to see you. >> coming up, more earnings and movers after this. later, general motors ceo, mary barra with us.
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coming up when we return, robinhood shares now getting crushed. take a look, we are at 35.54 off about 10%. next, we'll get quarterly results from coca-cola, mcdonalds, gm coming, kraft heinz. the reaction and the numbers all of it after this and all their devices. or it could be the day there's a cyberthreat. only comcast business' secure network solutions
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trading saying crypto revenue fell from $233 million in the previous quarter on the earnings call the ceo said the current headwinds will last until the end of the year to try to break all this down is tom, the founder and co-ceo of tasty trade. good morning to you. a lot of surprises for the investment community and maybe not a surprise to you. were you surprised by these numbers? >> i was not i happen to be in the same business so no, i wasn't really surprised. i thought their crypto business would drop off pretty dramatically, and it did y i don't think the numbers surprised us or the option marketplace either the move was a little under $4, and it moved a little under $4. >> when you look at trying to predict -- this is the hard part, especially given how volatile crypto has been f you're an investor, anenu
institutional investor, how do you project out what this looks like 12 months from now. >> i think you have to look at the fact that robinhood is in a very unique space. they have -- there's only a few brokerage firms in the u.s. that support kind of the decentralized market and support crypto and they're one of them i think that's a good thing actually they may have had and obviously in hindsight they did have too much reliance on their numbers in crypto, but i think that generally speaking, they're in the right direction with respect to, you know, with respect to the digital asset space. >> when you think about the other crypto currencies they may or may not bring online, and that seems to be another issue that investors are concerned about, at the moment looks like they're not going to bring some of these other, dare i say, wilder new coins on the platform, how much of a headwind does that represent to you >> i think that's a difficult situation. you know, the challenge that firms have is, writing to
different blockchains is not a simple task and writing to those blockchains while maintaining, you know, market maker liquidity across the board because we're doing the exact same thing, it is challenging, but i think if your job -- and i believe this is robinhood's job as every other online broker -- is to facilitate opportunity for the customer you have to offer as many coins or digital tokens as you possibly can >> can you break down the distinction between, for example, what you twicguys are doing, robinhood is doing, coinbase is doing, in terms of how these businesses are different or increasingly are they starting to look alike? >> eventually they're all going to kind of -- as the business matures, they're all going to look a little bit alike. coinbase is obviously -- they're pretty much a one trick pony, amazing outlier and pretty incredible firm, but they are
essentially a digital asset firm and that's it. robinhood and firms like tasty are, you know, we support every product out there. we support stock, we support options, futures, futures options and crypto i think over time, they are going to start to look a little bit more alike and everybody will support all products. i think the challenge for platforms like robinhood and this is a real challenge for them, is they have very limited technology and they have a little bit of limited know-how i think the challenge for them is to somehow figure out how to ramp up their technology to be able to support all those products and all those strategies around those products it is a challenge when you are an app only. >> we talk often about the regulatory scrutiny on this company in particular, given its role in really actually bringing so many retailers -- retail investors to the world of investing. how concerned should investors be about regulatory pushback, either on payment for order
flow -- i don't know if you think that's very much on the table, gary gensler has talked about it -- or any of the other issues that have come up over the past several months? >> i think the first thing since we're on the topic of digital assets, i think that regulatory clarity in the decentralized space, regulatory clarity around digital assets and crypto is incredibly important and it will ultimately be very bullish for that industry because right now, we're kind of in limbo and the products are limited because there is no regulatory clarity, especially here in the u.s as far as payment for order flow goes, i consider that to be essentially a nonfactor. i do not think that there's very much risk at all i think it's the optics of payment for order flow are bad, but i don't think there's a risk going away and i think, if anything, you will see the payment numbers go up. if i look at robinhood, i think they're probably right now going to get more money on the payment side rather than less money so i expect that to be actually a little bit bullish for them.
i think the piece that a lot of people are missing about robinhood and the online brokerage space, these firms are sitting on a lot of cash and that cash is an incredible free call to the upside in case interest rates uptick, so i think that's kind of the -- maybe, you know, the ace they're holding in their cards and i think it's just -- most people have just missed that. >> tom, it's always good to see you and to get your insider perspective on the industry. >> thanks so much. good luck. >> you bet. >> thank you becky? >> thanks, andrew. when we come back billionaire investor ron baron will join us on the other side of the break he's a long time tesla bull, first buying shares all the way back in 2012. tesla's stock is down just a little bit this morning after an incredible run up in the last week, still above $1,000 at this point. we'll talk to him about what is cost for his stake now north of $6 billion in tesla.
before we head to a break, let's get a check on the markets looks like futures are down across the board once again. dow wn bdoy about 18 points. s&p 5007, the nasdaq by 31 "squawk box" will be right back. the servicenow platform will make it just, flow. whether it's finding ways to help you serve your customers, orchestrating a safe return to the office... wait. an office? what's an office? or solving a workplace challenge that's yet to come. whatever the new world of work takes your business, the world works with servicenow.
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from the billionaire proposal to his bullish outlook on tesla, rod baron joins us for an exclusive interview. earnings coming fast and furious. in this hour we have coke, mcdonald's, boeing and gm. jo. rent the runway to wall street the ipo at the top end of the range last night, we will speak to the ceo second hour of "squawk box" begins rightnow.
good morning and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square i'm andrew ross sorkin and becky quick and joe kernen u.s. equity futures at this hour a bit of a mixed picture as we speak. we're going to be getting earnings in a second but you're looking at the dow up about a point, just a point. s&p 500 off about five points. the nasdaq looking to open down about 22 points. right about now, as i mentioned we have earnings news crossing right now coke is the one reporting and want to get over to sara eisen who has those numbers. sara >> hi, good morning, andrew. coca-cola with a pretty strong quarter, a beat and a raise. let me quickly run you through the numbers and tell you about my conversation i just had with the ceo. a beat on earnings, 65 cents the street was looking for more like 58 cents. a beat on sales as well. revenues at $10.04 billion the street was looking for $9.75 billion. organic revenue growth always key for these consumer staple companies coming in at 14%
yes, they are lapping some pretty easy comps because this time last year the business was shrinking, but also, james quincey the ceo tells me there's a lot of progress here when you look at these numbers relative to 2019. i say that was my biggest takeaway with the conversation with him as far as the outlook they are raising it for 2021 reflecting the confidence they have in this business and the comeback they have seen. on earnings growth 15 to 17% on organic revenue growth, 15% on cash. quincy telling me, look, here's what happened. we told wall street that we were going to get back to 2019 levels on volumes and sales faster than the overall economy and that's what they've done. how they've done that, it's coke, so they operate in 200 countries. they've taken lessons from some of the lockdowns they saw in parts of the world and they were able to mitigate some of the other lockdowns better, focus at the at home business instead of the away from home business
which got crushed during covid by the way, not fully back whether you're looking in the u.s. or looking around the globe, the away from home business, about half of coke's business is still hurting. he said it's back in categories like quick serve restaurants, especially those that are digitally inclined or that have drive-throughs, but if you look at travel and leisure and hospitality, coke is big on cruises and stadiums and concerts, not back to where they are which is why quincy is proud of these numbers on volume and sales being back to 2019 and growing from last quarter. in terms of what products are working, it was pretty broad coca-cola brand coke did well. the company has turned back on the marketing machine after they basically pulled it at one point last year during covid, just stopped spending on advertising. that's way back up coke's zero sugar continues to grow very well they saw growth back in sprite and fanta, which was obviously hurt during the lockdown as far as supply chains, guys,
quincy tells me he doesn't philosophically like the blaming of supply chains like the weather as an excuse, but obviously the situation is tight. they're feeling it on all fronts, commodity costs, transportation costs but they are able to navigate you may notice going to your local grocery store you don't see as many cans or bottles stocked as you normally would and that's just part of what's happening to coke and everybody else right now they expect it to impact results next year. they said a few headwinds on next year, but they'll give further earnings guidance on 2022 next quarter. >> you're absolutely right i can't find my ah-ha as you know my love affair with those. i can't find them in the supermarket. what i wanted to ask you about was just margin. it goes to the supply chain issue but virtually every ceo has talked about the increased cost of lab are. is that something that came up >> it's something that came up
but not under lined. coca-cola, i would say with its chief competitor pepsi, results stand out amid other consumer staples names like the food companies in particular, the campbell soup, general mills and kelloggs seeing big margin pressure as a result of labor costs, higher commodity input costs, costs for their materials like cans and bottles and coke is feeling all of this, but it's not something that's getting in the way of the profitability story. with coca-cola as is the case with pepsi, it's the scale is so key. they operate in so many different parts of the world and they're able to adjust really quickly. we didn't talk about anything like they can't get people at the factories or in the workshops. that's still happening coca-cola offices in atlanta still not fully open james was there, but he's bringing back people in november and early next year, but it really still hasn't happened because it's a company that -- he said in some places in southeast asia operations are
fully closed they've been dealing with rolling shup shutdowns and trying to be agile but emphasized they're big and broad and able to do it with others. that deals with the packaging issues as well if there's not enough cans you switch to bottles. >> i'm going to take us to break, but since this is, you know, since i'm allowed to do what i want here, do you still -- do you admit that where you're from, now say oh, yeah, i'm -- do you admit you're from cincinnati still, right? do you >> admit i'm so proud of cincinnati are you kidding? >> my question is, who -- >> go bengals. >> which one, bengals or bearcats who's real both, one or the other or neather? >> bengals as i understand, joe, you and i should be very proud. >> number two. >> joe burrow. >> i don't know about that >> bearcats are number two
number two. >> wow >> yes >> but aren't bengals number one? >> they're in first place. >> like going to the super bowl? >> it's been a long time it's been a long time since they even won a playoff game, but you take those two lsu guys and i think we have a chance i wondered, i never hear you talk about it because, you know, you're new york and big time anchor and all that stuff. >> i talk about it all the time. >> okay. >> i think you should be paying closer attention. >> okay. >> i am cincy proud. i've probably been there more recently than you have. >> i bet you haven't i had a big party reunion like three months ago. >> oh. so no, you actually have good for you. >> yeah. i drove in one day thanks, sara coming up, an exclusive interview with ledge darety investor ron baron, tesla and other stock picks, taxes, returning to the office, but he does love to talk tesla and that should be interesting.
