tv Squawk on the Street CNBC December 9, 2021 9:00am-11:00am EST
because southwest does not use wide bodies because they're domestic, they're not hurt by that. second, dave calhoun is trying very much to bring about change, but it's not -- the faa is in the pocket of boeing let's just say that boeing isn't even in the pocket of the faa. faa has made boeing very difficult and that's why you see this i don't think it's the first one. i think that the ripple of effect is going to continue. we're still waiting for china. china actually needs those planes they need the 737 max to come off the ground so it's a continual story.
i want to hear what gary is saying as they directly address let's call their ties to boeing and whether is it a good thing we have to bring this stuff up >> yep there's a lot going on with the airlines some of the restrictions regarding omicron. there is a democrat bill being introduced that would prohibit some airline fees, jim as you mentioned deliveries at american and the dream liner tech stocks are going to be one of the stories of the day as apple does get this surprise stay calls it an upside surprise and could delay changes for years. >> well, the actual thing that they lost they didn't lose look, i doen't want to make too much of this because this stock has just been roaring and this is not anything that isgoing t be added to the numbers or s subtracting from the numbers david, apple is up -- i don't know if pusaw it how do i say this?
people are saying it's a safety blank et stock >> it's moved but we can show a month because that kind of captures a lot of the move there as you take a look at morgan stlanl in terms of playing the l late-cycle transition. we mentioned eed it many s sometimes. times there it is. there is a lot of market cap it went from being a laggard all year to the s&p, significant 1 percentage points, even more to vastly outperforming the index in a month jim. and what accounts for that >> i think that you've got a couple things. one is that we actually now know, other than those reports, that the 13 is a great demand and also by the way, if they can't fulfill a demand i don't know why people realize that's positive. the service revenue numbers, i believe are going to surprise. it's going to be they show the a
r/vr remember this appeal that they won, the district court used this california unfair c competition. they couldn't even use the s sherman or congralayton nothing. she grasp at straws and was struck down, but i don't think anyone took that seriously the major thing, david here, i think, is that there is a reversion to companies with real earnings, real balance sheets that have p.e. multiple of say 25, 26 or less >> where are we on next year's numbers for a multiple now do you know off-hand >> might be as low as 20 i don't know i'll tell you this katie is basically making a $20 push here and you're gotalking about i'd say 25 otherwise 30 now but again. >> another eight bucks and we get to 3 trillion in market value. when you go through the ea earnings, the numbers the
themselves, the scale of these companies are staggering say it all time but the numbers havare just you can't even begin to remember the cash numbers >> three people left from an au tonmus car unit that people were making a big deal of this last night or left from their evs going to four? >> i mean, the numbers -- >> they do have to come up with ar/vrs omniverse, have you noticed that ever since facebook became m metaverse, no one talks about facebook >> we were just saying yesterday on tech check, all that hand wringing took a back seat. >> i know. yeah i mean, i was trying to figure out what to slam them for. i didn't really have anything. remember when you can get up in the morning and just say i don't know what to talk about on the 9:00 let me say what's in the papers today? >> this morning they're going to launch a crypto payment pilot in
the u.s. through the novemberi app. >> well, look. if we want anybody to do the crypto hearings were q quizzical. i still don't feel safe wherever my thieorem is trying to find a place to put it. none of the banks will touch it. >> it's going to be very important for crypt o. we all know that it's very unclear exactly. >> it's not hack-free. >> they can hack these institutions and say the actual coin, since you don't have it is hack-free, but i just care about where you put it and yesterday they were talking about how do you get 8% on your money and the answer is you put it in a crypt o bank >> they need to have a meta strategy, too >> industries are at least thinking, well, what do we need to do? kind of like the late '90s with
the internet and everybody suddenly had to put an i in front of things to show. >> there are two metaverses. there is the metaverse that's fun, put the glass on and see mark zuck erburg surfing with you. i don't know maybe that's your thing. and then there is the industrial metaverse that's the omniverse, where you discover corporate ways by having a digital twin of a bmw factor y so you don't have to shut down a product line in order to be able to fix it and cut out the waste and that's the one that i like. i like an omniverse that save people 's money this is the avatar 28 language >> now you're talking kathy woods' language. deflationary diynamics and enery storage, ai, block chain, ro robotics and she talked about whether or not that means we're in a bubble now or not take a listen. >> what i like about this period is many, many people are saying those stocks were in a bubble, and they deserved to correct
that tells me we are nowhere near a bubble. in fact, quite the opposite has happened they ran toward them way too soon during the tech and telecom bubble and here we are ready for primetime and we've got all this fear, uncertainty and doubt. as a portfolio manager, i actually loved that be right backdrop >> backdrop. >> one of the things that i do is admit -- i know david, this is a stock trading moment when i've been wrong. say i'm wrong. i talked about that. we have a wall of stocks, and two of them. >> we've come a long way in getting to you acknowledge your wrong. >> i can say everybody is wrong except for me and you've noticed simply because they're wrong and they think it's a bubble but con it's not a bubble. i can't do that. i can't do that cause i have to look at you two people and i'm not going to get away with it cause you're not going
to let me and you shouldn't let me when i won a win at 120? that was one of the most stupid things ever. did tisee delta and omicron and president xi going after mccall and the answer is it didn't matter i should it and i got it wrong now i'm trying to deal with the fact but i love the fact that there is ownership even -- >> these are short term cross currents that are impacting the stock? by the way, you have been in boeing long term you continue to be >> but i'm up on boeing >> but you could have saved yourself a lot of -- >> i bought at the absolute great moment but i want to talk about win for a second i believe that it's $10 billion to build it. he had the best single covid and
all the real guns. i was wrong where i started buying, okay >> all right >> it's okay to say you were wrong when you bought zoom all the way down i was wrong. i was too aggressive what's the matter with that? >> and if kathy were to do that, would that change with you >> absolutely, cause it's called accountability >> you don't like the fact that she's not doing that and instead just saying that -- >> when i'm up there in front of these people and i have to say you know what? i really like paypal right here, but i liked it even more up 50 because i was wrong? what am i going to say because dan schauman was wrong because the market's wrong no, i was wrong. people at home do things that are wrong. managers don't do anything that's wrong i bought some 250 thinking it
was way down from 320. i felt like a genius you know what i was, david >> you were dumb >> no, ill-advised dumb i was tracked in the dumb class. they used to call it that. there were four tracks >> you graduated up, i assume >> you were dumb >> dumb er >> but, yeah, that was i ill-advised. and i just think that what you have to do is become human and as much as i like tesla >> down 17%. ar k is down 17% what about people who own arc? what do you tell them >> you say look, i did my best and it wasn't good enough. >> no, no what do you tell them as jim kcramer in terms of a stock -- >> i said i could easily say is theris going to be long term cae i like some of the stocks. but you're coming in after a lot
of the stocks have really been crushed, however, it may take a very long time for these to come back if they come back at all if they come back at all i mean, look, i was on the call the another day, really fabulous callle and a lot of what's happened is zoom they talk about finding boise. well, i mean, look at zoom that stock was bought all the way down by funds and i think that your explanation, if you're following her and you're in the etf in the same way that i remember the club. you're owed an explanation about why i started where i did with paypal you're owed that >> well, she did this morning say that they count on multiple contraction anin some of these names. not quite down but they're going to out-earn that over time >> well, i mean, to bless draft kings as if it's going to be apple, that's not going to happen
it's not going to happen zoom didn't even -- should have done the deal. >> they tried to do the deal shareholders weren't interested in taking that paper given the losses >> they should paid up >> bumped it tup taken debt out made a larger cash portion >> these companies had a market and should have taken action >> look, i could say that anything's going to go up over time, but that's the old way that's the way that says that you're showing contempt for the people who are in your club or investors. it's contempt. you think that you can fool them >> speaking of clubs, in just a few hours, clramer's going to host a special event for the cnbc investing club at 12:30 p.m. eastern time. you're going to shake your outlook for the new year >> absolutely. and i remain bullish but not for the kinds of stocks we were just talking about. >> by the way, you can of c course, become a member and go
to the cnbc.com/investingclub. we're looking forward to that. >> first big event for club members members take a look at futures, including gme, cvs, restoration hardware, rent and sq"squawk on the street" straight ahead b ♪♪ this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity.
