You seek the key, but first, you must learn the ways of precision, craft, and performance with Acura's all-electric ZDX, with a premium bang and all-of-son sound system up to a 313-mile range and a Type S variant with an estimated 500 horsepower, the ZDX is their most powerful SUV yet. Unlock the energy when you visit Acura.com to order yours today. It's Jim Kramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action. Good Thursday morning. Welcome to Squawk on the Street. I'm David Faber. He is Jim Kramer. We are live in Postline at the New York Stock Exchange. Hey, look, there's Carl Cantenia. He's in Boulder, Colorado. That's ahead of tonight's premiere of Cities of Success, Denver, and Boulder, which airs at 10 p.m. Eastern. Let's give you a look at at futures right now. Of course, we get ready to begin trading 30 minutes from now. We're looking for, I don't know, what do you want to call that? That's barely a higher open. PPI scooped. PPI. Yeah, scooped all the bears. That's where our roadmap begins this morning. The inflation picture, of course, is what we're talking about there. We've got wholesale prices increasing less than expected, as Jim just said. Two banks also lowering their rate cut expectations. That's often yesterday. CPI is. We're keeping an eye on big tech as well. Nvidia shares their bouncing ahead of the open. JP Morgan lowering its Apple price target. And you just heard from Amazon's Andy Jassy saying so many different things, including the fact that he's committed to cost cutting while investing in AI. Plenty of other stocks to track this morning. Nike, Airbnb, Chevron, Occidental. We'll go through all the upgrades and downgrades. But let's get to the broader market here. First, let's get a reaction to PPI after yesterday's sell-off on the CPI. Well, I mean, there was a lot to like. I think there's a lot of confusion about these numbers. Yeah. I find that what's happened is that yesterday there were a lot of mistakes in the data. You know, what do you mean by mistakes? They're not taking into account a lot of a lot of e-com. For instance, they had a parallel. But the largest seller of a parallel after after Amazon is at Temu. And Temu's lowered the price of a parallel to the price. And Jassy just said, consumers are trading down. I heard him say that at the very top of the interview. And they're getting good value. I mean, the average price of the yesterday of the footwear on Temu was 89 cents. I mean, you know, I do not include this in the CPI. PPI takes a little more intelligent and we're put together. By the way, food was up because the Airbnb flew. I mean, I think if you look at the way that they do that, the labor department, I mean, I would go in that I would clean house. I mean, I would do a little deadwood chainsaw. Yeah. And what else here? I mean, because I think that we I'd like to go to Carl because I need some optimism right now. You're not going to get it from Carl right now. No, why not? The sun that sunrise soon? I know. I mean, he looked great as always. But that's optimism. That's optimism. I was trying to get some optimism. It's going to be well, where he's going to be with cities of success of success tonight at Temu. What did you say to skewed? Are you saying the deck stopped? Um, no, but what I think is interesting is you seem to want to emphasize the PPI today as opposed to the CPI tomorrow. I just want to add a significant sell off as a result of that CPI number. Everybody now coming way back on their expectations for rate cuts during the course of this year. I don't know if many are now coalescing around one or two. Certainly not June. Well, I just think that that PPI number is not going to change that. We got to keep perspective here. If we didn't have these aggressive projections on rate cuts, we would be like, okay, not great. But if let me tell you something, you raise the thing that worries me most is rent and housing. This member housing is out of the CPI because in 1988, they're worried about housing inflation. They wouldn't make the number look bit. We have an immigration problem. And we also, if we raise rates in the affordability of housing, it's going to get even worse. So the Fed's in a box on housing. But and the Fed's interval would also say the Fed's, it's not their problem. But I mean, Richard Fisher was on yesterday talking about it again. That auction yesterday, by the way, didn't go as well for my hand. We had a little just meaning concerns about so much, so much supply to help fund our deficits and not enough, not enough demand. And that's a concern as well this year. Do you share that concern? No, I am concerned about that because you'd supply. I mean, just dramatic supply and we are made in Chicago is he's great in real hard. St. Tell us great in real hard. But St. Tell us, what in real hard? He's grading really hard. Grading. Yeah, he's grading really hard. He's grading. He's grading with a D. Watch yourself with a D. Not a T. I'm not, I'm not negative. I know what matters. What matters to me here is that when I got a D once in biology, I went to see the professor, Professor Trivers. Yes. He asked me how I'd done on my life is I've got nothing but A's because this is going to be a great learning lesson for you. A D. I feel that this D was a great learning lesson for people. Let's not forget that supplies probably more important in terms of the grade yesterday on that box is what we're talking about. Again, we're talking about the treasury market here, which obviously is very important for the performance of the equity market. At least it was yesterday with rates moving higher and stocks moving. Thank heavens. We offer a better rate than a lot of other parts of the country. There was a take a look at there's a look at the tenure. We're about three eight. Oh, come on, David, you've been around when the tenure was seven point nine. I have. I have. You know, enough. I actually have been around when it was a lot higher. I