before we head to break, check out mcdonald's it's just reported adjusted earnings at 276 a share. the consensus estimate 246 a share. "squawk box" coming right back. that's a lotta money. ♪ did somebody say money? he said aflac. well if they're paying out billions of dollars to help cover unexpected medical expenses, what's the difference? coach prime. what... no smoke machine? [aflac!] looks like aflac is ready for prime time. [eh eh eh! eh eh eh!] hey, coach to coach... what do i need to do to get one of those jackets? ♪ get help with expenses health insurance doesn't cover at aflac.com
let's get straight to our newsmaker of the hour, ron baron, baron capital chairman and ceo, 16 of barron's funds, that's over 98rs% of the firm's $55 billion assets under management have outperformed the benchmarks this year thanks for being here today. >> thanks for inviting me. >> let's start with tesla today because you've been outperforming the markets pretty handily because of a lot of your investments not the least of which is tesla tesla crossing over $1,000 a share, which is pretty remarkable when you consider that you own almost 6 million shares of tesla for a valuation of about $6.1 billion and your cost average for that is $42.88. let me say that again, it's now over $1,000 a share and your cost average $42.88. that's a remarkable gain and it
tells just about how long time, what a long time you have been such a bull and considered tesla to be a great place to be. how long ago did you make t investment when did you start >> 2014 to 2016 when we invested that is sort of a normal type of investment being a very long-term investment for us, being seven years, eight years so far i think we'll probably be an investor for another ten years at least same with spacex talk about the profits that we've again rated, we now have $58.9 billion of assets under management and we made our clients 54 be $54 billion in prs and included is about $6 billion in tesla from a $380 million investment, you know, seven or eight years ago. it wasn't smooth the business was continuing to increase and the stock price guy rated fairly significantly the
first several years because they weren't profitable very hard to accomplish what they have, very hard, and in my lifetime in the 1950s, there were maybe 50 car companies, they all failed. when i first met elon ten years ago, i thought, i thought it was -- i was very skeptical about whether it would be successful and it's only after we -- he started producing the model s we began to purchase stock, it took us two years to make that investment, and the last -- before we made the investment we went and spoke to him regularly and probably followed it three, four, five years before we ultimately invested most people were really skeptical. roge roger penske, we had investment in penske auto car dealership, he bet me -- he wanted to bet me a lot of money, i said i can't take your money, but let's play for dinner, he says you'll never
make it, but i'll bet you dinner he never paid the dinner, he owes me a dinner he hasn't paid it. but most people, he's friends -- elon's friends told me they thought this is -- i shouldn't invest, and they thought he wasn't focused on making profits short term and thought that was going to make it unattractive investment the way we invest is that we're investing in businesses investing in themselves that are penalizing current profites to become larger businesses, that's what he was doing. he was able to show that the profits that he was earnings, he was reinvesting to build new factories, do new models, build new batteries, start all these other businesses and as a result of that, there was great volatility in the profitability of his business initially, spending more money than taking in, and he was stretching himself, but ultimately he now
has factory in fremont, one in reno, his one is going to open in austin very shortly he just opened one in china. these are massive factories. he's opening one in germany. by the way, i brought a prop so this is a tesla impact report from 2020. and so all you have to do, it's 80 pages i tell my friends, read this report this is why you own tesla. read this report if you read the report there's not any way you're going to sell it first 30, 40, 50 pages about the prospects for the business and the opportunities they have and then 30 pages on esg on how they treat people, and read that, you say, first of all, the first part is so clear about the opportunity, and so hard to accomplish what he has, and then when you read about how he's treating people and the social betterment he's creating for
humanity, there will not be electric cars were it not for elon musk. you probably wouldn't be into space right now if it not were for elon musk. this guy is dedicating himself to making the planet and humanity able to survive it's really remarkable things that he's done and people say all the time to me -- go ahead, i'm sorry. >> ron -- >> they say all the time how can you stand up against large automobile companies how come they can't do this? why are other companies unable with all the massive distribution and manufacturing that they have, why can't they do what he's done? the answer is pretty simple. you just reported last week that herbert base, the chairman o volkswagon had a meeting of 200 executives of volkswagon and this is, you know, a week ago, and said, he invited a special guest to address his 200 executives and the special guest was elon musk.
