Ahead of next week's Fed meeting, Carl Quintanilla, David Faber and Mike Santoli explored market reaction to key inflation data: The February Consumer Price Index. AI news in the spotlight: Oracle shares soared after the company posted an earnings beat -- and BofA raised its S&P 500 profit forecast for 2024. Also in focus: JPMorgan Chase CEO Jamie Dimon’s latest recession message, Southwest shares take a hit on Boeing-related woes, 3M selects a new CEO, Paramount deal speculation, the Co-CEOs of athletic footwear and apparel maker On Holding at Post 9 on quarterly results that sent the stock tumbling.
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David Faber is an HQ Kramer has the morning off futures holding on to some games here even though monthly core CPI does come in about a tenth hot more than half driven by shelter and gas yields bound settling a little bit June rate cut odds largely stable here our road map begins with the macro picture future swing as inflation does tick higher and Jamie Diamond says the economy is booming but that a recession may still be on the table plus quote enormous amounts of demand oracles cloud revenue surging fueled by growing AI needs and the Boeing challenge citing delayed aircraft delivery southwest cuts capacity and therefore rethink since 2024 financial forecast. Let's begin with this market reaction to CPI we mentioned a tenth hot at four tenths shelter and gas about 60% of that some surprises in here Mike peril up six tenths. Yeah topic of discussion. Yes I think what the market did and there was a real quick reflex where it said okay this is a hotter than expected you have to run more the bears playbook gone sold off yields higher stocks backed off then the rethink was well the things that matter and that will translate into what the PCE inflation number is going to say combined with how high a threshold was set by Powell last week for changing their premise that they are preparing for likely rate cuts in the summer so I think all that fit together the the core services stubbornly you know firm inflation readings there do not necessarily translate into the PCI is going to go the same direction so that's part of the mix we are also kind of geared for shelter being stubborn and I do think even you you know you didn't see that uptick like we saw in January so all that mixed together combined with I think the equity market saying the AI traits back on for all these different reasons and video is going to bounce today was a whole day and a half of weakness you got the Oracle numbers you have AMD say and happy things you have B of A raising its overall S&P earnings forecast because of AI so in other words we got CPI out of the way we'll see if if we can make something of it beyond that yeah we're gonna get to the B of A going to 250 that's a street high on the top down David as for more CPI I guess people will look to some relief in food where we got a couple of goose eggs yeah there you know again I sort of leave it to you guys and and a lot of our other experts to go through the numbers themselves in terms of why transportation services who's up nine nine shelter obviously we also keep an iron up five seven as you take a look at futures Mike I got to come back to you though so it was a day and a half it was what 30 36 hours of concern about the AI trade and now we're back I heard you say that I want a little more I mean I think I don't even know if it was concerned about the big picture trade it was concerned that the leading stocks in that area had become too overheated over-owned crowded vulnerable now I'm not saying it's over but you had two days of almost you know pitch perfect rotation out of the big leaders and there was a benefit on some of the recent week stocks like alphabet and apple people have talked about this my favorite poster trial for all this effect in general not so much AI but the momentum effect has been Costco which was down 10% off of its Friday morning high because it's in the NASDAQ 100 I mean that's kind of the silliness and it was also at a record high valuation going into its own earnings so no real change of the underlying store story either with AI or Costco but you did have this mechanical effect or at least a repositioning effect that maybe has not saying run its course but it's it's definitely giving way to the old playbook of by the leaders today at least in the in the in the pre-market action we mentioned Jamie Diamond's comments covered a lot of ground in this in this digital meeting talking about the broad economy saying that the US is in kind of a boom covered the possibility of recession covered the fact that he will never buy Bitcoin himself take a listen if you look at the you know the world economy say the United States it's kind of doing fine me you can almost say it's kind of a boomer right now the world is pricing in I'm talking about the United States mostly here but it's a little bit around the world a soft landing and they kind of price it in a 70-80 percent you see those stock prices which not bubble yet but they're high you see in credit spreads I think the chance that soft landing over next year or two is a half that which means I think the chance of a something a mild recession or Harvard says like 65% and the worst case of the recession would be stagflation so I that's almost off the table if you look at those projections I wouldn't take over the table yet goes on to say David that AI is pretty much central to every conversation right now I think he called the innovation that's taking place unbelievable and then had some comments on the election you got two men there on the