Transcripts For CNBC Squawk Box 20240711 : vimarsana.com

CNBC Squawk Box July 11, 2024

Good morning welcome to squawk box. Im becky quick along with yoe kernen and mike santoli. Andrew is off today. Well start things off with the stock futures after some positive vaccine news drove the dow and s p 500 to record highs. Dow giving back some of that ground, down by about 100 point, but remember how far they have marched for the last three weeks. S p is indicated down by about 14 points and then the nasdaq is indicated up by about 12 points. We do have some breaking news from amazon and better that coocoo Bertha Coombs ohas that story they are launching a full Online Pharmacy building on its acquisition of pill pack the new pharmacy is innetwork with major insurers and medicare and patients can pay for their prescription copays with funds from their Health Savings accounts just like they were at any pharmacy and they can confer with pharmacists online or over the phone about their prescriptions. Prime members get free two day shipping, patients who needs meds right away with k. Getit go go to a face pharmacy. And they will have comparisons to if they dont use their pharmacy tj parker the founder of pill pack tells cnbc that the experience is separate and distinct from amazon. Com and that data will be stored in compliance with Health Privacy rules and not used for marketing. Although their release says without clear permission so i get guess you could opt into that if you wanted to first czonka for the Drug Store Chains front of store and now direct aim at the back of the store at their pharmacies. This is something that probably doesnt come as a huge surpri surprise but when you hear the news that it is actually happening, it still has to come as a bit of a shock. This has been something that these competitors have been preparing for for a long time. How do they fight back well, they have been building up their instore services, that is what they think will be the key. And certainly we have seen that right now during the pandemic, you know, they have been offering testing and they will be a critical point when it comes to the distribution of the vaccine. But they have really been ramping up and making sure that their pharmacists arent just there to dispense pills, but also to offer advice and also adding other Services Like clinics and also dietitians and basically to make it your front door for health. So they still have the physical pharmacies and at this point as far as we know amazon is not ready to do that just yet. But stay tuned yeah, a huge story. Thank you very much. Good to see you. You too our other big story this morning, tesla is joining the s p 500 on monday december 21. Based on yesterdays closing price, that would make it one of the Top Ten Companies in that index. And with the after hours move, the market cap is about 430 billion, that makes it the eighth biggest and in striking difference of Companies Like walmart and visa now, because of the large size of the addition, the s p, dow jones seeking feedback from the investment exactly do this, to determine whether tesla should be added all at once or two tranches. This would make elon musk the worlds third richest person passing mark zuckerberg. And so many different angels to this i was trying to figure out, it used to be like we had like the press techians and they were all long they were really obnoxious vocal people that owned the stock. And if you said anything, they would get mad. Tesla or musketeers, they started out like that, but then they were replaced on the total obnoxious side by the people that are short this stock santoli, and are they still short this stock, the teslackers in youll be i dont think, youll be wrong, and they get so animated, and were duped reporter that goes report on tes tesla. When do they throw in the towel . They largely have this is not nearly as heavily shorted a stock as it was. Just the rise in the shares have basically taken care of a lot of that but it is fascinating because the exact reason so many people were short, all the fundamental challenges, the valuation that you really have to stretch to compute it based on what the company is worth today, that is also what probably kept it out of the s p to this point, which is just a lack of predictable consistent profitability and this idea that it was inflated beyond its economic foot print and three months ago, s p took a pass on it who knows exactly why. But it seems like they wanted the fever to break in the stock. So it sort of has flattened out and maybe digested some of that. And the it is just becoming too hard to mechanically keep a 400 billion company out of the index. So it is pretty fascinating. And there was some crossover between the teslackers and the modernarains or matter it got very strange. I dont think that twitter is a great place to pay a lot of attention to yes you dont want to step into the wrong stream have you done that, santoli . You dont take a lot of they will definitely come for you if you have something less than flattering to say about the company. Im just waiting right now. Even if you just put somebody on the air, when we put kathy wood on the air is when weve gotten like be the full frontal assault. And gordon johnson, when we have gordon on, he is very smart, but i dont know, i dont know why the really good reasons havent worked out too well and the thing that really struck me is watching this being compared to walmart. If you look at it, the close yesterday for walmart was 3 4 32 billion. If you look at tesla today with a 12 gain, you are talking about a market cap of roughly 426 billion so within spitting distance. And this is not a knock on tesla, this is not a knock on elon musk, but if you look at owning a piece of a business, which is what owning a stock is, if you look at owning a piece of a business, the idea that you could have one share of tesla, a piece of tesla or a piece of walmart, it is kind of shocking to me, you know, when you think through what these businesses actually are walmart is the biggest employer in the United States outside of the federal government it is 10 of total retail sales. 