Closing Bell - Closing Bell Overtime: Apple Reports Stronger-Than-Expected iPhone Sales; Exclusive Interview with DoorDash CEO Tony Xu 05/04/23

Episode Date: May 4, 2023

Fourth straight day of losses for the major averages as regional bank worries continued to spook investors although stocks closed well off worst levels. Apple reported earnings. We have you covered from every angle with Evercore’s Amit Daryanani, Fortt Pitt’s Daniel Eye and Patrick Moorhead of Moor Insights and Strategy. Bespoke’s Paul Hickey joined us to break down the market action from a busy Overtime of earnings, including: Block, Coinbase, Booking Holdings, Expedia and Lyft. DoorDash shares popped after a strong quarter; CEO joined Jon Fortt in an exclusive interview to talk the quarter. Randal Quarles, former Fed Vice Chair for Supervision, discussed the continued weakness in regional banks and what happens if there is another sale. 

Apple ahead and a lot to go before that. That is the scorecard on Wall Street, but winners stay late. Welcome to Closing Bout Overtime. I'm John Ford with Morgan Brennan. And get ready for one of the busiest hours of earnings season. We are counting down to results due out in 30 minutes. We're going to have expert analysis and shareholder reaction to those numbers. Plus, Star Reporters are standing by to bring you earnings from Lyft, Coinbase, Block, Booking Holdings, Expedia, and more. And we're going to bring you an interview with the CEO of DoorDash after his company reports numbers. And as we wait for all those results, let's get straight to it with the market action.

Joining us now, Paul Hickey from Bespoke Investment. Paul, how much do Apple earnings matter to this market, if at all, given that we've got jobs number tomorrow and we just had all of this bank turmoil post the Fed rate hike? No, John, I mean, I think when you look at it, it's the largest company in the world or in the U.S., so it is a very important earnings report. You know, we were very concerned about all, you know, the market overall was concerned about the other mega caps coming into earnings season. And they all held up, you know, very well, better than expectations. Apple, the biggest knock against it coming into this earnings season is its valuation, trading at about 27 times earnings.

But the thing is, it trades right in line with these consumer staple stocks like a Procter & Gamble, Mondelez, Coke, and Pepsi. And Apple's growing faster than them, and its products are just as sticky as them. So I think in that respect, when you position it that way, it's more of a consumer staple. It's a quasi-consumer staples stock, and its correlation to the sector is near record highs. So I think in that respect, you know, Apple, well, I wouldn't expect a whole lot of upside here. It could, you know, I don't expect a big downside surprise either. Yeah, there's so many big narratives and stories and factors that are weighing on the market. I mean, look no further than the down day we had across the board for all the major averages,

led lower by financials. You've got all the regional bank angst. You've got a market that's digesting the Fed's hawkish pause, as Steve Leisman would put it. And then you've got jobs tomorrow, earnings that are so far better than expected. So what matters the most here in terms of where this market moves next? So I think there's two things. You have the Fed, which if they continue to Fed speak, when they start speaking, we'll have some speakers tomorrow. If they keep up this hawkish tone, I think the market's going to have big problems with that. On the other hand, earnings, like you just said, this is the busiest day for earnings this earnings season. And again, heading into this earnings season, we saw multiple forecasts that earnings would be the doomsday of the market, and it just

hasn't come to fruition. We've had about 1,000 companies report since the start of April. Over 70% are beating EPS forecasts, over 70% are beating revenue forecasts. Okay, you can say the bar has been lowered, so it was easy to get over that bar, but that's what was priced into the market. More importantly, guidance. More companies are raising guidance this earnings season than lowering guidance. So that's that, given the turmoil we've seen in the banking sector and all the uncertainty out there for companies to have more companies to have the confidence to raise guidance and lower guidance. I think that's saying something that we shouldn't ignore here. Yeah, and of course, we're going to get a tidal wave of reports from quite a number of companies.

Apple, obviously the headliner, but we're going to be monitoring those reports as they cross the tape. Let's bring in CNBC senior markets commentator Mikeoli, for reaction on some of these results so far. Mike, what's your assessment of the market? Well, I mean, I agree with all that Paul said there in terms of that push-pull with the earnings fundamentals against some of the psychology and the fear of what the Fed might be doing. I do think that one of the more immediate things is if anything can come in and seem as if it can short circuit this cycle of fright about the banks, that would be, I think, a pretty big trigger point for some relief. persuade the market that there has not been deposit outflow, as some of them have been announcing right now. And it's much more about just equity holders not wanting to own these things at these valuations because they don't see a profit path ahead. And because you have downward momentum that's feeding on itself, I think that would be a big piece of it. It's not it's hard to know where that would come from unless it is another one of these kind of Fed

backstop type ideas. But all that stuff to me is in the mix that's really shadowing this entire market and its psychology. Well, hold on, Mike. I think we've got results from Booking and Expedia. Seema Modi has them. Seema? We definitely do. Let's start with Booking Holdings, John. $11.60 adjusted, which is better than what Wall Street had anticipated.