older side neither can get sick it's nerve-racking it's going to be a circus yeah I mean listen it's always we we use Jamie in part because he doesn't hold back and he and he sort of says what's on his mind I you know I always talk about he even though he is not a founder he talks like one in some ways because he doesn't have a corporate counsel in his head saying don't say that or his corporate communications head saying don't say that so you get do get unvarnished views from him I mean Mike he's been much more negative just for the as long as I can remember in terms of the course of the economy than any number of his other peers perhaps who run banks and or sort of the broader prognosticators out there and he continues to be as you just heard saying you know he kind of cuts it in half the chance for a soft landing versus what seems to be the consensus yeah and he says over the next year or two so once you stretch it out to two years I think everybody's macro forecasts start to lose some conviction but no you're absolutely right he he just by by temperament and orientation and maybe professional necessity or preference he decides to focus on the potential risks because if the economy is fine JP Morgan's going to thrive if the you know if there's no rate shock they can handle whatever's coming at it and in fact if things get a little bit worse they're likely better positioned to weather it and and so I do think that that all it all is an outgrowth of that general perspective that he has he has long thought when rates were much lower that it was ridiculous and they should be much higher and he seems to be anchored on you know in 80s 90s norm for exactly where rates should be so the idea that maybe the Fed shouldn't rush to cut in June is fine but when you're within the Fed and you have your models and you have your framework and you say rates are above five percent and even if inflation is sticky here it's three-ish percent that tells them that there's room to normalize so I don't think that there's a big you know kind of nasty argument going on between you know Jamie Diamond and what the Fed's going to do but maybe it's a matter of you know of exactly pacing and priorities in terms of what they're trying to accomplish Carl the the is the discussion right now Mike about they're going in June for sure I mean odds would tell you that yeah it's more about the total number of cuts for the year at this point yes something would have to probably come along to disturb that look they can you know we're going to get the the summary of economic predict projections next week after the Fed meeting and that will you know bring it up to date in terms of what they're thinking they're going to do I do think that's now the default assumption is is June looks pretty likely after that whether they follow it in July and they want to get one in more in September three seems like where things are coalescing I do think it's important to remember I mean it wasn't long ago what was it you know several weeks ago that Powell took March off the table so March has been off the table for that long it's still 16% May well yeah exactly so there's always a something Mike break kind of a kind of insurance policy in there and markets have been fine you know what I mean so there was a time when we thought uh-oh it's March make a break for the markets and that clearly wasn't the case right let's move on to Oracle this morning surging in the pre-market double digits on track to open at a fresh record earnings beat revenue does get a lift on some strong demand for the cloud driven by AI David they throw a couple mentions of Nvidia in their last night Jeffries goes to 150 Barclays 147 got an upgrade over at I can't see which one that is but there's at least one upgrade to the spot William Blair is it Blair yeah yeah there's and there are a number of very positive pieces out as you might imagine it seems to be not just listen the numbers themselves in terms of where they I guess they met much of the consensus but the guidance seems to certainly be hardening those who the position of those who believe that they are in the midst of a I guess back to Jamie Diamond sort of an AI renaissance here which we talk about every day as we should and they are the beneficiaries of it in terms of I guess reiterating what their fiscal 2026 guidance for as much as 65 billion in revenue and 45 plus non-gap operating margins indicating potential for upside to these targets and obviously talking there about the cloud offerings in particular that Mike are the great beneficiary of again this trend we talk about it in its earliest days generative AI the demands it puts on data centers on obviously the chips that will run it namely Nvidia and everything that goes along with it that can be offered to a certain extent by Oracle and as cloud offerings as they sort of move into this this new world as well exactly so yeah Oracle cloud infrastructure is is where the beneficiaries of the business lie and it is very interesting when you have these companies that you know for years we're just cash cows it's slow and steady it's just free cash flow and buybacks and and financial engineering and now they are plays and they're capturing a huge part of this business and well positioned in it yes it's going to take a lot of investment so free cash flow is coming down a little bit in the near term for Oracle relative to earnings just because of the investment but the market seems okay with it and because it has this legacy tech kind of overlay it's 20 times earnings and not 40 or 50 and so if you start to get aggressive and valuing the parts of this