10 of all money spent in the United States on retail exchanges goes to walmart. And walmart i think if you looked last year, it was 523 billion in revenue last year, it is on track for about 5 550 billion sales. For tesla last year, it was like 24 billion. So you are just looking at the comparisons for some of these things, 24 versus 5 523 billion i understand that it is a growth stock, i understand that elon is brilliant, you see him shooting men into space men and women into space and that is awful great. But spacex is not part of tesla and if i had the choice of owning a piece of a business, i think i would take the Walmart Tesla is seen as what replaces internal Combustion Engines in the world i know. And you have kathy wood comes on and shes got, you know, a lot of really far they seem at the time to be hyper billion lihyp hyperbolic views ron has been right about it all along. And hes made a ton of money. Almost went from the stone age to the drill age and well go from the internal Combustion Engine and henry ford and model ts and all that and well go into this, you know, emissionless future. And i think tesla has although dreams in the stock price. A lot to push through a stock. Every stock is valued based on what proportion of what the company has already done and what it might do in the future so for tesla, it is mostly about the future, for walmart, it is mostly about what it has done already. And i guess 25 years ago when amazon became public, we would have been making some of these comparisons against sears as opposed to walmart i dont think walmart is sears. I think what walmart has done under Doug Mcmillan is Pretty Amazing even going after things like tiktok. Drug mcmillan keeps a list on his phone of the top ten retailers through every decade he is very aware of you how quickly you can become irrelevant and i think that they have done a very good job of trying to make sure that they are keeping up im not saying it is the same sort of growth proves pepgspect you see with tesla, but this made me think wow. And this next story, i felt so good this morning remember last week, it was like lowes was looking at hd supply and im like what . No, that is not the world is right. I think home depot is buying back hd supply just to make wait a minute, lowes buying home depot supply was too weird. But anyway, the world is right again. Home depot will buy hd supply. That was a horrible investment last time. I thought frank made the brilliant move to get rid of it at the time and it was thought of as a i dont know, not a great business but at least it is home depot buying hd supply well go through the numbers next meanwhile u. S. Equity futures indicated down 158 points on the dow. Coming off new highs you can go your own way its time you make the rules. So join the 2 Million People who have switched to xfinity mobile. You can choose from the latest phones or bring your own device and choose the amount of data thats right for you to save even more. And youll get 5g at no extra cost. All on the most reliable network. So choose a data option thats right for you. Get 5g included and save up to 400 dollars a year on the network rated 1 in customer satisfaction. Its your wireless. Your rules. Only with xfinity mobile. Welcome back home depot out with earnings this morning the Home Improvement retailer reported Quarterly Earnings of 3. 18 a share and that was much better than the streets estimate revenue also beat the streets forecast and Comp Store Sales increased by a greater than expected, drum roll for this, 24. 24. 1 . That is unheard of for Immediate Reaction to home depots earning, lets bring in brian daboll this was better than just about every number and yet the stockstill down about 1. 2 doctor do you think that is . Good morning. Youre right this was another what i call blowout quarter for home depot very similar to what we saw in the Second Quarter these comps are amazing for a company of this size now, i think to answer your question why the stock is down, and look, i recently downgraded home depot on this concern that it is okay what is next. Hopefully the covid pandemic will subside rather quickly especially with some of the vaccine news were getting but the concern i think the market is starting to have and im starting to have, what 2021 looks like for home depot as so what have you done for me lately is the common refrain on wall street for things like this but brian, these numbers are phenomenal the company says that it will be investing a billion dollars in annualized permanent compensation enhance mgts for the front line Hourly Associates so even after covid goes away and sales come down, the company will be taking care of the associates that helped it through this incredible time where it was servicing needs through a crazy pandemic i think that that is laudable, but do you think that that is why the stock is under some pressure maybe first it is the right thing to do home depot takes care of its people but this is a theme were seeing in retail and it is clear that coming out of this pandemic, it will be more expensive to operate as a retailer. So labor expenses will be higher, there will be more cleaning costs, et cetera. And so i think this is one more indication of that but to answer your question, that may be a reason premarket, but now it is more where do we go from here im with you, it is the right thing to do. And the chairman and ceo says the reason that they are doing this, they want to lean into these investments because they think that they are critical in enabling market share growth in any economic environment, and their people are on the front lines and they should be rewarded for that. You said you recently downgraded the stock. Dana telsey upgraded to outperform from market perform she said because of the hd acquisition they announced yesterday. She is looking at that and thinks