♪ good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen. becky quick is reporting live this morning from the berkshire hathaway annual meeting in omaha which is about to get underway. becky, good morning. what do you have coming up? >> good morning, guys. it's wonderful to see you. andrew, i'll see you here later today. we are at the berkshire hathaway annual meeting. this is the convention center. warren buffett is going to hold court here this weekend. 40,000 people will anttend the meeting. this is the same setup for years here, but this year is a

different meeting. the first annual meeting since charlie munger's death at the end of last year. it raised questions of what berkshire hathaway will look like after warren buffett. those are the things that shareholders have been asking about and the types of things we see reflected in the media. big questions, obviously, thrown to warren buffett and greg abel and jane who will be on stage this weekend to answer those questions. we'll talk about those over the next few hours. some of the issues surrounding berkshire. these are issues that warren buffett was direct about in his annual letter to shareholders. he laid out the disappointments they have seen. bnsf was a disappointment on earnings. earnings dropped significantly from a year ago. buffett laid out how its railroad has fallen behind the other five major north american

railroads in terms of margins. he talked about bhe. berkshire hathaway energy. the major utility company berkshire hathaway owns as well. laid out the issues on the regulatory front with the western states. major fires there, liability issues that come with it and questions raised by regulatregu. all of those things raising questions. we will talk about those issues. the other major thing is litigation for real estate br brokers. berkshire hathaway did not participate in the litigation that was settled. there were questions about that. a lot of meat to chew over. we have guests today and the ceo from the portfolio companies. oriental trading, brooks running and pilot and bnsf. we have mario ganelli and we have questions to throw out about how the board is looking

at these things. a programming note. we will have full coverage of the annual meeting as warren buffett takes the stage to answer shareholder questions. tune in to cnbc and cnbc.com at 9:30 a.m. for full coverage here at the meeting. andrew. >> thanks, becky. we'll come back to you a lot over the next three hours. of course, a lot over the next 24 and 48 hours. let's check on markets and see where things stand. the dow is up 320 points. nasdaq up 121 points. s&p up 20 points as well. let's show you treasury yields at this hour. still three and a half hours before the equity markets open. the ten-year note at 4.569%. the two-year note at 4.883%. we want to talk about

berkshire hathaway with the apple shares reporting a 10% decline in iphone sales. 46.6% margin. think about the business. apple signalled the revenue growth in the current quarter in the low single digits. analysts estimate of 1.3%. perhaps the biggest catalyst for the stock move was this. apple approving $110 billion in share buybacks. the largest buyback in corporate history. it raised dividend to 25 cents per share. that will drawdown the cash pile at $162 billion at the end of the quarter. in the last ten years, apple spent $658 billion on buybacks. we will talk to the apple analyst who is raising his price target after the report. part of the buyback strategy is one of the reasons warren buffett got into the stock. if you can make the float lower, it makes everybody else's

higher. >> if they don't have a better use, there is no reason to sit on it in a money market fund. it makes sense. this sort of flies in the face of the criticism you see and in this example, tim cook has options that will be worth more if he gets a stock price up. it is the way companies decide to run and if they issued too much from the past to reduce the float and it will boost earnings per share. if you are sitting on $162 billion, it is an effective and wise use of cash. hopefully. the stock is down how much? this is the five of six quarters where revenue has fallen and the stock is still amazing. the size of the buyback. let's talkabout the market cap of the company. on the percentage basis, a normal buyback for anyone else. when you are worth trillions --

why talk about billions when you can talk about trillions? >> when you think about what could you do with $110 billion? >> not a flying car. lately, they decided we're apple. we have the great ecosystem. maybe we will not be all things to all people. i think that makes sense instead of pouring cash into some exotic venture. it's smart. when you go off on all these half cocked directions. a.i. a.i. has to do it. >> they're trying. they're behind on that. the question is and we talked to jon fortt about this yesterday. do they need their own model? amazon doesn't have their own model tyet? >> do you need an obesity drug?

did you hear my tease? >> amgen or novo nordisk? >> you know where i'm going by looking. >> i know. i thought you were talking about it. wegovy. amgen news out last night. i think it was phase one. that's okay. shares of amgen soaring getting into the business. number one, the company said it will stop developing its experimental weight loss pill and move forward with the injectable drug. the company will release initial data from the midstage trial on that drug. it is pleased with the results so far. the injection is different from existing drugs liking wegovy and zepbound which activist a gut hormone receptor. amgen's drug blocks the receptor

which changes how the body breaks down sugar and helps keep weight off after they stop taking it. that is the worry of the others. it has been tested to be taken once a month or even less frequently. that's the amgen news. >> a friend of mine ran into me last night. i'm at a cocktail party. i'm eating with no discipline right off the appetizers. >> you look like you have been cov gorging. >> he said you are really going to take ozempic? >> he looked at you. >> i think that there's going to be a microscopic version that people will take. >> what will it do? >> it is all about addiction. >> you will get addicted to that instead of food. you should keep your addiction to crispy treatment and don't

get addicted into an injectable thing. let's talk about booking holdings. earnings above estimates as it benefits from post-pandemic travel. rooms booked in terms of the number of nights jumping 8.5%. gross travel rising $43.5 billion. the guidance here is for those met tricks in the quarter fell below estimates. the company expects reservations to slow in the current quarter as tensions in the middle east curb regional tourism there. it makes up 7% of the bookings. israel alone is 1% of the bookings prior to the israel-hamas war. we will talk to glenn fogel at 7:25 east eern time. shares of expedia are down sharply this morning. the company has first quarter results in line with the

estimates, but did cut the full-year guidance. the signal that margins are flat from last year. the recovery from the vrbo vacation rental business was slower than anticipated which put pressure on the bookings. do you call it vrbo or v-r-b-o? >> i see commercials. vrbo. it's jobs friday. po polled forecasters expected the economy to add 240,000 non-farm payroll jobs in april. the market seems to be coming to grips with the current environment. if you think about it, andrew, and what we want here, when you have stagflation worries, you could not like a hot number or a cold number. you could not like the hot number because it implies they're not going to cut rates. it should dispel the slowdown

fears. you will not like a cold number because you thinking stagflation. i don't know how a surprise onon either side is bad news is bad news. >> i'm surprised the market is taking these numbers in stride. travel coming down. that's a first we have seen in a while. everybody is saying, oh, it is all good. >> can we go to becky whenever we want? becky? >> yes, i'm here. i'm listening. >> i didn't see any tents. none of the 40,000. >> here? >> yes. >> i haven't seen any yet. >> capitalists are welcome at the meeting? >> card carrying capitalists. some have cards they were handed out a few years ago. >> these are from the gatherings? >> it is a foreign country. you bring your passport when you go there. >> actually, tgi -- bh?

thank god it's berkshire hathaway. take my mind off the other things. >> this is the place. joe, i can't believe you have never been out here. you would love it. >> i know. you know what else i love? meat. the real meat out there. do they have a place that serves the gates burger? >> vegetarian? >> not vegetarian. it's like -- i don't know what it is. now i'm cooling on that now, sorkin. >> you should go out there, joe. >> when is the last time you had fake meat? >> a long time ago. >> years. what happened? i'll go out there. >> the fake meat is not any less fatty or healthier for you. that was the problem. >> you will be signing autographs out there, joe. >> really?

>> you're big in boca and omaha. >> worldwide. becky, we will come back to you in just a moment. excuse me. we'll talk about how companies are navigating a politically charged environment from the election to the nationwide protests on college campuses. that is next. as we head to break, here is the look at the stocks lifting the dow ahead of today's js ob report. "squawk box" is returning after this. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content curated to fit your unique goals, you can spend less time searching and more time learning. trade brilliantly with schwab.

and they're all coming? those who are still with us, yes. grandpa! what's this? your wings. light 'em up! gentlemen, it's a beautiful... ...day to fly.

welcome back to "squawk box." we have the latest on the college campuses and we have our guest with us now. good morning. i think we're all trying to figure out the implications of this and whether companies will ultimately hire some protesters. there are a number of ceos saying they think they would love to hire somebody who is active and passionate about things and others who say i would never want to hire any of these people. >> i think different strokes for different folks. you are seeing a variety of reactions to this. it is interesting that just as

things are heating up politically across campuses and across the country, of course, spurred on by the israeli-palestinian conflict, silicon valley is retreating from being out there politically. that is what we have seen at google and meta. that is actually more of the position of a lot of silicon valley companies. >> do you remember a moment two or three years ago after the murder of george floyd where brian armstrong came out with what seemed like a controversial view that politics should not be in the office or social causes discussed and companies should not be engaged in pushing for social causes and the like. there are a lot of people who seemed outraged about that position. now it seems that that position has become increasingly the

norm. >> absolutely. brian armstrong from coinbase was completely vilified for asking employees to keep politics out of the workplace. this was in 2020 after george floyd was killed. there was a huge push among a lot of employees in tech companies, not just in silicon valley for players employees to take a stand. there are others saying a time and place for political and social activism. we don't want it in the workplace or corporate channels. both felt it was divisive and distracting. it was creating so many divisions and people were on teams and they did not want to work together. that is how big of an issue it has become. >> how did we swing this issue so far?

we need to listen to employees and have to have a mission and social purpose. our customers are increasingly looking to us for political or not political guidance, but where we stand as a company and who we are to now saying we don't want to be anybody. we want to make our product and do our thing. >> yeah. by the way, i think there was a contingency of employees and leaders who just wanted to program and code. not everybody wanted their company to take a stand on a variety of issues. absolutely, there's been a shift. i think there is a bit of mission creep literally and figu figuratively. it is a mission. what started in silicon valley companies with the values and big mission statements. google, don't be evil and do the

right thing which they transitioned to. the big and broad statements allowed for mission creep. if going back a few years, it made sense to take a stand for, of course, we're for equal rights. we want our earth to be protected. fast forward to today. does that mean these companies are also expected to take an anti-israel stance? does that mean they're supposed to back out of a contract with the israeli government which is what google employees were agitating for here? no, that's against the core business. >> in a country like this right now, michal, it is either 49/49 with two in the middle. i don't know what it is on all of the issues. why would anyone in their right mind pick who is buying more sneakers? michael jordan will last

forever. republicans buy sneakers, too and i'm not getting involved. it is not as simple as equal rights for all. there are other issues that half the country feels really strongly about that it is the opposite of what the other half of the country feels strongly about. how do you know which side to weigh in on and why do it if you will lose half of your customers? >> yeah. there's the customers and there's the employees. when it comes to silicon valley employees in particular, they skewed younger with the employee base. that's the statistic for many companies out there. we see the political skew of younger generations. look at what is going on on college campuses. not everybody is protesting. you have viewpoints not

broadcast out there and not necessarily the loudest voices. with silicon valley companies, it was the natural inertia to skew in the direction. it has gotten out of whack. >> if you left silicon valuley alone on hamas, i don't want to know where they would come down. that doesn't change 80% of americans behind israel on this and all this stuff that's been going on, none of that has changed. >> i don't think you would find that on the polling to be on the other side of that. >> all these other people? >> you might feel differently. there are reports now with elon musk and david are putting together fund raising efforts on behalf of donald trump.