elon musk was invited by herbert to talk to the executives of volkswagen wagon why? because he said that he was trying to pivot his business from making internal combustion engine cars to making electric cars and the hardest, fiercest competitor we have is elon musk. you have to learn from him and so he -- >> ron, that does raise the question, you've made almost $6 billion on this investment and say you plan to be in it another ten years. how key is that investment how key is elon musk to that investment would these companies, tesla and spacex which you have a stake in, would these companies be the same without him >> right now they wouldn't and so the risk that we have, the biggest risk i think is his health he works, you know, incredibly hard there's a picture on the internet when he's living in bocachica right now, spacex, we're going to see next week, i haven't been there yet, he's
living in a must be like 500 square feet picket fence around it on the factory grounds, the launch grounds, and, you know, television i'm sure and -- i don't know if he has a television actually, but there's air conditioning and a little kitchen and a bed and that's it. he works he sleeps five hours a day and works 19 hours a day unbel unbelievable what he's doing i can't wait to see that i've seen pictures and everything and spoken about it and -- but i'm really excited about that short term, that's the risk. and, you know, he's healthy, and i'm hopeful that he stays healthy for a really long time he's got big plans he said he wants to die on mars, not landing on mars, but, you know, after living there, but i think that he's healthy and working hard and brilliant guy and inspiring. because of him this is, with spacex, the two most popular companies for engineers when
they great to work for it is -- you look up in these surveys the most popular place to get a job is for tesla and spacex they just had a recruitment, you know, day, artificial intelligence day, a robot day, about a few weeks ago, and they said that -- but it was really -- i -- it took him an hour, hour and a half of watching it, two hours, i couldn't understand most of the things they were doing and my wives comes in to the study -- i had fallen asleep and it was after about an hour and she said you're watching this and why aren't you in bed? what are you doing >> i was watching it and -- but after that video, after that day, the amount of people who applied for jobs there were skyrocketed when they have the super bowl ad and everyone advertises their electric cars or internal
combustion cars, but elon doesn't advertise at all, the people who go to the website skyrocket. when he's on "saturday night live" and other car companies advertise on "saturday night live," he doesn't advertise. advertise on "saturday night live," the people who go to the website skyrocketed. anyone who wants to buy an electric car looks at the electric cars and then goes to tesla cars and says i want a tesla electric car. >> to go to herbert deese, the problem that everyone has is supply chain and thesupply chain, they say, you know, you can't get chips so how come that other car companies reduce their production last year by 30% and he's 100% higher than the -- he's running at a rate of 800 or 900,000 cars a year, going to do 800,000 or 900,000 cars, running at a rate of over a million
right now, last year over 500,000 and on the way to 20 million. how did he do that how come he was able to keep producing and other people couldn't why? that's what he's asking -- deese is asking elon, how did you do that the way, first i'm an engineer, he said, and i'm focused on supply chain and what is unusual about this is that other people, he thought that major suppliers, the tier one suppliers, would have this in their pockets they've been around so long, incredibly profitable. what happened is that when the covid hit, all the car companies canceled their orders or scaled them way back. elon increased his first of all, they know this is the guy we want to supply and then what happens is that he didn't go just to the people who give him the chips, but the people who give him the chips, those people have contractors and they have contractors, subcontractors, he went all the way down he's figured out where the chips
were and whenever anything was short and where he went found other people who had more, and then he had his staff engineers and what they talked about was how he was able to very quickly with his engineers redesign the chips, redesigned the chips and gives it to the people who had more chips to make it for him and doesn't miss a beat. it was about being focused on supply chain >> let's talk about some other stocks, the other investments, veil is a stock that you've been invested for a long time and performed incredibly well for you. you bought it at a cost basis of $37.11 the stock is at $352 you've gone from $162 million to $1.5 billion valuation right now. this is a company you've been invested in for a long time and one that you like because of the way they've invested what makes you positive on this stock, let's say, over the next year or two? >> so in a case of vail, this is
back to work, back to life, back to going out, back to entertaining and traveling again, and in the case of vail, we started buying stock in 1997 at $17 a share 1996 and 1997, $17 a share, and it was then controlled by apollo and the stock over the next -- from 1997 to 2006, increased about $30 a share and then apollo distributed their vail shares to their investors and their funds. some of the investors and their funds are my friends and said to me, ron, what should i do when my -- the stock was $30 a share at the time. ron, what should i do with my stock? what you should do is buy more, but if you want to sell i want to buy your stock. we swept up and bought all their stock for the next year, year and a half, as they were selling it we bought all that stock in the 30s. some on the board of vail. and then for a while vail was
run by people -- by adam aaron, actually, who, you know, we didn't agree -- i love adam aron, funny guy, makes me laugh all the time, but i didn't especially like the way he was managing the business and then ultimately he was replaced by rob katz and rob was doing all the things we thought should be done, investing in the mountain, investing in ski lifts, investing in restaurants, $10 million restaurants, $10 million ski lifts, snowmaking equipment, and making plate better to make people want to go there. now -- and then they said they had the innovation of ski passes therefore, ross perot once looked at this business and said i'm not going to invest in that because i don't want to be partners with god because you don't know if it's going to snow or not the ski pass, you sell them
before the year. they were up to 50% of the lift ticket revenues were coming from ski passes last year, a subscription business, and then they bought the other mountains around, you can buy -- but now last year was 50%. they lowered the price this year, tickets are up over 50% this year, revenues up over 50%, they got 50, 75% of the revenues are going to come from lift tickets this year that are sold in advance so here it's not expensive it's an inflation play it's a travel play and we got a new executive i've been very lucky investing in businesses that are run and operated by female executives and we have a woman who has been there for i guess seven or eight or nine or ten years at consumer products goods and she is into data and harvesting and figuring out where people are on the mountain, where they're skiing
and knowing that we need to have lifts there that are faster than they were before so we're going to have a $300 million capital program this year in vail to invest by her data so, therefore, people when they're up 50%, we want to make sure when they come there they have a great experience. i think we're going to double our money in vail in the next five or six or seven years and someone is going to come along some day and say man, i just got -- my best friend, but maybe i should own something else in russia someone ultimately is going to buy vail. >> ron, let me ask you, you didn't like the way adam aaron was running vail what do you think he's doing at amc theaters >> um, i don't follow it very much i spoke with him i guess a month or two ago and what i didn't like about vail, he was taking the money he was making on the mountain and spending it on hotels outside of vail
if i wanted to buy hotels outside of vail, i don't need you to do it i need you to invest in vail that's what i didn't like about that and for -- for amc, i don't know >> not one you follow closely? >> if you buy popcorn, you buy the stock, they let you buy popcorn for free i don't know he's a really -- very smart guy. >> ron, less of an investing question and more of a policy question, hoping you would weigh in, you've had an enormous amount of success and we often call you a billion investor, what do you think of this new tax plan that could tax unrealized gains i don't know if you would be one of the 700 or not, but elon musk surely would be. >> it feels like the -- like congress thinks that they're robinhood from the old days, and it feels like the elon musk tax
bill, whether it's like big billionaires or little billionaires, he's a big billionaire, i don't understand why there's a vindictiveness against someone who works the way he has and doesn't make any money unless the shareholders and his business do well and the people who, you know, who are benefitting from what he does, but, you know, they have a meeting at the white house for, you know, for companies that are advancing evs, electric vehicle, and they invite ford, general motors, chrysler and uaw, thank you very much for all you've done to advance evs and then they don't invite tesla. isn't that crazy and then they send, you know, into space further with civilian astronauts further than anyone has ever gone before and musk saves the government billions of dollars for defense and they're
about to have, you know, you want to have more level distribution of wealth only way to do that is educate people if you have satellite broadband that's what he's going to do, make it so broadband is available to people who live in the mountains, live in vail, live in east hampton that broadband is not so good, so he's going to make it available and yet when we have this incredible feat, it's a learning, it's a science expedition, so to go to space, the edge of space, 60 miles and return, that's, you know, that's okay it's good. but to go into orbit is probably a thousand times harder and to try to land what you have taken from orbit to earth that's probably 100,000 times harder. and so you get a lot of publicity about the people, cap tin kirk going to 60 miles up and he goes 360 miles and stays
there for three days and does great experiments, not a phone call how come and then you have the tax bill that's targeted at someone like him. i don't get it yns i don't understand how people pay for these things people see there's a target out there. why don't they do something about the $700 billion they think they can raise from better enforcement and then this is also interesting, so manchin, i read this the other day, he gets rid of coal or something, manchin, they had a proposal that to help enforcement they were going to make it so that you could, you know, people cheating on taxes they want banks to report flows in and out above a certain level, i can't remember what it was, $10,000 maybe, manchin blocked it, said i don't want that. heres the government wants to enforce the laws that are on the books and they can make $700
billion more, and then they come up with some odd proposal to tax unrealized gains which is going to discourage long-term investing and job creation musk has created 100,000 jobs through tesla. >> we have to cut it off -- >> i don't like the proposal. >> we hear you two big earnings reports that are out. thank you for your time today. it's good to see you. >> good to see you too thank you. >> let's get to phil lebeau. gm and boeing both out >> hey, joe. let's start off with general motors q3, this is a beat on the top and bottom line. earning 1.52 a share, well above expectations for a profit of 96 cents a share. revenue a little better than expected, $26.76 billion just a smidgen above expectation. 10.9% profit margin for the third quarter. margin is going to increasingly be the story within the auto industry couple other notes they have a $700 million benefit from their settlement with lg
chem for the chevy bolt battery fires. they said we're going to take a billion charge over a couple quarters, and then a settlement, $700 million benefit there the company is saying that it is approaching the high end of its guidance the guidance was set just a few weeks ago at investor day between 11.5 and $13.5 billion for the year don't forget coming up next hour, you do not want to miss this interview first on cnbc we will be talking with gm chair and ceo mary barra coming up at 8:30 this morning an interview a lot of people will be looking forward to let's shift gears and talk about boeing boeing missing on the top and bottom line. poor eps, loss of 60 cents a share. that is greater than the expectation of a loss of 20 cents a share. revenue shy of expectations coming in at $15.3 billion, about a billion shy of what analysts were expecting. free cash flow, negative $507
million, a little better than expectations of free cash flow being negative $1.9 billion. couple of notes here they've got two charges, $183 million for 787 dreamliner production costs as they have stopped production or slowed down production there as they are working through those production issues with the faa that's $183 million for this quarter and the company says it now expects about a billion that are in charges all together once they finally get everything rectified with the 787 dreamliner in this quarter they're taking $185 million charge for the commercial crew launch remember that is the starliner that was delayed they eventually expect to have that launch in late '22, early '23 by the time you have demand crew launch there in determines of production rates we've talked about the 787 dreamliner in the past, fewer than five per month. they are now saying they're building two per month and the 737 max production at 19 per
month, up from 16 per month in the second quarter coming up on "squawk on the street," you don't want to miss this exclusive, dave calhoun, ceo of boeing, we will be talking with him at 9:00 a.m. and exclusive here on cnbc we'll talk about not only third quarter but what's happening with the 787 dreamliner and the production issues there. back to you. >> there are a lot calhoun came in and provided the stability the company needed is it thought he's the ceo that should be there from here on out? he's 64 years old. do you hear anything about that? is he -- >> i get no sense he is leaving this company any time soon, joe. no sense at all. remember, they just extended, you know, the mandatory retirement is 65 for the company. the board has said we are going to waive that and dave calhoun is here for the foreseeable future >> these are totally new issues after all the other things that boeing was dealing with.
