What's on the horizon for financial markets? At PJIM, it's a question that over 1,400 investment professionals relentlessly research in pursuit of your long-term goals. Specialised across asset classes, but united in collaboration, our teams provide global and local expertise. Our investments shape tomorrow, today. Pursue your tomorrow with PJIM, a leading global asset manager. Market moving insight and analysis join Jim Kramer, David Faber and me, Carl Cantonea on the opening bell hour of CNBC Squawk on the street. Good Tuesday morning, welcome to Squawk on the street. I'm Carl Cantonea with Jim Kramer, David Faber at Post 9 of the New York Stock Exchange. Futures are solid, and it's all about earnings today as more than a dozen S&Pers, either a firm or raised guidance, including GE, GM, Lockheed, Spotify, Raytheon, UPS, Danaher, oil below 81, doesn't hurt. Roadmap begins with an earnings ramp up. We mentioned some names, Pepsi as well, all crossing the table, dig into the numbers. Plus Tesla is on deck. The shares, by the way, at a 15-month low, investors, of course, are bracing for what could be the company's worst results in seven years. And Apple's China concerned new data signaling a 19% tumble in iPhone shipments that's in the country would be, if in fact it is the case, the worst performance in four years for Apple in China. Let's begin with earnings as the markets do look to extend yesterday's a rebound rally. Jim, there's a lot of big industrials we can go to. Yeah, I mean, look, I know we can focus on Tesla. I want to focus on Mary Barra. Mary Barra had an unbelievable quarter. I mean, and I say, when I say unbelievable, I mean, like they delivered on everything that she's been talking about. They only want to make cars that they make money on, cars and trucks. They're a very, very good job. You know, we can talk forever about Elon Musk because Elon Musk is fast Canadian. And Mary Barra is workman-like. But you know what? Workman-like is what works when you're doing cars. And that raised guidance, David, was extraordinary. As was the beat, frankly. Very good. How is it that the analysts miss it by that much? Well, is that rhetorical? No, I mean, I don't know, it just feels like that's not something that should be that far off. I agree. I mean, I was not modeling GM, but I was expecting her to crush it just as I expected for Ford to crush it because you see their ice, all right? They don't have to worry. You know, Jonas, okay, let's talk about Jonas. Jonas said what's bad for Tesla is good for Ford and GM. So let's give him his due. Okay. Well, it is proven good at least. We'll see how the stock opens, but right now it's looking as up almost as much as 5%. Again, on the numbers. You pointed out yesterday the buyback, which is not insignificant. And Ford better do a buyback, because Ford is just languishing with all this bill Ford pays dividend. Carl, I don't want a dividend. Well, it's not baby, you've got a good dividend, but I really want a buyback. Look at how much she's sopped up. She's very strong. Great stat out of the smoke this morning. In terms of they call it a triple play, meaning you beat on the top line, beat on the bottom line and raise. GM's done it five to six quarters. Well, I mean, maybe because she's not having an existential crisis, we don't care. You know, the multiple always is interesting. Well, you mean the lowest in the S&P out of the financials? Just talk us through that, Jim. I mean, it's always been the case or certainly for a very long period of time. This thing just does not get a serious multiple. You're talking about a company that's going to have adjusted, adjusted automotive free cash flow of a range now of eight and a half to ten and a half billion dollars. Let's say they get towards the top of that range. Talking about starting the day, at least with a $50 billion market cap, so five times adjusted automotive free cash flow. David, if you felt that the world was going toward ICE and you, I mean, way from ICE and toward EV, if you thought the state of California was going to just end, end ICE, which a lot of people think it might do, then what do you do with that company? That company is an ICE oriented company. Understood. But I mean, at this rate, in five years, they can buy back the entire company with their free cash flow. Look, I think the stock is ridiculously undervalued and Ford is one of my largest positions for the travel trust. I don't get, I agree with you. See, I think the answer, David, is that it's wrong. Okay. I mean, no, no, no, listen to me. I'm not a sideways. We have a lot of stocks that are misvalued here. Look, if it's enterprise software, Carl, can sell 40 times sales. But if it makes something that people think is going to be obviated by events, not unlike what people feel about refineries. If people feel we're not going to have refineries, sell the refineries, sell them to things that are low-modable. Meanwhile, you have MRO buying back every single share. So the answer is that you do exactly what Mary is doing, and you do exactly what Marathon Oil is doing, and then you come back with a low-modable where you buy every single share, and you have a stock that makes you a lot of money versus Tesla, which was doing well, but is that? I mean, you know, you can flip a switch. Implied volatility for Tesla tonight, I think, is the highest in about a year and a half, right? About 9% either way. Well, look, if he has any free cash flow, then I think that the bears are going to have to eat some grow, bears like grow on it. You think at this level the stock is discounting