>> he moved to texas for a reason. zuckerberg is probably in one of the tents. probably in that tent. >> i'm not so sure about that. >> he's not in a tent. maybe a yurt. >> i appreciate it. >> thank you. coming up, the exclusive negotiating window between paramount and skydance is set to end today. we will talk about the new cash offer from sony and apollo. how do you explain this? later, a big lineup from the berkshire hathaway annual meeting, including long-time investor mario dabelli. "squawk box" is coming right back.

are you keeping as much of your investment gains as possible? high taxes can erode returns quickly. at creative planning, your portfolio is managed in a tax-efficient manner. it's what you keep that really matters. book your free meeting today at creativeplanning.com. raising you was no bed of roses. are you getting me anything for mother's day? go to 1-800-flowers.com. oh my gosh! wow! gorgeous! i feel like royalty. thank you. 1-800-flowers.com. happy mother's day. happy mother's day!

sure, i'm a paid actor, and this is not a real company, but there is no way to fake how upwork can help your business. search talent all over the world with over 10,000 skills you may not have in house. more than 30% of the fortune 500 use upwork because this is how we work now.

sony pictureses and apollo global management submitted an all cash $26 billion for paramount global. this is in "the journal." the offer is a starting point for negotiations and n non-binding. the shares did jump yesterday after the offer was reported. sony would be the signi significant majority shar shareholder. paramount is an exclusive negotiating period with skydance which ends today. >> ends today. s>> does shari redstone get wha she wants with the deal? is it more fair to shareholders?

>> in terms of straight fairness to the broad shareholder base, you would think by default it would be. i'm sure that she would argue and we'll see what happens with this special committee and whether they decide if they think longer term they can make a go of it with skydance. it's apples and oranges. >> this is why i came to you first. i was hoping to get a clear explanation. let me ask you this then. is apples to apples if she decided to do this five years ago it would be $8 billion and now $2 billion. is that apples to apples? >> no. >> what was the most the redstone family could have gotten at one point? >> goodness. >> that's what i mean. this is like "succession."

this is like watching this -- >> part of the reason why they turned on bob bakish. they were mad at bob for not taking the deal at the beginning of the pandemic in 2020. i would say if shari redstone want ded them to take the deal, they could have. that is when streaming was going to the moon and netflix was taking off and everybody staying home and watching. yeah, there's plenty of blame to go around. the valuation that was seen a few years ago is not there today. >> you know, for the world's smallest high lviolin, but that still sad. that's built up. >> it is a tough and challenging environment. >> it is a change in how val st ued these things. it was a change in how wall

street valued it. >> jeff looks like a genius at this point. becky will have mario gabelli in a little bit. >> right. mario gabelli is a major owner of paramount. we are talking to rogers tomorrow. they own a chunk of it. berkshire hathaway owns 9.36%. three major players will get into it. when we come back, our first guest from berkshire hathaway's annual meeting. we are talking to the ceo of portfolio company oriental trading company. steve will join us next. a programming note. we will have full coverage as warren buffett takes the stage to answer shareholder questions. tune in to cnbc and cnbc.com at 9:30 a.m. eastern time. "squawk box" will be right back.

>> announcer: executive edge is sponsored by at&t business next level moments need the next level network. to start a business, you need an idea. it's a pillow with a speaker in it! that's right craig. a team that's highly competent. i'm just here for the internets. at&t it's super-fast. reliable. you locked us out?! arrggghh! ahhhh! solution-oriented. [jenna screams] and most importantly... is the internet out? don't worry, we have at&t internet back-up. the next level network. i sold a pillow! ♪♪ innovation in health care means nothing if no one can afford it. ♪♪

at evernorth, we're helping to unlock barriers. ♪♪ using our 35 plus years of pharmacy benefits management experience to save businesses billions while boosting medication adherence. helping plan sponsors and their members be at their best. that's wonder made possible. evernorth health services.

good morning. welcome back to "squawk box" right here on cnbc. we are live at the nasdaq market site in times square. look at the futures before the opening bell. 326 points up on the dow. you are looking at the nasdaq up 125 points. the dow is up 300 points thanks to big gains in apple and amgen. we will have more on that in a moment. let's get out to becky quick in omaha. becky. thanks, andrew. warren buffett's berkshire hathaway purchased oriental trading back in 2012. the affordable toy and supply company is facing pressure from chinese companies moving in and doing things and potentially a consumer who might be feeling the pinch of high are price was the inflation we have seen. joining me now is ceo steve mendlik. >> good morning.

>> i have been an oriental trading company for a long time. moms and teachers and schools are buying things. se seasonal things you put in for the kids. halloween gifts for the kids. where are things standing with the consumer? >> the consumer, you know, definitely is feeling the pinch. we're seeing that, i would say describe it as cautious. inflation numbers and everybody knows what's going with inflation. they are paying more at the grocery store. you see walmart's numbers for grocery and general merchandise which is not moving. >> these were items that were selling really well during the pandemic and people were looking for pick-me-ups around the holidays especially. where are we pre-covid numbers?

>> compared to pre-covid, we're back to that level. during covid, a large event provider which were not happening as well. that's more on the consumer side. we're seeing the consumer perform differently than our non-consumer business with churches and schools and those businesses. really, probably more than half of our business is non-consumer. the consumer is feeling the pinch. there's no question about that. it's probably high single digits less than the performance of the rest of the non-consumer business we're seeing. >> in terms of the supply chain which was a disruption during covid. how have things turned out? >> significant amount. you know, the supply chain is much, much better. i kind of laugh. i love our transportation team.

it wasn't great spending every day with the transportation team which i had to do during the pandemic. we meet less frequently now which is great. the supply chain is working well. containers are, you know, getting back to pricing close to pre-pandemic level after going crazy 5x or 10x. that is flowing through the snake, so to speak, in terms of p hitting the p & l. inflationary aspects to that as well. >> let's talk about chinese competitors. i think of a company like temu. it spent tons advertising to reach out to the consumer the last couple yeears. there is a trade rule which allows temu and shein to ship packages directly to consumers.

if you are consumer, you don't have to pay the same duties or taxes that others like you have to pay. what does that mean? >> it's not a level playing field for sure. you know, i don't know if that gets fixed at some point in time, but it makes a difference. the other thing that is important is, you know, the safety rules that apply -- there's no mechanism to ensure the same safety is happening. >> in terms of the products? >> product testing. safety testing. testing for lead-based paint and those things. no mechanism to make sure that is happening on packages that are going directly from the manufacturer to the consumer. when you are inputting a k container at a time and the csps has a chance to look at the paper work and making sure you are doing the testing appropriate for the products.

>> you are although your stuff is made in china? >> absolutely. that is important for what we do. offer safe products for customers. >> is there a movement afoot to get congress to change that? >> there are bills out there. we are not necessarily that active on the lobbying front. you know, it seems to be something that probably should be addressed. >> interesting. not something i realized before reading up on this. steve, thank you for joining us. steve mendlik. >> thank you. still to come this hour, the ceo of brooks running will join us here at the annual meeting in omaha as well. rem reminder, you can get the best of squawk pod on your favorite podcast app and listen any time. we'll be right back.

at corient, wealth management begins and ends with you. we believe the more personal the solution, the more powerful the result. we treat your goals as our own. we never lose focus on the life you want to build. and our experienced advisors design custom built strategies to help you get there. it's time for a wealth management experience as sophisticated as you are. it's time for corient.

your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

the nba is close to signing long-term broadcasting agreements worth $76 billion over 11 years. $76 billion. this is "the bloomberg" report where disney is expected to pay $2.6 billion. amazon 1.8 b$1.8 billion. a third package hasn't been raised with comcast. the wall street journal reported comcast's deal is proposed to be $2.5 billion per year. the future of the nba is looking bright at this point. pretty good game last night. you must be happy. >> mm-hmm. >> once again. unbelievable. really. joel, too. you don't point the finger at

him. right down to the end with the three-pointer. coming up, the ceo of brooks running will join becky quick at the berkshire hathaway annual meeting in omaha. "squawk box" will be right back.

when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change. savvy investors know that gold has stood the test of time as a reliable real asset. so how do you invest in gold? sandstorm gold royalties is a publicly traded company offering a diversified portfolio of mining royalties in one simple investment. learn more about a brighter way to invest in gold at sandstormgold.com.

♪ brooks running is one of several billion dollar plus brands within the berkshire portfolio. they claim the number one spot in adult running footwear two years running and growing the footprint at the same time. our next guest has been with the company for the entire career. joining us right now is ceo dan sheridan. dan, welcome. >> hi, becky. thanks for having me. >> there is a lot happening in brooks running. congratulations on the new position.

been there 25 years. i'm assuming you are up and ready to go with everything happening. what is the biggest step about coming into the new role? >> i think it is a few things. one, i've been with the company my entire career. i tell people i grew up there. we have great growth opportunities coming. the biggest is globally. we're 85% north america right now. our opportunity is to spread the brand in the global markets. >> you came out with your numbers on the quarter. record revenue. i was shocked to see the growth in china. i didn't realize you were selling there. >> we launched in china a couple of years ago. it was a slow growth at first. you know the market is different than many of the markets we compete in today. we will launch some stores in china. it will be the first entry into brick and mortar. we grew 180% in the first quarter of this year. it is a huge market and runners

are resonating with the products and programs over there. >> i'm surprised to hear it. we hear stories about how the chinese consumer doesn't want american goods with apple or nike pushback. what makes you think they're ready for brooks? >> first market is really strong. runners are participating in a rate that we haven't seen in many, many years around the world. but in china, we're seeing the growth of the middle class which gives them time for health and wellness. we're seeing races increase over there, and so when we see those kind of trends, we know immediately that our brand will be right in the middle of that, great products, great programs for them. >> what is happening in the united states? because there was this huge surge in health and wellness during the covid years, again, you're another one of those brands you saw a huge uptake as more people started running because they had more time on their hands. has that continued? has it not in. >> participation rates were sticky after covid.

more people walking and running than ever. we have seen races come back in all of our market. race registration is up 10% year over year. >> in the united states? >> in the united states. that drove our growth in the first quarter. we grew 13% in the u.s. in the first quarter and our e-commerce business grew over 20%, which is just an indication of all the demand that is out there for our brand and our products. >> did your sales in the stores drop? are these sales that used to be going to the stores that are now going to online? >> no, we're seeing actually double digit growth in our wholesale channel with all of our retailers as well. the beauty of running is it is a multichannel strategy. what we try and do is we try and be where runners research, where they try brands and ultimately where they purchase them and we don't really favor a channel. we know if we can influence them through our e-commerce channel, that they're going to find our brand in other channels and purchase us. it has been a great strategy for us. >> are your margins higher in your e-commerce business or is the shipping kind of cut back on what you would have made by

not -- >> it is about the same. very minimal difference between the channels. >> so what is your biggest issue right now? >> well, that's a hard question. there is a lot. with growth comes challenges and execution. you know, one of the things we did during covid when it was really hard is we invested in systems, in distribution network. we're set up for growth here. and our biggest challenge will be international growth, different markets, different cultures, different ways to go to market with the runner. so, that will be our biggest challenge, but it is also our biggest opportunity. >> it is a jobs friday. we're going to get the government's numbers in a couple of hours. how are you finding the employment market right now? how is it finding employees? >> i would tell you it is stabilized for us. we have settled in to a nice rut. there is always roles that are harder to recruit in, design, creative, things like that, but overall, the labor market is really steady for us. >> and, dan, we're here at the berkshire hathaway annual meeting, the first meeting

without charlie and that's a big difference. you've been working with greg abel, the vice chairman in charge of all the noninsurance operations at berkshire hathaway for several years now. greg is obviously the heir apparent as the ceo here too. what would you say about that relationship? >> i've been able to engage with greg for many years now. greg is one of the most attentive managers i've ever been a part of. >> attentive is not always good when describing your manager. >> it is great. in the way i explain it is at any moment you can pick up the phone and call greg. he's a wise man in terms of the guidance he gives us. over the last couple of years, one of the things he always said is focus on your customer, focus on your customer and that served us really well. >> that's great. thank you very much for being with us. congratulations. these are the new shoes, by the way. every year you bring out shoes for berkshire hathaway, these

are special, how many of these do you think you'll sell? >> we'll sell close to a thousand pairs here at the expo. this is the adrenaline 22, it is our franchise style, which many runners have -- >> what is adrenaline? what is special about this one? >> this is inherent stability. what we know is that every runner or walker needs stability. so we build stability into these shoes and it is a very inclusive fit as well, somany people can fit into it. >> you give shareholders a discount or they cost more because they're special edition? >> we keep the msrp the same, but these are special edition, you can imagine the demand for this. >> yeah. dan, thank you. looking forward to everything here this weekend, we appreciate sitting down with you. >> thanks, becky. thank you for having me. >> joe, back over to you. >> becky, what's -- this is a shoe store. what size are those? shoe stores, i like that shoe, you look at it and it is an 8. >> this is a 10. the men's version is a size 10. >> 10 is kind of on the small side.