The estimate was for $10.61. Revenue at $3.78 billion, which is better than what Wall Street had anticipated. The estimate was for $10.61. Revenue at $3.78 billion, which is better, again, topping Wall Street estimates. We're going to look through this release and also expect the full guidance picture on the earnings call, which begins at 4.30 p.m. Eastern. I would also point out that gross travel bookings did increase 44 percent in the quarter versus the same period a year ago, which is actually at a similar rate than what it saw in Q4. So the rate of bookings, the strength they're seeing there continues, but it's a similar growth rate than Q4. A lot of focus will be on the international pickup in travel. We know booking makes a majority of its sales outside the U.S. And with the economic data out of China certainly improving, the question is how is the pace of recovery when it comes to travel? Shares are down 5%.

Let's switch to Expedia, a 20-cent adjusted loss. So that is worse than what Wall Street was expecting. But revenue coming in line at $2.67 billion. The company also repurchasing $600 million of shares, one of the company's highest levels ever year to date. CEO Peter Kern saying, we saw strong growth and B2B driven by an expanding partner base and growth from our existing partners. Performance was enhanced by greater testing velocity and accelerating the deployment of AI. And we will speak to Peter Kern, the CEO of Expedia, tomorrow in the 11 AM hour. We will ask him more questions about just how much they are investing

in artificial intelligence under Kern's leadership. This is something that he's really been spearheading, and we will see how it impacts the company's growth portfolio. And also Verbo, Morgan & John, which is an asset that has been getting a lot of attention on Wall Street given its competitiveness against Airbnb. Expedia up fractionally. That earnings call also begins in half an hour. All right, Seema, thank you. And meanwhile, DoorDash numbers are out as well.

And I'm going to tell you, that stock is moving around a lot after hours, like really weird. It was up as much as 7%. Now it's down 7%, just moving all over the place. The numbers, though, good. Reporting revenues of $2.04 billion versus $1.93 expected. That's up 40 percent year over year. Marketplace gross order volume up 29 percent, also reporting less of a loss than expected. Fifty eight cents expected. Forty one cent loss reported. Also, marketplace gross order volume for the coming quarter projected higher than the street expected.

So and total orders up 27 percent year over year. That's a pace, Morgan, that they had been on in Q4. They're continuing on it. We're going to hear from Tony Hsu, the CEO, later in this hour ahead of the call. You know, a lot of momentum, it looks like. As he has been saying, it's not like customers, once the pandemic was over, stopped ordering in. And they've got other categories beyond restaurant. They've got grocery.

They've got convenience that look from these results to be growing faster even in the core business. Yeah, I'm going to be really curious to hear what he has to say about that diversification as well. That's going to be an interview you do not want to miss. In the meantime, speaking of deliveries, Lyft's results, people deliveries, are out. Deirdre Bosa has those numbers. Hi, Dee. Yeah, this is not a company that really has diversified and shares are really getting hit in the after hours down nearly 13 percent. It was a small beat on revenue, loss of $0.06 per share. But what investors are really focused on and what is hitting the stock right now is the guidance. Coming in light, expecting revenue of around $1 billion in the current quarter,

just shy of the $1.1 billion the street was expecting. It's the bottom line, though, where there is a major gap. The company is guiding for adjusted EBITDA between 20 and $30 million. The street was looking for 50 million. So very light there. I just spoke to the new CEO, David Risher. He's been in the position for only about three weeks, but he is not afraid to go against market trends.

And even what its competitor is saying, he told me that they are firmly in growth mode. There's no target, he says, for gap profitability. Remember that Uber said it would reach that metric and deliver that later this year. He says, in fact, they don't expect, quote, significant change on the bottom line for a while. I asked him about those cost savings from the round of layoffs that he just did. It was a major round. And he says that those savings are going right back into the business to drivers and riders. So essentially, they're spending more to win back some market share from Uber.

He says that's happening, but they're only getting started. So interesting, guys. This is an industry that has tried to focus more on profitability. He's going back to that growth push, and he's going to spend money to do it. Investors not exactly liking that. Wow, that's rough going up against a big competitor. Dee, thank you. And as we've been talking, Coinbase's results out as well.