>> the new engla"new england jo medicine" highlighting studies out of israel regarding people over age 50 who received the pfizer booster shot. participants who received the booster at least five months after a second dose of the pfizer vaccine had 90% lower mortality due to covid-19 than participants who did not receive the booster. studies took place prior to the onset of the omicron variant mean wile, guys, more studies, this one's out of japan now, saying that omicron may be four times as transmissible as delta >> the japan study was worse but i keep coming back to what we heard from pfizer. look, there is a timeline here that's very clouded. i think my favorite follow cacall the israeli study a striking reduction in death many. from the beginning, we've had two things that we have to have. we have to clear out we can't have hospitals crowded, right? can't have a bad death rate. if we can possibly make it so
that it's not a fatal illness >> people tart sto focus on that as opposed to to the top-line, as we i'dlike to say here numbe. i'm serious. because at some point, hospitalizations hopefully will be well below case numbers in terms of percentages they will change dramatically because most people are vaccinated and therefore, they're not getting sick and yet you're still having reactions to you know, lyft putting off until 2023 return to work ejeffreys, which had a great yer in the stock market and the company saying let's shut it down for a little bit because cases are riseing in london and new york so they're shutting it down for a week and a half >> put in plan b, which is london's in trouble again. >> right that story got a lot of focus yesterday. it's not that big. ejeffries mandated people comin back to the office in the first
place. but they have been pretty aggressive and having parties and doing events and things like that and the case numbers are rising. >> by the way, london, don't forget 4500 people at that firm, london has been bad, and so you say don't come to the office for a couple of weeks >> this new medicine was, i felt, very reassuring, if you've gotten three shots. now again, moderna and pfizer did not know that you needed three shots. they came up with this term booster. but it was a three-shot recomregimen and i hope that people don't say you know what? they told me it's okay at wone. now they say it's three. >> that's the trend's not going that way this week more shots a administered than we have since may. >> i think that we managed to make people more concerned >> i like that part of the memo from ejeffries when it came to comp, we're not
going to have any games or d drawn-out drama, like many of our ecompetitors seem to enjoy. you can have peace of mind at the end of the year comes and that's it. >> doesn't that come from the fact that they have a strong hand at the top and everybody respects and has built the company and that's authority we're talking about richard h hammer and i've known richard handler from when he was 7 he stayed in a cod there with his dad. his dad was a great guy. >> we're going to talk more about trading revenue guidance and what cpi may do to the financials as well the future for southwest airlines amid the pandemic we'll have the chairman and ceo joining us along with the carrier's incoming ceo robert jordan take a look at the pre-market here close to two-week hay highs and the s&p not far. don't go away. b
>> have a big ipo here we got about three minutes before we get started with trading. the original people. >> i like to use sometimes with you because yuyou're a lit erar person remember the play. you say the same thing about gamestop we're continuing to wait the quarter, nothing to write home about frankly it's just okay a whole thing is just okay
it's not a big-cap stock and maybe they have something. supply arrangements. and they broad en that. but david, the quizzical thing when you check the headlines is are you have a number five in the information, which was a subpoena they received after complying with the sec on may 26 of information concerning the sec investigation about the trading activity in the securities i i think that's most quizzical is even though it was the 25thing and they say they're cooperat cooperating, which is what people do, they mention that they're not finished yet >> right >> they're still in the process. and they also pointed out we don't expect to impact us. now maybe people think that they're just supplying data and it has nothing to do with them it's a leap forward to be able to say the sec does something you don't like when you tell them that your
inquiry doesn't impact us. >> well, oftentimes it doesn't financially impact a company >> i think this all was happening. this was the disclosure of it. i would have liked to know more. all that said, gamestop is we're trying to figure out what g gamestop's going to be >> waiting for gadeau and basically waiting for ryan c cohen. it's been a long time. it's still a $13 billion market value when any number of analysts would say it's worth a whole loss less. >> and they do mention a risk there could be insidereling and if you notice that's not new but you notice when amc peaked was when the adam family sold stock. gamestop's beloved so the question is can balls stay in the air until something happens. >> by the way, amazing tweet i don't know if you saw. he mentioned that this yaear am stock had the seventh highest number of google searches in the
united states. >> he said no to nfts. went from 80% institutional ownership of the stock and went to 20% embraced the shareholders at i level. this is not warren i've never confused berkshire hathaway with amc. >> speaking of berkshire here at the opening bell cnbc realtime exchange, new bank celebrating at the nasdaq and a developer o infrastructure information software we'll talk to the correctio ceo and everybody's waiting to see what c pi is going to bring us in the morning >> the estimates are going to be way off and a lot of the me
member -- oil and gas very important. natural gas come down a lot. so it may not be as horrible >> the consensus is too high >> consensus is too high >> what happens? >> the rally that seems to be termed i do want to report that those who are all screaming. interesting bank a digital bank in brazil there is some excitement involving this that's actually based on the history of could this be the next mckcarter >> that is not >> but a digital bank is ma something that maybe its time is coming i do think that warren buffet bought it and he would have v vetted it before he bought it presumably
>> yes that would have been the case >> did you see cvs today >> i got some new guidance predicts a 10-day 30 $10 billion buyback on the heels of $6 billion this week. >> i got to hand it to them. merck turned out that larry merleot was a wine before its time because a lot of things that he diput in did work sand thing that we wanted to see was a buyback. remember they bought all of that they bought the giant, the deal and people said they'll never come back. well, that turn out to be wrong. now it did take a bit of a pandemic to really get it rolling there, but lisa gill, who is the fabulous healthcare analyst at jp .p.morgan. at 56, i called her and i said talk me off a ledge cvs. she said no. >> i did think it was
interesting when we talked to adam parker, and he said based on since the financial crisis, the data shows no discernible impact on stock prices from b buybacks when you raisethe buyback is issue, something people should at least think about a bit more. does it really over time actually improve performance >> bought half their stocks. >> it's not immaterial to eps. >> but at the same time he said that their data shows that it's not been material to moving stock prices higher over a long period of time and we know that companies that have bought stock back >> and raised the p.e. of the stock market about how much when you buy back a lot of stock it's very positive. >> you mentioned cvs they are one of several re retailers asking congress to take action on anonymous online sellers, along with best buy, home depot, auto zone because of this organized theft operations