what a lot of potential bad news is? I think that there's two situations. I think that this is starting to, yes, if they have free cash flow as positive, it's bad news that everybody knows, and if Apple does 19% decline in China, it's like a knob. The way everybody thinks it's, wow, wow, revelatory, 19% revelatory, you mix up by two. I mean, you know, honestly, why do you do that? Why do you act as if it's news that China, that Apple's doing poorly in China? I mean, no kidding. Interesting survey out of Morgan Stanley today, Katie Huberty, 2000 Chinese consumers surveyed, 25% think they'll spend more next month. That's down nine points from January, and they're citing everything from income worries to job worries. Look, the narrative that Apple must adopt is that if you look at Indonesia and Brazil and Turkey and India and Mexico and Vietnam, you've got growth markets that will overtake China. But we are fixated on China because a lot of people, obviously, but the Chinese economy is not growing. The Chinese populace is not growing. We need to not have the infrastructure to support 400 stores yet. But David, I think that if you're going to be levered to India, I think you have the edge over country, people that are levered to China. All of which is to say, this news does not shake you. I've been saying the stock was 160 for ages, and it's still not there yet, and it's going to get there. And then when it gets there, we're going to rethink it. But you know, look, if you want to put a 19 multiple on it and you want to give it a haircut of what it might earn, you have a $135 stock. Do you think that the -- you know, it's a $6? Do you think that the investors -- and the big institutions won't come in and buy the stock of $130, where it would be valued at a market multiple on an estimate cut of about 7%, which is what people are implying? Okay. But that doesn't sound like a reason to buy the stock here. I'm not saying that -- I'm not saying by here. I'm saying that I don't think it gets to the 19 multiple. I see. I don't. I feel uncomfortable and it's selling to $24.25, given the fact that all the data points indicate it's going to be flat, and it's very difficult for any analyst to say, you know what, we got a stock that's flat, and we got a -- we have a -- we have a stock that's flat. No revenue growth is very hard to defend. I know that it's very hard to defend, but we do have a new iteration coming out, and I think that someone could say, well, listen, with the developers' conference will come up with something. I don't think people wanted to trade down to where it would be a market multiple and earn 6 bucks. Right. Speaking of China, at least, Pepsi did say China revenue up double-digit. Well, the thing you know, Ramon is doing something that I've been waiting Pepsi could -- from Pepsi could do for some time, which is to flood the zone internationally. And LaGuardia's really smart. He's in -- just came back from India. He's making a lot of money in China. Now, Dave, what people are going to say is that, wait a second, U.S. is nothing special. But what he's doing is saying, I'm going for proper growth. I'm no longer just go for rev growth. And so that's how you come up with that number. I like the number because I've always been wondering when are they going to move into China? Yeah, you have good DCC number two. But obviously, there was a recall with Quaker that hurt them. But I think that PepsiCo is becoming more of an international company than it has been. Europe is very strong. Europe is strong. Yeah. Well, I'm just saying the stock's not up because we're so ethnocentric in this country. If you're not blown away in the U.S., we think that you screwed up. But I think that I've been waiting for profitable growth forever. I don't want a price war forever between Coke and Pepsi. Nobody wins. I like them moving aggressively overseas. Yeah. Organic up almost three, even with volume down, 5/10, Jim. So they did make some on price. It was a good quarter. But now the only thing that happens to stock ran in the last couple of days. So almost like people said, you know what, I'm not going to let this thing go to 170. I mean, well, there's a lot of stuff like that where I'm seeing stocks where people just said, wait a second, enough is enough. We had that with Procter & Gamble, 154, enough is enough. We had it when the market is pressed, 212, enough is enough. There's like, my top, your top. Your top, what top? The top of the show tonight. I do know the show is enough. Enough is enough. You and my wife. You and my wife. So your point is that there are hands out to catch the baby. That's good too. We could just write a show right here, David. Hey, we'll pass over stuff. I think we should write a show right here. This is so about nothing. You know that. Why? Are you hands out to catch a baby? And Brown shoots is my other thing. We have Brown shoots. I like when you spotted that out last week. That was good. People love that. We did. Brown shoots. I had a lot like that. I had a lot like that. I had a lot of belt and road. I had a lot of belt and road. I like that. And then my belt broke. Jason likes myself. Jason Gortz. You ever look at his stuff? Jason Gortz, yes. He mentions me a lot. You got good stuff. You really. Your material is getting better. By the way, they did it right up there, too. I know. And what was I doing? What was I doing? Brushing my teeth. They had perplexity and enthropic on the last hour at Tucson Squawk Box. Yeah. It's interesting listening, obviously. It's such an important, overall, whatever that was happening to happen. You want to learn? Competition between these large language models. Oh, I think it was competition from Boston and Andrew. It's corporate Darwinism at work. I love Andrew. I love him. They shouldn't let him in this building. But I love him. No, that's okay. I'm not allowed in the NASDAQ. No. Like, yeah. That shouldn't be allowed. No, I'm kidding. No, I'm not kidding. I'm not allowed to try to get, oh, you have an interview with the NASDAQ, I saw him in no way. We love Andrew. Jim, what was more impressive? GM or GE? Yeah. Oh, my God. GE. Larry Cole. Look, what can you say? Larry Cole delivered a number. Did you look at the backlog? You see the backlog there? 