Christina Parks-Nevelis has those. Christina. What we're seeing from Coinbase right now is they're posting a smaller than expected loss of 34 cents. That's a gap loss on revenues that are $773 million. Both are a beat right now, adding to the stock pop of 6%. Much of that revenue growth came from cost-cutting and a jump in subscription service revenue, which actually grew quarter over quarter. Similarly to the banks that cover those earnings, the platform also benefited from high interest rates,

and they did say that they actually didn't lose any customer funds during the regional bank fallout in March. For their guidance, though, for Q2, that falls a little short. More specifically, the company said that they're not going to be providing guidance for the full year, just given the macro uncertainty, but they are guiding for Q2 subscription services, which is a huge source of revenue. They're saying that's going to come in at $300 million for the second quarter. That's a slight drop, reflecting fewer rate hikes, a lower staking environment, aka blockchain reward activity. And that's why you're seeing shares up 8% right now. So a beat on the top

and bottom line. John? Okay, I'll take it actually, Christina Parts and Avalos. Thank you. Thank you. I want to bring our panel back in, Paul and Mike. Paul, I want to get your thoughts on some of the results we just heard, because I think the key takeaway here is many, if not all of these companies are consumer facing. And we know that is the part of the economy that's continuing to hang in there. Yes, I mean, you look at stocks like DoorDash and Lyft, you know, DoorDash is, I guess, up a little bit now. But Lyft, you know, focusing on the single vertical there and the fact that trying to grow and increase market share. But you talk to any driver

on Uber or Lyft, they just go back and forth wherever they're going to get the highest pay. So I don't think that's really a sustainable model and more of a model where Uber is diversified, DoorDash trying to diversify within different goods, not just dinners and meals. So I think Lyft is a little bit of a question there. And Coinbase, they had missed EPS and revenue forecasts in the last four quarters. So, you know, hopefully they could have beaten forecasts this quarter, given the run up in Bitcoin during the first quarter. Mike, I've been watching DoorDash stock move around quite a bit after hours. I don't know. I mean, that happens every once in a while with a stock. But is there any kind of trend or anomalies that you've noticed this earnings season in particular with stocks trading after hours? Or, you know, is this people

getting all, you know, into options given what's been happening with the banks? I think it's about, you know, look, you have a company that's, you know, unprofitable, was expected to be. And it's an eye of the beholder moment. Whichever machine is programmed to seize on whichever variable was just reported. That's part of it. But also in general, this is a stock and, you know, Coinbase is in here. DoorDash is in here. The sort of class of 2020 and 2021 kind of moonshot consumer online digital companies that have been convalescing for a while. I would say DoorDash much more so than Coinbase,

where it seems as if they're in kind of a winner-take-most type of a game. They're surviving. They seem to have a plan. No hopes for real accounting profitability, but it seems like the top line is moving in the right direction. The stocks look like they're kind of basing over a very, very long term at much lower levels than they're high. So I think that's the give and take within these numbers. And something like a Coinbase, it was all about, I think, the cash burn and the fact that they were able to be more careful on operating expenses,

slow down that level of cash burn and then not have any bad surprises about, you know, customer balances and activity. And Apple's still to come. Mike, see you in a bit. Paul, thank you. Yeah, that earnings barrage was something, but we're counting down to that report. Everyone is waiting for Apple. We will bring you those numbers and instant analysis as soon as they cross. And after the break, former Fed vice chair

for supervision Randy Quarles is going to join us to talk about the latest contagion fears among the regional banks as PacWest and Western Alliance got crushed. Overtime's back in two. Welcome back to Overtime. We're waiting for the Fed's latest balance sheet numbers, which are due out this hour. Investors are watching it closely as more turmoil bubbles up in the banking sector. Here's the latest. Western Alliances vehemently denying reports from the Financial Times of a potential sale. First Horizon and TD Bank are calling it quits on their $13 billion merger. And this morning on Squawk on the Street, I spoke with First Horizon CEO Brian Jordan and asked whether more regulation or even just temporary action is needed to prevent a contagion.

You can put a lot of things on the table, whether it's regulation, whether it's FDIC insurance, whether it's rules around short selling. But I think we need to be thoughtful because most times when you change something in short order, you push down here, it pops up over there and we create another issue or problem. Meantime, yesterday, PacWest said it is exploring strategic options with potential partners and investors, including a possible sale. Reports of that first surfacing a mere hour during this hour, actually, after Fed Chair Jerome Powell said the U.S. banking system is, quote, sound and resilient. Joining us now is Randall Quarles, former Fed Vice Chair for Supervision. Randy, thank you for being on with us, especially today, especially seeing what

is going on with the regional bank sector and the selling not only of the stocks but of the bonds. There's been talk about short sellers. There's been talk about a crisis of confidence. What do you attribute this to this week? Well, so the the the system, just as Chairman Powell said, is fundamentally sound, provided that people have confidence in its soundness. You've got a lot of commentary out there that's raising questions about banks that should be fundamentally sound. And that's principally being driven by their securities portfolios that have losses in them. The Fed can provide liquidity against those securities. And they have a facility out there that isn't getting as much takeover as

it probably ought to. And we need to remove whatever remaining obstacles there are to that facility being used so that people have confidence that banks that are fundamentally sound will, in fact, have the liquidity they need from the Fed to meet their liabilities. Yeah. I mean, there's been a lot of talk about regulation as well, regulations that maybe have been rolled back or don't exist and also the need for maybe future regulations. Here's Senator Elizabeth Warren on CNBC earlier today. Take a listen. Why was the Fed able to loosen regulations like that? Well, part of that is from the 2018 change in law that gave the Fed the opportunity. But the second part was the culture.