remember when you were wearing that jacket. That was a seven point. I think it just must be Polly and Polly. In the late 70s, when actually with Volker, I was around, you know, sure. I too go ahead and like over 90s. Polly and Esther, right there. Polly and Esther. Yeah. My two girlfriends in that jacket. Yeah. Anyway, thank you so much. I have to think that Andrews, Amazon made me feel really great. It did. Why? Why? Because spending on AI, he obviously has a very positive view on AI. A lot of people yesterday were in A.I. Bubbleville. You ever noticed when everything's bad, it's like people coming out and say, before I get it to CPI, let me just tell you what a joke AI is. Yesterday, people reacted to the futures. And I hate that. Have some gumption. Have some backbone. I want to use AI. I mean, two excerpts from Andy Jassy's interview. The first on the subject more of what we've been talking about, which is the consumer and spending given CPI yesterday, PPI today. Let's take a listen to what Jassy had to say, of course, which is from what is the largest market place out there for many Americans. It's going to take a lot for people not to buy detergent or shampoo or things like that. And you can see that in the growth of our everyday essentials business, which lasts, you know, Q4 of 2023 was over 20% year over year. So that is because people are going to buy old times. So that is just because of the speed that we have and we're getting to people. So they consider us for more. But people are still, they are still buying, they're just being careful about what they shop for. Kind of interesting being more careful. Well, okay, when I was up there to talk to him, and one of the things that it's just so easy to be careful, because the head dead comparisons are just incredible. This is not like when you go to the supermarket, you gotta like, oh, over here, it's this and over there, it's this and the sizes are different. I mean, the head to head is so easy. And remember, they put the Chinese one. The Chinese, they put him, one of the great things that Jassy did was say, you know what, I will compromise and charge a little more for Temu, but we'll give you a date of when it comes. And people turned out to care more about the date than it comes to the actual price. Right. I think, look, I'm focused on Temu because there's 100 million people. It does. Which is in this country, 100 million people. Yeah, it's Temu. Yeah. Now, I tried as our viewers may recall, you tried buying your wife a bathing suit. Yes, and as I have said previously, but well, once again, reiterate, was one of the dumbest things I've ever heard somebody try to do. Listen to me, she's not a smoker, so we had no problem with the fireproofing thing. The only thing they left out of it was asbestos. I, I continue to believe it was the secret way. It was cool. Secret way of trying to like, see if you could get it before, say it had to be. I mean, it was the only thing you do that was lack. It looked cool. But your point is, okay, that you're even going on Temu to take a look at some of the bargains. I go into Temu constantly to see how much I overpay when I go to TJ Maxx. Right. Is it really the same quality of stuff? Well, kind of. They're both plastic. T2 Max has some great stuff. I'll trade it down. I listened to Jassy. That's one of the great retailers in this country. As we pointed out, it's got a market cap so far above targets, for example. And 1,300 stores has been fantastic. But I think people are looking at dov. Not looking at dov and looking at coal. I mean, they look at dov and they look at, I don't know, ivory. I used dov. I'm going to use, I'm going to use Jassy now to transition us to, to Nvidia and to what we saw yesterday. Take a listen to, to what Jassy had to say in terms of, for example, the use of Nvidia's chip by one of its bigger customers, Amazon. Most of the early AI models have been built by Nvidia, but supply is more scarce and people are concerned about cost. And so we've built our own custom silicon in AI. We've built a training chip called Trainium, an inference chip called Inferentia, that are meaningfully more price-performant than what you can find out there. So a lot of the training, a lot of the predictions are going to be done on those chips. Which gets to big tech, which gets Nvidia, which is up. It was up yesterday as well. But this, I don't know if it's a nascent concern, Jim, but you're going to start hearing it that alphabet and Amazon are designing and developing their own chips in some way to at least replace part of the Nvidia. Okay, so let's go over what Jenson once said to me, and listen, it's terrific that they're developing it. And we're working with them to develop, right? And you know, one of the things we have to separate, you know, Amazon Web Services is very different from actually Amazon. And Amazon Web Services is truly built upon Nvidia, right? Away from that, you have a lot of good stuff that Amazon's doing. Web Services is Nvidia. And you know, Jenson is not, you know, he always says, "I come in peace." But he said to me, "I hope they do a good job. They're my customer, and we'll help them in any other way, but they can. You can't get the chips you want from Amazon." This is in many ways a defensive move. Because I mean, from, from Nvidia, not Nvidia. Nvidia's out. And Nvidia's out. They're like, you know, this Blackwell's already sold through that they're coming out with September. It hasn't even come out with it yet. So they've got orders for Blackwell that obviously already. So, I mean, let's just understand that a lot of this is trying to help people who cannot get enough. I mean, if we had Michael Dell on right now, I think Michael Dell would say, "Listen, we're doing pretty well. We've got a lot of Nvidia." Right. And whoever gets the Nvidia wins, but there's not enough Nvidia. It continues to be, right? There are simply the benefits to having the orders, having the