202. I mean, you know, come on. That was Raytheon. I mean, look, Raytheon was Raytheon, Greg Hayes, his swan, so David, this was Greg Hayes's last-- Wait, you're moving on from GE Aerospace to Raytheon already? I'm a linear. Yes, I know. And I obviously end crazy. All right. Don't get distracted. Let's focus on GE Aerospace for a moment. All right. All right. No, I'm not-- Because we're talking about the backlog related to GE. Yeah. And then we can do Greg Hayes, the swan song at Raytheon. But obviously, it's the first quarter since the split since it is now fully independent company. Well, though, I have a lot of-- It did have a lot of it on its-- Yeah, it did have a lot of it on its-- And the other was still a part of the quarter. But they broke it out, because they're honest people. Total orders up 34%. No. Think about that. Leah, 34%. 34%. 34%. Hello. Well, remember also-- remember how they're set up? They are levered to travel. They are levered to planes that you have to continue to maintain because our friends at Boeing are offering not really a clue about how many planes they can produce. Right. So GE had to-- everybody had to estimate Raytheon that's a RTX. They wanted to estimate how much business there's going to be because of problems with Boeing. But believe me, they do well. They do well either way, because they do engines. Well, they probably had a beautiful number. I don't know if you told them about what the number-- The best part for RTX. Oh, I'm sorry. I'm not allowed to jump from one to one. I'm sorry. I was going to say it's a nice segue, because Pratt was up 23. Thank you. I've got to tell you, they-- this defense bill is fantastic for them, particularly Ukraine. They're sending them the best. They already have RTX in the mid-east, waiting to give it to Israel. Well, you're talking about the Patriot. No, sir. They actually have other missiles, too. They're in as well. They're in as well. Yeah. Patriot's a million dollars around. There's a lot of money. Look, they seem to-- I mean, the stock, remember, for quite some time, it was held back by the turbofan by the problem. And do you know that recall was a simple recall, and they didn't have nearly as much poo-blah as Boeing, because it wasn't as dangerous, but even announced as danger, you got to pull. Hmm. Who's going to become the CEO of Boeing? I floated the idea. It's early still in the-- The crankcase should be the CEO of Boeing. And I got a-- it was like laughing. I got laughter. From Greg? Yeah. Because Greg does not want that job, because Greg is going down on a high, and I'm thinking who's going to take that job? I mean, I don't know why Culp would leave $170 billion in parts of value company for Boeing now. Culp is not leaving. And Culp's-- He is-- it's sure-- Culp's Culp has got to be-- because I assume he-- I got to take a look. I don't think he plays for us. He doesn't play for Culp. Oh. He played-- what? All right. Fine. Mahomes didn't play for Culp initially. He's from the Mahomes of aerospace. Larry Culp is the Mahomes of aerospace. Mahomes aerospace. Got it. There you go. Yeah, too. Hey, Larry. Maybe he thinks he should be the Andy Rees, and he's now the highest-paying coach in the NFL. I wouldn't have been. Clark Hunt. One, two, and a row. One, two, and a row. Good owner. Anything else you want to talk about? Your guy's a rich owner. He's just-- My guy's lifting, right? Which guy? The Jets. Oh. Johnson? Yeah. Barack goes in Wilson. That's what I got. I got back. I like to talk. Take a look at the pre-market here. There's so many more numbers today, including Dana, her Lockheed Spotify. Not all earnings stocks are up today. We'll watch Xerox, Sherwin Williams, UPS, Tuff's Joy on Arc in the Journal when we could remove return. Hello. I'm Laura Castleton, U.S. Head of Portfolio Construction and Strategy at Janice Henderson Investors. Is a brighter future possible? At Janice Henderson, we think it is. For 90 years, we've worked to help clients achieve superior financial outcomes and fulfill our purpose of investing in a brighter future together. We know that this means our thinking and our investments are helping to shape millions of brighter futures for the next 90 years and beyond. To learn more, go to Janice Henderson.com. You seek the key, but first, you must learn the ways of precision, craft, and performance with Acura's all-electric ZVX, with a premium bang and all-of-son sound system up to a 113-mile range, and a Type S variant with an estimated 500 horsepower, the ZVX is their most powerful SUV yet. Unlock the energy when you visit Acura.com to order yours today. Advertising. You've got a big applause. You didn't sound like you were going to advertise that much, but you did at least seem to open the way to saying, "Okay, we might consider doing some advertising. Why?" Well, I believe in listening to shareholders, and I actually was surprised by the level of enthusiasm for advertising, since