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tv   Squawk on the Street  CNBC  April 22, 2019 9:00am-11:00am EDT

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why we are laying out this morning. we have a requirement and conduct these transactions in the financial market we don't lay out sanctions that we don't have any intention of ea encouraging countries. i will leave others about the details. i had conversations and the president had conversations with these countries and they committed of sufficient supplies in the market and i am confident that we'll achieve that and i am confident that they'll support this policy that's consistent with their objectives as well. >> good morning. >> more? >> thank you, sir. >> very quickly. we can stay all day. >> you said you are at zero level today. >> it is may 2nd
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>> midnight may 1st. >> they're not getting any grace period beyond the 2nd. >> there is no waiver extending behind that period, full stop. >> they -- we have always been fair about this. there is a particular transaction that's incidental, there will be no waivers >> thank you all very much >> do you think the incident there says anything about danger isis continue to pose. >> radical islamic remains a threat we are continuing to do, we'll work against these evil human
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beings that went into places of worship on easter sunday, yeah, we have taken that threat down substantially. it is important and it matters and the take down of these threats from other geography as well sadly, this evil exists in the world and the united states and all of its partners that are cooperating in the campaign and some 80 countries, and other nations, too they are assisting us in defeating this terrorism around the world. we have to remain active it is going to require attention and all that >> thank you very much >> thank you, have a great day >> that's the secretary of state responding to reports that are out in the media that the united states will let those waivers expire for countries importing
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iranian oil at the beginning of may, we are talking about china, japan, south korea and greece and commenting on the things that the market is worrying about is supply. >> audelthey committed to make america has enough supply. this is at a time that supplies are already tighten. u.s. wants to take iran to zero. it cause a 3% spike up in the price of oil even of the highest price of the year. just how mix matched are the price of demand right now? china data has looked better and supply continues to tighten including this decision. how much higher can oil prices go >> yeah, there is also a question for libby as well and in terms of production you can make a bit of a difference there
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approaching 74 bucks >> politics is going to be interesting, too gas prices for consumers have started to jump, now we are about $2.28. and california is about $4 this stuff makes it even worse i guess expect pressure on saudi arabia and others. >> let's get to ylan mui, who knows if we are going to hear of the strategic reserve later on today and a lot more >> i think one of the things that sit out to me is secretary pompeo did not confirm a report that was in axios earlier saying he's not looking for a military intervention in iran he did not confirm that before he said that instead, the u.s. is looking to pursue its goals
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however we can achieve them. that was significant that he did not confirm that report that was in axios he did say and felt that the u.s.'s strategy is working and iran's power diminished. he called out the impact of sanctions. they feel like the strategy of maximum pressure as they put it is working and sara mentions of the politics around this i think the president is going to see a lot of political support on this move on capitol hill a lot of iran talks have been unhappy as they have gone on, the six month extensions was too long this is going to be moved of a point of contention. >> ylan, thank you >> i want to bring in brian sullivan, our expert here at cnbc and what it is going to
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mean for the supply and demand picture. the price of oil is now trading at the highs of the year >> the market is not buying in the fact that we'll get the supply that you mention from the joint announcement from the press core of the white house. here is the thing, it is just math 3.7 milli 3.7 million barrels a day produced is exported 60% of production goes out around the world over a million barrels a day are china and you got other nation as well. u.s. strategy is not successful so you will take off two million barrels of oil a day you heard pompeo talks about the united states, maybe we can make it up or a couple of things. we are exporting 2.5 billion barrels a day. we have to up our export by 2 million. we don't produce the right kind of oil much of the iranian oil is heavy, just like what they got
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in venezuela let's say the u.s. can produce another 500,000 of the right kind of oil, that leaves a million and a half out there that needs to be produced by the uae or saudi arabia. sara, your point, you heard the saudis talk about oil, 88 bucks a barrel is where they break even they don't want oil back in the 40s or 50s the president does there are odds like this, you have to make up 2 million barrels a day if the strategy works. you know iran as it done in the past can put oil on super tankers. nobody knows who's buying it and where it goes. it is a they thining. >> that was part of my question. how much can we expect the chinese are not particularly happy about this one would expect they were quoted as such if we apply sanctions, there is
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a possibility that they're going to comply but to what extent do they and others can participate as you have said in the movement of oil in a way that's not obviously trapped. >> it is hard to know, david if you are going to buy this stuff, literally, you call the black oil market, i guess. it is buyers who are buying likely to discount if you are buying something that's effectively legal in the united states. you are going to have to buy it at a discount and bring the super tanker in at night these things are not easy to high they're football fields long whoever continues to buy can suffer the wrath of the united states as well the idea you talk about the beginning, and iran threatening to the close the street. that's the little elbow around the peak of the uae. 20% of the world's oil, most of it is saudi oil, a lot goes
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through the strait everyday. if iran does that, the u.s. navy will have something to say about that now you got a risk of a real price hike >> i don't know if we heard actually confirmation from the iranian government that would be moving the ba ball forward >> we have not heard yet it is like the revolutionary guard telling iran state agency who tells somebody to report it. if the market believes the strait was at risk of being closed, we see oil more than 2.5% >> what about oil stocks, brian? they're up this year but not much crude oil is up 44%. so far you have the massive chevron, it did not give the group much of a lyift. is this going to be what takes
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energy stocks higher >> no, you need the price to be stable what do they want of anything? they want price stability and cash flow. they' and what their operating budget going to be. it is really hard to make multi billion dollars long-term when you don't know the price of your core commodity will be higher prices will lead to investment and more u.s. production will make up for the yu ra iranian gaps how long is the sanction going to last? does this go on for six months or six years you may see more investment. in the short term, sara, it is hard to see the stocks moving along on this. >> brian sullivan, thank you >> i want to mention some news on the corporate front cra kraft heinz will get a new ceo
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miguel patricio, he'll be stepping up. guys, this is a big congratulations to cnbc.com, laur laur lauren hersch and the team breaking the news. it is a lot to unpack here kraft has been a big disaster. the stock lost more than half of its value and struggle to turn around sales and increase scrutiny of the 3-g strategy of cutting cost as the company has failed to grow it does have a lot of brands like velveeta and they have not figured out a strategy to turn it around. the deal was well received for quite some time in the believes they'll continue to acquire and
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in fact it goes back to when they fail on their attempts, if you take that as the opportunity to walk away or sort the stock, you would be happy for having done so. it really did mark a key turning point for the company. their in amendment ability to dt big deal or having the opportunity of cost cuts or extending the story was not there for them they start to run into it, it seems to be, did they cut too deeply so they are hurt being terms of their ability delivering products as they want and markieting it properly. >> the company came out said it is slashing its defendant and wri and -- dividend. and it is facing the sec that did not help.