ability to have the orders. Why wouldn't Jenson say no comment if he had, why did he say, "Listen, we're trying to help them?" Because he doesn't want anyone angry at him. You know, Zuckerberg, he has an amazing relationship with Zuckerberg. Yep. Yep. And Zuckerberg once all the chips he could get. Now, one of the things that Jenson said to me was that Zuckerberg would buy everything. Amazon would buy everything. Right. So your own question that continued demand for Nvidia's product. And I come back yesterday when we had a discussion about it, the 28 multiple on calendar year 25 earnings. If you're talking about it's just not an expensive stock, then not ever being able to meet demand at this point, one would anticipate the growth rate is still going to be pretty significant. It will be. You know, this is selling, as of right now, it's 26 times 2026 numbers. Yes, yes. I mean, you know, proctoring Campbell is more expensive. This is a technological marvel. And you know, I just don't understand how people value it so inexpensively. And yet all I hear about is how expensive it is. It's a bubble. It's a bubble. It's a bubble. Enough with the bubble. Can we go to Carl? Yes, we can. Let's do that. Carl's in Colorado. He gives us a sneak peek of cities of success, Denver and Boulder premieres tonight. Carl. David, you know, Jim's on the hunt for some optimism today. We should remember that the reason prices are so sticky in this country is because a lot of major metro areas are growing above trend. Tonight, we're going to take a look at that in Denver and Boulder with cities of success. We'll talk about it after the break. One in eight. That's how many people have worked out at McDonald's, who served millions the best Big Mac and best birthday party they've ever had. We haven't just seen kids graduate from a Happy Meal, but have gotten help graduating themselves because they know the skills learned here. Jiminidos, welcome to English Under the Arches. Can help you grow from here or keep growing here. One in eight. Start at McDonald's and where you start stays with you. At Morgan Stanley, old school hard work meets bold new thinking. At 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real, old school grit, new world ideas, Morgan Stanley. To learn more, visit morganstandley.com/yus. Investing involves risk, Morgan Stanley Smith Barney LLC. Hey, welcome back to Squawk in the street. We're in Boulder, Colorado this morning, ahead of our series, the latest in our series tonight, Cities of Success, Denver and Boulder. Jim and David, I heard you guys talking about, you know, it's kind of an appropriate week to be doing this show tonight because a lot of worry about inflation in the markets, but a lot of that is the result of economic growth. I see Williams is out today calling for 2% full-year GDP and that means a lot of American cities are growing above trend. Denver and Boulder offer a lot of examples about that. So we take a look at some of the policy decisions that have gone into play and bringing big employers to town. Historically, I'm sure you guys know Denver and Boulder have been about old-line industries, telecom and energy. It's much more now about quantum computing and life sciences and certainly aerospace. 191 companies here in the aerospace industry, some of them literally working on building gas stations for satellites in space. Now, in order to do all of that, you need a labor pool that is mature and ready to hire and that's something we talk with Governor Jared Polis about. Take a listen. Many employers are looking at workforce. Colorado shines. Great workforce. You people want to move here from other places, but we also have a great preexisting workforce. So both, right? Number one, great low taxes, great positive regulatory environment, great quality of life. And yes, we're making progress on housing, but it may already be less expensive than some of the other markets you're in, right? If you're in New York, New Jersey, California, so we're going to become more competitive and we're doubling down on that here. They definitely are working on housing, guys. They need a lot of affordable housing. Right now, they're offering incentives to various developers. They've got as much housing under construction, guys, as Los Angeles, which has five times the population. The governor likes to talk about property taxes, says they're 48th lowest in the country. Jim, just as one example, remember the other day when you took your belt off on the show? Sure. So I was speaking at the university. I was speaking at the university yesterday, and the viewer approached me literally moved to Boulder to start an apparel company that does make leather belts. So I have this for you. I'm going to bring it back. They want David's belt size as well. I just thought that sort of crystallized exactly what we're talking about. It really does. I also think that the kind of people would be drawn to working on that, and then right behind you are some beautiful mountains where to talk whiz, and you're done at four and you go climb one of those mountains, which is just a total rush, and we can't do that here. I think that people who are creative and drawn these days to really interesting things like to go hiking or skiing at five. And I think it's really one of the great things they offer there. It's interesting. We do a bit on on VC funding. A lot of VC has moved into the area, and they do say that you're right. 20 years ago, we would have moved our start up here because we like the lifestyle. We like the 300 days of sunshine. Now it's really about the fact that the labor is first. The talent pool is here, and you have the added benefit of having these things, these mountains behind you, and the work from home, of course, remote work phenomenon, has just accelerated that. But it's almost the inverse of what was classically the story, is that you move here for lifestyle. Now you're moving here for productivity. Yeah. Can you find a place to live? Is that becoming more difficult? I'm sure that's part of your coverage as well. Yeah. Diana Olecht has a great piece on how quickly you can get affordable units built in a town with faster permitting and developer incentives. But that's really the key challenge. And we do take a look at not only the housing challenge, David, but the migrant challenge. 