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tv   Squawk on the Street  CNBC  May 14, 2019 9:00am-11:00am EDT

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a quick final check on the market before we send it over to our friends on "squawk on the street." nasdaq opening up 48 points and s&p 500 would open up 1300 points higher. kevin o'leary and melissa, thank you, make sure you join us tomorrow, "squawk on the street" begins right now ♪ good tuesday morning, welcome to "squawk on the street," i am carl quintanilla with david faber. jim cramer is in san francisco the president both tweeting and talking about the china trade standoff last night and again this morning in the meantime, david faber has breaking news to start us off. >> we have a resolution in the
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ongoing discussion of ownership with hulu. comcast owns 33% of hulu and entered into a deal with disney that'll eventually mean it sells at 33% stake no time soon the two companies calling it an agreement of hulu ownership announced in 2024 that comcast will be able to sell its 33% stake in hulu and a valuation for hulu of $27.5 billion. it could be higher and there will be the opportunity to have so-called appraisal rights that we'll be used to figure out a value for hulu in that time which is 4.5 years from now. >> it will give the company full operational control of hulu effective immediately in return for this so-called deal.
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it is presented into our parent company comcast. what does it mean? well, as our viewers know how much often we discuss it when it was announced disney plus and espn plus and hulu all in the disney universe, disney has full control of hulu. we'll be able to basically treat it as another full disney property with a 33% owner and comcast prior to this deal there had been concerns on the disney side that it simply would not be able to do all the things it may want to do in terms of well, one customer sign on for all services, discounts if you own all three and any number of all things disney is freed up to pursue as it pursues that very important direct consumer strategies for nbc universal and comcast, the deal establishes $27.5 billion on hulu. hence the 33%. what that could be worth five years from now
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it does allow for comcast not to contribute during capital calls and the period from now until 2024 comcast can do that and hulu still needs money. it does not have to. it chooses no to participate capital calls. it can be diluted down to 21% stake over the next 24.5 years there is content licensing agreement between universal. nbc universe universal three years can choose to remove from the hulu platform if it chooses to do so and five years when all of this is done and 4.5 years when the programming is no longer on the platform an important transaction we have been waiting for more complex than anticipated.
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it gives comcast an option essentially to participate in what it believes will be the growing value of hulu to not fund it any longer with the idea that of 21% with a floor valuation far higher than what they just valued at when they did the time warner contrast >> disney gets freedom to grow the business >> i think the key from the disney point of view was they get the opportunity to have full operational control. remember tom rogers when he sat with us a couple of weeks ago. somebody knows the ins and outs with this kind of contrast comcast had board seats and was a potential economic number. while it is still on the economics, the government now is all disney that's the important thing they get for agreeing to a far higher
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number can we share that because actually i don't have it many front of me right now. there it is. he says we belief in strong and direct consumer space and our content is key driver of the ecosystem. get the maximum flexibility of their own director consumer platform significantly also goes onto point out it forms the value and gives them a path of liquidity jim, we have been waiting for this for some time we got it and perhaps a bit complex than we anticipated. >> i am surprised that our network is down and the new valuation sounds pretty good disney, my question is hulu got a lot of customers disney plus is not yet but it is on the come. bob iger, disney plus and hulu are apart of the same package.