business that are really seeing tremendous demand that they can't meet and those revenue estimates start going up then it just gets revalued in a hurry and it seems to be what's going on now one quarter ago there was a big disappointment a lot of that was sort of capex plans and the street was not really prepared only half of all cell site analysts have a buy on Oracle yeah so there is sort of room for people to be persuaded David that maybe the story is is real and durable to that point I mean I'm looking at a city note this morning saying the cloud revenue remains sluggish strong bookings offer optimism for recovery and they you know they again are neutral to your point Mike as are a number of firms on the stock seeing long-term targets as quote rather aggressive and would like to see further traction on improving cloud gross margins and the autonomous database modernization so there are still there are still some the who are less than positive perhaps that that should be seen as a positive as well I guess because their opinions can get turned and there's always that little bit of an impediment sure I want to own Oracle because they're going to be a big player in this new world when you buy Oracle you also buy a lot of HR software and it's been a roll-up and there's all you know some integration issues with recent acquisitions or whatever it might be so in other words it's not a clean pure leverage play on on just AI and some people you know would prefer to get to get those so that's where the valuation difference is going to come in Carl you mentioned the B of A note from Savita Subramanian today they do take their S&P earnings to 250 this year they were at 235 that's 12 percent year on your growth they talk about what they what she calls a virtuous cycle beginning it starts with AI investments it moves to the semis it moves to networking but then she goes on David to talk about the things you're you've been interested in lately electrification utilities commodities and then she ends up with 25 EPS at 275 that's going to be up 10 year or 10 percent on that yeah you know I mean we perhaps we haven't talked about it Mike may have been focused on it other reports during the course of the day but the move in some of the utilities has been somewhat interesting to watch with this idea that we're going to need more power but of course that doesn't happen overnight you've got to actually build it and that is a long time to come but to your point Carl or at least some of the references she's making in this note you know the data centers that are going to be built already have access to power that's the first thing you actually lock in prior to even putting a shovel in the ground to a certain extent but you are going to have it as a gating issue potentially in terms of building more of these to fuel the future of AI and we're going to need a lot more power but whether Mike that move in the utilities and or those that provide power in this country is justified based on that because you can only get so much capacity out of what they've got and then a lot of it is years and years away and obviously it's a highly regulated business as well I think in the very near term the utilities trade was this area is washed out relative to the index there's been massive outflows from utility funds and it just seemed like for a trade when we were selling the winners and buying the losers it worked yeah there terms of the long term whether you know utilities can can actually provide the the supply of power and price it right yeah bigger much bigger question that's that's to me not what the past couple of days have been have been trading up when we come back this morning a tough morning for Southwest and where Boeing fits into the picture a lot of airline news including some comments from Delta this morning and Alaska air we'll get to some retail calls earnings couple calls on DKS and Dollar Dream as futures hang in there in a moment canva presents stories to keep you up at night it was an ordinary work day until the Singapore presentation is at 3 a.m. the office was shocked that's when we sleep Maya made it less scary with Canva I'll just record my presentation so Singapore can watch it anytime recording present anytime with Canva presentations at Canva.com designed for work now is the time to accelerate innovation team mobile for business is powering Formula One Las Vegas Grand Prix operations and epic fan experiences with secure reliable 5g connectivity because an event this big and this fast deserves a network that can set the pace see what our 5g advanced network solutions can do for your business at tmobile.com/now view 5g device coverage and access details at tmobile.com Chairs of Southwest are down sharply in the pre-market you can see that the airline says it's reevaluating its full your guidance and cutting its Boeing jet deliveries forecast it all starts with Boeing let's get over to fill a bow we can explain what's going on here film David you have an all Boeing fleet you're going to pay the price when Boeing is going through what it's going through right now as you mentioned Southwest as you take a look at shares down as much as 8% pre-market pulling its full year guidance basically now maybe not pulling but saying we're reevaluating it we will give you new guidance our latest guidance when it reports Q1 results which we expect at the end of April and it's also cutting its max delivery plans now expecting 46 deliveries this year originally they thought they were going to get 79 this year clearly that is not going to happen and they will not be getting any max seven deliveries this year