but do they do that on purpose so they don't -- >> 8 1/2. >> so they don't look like big clunky shoes? yeah, the ones they have out are never 13s, yeah. >> joe, we can fit you for whatever size -- >> i'm worried about sorkin. you're, like -- >> oh, okay. >> yeah. >> we can help you out. >> okay. >> what are you, joe? >> this is going to be like a big drop as they say in the business, this is going to be like resale value on stock x on monday. >> these are special edition. so, if you don't get them here, it is going to be really hard to get. >> maybe i do want them. i'm only a half -- i'm only a half less than you. >> the travis scotts, the nikes, they just dropped this week. they're worth like three times what they were selling msrp. these might -- maybe have a chance. >> sometimes i have no idea what you're talking about. no. >> he knows what i'm talking about, though.

ur do you look at sneakers with yo apple goggles?

we put our heart into celebrating moms. we are local farmers, bakers, florists and makers who grow and create with a passion. 1-800 flowers. for mom, with love.

>> university of maryland global campus isn't just an innovative state school, it's a school for real life, one that values the successes you've already achieved. that's why at umgc, you can earn up to 90 credits toward the bachelor's for prior learning and life and job experience, why we offer scholarships and affordable tuition, and why we have online classes and the support you need from your first day to graduation day and beyond. no application fee if you apply by may 31st at umgc.edu.

apple shares are up this morning, rising nicely, up almost $11. the company reported, though, a 10% drop in iphone sales. that's about what was expected. also announced plans to buyback $110 billion of its stock, the largest in corporate history, not just apple. joining us now, senior i.t. harbor analyst at b of a securities, ramzi. at least the -- what is being written today is that the

results even though there were some negative numbers in terms of growth, they were better than what the street was expecting, in general. same for what you were expecting? >> yeah, joe. thanks for having me on. i think it is really interesting to see these results because, first of all, i think that they lowered on everything that people asked for. on china, there were a lot of fears going into the quarter on china. we did not see any evidence of cuts in the supply chain which we were told all quarter long and sure enough apple announces that they rule iphone sales in china. that's the first thing that people got wrong. the second thing was growth margins were quite strong, right? third thing, buyback was up massively. and lastly, when you think about generative a.i., they did drop these tea leaves, there is a lot coming here. really in some ways a much, much better than expected sort of

result and guidance. >> so, the buyback is partly responsible, the size of it, you think, for the gains today? >> i think the buyback helps. i think that's not really the driving factor. i think two main concerns going into the print was that the china market was deteriorating very rapidly. we all have seen the headlines around how much unit sales could have gone down in march and deteriorating into the june quarter. when we spoke with the company yesterday, they said not only did we grow on china, it grew faster and the trends in china for iphone are actually much, much better than what people feared. and i think that's the number one reason why the stock is doing what it is doing. and then second, i would say, people were hoping to hear something around generative a.i. because there has been this

narrative that apple is really behind, they're going to be laggards, that is put into the a.i. loser bucket and i think that notion is rapidly changing. i think tim cook, they have a lot of exciting products to come, they will be fully involving generative a.i. because of the expertise of integrating the hardware and software together. there is a huge number, always been a huge number in terms of the incremental share. >> only 20 billion more. wamsi, thanks. we got to run. you know why? because it is 7:00 a.m., apparently. we got to run. i don't know why. we have to run at 7:00 a.m. andrew, it is 7:00 a.m. >> it is time to reset. in fact, it is just after 7:00 a.m. on the east coast. it is just after 6:00 a.m. here in omaha. berkshire hathaway annual meeting. you're watching "squawk box" here on cnbc. i'm becky quick.

i'm in omaha, for the berkshire hathaway annual meeting. joe and andrew are live at the naz sdaq market time in times square. the futures are looking pretty strong. dow futures up by almost 300 points. thank amgen and apple for that. s&p indicated up by 17. the nasdaq up, 110. as we mentioned, omaha, nebraska, berkshire hathaway annual meeting, warren buffett holding court here in omaha this weekend. there are about 40,000 shareholders who are expected to gather for the annual meeting. this is a pilgrimage every year. we have live coverage of the event here on cnbc and on cnbc.com. it starts at 9:30 a.m. eastern time. he'll be taking questions on stage along with greg abel and the vice chairman at berkshire hathaway. taking questions from shareholders, questions that you

all have been sending in. in this how we have high profile names that we'll be speaking with including pilot ceo adam wright, long time investor mario gabelli and lead director sue decker. a lot to talk about ahead of this big event tomorrow. right now, over to dom chu with a look at this morning's premarket movers that are making the headlines. there are some pretty major movers, thanks to earnings. >> absolutely. we'll talk about those two dow components that are driving a lot of the premarket action. all big earnings reports here, we'll start with the big one, of course, the second biggest stock in the land, that's apple. shares higher by 6% now premarket after the iphonemaker reported better than expected quarterly results, that encompassed a drop in overall revenues in iphone sales year over year. apple announced a new record buyback program. the shares are contributing roughly call it 80 points to the dow's premarket gains right now.

next up, amgen, the biotech joint reporting better than expected quarterly results, and on the upside, the announcement about moving its injectable antiobesity drug into phase three trials. by the way, those shares adding about 280 points to the upside for the dow. and then coinbase, down about 3.5%, 75,000 shares of volume, on the heels of quarterly results that were generally positive. profits per share maybe had some questions about comparability, but revenues beat expectations. helped along by the rally in bitcoin prices in the beginning of this year. that's cooled. the stock drop follows a rally into the print and a 345% gain over the last 12 months. so, andrew, coinbase in focus. two big dow components. back over to you. by the way, i am, guys, wearing brooks running shoes in honor of today. back over to you. >> are you going to show them

off or no? >> i don't think you can. the camera logistics don't make it easy for me to lift my leg up here. >> let's work on that when we come back to you next time. >> all right. we're counting down to the release of the april employment report at 8:30 eastern time. our senior economics reporter steve liesman joins us at the table this morning with a preview. >> in 90 minutes we get the latest installment of the monthly game show, the big whiff, we see if the wall street concensus continues its streak of sharply underestimating the jobs numbers. here are the numbers we're looking for. consensus 240. there is that weakening expected once again that has not come. unemployment rate seen unchanged, pretty low rate, 3.8. average hourly wages ticking down .3% and that should bring it down to 4%. the consensus has been off, both much more than usual and unusually off in the same direction. that's forecasters look for a weakening yet to come.

december, they were 140 light and then march, you can see, 103,000 light with the consensus. we just can't know if forecasters have taken into account the misses and up their baseline. the strength comes from leisure, healthcare, hospitality and government and labor force looks to be pushed up by immigration. will they continue? there has been a noticeable step up in hiring, you can see from july to september, average is still strong, 197, but that's jumped up to an average of 280 a month since december. the fed, though, interestingly enough, has kind of made peace with this, several officials noted immigration as a source of supply, so as long as this supply is there of labor, for the demand, they're okay with it. some weakening, i think, would be welcome over at the fed. they wouldn't mind to see a less hot job market. now, all of that said, i'm

sorry, maybe this is contradictory, but you have stronger -- arguing for a somewhat lower number and some easing in the jolts report and other indicators like the nfib small business survey and home base. it may come this month, guys, but the under, talking about betting with the derby coming up, the under has been a bad bet for four months running now. >> how does adp -- >> 192. >> how are they doing versus accuracy? >> not been doing great. >> that was a stronger number. little bit stronger. >> little bit stronger than expected. it seems like, again, this is more sort of post pandemic stuff where it is, like, we don't quite understand other -- along with this immigration issue, where there is more people in the country and they seem to be fulfilling jobs that are needed. >> when you are worried about stagflation, even though i think the market will be fine today, you're worried about it -- >> who is worried about --

>> we talk about it. if you are, if you are -- but if you are, either side of this becomes a problem. if it is too strong, you're worried about inflation. if it is too weak, you're worried about a slowdown. >> i don't know where the stagflation comes from. i don't see it. >> i think it comes from the notion that we get stuck at 3 for inflation, the fed is unable to ease -- >> wasn't stagflation born when inflation was 10? >> it was a -- there was a misery index of 25. >> 25. what is the misery index now? >> like historically low. why are we worried about stagflation. >> there is plenty of room for it to go up. >> i don't see this -- i think i said this -- >> talk about it every day. jamie dimon talks about it, everybody talks about it. >> i said this before powell, i don't see the stag or the -- or much flation at all. you're a point over. that's important. it is something to talk about,

but it is not argentina, it is not -- >> you haven't seen the stag yet, but you started to see in the gdp, you got -- >> haven't we been talking and hoping for a weaker economy from the strength that we had? >> we had the ultimate goldilocks where we had inflation coming down, and the economy and jobs staying strong. and now it is flip-flopped and now you're worried about -- >> wouldn't it be awful to be living through great times and not recognize it? just miss it. >> you don't want to be sitting there -- >> oh, my god, when things got bad, well, things were great before. >> you don't want to miss -- if you're on the cusp of something that is going to be -- >> -- be terrible. >> or a change. >> i know they're playing the music. are you really worried? >> have you read about the news business and what sells? apparently not. >> i developed a reputation of being sober about all this. >> sober. >> maybe sober sells. sober sells, joe.