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that's why the stock is such a loser. >> exactly phillip morris as he told our team, consumer products or consumer products, does not mean you have to sell snacks to sell snacks again >> the market is different than food >> right >> that portfolio is not as healthy. >> a closer market this morning. al all kinds of questions about profit recessions and things being over bought. we got to start with oil, i guess, how much of a sticking point can this be for overall equitie equities >> in coming restrictions in supply that's going to cut in venezuela. it is about how sustainable that oil price is you look out into the future
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market and typically go out that far when you take out political risks and look at how much your political risk premiums pricing oils it is at the highest levels. that's not a great backdrop to really be able to continue to put that number in a reliable way. certainly there are question marks. >> we think it is good for energy company earnings. i would say energy was the sector, it looks super cheap to us during the middle of earnings revision, 2020 earnings, expectations look pretty good. it can help generate excitements. >> all right, obviously we are at the early ending of earning season is it shaping up well? percentage of company beating is
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trending down a bit. i just wonder whether or not you think it will end up in a quarter and we can brag about it >> the bar was set pretty low coming in, our model consistently been spitting out 171 on the s&p and consensus came in at 167 what struck me is the earnings beat were pretty strong. it is tough to gauge the trends right now. we heard from a few financials, i am eager to hear from the tech consumer companies >> the 30% s&p and 40% of the dow reports, you know, coming into the year there was a notion of an earnings session is that going to happen? >> i don't think so. the focus for me is on the margins, that's where the pressure is coming from. you can rely on fat margins to give yourself some cushion now those companies are saying wages are picking up, we are
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seeing increase and the two biggest o bigge biggest outputs starting to rise now we start to see year on year impact, i want to see what the actual margins are going to look like and what those wage pressure are going to be doing i think earnings, analysts estimate it will be too negative and it will be some beats but it will be a key week for them. >> they're depending the margins, they're doing things like hiring freeze os as and des not in a dangerous way but they are defending those margins of what they see as a big threat. the revenue trends, you are not seeing a lot of surprises but we are not seeing a lot of reasons to be concerned that we are going off the edge of the cliff. i think the bar has been set too low. >> let me stop you there so we
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can get out in time. >> thank you guys, lori and alex when we come back, we' g allet moment of silence to remember the victims of the bombings in sri lanka. ♪
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♪♪ ♪♪ ♪♪
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. in about a minute, the nyc and the nasdaq will each observe a moment of silence remembering those lost and injured in sri lanka. if you missed the news over the weekend, multiple explosions on easter sunday, at least six of them counted for 290 dead. 500 wounded at the locations like churches and luxury hotels. interestingly guys, there is more reporting this morning about the existence of what we told of warnings in advance that
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the government failed to follow up on. i think there has been 24 arrests at last count. the secretary of state pompeo was asked about that explosion and whether or not or more terror around the globe. let's give that moment a silent.
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big story today is oil oil pries ces is hittingthe hig of the year after the u.s. does decide to end its waivers to iranian buyers saudi arabia is close limon toing the oil market developments following the recent statement regarding the u.s. the kingdom would like to
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reiterate its long policy of its stability at all times a lot of people including the u.s. looking to saudi arabia to fill the gap as this continues to take more oil up line as the u.s. tries to bring iran oil exports to zero. we are minutes away from the opening bell joining us is kenny, welcome back >> nice to be back >> the market is 1% of a record high, what are you watching? >> earnings is a big story the trade and macro data is similar. this week we'll get 130 or 140 earnings this week, we'll get big names of facebook and amazon and twitter, there will be a lot of focus on that as it should
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be the market feels a little bit tired. we struggled last week with 2950 we hit it and we failed. we did it over night and we failed and now we are down ten points i am not thinking that earnings are going to be bad in the market, turning and trying to built a little bit more of a base it is all about earnings >> the thing we are saying of s&p and people have been saying about the russell for longer what's going on about this small cap? >> i thought the small caps in a better u.s. environment that the small cap would have been doing better for some reason they are stuck there. they are failing the last one, they have not broken through all their points. the little bit curious and raise a little bit of concerns of what investors really think of the u.s. economy going forward are they more concerned about it, that's what the russell is
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telling us >> you heard larry fink of blackrock of a melt up we are going to have a straight shot up because there is so much money sitting on the sideline and everyone is worried because of last year's big decline that's going to take the market higher do you buy that? >> he says the fear of a melt up and fear of missing out. >> i get it. they manage over $6 trillion you can argue that he's got a little bit of a finger on the pulse. the market does not feel like it to me. it feels like it just needs to pull back. i think people are much more patience because of what happened they're not going to jump all in i think they'll think over the summer that the markets are going to -- even if it does not pull back a lot. it is not going to run away so i don't see it >> do you think investors are accustom to a slow growth world. they need secular growth to get
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movement, that's what the crazy is all about >> it feels liking a little 1998 and 1999 all these stock companies came and the investor banks were pricing -- it feels a little bit to me like some of these unic n unicorns that whether it is the meter or these companies create all these. look at what happens with zoom the other day. so my sense is there is this frenzy building because people think that's where the 30s is. i am afraid that once again that's going to be over done >> all right, any sign of a market talk? >> certainly on some of those unicorns >> what about the fed, kenny there is a lot of emphasis on new patients, they're not easing
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though >> they're not easing. i think maybe a little too much of this. i still think that the path of leisure resistance that the fed is up. i think it will be out if you start to get any hint of inflation at all over the course of the next couple of months, the fed are going to be very quick. we saw that in the last set of minutes, he left the door open that the next move is going to be higher. my sense is there is so much emphasis on people thinking that rates are going to get cut verses staying flat or going a little bit higher. >> you look at the commentary just for the first couple days, honeywell and united reynolds >> all of a sudden, you will get the fed that's the hawkish and you will see the market backing up a little bit. >> thanks kenny. >> good seeing you >> let's get to that opening
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bell and s&p 500 at cnbc is procter & gamble celebrating earth day today. think they have earnings tomorrow over the nasdaq, janus henderson investor >> you may notice weakness at the dow at the open. part of that is boeing essentially reporting on allegations of manufacturing in south carolina on not the 737 max but the dream liners >> some of it is made near seattle. you know it is funny, a story like that you could imagine certain companies. if you really investigate everything and look into every instance of something that went wrong or shavings that were left here or tools that were left there. it is not that it is necessarily something that anybody wants but
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you probably can find some of those instances if you look back through many years of manufacturing faults or things in the process that may have gone wrong along the way occasionally what's difference now that boeing does not get the benefit of the doubt so that i think is the key for investors to start to consider in terms of the safety record of the manufacture whether or not these come to bare in any significant ways the report from the times, we sat here for quite some time and thought about their safety record we'll talk about it with jim and i think it is some what different environment in which we consider boeing now given what we learn about what they did and did not do in terms of the max 8 >> well, the story, e-mails and
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conversations and documents. >> and whistle blowers >> and it seems like boeing values according of this article speed over quality which something of your point resonates a little more. a report on wednesday, i guess all eyes will be on guidance and what the suspension of the 737 max or the cut back in some production will do to numbers. >> we were getting used to see four handles on the stock price. it has not been there since march march 11th lori was talking about companies trying to lean into their compression by cutting cost, kimberley is a textbook example today. they came out and beat revenues ahead. their guidance is not bad. higher sps and cost reduction. volume is down the reason it is a good quarter for kimberley clark and behind diapers and soaps and all sorts
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of everyday products was organic revenue growth of 3% expectations were around 1%, it was really all about pricing prices grew in most of the segments consumer tissues and personal care and professional services and on declining volume. it was considered a good quarter for the ceo. procter & gamble's chief rival has resurgence it is really turned up the growth now on its organic sales, not just because of higher prices is doing a lot better >> they say full year organic at two. it shows you how good that number is. >> you got the competitive space. last quarter for coca-cola was all about the weaker guidance guidance because of foreign exchange it is much more internationally exposed than pepsi
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>> we never really explained it though >> maybe you did i never felt like you fully understood exactly what was behind that. >> just strong dollar. >> a little bit weaker growth outlook. they did not over play that. the trends on selling soft drinks and diversifying other beverages going smoothly they have a volatile outlook on foreign exchange on something we are going to hear from a lot of company especially dow components did the stock get hit on it? >> now it is a lot behind a lot and basically it is flat pepsi is really taking off more than 10% they got a taste of why, earnings last week and higher growth >> and margins >> margins got better execution under the new ceo and trying to figure out how to spend more officially on advertising and get the products to the store.