they are not expecting it the plane hasn't even been certified yet so highly unlikely we're going to see the max seven deliveries we may not even see max seven deliveries in 25 it depends on whether or not it gets through the certification process meanwhile delta giving different guidance and we heard from them earlier this morning on squawk box the company expecting its Q1 earnings near the top of its guidance so there knows there's no change in the guidance but they are expecting to come in at the top end of between 25 cents and 50 cents a share the street by the way was at 36 cents a share for the first quarter heading into today here's Ed Bastian CEO of Delta talking this morning on squawk box about the strength of demand right now continues to accelerate and it's it's our highest margin product we continue to put more of it out into the marketplace international is also something that's at its highest level last year our highest performing routes in our system were international particularly transatlantic and that was a change from where we were pre-covid Ed Bastian talking about the strength of international demand transatlantic was huge last year it'll be huge this summer as well and they're noticing strong booking trends right now as you take a look at american jet blue and united we should also point out that americans q1 loss they expect that to be near the low end of the guidance that they and they have previously given so not a change there but clearly they're seeing some pressure on the cross side especially when you're looking at jeff fuel carol i'll send it back to you fill really quick on the southwest and the alaska impact not just from the capacity that they're not going to get as expected but also the impact of the case of alaska of that what that one flight did to demand huge i mean you cannot overstate how much importance the industry has when it comes to deliveries of new 737 maxes this was the year when so many airlines whether it's alaska southwest look at ryan air it's got to bring down its expectations in terms of 2024 because it's not going to take delivery of as many maxes so the implications here for the entire industry are enormous the max is the bread and butter for bowing just as the a320 and a321 are the bread and butter for airbus those are the main planes that fly people around the world those narrow body workhorse planes and the max right now the production is just not there then there's the audit i know you brought it up with bastion but the number of instances in which there was alleged uh non-compliance it's pretty startling uh count in the times today yeah what was it 33 out of uh how many out of 89 production checks that the uh FAA uh auditors were looking at this is according to the new york times by the way we just heard from the FAA we asked them if they could confirm those details that are in the new york times article they have declined to confirm the details simply saying that the audit was finished but they will continue to be aggressive in terms of checking on the safety and quality at bowing and limiting production capacity remember it's limited to 38 a month for this year for the foreseeable future until the FAA says you know what we're comfortable that you are doing what you're supposed to be doing and one other note guys the audit about the spirit is just as damaging in this report in the new york times half of the production checks that were checked more than half of the production checks that were were audited they failed so this is a damaging report both for spirit as well as for bowing Phil appreciate that a good roundup of all the aviation news city there is a ton of it that's our fill the bow still to come this morning shares them on taking a hit down double digits as the company posts some quarterly results in guidance a double miss in the guide below the co-CEOs of the athletic footwear and apparel maker will join us at post nine later on this morning meanwhile take a look at the pre-market trying to hold some gains here as yields do remain elevated 10 year just north of 414 don't go anywhere now is the time to accelerate innovation T-Mobile for business is powering Formula One Las Vegas Grand Prix operations and epic fan experiences with secure reliable 5g connectivity because an event this big and this fast deserves a network that can set the pace see what our 5g advanced network solutions can do for your business at t-mobile.com/now view 5g device coverage and access details at t-mobile.com we've been talking about some of the jostling going on in the bond market post cpi is the 10 year gets back to 414 or so Fitch is out just now Mike and says that the data is a sober reminder of the tendency of inflation to perpetuate itself they do look specifically a three-month annualized quarter which was three in october and has gone to three eight and the so-called super core you know if you want to really narrow it down as something that's maybe indicative of a longer-term trend it has turned higher in the last couple of months so it goes along the same lines it really comes down to the markets tolerance and the Feds tolerance for us being you know 1 percentage point shy of target and by the way on pce we're closer to the two percent target and it does seem right now it seems like the suspense is still there in terms of what ppi is going to have on thursday and how that feeds in uh going into the fed meeting so yeah you had an immediate response in the bond market to your no eel plums as if we're going to look through the hot core and then it uh it elevated from there so we'll see how the stock market hands that all