>> you're fine before noon. but i've seen -- i've seen the other liesman. i haven't seen you out and about since then. >> you haven't invited me. >> i'm assuming it is still happening. >> becky quick. >> oh, goodness. when we come back, with more than 870 pilots, the pilot company ceo has his finger on the pulse of the economy. adam wright will join us next live from omaha. plus, travel demand and quarterly results from booking holdings ceo glenn fogel. "squawk box" will be right back. power e*trade's easy to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley

welcome back, everybody. we are live here in omaha from the berkshire hathaway annual meeting. joining us is the ceo of one of berkshire company's that is celebrating -- a ceo celebrating 30 years in that role. we want to bring in adam wright. good to see you. >> great to be back in omaha, my hometown, my thoughts and prayers with everyone who is rebuilding after the tornadoes. >> yeah, those were devastating. i've seen a lot of the footage from it. but it looks like people are up

and ready to go and things are going to go off as usual here. >> normalcy helps. >> it does. i want to talk to you about everything you're doing at pilot right now. this is a company that berkshire bought outright, but the remaining tranche of it, back in 2024, tha total of $13.5 billio to buy the company. now you're in charge and you're spending a billion dollars renovating, changing, updating, remodeling things. what do you see on the ground? what has to be done? >> first, we have a great brand. it is a 65-year-old company, we're in 44 states, we have more than 800 outlets and it is a brand most people haven't heard of until recently with the acquisition from berkshire. we have an opportunity to upgrade our stores and we're focused on doing that, that's in the billion dollars, like you said, to upgrade 400 of those locations, to bring them into the future, a much better experience, shopping experience, want to make sure we're

preparing for electrification of the transportation sector, putting in ev chargers at several of those coast to coast. we have to bring our stores up to really give a great guest experience. >> what was kind of lacking in the guest experience before? where are you focusing those -- that money, at least in the stores and then we'll talk about electrification. >> some of this so bring food forward, have a great deli experience. others, making the aisles wider, call them gondolas about up we're pretty cramped in there, trying to get more space so the guests can move around the stores more freely, bringing our showers up to date. we do 70,000 shares a day. >> this is where truckers pull in, they come in, have a meal, get refueled, take a shower, refresh. >> pumps, parking lots, upgrading the whole aesthetics of the experience for the customer. >> trucking is a pretty major industry. an indicator of the economy. so what do you see right now, just in terms of how truckers are feeling, how much is moving, how much freight is moving on the highways? >> it is a tough time for truckers right now.

trucking is a tough industry generally. so, you have a capital intensive business, high turnover, you have low margin, it is cyclical, seasonal. if you have one or two of those, any business, it is going to be pretty challenging. trucking has all of it. we're in a pretty down cycle right now. mostly because freight rates is too much capacity from a trucking standpoint. that depresses rates. it is making it very challenging for the large and the small truckers. >> is that because there is less freight that needs to be moved or is this relative to pandemic level highs when a lot of stuff was moving? >> we're starting to see inventory levels come back down. they were a little bit bloated coming out of the pandemic. those are starting to return back to normal levels, we do expect some of those inventory headwinds to start to move out of the way. it is just an overcapacity. during covid and the big boom, you could buy a truck and get high rates, $5 a mile, that allowed a lot of one, two fleet operators to come into play and that created overcapacity. now that has to work its way out

and then things will start to level out. >> your background is in energy. you came from berkshire hathaway energy, moved on to another company, but you grew up in the energy industry. what you're doing right now is trying to make sure as you mentioned that you are looking at all ways, whether that's any sort of fuel or any charging levels, you got a partnership with gm. what are you doing with that? what is the electrification and charging stations you're putting in. >> it is important for us to really be fuel agnostic and guest focused. we want to keep up with the speed of value for our customers. how is the economy moving and what offerings do our guests want? evs have made a significant run and they continue to grow and we think there is going to be demand despite some of the challenges here recently. >> keep hearing about how there is not as much demand for evs and people would rather have hybrids. have you seen that play out too? >> we have. it is going to push through. one way or another, having challenging infrastructure at our stores is going to be welcomed by ev owners.

we see it. 40% to 50% increase in charging sessions and energy zpdispensedn weekends and holidays. they want to take their evs from urban settings and take them across country. we're starting to see an uptick in that. our goal is to build out 2,000 chargers at 5 00 locations by 2026. we're thinking through how to work with multiple utilities across 44 states. >> what are the challenges? >> a lot of it is infrastructure, infrastructure bill on the utility side. learning some of the technology and how to even price electricity that we sell to make sure it is economical for us and it is priced early for the customer. we're working through that. we're making a lot of headway and i feel good about it. >> how fast do the chargers charge? do they take a half an hour and someone goes in and takes a shower in the meantime? >> 30 minutes, you can get up to 80% charge. these are very fast chargers.

350 kilowatt chargers, that means anything to anybody. but they are the fastest on the market right now. and the idea is that you give amenities to ev drivers that they customarily don't have. >> the ev driver, if you're driving across country, they'll seek out one of your places and think i can do everything done there. >> you can go in, get a hot meal, relax, walk around, hopefully buy some products to take with you the rest of the road trip. >> if you had one thing you wanted to get out of this weekend, what is it? >> out of this weekend? >> yeah. >> we're part of berkshire hath away and what that means and the opportunity we have to build a lasting and durable brand that serves on point 3 million guests every day. >> you have a cool setup. you can actually get in and drive a semi. >> you have to drive. >> you drive it, it is a simulator? >> yeah. there is no score. she was disappointed, she drove it yesterday. she wanted to see a score. >> of course. >> but it is actually one of a

kind, so it is the first time an actual simulator has been built in a real truck. and so you get the real feel and look of driving a semi. >> i will try it out. we will go over and take it out later. adam, thank you very much for joining us today. >> thank you for having me. >> adam wright. >> joe, back over to you. >> i need to know -- would you ask him, is it still, like, you double clutch? >> he's got an ifb. >> are they automatics now? what is the state of the art for the big rigs now? >> it is not your grandpa's truck anymore. they are auto drive. they have a ton of safety features. seriously, ton of safety features. i test drove one on the closed track and there is features that they will tell you after test driving it to drive into the ditch and pull it back out and it won't roll. which is -- i think of safety features, the technology, the comfort, they drive very smooth. >> but you can't grind the gears anymore? like, can't get a shot of becky grinding the gears -- not

getting -- >> i know how to drive stick. not a semi, but stick. i never tried a big rig, eah. >> good to see you. >> all right, good to see you. >> by the way, he was waiting for you guys to jump in. he watches "squawk" every day. >> every day, in the background, every day. >> can i ask one other question then? i got a super charger question for you. do you have a view about that? what is happening there? >> i sort of have a view, but what in particular? >> becky and i were talking about it earlier in the week with tesla effectively ending all -- firing the super charger group and what that's going to mean, not just for tesla, but to me, what is more interesting about it is it is happening just as all the other automakers have created adapters so they can use the super chargers, and, you know, it is unclear whether that whole system -- an ecosystem is going to be supported in the short-term as i think elon is

trying to use as much cash as he can and focus it on the vehicles, but that, you know, part of the conundrum of all this is part of the ecosystem is the ev chargers. >> yeah. i think moving to the north american charging standard, which was a big push from tesla, i think they're going to rely on the rest of the industry, starting to take that forward. i have challenges that you highlighted that they're reprioritizing how they spend their capital. they're banking on the fact there is a standard out there in the market and the rest of the autos and, plus, if you looked at the ev production of some of the big three, that's starting to take off. i think there is confidence that the market is going to carry itself with the standard charging process in place. i think they're contie ing coun rest of the market. we're going to keep pushing forward on our 500 locations and 2,000 chargers. we'll have a network coast to coast. >> adam, thank you again. >> thank you. appreciate it. coming up, brooking holdings

ceo glenn fogel, parent company to almost a dozen travel brands including kayak, priceline, he's going to join us, live. >> announcer: time now for today's aflac trivia question. which state is the nation's largest producer of lumber? the answer when "squawk box" returns. see that? that's like the gap in my health insurance. gap in your health insurance? yeah, it didn't cover everything when i got hurt. good thing i had aflac. hmmm the cash i got from aflac helped pay for medical expenses, groceries, rent. it really helped close that gap. go, go, go! yay! go aflac! go duck! get help with expenses health insurance doesn't cover at aflac.com wish we had aflac on our team. you can! ( ♪♪ )

after last month's massive solar flare added a 25th hour to the day, businesses are wondering "what should we do with it?" bacon and eggs 25/7. you're darn right. solar stocks are up 20% with the additional hour in the day. [ clocks ticking ] i'm ruined. with the extra hour i'm thinking companywide power nap. let's put it to a vote. [ all snoring ] this is going to wreak havoc on overtime approvals. anything can change the world of work. from hr to payroll, adp designs forward-thinking solutions to take on the next anything.

and now the answer to today's aflac trivia question. which state is the nation's largest producer of lumber? the answer, oregon. with 30.5 million acres of forestlands, about 50% of the total landmass of the state is covered in forest. welcome back to "squawk box." a record number of people are projecting to get away this year as travel is continuing. our next guest's company is riding this wave, particularly with a resurgence in travel overseas. want to bring in brooki ing holdings ceo glenn fogel. brooking holdings saw a 76% year over year jump in q1 earnings, with gross books up 10%. rival expedia not doing as well. we'll talk about that as well.

i think we're trying to understand where we are in the economy, what is the strength of the consumer and is the yolo economy, is it still going here. >> good morning, andrew. thanks for having me. yolo. here's the thing. travel has always been something people always wanted to do, even before the pandemic. and, of course, pandemic kept people from doing it. when we came out of the pandemic, there was that revenge travel, which has petered out a little bit, we're getting more a normalized travel environment. asia still recovering somewhat, which is why we had nice numbers last night to announce about asia, with a midteens growth over last year. that was more post pandemic benefit. look, people want to travel, we're glad to be able to provide great services to them. >> to the extent that you can -- talking about asia, you can look to different markets, where are you seeing strength to the extent you're seeing weakness, where is that? >> as we talked last night, regionally, where we had asia, one of the strongest, that's

post pandemic benefit. we saw high single digits for europe and the rest of the world as we call that category. and then u.s., slow single digits. that being said, though, a lot of impact by when do areas come out of the pandemic and when do you get more normalized. i wouldn't point to, just, this area is weak, it has a lower number. that's more an effect of what was happening because of the pandemic. >> do you have any sense of this idea about tradedown? we heard from andrew jassy about what he called tradedown in the retail space. we saw these mcdo mcdonald's nu, there is a part of the economy which is more challenged and whether you see any of that. >> you know, we really don't. we look very closely at two key metrics that i'm always looking at. am i seeing people trading down for a lower star rated hotel. that's one. and the second thing, am i looking for seeing people who are going to take a less number of days, shorter length of stay

on their travels? and we're not seeing that either. so, i'm not seeing those. that to me says we're not seeing a weakness in the travel industry yet and we talked about last night on the call, i talked about we see a healthy amount of business for the summer. so that's good. >> big policy washington question, we talked to ted cruz about this yesterday. this bill that the biden administration put forth or rule i should say that would have forced airlines to send refunds to all consumers that were either delayed or where their plane was canceled, that appears to be stalled between now because there are people in washington, senators including ted cruz, who think this is a bad policy. not that it shouldn't happen, but shouldn't happen the way it is happening, i think. i don't want to put words in his mouth. what do you think? >> well, look, this is an issue for a lot of people in terms of if something goes wrong and how

are you going to be compensated for it. and basically it is going to be if we want to create a government-run insurance program, essentially, if something goes wrong, we'll do that through the airlines, having to give the money back very quickly, that's one way to do it. another way to do it, people buy travel insurance on their own, a private way to do it. lots of different ways to do it. countries around the world do it differently. in europe, you get compensated if your airline had a delay and didn't get you where you're supposed to go. these are all things that can be paid by a government, democratically elected and the people in charge can make the decisions. either way, though, there are no free lunches. that's a critical thing to understand. do you want to do it in a government mandated way, do you want to do it in a private way? the question is who has to pay for it? >> i don't think that's what we're talking about. it is a matter of whether you have to haggle for it and that's

the big issue right now, right? whether you have time to spend three hours onhold with the airlines to get your money back. >> yeah. that absolutely is a horrible thing. if you get it in three hours, great to you. i know people unfortunately had much longer times to get a refund and we do not want to have that happen. one would think in a free market type thing, an airline that gives less good service would end up with fewer passengers. >> glenn, you know better than anybody, given that you run the platforms. you run kayak, most people are looking at price, especially for coach tickets, over a loyalty program, no? am i wrong about that? >> i would say this, i am fully in favor of whatever our democratically elected senators and congress people want to come out with, we'll follow it and i'm in favor of it. i, mymyself, we don't make the refunds or the delays. we're a distributor. one thing to talk about is a.i. one of the things we're spending

a lot of time on a.i. is customer service. and being able to do it, you're not going to have the long delays. the a.i. system will be able to come back right away. i think hopefully in the future, you and i won't have to have this discussion at all. >> glenn fogel, thank you very, very much. if the ceo thing doesn't work out there is a job for you in washington. we would appreciate it. >> thank you, andrew. i think i'll stay with my job right now, thank you. >> thanks so much. see you soon. still to come, legendary investor mario gabelli will join becky live in omaha. into talk about paramount and so many other big topics with him in just a moment. all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai. what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is

what you hope for when life tosses lemons your way. cirkul, available at walmart and drinkcirkul.com.