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you can get a real deal if you ta take both. it is a roku question. >> hthis allows them as far as i am aware of doing the ro right tu report. if they want to change the name even, they can do that in terms of technology and in terms of sharing data and conceivably to your point offering discounts for those who own or subscribe to one or two or all three of the services jim, that's my understanding >> well, this is what the analysts most want which is growing sub cap. they got so disenchannel with disney if you do a combine all sub package, you are going to get the numbers going the other way
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which is why i believe disney stock is going up again this morning if the face of what may be in the down take. i don't trust the market at all. >> that's great news thank you, david yesterday's sell-off, 90% down day, turn around tuesday being talked about a lot, given the volume split yet why don't you trust it >> well, i don't trust at the beginning of the day, typically i would say we have a chance to fie find the bottom. the president is in tweet mode when he gets some of these modes we have to wait to see if he gets border trading. he created a level of uncertainty coming in both hands and start buying the tweets, he should knock the tweets off because they're making stop and think, well, what happens, what happens if he tweets i hate the
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chinese even though i love them and president xi is the greatest god but i have to crush him. their tweets are erratic this morning, they're in favor of the united states. he makes it so we got a way to buy and he's got to move on and stop tweeting them because wow, he's really disturbing -- >> more than half a dozen tweets today about how we rescued the steel industry and how farmers will see the difference made up boo by the u.s. as their time is now. the last one is about, china stimulus, what would happen in his view if the fed should do a match to quote him he's putting the ball in the fed's court if this thing is really painful >> they don't want to hear him telling the federal serve what to do. and we got to be careful, you
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don't want the president to pressure the fed right now let the fed think about what it wants to do with lower inflation. that's the tweet that really hurt me. i read that, come on mr. president, let's talk about don't cut per share, giver us something that american companies are going to do well and i am not worried don't talk about the fed all it does is it makes it feel like he wants to be a great dictator we don't want addict tathe dictr >> you mean blaming his great friend, president xi who he's trying to rip the face of. yeah, i don't think the president should be coming up with strategies of who to blame. true, you want to blame them for -- blame the fed for taking down numbers
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macy's he's got to be sophisticated don't blame the fed yet, let's see what happens he should be talking about discounts the chinese are giving us he went right to the fed he's got to stop watching another channel that says it is okay >> well, i think, coming back to that wall street journal story, guys, where they at least claim that the chinese perceive concerns on the u.s. part about the economy because of the president's continued focus on getting rates out of the fed >> i talked to a lot of executives out here. most of them feel like president trump is crazy like a fox so to speak. they are surprised with the chinese, they're so naive. three people said to me, wow, they're putting tariffs on american tequila it is hard to make tequila in america when it has to come from -- a lot of the list was problematic. and, a lot of them were
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chuckling wow, they're going to stop our eel implication they did not have a good list. you start thinking jesus, they really take so little of our stuff. they're really focused on mandarin and oranges, maybe because they speak mandarin. >> i know. i think it goes to this idea that there is still al communication gap between the two sides and truly understanding what it is they want or need or what it is they can deliver. that goes to those all of the people who are trying to figure out how long this goes on. >> there is a lot of reports about increasing nationalistic tone and their state media there is been one flip that has been mentioned from a tv anchor who talked about the 5,000 years of challenges they have been through. 3.3 billion views, billion views. >> pretty good >> they got a big addressable market >> they do >> some people must have watched it a couple of times
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>> yes >> good enough for starbucks >> that would be a start >> maybe the stock should be sold >> they can watch it 3 billion times, what are they buying from us we are not louis vuiton. >> to your point of starbucks, we are not there in any way in terms of any boycott at this point. we talked about it often times, no idea how that resonates with the population at large with china. but, you could imagine getting down the road to some where like that, can't you? >> yes, when you listen to the coverage and you read, it is all about apple. it is about how apple got the pricing out. it is all about how apple is going to lose china and they
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sound like some of the general hulu lost china in 1947. i think the analysts are out of things they can say or going to get hurt the commentary on apple is so let's just say so down beat that you would think apple will not sell another phone in china. that's the place the feedback that the supreme court made that decision, that was a long-term issue. people really struggle and they want to talk about apple and boeing abc, the president was thinking of apple, boeing and caterpil r caterpillar. really thinks the dow matters. everyone commenting on apple let's wait and see but that's what people are discussing and not much more because they don't want to talk about young china it is not kfc. maybe they're competing with
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starbucks. they're really wanting things for them to boycott. >> you mention apple and jp morgan they estimate that apple would need to take a 14%s assuming a s margins and they do suggest that there are more pain ahead for the shares this is a perfect storm for u.s. farmers. brazil and argentina is a record production this is separate from tariffs. >> you are selling at 13 times earnings they report this week is probably going to be a disappointing quarter. what can i say it is one of these things where you have one company and you can argue the dupont is going to get hurt the pressure and the short
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position is very large because of all the commentary. yes, deere has a habit of surprising let's see what they say. we mention the fed and whether or not the president leans on them s&p would need to fall to 23.05 before the fed cut that's down. >> i am so glad they got precision to where it is going to go down >> 23.05 >> not 23.03 or 23.08? are they like david blaine i got a king of hearts in my hand honestly, the fed target is down i don't think it is like that at all. we have to look at employment. if unemployment starts changing.