yield just still go within this three or four month range let's get the opening bell here in the scene to see real-time exchange of the big board of the gates industrial manufacturer of power transmission belts celebrating its capital markets day at the NASDAQ it's rocked an e-commerce technology company and red bull racing celebrating its partnership and commitment to diversity in formula one as we are going on to the mid 5100s here Mike yeah i mean look we're you know 1.3 percent off the all-time high something like that there has not really been uh a proper pullback in the in the broad index as we talk about the rotation it seems like we got a couple of days of that uh and today it seems like the story is going to be oracle we talked about that's a leader in the s&p 500 up uh almost 10 percent in the early going and then in vidia uh does seem like the you know we're bouncing almost 3 percent so you had about a approximate 10 percent correction off the intraday high on friday uh that seems to be the storyline is exactly whether that refreshed the leadership or uh or something else has been going on you know even with let's say bank of america's new 250 dollar s&p 500 20 24 target you're at 20 times that right you're more than 20 times that so you still have this i think psychological high hurdle for exactly how good things have to be to get you to buy the overall market and say that we have a lot of upside here after an 8 percent run going into march which is what we've had in the s&p 500 so to me that's not going to go away this idea that the market doesn't always very much but within it uh you've seen this real willingness of investors to allow equity exposures to stay high yeah and uh you know credit markets are strong and yields are well behaved so far um although savita would come back and say equity allocations are basically where they were in 95 yes um margin financing margin debt nowhere near approaching no that is a 21 every target increase is accompanied by these reassurances the valuation is not crazy well and of course you can hive off the the most expensive higher growth parts of the s&p and say the rest of the market looks cheaper you know to say that things like equity positioning looks like mid 90s not late 90s that still leaves the question of are we ever getting back to late 90s so i agree that it's not as if retail is over leveraged long stocks but more tactical positioning looks aggressive that's the way i would square that a little bit here so not to say we got to go down a lot but the market has done people's reallocation into equities for them to a large degree i know even b of a's private client they're up to 62 equity okay they were at 65 percent a couple years ago so there's upside to that the mag 7 is not as expensive on earnings as it was in late 2021 so you can maybe lean on that as well so the macro stuff you can sort of come at it from either direction and make a make a case that you know there's theoretical upside we can get a little more fully positioned than we are right now it's interesting you mentioned in video i remember people saying in February two big catalysts of the month fed meeting and in video earnings this month it's fed meeting and gtc that's exactly right yeah it's hilarious and uh you know it's it's definitely taken over the you know the sort of hearts and minds trade in terms of people who look for open-ended growth a lot of back and forth as to whether the conference next week would be just an obvious sell the news event or whether it would be uh something that would really recharge the story and sort of push it out multiple years i i don't know how to handicap that but that's absolutely true i mean it's as much as i'd like to say listen this should be about broader earnings growth the way we are on the cycle and whether the fed's going to stick the landing uh it is really about can we get incrementally more excited about the long-term you know AI trends and even the you know uh cevita at b of a talking about ai capital investment virtuous cycle are there any net losers from that like where's the money coming from right is it just not as much in the way of buying that one theory would be then it buy back suffer and capx benefits that's fine yeah which works in the short term yeah um yeah definitely and vidya had a chance to say something at the morgan Stanley tmt conference they chose to basically reiterate the earnings call but we'll see what we get next week and i know Kramer is going to be all over that event and san jose in vidya is the market leader or sorry oracle is the market leader at the moment's followed by three m yeah which uh does have a big management shuffle after a tough six-year run for microman yeah um so a new uh newly appointed ceo he had come out of uh of harris so kind of the defense contractor under very much uh a win in investors minds in terms of how that company was uh was managed i think there's also a general sense out there that um this is a company that you know the conglomerate structure worked for a really long time uh to kind of have this nice smooth earnings growth and it hasn't worked for for years at least in a seamless way so reshuffling the portfolio uh people probably have in mind what uh colp's been able to do over at ge in terms of deciding what are we good at what are we not uh and uh and so it seems like an extra reason to think that 3m might be able to you know get some of the glory of the broader industrial sector which has been incredibly strong but very much in these specific areas where you know these earnings growth machines like eating corp and and textron and and those