that go, steal a bunch of goods. easily sell them online >> it is very discouraging moment when it kcomes to just what we call slhrinkage but i think that that can't be used right now. >> well, it's always been stealing but yes, slhrinkage has been on of the strainnger ones to talk about theft. but now it's really gotten to a more difficult spot for some of these retailers. >> i know people have seen theft at ate store some of the very nice police and guards i speak to out here say that this -- there's a walgreens out here that is kind of -- they don't know what to do with t theft. no one knows what to do. in california, what do we do >> i told you i go to the cvs across the street to get an ice cream swiandwich and it's locke up >> good luck
>> i know. i mean, chewing gum. >> that's it it's good for me cause then i'm not eating ice cream sandwiches. >> you need someone who when you ring the buzzer, the person comes and that's no mean feat because people won't work. remember, starbucks find out whether they want the job and three of the buffalo stores >> guys, i want to talk about cable and telecom. we taulked about it yesterday. >> now you got to bring that up? >> your whole posture just went. it's a favorable report. >> are you doing >> morgan stanley downgrades some things and talks about new entrants but we also have had this week lower guidance from all tease and comcast in terms of br broadband and net additions and now seen as negative, in other words losing. comcast is still gaining, but
m not as many as has been a anticipated. they referenced sort of a change in moving patterns and then i recall that i actually sat down with the ceo of charter and he tried to explain what's going on despite the fact that charter has had a $added 3.5 million bradband subis >> people aren't moving. the pandemic effects and the economy are still real, and we're growing nicely, but it's a smaller activity marketplace at the moment so we're comfortable that our long-run trajectory will remain on track, but there are a anomalies in the way people are moving about and the way the marketplace is working right now, and our growth is good. it's just not as fast as it's been >> that explains a lot that was on november 18th. but take a look at morgan stanley because as well there is also this concern about
so-called overbuilders, if you recall those who come in to an existing market but because things are cheaper now, choose to provide broadband services and they a ins listen, small but incremental gains by new entrants in fixed wireless creating additional concern over competitive in intensity and the attractive returns available from broadband have likewise increased the attractiveness of investing in competitive fiber builds that's something that i asked john malone. a guy who knows a little bit about cable, about a couple of weeks ago as well when we did than interview take a listen. >> you woucould well be in a situation where the incumbent is forced to expend capital that it otherwise wouldn't or does it early in order to repel a competitive overbuild er the long experience of ove overbuilders in our cable ind industry was quite negative.
the ultimate returns were very poor >> okay. all good to know meanwhile, the stocks are all down comcast down 7.5% from the year year charter down and we move on to the big telecom names, which really verses and s&p up 25% this is very significant in terms of what's happened this year i would note a note from earlier in the week about pricing. in the wireless industry and by the way, pricing pressure is also coming from comcast and charter spectrum unit, as they move forward with their wireless offerings at very competitive prices here is the note wireless industry has always been ruthlessly competitive. expiring capacity is the perfect recipe for price wars but they go on to say at the moment differentiation is at a trough that makes price competition significantly worse. everyone has the same handsets 4g networks are largely viewed
as interchange able and 5g is still too new and applications still too distant. what's left? price, price, and price. jim, i mean, these charts. you just see it right there. it's been a disaster this yaear. buters verizon at&t, t-mobile, charter, co comcast, not places to be and we've outlined why >> we've always believed that profitable cash flow would be enough turned out to be not enough. we said thaters verizon and at& would gsave you with dividend and t-mobile has >> pricing power in terms of their network, but they're in there right now in the mix, and nobody is benefiting at this moment will be interesting to see in 2022 whether the narrative around these stocks changes.
>> back to the 200 revenue ahead and raised some guidance >> love the quarter. just to quote gary, the fantastic ceo this is a time defined by our vision, not by a virus wes move forward past the dark days of the pandemic, let this be a time where we rise up sand shine, a time where reimagine and reinvent ourselves once again. >> wow and everything he said in this is true. they don't use any social immemedia but because people like their places so much, they're a leader in instagram everything he says about the excitement and of course, the british state architect sommas is coming. it's going to be amazing it has to be delayed because of the rainy season in the uk but i love it. >> what are you caltalking abou? >> they're building galleries, including one in a the uk.
there's going to be buckingham palace and rh and i'm going to the latter i saw the first one. done >> like it or not. >> speaking of social mimmmedia, twitter is leading the s&p this morning. maybe we can get to that still to come, though, southwest outlining its game plan for growth amid the pandemic gary kelly and robert jordan ing are are going to join us on the other side of this break first, though, a look at the bond report as we await c ppi tomorrow jobless claims 184,000 is the lowest since september 6, 1969 b
reducing our carbon emissions to net zero may be our biggest challenge yet. there's no single action that will lead us to carbon neutrality. but there is a single source of essential sustainability intelligence. s&p global sustainable1. uncover risk scenarios, reveal transition pathways, and optimize your net zero opportunities with our unparalleled data and insight. accelerate to zero with us. ♪ i see trees of green ♪ ♪ red roses too ♪ ♪ i see them bloom ♪ ♪ for me and you ♪ ♪ and i think to myself ♪ ♪ what a wonderful world ♪ a rich life is about more than just money. that's why at vanguard, you're more than just an investor, you're an owner so you can build a future for those you love. vanguard. become an owner.
jeffries on southwest down a hold we're going to talk about the business obviously with gary kelly and robert jordan of southwest in just a moment so don't go anywhere. a the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential. i promise - as an independent advisor - to put the financial well-being of you and your family first. i promise to serve, not sell. i promise our relationship will be one of partnership and trust. i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people
achieve their financial goals. visit findyourindependentadvisor.com (tennis grunts) pnc bank believes that if a pair of goggles can help your backhand get better yeah! then your bank should help you budget even better. virtual wallet® is so much more than a checking account. its low cash mode℠ feature gives you at least 24 hours of extra time to help you avoid an overdraft fee. you see that? virtual wallet® with low cash mode℠ from pnc bank. one way we're making a difference. want to save on your home internet? xfinity is proud to supportk. the emergency broadband benefit program.
for a limited time, you may be eligible to qualify for a credit of up to $50 a month toward your internet service through this program. that's right! you could qualify for a credit of up to $50 a month toward your internet service and equipment. for even more value, switch to xfinity mobile, and you could pay as little as $15 a month for wireless. click, call, or visit a store to learn more.