40,000 migrants have moved here. That's the highest per capita in the country for a major metro. So we try to look at both sides tonight. Well, Carl, one of the things that I'm intrigued by is that there are companies that are headquartered in California, but the whole workforce is where you are. That is true. That is true. And that is why a lot of the the entrepreneurs here are thinking in terms of a new Silicon Valley. I think it's Senator Hickenlooper says it's not doggy dog here when it comes to startups and tech. It's more like hunting like wolves in packs, trying to make the ecosystem work for you just as much as you're working for your own individual firm. I love it. Yeah, just fantastic. Carl, looking forward to it. Of course, no, we'll hear more from you during the course of the day. That's a nice shot too. City's a success tonight, premieres tonight at 10 o'clock. All right, coming up right here, Jim's going to have a mad dash for us. We're going to count you down to an opening bell that is 10 minutes from now. Here's another look at futures we are anticipating. A higher open. We've got a lot more for you. Squawk on the street is right back. For more than a decade, Comcast has been committed to bridging the digital divide and connecting millions to affordable high-speed internet. But the barriers to get connected go well beyond affordability. Through Project Up, Comcast is committing $1 billion to reach millions with digital skills training, resources, and opportunities needed to succeed in a digital world. Project Up, building a future of unlimited possibilities. Learn more at comcast.com/projectup. Okay, it is time for a mad dash. We've got seven minutes before we get to an opening bell. What do you got? Constellation Brands, STZ, this morning reports numbers that I have been waiting for. Frankly, we're talking about some depletion numbers, which is how you really measure whether the company is doing well. But Delaware, special, solid 14% depletion growth. Pacifica, that's the ground bottle long neck, up 22%. These are extraordinary numbers. Great cash flow. This stock has historically failed almost every single time when they report the number. It opens up and then goes down. I don't know if that's going to happen to the family and their control or not the control. And this thing every so often, Jim, comes around and is like, people want to make it a takeover target. I don't know who the buyer is. There's no any trust we've never. It's hard to imagine. If I robot can't get them in, no, you can't buy this. Remember, the home giveaway here was that they got, well, they got Corona from the justice department. What helped create the success of this company was the forced divestiture from mankind's robust. It was the greatest giveaway in government history, I think. But they had to give it to somebody. And this was a number that I think I will say was aided by a backlash against Bud Light. Yes. Which was the biggest beer. Medellos number one. Yeah. And the medellos numbers are extraordinary. And don't forget, if you sell it right now, send me an invitation to your funeral because Sanco de Mayo is coming up, which is a beer day. Like, you can make a month. I made my month at Barcy Miguel one on a beautiful day. I wish I had to sell it because my wife, you can't own a mat. You can't own a liquor brand and also own a restaurant in this country. Look who you have. 34. You've got Bill Newlands on it. Well, yeah, because this is all self-promotional. It's all self. It's all energy. It's all works. There are people who I have one that are going to blow this network away. Okay. And there are people who are really, they, you won't believe who I've got. Wow. Okay. Yeah. I personally book you myself. Thank you for that. Just but you think you don't think this is enough. You got you think that it's got more to go. I do think it's got more to go. It's been stalled. You know why that's more to go? Because Elliot has a board seat. Oh, yeah. I got a man in the room. That's right. And Elliot's established a level of discipline that has just blown out. And David, I'm giving no credit to canopy growth to CGC. No credit to cannabis whatsoever. Even though people are telling me that it's making it. It's going to be a small thing. I have a guy who last night selling LSD, LSD, cannabis. I mean, Timothy Leary, where are you? Yeah, where are you Timothy Leary? All right. We got an opening bell four and a half minutes from now. By the way, you can catch us anytime in anywhere you can listen to and follow the spot in the street opening bell podcast. We're back refugees. Well, as our viewers may know, a lot has been made of late of the moves in the magnificent seven stocks. Remember good old Fang though? Remember that one? Apple is the only member of the group. I don't know what he's doing here. This is negative territory. This is a card game of fang. Oh, that's all positive pieces. The one fact, the remainder of it, all, all done. Did you see that? You're all double digit gains. Well, I led by Matt, of course, which is up more than 45% for the year, though. Yeah. But this is a piece. These are pieces that defend back right here. It is a full house. Incredible. Or if you're playing Rummy Cube, this is a lot of the house. Are you going back to Fang now away from the magnificent seven? Well, it doesn't matter. I mean, here's a possible video. This is why I love Amazon by amassing. This is why I love Meta. This is why I love Microsoft. This is why I love Alphabet. This is why I love Apple right now this morning because the street wants