right uh david jimmler here i'm sure no doubt he would comment on the way in which roman sort of tried to manage some of those legacy costs yeah i mean we've talked so often of course about the enormous cost of litigation whether it be PFAS and the various settlements or the uh uh the military issues in terms of the uh the hearing uh the things you put your ear to stop the net loud noises um i forget the technical term for it guys interesting to note here i mean yes roman has been in the job for a long uh for for some time as you point out carly has faced any number of challenges given the litigation that we uh that we mentioned uh and you can take a look at what the stock price has done during that period but it's not like they're turning to a younger member here of previous of management brown is 61 years old i got to check my gromance age i haven't had a chance maybe you guys can but i think may even be younger so um you know this is an interesting change roman will continue as exec chair um as as i think we've already pointed out um so there is that but uh but all right roman is a little bit older i'm told um but you know you're not it's not as though you're bringing in uh a youngster it's always nice actually guys when the ceos are still older than i am so applause like the pilots in the dentist yes applause to that for my from my side here but i did want to note that i i think he's a well regarded executive is brand you can see the reaction and the stock price is quite positive uh and and to mike's point you know we'll see in terms of portfolio realignment in some way but really the big issue that's been dot of dogging this company for quite some time has been the cost of litigation related to brown water and and the hearing mitigation uh as for media david uh we did get some decent oscar ratings four-year high almost 20 million good news for disney we had that uh video going after uh pelts yesterday and then we got a little paramount news today what what do you think i don't know i you're referring i guess to this axios report about Apollo you know paramount is so little i i you know i mean we talk about it obviously people care about it but apple spends in one day the market cap of this company i mean it just the the competition when you look at the broader picture in terms of the the big tech companies whether it be apple or amazon or uh or even netflix obviously just far smaller but sort of lumped in there not to mention the net is the world it just it there's no real comparison that said uh the efforts continue carl to some extent to try to see if there's a way to have a change in control here i've talked often about the sherry reds of the uh the red bird slash david elison partnership um which would involve buying national amusements paying sherry redstone or premium there and then taking control that way of paramount merging in skydance the studio that elison has with paramount studio there'd be a process that would require a special committee vote but it would be two step you wouldn't do one if you couldn't do the other so you need to know in advance you're going to get that special committee vote in favor of being able to merge the studio before you uh agree to pay the premium for sherry redstone so what do you offer in terms of public shareholders not to mention they're going to need to raise a lot of money in terms of just putting the capital structure in a better place as much as three billion is what i've been hearing so there are no shortage of challenges to a potential deal here paul has been hanging around they like some of those local uh stations for example or or you know cbs related things uh we'll see what happens i'm not hearing though the what would be the big thing which is just a a major company stepping up and buying the entire thing yeah i mean it david it already kind of has an obio capital structure right so it's not as if you know you have that juice you could do if you're a new a new buyer to levered on you know you can't add exactly like you can't really add a lot of debt in fact my point is that you need to sort of sell three billion dollars worth of equity yeah uh it for the for paramount itself that's the sort of the plan so you take control then you raise more money via the equity via additional equity which obviously is deluded so you know we'll follow it we'll we'll car will update people as we see fit but you know certainly responding to any number of these stories that are out there i guess we got to do that sometimes um and you know we'll see if impala really gets anywhere speaking of selling equity uh arm holdings a big lock up expiration i believe today a stock's almost a double since the september new issue uh but there's been a lot of discussion david about what a big test the stock faces this week yeah i mean we we've remarked so often of course about after earnings that incredible move uh and pointed out many times of course the float is very small hence you would have those kinds of potential moves that did not seem reflective really mike of the overall fundamentals not that they aren't strong but were they really that strong i mean we were talking you can see what what the the six-month chart looks like and that move of late really all much of that percentage move took place just in that a few days after earnings uh more shares out mike typically does mean oftentimes it doesn't always happen but many people do shorten at least when they think the lock up's coming and or at least when there's more shares to actually be able to to do that with and to borrow for sure and and the high on that chart is around 150 so it is you