because of this, it will be assuming about a 3 earnings per share boost if you look at synergies of around 5 , she says it will be accretive to earnings next year and that is enough for her to upgrade i have a lot of respect for her, but i disagree with her call jo you were saying that the hd supply purchase is interesting especially given its history i get what they are doing. They are now in a much better position home depot is better run today than the company was 10 to 15 years ago. So i think that they are much better situated so to say to operate a company like hchlthd. But it is small. Only 6 billion. This is a small addition to the home depot enterprise. Again, i home depot over the next few quarters this is a well run company i think once we get past this comparison issue, i would wont again turn very positive on home depot. Not because of home depot supply, but the underlying retail business. Home depot you down graded to what well, we call it perform, which is the mutual or hold rating i kept my 305 price target, so we see potential for up side near term, but i also considered a down side target of 220 to 230. And at that price, not to get too cute, but at that price, i would think these concerns that im talking about are priced into the stock at which point it becomes attractive on the long side what about lowes, did you done grade lowes at the same time or is that different story no, i did i made almost the exact same call so well see what they report tomorrow given what home depot said today, i have every reason to believe that lowes had another Strong Quarter as well what will be interesting, home depot will host their Conference Call at 9 00 this morning and they will talk about the trend again, strong numbers. But well see what they say about business so far in the Fourth Quarter or first few week of november. Brian, thank you. Great talking to you im sure well check in again tomorrow with lowes. Thanks for having me on brian, youre home . This is my home, yes. And you have on some wild like couch material jacket and you heard me say that and then ran up and put thats, did you do that . Did you have time in. No, i was actually disappointed this is my most boring sport jacket ever. I was going to run up and get something a little more flashy how much those couch jackets did you have, is it also the one or you go big couch hunting sometimes, dont you i have a pretty expansive collection i truly enjoy them you do have a collection. We enjoy them too. Why did you think youre on so much it is Little Things like that when a guest goes through the extra effort to surprise us every time i mean, why not. It is tv, it is a visual medium. Thank you. He surprised you this time, he didnt have it. Look at him, i was like no, that is not nagel. Mike, probably worth pointing out that home depot is a dow component, dow down by 99 points and now with the added pressure from home depot shares, now down about 182. Yeah, so close to seven dow points per dollar of a stosk as stock as a general rule of thumb. Coming up, some what i wile wat. And costco declared a special Cash Dividend of 10 per share the cfo said the reward is possible because of costcos stnghan setro blalcehe before we talk about taxsmart investing, whats new . Well, audreys expecting. Twins grandparents we want to put money aside for them, so. Change in plans. Alright, lets see what we can adjust. Wed be closer to the twins. Change in plans. Okay. Mom, are you painting again . You could sell these. Lemme guess, change in plans . At fidelity, a change in plans is always part of the plan. And sweetie can lecoloryou just be. N plans . Gentle with the pens. Okey. Okey. I know. Gentle. Gentle new projects means new project managers. You need to hire. I need indeed. Indeed you do. The moment you sponsor a job on indeed you get a short list of quality candidates from our resume database so you can start hiring right away. Claim your seventy five dollar credit, when you post your first job at indeed. Com home. That selling carsarvana, 100 online wouldnt work. But we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. And putting you in control of the whole thing with powerful technology. Thats why weve become the nations Fastest Growing retailer. Because our customers love it. See for yourself, at carvana. Com. Welcome back regulatory filing revealed a slew of changes to Berkshire Hathaways portfolio in the third quarter. It bought 2. 4 million shares of tmobile and took on big positions in pharmaceutical stocks including abbvie, merck, pfizer and bristolmyers squibb. Apple remains berkshires biggest Equity Holding it sold most of its position in jpmorgan chase, from 22 mountain 2 million shares to less than a million. And also dialed back investment in wells fargo and pnc and cut its relatively new you stake in gold by 42 . Wish i understood the rationale behind some of those moves. Which moves jpmorgan. I thought this is the time that the banks have been hurt and it is above book unlike some of the other ones, but i dont know, it seems like were coming out of something that would be good hes built up a huge position in bank of america remember, he has really pushed up his position. He owns more than 11 of that. Gold, the mining stocks i dont think gold was about him. My guess is the pharmaceuticals were him because it is 5. 6 billion. That is a big position that is a massive part of the portfolio, so my guess is that these moves i would guess are you and or charlie i would guess t mobile is not him. I cant imagine that that is him. But i could be wrong on that i dont think the gold was him, i think the gold was either ted or todd. So i think that moving their position in that is that and jpmorgan chase, a little surprising pnc bank a little surprising i know he liked booth thoh he le and apple, that is such a a rounding error a small percentage. I actually wonder on the apple if that was something that they did or just sometimes they have m

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