the chart certainly doesn't look too good okay all right. thanks, phil andrew >> you bet we got a lot going on this morning. before we head to a break check out some of the other movers right this moment. shares of twitter are higher, earnings of 18 cents per share, beat estimates of 15 cents revenue jump of 37% roughly in line with estimates. take a look at shares of google parent alphabet, reporting earnings per share of $27.99, much higher than the $23.48 analysts expected. revenue also beating "squawk box" returns with a lot more in just a moment. time now for today's aflac trivia question. earlier this week wti crude traded above $85 a barrel. when was the last me itredtit ad at this level? the answer when cnbc "squawk box" continues.
this week, wti crude traded above $85 a barrel when was the last time it traded at this level? the answer, october 2014. tv: mount everest, the tallest mountain on the face of the earth. keep dreaming. [coins clinking in jar] ♪ you can get it if you really want it, by jimmy cliff ♪ ♪ [suitcase closing] [gusts of wind] [gusts of wind]
welcome back to "squawk box. i'm kate rogers. mcdonald's out with better than expected earnings across the board for the earthquake adjusted eps a at $2.76 better than $29.46 expect -- $2.46. in the u.s. comps up 9.6%, better than the 8.3% expected. on a two-year stack up 4.6% in the u.s. thanks to larger orders and menu price hikes the crispy chicken sandwich continues to boost sales digital channels produced growth overall, same-store sales increased 12.7% versus the 10% in expected. international operated markets increasing 13.9% in international developmental license markets and corporate stores up 16.7%. all better than expected the company calling out strength
in the uk, japan and latin america. now year to date, system wide digital sales up to $13 billion or more than 20% of total systemwide sales in the top six markets. no mention of labor challenges, supply chain or inflation issues in the release here but more to come on the call in the next hour those issues, labor in particular, seeing competitors including dominos and restaurant brands international during the quarter. back over to you. >> kate rogers, thank you. coming up when we return a huge lineup still to come right here on squawk including blackrock bond king, mark fields buying 100,000, tesla, gm ceo mary barra and twitter ceo, from ned siegel rent the runway, expected to make its first trade today the company's -fndcoouer and ceo jennifer hyman will join us on a first on cnbc interview to discuss the business next. move your high-interest debt to a sofi personal loan.
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right? becky -- >> depends -- >> i can read her lips. >> bacon >> bacon >> are you -- my question to you, joe -- >> bacon and germs fantastic -- >> do you own that tie or did you rent that tie? >> you want it, don't you? >> same color as my dress. >> same as becky's dress >> i didn't get the memo on purple today. >> andrew, when i put it on this morning, i said, this is like an andrew it's thin, it's monochromatic, and it's for sale. >> for sale. >> for you >> for a plate of bacon it could be yours. >> we'll negotiate later you could rent it to me. >> i'll rent it to you rent the runway, exactly. >> squawk the runway but right now we're going to talk about an ipo that is happening today. rent the runway upsizing its ipo last night, a big one, pricing shares at the top range raising more than $350 million giving rent the runway a
valuation of $1.3 billion. julia boorstin joins us with a special guest. julia? >> good morning to you, andrew that's right we're joined by jennifer hyman, the co-founder and ceo of rent the runway thanks so much for talking to us on your ipo day. >> oh, my god, i'm so proud and so excited to be here. such a milestone day for rent the runway >> so, jen, tell us what does this ipo mean for the company and why do it right now? >> yeah. so we have built this business from a single dress in a single situation to a full closet in the cloud that women use for every situation. our mission has really always been to disrupt this multitrillion dollar fashion industry and provides the world's first and largest share designer closet and we have been able to do that while empowering women to feel their best every day. we're so proud that this ipo is actually a historic one for women. we're the first founder-led
company to ipo with a female ceo, coo and cfo. >> that is quite the milestone indeed now, jennifer, looking at your s-1, there has been some bounce back since the depth of the pandemic but your revenue is in decline and your subscriber count is below where it was before the pandemic. how do you address those potential concerns for investors? >> yeah. well our subscriber count is back up to nearly 100% of where it was at the end of 2019, as of the end of september and we continue to experience fantastic momentum we've seen that subscriber base has really diversified so we're acquiring subscribers from more diverse geographies, more diverse household nyse and more diverse use cases 50% of use cases are for casual, everyday occasions and frankly, you know, we've
seen that women did not have to return to the office to return to rent the runway 90% of our customers continue to work from home, but we experienced this momentum where we're back up to 2019 levels as women do return to an office even if it's just a few days a week or return to a -- actuall sequentially q1 to q2 by 39% and experiencing similar momentum now. >> so, curious about that momentum going forward i mean, you mentioned that getting dressed, going back to work when i think about the fact people are going to be in more hybrid workforces and there's a lot of uncertainty you about that going forward and also uncertainty about more covid variants and what going to weddings or parties in the winter and into the spring will look like. how do you address that uncertainty, and take that into account when you're making forecasts about what the business and consumer base is going to look like going
forward? >> yes so, remember, our customer uses us to get dressed 83 days per year, and 50% of those days now are for casual everyday use cases. everything from, you know, wearing a fall coat around your neighborhood to everyday loungewear, to, you know, going on a last-minute trip. and so we have been very deliberate in expanding our assortment over the last few years, and have actually been able to partner with the designer community to expand that assortment, primarily on consignment via our share by rtr channel where we partner with our brands to revenue share on every single item that we rent that means we're able to grow our business in a much more capital-efficient way than we ever have. >> but i guess my question is, do you think the potential addressable market, the whole number of people who might want to subscribe, is small.
just simply smaller now than it was pre-pandemic >> i think the number of people who are open to putting their closet in the cloud has never been higher. if anything, this pandemic pushed us even more as consumers into sharing models, into valuing the experiences over ownership. into valuing sustainability as core tenant of how we're going to spend our money, and into thinking about the actual cost and financial value of every single purchase that we make and so rent the runway really wins on all three of those measures, and we've seen that in our customer base. we're seeing joining us because it is way to get dressed and able to get dressed with 20 extra buying power. >> during the pandemic you did expand to move further into that sustainable model by offering a resale option, but that is a very competitive space you know, you have threadup, the
real real. what's the opportunity you see there and are there other business lines you expect to launch >> resale for us is just an incredible new customer funnel into subscription. it's exactly how we look at our spe special event rental business, it's a new way to introduce our customers how valuable and how easy it is to come to rent the runway and we've been very productive converting former customers into subscribers so every year we see about 50% of our subscribers are brand new to rent the runway and 50% are actually former customers of rent the runway, primarily from our special event rental business >> well, quite a lot of growth so far an opportunities ahead jennifer hyman, thank you so much for joining us and talking to us about your growth at rent the runway on your ipo day. >> thank you so much it is such an honor to be here.