know twenty five dollars off of that it was very kind of squeezy on the way up right in the reaction to uh to earnings but yeah i don't know that it would be a game changer just to have more wider float on the stock at some point gets put into the indexes and that gets sort of uh you know soaked up to some degree uh so i don't know that it uh it would necessarily be the uh the thing that would hang over the stock for very long unless of course you have you know your big anchor investor that uh that wants out yeah which they have indicated they don't uh obviously it's a great win for soft bank certainly given where the thing went public and and the game that they have right now i think their frustration to a certain extent is that their own stock price doesn't really reflect the underlying value as much as they might like at soft bank given that enormous move uh in value that they have seen with their with their really i mean uh what 80 something percent night percent control uh of of the uh of the economics there mike but yeah we'll see over time whether they do choose to sell any of it at least to sort of realize some of those profits uh tesla uh weakness continues uh it's taken out its lows for the year to date uh once again getting into the 173 range going to take you back to levels last scene in may of 23 few things going on musk is expected to visit the berlin gigafactory possibly tomorrow uh where that arson attack took place morgan stanley's adam jones talking about how the correlation between the share price and bitcoin has really broken ever since the notably lower delivery forecast came about and then joitra bank yesterday saying they expect deliveries to miss this year by a pretty wide margin even as they're trying to catch up to this slowing demand with price cuts yeah exactly um you know i mean even even jones what does he attribute the in terms of the stock price value that's attributable to the auto companies 75 so you know but that has been the main weight here this idea that you can't just count on you know ever increasing market share for evs and test the holding its share of those um in terms of the linkage to bitcoin i mean that that really broke down last summer i'm gonna say in a decisive way and that's because in vidia has taken over so i you know if we can look at in vidia versus bitcoin versus tesla and really those things trade is in exactly that similar way of the types of people who want to you know put a lot of money in an aggressive way behind the big picture world-changing technology however you define that uh of course in vidia you got charismatic founder you have kind of a cult forming around his vision similar uh to the kinds of energy that was driving tesla for all those years so you see it's not that dissimilar uh on on a one year or year-to-day basis in terms of vidia and uh and bitcoin then you got this washington post-story uh david where they say the former president trump asked musk last summer whether he'd be interested in buying uh truth social according to two people with knowledge of that conversation didn't go very far you know i guess it's not a bad time to refer people to d w a c um which is of course digital world acquisition core that is the spak that is going to very soon d spak with the acquisition of that is planned of trump media which includes truth social and you know i know people may have a hard time sort of working through the numbers in terms of how many shares are going to be outstanding i had it in front of me not that long ago i apologize because i didn't know it was going to come up right now but there's going to be a lot of shares out there this thing is at thirty eight ninety three i mean trump alone leave is going to have access to as many i think it's as many as a hundred million shares i want to do a little more work guys but the point is even though he's locked up for six months uh and i don't know how to view this story from the washington post but he's going to you know conceivably at some point have access to an enormous amount of of uh potential money if the stock stays where it is at thirty nine so i mean the vote scheduled i think it was for march twenty second guys and this thing will close soon after so i'll take a closer look we may have more on it in the days ahead but it's something to keep an eye out yeah uh definitely meantime uh dow's gone right here about 30 points we'll watch bonds as well talked about the 10 year reapproaching the uh four in the teens but the big news after cpi will be the 10 year note auction today at one p.m. eastern time we're going to keep a very close eye on that we're back in a moment welcome back on holding known for its athletic footwear and apparel reporting a revenue missing q4 shares are down this morning better than 17 percent joining us here at post nine and at first on cnbc interview mark more on holdings co-ceo and martin hoffman co-ceo and cfo gents it's nice to have you in the building thanks for coming in thank you for having us mark is it is it about forex is it broader than that what's going on here in this first half i think we we're not commenting on what's going on in the stock market what we're doing is we're very much focused around executing on our mission which is going to be being the most premium global sports for brand we're very happy with our consumer demand is we're growing in running we're growing apparel we're growing on retail and so i think everything that we're doing is according to the strategy and and it's according to what we communicated so very happy with very standard as a company you can't look past what's happening with currencies