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it is just the beginning when it comes to some of those changes >> while we are on the subject, we should share kraft heinz is up about 1%. some investors are saying what took so long of this company, kraft heinz. not until july 1st it will get the change we have detailed in the past of many problems kraft heinz faced. portfolio was not the favorite sara knows a lot about this but at least help me understand. beyond that, well beyond th that -- >> you are not a millennial. >> the larger question is how far can you cut before you cut into the muscle. how much do you actually impact your ability to sell products if you eliminate too many jobs and
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too much on marketing. they'll argue no, that's not the related case there but it seems to be. kraft heinz on the next deal when it does not come, it does not give you the opportunity for further cost cuts which do seem to encourage shareholder based so it is all done the other way. >> it is an industry wide problem, it is not like campbell soup or hershey. the stocks have done a little bit better because they're making strategic moves they all got new ceos by the way in place one open question, david, whether kraft is going to do that deal that everybody expected for the last six years. >> makes it difficult. new ceo and the transition is hard, necessarily to see what they can do in terms of just their ability to actually do a large deal not just barring but using that
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stock. who's going to want it it becomes more and more difficult for them they can't be hostile as we know, given the presence of mr. buffett. i wonder his role here, warren buffett, and whether he's an adversary position in some way with his partners at 3-g here. >> publicly with 3-g >> i am not sure privately >> he was not happy. >> we have not mention tesla by the way. we'll wait for this announcement that's unveiling this afternoon. 2:00 p.m. pacific on what tesla is calling autonomous day on what we think we are going to n unveil on their technology they go to 240 on their targets. they were at 330 they'll shrink the board down to 7. the video of the parking garage in china which we know nothing
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about it it appears to show an exploding model s. the company says they are investigating. a ton of news on tesla tonight >> the common theme is usually investor days for tesla when there is hype around new technology are met with more excitement there is a lot skepticism around the stocks, because of questions of demands and deliveries and price cuts i mean david, in fortthe investr letter who has been short. the wheels have been coming off. you see downgrades like you do today. the big question on autonomous driving whether tesla's technology is actually there elon musk talked about next year seeing that on the oad >> he said by year end >> that's aggressive >> that's what a lot of people said >> i am not sure that's the most positive things tesla have heard
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given his track record take a look at the numbers >> exactly >> ap has a piece if you want to read more about it people who argue that, there is no way they have this technology ready to go or show. others are saying they're light year ahead of everybody else so we'll have to wait until 5:00 p.m it is the second day of trading for pinterest and zoom after the strong debut on thursday pinterest saw 28% of gain and zoom up 72%. that's going to make the fourth best ipo debut for the year. a lot more is still to come. >> hanging in there very well here, 61.5 or so after the incredible first day pinterest did not do badly pinterest is up approaching 25 bucks. both quite strong in light of where is swift is it up today no, it is down, 57.78. that's the latter, those are both very strong >> i wonder how uber looks at
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that picture strong pinterest and lyft which is now at 20% as we await for it >> google would have been encouraged of stronger performance. you would think perhaps they would rejoice their competitors not doing particularly well in the market debut i don't think that's the case because it would help uber with that said, we'll have to see where they do prices and there is a lot of reports about that and whether it comes in at or near the last round it is a different company. far larger and global in the way that lyft is not in a number of efforts that lyft does not have such as freight. >> as for pinterest, on thursday, about advertising and the degree which they rely on heavily. take a listen. >> the cool thing of advertising on pinterest is people are there to get inspiration and that often means buying over the last couple of years
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and the future, we'll work on bridging that gap and finding a product of retail of what you trust. >> 60% of revenue basis advertising if i am not mistaken >> i know there is a lot of discussion about this of what it says on the market that zoom was valued here than pinterest at 15 billion verses in touri13 billin zoom is profitable and it is faster revenue >> it is growing they're both strong revenue growth and faster. >> i want to get into the idea where there is some articles written about this whether investors find it sexier to hav the less six exier technology
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if you look at some of the other successful ipo, it is about the b to b or the business oriental companies. >> the president with a tweet about the situation in iran. he argued others in opec will make up for the oil flow iran is being given bad advise lie john kelly big violation of logan act we'll see and the saudis for that matter. >> and how high oil prices are energy stocks are the biggest winner right now in the market clearly benefiting and helps the profit of oil prices if you look at twelve months period, it is the worst performing sector on the s&p
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down 7%. it is been battered, the concerns of universal healthcare of democrats healthcare gets a boost today. barren says it is way over done but it is the worst performing group in the mark. market. >> let's get to bob pisani >> good morning guys not a lot of energy elsewhere and healthcare is lagging here take a look there, it is nice to see oil moving to the upside energy and materials and tech is lagging a little bit as well healthcare is over sold as you can see. tr industrials have been on the weak side and boeing a little bit weak in terms of earnings, 35% of s&p 500 is reporting be a new high for kimberley-clark they're beat by 10%.
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take a look, they're all trading at the upside. granger, some of these companies are reported at a little bit disappointing revenue numbers. you see the board there, grainger are trading a little bit at a downside. halliburton with small amount. with the prices going up, the analysts are going to be wrong everyone thought there is going to be a slow glow down so on january 1st, they had 41 cents. they dropped it all the way down to 29 cents in a few weeks those numbers are too low thousannow. oil stays up around here people have been saying why don't we get better out performance. if you look at the s&p, we are up 16% the sector is 17%.