meantime, an fda advisory panel recommended regulators authorize the covid vaccine for 5 to 11 year olds. if the fda follows the panel's advice in the coming days, the cdc would have to sign off before the shots could be administered >> further news along the same lines, a federal judge in texas denied a request by the southwest airline pilots union to temporarily block a vaccine mandate for employees. that mandate is required under president biden's order for government contractors the pilots' union argued the mandate and other company covid policies need to be negotiated the judge rejected that argument and said requiring the vaccine would further the goal of the collective bargaining agreement for safe and reasonable working conditions for pilots. under the federal order, southwest must require staff could be fully vaccinated by december 8th, unless they receive a religious or medical
exemption. meantime, joe, facebook is under fire again this morning. the "wall street journal" now reporting the federal trade commission scrutinizing central networks closings weather documents so facebook may have violated a 2019 settlement with the ftc over privacy concerns. the research is being mischaracterized, according to facebook begs the question whether the fcc will ultimately open an investigate and open a case regarding the whistle-blower's argument. >> how would that be >> the argument, and the argument is that the company made certain statements to the public, either during conference calls with investors or during hearings with congress, about what they were doing and that those -- that those were -- >> contradicts them. >> were not in fact truthful
relative to what some of this research and other internal communications was saying. that's the -- the whistle-blower umbrella they've come under is that, in fact. in fact, they've syd, coming forward as a whistle's -- whistle-blower wah of what they said to customers. >> interesting. when we come back, interim ceo of hertz mark fields will talk about the big tesla deal and the booming car market. and later, general motors ceo mary barra joins us on inflation, evs and much more > ay>>st tuned you're watching "squawk box," and this is cnbc. from a conference,g back when she got a text: she needed a bigger fridge asap if she was going to fulfill her orders. so she used her american express business platinum card® to earn more points on the big-ticket purchase.
good morning big named earnings flowing in. new numbers out from multiple dow components, plus a slew of other top american brands. we've got a power-packed hour ahead for you. starting with the markets and blackrock, and then talk about a huge tesla order with the interim ceo of hertz, and finally earnings interviews you can't afford to miss with both gmc mary barra and then twitter's cfo ned segal. the final hour of "squawk box"
begins right now. good morning, and welcome back to "squawk box" here on cnbc live from the cnbc site at market square. >> smell the bacon just haven't seen the bacon. >> i'm andrew ross sorkin here with becky quick. >> and i'm joe kernen's sometime as quiche, too, right? but u.s. equity futures at this hour up about 15 points. nasdaq down 28 or so this isn't really the big story. a lot of earnings, though, is the story this morning more to come you see the s&p giving back five or six close, close to records on all the averages. treasury yields now as you can
see back below 1.6% on the ten year and three dow components already reported quarterly results this morning. boeing posted an adjusted loss wider than expectations. revenue short of forecasts, though boeing did report better than expected free cash flow, and boeing ceo dave calhoun will appear next hour on "squawk on the street." coca-cola beating on both the top and bottom lines in its latest report. theater and restaurant reopenings both instrumental in the company's results. and mcdonald's also beat analysts estimates for profit and revenue as well as same-store sales higher prices and new menu items both helping there >> joe, thanks get right into the markets this hour and those corporate earnings right now we are joined by our first guest, who thinks stocks could rise by up to 10% by the year's end welcome rick rieder. chief investment officer at
blackrock and head of the firm's global allocation team rick, watching what's happened this week, no argument that at least at this point earnings trumps economic news right? >> yeah. pretty incredible. by the way, thanks, becky, for having me on it's pretty incredible some of this, think about the demand that's out there for consumption and where it's getting into look at some of these earnings numbers. no doubt supply chain shocks across multiple avenues, but we actually looked at aggregate inventories, and look where you are today. the actual aggregate inventories are not bad. it's the demand that's so darn high you see good numbers coming out and this week and last week lesser of that. >> i looked at similar data, rick, just showing traffic into the ports. the l.a. ports that are there. the number of ships trying to get in there now versus two years ago before the pandemic is kind of astounding, pointing again to this demand picture
how long does that demand last >> becky, i think we're really in this incredible point in time, and we went back and looked at what the consumer spent over the last couple of years. because obviously locked at home, consumer under-spend $50 billion underspent the last couple of years. take that number and take $2 trillion of a one-time stimulus shock. look what happened delivered, the consumer, long cash, and prospects for jobs and income is high it's going to continue demand is going to continue. the other side, corporate sector, gotten liquid through covid, free cash flow generation is really strong cap x growing, r & d grown and buying back stock. during 2022, a durable demand function and i think you'll see, per your point on some of the ports, starting to see easing in places we study this at companies around where trucking is able to deliver goods. it takes some time, but definitely easing in that.
i think you're going to have strong numbers that are durable, at least into -- well into '22. >> all the talk about inflation and inflationary cost pressures eventually overcoming the companies' abilities to raise prices that doesn't matter? or is this a case where you've got to pick winners and potential losers >> becky i think what people don't factor is is, a., go back to the demand point. demand is really strong. it will be durably strong. these companies are in a luxurious position in terms of getting pricing power through. if you can increase your prices and think how a business is set up you've got fixed costs and variable costs many of your costs are fixed you sign a long-term lease, that's a fixed cost. if you're able to price through these increases, because demand is so strong and i think some companies, a little price discovery. wow. this is actually not denigrating demand price it through, variable costs, fixed costs stable. actually positive.
operating leverage as a business listen, there are some industries that look at consumer staples, some of the numbers that came out your input costs are moving up -- excuse me, significantly. that's an issue, but for broad corporates you can have a pretty positive impact on margins and that operating leverage is real. >> sounds like a recipe for an inflationary spiral when you consider one of the costs going up is labor costs. it's hard to get people to show up for a lot of these jobs does that concern you at some point? >> so we talked about inflation is going to be a bit stickier. break it down. some of the reopening shocks that took place obviously demand for semiconductors you're seeing including some companies coming to the market, seeing increase in semiconductor that takes tile seeing increased drilling in the energy space and to offset some of the lack of cap x, but it takes time, and wages, no doubt, will continue to be buoyant for
a period of time, i think. i think a lot of reopening costs, see it in lodging, in airfares, some of the used car prices, not across the board, starting to come down. i don't think it's inflation spiral i think stickier inflation well into 2022, but we map things like core pc the fed focuses on, of course, cpi, as you get into the spring, summer of next year, by the way, after the winter and pressure on energy prices, we think that will come down. we don't think it's an inflationary spiral. i think, we own tips inflation break-evens, own areas commodities et cetera that will participate alongside higher prices, because we won't know much different in the next couple of months but i think it's coming down we let go inflation, some of our tips yesterday as the markets have gotten pretty enthusiastic about durable inflation. >> okay. price does matter. you do watch those things. you do think, though, that equities prices could go up by as much as 10% just over the next couple of months and into the end of the year.