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that's what the fed is looking at right now >> december pivot was not the way to the market? >> december pivot, he was off his mind i know people are saying this. he shougt hald have tighten higr look, i am not -- the least bit concern, if the employment goes down, the fed takes action jay is a little more certain of himself than the president i will take 28 to 1. a lot of people like this. >> a lot to see of what this hols when we come back, the uber slump, will today be the day where the stock experience a positive session taking a look at the market here the biggest drop for dow and s&p since january 3rd. worst for the nasdaq in
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all right, we get started with trading here, going across the country to get our "mad dash." sociobiolo cybercark is what we got this morning. >> it has one of the greatest anticrime, yes, crime businesses going. he tries to stop the chinese from hacking u.s. industry is there a better job right now? i can't think of one this may be the ultimate tariff
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s play it is not like they are going to boycott young china which is kfc. the way to attack is hack. the way to stop the hack is hire cyberark business did 56 cents and people are looking for 41 that's what i call a surprise. >> it is even with the stock up 71% today you still like it here >> yes, i do they got china and north korea and russia seem to be relentl s relentless he has convinced people to look out. those three states must be
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stopped. this is maybe one of the best because of what the chinese do in reality >> okay. jim, we'll be back to you momentarily. >> i am responding to your teaching >> you don't want to have board meetings in china as a lot of u.s. comnipaes were doing for a while. bad idea we got our opening bell six minutes away stay with us
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brighthouse financial. build for what's ahead℠ you are watching "squawk on the street," china's trade will color the tone of the trade. we have some room to pay attention to corporate news. >> i am trying to get to the bottom of this ralph lawrence. that has been very much a company that has turned around hand in hand with ralph lauren it would be important to watch a company that's surprising, take two, we have to keep
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ongoing back to apple. apple has come down a dollar and a half in the last hour. let's see apple, see what happens and see if it holds or if the company is buying around 10:00. if apple rolls over, the morning is going to be a tough one >> speaking of going lower or holding. uber is looking up, i am actually looking here and it does appear that the stock may actually move higher this morning of course after two disaster sessions. price of 45 and opened at 42 closed yesterday at $37.10 cents. there is no shortage of blame in terms of why this happened the question is what they'll do about it >> it is still pretty early because the day has not started. i think the draft, the blame game i keep hearing comes back to the fact that nobody in the chain wanted to violate the last
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round, david, the unicorns if on too many last rounds, they have been sitting around for too long most people have everyon thoughe last round was higher. it turns out that the unicorns as opposes beyond meat have too many people who are not venture tap r capitalists and who are not playing by the rule. those are potent, bad shareholders to reckon with. >> you need an under writer who's going to lefvel with uconn recei who's going to lefvel with uconn recei you conceivably. >> zoom is up 100, pinterest is 24 it is either about size or the
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model. >> pinterest is becoming a five and pinterest is going up. uber's number last quarter going down >> let's get the opening bell here at the cnbc realtime exchange at the big board is ally financial celebrating ten years and at the nasdaq, ameris bancorp based in georgia. >> we mention facebook as we continue to wait for a deal with the ftc, they could be subjected to 20 years that's reuter citing sources. >> this is what happens when you don't do your ownov over site the government had no choice because they did not bring in
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anyone and no new form of government, the government felt like they have to do the governance the government a lot is tougher on facebook than on elon musk who has his own narrative and seems to be able to say hey this is what we are thinking, of course, facebook sold the world out. they should have realize early on that the government was going to do this if they did not do it so government have done it, it is not good for facebook. facebook in the end has a lot of good advihave had v advertisers >> two of the worst days the s&p have seen. we are up this morning what are your thoughts in terms of the broader market here given what we have digested over the last few days and not to mention this morning in term of all the tweets coming from the president and other data that we have >> we allocated enough downside at this point to sort of feel
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like okay, that's the way we stand? no there is too many very smart people who bought within the last hour. they are terrible in terms of being traders and not investors. i would not chase this yet you got a long day most of the research is not positive watch apple. if apple goes down a couple of box and all these buyers and tec tech i think it is early and you get a better chance to buy and maybe do a little buying here. you can't be aggressive. we know the research is way too negative in order to keep the stocks up. so many retailers and numbers have to come down if any of these research is right. so you can do so much if buying a pepsi and clorox and proctor we need to see the stock and then try to find some price discovery and be able to bottom. not this kind of bottom. >> yeah, we did get an upgrade