It invited the Fed to loosen those regulations. Randy Quarles, you remember him, the vice chair of the Fed. Sure, had him on earlier this week, I believe, right? In charge of regulation. Let's go back and play the tapes from him talking about his mission was to change the culture at the Fed so that they were lighter, more hands off, not looking over your shoulder. And now we reap the consequences. That was actually yesterday, but I want to get your response. Yes. So the Fed report itself says that the regulatory changes wouldn't really have made

a difference to what happened at Silicon Valley Bank. I mean, Senator Warren's cultural charges are without evidence. She doesn't provide any at all. There is, and the supervisory stance that we took at the Fed was you need to be focused on what's important. Obviously, for a bank that has a huge interest rate risk-driven hole in its balance sheet, that on what's important. Obviously, for a bank that has a huge interest rate risk driven hole in its balance sheet, that's what's important. Not a lot of the trivia that the Fed's report shows that they were instead focused on. So there are issues that need to be addressed. But fundamentally, what's driving this is not quibbles about the appropriate capital to keep against accumulated other comprehensive income

or questions about what level of assets a bank will move from the RBO to the LFBO supervisory category. Those are ridiculous on their face. What's important is that just as happened with the savings and loans decades ago. We have an inflationary episode that is driving issues on the balance sheet of a large number of banks. We need to have a broad response that can address that. The Fed's monetary policy is absolutely appropriate for the inflation that we're undergoing. The response that can address that, the Fed has articulated a liquidity provision program that with some tweaks should be able to respond to provide the banks liquidity that they need and to restore people's confidence that they will have the liquidity that they need, notwithstanding the temporary effect on their balance sheets of current interest rate policy.

OK, Randy, trying to bring this home for investors, how should investors digest this disconnect between where the market right now is saying interest rates are going to be and what the Fed is saying about where interest rates are going to stay for a while? What should investors do? Who should they believe and how should they act, do you think, based on that? So I do think that there will be some significant adjustment over the course of the summer as the market realizes that the Fed is right and they are wrong. Interest rates will need to remain at the terminal rate. And I believe, I believe for some time that this last interest rate increase would be the end. I think that's consistent with Chairman Powell's statements and consistent with the market's expectations.

It's just that the market is expecting interest rates to start coming back down again much sooner than they will. And when they come to that recognition, you'll have some sort of probably uncomfortable adjustments over the course of the summer. But you should definitely believe the Fed and not the futures markets at the moment. If this is the last, this was the last hike, does that mean that we've got to get cool enough wage data tomorrow along with the jobs number? Or do you think just regardless of what we get, that's going to be the last one? So, you know, the issue that you have with monetary policies is that it acts with a lag. And while there is reason to believe and the Fed believes that that lag is shorter than it used to

be, people used to estimate that it was maybe a year or even two between a policy move and seeing it really work its way through the economy. And now maybe it's as short as six months, but maybe it's a little bit longer than that. So the Fed can't really look at what tomorrow's data show and determine whether that meant that yesterday's action was sufficient, because tomorrow's data is reflecting actions that were taken months ago. So I think it's appropriate. And certainly the Fed communications suggest that they believe that it's appropriate for there to be to allow some time now for the economy to catch up with the stance of policy. And I believe that that's likely to be sufficient. And we do know that there are some early signs emerging that credit is tightening. And Fed Chair Powell talked about that yesterday as well. Do we know how long that process could take to wind its way through the economy and through the banking system?

And I guess just as importantly, we have a lot less money moving through the system, too. M2 has absolutely plunged. So even before we saw this banking stress, weren't we going to see credit tighten anyway? Yes, absolutely. Weren't we going to see credit tighten anyway. Yes absolutely I mean that's the that's the objective of the- of the feds policy response to inflationary episode- it's to constrain demand which means that you're

going to see that and it does that by constraining- the provision of credit which it does that by increasing the price of credit- and and all of that will- will have an effect. And it just takes time to work its way through. We're seeing it have an effect. Obviously, inflation is materially less than it was several months ago. And we're still seeing the consequences of earlier policy changes