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crude is up 40%. that's only up 20% and i think brian hit it on the head earlier today when you got oil going from in the middle of the year of $42 and $75 and $65. it is hard to plan when you have oil bouncing around that much. speaking of hard to plan, we have terrible performance in the healthcare sector. this medicare for all issue gotten away from the whole sector right now and of course concerns about drug prices we have two things here and this is essentially flat for the year of course all of the managed care stuff and molina if you take a look and anthem and some of the bigger names. they're you will trading on the downside this started about two weeks ago and has not improved at all. that has been a major drag
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why we have not been hitting the historic highs we keep on anticipating even though we are only 20 or 25 points away from that. europe is closed i want to remind everyone, we are in a global economic market recovery in 2019 europe, i use the stock 600, 16%, that's a huge relief. in december, everyone thought europe was falling apart it is stabilizing rally and china is not only stabilized, china is the world's leader right now in terms of the stock market europe and china are stabilizing and that's why we got the market holding on right now near the lows of the day, sara, back to you. >> bob pisani. >> rick santelli at the cme group at chicago, as always, morning, rick. >> good morning sara interest rates is up a base or two.
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look at the one week chart of tens, those rallies we had that took us into today to 261. open the chart up to the 19th of march. that's the last time we close there. the last time we traded was the 20th of march. you can see we melted a little bit. if you open it up to year to date we melted back to that what had been a low yield close and it continues to be around 256 foreign exchange, the dollar index is giving back if you break it down of component parts, there are certain areas that's really strong let's look at the dollar yen for example, this chart, early december last year we all know the euro verses the dollar has significant support of trading at 1.12 on thursday, it really jumped the broom and fell on most of
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those greens even though it melted a little bit. we are hovering around 97 and 31 and 32 should we take it out? carl, back to you. thank you, rick santelli for more movers, let's get to the nasdaq with bertha coombs. >> good morning. the loser this morning is tesla the analysts are concerned of slowing demand that they see for the model s. meantime among the gainers, kraft heinz as it needs a new ceo that begins in july, miguel patricio will start july 1st and a couple of biotech names. healthcare had been so over sole and concerned. biotech held at the best
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after some disappointing earnings numbers come out thursday after the close biotech held up the best within the healthcare sector. it is off 6.5% this month but up about 9% for the year. when you take a look at the s&p 500, healthcare sector, only a handful of stops are positive for the month. henry shine. few and far between this month as a lot of folks retaotated ouo that sector, despite all the folks coming out saying this is over done at this point. back to you. >> as we go to break, we did open down 100 on the dow and below 2900 on the s&p. that did not last long we cut those losses by two-thirds some of the top performers at the s&p. we'll be back in a moment. 3w4r57 this is my headquarters.
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internet that puts alright boys, time to eat. that handles anything. [ crowd cheering ] that protects what's important. and reaches everywhere. this is beyond wifi. this is xfi. watching this rebound in crude from those december lows obviously up still negative for the year from one year, about
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4% big news today as the u.s. says it will end the waivers for countries that import iranian oil. back in a minute
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time for a closer look at one of my favorite subjects, tax
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rates, paid by the wealthy our resident expert on all thing taxes, robert frank is here. >> we're the tax nerds at cnbc on the campaign trail, democratic candidates are citing the 1950s and '60s of the golden age of taxing the rich when the rates were as high as 70%, 90% what the candidates are not saying is that the taxes actually paid by the wealthy were much lower and actually haven't changed much in over 60 years. according to congressional budget office, in 1960 when the top dakottax rate was 91%, the e was 31%. when it fell to 70, the rich paid in the mid-20s. now it is about 26 to 27%. so only a few percentages points less than it was when those rates were so much higher. now, if you look at the chart, the orange line is the official tax rate the blue line the rate actually paid by the wealthy. you can see that blue line, well, pretty stable.
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now, why did the rich pay so much less? those top rates only apply to a small group, less than 10,000 households made enough to pay that rate. in the 1960s, a lot of that income came from capital gains, taxed lower. and as they always do, the wealthy found ways to avoid those high rates even though the top rates were much more than they were than they are today, the rich have been fairly consistent over time in what they actually pay. carl, back to you. >> interesting insight into the long-term impact of taxes on the wealthy. thank you, robert. when we come back, jim stewart on the ipo wave, and tech valuations wi t dthheow down 65. don't go anywhere. illo. did you know that americans who bought gold in the year 2005 quadrupled their money by 2012? even now, experts all across america predict the real gold rush is just beginning. - [announcer] us money reserve is the only precious metals company led by a former director of the united states mint, and as one of the largest
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♪ good monday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at post nine. the market starting out with a bit of a loss. we'll go to diana olick for existing homes >> existing home sales in march down 4.9% month to month to a seasonally adjusted annualized
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rate of 5.21 million units that's a miss, folks the street was looking for 5.3 million and february's huge jump was actually revised lower so sales are now down 5.4% year over year. that is a 13 straight month of annual sales declines. what is it all about high prices, median price, $259,400, that's the highest price for march ever recorded. so it is up 3.8% year over year, own though we're seeing inventory rise, 1.68 million homes for sale, that's up 2.4% to a 3.9 month supply. this is a tale of two markets. we're seeing home sales decline because there is nothing for sale, we're also seeing home sales decline measurably down 11% on the very high end, that's the million dollar plus range, also down 6% above $750,000. that as you were talking about, realtors are saying is all about the change in tax deductions, the salt that we're seeinging in
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high price market like new york and california, the biggest drop in sales was out west and sales in california way down, bringing the west down 11%. a disappoint on march home sales. realtors hoping lower mortgage rates will be reflected in the next couple of months. so far not seeing it back to you guys >> diana, thank you. our road map starts with the u.s. clamping down on iranian oil exports, tightening global supplies, hittinging a 2019 high. >> the tech ipo wave continues >> boeinging fa ining fac ininiw scrutiny. earlier this the trump white house announced they will not be renewing sanction waivers on iranian oil exports. brian sullivan helped us make sense of the news as it came out and more comments from other sides, the president included. >> i'm trying to make sense of it as well here. you hear sanctions, carl, you think, okay, we're not going to sell any iranian oil then we start to learn about
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these waivers last year. eight countries askinging the treasury for a waiver they said, listen, we'll stop buying iranian oil eventually, we need team, need to figure out other sources. they got six month waivers, what was announced today is those waivers, which end on may 2nd, will not be extended and new ones will not be granted secretary of state michael pompeo laying that out pretty clearly a few minutes ago. >> today i'm announcing that we will no longer grant any exemptions we're going to zero. we're going to zero across the board. we will continue to enforce sanctions and monitor compliance and any nation or entity ichbt a interacting with iran should do its due diligence. we have used the highest possible care in our decision to ensure market stability. >> and that last part, guys, referring to a statement that came out of the white house actually about an hour before we heard the secretary of state
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talk about, hey, the white house was speaking with saudi arabia and the uae and those two countries, big opec members, have agreed to help make sure the market is well balanced. you got to nuance the language, they say they're aware and they're going to help. by the way, that news from pompeo, i understand the news was made today, but shouldn't take cnbc viewers by surprise. back on march 12th, at the conference in houston, we interviewed this secretary of state and i asked him about the iran sanctions and he indicated this was what was going to happen listen. >> not going to get ahead of myself or ahead of the president, but make no mistake about it, that's the direction of travel. we want to deny iran the resources to continue to -- hezbollah, the houthis in yemen, a whole list of terrorists around the world. >> they said it a month ago, it happened either way, the market clearly not believing that the oil market will be well supplied