dow is down 115 here obviously taking a breather from the past three days of gains stocks near two-week highs and the s&p awfully close to the november 18th record david, you know, it was 4701 when we first heard the word "omicron" and we just got back to it yesterday can. >> and what's notable has been apple, which i continue to watch
and we continue to watch as it gets closer and closer to 2.9 trillion dollars in market value at this point. up yet again i thought that outperformance versus the s&p over the last month is really amazing. 15% gain on the s&p as it sort of far surpasses the perform of the broader market over this last month >> yeah. and morgan stanley commenting not just on the surprise app store. but names it a top pick for 2022 by the way, the magic number in terms of price, if you're watching, know this, dave, 1826 would give you to $3 trillion. some of these numbers are difficult to get your head around >> the scale of these bus businesses, and obviously, if you when you talk about an apple and an alphabet and a facebook
slash meta, youand amazon, you'e talking about a global scale, the likes of which we've never seen and it's reflected in those numbers and the underlying m metrics that bring that market cap to bear. >> let's get to jim outside.out. >> thank you so much, carl this is a pure joy to have both of you gentleman here. gary kelly who is the chairman and ceo of southwest air and then incoming ceo and this is very important because you're not going anywhere, robert jordan bob, great to have you, gary, terrific gary, i've been researching about your legacy and we have to start with the fact that there was a time when almost every airline looked like it was going to go under. a lot asked for a bailout. what did you do? >> we were as prepared as we could be coming into 2020 and, you know, we could have fought our way through it, but it would have been really difficult all you have to do is look north to canada and see the struggles
the airlines are having there. we were able to preserve jobs, no layoffs, no furloughs it was a scary time, but you just got to believe. we talk about that before. we've got a 50-year legacy and foundation we're built on. our people found a way in the end i'm very grateful for the federal government payroll support and, you know, we're in very strong position now and looking ahead. >> yeah. >> i think our last losing quarter is behind us. >> you did not -- your cash position is extraordinarily strong and you traced out yesterday, bob, a plan of expansion that i think is not being recognized enough on wall street because you're talking about pure growth. >> we've got multiple things we've got the network itself to restore. we'll add frequency and depth to the current network we had to trim during covid and yesterday, we laid out a tremendous list of new revenue initiatives. we've got this great new agreement with chase
we've got a new fair product that we're launching there's a lot of opportunity on the revenue side we've got costs that we're going to ring out as we continue to grow the main thing is to restore the network. we need to get frequency and depth back into the network. >> you mentioned something in your preamble, which i got to focus on, it was disturbing, you talked about the need, number one, to reinvigorate your winning culture. that would imply you don't feel you had as much winning culture in the last few years. >> oh, no. to me the foundation of southwest airlines is our people we hire people that are humble, they love to have fun, but they love to serve each other and our customers. it's been a tough 19 months. >> there's been some issues. not everybody is as happy as i'm used to at southwest when it comes to the employees. >> i travel a lot and we have terrific employees the 19 or 20 months have been hard covid has. tough. the operation has been tough on occasion we just want to love on them and
invest in them they're terrific we have the best people in the industry, bar none. >> gary, how is business we know that corporate business has always been a big part of southwest. that's not coming back as of yet. looks like people are traveling. you said on our show that they didn't have anywhere to go so they're not traveling. things are open. is it getting better >> i witnessed new york city, it's such a pleasure to be here and so exciting to see, you know, how vibrant it is once again. yeah, people are traveling and i would say right now, that the demand is much stronger than the supply of seats that we can offer as an industry that's even without business travel having recovered. we're still down 50%. >> about 50. >> and you know, we might be pretty well recovered by the end of next year or the following year at southwest because we have some unique, you know, company-specific business initiatives, but our -- we're going to plan, assuming a very modest recovery there, and right
now we're well positioned to serve consumers and they're filling our airplanes up we're very excited about that. >> bob, i have fighting words for you. jeffrey downgrades your stock, no longer the low-cost carrier, come on. that's one of the reasons i felt that luv is worth buying. >> luv is worth buying we have, like everybody, we've got costs that have come into the system through covid you're just not as efficient as you've been historically, anybody. we're flying -- we're under flying our aircraft as an example, working on staffing, and so we've got costs, as you compare to 2019, you've got general inflation that is in the system but we've got costs we're going to wring out as we grow. it's almost in totality a product of the fact that we're under flying our aircraft. as we add back flying to the network, we'll grow back into our -- into the size of the company. i have no doubt that we'll get
our costs back to our 2019 levels of efficiency, no doubt. >> i think the beat we're missing is the fact that the whole world is struggling to hire, so we are competing for talent and there's a cost associated with that like bob said, we will get back to our historic efficiency and then some. we have a number of initiatives planned that will improve our productivity going forward i'm bullish about our ability to maintain our low-cost position. >> want to talk about bogey but military, aircraft personnel, are you able to bring in people you wouldn't otherwise who served in the air force and would be terrific as pilots? >> we have plenty of access to new pilots and i think -- southwest is a great career, great company, and a great opportunity to look forward to we're a pilot's airline. i'm not concerned about hiring
in that space. i think it's been a lot of the frontline positions we're competing with other sectors is where we're seeing the most struggle that will smooth out over time, but in the meantime it's definitely a struggle for us as well. >> i do want to go back to boeing we had some disturbing news. dreamliner, causing american some problems, they will have to cut back routes in the summer. you go over the boeing order book and after a period where i felt it was a little tense, you seem to be banking on boeing how can you do that given some of the missteps of boeing? >> boeing is a terrific partner and the boeing product is terrific the 737 max, the max 8, max 7 are just terrific aircraft for us they're very fuel efficient, terrific cost profile and our deal with boeing is terrific as well we're going to take 114 aircraft next year in all likelihood from boeing may retire 28 or so, but
our future counts on boeing delivering aircraft, and i am comfortable with that. >> there is a great focus on esg these days i think we would agree, i know your culture, very close to chevron. chevron is talking about this renewable fuel pie in the sky something we can hope for? >> well, i mean there's an array of things we're going to need to have happen to be carbon neutral by 2050, so sustainable aviation fuels is an obvious one and that exists today the engines can do the 50% jet fuel, 50% sustainable aviation fuel no, it's not pie in the sky. i think it's very important. one of the things that southwest has done, specifically, is we've made a grant to yale university to invest in natural carbon capturing sequestration which would be a low-cost way of
offsetting emissions that we have there's two examples plus you were talking about boeing boeing is doing a great job for us max is a great airplane, 15% more fuel efficient. 40% quieter. it's a major component of our strategy going forward as well it's important and it's something that we're very, very committed to >> the other thing i love too, where you have folks out there committing to carbon neutral by 2050, a long ways away, we have a very tangible plan between now and 2030 -- >> more than delta which tells me they're far ahead. >> it's a long way's away but a tangible specific plan through 2030 to grow the airline, completely carbon neutral to 2019 wishes i love, it's a specific commitment and we're going to do it >> now we have to talk covid, omicron. when you hear something, it's thanksgiving go back, it's thanksgiving you suddenly hear on the news there's a new strain do you start thinking more masks
longer, people aren't going to travel as much what does an airline, which is so impacted because your stock is going to be down that friday, what do you do >> we're all planning and we've been through a number of waves now and every successive way while intense has been less than the wave prior in terms of impact in business it's early on omicron but we've seen no impact on our book, on our revenues, nothing yet. doesn't mean there won't be an impact, but we always plan and react. you've seen us modify the schedules and trim, but there's no impact on the business. >> that's important. >> our outlook for next year we're going to have to be cautious and we have to assume there will somebody penalty from continuing waves, and even with that, our plan calls for profits every quarter of next year. >> you're going back to routes that i didn't know, going back to havana. >> yeah. >> why >> because it's a great market >> there's traffic. >> yeah. >> tell me about it. that's a true -- >> we've been flying tampa to
havana, we're adding back fort lauderdale to havana very strong demand in those markets. we have a large cuban american population in florida that enjoys that service, so it's a great market and we're glad to be serving it. >> bob, you have big shoes to fill what are -- >> i've heard that many times by the way. >> all right cliche we'll go into something else there's a legacy here. >> there is. >> half a dozen ceos over a period of ten years. it's a big mantle. i know that the company has to grow and continue. we know you as profitable growth and low cost but we're in an era where that seems like it can't happen, but you keep assuring is it can. >> it's a -- we're just in this period especially in the '22 where it's choppy and going to be a transition year and rebuilding year. again, back to our investor day