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of coke today. a lot of discussion about if we go to the full tariff on the other 300 billion as the washington post says they are making plans to implement then you are looking at maybe some price changes at target or costco or home depot or walmart. >> that's where you start getting margin pressure. i am not going to disagree with that we'll get slow and global growth we talked about it yesterday you are going to have someone. there is only so much you can push back to the chinese saying listen, we are not going to buy that good for that mumch you have to cut it back. 25% makes it harder to say, okay, you have to eat all that china. they are able to do that for lower amount it is going to cost more you have to see who takes that do they keep the price down or do they feel like consumer is
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strong and pass it on consumers. either way, someone is going to get hurt in this country it is undeniable larry kudlow who's apart of the administration, he said it so it is not like i am breaking the narrative. it was a story line that larry kudlow gaifr yve you i can't disagree with larry. >> there is some discussion about how tariffs in general disportidi disproportionally -- they tend to buy goods that are lower. >> it is a tax consumption >> regressive. >> excuse me disposable income. guys, i did want to mention a name that's quickly rising the front rang ranks having done one of the worst deals ever
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of course, they purchased monsano and along with it, most recently jury award $2 billion they're going to appeal it of course as they are with all the other jury awards. it is not helping things for that company 45.5 over the last 1 mont2 monts that deal from -- now they inherited potentially enormous liability as a result of these suits. >> yeah, david, i mean wow, what an unfortunate deal. it does seem like this may be -- i don't know, david, i don't want to be dtoo down beat.
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it could cause the viability of the acquire if things go nuts. >> they are being urged by some of their shareholders trying to settle it. they're going to fight them all one at a time and it is good to know where these things go but fascinating from a deal perspective. this has been valued destructive to the tune of tens of billions of dollars of market cap >> hardly you don't see an ad from reuters looking for people to sue them. it is almost like let's get in line and take everything we can. they are deep pocketed wow, it is ugly. wo holy cow >> we didn't get your take yesterday on go pro.
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their reiteration, they're going to move some production to mexico from china for cameras that are bound for the u.s is that the kind of thing you think it is going to happen at scale? >> believe it or not martin franklin when he was running jordan, pioneered the idea of on shoring, going to mexico yes, one of the things president trump did and although commerce did not seem -- he wants companies to open in mexico and of course in the united states this is important. i think what laura alber says yesterday, she talked about moving business to two below mississippi. she got 500 people that she brought in or trying to find to make a polstrery. she was trying to apiece the company. and it is making so that she's going to get it faster and pay
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less mexico is easy on the supply change because you have union pacific. i do believer you will see much more of gopro. that stock is toxic. have you seen it going up? it is incredible ever since they put the gopro on the surf board, it has been going down now starting to come back. >> yeah, we love the goat. by the way, here is a look at what is laura alber told jim las night. >> we have great relationship with our vendors and we start moving products. there will be select price increases as there always are. more importantly we are reducin costs, not just the costs of goods by moving them but other
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cost of our company. >> that's quite a show last night whether on wsm or workday or twitter >> twitter is doing well not a lot of chinese business in the united states. they become more national company. no chinese business, business is incredibly strong and getting stronger william-sonoma they do make a lot of things in china, they are moving rapidly tho t to the united states they were patricking 25% the ones that did not think is 25%, they're the ones who are scrambling and most retailretai, again, remember watch apple. apple is the one that everyone is afraid of let apple come down when apple comes down then you will be able to make your move and do zombieinzombisom some buying. apple is very strong this morning. >> guys, i want to come back to
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our lead story on the corporate front involving comcast and disney over a new agreement involving their joint ownership of hulu. they're calling it an agreement on hulu's future governance and ownership. it is some what complex but i will give you the quick highlights yet again here. in five years, 4.5 years time. disney or comcast has the right to sell either one to tell either one if comcast wants to sell or business wants the buy and the floor value that'll be applied to hulu at that time will be $27.5 billion. between now and then, they're conceivably going to be capital calls to hulu and both of its owners, disney and 66% and comcast at 33. and during that are time, comcast can choose to either fund those capital calls or if it chooses noteen now and the next 4.5 years roughly
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speaking if they can be diluted down to a maximum of 21% 21% if it chooses not to fund any capital calls it would be worth $5.8 billion minimum valuation or applying to hulu in that time. remember at&t and time warner sold back its 10% of the value of $15 billion for hulu. you are talking roughly 4.5 years from now service at 28 million subscribers. important for comcast because it gives them an option on the future growth of hulu that they can benefit from they also will continue to supply programming to the service for at least the next three years. after that they can use some of the programming and some of the programming as well for their direct consumer business that is the one being launched by nbc universal and the three-year