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otherwise you wouldn't see crude oil up 2.5%. >> yeah, that was my question, brian, and that is how many of the countries that were granted these initial waivers like china and other countries actually still bought oil from iran because they too were -- have got -- have been expecting these sanctions to come into play. >> italy and a few of the small ones, they pretty much kicked their habit if you will. you look at china and india, they kept buying, they have to we're talking about over a million barrels between those two countries. china may be able to go out and source otherwise i think the country, had to focus on one nation that particularly might be hit by this as an unintended consequence, it has got to be india. india not only big importer of iranian oil, the biggest refinery in the world, 2.5 times larger than our largest refinery in the united states is india. a nation where every dollar matters to their consumer as well we talk about inflation here gas prices in india certainly could be a story as well gas prices here too, guys, oil
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keeps going up, going to play into the fed's thinking, don't you think? >> potentially paying higher gas prices which have already jumped so much since january. brian, thank you brian sullivan stocks are lower as we kick off a big week for earnings. should investors brace for heightened volatility. joining us now are tony conaris and kevin karen. so, you know, tony, 16% is the gains that we have seen for the s&p 500 so far this year we're within 1% of record highs. should investors lock in the profits or hang on for more? >> we don't think so we think investors should follow a plan and if your plan is to own a certain percentage of equities in your portfolio, you should rebalance when you get out of whack we look at u.s. valuations today as being on the higher side of a normal range, which means future returns should be slightly below average, but not terrible, especially compared to bonds and
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cash which we think equities look far superior too at these prices, as long as you have the proper time horizon for equities >> where within equities would you be shifting money at this point? we manage global portfolios, and when you look at our portfolios today, we have around 45% in u.s. equities. and our global portfolios. and in -- on the international side, it is a very different story. in europe, we think valuations are much more attractive the european and uk indices are selling at 25% to 30% discounts to the u.s. market and within those markets, anything with any sort of cyclicality is selling at significant discounts to that and so we have nearly 50% of our global portfolio in european and uk equities versus only 20 for the index. >> kevin, it looks like you've been increasing your equity exposure why is that? >> yeah, so at washington crossing advisers, what we have
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done over the years is follow a thing we call our barometer, which is -- takes a lot to get into it, but it is about 30 different indicators into one number and that number jumped the most substantially it has in years, the first quarter of this year it makes sense, if you have easing financial conditions, central banks that are becoming more supportive, you're now seeing a big pop in manufacturing activity and gdp expectations around the world. especially out of united states and china. we need to cop to that and follow that -- those facts as far as europe is concerned, we agree that there is cheaper valuations to be had there, but there is a real significant prospect for recession in -- on the continent and we're staying a little further away from that. we're still sticking with our u.s. domestic focus as europe continues to work its way through its problems. >> tony, speaking of u.s. domestic, looking at the holdings in the oak mark select fund, which you oversee, despite alphabet being 10% net assets as of the end of march, you seem to
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like financials at 25% why? >> we like financials because they have a great combination of good fundamentals and low prices they're growing their pretax profits mid to high single digits today and they're returning high single digit percentages of their earnings to shareholders via buybacks and dividends we think that's a great combination. earping midteens returns on tangible equity. and they should be selling closer to two-times tangible book, not one. >> when is the last time we saw that >> we do typically see that near the end of the cycle, but that's where fair value should be for a bank earning midteens returns on tangible equity. >> kevin, what is your favorite sector >> well, we like the consumer. we think the consumer has been and will continue to be an engine of stability for the global economy consumer discretionary, consumer staples, both of them we think
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offer some good value here so we would focus there. i would point out that some of the health care damage that has been sustained in the last month is worth taking another look at it so, yes, we're going into a political period, health care is going to have a lot of headline risk we think there is some good balance sheets and good valuations to be had in that sector as well >> kevin, on that point, some argue that if you really believe that global manufacturing and global activity is coming back, maybe you don't need to hide in defensive names like health care, for that much longer maybe want to beat the russh an get back into heavy cyclical >> this bounceback is interesting because we're not -- we're not balanouncing back fro true recession we're long in terms of the last cycle. our recession, our last recession ended in the middle of 2009 that's ten years ago what we're seeing is a bounce and what we're curious about is to see whether or not this improvement in financial conditions and manufacturing in
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global activity continues to pick up and extend from here we wouldn't make big commitments to industrials, but where you can find value certainly you can move ahead there >> tony, want to talk to you about energy it is about 7% of your fund breakdown. it is the big mover, higher today on the jump in crude oil after the story brian sullivan was talking about. why do you think energy stocks have been such underperformers given we saw a megadeal in the space and crude oil has jumped this year. >> i can't answer that question. it is very difficult to say why the market does what it does on a short time horizon like that but what we do know is that oil prices have recovered very nicely and the oil stocks haven't so that discount of value has been growing and we have been taking advantage of that. >> finally, kevin -- sorry, go ahead. >> no, go ahead. >> growth. it sounds like a lot of your model of why you like stocks now has been built on growth are you getting the kind of
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numbers we need to see earnings typically do beat expectations at least on the bottom line. the economic data has kind of been so-so especially if you look forward second quarter and beyond. we got another weak existing home sales number. yes, retail has been good. but economic surprises have mostly been missing. >> yeah. okay so it looks to us like the united states is tracking to somewhere between 2.5 and 3% growth for the first quarter we're thinking really a longer term sustainable growth path is around 2.5%. so for our money, it looks like a good quarter and the most important thing is that it is a big turn around in expectations from where it was just a month or two ago. if you look at gdp now, put out by the federal reserve bank of atlanta, a month or two ago, that was close to 1% expected growth we see some very nice momentum in terms of growth, we just need to follow that and be willing to change as the data in front of
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us changes, we need to respond to that. >> it is true. it is actually -- it was .2% that was the first quarter expectation in march now at 2.8% from the atlanta fed. kevin, tony, thank you very much >> thank you >> thank you when we come back, a wave of tech companies heading to the public market, new york times pulitzer prize winning columnist jim stewart will join us with his take plus, a canadian cannabis company readies to make its way to the u.s., we'll talk to an industry insider who says this could open the floodgates for even more mergers in the space as we go to break, some of the top performing names continue to be like kimberly-clark and nelitomm tfx o. "squawk on the street" back in a minute
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investors continue waiting for uber's highly anticipated ipo, one of many technology companies going public this year so what lessons are investors learning from the recent results? leslie picker joins us with more good morning >> good morning, sara. the market conditions are ripe to host the flood of ipos in 2019 market valuations are high, volatility is low and both zoom and pinterest made investors a ton of money on thursday, meaning more likely to buy into the next deal. but not everything in the process of going public is a guarantee. now, after the recent stumble and other ipo mishappens, bankes are being quite careful.