yesterday, we laid out a tremendous list of revenue initiatives that are going to provide a ton of value up to $1.5 billion in ebitda in 2023 the cost issues, it's back to we're just not as efficient in terms of how we're running the airlines and we'll ring those costs out, i'm convinced. >> i'm counting on you. >> a lot of people are counting on us. >> we should it's southwest air not just any airline thank bob jordan, incoming ceo, gary kelly who will be on the call but your last but you're not going anywhere thank you for coming down to the new york stock exchange and seeing us on "squawk on the street." carl, back to you. >> okay. jim, we'll see you at 12:30 eastern for your special investing club event join jim for that. in the meantime good thursday morning welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber live at post nine of the new york stock exchange stocks giving back some of the three-day rally of the past few days all sectors red except for health care, claims good and
waiting for cpi tomorrow wholesale trade out a few moments ago. rick santelli has got it >> yes post sale inventory, october final up 2.3%. replacing the mid month read at 2.2. this is notable because in the entire 29 years since the inception of this number series it's never had a larger month over month change than up 2.2, stands at up 2.3%p we know about supply chain worries but if you don't have anything to sell, sales don't go up. double plus the expectations up 2.2%. that's over double the 1% we were expecting and a large revision to september from 1.1 to 1.7 this, indeed, is very good news to see those numbers kick in and, by the way, if you were paying attention earlier, initial jobless claims, 184,000, was a 52-year low, yes, 52
years, back to 1969 and the beatles. morgan, back to you. >> between the reference and the fact that we're getting good news i'll take it, rick santelli we're 30 minutes into the trading session. here are three big movers that we're watching this morning. we're going to start with rh, after topping q3 earnings and revenue system, people keep buying furniture stock up more than 11.5% right now. it is up about 43% year to date. on the flip side, though, rent the runway shares running lower after releasing its first quarterly results as a public company, widening third quarter losses the company has yet to turn a profit shares down 10%. we will end with cvs issuing new guidance ahead of its investor day raising the 2021 outlook do not miss karen lynch on power lunch at 2:15 p.m. eastern. cnbc is out with its all america economic survey revealing many americans remain downbeat on the economy for the
holiday season steve liesman has that for us. >> yeah, david, downbeat on the economy but upbeat on the spending the economic survey finds christmas cheer not making its way into americans' views on the economy. americans planning to hit the malls and do clicking and spending online just the same. 41% of americans believe the economy will get worse in the next year. a modest improvement from last quarter but still far from normal levels of around 30%. the number driven by a highly partisan split with 67% of republicans pessimistic compared to just 16% of democrats these negative views comes as inflation has rocketed to the top of the list of concerns among the public the survey of 800 americans, saying higher prices is one of their biggest concerns that compares to 38% who pick the coronavirus, immigration, crime and climate change you can see there, they all follow next.
big worries. despite the negative economic news americans plan to spend 13% more this holiday season on gifts or the most in three years, topping $1,000 with some saying, they're going to spend more because they have higher earnings, others because prices are higher. one positive here, 37% expect their wages to rise and by a strong average of 5%, it's the highest wage expectation since the pandemic began but those expectations are muted for equities just 40% of those with $50,000 or more in the market. those are the big portfolios say now is a good time to invest in stocks well off their long run average. you can see for the usually optimistic group, 55%, 36% saying it's a bad time, considerably more pessimistic than usual with growth in the job market strong you can see inflation and the virus, they're the big fac
factors that influence the public's mood. for the holiday season, these numbers views might affect spending in the months ahead carl >> it's a go ahead setup steve, thank you here to talk about the things steve was mentioning along with recent volatility, covid challenges, inflation risks, goldman sachs chief u.s. equity strategist david kostin good to see you. >> good morning, carl. nice to see you. >> you've been writing a lot about hedge fund de-leveraging latery and index rebalancing, but i wonder how you're thinking of inflation given the print we have coming up tomorrow? >> well, if you're looking for a good hedge on inflation the equity market is certainly one area to focus on carl, if you think about the biggest surprise of 2021, it's been the fact that management have been confronted with four headwinds -- you had supply chain disruption, big jump in
commodity prices, you had a difficulty in acquiring and finding talented labor and the delta variant and now the omicron variant. despite all those things, carl, you had profit margins rise in the first quarter, second quarter, and third quarter coming back to your question about inflation, the idea of pricing power is something that has been a discussion of every company, all different industries they've been able to maintain margins and improve margins to all-time highs pushing through the cost increases as well as using automation and technology. so as a way of hedging against inflation equities is providing that as an opportunity that's how i think about the inflation in the equity market right now. >> and given the fact that your colleague does see inflation moderating or peaking in the next quarter or two, what will the margin story be for 2022 hence, the earnings story? >> our forecast would be that
margins will increase by around 40 basis points, so carl, we're at record high level of margin right now a little over 12%, about half a percent off in the next year in our forecast. however, by 2023, coming down and one of the other surprises this year, in addition to margins, all year long, i've talked to you on a number of occasions and your colleagues, morgan and david, the idea of tax increases, all year long we're discussing the risk and the potential headwinds for corporate profits for next year and now it turns out that whatever legislation may or may not be passed, we are expect something legislation to pass, but the point is, the tax reform is likely to increase in 2023, not next year. so that headwind has sort of been removed from what people are looking at, what western looking at we have that clarification in the legislation that the house
passed obviously it's gone to the senate now for some reviseions market looking to rise a little bit in 2022 but have a headwind in the next year keep this in context, in the subject of technology, the sector has margins of 25%, twice as high as everywhere else lotz more flexibility on the margin front coming back to your point about inflation, where do you have companies with flexibility to pass that through or deal with their own situation with very high margins to start with that's a good set of cards to start in and be dealt a hand with that. >> key insights there. not to mention the fact that we got a midterm election and congress could derisk some of the policies you're talking about right there. given this conversation and also given the fact that wall street forecasts for 2022 for the s&p just all over the map right now, is that how you get to 5100 on
the s&p for 2022 >> it's 5,100 as a target for the end of the year. report card last year at this time, our forecast was 4,300 and we lifted that in august to around 4 th,700 for the end of s year, where we are today looking ahead 12 months, around 5,100 would represent, morgan, around an 8.5% gain in price around 1.5% or so for dividends. it would be about a 10% return it is all likely to come in the form of earnings growth. earnings increases about 8% or so profit growth is our forecast one of the issues here is valuation is extremely high relative to history but the interest rate environment is low and that's really the tradeoff between the earnings growth, stable valuation, and, in fact, morgan, that is the history of
equity valuations around fed hikes. the initial tightening that takes place if you look at the p/e multiple six months before and six months after valuations are basically flat and that is essentially our forecast that's not the source of the forecast, but as a result of it, that's pretty consistent with what happens in history. i think you're likely to get a better and stronger market at the beginning of the year in the first half because as you raise the question, political election next year and then the concern that would be about what the growth is going to be in earnings in 2023 right now, we've got basically a lot of pricing power, companies are pushing through. we have the idea of valuations pretty high, look, goldman we had our financial services conference, my colleague just hosted like 100 companies to present and generally speaking, credit quality was good, loan growth was there and pretty
optimistic financial executives in different areas of the ecosystems the financials that's a good place to focus on where interest rates are likely to rise around 2% 10-year treasury yields next year. >> i do wonder, david, there's more and more discussion of the so-called fiscal cliff at the household level. whether it's about rising credit card balances or all that excess cash beginning to burn off as a result of inflation in part, holiday retail sales were good, but, you know, not a barnburner compared to a two-year stack do you worry about household right now? >> well, as the former fed governor stanley fischer used to say, there are always risks. they're just different riskses so there was a risk about the omicron and there was a delta variant, questions about job creation, questions about the fed policy, inflation, sort of householded fiscal cliff as you reference it there are always these issues
but fundamentally business is strong and on the idea of job gains, there's plenty of -- the unemployment rate super low, wage inflation has been an issue that i would focus on more than, quote, unquote, household fiscal cliff. wage inflation creates pressure for some companies in the margin front, certainly some more than others, so we're leery of companies with a high percentage of their operating costs coming from labor that's going to be a headwind that probably persists than some other areas. i think focusing on financials, technology, where there's an ability to push through those prices that's an area to focus on. >> yep jobless claims points to your thesis, david, this morning. i see jan said there were seasonal factor in the numbers as well. good to get your take. thank you very much.