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time, they can pull as much as what they want and keep it on the hulu platform. what does it mean for disney you can see the reaction for stock price this is morning is positive disney is now going to be able to pursue whatever it may want to do with hulu and conjunction with other directive consumer platforms, disney plus espn plus, majority exists in terms of customer management and in terms of technology under girding all these assets and data sharing, anything they want to do. discounts, they can't pursue any concerns that their owners or comcast would raise their hands and say no it frees up disney and with a target of when they could get out and should they want to and it resolves the ownership around hulu both sides would say in a way that's positive for them it is reflected to a certain
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extent of the stock prices this morning. >> david, i thought comcast would be up. i did not understand i hate to over use win-win cliche it is. i think this trifecta of abc fox and disney plus and now hulu plus do you remember a year ago we started questioning does disney have enough in order to go over the top? this directive consumer package, i now put it equal we have not put netflix in the equation it is kind of a netflix situation. i think everybody is going to want it now. >> there are the ability now to have discounts you will get some sort of pursue it.
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hulu does becomehou hulu become as disney property which is important for them to be able to get that ability. >> i still kick it over to iger giving jj abrams a tour, did you see the photos in the past week? >> yeah. >> that's a good guest list. >> let's get down to bob pisani. >> whether or not apple will see a bounce this morning. it is up with other big trade names, caterpillar and 3m at 134 with the dow with the president's tweet, we were dramatically over sold condition on semiconductor stoct and dow industrials. all of these are among the big bounces. this makes a lot of sense where much damage has been contained s&p 500, a lot of people keep telling me, hey bob, we are only
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4%, that's good. there we are only 4%, that's the good news. the bad news is there is a lot of damage being done because people are calculating the effects of these tariffs now that we have real numbers on them we saw barclays yesterday talking about gdp declining 0.2% to .03%. ubs, at 0.25%. >> you can see some of the damages that's been done let me show you the big trade names. intel, boeing and caterpillar and apple, all 20% or more off of their 52 week lows. i will show you what jp morgan had to say of the impact on apple. apple would need a 14% price increase on their iphones to offset tariffs the cost of the tariffs could reduce iphones growth margins by
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4% shipments are imported into the u.s. following assembly in china. we estimate the cost of the tariffs would imply gross margins. mark already knows this. this is why apple is down a percent this month because of potential erosion in iphones if they absorb all the cost of tariffs and don't pass it on consumers. the market figured out the potential impact that we have seen here. this is true of other stocks people keep saying oh, we are not as bad as december have you looked at intel they're at where they were back in december. there is a lot of sectors where tremendous damage had been done. 3m just had its disaster it is the same thing at intel. it is at a new 52 week lows.
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of o we saw this on a number of other stocks, dupont has the same situation. we are in a global reset tariffs are not going to be going away a lot of people are coming to that conclusion. that'll be difficult to actually get them out a lot of this has to do with the election we'll have a lot more on this in the next hour. for more go to tradertalk@cnb c tradertalk@cnbc.c tradertalk@cnbc.com. >> back to you >> all right, let's get to rick santelli at the cme in chicago >> morning carl, i don't know any of these will hold today you guys call it turn around tuesday. down here we call it counter trends tuesday no matter how it turns out, many are still going to be suspects and decisions are not going to go away but today is what we
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have look at the two days at two's. it is holding better than you see right side higher than the left it is really all about foreign exchange if you are looking for more stroll tivolatility if you look at the one-week of the dollar index it is fighting and it really bounced yesterday. treasury options continue to be quite volatile as one would expect being such extreme with respect to low yields. if we look at what's going on in the dollar index, no chart is better let's go all the way back to mid 2017 you can see the left and the right side the dollar index has been doing so well, it avoided all disaster yesterday. it was one market that really held in and finally the dollar verses the chinese, yuan,
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everybody talked about it. we did back off ever so slightly in favor of the chinese yuan is it going to go test yuan to the dollar when was the last time it occurred the first half of 2008 as you see in this chart. carl, jim, david, back to you. >> thanks very much. marco rubio is with us, we'll get his take on trade tensions between china and the u.s. as we go to break, it was one year ago today that the supreme court approved sports betting. take a listen. >> in the meantime as we are talking, we are getting breaking news out of the supreme court striking down a federal law that bans sports betting in most states this is a big deal. when you rent from national...