we've not historically done that, but there perhaps is some good logic to it in that if we're simply saying that information by, I say, the Tesla Twitter account or my Twitter account were somewhat preaching to the converted and not reaching people that are not already convinced, essentially. So I think they probably have a good point. Well, I think it's worth a try, and we'll see how I factor it. Tesla CEO Elon Musk, that was, of course, our interview from last May, talking about the company's least possible foray into advertising because it was something he had mentioned at the annual meeting, which directly preceded our interview. Now a bit of an about-face ahead of earnings tonight, Tesla is scaling back its marketing team, Elon Musk tweeting yesterday, that the ads were too generic and could have been for any car. Of course, we've already talked a bit about what we can expect in terms of results tonight, the volatility that may result in the stock price, Jim, but he does seem focused. Very much so, and that's why I say, "Look, there's no rabbit out of a hat out there," but the stock reflects a very big loss. And if there's anything less than a loss, I think some institutions are going to come in. Not Kathy would have bought it yesterday. I mean, like not Ron Barron, and the people who are true believers, I'm talking about actual institutions who might come in and say, "You know what, this stock is at the right level." Versus, say, Apple, when people are going to say, "Look, I'm not going to pay you. I'm not going to let this thing go to 19 times earnings." This is not that kind of situation. This is a, "Okay, look, and here's what we're going to do. We've got a roadmap. It looks like that the initial cyber truck is better. We're going to stimulate demand. We've got to be able to, we can do 250,000." I don't hear that. Right. But maybe it's possible. I know Ford felt that they could sell more than they have, but I mean, again, the dynamics of the marketplace have changed. Yes, they have. They've changed rather dramatically. A, in terms of just overall consumer demand, yes, there is absolutely growth. We don't mean to imply there isn't, but the growth rate seems to be slowing to a certain extent in terms of adoption here in the U.S. certainly, and then you've got this enormous competition from Chinese EV makers in other parts of the world, not to mention the domestic market of China itself. RoboTaxi's dodge. RoboTaxi is just, I mean, at this point, it's not about, you promises aren't going to work anymore, right? I totally agree with you. And that's why I think that you have to hope that people just say, "You know what? We thought that there was going to be a big loss. There wasn't, maybe the company is doing better than we thought, and there's therefore Carl. It's okay to step in." Look, that's the only logic I have in the world. The awarded stock, Carl, that shareholders will be voting on, remember, in terms of his compensation is a lot less worth a lot less than it was. Good point. Keeps coming down. Good note out of Barclays today, looking at how and why Musk and the company really pivoted hard toward Texas, Jim, because in Barclays' view, that's a regulatory zone where you could take long shots on autonomous. Look, I think everyone in Detroit would like to go somewhere else now, but they're deeply committed to Detroit. They're never going to do that because that's the home. But if Toyota passes Tesla, can you imagine? Well, and then you've got the UAW piece on CNN today, looking at the victory in Volkswagen, where that's going to lead, what it's doing to the labor market in the South, Southern manufacturing? You're going to see a boom in Mexico, like you went away, because Mexico is where you can make it. I don't think you can control laws. You make $5 an hour, the transportation, you just go right up pay, you know, KSU. I mean, that's what's going to happen. I don't think people understand that. I don't think the news understand that. I mean, look, Trump didn't like it. Biden. You know? They're not aware. They're not aware? I don't think you're arguing for $5 an hour. No, no, they're not aware of how you can bike. You can make a car in Mexico and put just enough American in it that the Biden people can't fight it. That's what I'm saying. They'd be aware of that. No, no, okay. I'm saying that if you talk with Phil LaBeau, Phil, Phil will tell you you can kind of play with the rules. Yeah. That's all I'm saying. They're not aware of me. They've got to be able to say, look, it's now if you have 25% match, go, no, we're going to give it a turn. Kramer's mad dash in the opening bell after a break. Norman, we need to pause this surgery. What, doctor? 'Cause Xfinity Mobile just got even better. Now you're automatically connected to Wi-Fi speeds up to a gig while you're on the go. Plus, existing Xfinity customers can buy one unlimited line and get one free for a year. Visit Xfinitymobile.com to learn more. Offer N621. Restrictions apply. Existing Xfinity internet service and two new unlimited lines require. Reduce speeds after 30 gigabytes of usage per line. Data thresholds may vary. Actual Wi-Fi speeds vary, not guaranteed. Got some AI enthusiasm reasserting itself with AMD, meta, and video on the NDX gainer list this morning, along with Datadog at the top as Wells goes to 150 prior 130, opening bell a few moments away and don't forget, you can catch us anytime anywhere. Just listen to and follow the Squawk on the street, opening bell podcast. All right, let's squeeze in a mad dash for an opening bell, Kimberly Clark. They