working their way through those data. All right. Former Fed Vice Chair Randy Qualls, great to have you. Thank you. Great day to have you. Yeah. And hey, block earnings are out. The hits keep coming. Christina Parts Neveless, how do they look? It looks pretty good because this is the company that operates the popular Cash App and Afterpay. They posted $4.99 million, so just shy of $5 million in revenue, with adjusted 40 cents per share for earnings. That's also a B. Cash app revenue is up. Transaction-based revenue coming in a little lower than expected. But I did just get off the phone maybe about 25 minutes ago with Block CFO Amrita Ahuja and asked about the current spending patterns because I want to know how the American consumer is doing

or the consumers in general. And she said the spending power and customer engagement is still strong, especially with buy now, pay later customers, as well as their cash app. And that's what gave them the confidence to, quote, increase expectations for profitability this year, reflecting strong gross profits during the first quarter. And that's why they expect to deliver adjusted EBITDA of $1.36 billion versus the previous $1.3 billion and adjusted operating loss of 115 million versus the previous adjusted loss of 150 million. So definitely improvement. You can see shares jumping 4 percent. All right. And folks, don't miss Squawk on the Street's interview with Block's

CFO tomorrow at 11 a.m. Thanks, Christina. And we're still just minutes away from Apple's earnings report. Stocks off to a strong start this year, up more than 30 percent. We will bring you those numbers and instant analysis when overtime comes right back. Welcome back. We are expecting Apple's earnings report any moment. Meantime, let's bring in Amit Dhariannani of Evercore ISI, Patrick Moorhead of More Insights and Strategy, and Daniel Ai, Fort Pitt Capital Chief Investment Officer. He's got $4.3 billion in assets under management. Apple's one of their largest holdings. Pat Moorhead, I want to go to you first on this one because Qualcomm reported last night

trouble in China with consumer demand there. They said the timing of modem purchases or purchases from a modem-only customer was a bit odd. We expect that might be Apple. How does all of that, if at all, read through to this report? Yeah, so Qualcomm has one modem-only customer, and that's Apple. So they can't use the A word, but it was definitely Apple. And while I know there's some differences between supply chain, between chips going in, phones being built and being sold,

but I'm expecting there to be a correlation between those. Now, Apple as a whole is insulated because its services business is so big. Now, long term, those services are reliant on having a robust iPhone sales, but short term, it is more insulated. So I am expecting... Pat, hold on. We've got those numbers. Apple's out for that. We go to our Steve Kovac. Steve, how do they look? Yeah, John, you see shares going up two and a half percent. It's a beat on the top and bottom lines for Apple. Let's go over the numbers here. EPS coming in at a dollar fifty two a share versus a dollar forty three expected by the street. Revenue is also a beat. Ninety four point eight four billion dollars versus the ninety two92.96 billion expected. And iPhone

showing strength here, John, $51.33 billion in revenues there. That's up 1.5% from the year ago quarter. We're expecting, or there's some fears that is and some softness there. But also as expected, Mac and iPad sales are down year on year. Mac revenues coming in at $7.17 billion. That's down a healthy 31%. iPad revenues coming in at $6.67 billion. That's down 13%. But services showing some growth there, $20.91 billion there, 5.5% bigger than a year ago quarter. And of course, as expected, we got that announcement of a $90 billion buyback and a dividend increase of 4% to 24 cents. John, I'll send it back to you. All right, Steve Kovach, thank you. I want to go back to our panel here. Dan, you're an investor in Apple. Your initial reaction to these results, and I guess just as

importantly, what matters more, the actual numbers we just got and those top line numbers or $90 billion in dividends and share repurchases? Yeah, well, I think they're really strong results. You know, we were expecting a top and bottom line beat and some strength in margins. You know, if we look back to the December quarter, it was kind of a throwaway quarter for Apple with, you know, 800 basis points in currency headwinds and lockdowns in China and problems with the supply chain. The guidance was very conservative and pretty low bar to to to to jump over. But I think it's really all going to be about about guidance going forward for next next quarter. And we think Apple will be fairly conservative there. Well, Amit, Apple hasn't been giving a lot of guidance lately. And this isn't a quarter that's crucial for them.

I mean, we're kind of far from Q4. But getting into that season where they lay product groundwork, WWDC in about a month, and then products rolling out in the back half of the year. So is this, in a way at all clear? It could have been worse type situation. And it's more based on what products they release in the back half or no? Yeah, I mean, listen, the numbers, headline numbers look pretty good. The fact that iPhones went to a positive growth trajectory is a positive for them for sure. Right. So I'd say headline numbers are good. You know, June to your point tends to be a giveaway quarter

for Apple more often than not, because it is the pause or the lull ahead of new product launches. But I do think anything they say in terms of what's happening with consumer demand, if they see any sense of weakness in that, will be super important for clients to be aware about, for investors to be aware about. But away from that kind of demand-specific comments, which they qualitatively make, not quantitatively, the big thing will be you have AR, VR headset that we can come out in June, and then you have the new iPhone 15 launch in the fall. So I think those two things will start to garner a lot more attention versus not. Yeah. Pat, I want to go back to you. 20% plus increase year-on-year in services. That seems to be more than we've seen in recent quarters

and more than the street was expecting. It is, yeah. It beat expectations. Expectations were 21.1. They came in at 20.9. And that is a positive for them, especially when you consider we're no longer in the pandemic and you have people actually getting out and having their lives as opposed to sitting in front of their TVs, playing games and watching movies. So that is a positive. On the iPhone, it's not necessarily surprising to me, but as I said in my note in the run-up to this, Apple is either going to get hit this quarter or in the future.