hi, everybody. i'm becky quick, coming to you live from the berkshire hathaway annual meeting where i'm hanging out at the jazz wares booth. jazz wares is the maker of squishmallows. this was an acquisition that berkshire hathaway picked up in 2022, an accident. they bought allegheny and this happened to be in the allegheny portfolio. but, boy, did they get lucky with this acquisition. squishmallows are hot. if you have kids, you know this. if you don't have kids, you might know this too. this booth here at the meeting is three times the size of the booth that they had last year here. that's because of the huge popularity of squishmallows and in particular the warren buffett and charlie munger squishmallows. the first time that any human has been turned into a

squishmallow. there was an incredible line trying to get these things. they were selling a thousand an hour of the warren buffett and charlie munger squishmallows. they sold out. they had something like 10,000 they sold and shareholders lined up for two hours to try to get these things. they tried to streamline it to get people through more quickly. they have squishmallows of warren and charlie again. here they are. here is the 2024 versions of these things. this year, they're more casual. last year they were in suits. this year a little more casually. on the back of each of them, they have some sayings, i can't find the sayings right now, but charlie's is pretty good, pretty philosophical on the back -- maybe it is on the tag. i got to find it. yeah, it is so small, i can't read it. it is a good saying. so, if you want to check it out, i will bring these later and we'll look at these things along the way. this has been a huge seller and a huge thing for the shareholders. so we're here for now. and we're going to check out the

crowds here later. when we come back, joe, we got a lot more -- >> are you supposed to be doing that? are you -- is that -- is that okay for people to jump in there and frolic around? >> i think you're allowed to come in and take selfie pictures. this is a big, like, instagram social media thing that they're trying to get some coverage with. so i'm allowed. >> like the places with the balls. have you ever seen what happens if the kid loses his lunch in there to -- >> no, i have not. >> i'm the first one in here, so -- >> not in there. >> whatever happens later is fine, but i'm the first one in here. >> that's good. >> those places -- yeah -- >> i didn't know that was recommended, though. >> i'm hiding. >> the ball pit, you have to -- >> you just showed your feet. that one guy -- oh, my god, becky, you just showed your feet. >> a weirdo on twitter wanted to

see my feet. there you go, weirdo. >> we just saw it. he knows that those weren't your feet. coming up, mario gabelli, apple announcing its largest ever $110 billion -- the largest of any company, buyback, despite a drop in iphone sales. more on that after the break. "squawk box" coming right back. when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change. savvy investors know that gold has stood the test of time as a reliable real asset. so how do you invest in gold? sandstorm gold royalties is a publicly traded company offering a diversified portfolio of mining royalties in one simple investment. learn more about a brighter way to invest in gold at sandstormgold.com.

raising you was no bed of roses. are you getting me anything for mother's day? go to 1-800-flowers.com. oh my gosh! wow! gorgeous! i feel like royalty. thank you. 1-800-flowers.com. happy mother's day. happy mother's day!

all right, welcome back, everybody. joining us right now is long time berkshire shareholder, class a shareholder, i should add, mario gabelli, the ceo of gamco investors. and who has been coming here for decades to this meeting, but who has known warren buffett since all the way back to the 1960s. mario, this is a very different meeting, because it is the first one without charlie. what are you looking for in this

meeting? >> first of all, because of that, i want you to have your own personal peanut brittle so that you can think of charlie when you're on the stage this morning. look, go back to the '60s when warren left the hedge fund business and bought a business. the idea at that time was to buy businesses that you could buy for less than liquidation value, kind of cigarbutt investing, and as time evolved, he did other things and gets full credit in his annual report to how charlie said good businesses, good management, and reasonable price, and then the question is, what do we do next? what is warren going to do because of all of his liquidity and the world that he's in, in terms of the style of what he buys? he's buying pieces of companies, much like we do in our portfolios, we have lots of little businesses that we think are okay. and some don't do well. we have our own equivalent, so, that's the question. the second part is that the world changes. he's had more litigation in the

last year than he had in the long period of time prior. so he'll adopt and he'll do great. for example, last year, he had $15 billion of his holdings in japan. he now has 25 billion, even with the yen at 155, last year it was 133. what is he thinking about on a global basis? that's it. >> so some of the questions, let's jump into that. the litigation factor, berkshire hathaway energy has been front and center for most of that. he wrote about the problems on a regulatory front. what do you see as the potential solutions for a problem like that? >> there are going to always be issues. i happen to think more generic. in england, losing party pays. so, the airport -- >> if you sue somebody and lose -- >> yes, that would make a little bit more difference in terms of the focus and the attention. >> because you think that these

are not valid lawsuits? >> no, no, no. not with regards to warren, you're talking more in a broader scope, from warren's point of view, the notion of starting what goes on in the change of the climate and the impact on energy, the wildfire in west texas recently, forgot the name, what impact does that have? assuming you had nothing to do, you still will get probed. assuming the challenges of having transmission, i'm a data center, i need electricity, i'm an ev, i need electricity. where is electricity? renewable. i want quality, i want new, small nuclear reactors, a long way off, i want distribution. >> i want it really cheap. >> you don't want the consumer to pay. so, one of the things that i've been thinking about is i had a bank, you know, the 1930s, we had the movie, and the banks go bust, but you had fdic insurance. funded by the other banks. just like you saw the, you know, the republic first and first republic, i forget which one was

first, the -- and so, why not have the -- those that own data centers, like apple, put money into an insurance fund that if they're taking energy from an area where there is a wildfire, or some kind of fire, they help fund it like the fdic. a lot of things going on. that's warren. he's appropriate. if i can't get -- if i get tarred and feathered, and i don't get a return on investment, i have to think what is morally right and legally right and financially right. that's what he's going through. >> and as a shareholder, you feel confident in all of this, though. what are you thinking? long-term berkshire shareholder? >> i would not have thought about the impact of what pacific gas and electric went through because of the wildfires. the notion of having different climate, different points, i always thought about, you know, you have a hurricane, you have a tornado, you have an earthquake, the notion of consistent damage to the environment, maybe that your transmission is going

through that, how else do we find distributed power. i have my ev without going through the system, but that's the minhde minimis dynamic. the book value is the largest of the any company. and he's growing that. and he's got -- if he sits back and does nothing and yawns, he's making 5% t bills. you know, yesterday doing nothing, after the market closed, i think he made $8 billion on the tick up of ten points in apple, you know? so sit back and say what do i want to own, where are they, how do we have the capitalism that allowed him to succeed, how do we keep that in place given the dynamics of the world and the dynamics of the united states and then when lebron james makes a lot of money, or taylor swift makes a lot of money, we applaud

ohtani, they make a lot of money. if individuals create businesses, they should be applauded. and so warren has created enormous wealth for 35,000 people who come here today and all of the shareholders and all the companies he works with. we should applaud him. that's it. >> there are going to be questions about some of the holdings, including paramount. biggest shareholder in paramount, berkshire. you're a pretty big shareholder in paramount too. what do you think about the deals that are circulating right now? we just heard about another potential offer that could be in the works, what do you think of the existing offer on the table, what do you think of the -- >> as an analyst, i gather the data, rate the damta, fast-forward there is 40 million shares of voting stock. they closed the at 26, call it 25 yesterday. $10 billion. so, we own 5 million for about

900 clients. what i'm concerned about and thinking about -- >> 13 yesterday? >> i'm talking about the voting stock. >> the voting stock. >> like warren buffett buys lennar voting, it was a ten-t ten-point discount. when i started buying the voting stock, i had to convince smome o allow me to exchange. bottom line, what do we need? we need content. going back to the days of the gladiator, going back to the days of silent television, you know, silent movies, so, content and they have the scale. what they need is someone that can look at 100 scripts and figure out which of those may have a higher success rate and so bringing in an organization like skydance makes sense. the second part is, the problem is great opportunity, great

tailwind. >> you own the general -- >> i own a million shares of the general -- the one you saw at 13 and change. i own 5 million of the 10 million that are not held by the public. >> so you're in the camp with sherry redstone. that's the question -- >> i'm in the camp of fighting for every shareholder to get the same price as at shari redstone. problem is national amusement. she have leverage. anticipated challenges with covid and the movie business. last year cut the dividend, screen actors strike, writers' guild strike and box office was choppy. you have theaters and leverage. read the annual report of other data companies you see the challenges she's facing. >> is skydance share for all shareholders or not? >> i don't know the deal. i'm the yogi. it ain't over until it's over. al free market system, the deal on the table you're rearing to

is from apollo with sony. sony and paramount were going to do a deal in distribution globally. they bring to me not intensity that skydance does but they bring a lot. >> a lot of money. $26 billion. >> that's not bad. bottom line you basically have neither of those entities want to own a tv station. you don't want fcc regulations. it's just challenging. you got to spin off that. that television business, linear television, just got some question marks long term, they're going to have a tsunami because of all the elections. earn $700 million to $800 million at cvs tv stations i can spin that off. talk more about copper lovemaking and finance. in this case, got $26 billion knock offs 12ds billion press gets it. get the $12 billion right. okay? it's not a higher number. the second part is, i divide that.

shari deserves a share. the question, how much. pay her 30. $1.2 billion. do the math come up with $20-plus 6 million non-voting. if i'm buying it i want to make money. one will take it private. come up with different creations. spin off, neither can skydance. >> screaming in my ear we have to go. >> i agree with that. >> you are a famous columbia university graduate. you know warren from these days. what do you think are the situation on campus? >> listen, i was president of student body at another university and went to graduate school there. i like creative tension. i like the fact that people like joe and andrew can argue on television and still be friends. that's what the campus should be all about and protect the students. so to the degree that you have a campus with somebody's coming

in, they're not students, that are trying to interrupt, trying to occupy something and disrupting the students that are there. just -- credit to the new york police department for restraint. about five months ago, becky, i was in, kent. kent state, and, in ohio. in part because there was a dedication to the crawford business school there. ambassador crawford. and i walked up the hill. four students died, and it just -- saddens me when i hear storying about that they are creating that kind of challenge. protect everyone. >> mario, thank you. we really appreciate your time today. and it's great to see you, glad to be here. when we come back, former yahoo! president and berkshire hathaway lead director our guest. that sue decker joining us right here from omaha. "squawk box" will be right back. . (grandma) and a million stories to share.