>> thank you. as we go to break a look at the road map for the hour starting with apple, inching closer to the $3 trillion market cap. nasdaq on pace for the best week since february we'll talk about it with investor roger mcnamee >> the new president of the new york stock exchange lynn martin will join us live for her first tv interview since accepting the role. another ev battery maker hitting the public markets making its debut on the nasdaq the ceo will join us exclusively later this hour. we have a big show don't go anywhe.er you're a one-man stitchwork master. but your staffing plan needs to go up a size. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description.
want to save on your home internet? xfinity is proud to support matching your job description. the emergency broadband benefit program. for a limited time, you may be eligible to qualify for a credit of up to $50 a month toward your internet service through this program. that's right! you could qualify for a credit of up to $50 a month toward your internet service and equipment. for even more value, switch to xfinity mobile, and you could pay as little as $15 a month for wireless. click, call, or visit a store to learn more.
welcome back to "squawk on the street." let's get over to bob pisani. >> new boss on the floor of the new york stock exchange. lynn martin is taking over to from stacey cunningham as president of the new york stock exchange, beginning january 3rd. i have known you for a while now. head of fixed income and data services, one of the three divisions for intercontinental exchange that owns the nyse. this is a different job. nyse is a small part, but a huge part of the investors' consciousness. what are your thoughts of taking over one of the great brand names of the world. >> thanks so much for having me. i'm so excited i don't know if there's a better word to describe the way i'm feeling now and this week other
than immense pride i don't know that you can take over such an iconic institution like the new york stock exchange and not feel a tremendous sense of pride and excitement about what we're going to be doing in the future i mean just look at today, three different transactions happening right behind us while you and i are talking. spacs listing on us, business combination, and we have the news of the day, the new bank ipo which is going to join our community of innovators, community of entrepreneurs, that really make us such a special place to be and the leader of capital markets. importantly, the nyse i'm inheriting today, is a completely transformed business and that is 100% due to my friend stacey cunningham who i am so happy that she's going to be staying on the board, joining the nyse board, and enable me to ask for strategic items as i
assume this new role. >> the listings bring in revenues, creating revenues, but listing fees and ipos. now you're still in a battle for nasdaq with ipos, nasdaq has won this year, listings very important for the revenues down here what are you going to do to compete with nasdaq? how do you differentiate the nyse >> yeah. so i think it comes down to the way i'm thinking about my priorities for this business going into 2022 and i really classify that into three buckets. first bucket, unsurprising given the fact that i'm a programmer by trade and data scientist is focusing on technology and enabling our unique community of listed market participants to tell their own technology stories. in today's market and today's age there's no company that is not a technology company and a data company at heart and having the opportunity to tell their
stories at the new york stock exchange and to work with them on their future path is something that i'm incredibly excited about. the second area, unsurprisingly again, given the business i lead, is esg and continuing to add transparency around environmental social and governance, both for investors but issuers as they start to think about challenges and environmental and social governance our parent company announced we're acquiring a fin tech firm focused on climate change and making that service available to data clients as well as our issuer community last but certainly not least, i am incrededbly focussed on working with egulators, lawmakers, market participants, to ensure that this remains the envy of the world. the hallmark capital of the world. >> i want to ask about another source of revenues and that's rebates from trading there's a new sheriff in
washington, gary begins her, made a bit of a crusade, not just payment from the brokerage or wholesalers, but even the payments that the nyse and nasdaq make for payment for order flow here. got a new sheriff there. you're a new president what are you going to tell gary about this he seems concerned about it. it's an important part of nyse's revenue. how will you come to agreement about what, if anything, needs to be done >> first, i'm looking quite forward to sitting down with chair gensler and talk about a variety of issues. it comes back to transparency in my mind and liquidity and fostering good markets, transparent markets that provide good liquidity, good access to capital, and good public access for investors. >> is the average investor getting ripped off mr. gensler seems to imply that there's a problem here the data doesn't seem to support that, but what's your thoughts q.
>> the cost of retail trading has never been lower and you've seen that continuing you've seen that actually as a result of this new emerging group of retail traders that has joined our public markets through the pandemic >> the floor of the new york stock exchange, i know it's an old question, is the floor going down or going away for 20 years now, what's your plans for the floor? >> that's a question i love and it's a question that i think is a tremendous amount parallel to the business i run and the businesses we run at ice the most important thing is to take the best technology and people and marry those together. that's the way any tech-forward company thinks, any tech-forward company operates and that's what we are in my current business i employ 150 people around the globe that take models that provide real-time valuations for 2.8 million securities around the globe, and they provide the human intelligence to know what's garbage in and what's garbage out.
during volatile periods you see us providing the market leading fixed income valuation in the market and the floor brokers are the same model during volatile periods there is no better place to trade than on the nyse. >> the floor is going nowhere? >> absolutely. i'm committed to its continued success. >> technology focus from a technology person. congratulations. welcome as president of the new york stock exchange. tell your boss to come by and talk to us >> absolutely. i will pass the message on one of the great tech innovators we're going to get him here to talk about his plans for trading and other categories lynn martin, the new president of the new york stock exchange david, back to you. >> thank you bob pisani take a look at shares of lucid, the ev maker they've been down over the last you can see couple let's call them the last week or so, but down a lot todayed. >> late yesterday the company did announce its geintent to isu
convertible senior notes due in 2026 that might have been unexpected. those thought that perhaps they were in position given the spac that closed an all the cash that came in to fund their business, but they're going to the markets as well to raise more. they say the proceeds will help for business expansion and general corporate purposes we'll be right back. if you wake up thinking about the market and want to make the right moves fast... get decision tech. for insights on when to buy and sell. and proactive alerts on market events. that's decision tech. only from fidelity.