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uber would be the largest u.s. listed tech ipo since alibaba's deal in 2014 now, even with the brand name like uber with a global business and ride hailing, food delivery and freight selling $10 billion worth of stock is no easy task one, uber is already discounting the valuation it is seeking to bring more investors in the door the company had initially aimed for $120 billion, but sources say it is now aiming for 100 billion or maybe less than that. the company also needs to find investors who will stick around for a while, some of the larger deals namely lyft and facebook allocated stock to investors looking to make a quick buck and those investors flipped the stock too quickly. uber needs to ensure it has a loyal investor base to keep the stock price up after its debut now, lastly market timing uber needs to go public in a market with investors that are willing to give the company a pass for its $3 billion in operating losses, guys >> yeah, that's not an
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insignificant sum, leslie. >> it is quite a lot absolutely and i think what investors really need to see from uber is just this path to profitability and when you have an amount like $3 billion in operating losses, that path can be hard to come by, especially as you model things out into the future there are a lot of different variables that could happen to get you there, but it is certainly a big gap to close >> yeah, we'll be watching it closely, of course, as we move closer and closer to that initial offering leslie, thank you. pinterest and zoom, speaking of ipos, of course, both went public on friday they're both lower this morning as you see here is what ceo eric yuan told us on thursday >> with zoom, you can live anywhere with any device, talk with customers and partners of so many companies. we did not have any physical
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office anymore, they live on zoom platform. save cost. employees have more flexible time i think i do not think there is any issues to the zoom platform. you can live anywhere and work together today >> be anywhere and work together with us at post nine, somebody we like to work with, jim stewart. and you're in person, thankfully, not video conference of some kind we both have been through this wave you can't help but think back to the late '90s sometimes, any thoughts there in terms of it is different this time? >> in the broad market, the question is, are people just indiscriminately throwing their money at every one of these things that comes along. let's face it, what was happening in the '90s. didn't matter how big the losses were, how flimsy the arguments were for however there would be profits, people wanted to buy it that i think is worrisome. i don't see that happening here. i think the fact you see a lyft
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struggling the way you did, see some caution about uber thing coming up, you see -- i think this is very important, you see these debuts at very different multiples of revenue it looks like people are taking a close look at the data and, of course, as i said many times, it is about the story and what the story is i think you're seeing some discernment going on in the market and i think that shows it is not an ideal situation. >> to the extent you've been focused or will be focused on uber, give us your latest thoughts. >> i'm fascinated by the lyft uber rivalry here. what really leaped out at me is the growth rate in the core ride hailing business which for the last six months was basically flat that is definitely a worrisome sign to me revenue growth is really the only solid metric you have to go on, multiples of revenue i think people, potential
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investors need to look more closely why has that leveled off. on the other hand, i do think that this is a duopoly, maybe room for a third party here. in this ride sharing, you definitely have these network effects that the internet has really made possible in so many areas. you want the company that has the most drivers so that they can get quickly to pick you up and you want the company with the lowest prices, which is an economy of scale model, which also suggests there is only going to be so many players here the addressable market, potential market is huge, there is a lot of price competition going on at some point when they dominate, you would expect to see that tapering off. i'm actually -- these multiples are pretty reasonable. i look at, you know, pinterest, and zoom, i'm actually a little more nervous about those given the threat of competition. in the case of zoom, you got some big players who have been
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doing video conferencing and i don't know enough about zoom to know what its technological edge might be but i would want to look very closely at that to see if, you know, the verizons and at&ts of the world can't simply replicate that or one of the other tech companies. >> cisco is another name. >> same with pinterest is this another snap it is a video -- a photo sharing thing. i think it does have some clever things going for it. communities of interest, some of them are very narrow, very shopping oriented. but once the growth potential there, and what is instagram going to do. why can't instagram do something like this? those longer term worry me a little bit. >> do you think investors are piling into -- are interested in ride sharing because of the promise of technology and autonomy and if so, are they going to be disappointed that that is farther off than we think and you're stuck with the expensive driver model for years >> obviously i think people love
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the story there, that is going to move to -- and notice tesla is playing that up now i don't see in the numbers, though, them putting a lot of value on that. these revenue multiples on lyft are in the 10, 11 neighborhood, that's pretty low for something that is on the kind of growth trajectory they had. by the way, i think uber numbers have hurt lyft because if uber is not growing that much, people say, well, how can lyft keep going at this rate, which i think is a reasonable question i don't think so far people are putting a lot of value on the driverless technology, which let's face it, is pretty far in the future. >> that's more of a moon shot than it is not a moon shot. >> it is but i still think short of that there is a -- this local transportation market is big and how disrupted is this going to turn out to be, how it is going to affect auto sales, how many people say -- it is like having your own car and driver at your
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disposal, i can just do this, i don't need a car anymore there is a lot of growth potential. >> i wonder, back to the point, your thesis that ride sharing business and uber is slowing and that's -- i wonder if that's more worrisome for lyft, which is just pure play ride sharing versus uber which is growing very fast in uber eats and freight business and everything else and wants to build itself as the amazon of transportation. whether that pitch will resonate >> again, i think the danger is, that's definitely the case for an uber, more diversified, the danger is it is less focused and one thing i kind of like about lyft is that it is more geographically concentrated. uber talks about the global footprint, but i don't see much of a global economy of scale here these are pretty local markets, and i don't know that you spread yourself too thin around the globe, what is your competitive advantage in these foreign countries? i kind of like the way lyft is very focused, very concentrated, both on ride sharing and on its
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local markets. and then from there, it may be able to take market dominance and be able to extend in some other areas. but we don't know. again, with all these things, you're rolling the dice here that's both the appeal and the danger of these things so much is really not known. another point i'll make is, especially for investors, you know, regular investors, understand what the companies do it is tricky, there are a lot of these coming up, a lot are not consumer products that we're familiar with. zoom, for example, there are even more, slack, you know, you got to figure out what they do as step one in order to assess how big can they get what is the market and especially what are the barriers for existing big players for getting in here. that worries me occasionally when i hear somebody -- i was pressing somebody who bought what is it called mongo -- trying to press that, what does
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mongo db do? i could not get a straight answer out of them they were all excited about it i couldn't understand what they do i haven't spent a lot of time on it this investor, they put their money behind something. >> that's a jon fortt question. >> jim, thank you. jim stewart. >> sure. coming up, shares of boeing down more than 15% this year under pressure again today as the company faces a new controversy. plus, tesla reshuffles the board, what this could mean for the battle between the s.e.c. and elon musk. we'll break it down when we come back "squawk on the street" will be w do 6ba down9. pnc bank has technology to help make banking easier, like... a business borrowing solution to help get a little more space with a lot less mom.