Qualcomm did hit their numbers. In fact, they beat revenue this quarter, and it was the guidance that was soft. So I'm really interested in getting any cookie crumbs from Tim Cook and the team on what he's expecting for the next quarter. But we'll see what we can get. Yeah. And to your point, just to correct myself, $20.9 billion in services revenue, which was about a 5.5% annual increase. This is what happens in real time when you're breaking news on earnings. Let's get back to Steve Kovach for more on Apple's results and also some comments from CEO Tim Cook. Yeah, that's right, Morgan.

I just talked to Apple CEO Tim Cook, and I had him dig into those iPhone sales that beat expectations and actually grew, unlike some people have been fearing. And he basically told me it's a little bit between China and a little bit of carryover demand. Here's what it is. Quote, well, it accelerated from the December quarter and it accelerated partly because of China reopening. Then he went on to say part of it is also the recapture of some of the loss in Q1 from the factory issue. Now, what he's talking about there is during the holiday quarter, we saw those COVID shutdowns in China affect production, particularly of the iPhone Pro, which is more expensive,

raises iPhone revenues. So part of it, we saw some demand carry over into this quarter. The other part, China reopening, benefiting Apple, unlike some other handset makers. And then he talked about the strength in India. Of course, we know a couple of weeks ago, he was out there opening the first two stores and he also expanding production out there as well to alleviate some of the supply chain pressures. Here's what he told me on India, quote, the dynamism of the market really comes out there. And I do think that India is at a tipping point and it feels good to be a part of it, end quote. So still very bullish on India, as we heard in last quarter, Morgan. All right, Steve, thank you. Daniel, the China comment's interesting. I'm not sure what Tim Cook means there about the China reopening, if he's talking about production or if he's talking

about consumer demand. But we heard weakness in China from Qualcomm last night. How do you read these kind of comments? What more do you want to know about the China color from Apple? Yeah, so I think it's really hard to kind of, you know, break down Apple's suppliers and come up with a good estimate of what their quarterly results are going to be. You know, very, very difficult to connect those two sometimes. But I think, listen, you know, China reopening, you know, spurred more demand. And I firmly, you know, expected to hear that some of the shipments that they missed in the December quarter, you know, came through in their March quarter as well. You know, we'd really be

interested to see, you know, kind of what the net additions to their overall ecosystem looks like. You know, that's kind of one of our main pieces on the stock, as well as the strength of their service business. Amit, I want to get your thoughts on China versus India for Apple and what matters more in terms of a growth story for this company moving forward. We might have a technical issue here. A mute button that needs to be pressed. I was going to say, I think they both matter tremendously for Apple.

I think India is quite literally where China was a decade ago for them. So I do think the ramp that you're going to get out of India is going to be fairly pronounced. The fact that they have stores there, I think they're going to start building the app community. This is going to be a very big deal for them. In China, what I would say, I do think there's a little bit of a refill of inventory that may have helped them in December. This is what the lost production is that I think Tim was talking about. But I do think emerging markets broadly is where the next billion iOS users are going to come from. They're not going to come from the developed world. Steve Kovach, did Tim Cook say anything about inventory levels? We didn't get into that, no. But speaking of India, though, I mean, again, he was so bullish

on India, just like we heard him last call. And based on our conversation, he sounded like he really enjoyed the trip, loved opening up their stores. And I asked him specifically, what are you seeing there? And he was talking about that made you want to open their stores. And he's like, yeah. I asked, is it a middle class thing? He said, yes, I'm seeing a middle class resurging there. And that's really why they're entering on the consumer end. And of course, we know why they're entering on the supply chain side too, John. All right. Great reporting, Steve Kovach. Thank you for bringing us that as shares of Apple trade up about 1% right now in the after hours. And also,

thank you to Amit, Patrick, and Dan. We got breaking news from the Fed. Steve Leisman has those details. Hi, Steve. Hey, Morgan. The Fed's balance sheet declining by $58.9 billion, $8.47 trillion. That's in a week's time here. And it happened. Treasuries went down, mortgages went down, but bargaining at the discount window also went down. It declined to just $5.3 billion, which is really a pit. It fell by $68.5 billion from the prior week. Now, I do not know this for sure. It can't be known for sure. But the speculation here is that First Republic might have been doing a lot of the borrowing at the window. And since it has been taken over, that borrowing no longer needs to take place.