(vo) the key to being rich is knowing what counts. when you own a small business every second counts. 120 seconds to add the finishing touches. 900 seconds to arrange the displays. if you're short on time for marketing constant contact's powerful tools can help. you can automate email and sms messages so customers get the right message at the right time. save time marketing with constant contact. because all it takes is 30 seconds to make someone's day. get started today at constantcontact.com. helping the small stand tall.

whoa, what's that, grandpa? get started today at constantcontact.com. look at us knuckleheads.

and they're all coming? those who are still with us, yes. you look good. you as well. one, two three. grandpa! what's this, ellie? your wings. light 'em up! gentlemen, it's a beautiful... ...day to fly. wooooooo! whoa! on your wing, grandpa!

shares of apple at least today moving higher. following its earnings report and some buyback plans. steve kovach joins us now. >> yeah. apple revenues down 4%. iphone sales down 10%. who cares? apple gave shareholders biggest stock buyback in corporate history. $110 billion. increasing dividend 4% to 25 cents and guided towards modest growth for the june quarter, an unexpected move as analysts have been trimming june quarter estimates in recent weeks. easing fears around china. sales down. improvement quarter over quarter from 13% drop in december quarter. and ceo tim cook saying iphone sales in china actually grew. countering the narrative we've been hearing the last months. also asked tim cook about his recent visit to china. he told me "i feel great at the

extraordinary competitive environment we grew." might come as a surprise. i feel good about china, i think more about long-term than the next week or so. quote/unquote. the services business appears to be over economic slump beating estimates. new record $23.9 billion in sales. up 14% from a year ago. cfo saying on earnings call expect similar growth and services in the june quarter. a.i., nothing much material to share. tried to get fresh details out of cook. wouldn't budge. teasing announcement on generative a.i. soon expecting at wwwc on june 10th, guys. >> yes. >> okay. very good. i thought -- thought we were -- a question, becky, but thank you, steve kovach. back to you. >> no. actually checking us in over here. sorry, joe.

absence of long-time berkshire vice chair charlie munger will be felt at this annual meeting. preparing for this with warren buffett working well past the age of 90. joining us, lead director. sue decker. great to see you. >> great to see you, becky. >> this is a different meeting with shareholders focused on what the future brings for berkshire hathaway. where are you all in terms of the board on all this, how are things going and what do you think about this year? >> as relates to charlie? >> yeah. charlie not being here. >> it's sad. he's you know, a legend, and also i've worked with him closely on the costco board as well as berkshire. it's sad, but i do think that he, warren wrote in the annual report a lot about his being an architect of berkshire. i think that means he's left a blueprint that guides us in

decisio decision-making. he may be absent but his impact will go on never. his seat empty but he's all around us, in the air we breathe, in the dna of berkshire. >> what sort of things come to mind when you think about the bluepresent he laid out? what are rules are charlie-isms you keep in mind as a board member? >> the abcs, absence of bureaucracy, arrogance he tried to instill talking how to run a business and the ills that grip a lot of other companies when they don't do that. always been, you know, an advocate for frugality, for ethics. hard to separate those same principles from what warren's been talking about. the two were very aligned on that. i think those principles are really a part of berkshire's identity. >> so there are some issues facing berkshire hathaway, and warren was very clear about it in the letter he wrote to shareholders this year.

in terms of disappointments. energy and bnsf. problems facing each are those sector, industries and each of those parts of the company. when it comes to the energy front, how do you kind of look at the liability that's out there. how do you look at the lawsuits being brought, and also this confiscatory of it? >> one is liability wildfires i $2.5 billion. not all on the expense sheet because we spent some of it. roughly the impact. what it will be. we don't know but over time will become more clear. somebody berkshire can absorb. the bigger question is, what does this mean in terms of -- warren wrote about it in the

annual report. which is for years and years the utility bit has been guaranteed a rate of return based on a rate base and the regulator framework. >> partnership with regulators who say, yes, you should be able to earn a small but decent return? >> exactly. >> investing money on the capital -- >> exactly. capital expenditures certain kinds included and others can't. take climate change into effect, that either needs to be fully reflected in a rate base or somehow needs to be borne by society as a whole. can't really be borne by the electric utility industry. i think the near-term issues are not so significant for berkshire. we'll get through it. it's a huge company. a trillion dollar company, so it's manageable. the bigger wquestion is how doe it evolve and strategically quite relative because of the world of a.i. and computational power so significant the draws

on the electrical grid will get more and more significant the next five, ten years with the supercomputers now. this needs to guessworked out. otherwise the, there's going to be a up in more adverse reaction by the utility industry to invest in new capital. >> could be limited. not to mention evs drawing up on the grid, too. >> absolutely. >> what type of expenditures would it take to keep up with all that? >> i don't know. look at q1 for meta and google, alphabet, and microsoft. i think the collective capex in q1 was $30 billion for those three companies. that's q1. i read recently some predict data centers, you know, will cost $100 billion. it's huge in that capital that is going to be wanting to go into this industry to help fuel

this platform shift to a.i. and it's important that the regulators figure something out here that will incense the right behavior. >> i've looked through a lot of questions from shareholders. there are some questions that resurface every year. one of them is the dividend. that's a question that -- you hear in more force now. especially as people start to wonder what is the ability of berkshire to be able to invest in this? numbers get bigger it's tougher and tougher. law of averages. hard to find deals to move the nields for berkshire. do you all talk about a dividend potential? warren in the letter says we don't pay a dividend right now. which i think made people question. is he opening the door for one down the road? >> down the road is a long time and anything could happen. i think so far clearly the -- the issue that it's getting harder to generate usage for all the cash is not brand new. back in i think it was 2019 we

started doing more systematic sharing for the first time. episodic ones for families and things like that, but in the last four years look at the treasury stock line and the 10k, referred to about $75 billion, $80 billion in the last four years. so we're starting to pursue that. that is more of a cash return to shareholders that is tax efficient. it also doesn't, it's completely discretionary in any one year. once you start a dividend, it can be pulled, but the goal is never to stop. >> unless it's a special dividend. >> as i say, i almost think in hierarchy of choices a special dividend is something in between. some on the costco board that we've employed really suc successfully, but it's not something we're discussing right now and over time things could change, of course, but i think the redeploying the capital through share purchases, preferred method at the moment. >> also questions get raised just about -- this is a constant, too. questions about the power of a

conglomerate, if it works. if berkshire as a conglomerate works and you see the market win and lose favor in terms of conglomerates, whether watching ge or any number of them. people do point back to the idea does a com gconglomerate. what's your opinion, why the company should stay together? >> one of the few that has worked. i point to, why has it worked? one allows for an efficient transfer of capital from businesses that don't need it. >> like insurance. >> like insurance to reg lulate in an extremely -- and talking about earlier with charlie. a culture that has a collection of businesses that are swimming in the, you know, with the current behind them, because they're making decisions that are long term. they're employing their capital

efficiently, et cetera. and i think another reason a conglomerate makes sense like berkshire, anyway, is the portion of the balance sheet that gives flexibility and also allows the company to potentially step in when there are major finance dislocations. look at -- stunning to me. there will be other situations where the financial markets will get gummed up and there will need to be stability and 4rikd liquidity. it's stunning. a trillion dollars of assets more than $500 billion of shareholders equity larger than the next couple by almost double. it's a huge amount of capital all in one place that can move quickly and can help. more episodic in nature, favorable returns generated from that. for those three reasons none of those require warren to be in the seat now. all true there's tax return for

capital, a culture he and charlie have built over the years, and the fortress of balance sheet, all good reasons to keep berkshire united as it is today. >> sue decker, lead director at berkshire hathaway. thank you for your time. sorry didn't glet to talk about apartmenter and other companies you're involved with. do it soon. >> not at all. great to see you. >> joe, back to you. thanks. been a while. and investment founder is here. knows all about tech, and you would like to own some, short some and we want to hear about that, but i think you've got comments about apple. it's up this morning. one of your biggest holdings long. isn't it, dan? >> correct. it's my second largest holding on the long side in terms of single stocks, and i think when you look at apple, it has a pretty consistent pattern in the sense that people always want to get excited in front of new

products, et cetera. i don't think investors will focus revenues are down 4% year over year and in the last three years only up 1%. compare that against the magnificent seven, revenues up 42% year over year and they're up 86% year over year for the last three years, and if you go out to even five years magnificent seven revenues are 275%. apple's only 56%. no matter what time period you look at this the stock on a revenue growth basis underperformed, but for investors, there's always the hope there's an upgrade cycle coming or some great new product, and what you have coming in june, the 10th, is the worldwide developers' conference and the hope is that they'll put out stuff and that's going to drive revenue growth and upgrade cycle. so we think the stock will trade up into that and eventually you'll get to whatever the reality is in terms of, does that actually happen?

and they actually go out to cell the new iphones. much like the visionpro where anybody's actually talking about that anymore. >> right. you state in the notes stocks in the short term trade on things like that. investor belief. sentiment. not necessarily fundamentals, and valuation. i'm sure you pored over the details of apple's report anyway, even though that might not be what causes the stock to move today. so in there, if you look granulely, what was not as bad as people thought? >> what was solid was services's that did well. and imax did well. iphone came in a little below expected. i know apple's trying to talk about mainly in china, but poor china, greater china. still down 8%. so there's no way you can look at this report, if you look what they guided to, which was originally revenues flattish

versus last year. reported down four. apple probably has one of the best investor reses team relati teams because they managed to get estimates down per when they originally gave guidance to now. looks like they got to the numbers, but those are the pieces within that. remember, there is pressure on the services side and we've got this government lawsuit going on. we'll see if they have to unbundle what google pays to them. a big portion of the services profits, et cetera. so there is some risk to that going forward. so from a longer-term basis we still like the other names in the magnificent seven. so specifically amazon, tremendous profit growth. meta. microsoft. so, nvidia, obviously, on the a.i. side. those are the ones we'd be more focused in long. on returns. >> you own all of those and like all of those fundamentally, long

term. you like all of those better than apple? >> long term, correct? near term, apple, i think, betweenth, there event, people hoping for upgraded cycle coming. >> not saying that -- i don't know where the market's going. so i'd like to maybe have a short position in something in case -- i don't know. in case the nasdaq comes down. are you sure? anything? are you short? anything? >> i mean, tesla a name we're short again. we've got other shorts. i mean, shorts for viewers, they're incredibly dangerous. >> yep. >> single stock shorts you better have a really good grip on this and really manage the risk, engaging. stocks don't generally go to zero. if you want to hedge the market you're better off doing a broader-based short position.

around things like the s&p 500 or nasdaq. it may surprise some viewers, but nasdaq is up less than the s&p so far this year. there's a group of names where profits are surging. such as an amazon or a meta, et cetera. and then there's another group like an apple or tesla where, you know, they're just not growing right now. so that's where you need to kind of get a lot more selective. so this is a great environment for a stock picker. it's a horrible environment if you have a big-picture view and just are throwing money into the market, i think. >> you really don't think this is a good time, before this report, to own apple? kind of -- recommending people steer clear. so did it surprise you -- is it the move in the stock that surprises you or something in the results that surprises you more? >> well, i mean, you kind of had a hint it might not go so poorly when you saw big suppliers to apple massively cut their

forecasts. apple actually didn't budge. so numbers came down tremendously. stock clobbered. over 50% of revenue from apple. stock hit again. apple didn't bump either. that sort of gives you the hint. as we mentioned earlier, right? stocks in the near term, it had nothing to do with fundamentals. it's perception. the fact that apple managed to get to the lower numbers with revenues do you, managed to say, hey, we think for the next quarter we're going to see low single-dump it growth, that actually surprised me. remember, apple said they would grow back from the march quarter as well ansdd shrunk. dealing with perception right now and a beautiful thing if you want to be bullish. >> all right. serious smog outside today. don't go out there. hearing, like, a -- what's happening back there, dan?