though right yeah i mean the the Swiss frame just gained value against every other currency but for us it's about how many shoes do we sell to the fence so that's how we measure success and so we need to take this out and as marchers said there we had a super successful year 55 percent more volume that we sold in 2023 very strong holiday season we are a premium brand we sell full price high margin we increase our profitability and now we expect 30 percent grossing this year and so that's above our expectation to double our business in the next three years that's what we communicated so we're very positive i guess mark given the growing so fast and obviously therefore taking a lot of market share can you get a read on underlying consumer demand or behavior at this point let's say this year relative to a year ago yeah i think we understand it relatively well we have very good sell-out data from our accounts we understand how consumers convert and so consumer demand is there i think our big opportunity is to increase brand awareness we're still a relatively small brand compared to some of the bigger players and so we have ample opportunity in the u.s but also in asia pacific to increase brand awareness this is where we will invest in more people should get to know on and then we have enough point of sales with some of our wholesale partners but also with our d2c engine to convert that increased brand awareness you mentioned margins and gross margins did improve right is it 60 plus at this point yeah so it's a 59.6 for for last year our goal this year is to clearly be at that 60 percent mark so again it's it's a testament to the premium position that we have with a super strong margin and now we have a lot of leverage in our SGNA to really improve profitability economies of scale retail will be growing the channels will will change more d2c so this will drive our epda which is the at least 16 to 6 and a half percent call we did see here we got a us CPI number this morning where apparel was up six tenths month on month some are arguing we're sort of ringing as much goods deflation as we can out of out of the goods market are you seeing cost pressures sort of re-accelerate or be stubbornly high no at the moment as we are in a good position so we still have pricing power and we can use this if we if we need to but we are still growing and we still have economies of scale also on the factory side the supply chain luckily is in a very good position at the moment so no concessions we only have a very low share of air freight that we need so that helps us to really know focus on executing the business towards the customer you mentioned a couple times you're a premium brand you want to kind of stay that way i assume with the link to a more performance is that limit things in the long term i mean in other words not so much about fashion or casual but it has to be you know someone who's somewhat either serious or very aware of the branding no we don't think it's limiting at all right so i think in the end we're bringing a premium product we're bringing a performance product and we're bringing product that becomes more and more sustainable to the market and we can do that in more and more categories so we spoke about growing apparel we see demand for a pair way above our forecast which is very very positive and martin and i are showcasing some of the pieces that launch pretty soon too and then we can besides growing and running you know we can enter new categories like training and we will for the first time launch a tennis collection around Roland Garros and the French Open and so i think there's a lot of categories that we can still tap into and where we can continue to grow as a premium sports world brand speaking of that i mean it's it's getting a lot warmer here on the east coast this week um you know summer season will be here people will start running outdoors we'll have the olympics in july and august is seasonality more pronounced for you than your peers would you say we're a global brand so if things are setting each other off um and we are also basically catering to to consumer that uh is is running but it's also doing other kinds of sports so it's not a it's not a strong impact but you mentioned the olympics so of course that's our big focus um so it's a big friend moment for us uh paris is very close to our home um so we have our on athletics club team ready to compete our tennis player equals we are deck bench health and ready to compete and uh we have a big store already in in paris we expect to open a second one on champs alice so really being on the top street in paris present uh so very excited oh that's good well i'll be there so maybe we'll meet you there yeah we'll catch up in paris we'll do a story interview in august uh mark martin thanks guys for coming in it's good to see you for sure thank you uh mike thanks for joining us this hour still a lot more to come is the doubt tries to hold on to some gains once again don't go away you've been listening to the opening bell on cnbc squawk on the street all opinions expressed by the squawk on the street participants are solely their opinions and do not reflect the opinions of cnbc nbc universal or their parent company or affiliates and may have been previously disseminated by them on television radio internet or another medium you should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy but only as an expression of an opinion such opinions are based upon information squawk on the street participants consider reliable but neither cnbc nor its affiliates and or 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