these stocks. They can't have this full market end, David. The street won't let it end. People didn't catch that. That was funny by Andy Jassy. That was Andy Jassy's Amazon letter that didn't say like a buy on Amazon. All right, you're good. Good boy. Over at the NASDAQ solar bank. That is a key energy operator and developer that we listed as well. All right. Where do you want to start? We need more listings. Where do I want to go? Okay, let's have a little negativity and trying to figure out exactly why it's so bad as Carmax. KMX, they failed to deliver in a lot of what Carmax, a big miss in how much money they spent to get used vehicles. And I'm trying to figure out how this factors him with possible CPI. Carmax down usually means that you're making less money in used cars, which means the used cars to be down in price, which means that something that says the CPI was a little too high yesterday. Right. And it might get cooler. As a professor at Seagull said this morning, we should care about the next CPI, not the CPI. It's very good. So we're already moving on from CPI. We've moved on. Well, yeah, we're moving on. Okay. Now, let's talk about lastly change. Is the equity market going to move on as well? The equity market is concerned that we've been up so much this year already. I think people feel, come on, let's do for a break. I come back and say the banks go first. Jamie Diamond will speak first. He will talk about how rates should be higher. That's going to cast a negative poll. And then a bank America will be positive. No one will care next week. Wells Fargo, I think Charlie Sharf, will tell a darn good story. But you know, people think he has commercial real estate problems. Oh, contrary, I'm unfair. He does not. He doesn't. Wells Fargo does not have commercial real estate problems. And it's been doggy him and he doesn't have that. We're going to put that to him. Okay. We're going to put that to him. But not with Charlie because I don't believe you have an interview scheduled with him. David, I'm a master of disguise. You are, but I don't believe it. There's nothing coming on that one. That said, I'm curious to see what you have to say about Wells. I'm also curious to see what the earnings reports look like. Wells is still down. Well, this comes to come six years ago. There is a story, at least emerging, by the way, that some of the banks are trying to reclaim territory lost to private credit by coming in and undercutting on price. Which was Jonathan Gray at the dinner last night? Jonathan Gray. Was he great at the dinner last night with the president? I don't know. Was he? I saw John Gray. Oh, did you? Yeah, I saw Judy Marks from Otis. The chief and Elizabeth. John Gray, of course, the blackstone, the president. David, that list is I'm upgrading every one of the stocks. Anyone was at that dinner? Yeah, I'm taking the stock iron. But my question was, are we, no, we know M&A activities still been relatively neat, relatively neat. And you heard Jesse, like, if I robot doesn't get done? No, really, fixed income currency and commodities. What are our expectations when it comes to that? Just okay. Just okay, right? But the lending business, perhaps a little bit of a tick, IPO is not much. M&A now much. I mean, it shouldn't be. That's, I mean, we're talking a lot more here, Goldman, and to a lesser extent, Morgan, and then some of the smaller companies that obviously really rely on M&A, whether it's... Why did they not like that? Every quarter, a lazzard, a PJT, a moles, you know, you go on and on. Well, look, I just think that these multiples have gone up, but they're still low. I mean, JP Morgan and 12, that's just not an expensive stock. Not the best performing big stock, big company, big bank this year, though. Well, I just, you know, I mentioned it. Because Jamie and Judy worked at the dinner last night. This is a dinner. Jamie and Judy, this was a skateboard with Japan, and this was a list of the who's who and who's not who. Larry Fink was there. I'm saying that all those companies deserve a re-rating. Because they're obviously in the room. That's what we were looking at. There you go. Tim Cook was there. Yes. There's Larry Fink. Larry Fink was there. Right. Will you look at this? Reporting numbers tomorrow as well. Wait a second. Is that Mosso? That's Mosso. Holy cow, we're Sanjay Marocha. Oh, there's Judy and Jamie. Mosso was on this on these shores. Look at this. That's Bezos. That's quite a, quite a showing. Oh, yeah. Great showing. Who's that? Is that Brad? This thing's amazing. You've got to take all these stocks up, David. Oh, look. Look who it is. It's the chair. That's Jay Lewis, fantastic. Everybody's looking so sharp. Oh, no, he's easy, very deep in here. We're Sanjay Marocha. They don't need to watch that. Don't you? Larry had to walk in alone. Larry's the best. Where's Sanjay Marocha and his wife? We're dying of Mike. Mike runs up a lot. I would have put Sanjay in that list. Okay. Marvin Christian's up a lot. Why don't we show him? Mosso is walking. I mean, cool. Let's go with the hitters. All right. You got anything else to talk about stock wise? I was so good on that. You were great. Apple meadow, alphabet, Amazon, and Microsoft are all up. You bet. Okay, man, I got a migraine. That's killer. Meadow. All right. Another one they're saying, hey, look out. They're developing their own chips. Meadow wants everything that Jensen has. So yes, they have to develop their own chips. Josh Darnit. I'm wearing a new hack here about Microsoft working on that, too. I got a lot of stuff, David. Really? You got a lot of stuff. Man, we're just beginning med tech. I see a lot of good news, med tech. Visa and MasterCard. Did anyone ever say bad word about those two? Hold it, David. Stop trading. Warner Brothers Discovery. Positive. Let me see that. It's electric. Oh, that's Jessica Reef. Look at that. Jessica Reef, Ehrlich. Thank you. Excuse me. You're welcome. Well, yesterday, as were