scary. thank you. see you later. >> uncertain. coming up after this, bnsf ceo katie farmer joining us discussing state of the rails, the economy and so much rail, right after this. >> [music] i enrolled in umgc because i became very passionate about emergency management. the professors were great because they've had several years' experience in the field. they've seen emergency management hands-on. i'm able to learn from their experience and really make a difference. i picked university of maryland global campus because you get so much more out of it than just a diploma. >> learn about our more than 125 online degrees and certificates at umgc.edu [ music ]

we're here in oak haw at the berkshire hathaway annual meeting. next guest runs been zfr. the largest of six major rail systems across north america. bnsf ceo katie farmer joining us now. katie, good morning. >> good morning, becky. >> let's talk the economy broadly, because railcore loadings a great example. >> it's a mixed bag, becky. we divide our business into three segments. our consumer product segment, which is really international, domestic intermodal and automotive. the consumer is really hanging in there. we saw a drawdown in inventory following the pandemic, and that impacted or loadings last year. this year the loadings have picked up, and we built back

inventory. intermoatly, strong for us. then automotive inventory rebuild as well. if you turn to our industrial segment. that's a mixed bag as well. it's, you know, chemicals, plastics things like that up. anything regarding building down. also where we put coal as well. low natural gas prices as well as really oversupply of international gas in the market, those volumes have been challenged for us. finally, in our agriculture product segment, you know, we had really strong first quarter relative -- we saw about 60% more grain loaded to the pacific northwest. we also see an emerging market in renewable diesel. a great market for us. handle raw products inbound and finished products outbound. it's a mix -- mixed segment,

really. >> warren buffett wrote in the annual shareholders letter, operating profits down. wasn't disappointment. what happened? >> 2023 definitely was a challenging year and out performance reflects those challenges. we know that we need to, for our customers, we need to be more, we need to work on our cost structure, and our business -- >> you mean lower prices? >> no. it means we need to be efficient and productive. we need to offer industry-lead service, get everything we can out of assets and get value for what it is that we do. our business closely tracks the industrial and consumer economies, and so we need to evolve and we need to adjust and we know we need to do more relative to costs. >> how do you do that? warren also pointed out that your profit margins relative to the five major other north american railroads had fallen since berkshire hathaway bought the company back in 2010.

over the last 14 years. what specifically can you do to change that? >> well, our business ais reall in a transitional period. seeing portfolio move, much greater of that portfolio in intermodal. you know there's a lot of truck capacity right now. headwinds with that. also we're seeing structure decline of coal. we need to focus on really being aggressive relative to cost structure. making sure that we're giving our customers a competitive cost structure and good industry-leading service so they can be competitive in their markets. i would say, also, becky, that during 2023, we worked to extend contracts with our customers. brought new volume on to the railroad and we started the first quarter of 2024 with increased volumes and a record market share in intermodal. >> it is a capital-intensive business. you're planning to spend something like $4 billion. what's that's going towards? >> a large percentage

maintaining our infrastructure. you know we maintain our own infrastructure and have to do that to give customer as reliable service product, maintain an infrastructure that's safe for our customers but also investing in expansion as well. one of the projects we're excited about is the barstow natural gateway in california. we refer to it as "big." adjacent land they wercan be adjacent to the hub. this is an opportunity for us to improve efficiency and productivity of the supply chain through the ports of l.a. and long beach by taking that freight, moving it through the alameda corridor into that new facility in barstow, which really gives us the opportunity to offer customers a sustainable solution. a really competitive option where we can offer new services to the interior of the country. >> california's not always an

easy place to do business, though. there is some regulatory, the california resources board finalized what they call their in-use locomotives calling for zero emission locomotes by the year 2030. is that even possible? trains run on diesel. >> it's a challenge. there will not be zero or near zero locomotives and the challenge is if carb is into the waiverby eta, we think it would cost abouts it's 800 million a year. so not only is the technology not there, but the cost that the american consumer would bear because of this would be really devastating to the economy. >> would that make it even less competitive with trucking? that's the really unfortunate part about all of this. it's that rail handles 40% of

the long haul in this country. and we really only account for about half a percent of the greenhouse gas. so the unintended consequence of this is there would probably be more traffic moving by trucks over the road. so we have grave concerns with this, and the concern is that if epa allows us to go forward my concern, 17 or 18 more states that will adopt this, significantly impact the american consumer. >> making it almost impossible to do business competitively? if it goes into effect we would seriously have to look at our investment in our barstow project. >> katie farmer, bnsf, thank you for being with us today. >> thank you. appreciate it. by the way, folks, a special programming note. tune in tomorrow, may 4th. berkshire hathaway annual shareholder meeting streaming live and warren buffett onstage answering questions five hours on that event. mike santoli and i will be there. starts at 9:30 a.m. eastern.

we'll be right back. andrew, back to you. sorry. we will be right back and bringing you "the" number of the morning. don't go anywhere, because the april jobs report is out. literally in five minutes from now. we will have the number instant analysis, reaction, and how the markets take it and maybe how jay we tespollak that number, too. back after this. makes trading . with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley power e*trade's easy to-use tools make complex trading less complicated. custom scans can help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley to start a business, you need an idea. it's a pillow with a speaker in it! that's right craig. a team that's highly competent. i'm just here for the internets. at&t it's super-fast.

reliable. you locked us out?! arrggghh! ahhhh! solution-oriented. [jenna screams] and most importantly... is the internet out? don't worry, we have at&t internet back-up. the next level network. i sold a pillow! how's the chicken? the prawns are delicious. oh, i have a shellfish allergy. one prawn. very good. did i say chicken wrong? tired of people not listening to what you want? it's truffle season! ah that's okay... never enough truffles. how much are they? it's a lot. oh okay - i'm good, that - it's like a priceless piece of art. enjoy. or when they sell you what they want? yeah. the more we understand you, the better we can help you. that's what u.s. bank is for. huge relief. yeah... ♪

welcome back to "squawk box." we're just a couple minutes away now. exactly -- two minutes away from the government's april employment report. ahead of the number let's bring in our jobs panel stephanie link, hightower advisor chief investment strategist and cnbc contributor jason furman. former council of economic advisers and now economics professor at harvard's kennedy school of government. douglas holtz-eakin, former congressional director and our own steve liesman and rick santelli. we've talked all morning and i guess maybe i just quickly would ask stephanie, since you trade. you make investments all the

time. what would be worse? a really hot number or a really cold number, or are they equally bad and we just sort of need a nice goldilocks number? not too hot. no too cold. >> i want a good number. i'll take a hot number. a strong job market has been the backbone of the strength of this economy, and we have seen good numbers across the board in other areas of employment. weekly jobless claims, four-week moving average far from recessionary at 210,000. we have the challenger gray year-to-date. layoffs off 6.4%. this is very important. driving the consumer which is 70% of the economy, and the economy is growing 2, 2.5%-ish good for earnings. that's what i care about. because earnings are revised higher and seen a beat rate of 80%. >> going to rick. rick, we know that some people that just -- they just think that inflation comes down after

unemployment goes up. so we're not going to see inflation come down until an uptick in unemployment. people probably would like a little cooler number, but this is, only got ten seconds to respond. might as well wait now until we see what the number is. rick? >> yeah. i'm like stephanie. i want to see people get jobs. however that plays into the hand of the fed, that's their concern. and april non-farm pay rolls expanded much less than expected. 175,000. looking for a number closer to 250,000. at least up to this point, in the rearview mirror. 303,000, there are revisions. minus 22,000 for two-month span. look at manufacturing. went from zero to 8,000. there is improvement. ma 303,000 went up 315,000, by the way. which means last month's 315,000 was the best since january of

'23. then go to 175,000. which actually is the weakest since october, october of last year. now, let's go to the unemployment rate. 3.9. moved up one tick from 3.8. 3.9, equals february and define a higher level than that, you have to go to the 4% in january of '22. and to be fair, the 3.9% represents the 27th consecutive month under 4%. all right. now, let's get to the average hourly earnings. shall we? up 0.2. 0.1 less than expected that equals february to find a lower number, boy, you have to go back a long way. to find a 0.1 number you have to go to february of '22. there's been several other 0.2% increases. year over year. below %. below 4%. 3.9%. 3.9% equals june of '21.

to find a lower one, boy, you go back to may of '21 when it was 02.3%. what a drop there. average hourly earnings right now, on a year over year basis, i'm sorry. yeah. average hourly hours. just did the earnings. on the hours, 34.3. that's a down tick but a lot of 34.3s. equals february. 34.2 was january. that moved back up a bit. so it has escalated from 34.2 in beginning of the year. hor hovering at a level. this one doesn't make a difference. this participation rate hanging steady at 62.7. that was last month. that was this month, of course, prior to that, if you wanted to find a higher level of participation it would have been 62.8. that would have been in november of last year, and finally the u6. under employment rate.

many pay close attention to this. 7.3. last month. highest going all the way back to november of '21. it moved even higher. 7.4. also go back to november '21. at that point in time 7.7. interest rates dropped, which makes a lot of sense at this point. and as stephanie talked about, reiterate. listen, the fed has its issues whether employment goes up or down doesn't necessarily mean inflation's going to follow. powell during his press conference talking about owners and rent, hard to get gps here, because post-covid, there's long lagging we never counted on. i think that is a good sentence to keep in mind for everything, because these long lags might lead to a spot that rhymes with pre-covid but doesn't necessarily equal pre-covid. joe, back to you. >> rick, thanks. steve, i'm not convinced that if it was up 100,000 jobs over

consensus that you'd be up 600 points on the dow. i don't think -- i think the market was looking for -- >> a weaker number. >> yeah. >> yes. yes. and i -- i think it's a good number, joe. i'll tell you why. because we want to do, come down to what is believed to be more sustainable rate. in any other month outside of this sort of crazy postpandemic gyrations we've had. 175 would be a good number. it's also a good number in the sense that i think the fed does want to see some weakening to a not weak number. that's where we are. it is interesting to look at what's happening in the economy. >> what do you mean, to a not weak number? >> it's a pretty good one. >> say 500. what would be going -- >> 500,000 jobs. a big up surprise -- >> cuts further down the road. >> xabexactly. >> love to hear more from the panel. you had a lot of strength in

that area. we've had that strength, which is health care, 87,000 of the 175 were in there. i think leisure and hospitality. saw a bunch of transportation and warehousing. airlines always appear to be hiring folks out there and retail trade up 20,000. government, not a big addition. adding but not seeing it ther. if this is a number that stays. you're right, joe. could worry about consistent weakness right now a good number. >> we had -- deflation. >> inflation. >> part of the stagflation. >> this is not stagflation. >> i think it's nice. i think it's nice pup. you think so, too, jason furman and then to doug and back to stephanie. trying to do everything. what do you think, jason? >> looked to me like a

goldilocks report. not at all surprised how happy the market is. that job pace, that's still a very healthy pace of job growth, plus this is off of over 300,000 last month. still averaging about 240,000 a month. i think one of the most important data points was average hourly earnings. that growth coming in lower than expected. over the last three months it's up to 2.8% annual rate. that is a very different and much more inflation-reassuring picture than from the eci earlier this week. those data are noisy. you don't want to take them too far, but after some of the concerns raised about wage growth and its inflationary impact earlier this week, the bottom line is, this report is quite reassuring and if we have 170,000 jobs a month for the rest of time, a 3.9% unemployment rate the rest of time, inflation comes down.

you know, i think we'd be thrilled out of our minds. >> doug, been a while. >> yep. >> comments on a lot of things, but i get, we use goldilocks a lot, but kind of not too hot, not too cold at 175. >> yeah. i'm with jason. i think this is a good report from respect of the fed. first read on data second quarter. and the components of labor demand. hours, employment. average hourly earnings all modestly down. what the fed would like to see when it has restrictive policy in place, but by no means falling off a cliff and we know from the weekly -- as stephanie mentioned. no evidence of recessionary conditio conditions. what they'd like. evidence monetary slowing and without creating a hard leaning. this is a good report from the that perspective. >> yeah. so stephanie, while you're here, what do you think of apple?