what sectors would lead the way? >> so, i mean, first of all, i would say i pass enthusiastic not to describe -- i think i said go up in our 4% to 7% maybe 10%. i think that's fair. >> gone up since you said it, even's that's probably true. 4% to 7% from here. >> but, becky, i can't believe look at the google and microsoft numbers and step back and put perspective on it. looking at talking $90billion of ebitda for both companies over $60 billion of free cash flow it's like a country. so you think about it. go back 20 years and think what the s&p 500 looked like. looking at it today, by the way, we like the auto companies today you combine them, auto industry combined, u.s. auto industry a third of that cash flow globally about the same as cash flow of two companies. listen, i think tech, i think in and around tech, services that
are even, in and around tech will continuing to the leader and we're looking at biotech yesterday, had pressure. i think some of the health care places are going to be some upside talk about autos hearing your interview today i think autos are throwing off a lot of cash flow today, and are reaping the benefits of the cap x that went into ev and will for a few years. >> there are so many currents, cross-currents coming out of washington right now talk about who to tax, what will happen with prescription drug care benefits. what will happen with the power to negotiate with some of the drug companies if you like biotechs does that mean you don't think those things come through or is that outside the realm of the things that will be impacted? >> deck becky, the cross-curren, amount of sleep you get following everything that's happening is a little challenging. listen, it is unequivocally the point to think through thinking how markets overshoot in both directions literally just started doing work on some of these yesterday, but, boy, markets have priced in
a lot in terms of -- you know, markets were in or out, how they look at sentiment across different sectors. looking at companies that maybe the markets have priced in a bit more aggressive price reduction, et cetera, and so we're getting started, but i thought interesting, core health care, managed care, et cetera, is a core position for us we think health care expenditure is durable for a long time >> rick, do you think maybe the new wild card that you really need to think about could be energy and maybe we don't know -- we don't know really what the end game looks like i'm talking about if it was a cold winter in europe, or who knows what putin's got up his sleeve, and under-investment in this country and other parts of the world.filters through to everything i don't know where oil's going i don't know wti. does $100 wti jive with a 1.95
ten year >> so, well, threw it a zinger at the end i think you're going to be in a locker period of time demand for income and real rates will stay low longer than people think, but, no. i think rates can move moderately higher. the energy thing, joe, is unequivocally the case around how to think through the cross-currents around the world. one thing that's really different than history look at u.s. and what supply and demand looks like, reliance on import versus drilling that you get in the u.s. and clearly controversial now, but you're seeing some of that drilling pick up, and so the import reliance on import and the shocked inflation on the back side of it, i don't think will be similar to what we saw 20, 30 years ago, but your point is well taken around today, and we're not going to know anything different for a few months the supply/demand paradigm is real and it's going to have a support for energy prices for
certainly through the next three, four months >> are you having any conversations with institutional investors saying, know what? we believe in esg but maybe need to think about keeping some of our money in some of these energy companies in ways we haven't before as a result of this situation >> 100%, andrew. i think one of the things that's critical is the transition -- i don't think anybody debates movement over a period of time or debates sustainability is something ingrained in investment in the world over the next 20, 30, 40 years. the debate is, you know, in the interim where supply and demand, clearly a capital shortfall has gone in. do you keep some investment? particularly there are a lot of companies in and around energy that actually made tangible evolution to their business. compliments to net zero, moving cash flow into clean initiatives. your point is very well taken.
there's a big debate about that and you got to generate return for clients. some of these things take years. the direction is right nobody debates that. >> i wonder whether some investors actually thinking of disinvesting or slowing down certain types of investments are going to change the timeline the other question i wanted to ask quick, you mentioned inflation. what did you make of jack dorsey's comment about hyperinflation given i know you're -- crypto beau of sorts? >> i didn't dig into it directly i don't believe we're going into hyperinflation people don't consider, we're in a world, full-stop, it's data. implementation of data that's changing technology, that's changing innovation. you get spikes of inflation, and then all of a sudden innovation comes in by the way, look at all of the numbers coming out of earnings and think about what's happening today that's so different. goods inflation 20, 30 years ago. now a spike in goods inflation because of reopening so
explosive. you don't have goods inflation durable while you have service inflation that's real. boy, i don't see it. by the way, you need to have pressure on currency of significant magnitude, and i don't think the dollar's coming under any significant duress over the next few years. i don't see any underpinnings of it being real. >> rick, always great to see you. thanks for your time. >> thanks, becky. >> thank you. coming up, is a kid one step closer to getting a vaccine? what a key advisory panel said. plus, three more big interviews before the hour's up. ceo of hertz and gm, plus twitter's cfo. it's all ahead when "squawk box" tus.
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belies a strong debate that happened among adviser 17-0 in favor with only one person abostaining risks for this population. benefits, 91% efficacy preventing cases of covid. a potential return to school and normal life for kids the risks, of course, this unknown risk for this age group of myocarditis the heart inflation that appeared as a very rare side effect after the mrna vaccines particularly the second dose for young men. so that was a lot of the debate in this meeting yesterday, because they didn't know the risk for this age group. it's a lower dose. also, the number of kids that have already potentially had the virus. the cdc presented this study of an antibody survey essentially where they found 42% of kids in this age group in may and june had antibodies for the virus, suggesting that six times as many kids have had covid as has been reported in the actual case numbers. there was debate that these kids
need two shots maybe just need one. so a lot of talk about should the vote be narrowed in some way? but the fda pushed it to be a binary vote for a broad population of kids pfizer's interesting debate from at least one panel member who was worried that a "yes" recommendation could lead states to mandate the vaccine for kids to go to school and thought that was not a good thing to do, but the fda reminded the committee that states really have said it will only be on full approval they would mandate the vaccine all of that coming into the debate ultimate andly overwhelmingly positive vote, next it goes to the fda to issue the emergency use authorization and then cdc's advisers meet next week, november 2nd and 3rd making their recommendation. the cdc director signs off, kids could be getting these shots end of next week guys >> and meg, patients, of course, watching this very closely, but bosses, leaders of corporate america, watching this closely as well, because it really does set the schedule potentially for
a full-on return to work depending whether you think we're going to hybrid or not in terms of timing, when you think about the ability for, for kids, 5 to 11, to really be able to be fully vaccinated, and also recognizing some of the hesitancy issues, what do you think that timeline really looks like now >> reporter: well, there are going to be a number of parents who literally day one the vaccine's available are going to line up at their pediatricians office or wherever they want to get the vaccine pup need two shots three weeks apart. for those folks about five weeks for this kids to be fully vaccinated polling suggests one-third of parents of kids this age are ready to get the vaccine right away a quarter say, absolutely not. no way ever am i getting this vaccine and some folks are kind of in the middle it's going to be a mixed picture. of course, this also doesn't discuss kids under 5 that's a delay >> okay. meg tirrell, thank you for brings us that news.
and up next, hertz interim ceo mark fields on uber and carvana, and the news the other day from 100,000 teslas. and mayor barra joins us on third quarter earnings, as we head to break, check out gm and other companies to report quarterly numbers this morning gm down by about 1.3%. quk x"-davidson up by 2.5% "sawbo will be right back.
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so, should all our it move to the cloud? the cloud would give us more flexibility, but we lose control. ♪ ♪ ♪ should i stay or should i go? ♪ and we need insights across our data silos, but how? ♪ if i go there will be trouble ♪ ♪ ♪ wait, we can stay and go. hpe greenlake is the platform that brings the cloud to us. ♪ should i stay or should i go now? ♪ ♪ ♪ out with two big announcements, hertz and uber. cars available by 2023 for drivers to rent. on monday you might recall hertz announced offering, ordering 100,000 teslas for its customers. also today hertz said it will partner with carvana on a direct-to-consumer sales channel
for used rental cars joining us, mark fields, interim ceo of hertz and also the former ceo of florida strait. great to see you, mark, in this context. we're old friends. you've -- had many, many appearances in the past. i think this is the first as the interim ceo of hertz so welcome. >> great to see you, joe always enjoy it. >> you know, i was thinking about hertz and thinking about -- a company that's fortunes are affected by the pandemic and thinking how things played out i want to start there k i don't know of any company more effective once closed down completely. >> no one traveling. zero people renting cars. >> zero. >> then we reopen and people can't wait to get back traveling again, but don't want to fly on planes, for whatever reason, and then suddenly cars, your entire
fleet of used cars, must be worth twice what it was before with used car sales. you went from absolute famine to where you're actually in a feast right now. is that a fair characterization? >> yeah. well, as you know, joe, life's a journey and the journey over the last number of months and years for hertz has been interesting i would say, though, that, listen, we came through restructuring -- >> uh-oh we got -- okay go on -- we came through a re -- we're going to work on that obv obviously. that's a technical issue what was that? zoom another pandemic play? i'm not sure we're going to work to get him back. >> maybe it was our fault. we'll see. >> really? >> oh. he's good. >> he's back he's back! >> sorry, mark tell you exactly where you stopped. we went through a -- restructuring -- >> yep >> and then go on. >> so we went through a