The borrowing at the Fed's bank lending facility remains high at $75.8 billion, down $5.5 billion. So there's still a number of banks that seem to be borrowing from there the combined borrowing down to 81 billion so banks are still borrowing from the Fed in those programs but a big chunk from the window just went away now what is interesting is loans to bridge banks those are the those are the loans to the FDIC to finance the bridge banks that were created taking over they went up to $228 billion, an increase of $57.8 billion. So the FDIC borrowing more money from the Fed as it closes down banks. Morgan?

All right. Steve Leisman, thank you. We're going to have much more on Apple throughout the rest of the show, including a technical look at the charts. And up next, we will hear from DoorDash CEO Tony Hsu about his company's earnings report as that stock moves higher on earnings. Overtime, we'll be right back. DoorDash out with Q1 numbers just a few minutes ago. That stock popping about 6% now after hours after beating on both lines and guiding to a strong current quarter.

I spoke with CEO Tony Hsu minutes ago about the quarter. I asked about growth, what's driving it beyond U.S. restaurants. We also talked about how DoorDash has managed to weather inflation. So we have two big investment areas, one of which is our new categories work in grocery, convenience, and the other is our work beyond the U.S. and growing to now over 26 countries outside of the U.S. And so both of those big investment areas for us are progressing really, really nicely. On the grocery and convenience side, there's a few things that's helping us continue to grow much faster than our core business. You know, one, I think, is just the product improvements. We're adding more selections such as all these in the second quarter.

We're improving the quality of the service by being more on time, by being more accurate in our picking and in our shopping. And we are adding more and more affordability as we introduce and continue to introduce programs like DashPass to certainly our current subscribers and all the new benefits with all these other categories, but also attracting new subscribers at the same time. Give me the plus minus on the impact of inflation on you, because I imagine on one side, it pinches what consumers can spend on. So there might be a basket size issue. But also, I imagine on the Dasher side, there might be more people looking to make a little money. And so maybe you're able to handle a different kind of volume. How is that shaking out for you?

You're absolutely right that inflation has puts and takes. And we've certainly been tracking a lot of this, especially as we're looking at peak inflation, Q1 of 21, all the way now to where it is today. And so for us, inflation on the consumer side certainly puts pressure on people's wallets. And so we do see some small degradation in the number of items purchased per cart, but that is made up more than made up by the price increases that, you know, some of these suppliers are passing on to the consumer. So that kind of is a net even. And then on the Dasher side, you're absolutely right. I mean, in surveys that we've taken, we've seen that more than 80% of Dashers are telling us that the extra incremental income

that they can earn from a platform like DoorDash has really, really helped lessen any financial pressures they have. So even though we've seen record low unemployment in the U.S., we've actually seen record high demand to Dash, where Dashers now have earned over $10 billion on the platform over the past 12 months. Also asked you about what impact investors should expect from AI on DoorDash. He said more features, better productivity. Given all of the data that we do have, by being the largest local commerce platform here in the United States with the highest order frequency and the most amount of information,

we really do believe that there's going to be lots of consumer experience enhancements that we can bring, but also productivity gains, right? I mean, think about it. We are trying to catalog to digitize the physical world. Where is every single store? Where is every single parking space? What are the items on the menu? How do we actually build all of that physical information, assemble it, and put it into digital formats that can be structured and that we can work to certainly improve our operations, but also that of the merchants that we work with? I think a lot of generative AI can really speed up a lot of that work as well as lower the costs of digitizing

that physical world. I think that's a big part of it. I think certainly there can be enhancements to the consumer experience as well to reduce the friction of ordering. So I think all of this is to say that we're at the very, very beginning. I mean, I just think that part of the conversation is especially fascinating when you have certain fast food chains that are starting to test AI applications at their drive-thrus as well, and sort of this idea of enhanced productivity, but not necessarily replacing the labor. But

the fact that we've seen so many companies that benefited from the pull forward of demand in the pandemic and then the erosion as we've moved away from it and the reopening, they're still growing top line at 40 percent. I mean, it's intriguing to me. It is intriguing. Also interesting. I asked him if there's been a tone shift from restaurants because there was this push on folks like DoorDash and Uber Eats. They're taking advantage of restaurants, right, during the pandemic. They're charging too much.