>> oh. well, it was better than feared, and i mean, there was like this pile-on of negativity over the last couple of quarters. yet so many downgrades. numbers coming down. expe expectations really, really low. china better than expected. services phenomenal. 14%. gross margins in services 74.3%. so i think you got the bad news out of the way. the guidance was pretty decent. got $100 billion buyback. biggest in history. i think that if, the setup going forward. this is 7% of the s&p 500, joe. in terms of the waiting. i think you're going to see a lot of chase in the next couple of weeks. >> a couple quick points, joe, on the, what's happening. you know, rick is right to see the fed funds market basically a glorified -- a bond market. even what it is. precise thing.

but a little more back in play where it was. 4% this morning. september, over 74%. ended below 50 % before the fed meeting. powell dovish. doug was saying i watch closely duration of unemployment and not seeing that average time being unemployed actually is down. duration and so people -- there is churn going on in the market, but that's not creating long-term unemployment figures. >> earnings nice, jobs nice, but traders, nothing they like more than the prospect -- that we might get -- just main line. they do. they do. main line that easy money. you will to ask -- used to say an asteroid's going to hit, remember this, joe? an asteroid's going to hit the world tomorrow but markets rallied when they thought the

fed might cut. right? >> flight to safety. treasury yields would go down. right. all joking aside. here's the issue i see. i can't believe jason considering his past is happy about wages going down. i would think that wages going up is a good thing. i would think when i look at california and i know the state doesn't support it specifically but does generically. you go to bottom of the food chain bottom of the wage food chain and raise min mumm wage it trickling through everything. diesel prices going high. it will trickle through everything. my point. look at pre-covid wages year over year. go backwards in time. okay? in february of '20. 3.0. january, 3.1. in dec of '19, 3.0. you get the picture. celebrating at 3.9. listen, minimum wage at the bottom not necessarily boosting these numbers but put a floor

under these numbers. so to celebrate this i think, a., un-american. b., i think that wages aren't going to necessarily cooperate in the same way, because once again, long and variable lags, listen, i don't think we'll get back to pre-covid levels. that really is some of the same types of issues were she to thto -- to think about when you think about sticky inflation. >> respond to the charge against being "un-american." what you care about, real wage gains. >> you're at harvard. i don't know. >> care how much wages are growing in relation to inflation. too high a number, goldilocks. a signal of more inflation. not good for anyone. higher interest rates and the like. wage growth at this type is sustainable. could do higher and be sustainable. get inflation back to target. have interest rates come down. by the way, people don't just

k care about wages but how much they pay on mortgages. i don't want it to be a million either. heading towards a sustainable place. one noisy data point what's been along and arduous process we don't know how to lend. >> doug, either to you or try to start something between steve and rick. better go to you. >> i can't believe -- >> rather than me. >> you were sitting here -- >> rick had -- >> all right. go ahead. >> here's the thing. >> go ahead. >> put aside -- let's put aside jason and look at numbers. wild card here is productivity. what happened in -- a huge burst of productivity cures a lot of ills, helps disinflation. concern to see it moderate in first quarter data and this number only makes sense in retrospect when you see what's going on with the productivity numbers. >> i was going to say, joe, talking about suss diseased

hamburgers. >> yeah. >> the notion being -- >> fake meat or real? >> subsidized hamburger's you have people working below the minimum, at a low minimum wage and they then qualify for government assistance, you're subsidizing hamburgers. >> i see. >> also read studies suggesting the minimum wage i think it was, september in one of the wall street firms put out a piece that said minimum wage change in california would show up in decimal points in the national numbers. not have a very big effect on wage inflation. >> are you tweeting, rick, right now? what you're -- deliberately -- >> a social question here. >> subsidized hamburgers. >> rick? >> you subsidized everything else. why not? >> that's a fair answer. we do have a lot of government policy in place here. i'm interested in the notion whether or not the other part of the mandate. employment part of the mandate

becomes part of something the fed has to worry about. i don't think we're there yet, yeah. >> right now essentially say i'm good over here. i have to worry about only over here. powell talked about the idea that at some point if you have persistent increases in unemployment we start to worry at the other side. an mating the trade today, i think. >> okay. >> hey, joe -- >> too job reports away from a rate cut. wasn't a bad jobs report. >> go ahead. >> can i just say all of this, all the data we're getting, supportive of, like, a 2, 2.5% gdp. we are seeing better growth here, but also seeing better growth around the world. decent gdp numbers from china. we have india growing 7%. japan actually growing low single digits. that's really good. if that's going to keep inflation higher and elevated, that's why the last mile of inflation is hard to bring down. i will take higher growth around the world and a little higher

inflation, because that does mean earnings are going to come in better than expected. we know stocks follow profits. on wait up and on the way down, numbers are going higher. >> jason, interesting point that stephanie's making. really gets to an argument that i've seen economists begin talking about. is the -- use the word "equilibrium" rate. use a more friendly term. inflation running of the economy. is it higher now because of things like deglobalization? because we're onshoring certain things? because of other things happening in the economy. say the need for capital investment? do we have a higher run rate for inflation that the fed should abide here? >> yeah. i don't think there's anything structural about the inflation process. just think canada is an incredibly globalized country and face the same inflation issues we do in the united states. once you have floating exchange rates you can create disconnect to what's happening globally and

what'shappening domestically. ultimately inflation is a monetary phenomenon and what the central branch wants it to be. the question, how much do they want it to be 2.0%. i'm not sure. >> i'll bet on structural. >> definitely structural. no doubt about it. >> and sometime, it's an important one. fed should back off, then, if it's structural. just let it happen. you know? >> they can do that. you know, six people -- looking for maybe an -- >> we can do that. >> answered that. >> becky could be in one. andrew in here. i asked for it, no reply. tough to get a lot of information out of just six people. >> running this show, joe, i try. >> not as powerful as you suggested. >> i want an extra box. two extra boxes. >> get becky ithe n box. >> used to do nine box. put carl's dog luck any there or paris hilton.

d sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

welcome back to "squawk box." the government's monthly employment report showing a gabe of 175,000 jobs in april. joining us now his insights what that neb umber says about the economy and more importantly what it could mean for the federal reserve. cnbc contributor and repeated over and cnbc contributor and possibly the only person that we've talked to over the past two years that's gotten what the fed may do next right. so, roger, what's your assessment of this number, and what does the fed do next? >> i think it was a good number in that it showed the economy is still doing well. it was not a number that suggested increasing inflationary pressures, nor did it suggest the fed should change its outlook and bring in the expectation of cuts. i think right now this is a number that didn't move things too much one way or the other, and i think the message is still the same. inflation is still too high. they have to be attentive. they'd like to cut rates. i'm not sure yet that they're

any closer to that because of this number, however. >> the bias is towards cutting. you don't think there's any chance that the fed would feel they need to switch gears and at some point raise rates? >> well, you heard chair powell the other day say exactly that. look, i think inflation's become incredibly unpredictable. we've seen it be stickier than we thought. unlikely they'll have to raise rates but i wouldn't be quick to say it's not going to happen. not the likely outcome, but nothing is impossible at this stage, and i think the fed should be prepared to move as the numbers suggest. >> in terms of looking at the numbers and the way you think trend lines are progressing, and i know it's moving around, if there was going to be a rate cut, do you see a rate cut happening in this calendar year? >> i think it's 50/50, frankly. earlier, one would have said -- and they thought they were going to do three. the markets thought four or five. we have had -- the first quarter was much stronger than anyone expected, and let's see how the

second quarter shapes up. the economy is doing very well, which is a good thing, but it's not consistent with inflation coming down much more quickly towards 2%, so i think it's a 50/50 they'll keep rates exactly where they are until the end of the year. >> is it crazy to be able -- and i don't know if we can hold both ideas in our mind at the same time -- to say the economy is doing great on one end and on the other end, say we're in some form of stagflation? >> i think it's hard to say that. i think we -- stag doesn't seem to be the story right now. the economy is growing at potential. our potential is roughly 2%, maybe a bit more. and there are a lot of good things that go on here. i wouldn't say stagflation. i think we've got what's going on, ultimately, is inflation is sort of a little -- interest rates are in somewhat restrictive territory. we're not sure how restrictive, and there are interest sensitive sectors and individuals that are suffering a little bit. but not stagflation. >> you're not as happy as i

think you should approbe, roger. the fed futures are ticking up. it's a high probability by the end of the year, at least, that there's a cut. but you didn't immediately say, yeah, there's going to be a cut now because of 175. you are still worried about sticky inflation. you're still worried about sticky inflation. i know you. >> absolutely still worried about sticky inflation. you're right, joe. to be very fair, the market has -- the market is hoping for, for lots of good reasons, cheaper money. that drives equity valuations, many good things happen to market participants when money is cheaper than it is today. that's not the fed's job. those of us who are focused on inflation should say, the signal, more than the noise, thus far this year has been inflation has been hard to drive out of the economy. we like a strong economy. we'd like to get inflation closer to 2%. the fed has been adamant about the 2%, and there's some way to go. >> pretty amazing moves in stocks and bonds, though, after

that, roger. we see the ten-year, 4.65% or something like that, couple days ago. >> one shouldn't be surprised. they can't be surprised. remember that the market really has gotten this wrong more than right in terms of expecting fed cuts. so, let's just wait and see how the data play out. >> both ways. >> absolutely. >> thank you, roger. great to see you. have a great weekend. up next, what to watch in the markets today following the april jobs report, saira malik isoi tjo u stay tuned. in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there.

i can't believe you corporate types are still calling each other rock stars. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

it's a beautiful... ...day to fly. wooooo! it's your time to cache in... so don't just play... stay at northern california's premier casino resort. book your getaway now... ...at cachecreek.com.

it's time to get away. northern california's premier casino resort is the perfect place... ...to do as much -or as little- as you want. cache in at cache creek casino resort. futures following the april jobs report still almost 500 points. you got to remember, amgen is -- even the lion's share, almost, of what we're seeing in the dow there. joining us now to talk the markets, saira malik, chief investment officer at nuveen. you feeling like a fable, like a goldilocks thing, saira? 175 was not as many jobs as maybe we would hope for or expected, but it's still solid and not too hot. >> good to see you, joe.

this is one data point, but it's one data point in the right direction and in the short-term, it's going to add to this relief rally we're already seeing from a less hawkish fed and strong earnings. the fed came in this week and took the worst case off the table. they said rate hikes were unlikely, and first quarter earnings have been strong. act 80% of companies have beaten consensus this quarter. long-term, we have concerns over weaker manufacturing data, and inflation, which did reaccelerate this year. >> when the fed takes hikes off the table, can we -- it's nice to hear that, but we've also heard some other things recently that maybe weren't quite as true, didn't turn out to be quite as true as we thought at the time, and i want to believe it too, but do you think the chances are zero that we -- that the next move is higher? >> i don't think they're zero. i would not go as far as to take rate hikes off the table. we learned this year that while inflation had moderated in late 2023, it reaccelerated this year.

sure, wage inflation looks better today, but cpi, ppi, pce are all well above the fed's target, and the economy has remained relatively strong. if this sign of lower payrolls and some of the weaker manufacturing data we've seen doesn't hold and the economy stays resilient or reaccelerates from here, i think rate hikes come back to the table. we've been in the camp of less than three rate cuts this year with possible hikes. >> we haveabout 30 seconds, but do you think that inflation could come down, even if unemployment doesn't go up? >> i think you need both for that to happen. i also don't think inflation is going to come down to target in 2024. that's a 2025 game, which is why we've not been predicting many cuts this year, and if employment does stay strong and the consumer keeps spending, those rate hikes could stay on the table for the fed. >> we hear it a lot. higher for longer. saira, all i know is it's friday, andrew. >> yep. >> becky.

you're going to be back when? you'll be here monday? >> yeah, well, i'll be here monday. we'll be on the show again, but we're here tomorrow too. tune in, 9:30 a.m. eastern time tomorrow. >> you'll be there still on monday. okay. make sure you join us next week. "squawk on the street" is next. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures are soaring as the market welcomes this miss on april jobs. 175,000, some negative revisions, wages run cool. ten-year is back below 4 pnlt 5%, and that's where our road map begins, stocks roaring on the less than expected number. unemployment rises a tick. plus apple is posting a double-digit drop in iphone sales, but it did approve that $110 billion buyback. that's the most ever for a pu