announced some restructuring. One may have money. Sure, and it was a restructuring that really put the wood to a lot of people because they felt that they didn't need as many and it was very tough to do. Obviously, this is kind of almost like a family-like environment, but you saw it. You saw the greatness. There had been a lot of different things, earnings per share. Now, looking for low teens that have been high single digit revenues, they were looking for now high single digit. They were looking for mid single digit, low single digit. This is just a remarkable turn. So the guidance has improved dramatically with all with this order. And revenue is good. Revenue is good. The 2 billion free cash flow is extraordinary. I cannot believe it was like Heidi in plain sight. He came on. He announced it. It was a remarkable destruction. Nobody cared at all. I told him I said, "I think this talks to me after a couple bucks tomorrow." Completely wrong. Delayed reaction. This is what I mentioned about the market, anything is wrong. Look at that. He told you everything, everything. I think he's an executioner. Let's get to the opening bell here and it gives you a kind of change. And the big word is lithium motors and auto dealerships. As an Aztec medical device company, QT imaging holdings. I have the light lad very much. This is lithium driveway. It's a very, very good company. The stock's been down. I think it's kind of an interesting one. It sells the seven time journeys at before what we're talking about. I think it's auto. A Brian DuBour's terrific and he lives in the town of Ashland, my daughter lived. And this was where my daughter bought our car and it goes to fabulous experience. It's almost as good as Carbone and David. Almost. Almost as good as Carbone. Carbone has got the giant. We put the coin in. It's an inventing machine car thing. We'll actually do that. It's unstoppable. Yeah. Tell you what's interesting, Jim, is some of the commodity action today. Copper worst day in a week, aluminum nickel worst day in a year or two, cocoa down seven, oil below 82. I knew cocoa was going to crash. That's why Hershey never really got crushed. You buy Hershey here because when you have a power box move in cocoa, it has always ended so badly that they obliterate the commodity. Let's see if coffee gets it. That's been up 25%. I think nuclear last night, I happen to like nuclear very much, they're going to be on. Obviously, people are thinking that the worst is here. There were some of some actual things involving restructuring of internal costs. But there were a lot of in March, there was a lot of weakness, and I'm dealing with developing, along with my brown shoots, a March weakness theory. That's interesting. Yeah. Sherwin Williams, demand choppiness. March weakness. That's a double miss. March weakness. That was very surprising. Are people selling home people on that? I don't know. UPS, Jim, average daily volume down three, although she made Carroll to Mesa improved during the quarter. She made pledges. There are people who feel that she's too optimistic. I think that she made a pledge and she's going to live up to it. I actually believe in her here. I think she's going to live up to it. You do. Yes, because there was no need to do it. No need to do it whatsoever. She did not need to put herself out. Well, the stock is fractional, at least, in the early going. I got a stock that's up a lot more than that, percentage wise. No. No. Keep trying. IBRX. Nope. Spotify. Oh, yeah. You had to do this. What do you mean, how to do it? It's up 14% when it's upsetting you, somehow. No. It's just so good. When I did my game plan, I said go buy Spotify. No. I said go buy Spotify. No one listens. No one cares. No one cares. I do the show in her mirror. Yes. You might as well. I said, just go buy Spotify. Like, here's my game plan. Go buy Spotify. I don't care. Stand on the street and do the show there. I would do it. Yeah. Why shine shoes? Why not? I don't know. I should do this. It's my best one for next week. 3.64 billion euro. A bit above the street, gross margin was 27.6%. That was better than had been anticipated by men in the analysts who follow the company. The operating margin of 4.6%, again above, at least, where many analysts were at 4.2%. And they did guide for the second quarter premium subscribers to $245 million. That was a little bit below, I'm told. But overall, guys, as you get the picture here, origins, earnings, and the average revenue per user is extraordinary year over year. $615 million. There's $500 million. David, this is the way Netflix used to be. Remember when Netflix, when it would be like the numbers would come out and you'd say, like, wow, how'd they do that? This is the old. This is the new Netflix. They're focusing to a certain extent on efficiencies, like so many other companies. Remember, the podcasting effort is definitely waned and how much money they were spending on that, right? Although price hikes are getting digested pretty well, Deutsche last week went to 3.40. They were at 2.60, Jim, because they think the price hike got so well as received, there's going to be more. Well, I just think that it's an extremely well-run company. You joined a person at some very good comments. You spoke with Dan Eck, and all I can say is that this is a company that is chronically undervalued. And I understand it. I mean, can't people search this as a good company? It's a subscription business. One of the things that we've learned a lot is if you have a subscription business, the stock can go higher. Now, Netflix, when they talked