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it's kind of like playing your own version of best ball. because here, you can choose any car in the aisle, even if it's a better car class than the one you reserved. so no matter what, you're guaranteed to have a perfect drive. [laughter] (vo) go national. go like a pro. see what i did there? here is a look at uber with some green attached, back above 37, about a percent gain for
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that name just a few days after its ipo. stock trading with jim in a minute dow up 105 your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.
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you need decision tech. the latest inisn't just a store.ty it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome. let's get to cramer and stock trading. >> even if you're a visionary, you've seen the tariffs coming,
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you see what can happen with your company stock when you look at ralph lauren, rl, 25% of the business sourced in china, down from 30. they've been frantically trying to get it lower. talking about sweaters and polo shirts and footwear being in play here. can they tell the chinese, here are our new prices does the consumer end up getting hurt or does ralph lauren? the market right now is saying ralph lauren is going to be the loser because of margins i don't know if that's right it was a great quarter, but the market is speaking loudly. the retailers are the ones that are going to get hurt here. >> you've long said, jim, someone is going to eat it it depends on who that is. what's on "mad" today? >> we'll understand how facebook gets its -- what it does with advertising. obviously we have to talk about alphab alphabet notice facebook down that stock got hammered.
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adobe is doing everything right here people are saying sell tech until we find levels that make it so people feel comfortable. i think it's a mistake to sell tech this willy-nilly, but it is happening. >> all right, jim. we miss you at that desk, but we'll see you tonight. "mad money," when we come back, mohamed el arian and trade tensions the dow up 115 .when a today's merrill can help you get there with the people, tools, and personalized advice to help turn your ambitions into action. what would you like the power to do?
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♪ good tuesday morning welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber. not quite getting back to yesterday's open >> our roadmap for the hour starts with 1.1 trillion in market cap gone. that's how much has been wiped out of the market since president trump turned up the heat on china. we're going to break down how to protect your portfolio and where to hide in these volatile markets. >> is there an end in sight? the president sets a new timeline for china trade talks we'll go live to washington for
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the latest. full control cnbc parent company comcast is selling the hul lie stake but not for quite some time. it will give disney full operational control immediately. we'll give details next. we begin with the trade war. president trump offering up a projection about how much longer it may last with china, tweeting up a storm kayla tao joins us with the latest. >> president trump offered a myriad of views in a series of tweets this morning. some policy suggestion, some political broadside, saying the fed should pump money into the economy to help the u.s. win the trade fight. the white house could do a deal with china tomorrow if it wanted to, but it will move when the time is right. he said the u.s. is in a fantastic position and a better position now than before and also that farmers will be among the biggest beneficiaries. agricultural secretary sonny perdue says the president directed the usda to work on a
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plan quickly the president will not let farmers down we're told that tweet is the usda's official comment on the matter as a new list is unveiled of chinese goods totaling about $300 billion, including a new timetable for this latest escalation, written comments from companies affected by these tariffs are due june 10th. june 17th there will be a public hearing, and a week after that, that's when final comments are due and after which tariffs are legally allowed to go into effect last night president trump gave his own timetable. >> just got back from china. we'll let you know in three or four weeks whether or not it was successful yu never really know i have a feeling it's going to be very successful >> the president said yesterday he hasn't decided whether to go forward with the new round of tariffs, 25% on the $300 billion. we will see what he decides in that three to four-week time
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frame. >> kayla, thank you very much. for more on how the ongoing trade war is impacting the markets and the economy. mohamed el erian joins us by phone. you've been fairly optimistic about the u.s. economy how much have you adjusted, if at all, your view given the trade escalation we've seen over the last week and a half >> i still think, sara, the economy is in a good place and this trade escalation may take some of the momentum off, but it's not going to be that big. it's a bigger issue for the markets than the economy the economy is relatively closed the market depends to much higher extent on external revenues it's much more a market issue than an issue for the economy. >> even with a market that is dipping, i don't know, 5% off the highs in about a week or so? doesn't that filter in to consumer and business confidence, if not the direct tariff effect in a closed