DoorDash made some tweaks to how they charge to their model, but he says now restaurants are coming to him because they want to be digital for growth. So that is an interesting aspect of this as well. And, of course, the call coming up for them. And there's more. Before going public, way back when, DoorDash was a CNBC Disruptor 50 company. And there are more of those. Tune in Tuesday when we reveal the 11th annual Disruptor 50 list of private venture-backed startups. That's on air and online at cnbc.com

slash disruptors. It is always such a fascinating list. I cannot wait for the unveil on this. All right. Well, up next, a top technical analyst reacts to Apple's earnings beat and where the stock could go from here. Shares are up about half a percent right now. Stay with us. Welcome back. Let's get a check on Apple. Shares are in the green, but down from that initial pop when the numbers crossed just a short while ago. Joining us now on the phone to discuss technicals is Sven Henrik, Northman Trader founder. Sven, great to have you on the show. I want to get your thoughts on Apple, which has had a strong rally to start the year up something like 30 percent before we got these numbers. Hi, Morgan. Good to be with you. Yeah, 28 percent up on the year. It's been one of the

big winners this year, along with the other big mega cap tech stocks. But the overall market, and I need to highlight this, has not been participating, even in tech. And that's a bit of a concern in terms of who's in to win, because you don't want the apple to fall from the tree, because it may just take the tree with it. The advanced decline, if you look at this on a chart, cumulative advanced decline on the NASDAQ, actually made a new low in this entire

cycle just today. The market's really dependent on these few stocks, and they're too big to fail at this point. So the question becomes one of sustainability going forward. And given the macro backdrop, they need to really show some solid forward guidance, which is about to come out in a few minutes. Well, Sven, Apple hasn't been guiding much at all lately, so I don't know how much we're going to get from them on that. But in these numbers themselves, there seems to be some relief. Any sense of how the charts look at this point,

compared to how they normally look at this point in the year since the back half is usually where the excitement is? Yeah, very good point, John. Actually, it's interesting that this earnings report is coming at a T technical juncture. First of all, note Apple is still in a period of lower highs from last year, from the all-time high. It's still in a period of lower highs from last year, from the all-time high. It's still below the August high. So that's generally something you want to see broken above to get a sense that actually we've changed the general trajectory. On the positive side, there is a downtrend, you can say, from the last January highs down to the August highs that actually was surpassed here with the April rally that we had. Unfortunately, the last couple of days, that actually, you know, we saw weakness in the stock.

And today we actually back-tested that trend line. So it's going to be key to see if this can now rally again from here to support that as support or not. But the more concerning part to me here is this. This big rally that we've seen since the beginning of the year has built a massive rising wedge, which can be a very bearish pattern. And Apple actually broke that wedge in the last couple of days. Now, it's not the death knell yet, but it needs to get back above. All right. Noted. We've got to leave it there, Sven Henrik. Thank you. Because, hey, flying cars,

at least this afternoon, Carvana earnings are out. The stock is up more than 20 percent. Bertha Coombs, what's going on? Yeah, it's like the Jetsons. Carvana surging after results beat across the board, posting a loss of $1.51 per share. The street had been looking for a loss of $2. Revenues came in at $2.61 billion. That was slightly ahead of expectation, but the company is forecasting that it will be EBITDA that is cash flow positive next quarter after completing its cost cuts one quarter earlier than expected. And that's really playing out when it comes to car sales. Unit sales overall were down 25 percent at about 80,000. But gross profit per unit was up 60 percent from a year ago. OK. Back to you, John. All right. I guess that explains part of it.

Probably people betting against it as well. Bertha, thanks. Up next, another check on all the wild after hours action as we count down to the earnings calls. Plus a checkout shares of Kenview soaring following the consumer product maker spinoff from Johnson and Johnson. Kenview sells brands such as Band-Aid and Tylenol. The IPO had priced at $22 a share, finished the day up at $26.90. Biggest IPO of the year. Are we going to see a thaw now? They don't need a Band-Aid on these results today.

We'll be right back. Hey, before we go, let's check on the big overtime movers ahead of those conference calls. Apple popped after beating on both lines. It's tepid now, raising its dividend, announcing a $90 billion buyback. iPhone revenues topping estimates as well. On the fintech front, Block and Coinbase both beating on the top and bottom lines. And DraftKings is surging after a beat on both lines as well. Also raised its full year revenue estimate, Morgan.

Yeah. Tomorrow morning, we're going to get Warner Brothers Discovery. Worth watching because if you look at the board behind me, regional banks got hit hard, but the worst performer in the S&P was actually Paramount after they missed on top and bottom line and slashed dividend. Yeah. So hopefully it kind of lowers the bar a bit, perhaps, for Warner Brothers Discovery. Also want to mention DoorDash.

We had Tony Hsu on the show just minutes ago. That remains up nearly 6% after hours on a beat and a raise. These Apple results, though, that's what we were waiting for. Better than feared from that company. Want to hear more about inventories on the call, though. Didn't really get color on that. That's what a lot about inventories on the call, though. Didn't really get color on that. That's what a lot of companies in the space have struggled with. Yeah, and of course, they've stopped giving formal guidance since 2020, but any kind of details on this

current quarter are going to be watched closely. That's going to do it for us here at Overtime. Fast Money starts right now.