about the idea, you can only multiply the person by the fee. That was so hated. It's this year. Netflix saying a year from now, they're going to no longer give us their KPIs, no longer give us their credit numbers. That killed it. They just killed it. They just killed it. Just killed to us. And by the way, why did you need to tell us a year out other than you think they're not going to be so good? It was a suboptimal call, and I love Netflix, but holy cow, that call was like, hey, let me be the bad guy. We're not going to give you what you want. Let me be the bad guy. Why don't we need a bad guy for it? I just want good guys. How about Wells taking Disney to 141? Oh my God. That was like, wow, Nirvana talking about the parks being strong. I mean, the stock kind of has been weeks since, say, Nelson, I didn't win that. Yeah, it was a bit weak, but the market caps are converging once again. Netflix and Disney. It's always interesting to watch them for the years. Did you read them? Wells knows. I mean, Netflix is still, let's call it 40 billion, almost 40 billion bigger, but. Yeah, to do that. Yeah. What? I had to do a lot. No, I'd say the comparison is fatuous. It's a fatless comparison. It's a fatless comparison. Netflix and Disney. Well, it's endless. Am I tired of it? You're tired of it. I haven't done it in years. Well, I haven't gone through the proxy. The proxy war. I don't need to hear it anymore. I think that I still think that Nelson could have been a value. Oh my God. We're still going to be hearing about this. Hey, you lost. You're side lost. Me. I lost. You lost. I lost. Yes. You lost. Yeah, you're right. Was it rigged to Jim? Yeah, it was. I planted the Nelson article in the Times. Okay. You planted the Nelson article in the church. I was like, yeah, which one was the nice one? By the way, why did that Wells piece come out? What was the genesis of Wells piece? I don't know. I mean, with the proxy fight over, we think management will focus on execution, sports stabilizing, DTC upside. That's why Jimmy Patero should be named the CEO. Oh my God. Okay. Okay. When I worked for Roger, he said that they're going to be focused on doing all the things they said they're going to do. So they continue to Wells apparently thinks they're going to be successful out of it. Moving on. Warner Brothers Discovery. My travel trust is a huge position to do. Which you have been somewhat supportive of lately. What do you know? Warner Brothers Discovery. He had a checklist. He had a right behind the, right behind the chest. Love? Right behind the fixtures. Oh, yeah, with Mackinac right? Yeah. Really amazing sheets. Interesting. Yes. Yeah, that stopped you. That stopped you in your tracks. Yeah. Yeah. You were like talking, you were running fast. Yeah. You come up like me. Went to the same high school. All right. Wolf research. Wow. This morning. What? I went to see my school. Yeah. Yeah. Yeah. 44 billion of gross debt equals nine years run rate free cash flow. Sits the top 2024 EBITDAB 9.8 billion and that forecast relies upon seven and a half billion of high margin linear TV advertising whose the fine keeps accelerating with these exposures and the bulk of merger synergies realize we fear EBITDA peaked last year. They go to an underperform price target. Oh, no. $7. $7. Jesus. I guess that's the end of the next tickets. Oh, I don't think so. Oh, really? No. Comp is fine. Comp is fine there because it's based on free cash flow. A lot of the metrics. Well, the 27 million and then the additional Zaz comp is based on free cash flow metrics. I'm going to tell you something. I am rooting for him. All right. Who? Zaz. Of course. Why not? You're okay with it. 30 years. I thought this piece was breakthrough because it said turner over earning on agent NBA deal. Agent. What does that agent mean? It's like, you know, the Zaz, I didn't mean we already went through this thing yesterday where I said that I think the Jassy would like more and Jassy said no. So, but we don't know what Apple wants. No, but the NBA deal is going to be a lot more expensive and do they have the wherewithal to continue to actually have the same amount of games they do now at Warner Brothers Discovery? Probably not. It's a nice end to a game. Is that the Knicks? Yeah. Yeah. NBA free after this week. That's right. They focused. Um, and there's OG hitting the final free throws. Oh, why don't you get it? Were you Dars Burke? Yeah. Well, we didn't have the man before and all the guys there are amazing. So, aren't they? Oh, killer in favor. Can we you want to talk about this capri the FTC and the tapestry capri. It's about time that we talked about this. It is. It's an important moment again here in terms of antitrust, something we have talked about so consistently now for years, of course, the FTC being more aggressive than we've seen in a long time under leader, it's leader, Lena Kahn, and they've come after what they call the accessible luxury market. That's not a market they made up. That's in fact, what the companies involved here have been calling this market for some time. All luxury handbags and, um, they say, uh, uh, it's going to create a colossus, dwarfing all other market players. They go on to point out that accessible luxury is very distinct from what the parties and other industry players call luxury or true luxury. Yes. And these elite brands also claim affluent high wealth consumers in contrast to the millions of working in middle class clientele who comprise a large part of the customer base for coach, weight spade, and of course, Michael Kors, which is a part of the company