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to make connections of a different kind. at adp we're designing a better way to work, so you can achieve what you're working for. it is time for our etf spotlight. the energy sector moving higher this morning this is the united states ends waivers for countries to be able to import iranian oil. the xle close to crossing above the 200 day moving average for first time since october of last year components that are leading the way, well, they include marathon oil, diamondback energy, eog resources and conocophillips. now to boeing.
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another mover. this one lower, facing new scrutiny from our report about issues with the company's popular dreamliner model phil lebeau joins us with the details. good morning, phil. >> good morning, sara. a lengthy report from the new york times over the weekend looking at the 77 dreamliner that is built in north charleston, south carolina this is a second final assembly facility for boeing. when they establish this in 2008, people say how is it going to work? this new york times piece focuses on the 787s and the allegations revolve around whether there is shoddy or rushed production that calls into question whether or not some of the dreamliners are as safe as they should be boeing responded to the report by issuing a statement in part it says, this piece paints a skewed and inaccurate picture of the program and of our team here at boeing south carolina as you look at shares of boeing, remember, this company reports ea earnings wednesday morning and that's going to be crucial not
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only because there will probably be questions not only about the 787 but certainly about the 737 max and where things stand there. but what happens with full year earning and whether guidance comes down that's going to be in focus wednesday morning. and then wednesday afternoon we get tesla. speaking of which, phil, we always joke about the news on your beat, but you could fill a whole day's worth of coverage on tesla alone today. >> some of the news date becauses babecauss back to friday afternoon there was not a whole lot of news flow in the business beat. tesla put out its proxy statement, it plans to shrink the build from 11 directors down to 7 directors they'll be shortening the terms for directors from four years down to two years. as for elon musk, remember, he remains the largest shareholder at tesla people saw this news and said, zp does this mean more outside governance, greater independence for the board? people look at the board and say
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it goes as elon goes as elon wants it to go speaking of elon musk, front and center this afternoon when the company holds its autonomous day out in northern california this is where they'll be meeting with analysts and they'll be saying this is the technology that we see in the vehicles, not only right now, but in the future, and don't be surprised if they talk about a tesla autonomous ride share service at some point in the future these are all things we'll be focused on today >> all right, phil, thanks ton of news, waiting for more this afternoon in the meantime, to courtney reagan with a news update. >> here's what's happening at this hour. a church in sri lanka remained guarded by armed forces this morning, a day after blasts hit the site in a series of targeted attacks that killed more than 200 people and injured more than 500 others several americans were killed in the blast. >> this is america's fight too a spoke with the prime minister
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of sri lanka this morning, and our embassy and other parts of the government are offering all possible assistance. >> the supreme court agreeing to decide whether u.s. law banning workplace discrimination on the basis of sex protects gay and transgender workers. this as the conservative majority court wades into the fierce social issue dispute. president trump congratulating zelenskiy on his election in ukraine. cnbc update for this hour. back over to you, sara. coming up, as the cannabis industry continues to grow, some insiders say a big wave of consolidation could be on the way. we're going to look at what this could mean and which nes tamo
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watch. "squawk on the street" will be right back
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welcome back to "squawk on the street." i'm sara eisen here with carl quintanilla and david faber. live from post nine at the new york stock exchange. stocks are lower but recovered some early losses. the s&p pretty much heading toward the flat line you got real strength in energy today. 1.25% higher for the stocks on a more than 2% bounce in crude oil after the u.s. administration does end its waiver program for iran in terms of exports and will sanction those countries. consumer staples doing well, thanks in part to a beat from earnings and especially revenues from kimberly-clark. a very big earnings week coming up ahead in the next few days, dom chu joins us for a look this morning.
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>> nearly a third of the s&p 500 will report the results throughout the course of this week you got a dozen dow components as well. so behind me we have the calendar, just to give you an idea of how full the score card is, going to fill up with, if you look at whirlpool, big one after the closing bell today, we already got kimberly-clark and ww granger on the books from this morning tuesday, coca-cola, verizon, dow components procter & gamble, big day for those as well. twitter and snapchat, snap is not an s&p 500 company, but still a notable one. at&t, boeing, caterpillar, facebook, tesla, big day on wednesday. look for commentary from boeing and facebook about their current situations with regard to what they're dealing with from a newsstand point. thursday, amazon, ford, intel, bristol-myers, comcast, and friday oil, chevron and exxon both reporting that day as well. if you look at the whole score card, so far we have only got about 70 some companies reporting the results so far this earnings season if you take a look at the number
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of companies that have beat, it is doing pretty decently now if you look overall at some of the stats from refinitiv, if earnings reports come in as expected for every other s&p 500 company, you will actually see reported earnings per share down about 1.7%, that's big, right, also the revenue side of things, we will see revenues grow by 5% overall there. this earnings season is still young, but the trends are there, they're negative for earnings, slightly positive for sales, whether or not those trends continue after a third of the s&p 500 reports after this week remains to be seen, but still a big deal for earnings season, guys ones to watch there behind me, back over to you >> dom, thank you. by the way, tomorrow after the coke earnings, ceo coca-cola james quincy will join us first on cnbc. always a good global picture m&a and the cannabis space
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has been hot acreage holdings in a $3.4 billion deal surging up 70% this year joining us for a look at investing in cannabis, michael lavery and matt hawkins, managing partner at cresco so, matt, i guess you're pretty happy to see this deal and do you expect to see more cross border m&a activity? >> yeah. i think so it is -- this certainly is a step in the direction of consolidation. it is a blueprint, i think, that was quite creative you have -- it is a step to a step, so we're all clear there has to be some federal legalization to occur in order for this to close. but i think what is going to happen is you may have some other larger companies come into play with some m&a activity that
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has a contingency clause in thereupon federal legalization or even a passage state of's act or the banking act >> it is a good point, michael that unique structure, the conditional and federal legalization of marijuana. does that set some sort of precedent for other deal-makinging activity? >> certainly the u.s. market is considered the prize by investors and canadian operators listed in the u.s. haven't had access to the u.s. because it has been early legal this lays out -- gives visibility to canopy for how they'll enter and be partnered with and how to proceed. it is inevitable, would seem like other companies could follow that same playbook for the benefit of the visibility it gives. >> what is the consensus on federal legislation and did the failure of new jersey and apparently now new york, does that put a roadblock in that. >> those states matter for things like the voter an consumer perception, the more it is perceived to be legal in any state, the more it seems like it lowers the bar for changing
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federal law. but politics are totally unpredictable. we think it is in the next two to five years, canopy and acreage gave us 7.5 year time frame on their deal. it certainly looks like it is coming, looks like it is in the near term, it is very hard to be precise. >> matt, in any industry that begins early on and starts to mature, there is consolidation, there are going to be as we like to say winners and losers, what from your vantage point are you looking for that will distinguish those here for the long-term? >> there is no doubt that the multistate operators in the united states have separated themselves from others in terms of aggregating assets and multiple states. as early investors and what used to be high street capital partners, now acreage, we were early investors in gti, another larger player in the states, but we also -- we look for science and technology plays too
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we look for other types of vertically integrated companies in the space, but, you know, to the -- to your point earlier, this isn't going away just because new york and new jersey can't get over the goal line now. this is expanding rapidly and, again, this -- this canopy acreage deal only proves that. >> so who are the acquirers and who are the acquires >> you look at the category in the u.s. in total, the top seven listed players combine for 5.5% of the total market. so there is a long, long, long runway of consolidation here and lots of deals to be done generally speaking, it is the canadian global licensed producers who are looking for partners and entry into the u.s. and the u.s. players who want to consolidate with each other. we have been seeing that as well prior to this canopy acreage deal, you wouldn't have imagined deals coming over the border from canada yet.