time for our etf spotlight, looking at the u.s. global jets etf, jets, down double digits for the month but seeing strength this week amid positive news around booster shots and the omicron variant. southwest the biggest holding and lower as jefferies goes to hold this morning. robert jordan getting ready to take the reigns. they joined us this morning to talk about the transition and outlook for the company. take a listen. >> we are able to preserve jobs no layoffs or furloughs. it was a scary time but you have to believe we talked about that before and we've got a 50-year legacy and a
very strong foundation that we're built on and our people found a way. in the end i'm grateful for the support and we're in very strong position and looking ahead >> overall, the general line to jim, was they need to be conservative with assumptions for '22 given the curveballs this year. >> yeah. which i think is a fair thing to think and say. we will check in with roger mcnamee, talking everything from the tech rally to yesterday's instagram hearing. we are back in two with major averages taking a breather this morning. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq,
this hour. on capitol hill a ceremony to honor bob dole president biden, members of congress and others paying a tribute to the war veteran he was the republican presidential nominee in 1996. and earlier this morning biden opened what the white house is calling a summit for democracy and warned there's a backwards slide in democracy around the world and called on the world leaders attending the virtual gathering to lock arms and show democracy cans work. new york's attorney general wants a deposition from donald trump. "the washington post" says letitia james is asking trump to testify early next year,quotes a source saying her civil investigation is looking into whether widespread fraud permeated trump's company. trump has accused james of conducting a witch hunt and james announced she is running in next year's new york state governor's election.
you're up to date. morgan, back to you. >> rahel solomon, thank you. apple notching a new record high this morning inching closer to a $3 trillion market cap turning slightly lower down half a percent. joining us co-founder and early facebook and google investor plus author of the book "zucked" great to have you back on the show and good to see you. >> outstanding >> let's start with apple and the fact that we are closing in on a $3 trillion market cap. does this run continue here? >> i think apple is as well positioned as any tech company in america the thing that they havedone better than anyone else is control their supply chain and hardware and, you know, the new chips, the ones that they designed, are groundbreaking from apple's perspective the challenges they face are the same that the other big tech companies face, which is to say regulation, potential antitrust action but in apple's case, th potential impact of those things is much smaller so i think
apple's situation is really terrific right now as long as you like the market. >> how do you balance that i ask that because apple did win the monopoly case where the app store is concerned, but getting scrutiny not just in the u.s. but abroad, but it does focus heavily on privacy and we've seen the impact of that on other companies. for example, meta and advertising companies and the like as well how do you balance those two with each other? >> apple has been put in this awkward situation where it is the privacy regulator in the united states. they don't like being in that position yet, for their business, they have to be there because privacy is their brand the big challenge they face in the short run is that the way they structured the new privacy tools that are in ios, they have essentially a way to tell people, don't track me, but it doesn't actually prevent vendors from circumventing apple's
rules. apple's next challenge, what does do it about that? i think consumers rightly expect apple to take care of them on privacy and apple has a big challenge there from a pr point of view. i don't think that's going to get in the way of the business in the near term, because the alternative is android and android has no protection at all. >> i mentioned meta, company formerly known as facebook which owns instagram, we saw adam mosseri testify on the hill yesterday. privacy, a huge focus there and certainly seems to be a bipartisan push against this company, although we haven't necessarily seen anything meaningful in terms of policies or regulations if you had to give him a grade for that testimony what would it be >> f >> really? >> yeah. here's the reason why. okay so mosseri is out there saying yesterday, please regulate us. simultaneously, in europe, where the general data protection
regulation is supposed to provide a relatively low standard of privacy, and in california where the california computer privacy act does something similar, facebook is contending that those laws do not apply to it. so on the one hand mosseri is saying regulate us, but on the other hand regulations exist but pretend like they don't apply to us that is just facebook being facebook again, from an investor point of view, the regulators are doing a terrible job right. the enforcement isn't good in the united states we're not moving forward quickly enough. so from an investor point of view facebook at the moment is in the clear it can say what it wants because no one punishes them for saying one thing in one context and a different thing in another no one punishes them for undermining our response to covid no one punishes them for being involved in the insurrection from their point of view this is working out great. >> roger, from the world of keen
sense for the obvious, i spent a lot of time talking about the simple size and scale of these companies. frankly, given how long i've been doing this, and i assume you share this, the numbers themselves are staggering, whether 3 trillion for apple's market cap or $2.5 trillion for microsoft or $2 trillion for alphabet and amazon, the actual financial performance is staggering as those numbers are. is there anything you can point to in the history of sort of capitalism in the united states that is a similar time where we've had just the scale and power of these kinds of platforms and companies? >> i mean, david, obviously not in our lifetime. the standard oil trust and the other trusts in the beginning of the 20th century had roughly an analogous impact on the economy and similar levels of control of the economy, but what's going on now is different because these
companies are also influencing our politics, and they're doing so on a goblobal basis. as we look at it today, the world has a choice to make right now because these companies are doing something very powerful, but it's really driven bay focus on efficiency. countries like the united states were founded on democracy and on the right of self-testimony nation those two things are inefficient by design. when companies like google and facebook and amazon get to nation scale, their value system conflicts with the value system of the countries they're operating in and that creates a political crisis which is what we have going on in this country. from an investor point of view the stocks are so well positioned because the country's response to their success has been to just sit back and watch it >> finally, roger, slightly off topic but there is a story on
the tape about the sec and gensler exploring some regulations for heightened disclosures, rules around marketing, liability obligations for sponsors and advisors and accountants. i wonder how material you think this might be over time? >> it's too early to tell. the big challenge with the sec is that for 40 years we've been defanging it, and so that it really has not had a successful enforcement in many years. it is my great hope that the sec will go back to doing its job. for example, there's a case in the state of delaware, consolidated case, from pension plans against facebook for insider trading and improper disclosure around cambridge analytica, and that is clearly an sec case and sec should be taking that on and investigating it and when they start doing things like that, enforcing the existing laws, then i will start
to be more -- have a more positive outlook on what they're likely to do >> roger mcnamee, great to see you. thanks for joining us. >> my pleasure. getting some breaking news out of this new american airlines phil lebeau has a look. >> take a look at shares of american airlines, announcing what was reported earlier this morning by "the wall street journal" that the company plans to reduce its initial plan for the summer schedule of next year because they have fewer wide bodies that will be in the fleet than originally planned, so as a result, they're going to be stopping, suspending, reduced flights or delaying launches they're stopping service to edinburgh, scotland, shannon, ireland, suspending service into prague they're going to be reducing the frequency of flights due to a lack of the number of wide bodies compared to originally planned with fewer flights into shanghai, beijing, sydney, and they're going to be delaying the launch of service into banga
lor, india, all has to do with the 787 dreamliner they have only received one of the dreamliners they were expecting to receive originally planned to receive 14 that's not happening look at shares of boeing boeing continues to have problems getting the faa to sign off on the inspection regime that they have put in place or the regiment that they've put in place for inspecting these dreamliners before they are delivered to customers because they have not been able to get this officially signed off by the faa, they are not delivering these dreamliners and as a result, american is going to be reducing its schedule next summer substantially they were expecting to be down just 11% on their international routes next year they're going to be down 20% now they still have full service to certain markets like london, madrid, but they are definitely not going to be expanding as much as originally planned this all has to do with the
dreel dreamliner they're not expecting them to be delivered until at least april. >> covid restrictions, labor supply and now the actual equipment supply phil, thank you. note as we go to break, came her will host a special event 12:30 eastern time for the cnbc investing club and share his outlook for '22, answer members' questions. go to cnbc.com/investing club/live to sign up i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it.