many of the companies that have heavy debt loads, Warner Brothers Discovery shares were down. Today, they're rebounding a bit to the tune of over 2%. Do you see this? There's got to be an out. There's algorithms out there, Jim, that any time rates move appreciably higher, it sell all the high leverage companies. No, you're right. And they all get out of the people outside. Because what's happened is that there really is a program, which just says if there's an elevated debt, certain number of terms, those stocks should be sold. We also need to sometimes remember is the machines, to a certain extent, run this market. And when I say that, I'm not talking about, yeah, I'm talking, I'm talking about the algorithms that are run by the giant comp complexes, such as two sigma, dee-shah, renaissance, Citadel. I think we've hit it. It's why it's why you had money, I say, please don't try to. The quants, don't trade. Please don't trade. Because you're up against these people. They are such, you know, we don't, again, we don't come back to it that often. They are such a large percentage of the overall volume. Oh, check in. That's why you can stay away and just try to evaluate good companies for long term. And pre-occupied pieces like the Nike upgrade this morning, it'll be like, doesn't fit the algo. But what you want to do is try to be, wait for the beaten track if you're a person at home. Try to find which one of these stocks is unusual in that the machines just automatically say sell. But maybe they shouldn't be sold. Right. I mean, that's what people at home should use. Obviously, you've got rocket scientists, literally, who program and spend many, many hours coming up with the algorithms that they think are unique. You're going to talk about it. You can't beat things in the market to other things. And therefore, say, if this happens, that happens, that happens. Do this. And thank heavens that you're saying it. Always worth mentioning as we have a NASDAQ that is up 0.41%. I don't know, you know, Jim, are we just going to sort of trade around here for quite some time? Well, there'd be something that I don't want to say something that is about inflation. And therefore, I think that a lot of people, in the end of the day yesterday, there was a move down, secondly down, and it coincided with stories about U.S. intelligence saying that there'd be a rocket, there'd be an attack on Israel from Iran. But, you know, yeah, that's what- Saw that. That's what moved us down in the airplane after me. You surprised, by the way, that the markets overall had just shrugged off the level of hostility in general. I mean, in terms of Ukraine, which continues to be an all-out war. Yeah, and it looks like not to mention, obviously, what's gone on in the middle. If this was 1943, we would say the Ukraine's losing. Yeah. Not unlike what was happening in Russia last in '43. I do think David did. There's a war premium to oil, and that seems to be the only place that really is that interesting. That's not one. Yeah. And I think that maybe the more is the market callous, or is the market just saying, look, what does that have to do with the press attorney's ratio in person marks? Not much. Not much. What do you got from me? Yeah, paramount. I got paramount. You know, Jim, it's funny. I know, paramount is a small, relatively small company. But people who- The amount of interest in it is incredible. I have to tell you. It was not a day that doesn't go by that I don't get a number of phone calls from people who I haven't heard from in a little while, I want to- What's going on? I'm a guy. I've been my great friend, Jim Stewart, spoke about it. Yes. And I keep saying, "Well, I want my own chariot." Yeah. What does chariot think? Let me give you a quick favorite part on what's going on right now, because it is interesting. We are in that 30-day exclusive period, of course, that will expire actually in early May, in which David Ellison, along with his partners at the private equity firm Redbird, are negotiating a transaction under which, as I've said, any number of times, but of course is worth coming back to that would involve both buying national amusements, where the control stock is held, and chariot Redstone would sell it. They've already agreed, as my understanding, I think others may have reported this to a price there. That was done. That was done actually months ago, still subject to due diligence. But they've agreed. The key, though, is the negotiations between this buying group and paramount itself, and the special committee, of course, for the board of directors. By the way, the big story that Julia has been covering, for example, is the fact that four directors on Paramount's board are going to step aside at the annual meeting. But what I'm going to come back to, Jim, is the deal itself, because you've already had a number of shareholders coming out, saying, "Wait a second. You're going to dilute us. You're going to pay a premium for Sherry stock, and what do we get out of it?" And you might imagine there's some frustration in the Ellison camp and the sense that they can't really explain their deal. They don't yet really have that deal fully in place, but I can give you some sense, at least, based on any number of conversations I've had with people close to and familiar with their thinking as to what they're talking about. First of all, you still need to negotiate an exchange ratio by which Paramount would essentially buy Skydance. That is part of this deal. It's not a one-time deal where they just buy control of national amusements. They've linked the two. National amusements got to buy that. You also need to get a special committee that agrees that you can merge Skydance into Paramount. So you need Paramount to come up with an exchange ratio. That's being negotiated. They're narrowing that range. And in fact, next week, for the first time, Ellison's group, the Ellison Redbird group is going to begin conducting due