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now it looks like that's more likely to happen with the precedent set but a long way of consolidation here to go. >> matt, i wonder, we talk about constellation all the time, but we have yet to get real play from global giants like a lot of the consumer packaged goods companies. how would you characterize their willingness to play in this space and do you think it doesn't really hit full bore until we get some kind of federal law? >> well, if you look at the canopy acreage transaction, they're a possible trigger could be passage of the banking law or the states act and the states act bill. and if that happens, that is a trigger. and i think because the blueprint that, you know, kevin murphy and bruce linton put out in this transaction as i said earlier, this could be a monumental shift in how some of those companies that you mentioned get involved in the space based on some type of a
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c contingency based deal i think it will happen rapidly. >> how long has cannabis been part of your coverage universe >> since the beginning of january this year. >> give me a sense of the interest among clients and institutions in terms of talking to you, versus whatever -- you covered -- covered altria and philip morris. >> it has been more than i expected initially and it has grown almost literally every day. and i think there is more and more people taking a look at it and trying to understand how to be positioned. it is clearly the category is clearly positioned for growth. there is not a lot of things in consumer staples that can say that let alone consumer even more broadly. so i think there is a lot of interest and everyone is trying to figure out how to be positioned and invest wisely. >> thanks. >> as we go to break, look at the markets, s&p continues to churn just above 2900.
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it is the busiest week for earnings find out which stocks investors are watching at tradingnation.cnbc.com
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let's get to the cme group in chicago rick santelli. >> good morning. yes, happy monday morning to all viewers and listeners. like to welcome my first guest, mark straussen i call you the go man you like to monitor a different twist to gdp in the former gross output and for all of 2018 it was 2.91 versus traditional gdp interpretations at 2.86.
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what are we seeing now, mark >> i see gross output as the top line in national income accounting at major sales at all stages of production it is a fantastic leading indicator and it shows that business spending, b to b spending and the supply chain are far more important than consumer spending. and it also is a very good predictor of what gdp is going to be in the next quarter, which is going to be released the first quarter is going to release on friday. and so last year was really very positive as long as go and the supply chain is growing faster than gdp, that's a very good sign for the economy and the trump administration, larry kudlow is a big fan of go, and it does look very positive, except this last quarter that was released on good friday showed that go was actually a little bit struggling and b to b spending
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changed hardly at all. that gives us a little bit of a cautionary tale as we enter 2019 and it may be a bit of a struggle this year >> now, you know, as i ponder re reading what you you just shared with viewers, what struck me is when i'm monitoring all facets of production i think that g.o. is going to be bigger, have a bigger impact on potential trade issues that may or may not get resolved in the near future with china. would that be your interpretation as well, mark >> yeah. i think that the trade war is finally picking up catching on or having this negative impact that he we keep talking about and the fact that b to b spending, the business to business connections with china and europe because trade is nearly 30% of the u.s. economy, that suggests that it's finally having a negative impact and unless this trade war is
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resolved and we're all hopeful that it will, it could have a negative impact into 2019 and it's one reason that i'm rather cautious. i'm still fully invested in the stock market because the fed has decided to wisely not to raise interest rates this year. the economy -- the global economy is struggling and i think the fed got ahead of itself by raising rates too far too fast. >> mark, it certainly seems to be the mantra in the conventional wisdom of the moment. it's very fascinating to see the first few quarters after we get a trade agreement. thank you for your time today, mark. now we'll go back to david faber. >> thank you. coming up, it's an interview you're not going to want to miss. coca-cola's ceo james quincey will join "squawk on the street." he'll be talking earnings and a lot more.
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welcome back to "squawk on the street." stocks are starting the week off with some tiny losses. we'll trying to get back to
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positive territories. energy leading the way to the jum side today but consumer staples, also another one of those key sectors, one of the outperforming groups today at a pace to close at a 52 week high going back to february of last year. among the names leading that sector high, you got consolidation brands but that stock of the day, of course, is kimberly-clark on pace for its best day since october 2008 after reporting better than expected results. also fx issues as well. certainly kimberly-clark a stock of the day. now i will send it back downtown to you guys at the stock exchange, david. >> let me turn to sarah who is an expertise in those areas, actually. i would imagine you may be focused on the "closing bell" show. >> big move in kimberly. coming up today, also, we'll get
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whirlpool earnings. we are also going to talk about the tesla event which will just be wrapping up. he'll lon musk talking to investors. it is investors day this afternoon. we'll be talking about self-driving cars and i think the key questions investors have is, is it safe and really ready for primetime by the time that elon says it is because his targets are getting scrutinized more than they have in the past. also, guys, joseph stig lilitz l be with us. he's a nobel prize winner. we'll talk about this whole debate going into the elections, about socialism and whether they're real merits to some of these policies that the democrats are putting forth in terms of their economic ideas like wealth taxes. >> that's a lot. just tesla alone is a big show. when we come back, a lot more on the wave of tech companies coming to the public market. measure up?
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♪ good mondays morning. i'm carl quintanilla with morgan brennan here at post nine of the new york exchange. jon fortt has the morning off h. we'll begin with the blackout of several social media sites in sri lanka following the terrorist attacks over the weekend. facebook, what's app, youtube, instagram and snapchat were all blocked in the country over fears that misinformation in the wake of those attacks would be more easily spread. kara swisher joins us this morning. she'll address this in her column coming out later today. all of this has "the washington post" reports facebook's mark zuckerberg is under, quote, clos

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