restructuring, and, you know, clearly that has a lot of benefits in terms of cleaning up our balance sheet and things of that nature, but just at importantly, joe, when you come through a situation like that, it allows the company to take a fresh perspective, and it allows us to ask ourselves, hey, how do we disrupt ourselves going forward, and ask the question, instead of "why? "why not?" that innovative thinking is infused throughout the company now. the business environment as you know is very dynamic, and we're just going to stay agile and flexible, and just stake out our leadership, which is part of our strategy we want to be a leader at playing in a central role as the mobility system evolves. >> mark, is it fair to say, and i don't see how you could say that i'm wrong here, you have had an evolving view of tesla in a very short period of time, and i'm alluding to some comments --
thought it was a tesla bear, and then the big order for tesla back in june, i think you said, tesla's never had the kind of competition it's going to see from the majors. although you're also known as not being a big fan of the way detroit was doing business towards the end either, but you said that back in june, and now you're saying the competition that you alluded to in june, they don't have the scale. only tesla has the scale to mass produce a great ev so did it evolve or did we misunderstand what you were talking about back in june >> well, over time, you know, i've been making comments around tesla, and, listen, end of the day, what tesla's done is push the industry and rightfully so towards electrification and sustainable transportation and as you look at our strategy, you know, going forward, again, we want to lead in helping the industry have, you know, the consumers be able to adopt
electrified vehicles and do our part in sustainable transportation, and right now tesla is the only manufacturer that's producing its scale so we obviously started having discussions with them, and, actually, this is not very transactional. you know, our two main shareholders started having discussions with tesla, you know, many months ago, because this is about relationships. and so, you know, from that standpoint, tesla relationship is very important to us, but i also want to make the point, joe, that we have relationships with all of the automakers, and we want to help them as they introduce their electrified vehicles, we're going to them. not on a kind of transactions basis. hey, how can you give us some more cars? it's a strategic discussion that says, how can we help you achieve your objectives? we've done that with tesla and our intention is to do that with all of the automakers. >> we're having a, gmc mary barra on later in the show
do you think -- is anyone in second place is everybody besides tesla tied at some lower, they're all tied in fifth place what would you say ford, general motors got some european automakers, volkswagen, chinese e vev-maker. who's doing well in your view in competition with tesla. >> good news overall, all of the major automakers are making major investments in electrification. when i was ceo of ford we started doing that as well when you look at the landscape, clearly tesla was a first mover in this case and therefore because they're at scale is why we approached tesla, and we have a great relationship with them but when you look at the other automakers, you know, general motors is coming out with many products over the next couple of years. ford has made a big commitment their marquee is very successful in the market place coming with the lightning, f-150 lightning
and made a number of announcements on electrified vehicles coming. volkswagen, very clear in think pivot to electrified vehicles through your iv-4 and iv-3 and who range of vehicles. clearly the major automakers are making a big push in this regard, and that's why it's important for us to talk with them at a strategic level and say, how can we help you how can we bring our core competencies at hertz around managing large fleets and help you achieve your objectives? >> how much -- i don't know, calculation had to go into the idea of having a big rental fleet? 100,000 cars of evs? i guess evs don't break down like normal internal combustion engines i guess, but hertz has to be there for renting cars and then there's charging stations
and a lot of things that go into someone walking in saying, yeah, rent me a tesla. at this point i'd think about it but i'm old-fashioned. did that go into the calculation? >> well, absolutely. listen, can you have a great strategy, ultimately you got to be able to operationalize it so when you look at our relationship with tesla and the purchase of the vehicles notice when we made the announcement on monday, it's not only investment in vehicles. it's a very big investment in building out our charging in infrastructure on around locations and off airport locations. from our standpoint, we're operationalizing it and making it easy for customers to rent. they won't have the range anxieties and poor importantly, joe, what tis is going to do, we are going to become expert on managing large elektra tried fleets well before our competitionened i think that's going to pay a lot of benefits for us today and as you think towards autonomy down the road,
we think we'll solidify our position or create a bit of a moat on being that central component of the mobility system because many providers of products and services are going to need that, and we want to be there for them >> andrew, did they cut you off this, andrew >> i think we're out of time, my friend we're out of time. >> my god. unfortunately. >> mark, love to have you back at some point i want to talk about the effects of building out that infrastructure whether it means buying more and more teslas over time makes it harder to actually buy other cars from other vehicle mamakers that's a conversation for mother nime. >> you know that and you have some of best service i think in the industry i need hertz if you fly somewhere, i'm not going to be hitchhiking. >> exactly. >> i need hertz badly. thanks see you later.
and number two tries harder, but -- general motors shares underalities pressure after third quarter results reported phil lebeau joins us with a special guest with him hey, fill. >> reporter: becky, bring in mary barra, chairman and ceo, chairing ceo for general motors joining us from company the headquarters in new york not a lot of love from investors. paint a picture what you're seeing in the market right now. >> well, first, it's great to be on with you here today, and i want to start by, again, thanking and recognizing the team for all the great work they've done q3 faced challenges, covid and performance in asia, but still good performance through the quarter. continue to do well with trucks and full-size suvs, where we have our focus, because those are the most in demand and also plants already running at max
capacity so we're confident in our portfolio of vehicles as we continue to see improvements in the semiconductor supply, which we believe we'll see in fourth quarter and then into next year. although still a built of a tail on it. we're going to continue to see that growth, because of the strong product portfolio we have overall. and then on top of that, you know, i'm very excited about the growth opportunity that we have as we look at the vehicles that are launching off the ltm platform and ulta five, a strong business with onstar, take it to a new level withselveses and subscriptions. >> mary, you mentioned chip prices and mentioned it's improving this quarter, but it's going to linger threattat leasth the first part of next year maybe the entire next year you know the narrative people look at what happened with tesla saying they were able to increase production, wasn't
hit to the same degree as other automakers, but the narrative is, elon musk can get it done. gm and others cannot when you hear that narrative, what do you think? >> well, i think that the complexity of the semiconductors is something people really don't understand until you dive into it deeply, and if a speck facility that produces a lot of your semiconductors is hit like we saw in malaysia with covid, first we're going to look at the safety of the workforce and making sure they have the right safety protocols in place before they start operations again. so i think it's a bit more complex than everyone's looking at it, but we are seeing stronger supply in fourth quarter. we'll see stronger supply in the first quarter and also are taking steps longer-term to make sure that we aren't impacted by semiconductors or any other of the commodities or material we need to successfully grow our ev future >> what about inflation?
do you expect it to be as hot in the fourth quarter and into next year as we've seen it in the last quarter >> well, we definitely are seeing it in commodities and logistics costs. we think it is going to linger into next year i think many factors are going to depend how long it sticks around, but we also because of our very limited inventory, we're going to continue to see strong pricing we saw it in q3, that's remaining in q4 and we think that will carry us into next year, because the vehicles we have, we're selling every vehicle we can make. >> and that continues in terms of the pricing roshd record transaction prices, percentage gain. people will look at this, come on looking at every price approaches $50,000 a vehicle >> well, i think because of gm's specific situation we're pretty lean on inventories i think we'll see strong pricing well into next year
as we're able to have the full portfolio and be able to meet consumer demand, we're going to see some moderation, but also done a lot to improve our costs in working with our dealers to do things more efficiently so a lot of the lessons we've learned nob ed not only from cot the semiconductor will make us better positioned going forward. >> shift to a discussion of evs. hummer you say deliveries begin this fall. i think fall, when does that run through? end of november, early december. so you're going to be having that come out very shortly, and then you've got 30 at least through 2025 you've already accelerated plans in a number of areas can you accelerate them even more >> well, it's very important, and i couldn't be more excited about the hummer vehicle that's coming out in our recent investor day as investors got out of the vehicle, the smile on their face after experiencing this was
incredible we will be delivering yet this fall i was at the plant a couple weeks ago and the vehicles look outstanding. i can't wait to get them into customers' hands then launching the lyric which is early next year i think as we launch these two first products off of the ltm platform we're going to look to see how fast can we go as you know, we've already taken half the time out of our vehicle development process behalf you the ltm platform and the way it's designed. of course, we're looking for ways to accelerate, because we see the strong interest in our electric vehicles, but also going to put quality first always. >> mary, we talked a couple weeks ago at investor day, one of the goals you guyed stated emphatically, you will be market leader in evs. right now tesla is at 63% market share. by 2025 some believe you can catch tesla. you guys are at what 9%, 10% right now in the u.s do you think you can catch tesla by 2025? >> absolutely, phil.