diligence at Paramount. They are having meetings with management, and that process is beginning. So they're deep into this. They haven't yet agreed to, though, an exchange ratio. And as I have reported a number of times, beyond the equity that would be exchanged for Skydance, you would also have an additional equity issuance by Paramount, for which Redbird, Ellison, Larry Ellison, KKR, which owns some of Skydance would step up and buy more equity. That would be used in part to delever and do a number of other things. The plan on the part of Ellison is to radically restructure Paramount, massively cut costs in terms of rationalizations, and get the stock to, frankly, they believe it could be multiples of the current price. That's their hope and their plan. That, by the way, is what Shire Redstone is signed off on right now. Despite the fact that, from what I've heard, there may have been a couple of opportunities she had to sell national amusements and only national amusements at a higher price than she has agreed to currently with Ellison, because she believes in this plan, and she would remain a shareholder, by the way, in the new pro forma company holding on to her common, her non-voting stock. Will it all happen? What are the synergies, for example, available? Could it be a billion, could it be two or three billion in synergies? There aren't certain, but they certainly have a good deal of confidence, Jim, that, in fact, they can reduce costs, delever, and essentially restructure paramount, in a way, by the way, that would have reverberations far beyond paramount itself, because we talk so often about streaming direct to consumer, whether it's Netflix, or Disney, or Peacock, or Warner Brothers Discovery's Max, and so it will be very interesting if this deal actually does happen to see what comes out of it. I'm listening Andy Jassy today, he's talking about wanting to have all the sports program he can get, and I look at this incredibly levered, and I also Warner Brothers companies, and I just think, like, did they just, like, these companies have so much debt? How can they compete in the new world where the only thing that's watchful in regular TV is live sports? Yeah, and that's the key that we come back to. Bob Iger last week, of course, says, "Hey, we're going to be solid number two to Netflix." That is the hope for Disney Plus, but the question still is, "All right, Warner Brothers Discovery and Max, can you really make a go of it and make it a profitable, strongly profitable business that's growing?" And then you get to the likes of a Paramount Plus or a Peacock, and there are real questions in terms of the long-term viability of these platforms, if there isn't scale created, if there isn't some sort of consolidation or rationalization. Ellison's got a big plan, Sherry Redstone seems enthusiastic about it, a number of other people I've spoken to seem quite enthusiastic about it. Will it get to the finish line? That is a key question. And by the way, this semi-offer from Apollo of 26 billion, which was simply one letter, as I understand it, didn't do anything to help the special committee, which is going to be under a lot of pressure, is going to want to assemble a very long record here to fight any litigation in terms of what their decision-making looks like. But there hasn't been any more delineation, as my understanding from Apollo, in terms of what that really meant. Are the thing we're looking at right now, the common stock, does that have anything to do with things you're talking about? Yeah, it does, because there will be dilution, but you have to believe that that dilution will be taken on eventually, because you'll have a far stronger company. You'll have a merger of Skydance and Paramount Studios. You'll have a completely different approach that perhaps current management simply is unable to do right now, given the constraints they're under. You will have a rationalization in some way of the streaming service. Perhaps there will be asset sales of some significance. Jim, you know- But there is a CEO, the name of Bob Bakker. I'm not hearing his name at all. No, no, no. If this plan takes place, David Ellison will be the CEO of this company. Of the company? It's not this. The pro form a company, the merger of Paramount's Skydance, and Jeff Schell, our old boss, very much involved in this process as well. He is working with Redbird, and he will have a significant position at the company in terms of helping them reduce costs and do a lot of different things in realizing what they believe are very significant synergies for what is essentially almost a recap, a recapitalization of Paramount. So, yeah, Ellison, Schell, and then Larry Ellison, don't forget as well, will be involved because he will be a very large shareholder. If Larry Ellison's involved, I'm gonna buy her. There you go, right? There, end of the story. So, that's Paramount for today. I'll send it back to you, wrap up whatever it is you want to hit before we take a quick break. Well, look, I think that we have to watch the group that was hurt so badly yesterday, which are the home builders. They were wrecked. Frank Hollins going over to the home better this morning. You know, you take a look at a polity home, which was just absolutely crushed yesterday. It lost like a month's worth of gains. And it's making a nascent comeback, not a lot of volume. Watch the home builders. If they don't stay up, David, then people think the PPI was not real. I mean, the PPI was not real, the PPI was. So, let's watch that group. That's the most important. And finally, back to M&A, not Paramount. I did know, Jesse's comments to Andrew Sorkin and the interview on Squatbots around the I-Robot transfer. Well, man, I was on that too. I thought they were really interesting in terms of what he was talking about. It was opposition, if you recall, not just in the EU, but also from our own FTC, the small acquisition, right, of the maker of the