being acquired here, which is pre bi tapestry and the price was 57 bucks is 57 bucks a share. You can see when we look at the stock, it is well below that, but there is believed to be even more downside if in fact this deal were to be upheld by a court. I mean, to give you a few things here. First of all, it was a 5-0 vote from the commissioners. There are two Republicans. They were appointed by President Biden nonetheless. It's interesting to see a 5-0 vote from the commissioners. It's not that often that you see that or at least when you've got two of the five Republicans. The level of redactions in the complaint itself is very high, so it's tough to gauge the level of bad documents that they're relying on, bad in terms of bad for tapestry and concrete because it points to a lot of different competitive things that they may have been sharing. And then, of course, they're going to contest this market definition even though it's their own, Jim. And they're going to say probably, listen, yeah, together we represent 50% of this market that you're making up, even though they, of course, have made it up themselves. But there are still 50% of that market that is made up of very serious competitors in all forms, although many of them, I'm told, do not have brick and mortar stores. So market definition will be important, and we'll have to wait and see. I'm for the FTC on this. Are you? Yeah, I am. Because there was very well-written brief. Wow. I did not expect that. No, I am. And the most important thing is the competition between the party today benefit not just consumers, but other consumers when she's such employees. The fact is, is that I have been a not that big a fan of the FTC because I didn't think they care as much about the consumers, they care about other constituencies. This was spot one. I did not realize how concentrated this business is. I think it would be very difficult to be able to get a lot of floor space. And these two companies, they go out of hammer and tongs. So we actually have a consumer benefits from this. So I'm with the FTC on this. That's interesting because the Republicans are too, because this has to do with the consumer, which is what I really care about. Well, apparently what they're claiming is the middle-class consumer who buys these accessible luxury brands. For their part, I don't know if we had anything from the companies, they're saying there's no question, this is pro-competitive, pro-consumer deal. The FTC fundamentally misunderstands both the marketplace and the way in which consumers shop, and they say both companies operate in intensely competitive and highly fragmented industry alongside hundreds of rival brands, including both established players and new entrants. Well, it will be an interesting one to watch. They've got a judge, a judge codal. He was a Clinton appointee on the U.S. District Judge for the Southern District. So it is here, not far from here in New York, started in September of '94 and has worked on a number of important cases. Let me give you a quick rundown on codal, just if you want to actually try and figure that out. No antitrust opinions, at least, is a first quick look. He did dismiss the DNC suit against WikiLeaks, Russian Trump campaign as well, alleging Russian interference in the 2016 election. So people are looking at his decisions to try and figure out where he's going to come down to him. Do you see a new rule of five here? Propose acquisition will eliminate direct head dead competition. David, then it's all redacted. I think they've got a home run here. There are so many redactions, and that does point to... You have to gauge what they've got. I think the FTC has documents. I think they've got a new stuff. Yeah. The question is how many are really bad for the Fed? Look, I'm against head dead competition combining, because that's what happened with the airlines. You can say, obviously, it's a fractured market. But this is a very well-reasoned brief, and it is true that the consumers benefited from head to head. I like anything the FTC does that's pro-consumer amoled in favor of. But they... You know, you're nothing if not surprising sometimes, Jim, and let's not forget he did go to law school. I didn't go to law school to get stupid. No. There you go. And Jim, some of the biggest earnings gainers we've not mentioned, that is Dan Herr, number one S&P. Thank you. Quest and KMB. All right. So let's go. Dan Herr's one of my large positions from Child Health. I have waited, and I even mentioned it to Larry Kolb today, because he did that too. I have waited and waited and waited for this company to have the inflection. And this is the inflection. The inflection is that they do equipment that's really great for biotechs. And there've been enough new biotechs, companies that came public that have money, that they're now finally doing what I thought they would do, which is to go to Dan Herr by the equipment that you need to sequence, by the equipment that you need to be able to develop really good new drugs. And this stock, dare I say, is just... This is day one of a very big move. Now, it is a child trust name. I do have my club meeting tomorrow at 12 o'clock. But this is one that I said, there's going to be an inflection point, and you have to be ahead of it, because if you're not, you're not going to be able to catch it. And that's exactly what happened in Dan Herr. You know that Dan Herr's well-run company. It is. But it's been... Renee's good. Renee Blair. shareholder's became so accustomed for so many years for just nothing but an incredible performance and stock