when we look at the portfolio we have, not only the hummer and lyric, but mark royce talked we're going to have an equinox-like product around $30,000. we have the silverado e coming, gmc product after that and, again, all the other products we haven't announced yet i am very comfortable, because when people get into these vehicles they are just wowed so we will be rolling them out, and we're going to just keep working until we have number one market share in evs. >> one last question the biden administration looks like it's close to finalizing the economic deals they've been negotiating with congress, and a lot of speculation what this might mean for ev incentives what's your expectation and will you be able to potentially say to buyers, look, we can once again offer a federal tax credit >> well, i'm very hopeful. i've had a lot of conversations even through the weekend, and
the i think there are going to be provisions that level the playing field and don't penalize first movers and really help drive ev adoption. so, again, nothing's done until it's done, but, you know, it looks very hopeful, and, yes i think it's going to position general motors in a very good spot. >> mary barra, chair and ceo of general motors joining us from the company's headquarters this morning. mary, thank you very much. andrew, send it back to you on a day where gm beats the street on the top and bottom line but not reflected in shares before the market hey, don't forget, guys. coming up in 20 minutes talking with boeing ceo dave calhoun exclusively here on cnbc guys, back to you. >> phil, thank you for that interview and mary, thank you. when we come back, jim cramer gives his first take on the corporate earnings we've got and twitter's ceo joins us stock up 1.5% post earnings. "squawk box" returns right after this.
coming up, cfo of twitter joins us talking about third quarter earnings and to tell us why his company didn't see as much of an impact from apple privacy changes as other tech firms. you're watching "squawk box" on cnbc the nasdaq market sites, the famous market site apparently, times square be right back. are the things america makes out here.
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>> announcer: the nation's earning season realtime corporate scorecard following a volatile quarter strategies for investment. portal yo opportunities. team coverage and analysis all day. watch and listen live on the cnbc app. welcome back to "squawk box" this morning shares of twitter on the rise following third quarter earnings the social media companies saying apple's recent changes had a modest affect on snap and facebook, bigger financial hits. joining us first on cnbc, twitter cfo ed segal ned, great to see you. the market is liking these number this quarter. i imagine you're liking them too. speak to the issue of the apple privacy changes in terms of the
ios. i think both you and the market thought something very different would be the outcome. >> thanks for having me. yeah, i'm pleased to be here to talk a little about the quarter just reported. there's been a lot of focus on apple's privacy changes over the last couple quarters it's really important to remember, all companies are coming at this from a different starting point because twitter historically hasn't leveraged third party even first-party signal the same way, because we've his soarically been 85% brand advertising, less impacted by these changes and 15% direct response, i think we see opportunity where others may see risk this levels the playing field, and it means we're all working under a new environment and as advertisers and agencies adapt, we see opportunity to make ads on twitter more svel relevant, less. >> a big plan to build new tools to better target users are you building new tools as
well >> we're always improving the models we use to drive better relevance. we're always working to improve the measurement that we provide to advertisers, the work we've done with the sk ad network what apple uses to provide anonymize aggregated reporting to advertisers, that's been very helpful but we're going to continue to consider all the ways we can help agencies and advertisers measure the success of their campaigns, and when we step back from all of it, we've seen modest impact, as you said, and still think there's so many ways to improve relevance of the ads people see on twitter. >> one of the other big issues, of course, is the supply chain and whether companies are going to be advertising. you haven't been hit again in the same way that a facebook has, in part because so many advertisers are brand advertisers or digital advertisers. is that something that we, is the takeaway there's now opportunity to get into those spaces or is the takeaway that there is a limit here
>> well more than half of ad revenue at twitter is tied to services, whether it's credit cards, or other things like that, or to digital goods. a launch of a movie, a launch of a streaming service, a launch of a fitness subscription program, and other really compelling offerings for the people who are on twitter that they're finding from the advertisers buying websites quick ads, buying ads to help people find their apps through twitter and all events and topics bringing people to our service. so that's been a real opportunity for us to help the services and digital goods, i is a specks mixed, maybe different from others. we certainly see supply chain constraints affecting us buying servers and impacting ceg and electronics it's aers but still see lots of opportunities or services and goods seeing how big it is. >> long-term ambition to cover
moral that market which you're not in now >> there's definitely lots of opportunities to improve commerce on twitter. we've launched business profiles, helping businesses k differentiate your account from mine and established buying and you'll see more over time. commerce doesn't have to mean buying a physical good commerce can mean helping somebody transact when the they're subscribing to a new service. it could mean buying and ft. could mean buying something else that doesn't have to be physical in nature. >> ned, your friend rich greenfield tweeted last night, remember when "people were speculating twitter was going to be crushed by the loss of a certain someone on the platform in january 2021. did you think about that back then in terms of what you thought the impact might be in terms of engagement and usage? >> well, when we step back and look at twitter and how people
use our service. remember, 80% of the people who use twitter are outside. united states. politics, it's just a small percentage of the conversation on twitter there are political conversations and sports and entertainment conversations happening all over the world around the olympics there was 76 billion impressions related7 billion impressions. there were 2 billion impressions related to the music video awards we know there's so much more to it than any one account, conversation o. country. >> given the challenges that facebook is confronts, what risk is there that there's a whistle-blower no twitter, who will come forward and say you didn't do enough in terms of the content we see on there? >> it's so important we continue to be principled, transparent and consist president on how we
lay out our priorities it means a lot to the people who work at the country, and hopefully the shareholders as well, when we try to be clear how to make decisions and what's best hind them we're proud of the decisions made in the past, whether it was to stop taking political ads a few years ago when that seemed unpopular, but we made sure that people we are earning, not buying, their voice, and removing suspicious accounts, to help people understand where our priorities were. jack, as you know, took to twitter itself over the weekend, say he's anticipating hyper-i hyper-inflation. >> we're always mindful in making sure the team is appropriately compensated and
making sure our balance sheet is invested in ways that make sure that the capital will be worth what we meeting need it for in the future, relative to where it is today that means we buy low-risk, highly liquid securities if interest rates go up, the securities we're buying, the interest rates will likely go up as well. we also want to make sure we can help people get paid on twitter. some of the services we do that, you notice i can accept tips on my account through bit counsel or a number of other ways, as we reduce the friction to help people get paid on twitter, that will -- >> do you think hyper-inflation is on the way? >> we see signs of hyper-inflation in parts of our business, but i think it's too early to say from the signals we
get, whether it's something that's sustainable or something more short-term in nature. i think it's important to have a point of view, but too early to make a call about that. i close it out by asking you about crypto itself and whether you want to put it on the balance sheet, given your founder's interest in that and a believe in a maximalist world f hats he persuaded either you or the board? >> bitcoin is a great way to facilitate commerce on twitter, and breaking down barriers between people who have incredible content and the people who want to pay for that content you about we would have to change our investment policy and view more broadly. the conclusion is that it doesn't make sense today, given the types of securities we buy, the risk profile, the volatility of the securities we buy, but
we'll keep watching it and thinking about it over time. >> always good to see you. see you on twitter. >> thanks, andrew. >> you bet. ned is so skillful he's so careful. he's amazing those answers, we can all learn a little from that let ate get to the new york stock exchange jim cramer joins us now. alphabet, microsoft, amazing i want to ask about boeing it is called higher this morning, though think phil said the numbers maybe weren't up to speed, but i don't know, jim, earlier this week we were talking about airbus in terms of pratt whitney, airbus this, airbus that. boeing is still 50% -- the do you is at all-time highs has airbus supplanted boeing as
the world leaders? >> airbus is definitely the leader the 787 has issues, but the operating cash flow was better, meaning there's not as much money leading. that means they can get orders from china china seems to be warming up to some of or businesses. so perhaps if the chinese government wants to be able to make another olive branch, that's why -- my charitable trust, i'm afraid to sell it, frankly. if things are stabilized, they don't need to do an equity offering under next year i think they very quickly can come back if you you this international travel will come back, and i think it is. >> how about the paradox, to
lead the globe, we need to sell to china if you don't deal with china, it's almost like helping them preempt us it's a very hard line to walk for big multinationals to keep us number one, we need to deal with what potentially makes them number one. >> i think raytheon, greg hastings is talking about china is ahead of us, somewhat like the missile gap that we remember from the '60s. it can get that, because the chinese -- you can say, well, listen, it's only a matter of time it's only a matter of time for everything with china. they want to be a global superpower, but i think boeing can do that. >> jim, we look forward to that interview coming up.
competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute. hello! hey, rob, there he is. workday. the finance, hr and planning system for a changing world.