is tesla in trouble for 2022 after its recent reversal? we asked the pros on tradingnation.cnbc.com much more "squawk on the street" straight ahead. that's great, carl. but we need something better. that's easily adjustable has no penalties or advisory fee. and we can monitor to see that we're on track.
busy day for crypto as washington wrestles with thou regulate the $2 trillion market. ceos from half a dozen crypto firms testifying before congress yesterday. here to talk about the space, steven pier, big pay co-founder and ceo whose company rolled out new coin payments for merchants like amc among others. good to have you. >> good morning. thanks for having me. >> what do you think about the message those executives delivered yesterday? >> you know, i think they're focused on stable coins and how they will be regulated in the future going forward on bitpay's platform we support five stable points for payments and those are u.s. dollar denominated tokens >> how do you think right now, how are you thinking about the currency's use as a payment mechanism? are we making headway snooinl.
>> finally >> we support 14 different currencies we see an increase in payments so that's huge for us over the last year. recently we've seen a huge uptick in the use of stable coins. probably our fastest growing payment method on the platform people are buying luxury goods to electronics and boats and cars and real estate and everything you can think of. >> steven, it's morgan who are you partnered with where are these transactions happening in terms of businesses an partners? how does it work where exchange rates are concerned? >> that's where our platform really shines. we figure out, we pull all the major exchanges and the exchange rate, whatever currency the merchant wants to accept companies like new egg, a launch partner with sheba we've announced today, but companies
like pac sun, more recently pick casa if you want to buy ownership in a vacation home we've partnered with those merchants and get the word out about their products and services to people that have crypto currency. >> you have amc helping with the payment option i mean that's a name you would expect i guess i'm wondering, at what point do we get partners that maybe would take some people by surprise or industry verticals that would take people by surprise >> you know, i think all these companies are, you know, exciting to us, and they surprise me, so i don't know -- i mean, i think you're going to see pretty much most companies in both e-commerce and point of sale, in person payments, start to adopt crypto currency payments there will come a day when you walk into a restaurant and you expect that to be a payment
option alongside mastercard and visa. >> there's so many coins out there. you mentioned you have five that are actively being transacted with on your platform as well. stable coin is getting a lot of focus right now. both in terms of a potential future use case on a more widespread basis where transactions are concerned and now from regulators. what does that look like what is your outlook around what becomes most massively adopted in the future? >> well, i think all of the top crypto currencies will be used for payments we've seen our biggest growth with the stable coin and there are a lot of benefits to transacting in dollar terms. you don't have the capital gains and losses you have to track on every transaction, for example, and they're leveraging this new payment rail called a blockchain to make a transaction faster, cheaper and to eliminate a lot of fraud issues. >> yeah. headlines out of florida looking
after this break, listing day for battery makers stocks up 7% for solid power the ceo joins us exclusively on the other side of this break ♪ music ♪ ♪ dream, dream when you're feeling blue ♪ ♪ dream, dream that's the thing to do ♪ ♪ music ♪ when you see value in all directions, you add value in all directions. accenture. let there be change.
esg is responsible investing. who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes. join the pursuit of outperformance at pgim. the investment management business of prudential. what's strong with me? i'm ready for anything. find out what's strong with you with fitbit charge 5 and daily readiness.
welcome back to "squawk on the street." solid power making ilts market debut this morning, listing under sldp shares up 10.5% right now. joining us, ceo doug campbell. congrats on closing of the deal this morning, thanks for joining us. >> thank you so much, thanks for having me. >> so you're bringing in roughly $543 million into cash through this deal onto solid power's books. how will that enable you to carry out this ambitious strategy over the coming years >> yeah. that's what's so exciting about today, that capital that comes
onto our balance sheet fully funds our business model, meaning gets us to revenue sustaining future. we are incredibly excited about what's occurring today >> let's talk a little about the technology itself. we're talking solid state batteries, disruptive charging capability what is that capability and how are you able to produce it at scale? >> great question. in a nutshell, the value proposition for what we're doing 100% solid state batteries is addressing what we believe to be the primary points with electric vehicles, range and cost in effect the way solid state batteries address that is by dramatically increasing the energy over today's lithium ion batteries and dramatically increasing the safety. >> you're partnering with swk for that manufacturing capability, projecting $1 billion in sales by 2027 it is a long runway to get
there. what are the milestones or phases that investors need to be paying attention to for this to actually be pulled off in that time frame >> absolutely. yeah, the lengthy process is really related to the extensive vehicle integration efforts that need to occur over the next several years. really the big milestones is tracking us as we go through that apologies for using industry jargon, but for us, it is about kicking off a sample validation phase early next year and successfully concluding a b sample validation by 2024. for us it is going through the industry standard vehicle qualification process. >> doug, what happens between 2026 and 2027. i mention that because projections have you at 132 million in revenue in '26, almost ten times that in '27, going from negative free cash flow to quite positive what occurs in that year
>> that's mass production. it is getting the batteries into vehicles as you might expect, that's when the revenues begin to grow rather dramatically. >> again, back to morgan's question, how are we going to be able to, how are investors able to measure progress effectively to understand whether that is going to be the crucial year that it clearly is at least in terms of projections. >> yeah. we're going to be pretty transparent about it, but again, it is all about us getting through that vehicle qualification process so we'll be producing our cells at full scale early next year and then we'll be essentially validating performance and then eventually validating performance off sales from the factory that will be very much in the public domain. >> how should we think of the competitive landscape. the most direct publicly traded comparable is quantumscape
is that your chief rival or do you see yourself disrupting and competing with other ev technologies as well >> first of all, we're the only true 100% solid state battery play so again, when we think about rivals, we think fairly entrenched large asian companies and that is unique while those might be competitors, they're customers i mean specifically to our long term business model which is to be the industry leader in solid materials. one for the product which we deliver to ford and bmw but then on the other hand to electrolyte product and we're going to endeavor to get that into the addressable market >> doug campbell thanks for joining us. congrats again on the closing of this deal. >> thanks for having me.
well, as we like to do in the last 30 seconds of the show, we're on apple watch stock is up a half percent, moving up. getting closer to the $3 trillion market cap number really approaching 2.9 trillion. outperformance versus the s&p as well tech check starts now. ♪ ♪ good thursday morning. i am deirdre bows. today, apple nearly $3 trillion in market cap. and earl