price. And that changed our last couple of years. Two and a half years. Yeah. You're absolutely right. I would point out shares of Thermo, TMO, are also up on the back of these numbers, right? The top of gang are there. But I just think that David's absolutely right. My trouble... Of course, we bought some Dan Herr when it was down. But it has been a huge struggle because Carl, these guys were in the Never Miss category. And that's why they had such a high multiple. And I think this is the beginning back to the Never Miss, because there's so much money coming into the biotechs. We see that all the time now. We see the deals work. It doesn't hurt that they were put on the same day as a nov artist, which is pretty good. But I just am very glad that these guys who have been like clockwork are back. Dan Herr's back. Let's get some PMIs this morning as well and welcome back Rick Santelli. Hey, Rick. Hi, Carl. Indeed. We're looking at markets moving on these data points. S&P Global PMIs. We know manufacturing's been a bit bumpy. We had three months above 50, but not this month. We break the streak 49.9 and interest rates have dropped about three or four basis points on the tens and the twos, of course, moving further away from 5%, 49.9. That's the first read under 50 since the end of last year when we were at 47.9. Now we know that the service sector's been much stronger. And we now have 15 above 50. That's one five above 50, but still a disappointment. 50.9. We're looking for number 52 or higher. And if we look at the composite, also the 15th consecutive month above 50, but also a weaker read 50.9 on both services and composite, 50.9 is the weakest. Well, you have to go back to November of last year. So we are watching rates drop, but we have a two-year note auction at one Eastern, the biggest ever at 69 billion. That's going to be something to pay attention to, squawk on the street or return after a short break. Watch ARK today. Jim mentioned Cathy Wood by some Tesla in recent days, but tough piece in the journal this morning looking at the 2.2 billion in net outflows so far this year, which more than surpasses the total from 2023. Meantime dows up 155, inching back to 50.50, just a few points shy. Stop trading with Jim's coming up next. Time for Jim and stop trading. When I was some guys and dolls, I got a horse right here. Its name is ServiceNow, reports tomorrow. And I think it's going to be blow out. I didn't want to go out on a limb other than the fact that SAP had an amazing quarter that was a Bill McMurmore's previous company. Really an amazing quarter, and using a lot of AI as a ServiceNow, SAP won tonight for Mad Money. And I think that you buy ServiceNow at 733 and 735 now, and I think you make some money. Are you more master sky master soon or nicely nice? No. Why the horse? Ah, nice. Second rate. Second. You know how you go out for the big one and you just don't get it? Don't get it. Just so bad. Jim tonight. OK, so I've new core, which has got a new core actually missed the quarter. They had some some reasons that had to do with internal, but some of the pricing didn't hold up. I'll leave them close. Well, we actually have a minute here. I mean, yeah, new core and Cleveland close both down. Cleveland close down about 8%. March was a bad month in this country. It's my theme. You know, obviously we're reiterating on the call all the reasons why Nippon will not succeed in buying U.S. Steel. It was pretty great. Well, what about the overall business for new core and Cleveland? Well, new core. I'm going to challenge him. I think that new core March was not that good on a series of grades of steel. I think that this is just like the PMI that Rick talked about, the PMI was weak. I think the Fed's going to get bailed out here. No one's thinking that I'm going there. I would like to see the home builders get hurt. We need shelter to come down, shelter has not come down. Actually, Morgan Stanley, nice chart today, looking at leading indicators of shelter. Second half, they think, will lead to more disinflation. Then you're okay. Then we're home free. Yeah. You're home free and you want to buy them after we have another touch. We had a big oversold, then we're bouncing back, then we're going to have another sold. It's going to be the same situation that we had last October. I think that after the second decline down, you're going to be so tempted. You've got to wait for a third decline and everything will depend on it in the end in video, which if you go listen to his amazing discussion at Oregon State that he had with the president of Oregon State, you will realize why Jensen Wong, he is the most brilliant man in the world today, not Mr. 50, but the 56 billion dollar man. While he's not anymore, that compensation free line has come down to like 46, maybe even less, given the decline in customer stock price. Yeah, that's the problem with America. Wouldn't it be great if he had made 56? That's what we're talking about. That's America. Mr. Handbag. I'm Mr. Handbag. Mr. Handbag. Thank you. Thank you. I'm bringing it in. I'm bringing it to Michael Korsman. You can see why they have to see his name right on this. Jim Kramer aligning with Lena Kahn. Yes. Miracles will never cease. Kahn, Cantor, Wu, and Kramer. You betcha. Attorneys at law. Yeah. Betcha. There's a firm. Fighting. The defenders. Fighting for middle class accessible handbaggery. Jim will see it six. Mad money, of course, six PM Eastern time. 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/squawkonthestreetdisclaimer. 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