room. But take a listen to what Jesse had to say about the opposition they faced there. It's a really kind of a sad story. It's a great entrepreneurship story where you had this American company that invented this product and invented the category and built a business that was almost a billion dollars in revenue. And whenever you build a good business, you end up with company and competition. So, they track these two very large Chinese companies as competitors. And they need to scale because scale lets you buy components at the right price and invest in R&D. So, they merge with Amazon and the European Commission blocks it because they worry that we're going to feature our vacuum cleaner, you know, their Roomba versus others, which of course is not our model because we make actually at least as much money to sell them third party items as our own. He went on to say, Jim, basically say that they're operating outside the law. Okay, so I had Shark Ninja on because I said, this is the justice department play. Just the department wrecked our robot, you got to buy Shark Ninja. And it was like, and now let's see how the flip side by Jesse's. Jesse's actually talking about the policy implications. I'm trying to make money with Shark Ninja, but Shark Ninja was the winner. So, what the justice department did was gave this Chinese company the run of the joint. Is that what we want? No. Backfire. No. Justice department is so out of touch with the reality of the business world. It was the FTC. It was the FTC. But I believe it was. But I've got to tell you that Shark Ninja is such a winner up to see you should go buy it. The Chinese stole them 51% of it's the only thing I've said possibly about the Chinese since I've started this job. But Shark Ninja's a winner. Okay, and you can get their stuff at Costco for fraction of the cost of nothing else away from this incredible hour. Shark Ninja is a winner. Shark Ninja is the winner, man. Hey, there you go. All right, we'll give you a quick bottom report before we head to a break as well. Of course, treasure is where the story yesterday, including that option that, what was it, a D? Is that what Centella gave it? Where are yields right now? You can see the 10 year down a bit, 4.5, 4.2, and the two year note still pushing near 5%, but down a bit on the day at 4938. Having checked in on Trump Media and Tech, it has had a rough debut since de-spacking. So, of course, you could have bought the SPAC, remember? I mean, did the DWAC at prices far below this, and you would be still up enormously, but well down from those very early days. That doesn't mean the foreign president's not going to get those additional 40 million shares, he will, because every day that goes by that it stays well, but well, it's already basically done. It just has to average 1750 for any 20-day trading period. Which it will do in the first 20 trading days, but we keep an eye on it for any number of reasons. We're back with Stop Trading from Jim. Okay, let's get to Stop Trading as we wrap up this exciting out. There's a lot underneath the market, the ROT. Not ROT from North by Northwest, but Johnson & Johnson is now broken 150, and this is a premier company with a 3% yield, sells it for 14 times earnings, that's really low and low. And this is what you see when you get away from the Magnificent Seven, or you get away from me, loved it or loved industrials. Sometimes I wonder whether this isn't finally coming to roost at Medicare's negotiating prices. Which I've never had when you've talked off in the course of that talc and the potential litigation there. I don't have any idea what a 20-year looks like, but I'd be curious, because sometimes, I mean, these great names, and yet they don't really perform particularly well sometimes. We can take a look. What is that? No, it's not bad. I just want to see that up turn continue, because when you buy great companies in our country historically, you've done well in J&J's, the AAA balance sheet, they do a lot of good things, and the stock has just failed the performance period. All right, I know one of your guests tonight, what else you got? Okay, I've got Morville, which is a competitive, you know, it's right up there with Broadcom, very much involved with the data center and NVIDIA, partner of NVIDIA. I've got DocuSign, remember that was that? I wanted to ask about that. Non-LBO, non-takeover DocuSign. And then Constellation, which of course is, I wish for Victoria, I'm going to push for them, because right now it's Medello, Corona, and Pacifico. Pacifico being the lowest end beer in Mexico, but you can charge the most for it, because people in their 20s love the long neck. They like the long neck. Rob Sands told me to charge more of Bar San Miguel for the Pacifico than it was doing, and it was dead, right? Again, Bar San Miguel. Well, it's done, now it's Fusfora. How about you get out of the Mezcal business and back into the owning of my wife? Fusfora, I do not. If you want to take on the bacon, I mean, you want to take on my wife, forget about it. I'm going to slip there. Coming up, see you later, by the way. Coming up, we'll have more from Carl. He's in Colorado, ahead of tonight's Cities of Success premiere. Also ahead, and exclusive with the IMF's managing director on what she sees as a challenging global environment. Keep it here. You've been listening to the opening bell on CNBC's 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 subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Squawk on the Street disclaimer, please visit cnbc.com/squawkonthestreet disclaimer. What's on the horizon for financial markets? At PIGIM, it's a question that over 1,400 investment professionals relentlessly research in pursuit of your long-term goals. Specialized across asset classes, but united in collaboration, our teams provide global and local expertise. Our investments shape tomorrow, today. Pursue your tomorrow with PIGIM, a leading global asset manager.