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economy? >> it may at some point, and that's the one thing that people are scared about and it's the reason why i think president trump is putting pressure on the fed, is you're worried that bad markets becomes bad economics. that's a major concern i think the major change going on in the market mindset right now is the journey versus destination. for quite a while, we all expected it to be part of a journey that still leads to free but fairer trade now there's growing concern these higher tariffs may be part of the destination that's a completely different calculous for the markets. >> do you believe that the president believes that the tariffs actually are a constructive force on the u.s. economy? >> i think what the president believes is that this is more than just an economic issue. this is also a national security
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issue. the economic dimension is relatively simple to solve the national security dimension is much harder there are those out there that believe this is the, quote, time to contain china if you don't do it now, when will you suffer? we may suffer, but china suffers a great deal more. it's the national security angle, carl, that comes in and complicates the economicaling laos. >> investors are rightfully confused on one hand his tweets seem to suggest the goal is repatriation of u.s. supply chains, make your products here in the states. yet he still suggests we could make a deal in a matter of weeks. one is a very long scenario. the other is relatively short term >> i do think you're seeing a reorientation of the supply clain. companies that i speak to are all looking to reduce their reliance on china. that is because they realize these trade tensions aren't going away with a deal, that the
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deal will be a cease-fire, but fundamentally this is an issue of global positioning. this is an issue of national security it's not just an economic issue. it doesn't surprise me that companies as a prudent step will start to diversify more their supply chains. >> mow hthe president tweeted o about china and called on the fed to match the policies of china, saying china is lowering its interest rates and trying to stimulate its economy. how much more difficult is life right now for share jai poul >> it is more difficult politically. china will boost stimulus. their problem is that first these measures are not as effective as they've been in the past second, they are inconsistent with where they want to be in the medium term. they'll go to those measures to
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try to boost the economy i don't think anybody doubts that a more dovish fed is good for the markets, but the transmission mechanism to the economy has proven to be quite poor so i think it puts the fed in a really hard place unless it believes what you said earlier, sarah, that we are on the brink of a financial disruption that will contaminate the real economy. that's how it felt at the end of december we're in a better place now. that's the only thing that will get the fed to move, a feeling that a market dislocation would contaminate the economy. >> what's your bet do you think the fed will cut rates this year? >> i do not. i think the labor market remains strong i look for wage growth to pick up, business investment seems fine the government will be slightly contractionary but nothing major. i think this is a 2.5% to 3%
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economy. it's hard to see the fed cut rates in this. the one qualification is a self-fulfilling market accident that then forces the fed to worry about financial contamination of the real economy. >> finally, mohamed, where are you looking in the market, bond markets, currencies, where are you looking for a signal that might make you feel a little bit more nervous overall you seem pretty relaxed about the whole thing? >> i'm relaxed about the economy. i'm not relaxed about the valuation of risk assets it bothers me, for example, that the ten-year bond hasn't really picked up in yield today and it's not because of europe normally it's because of europe. no, this is not because of europe valuations are still quite elevated investors have to focus on relative value trades. they have to favor the u.s.,
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domestically-oriented trades versus the rest of the world it's going to be very choppy out there. >> mohamed el erian, thanks for weighing in today. >> thank you very much. joining us for a closer look, ben mandel is global market strategist at jpmorgan. thanks for being with us today i'll start with you, ben on mohammed's point, what can we expect >> we are positioned fairly moderately leaning into risk at the moment i think we're cognizant of some of the long-term risk, what is the end game here, the trade issue? it's important to be more pragmatic about it we're thinking about trade-induced volatility as potentially introducing some buys opportunities in equities i think there are a few reasons. one is despite being bad news, last week was not the worst news it could have been there's still a path back to the negotiating table that you can
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see. second is that the economic feedback of the tariffs themselves a case being made, it's worse to introduce tariffs on new items versus increasing existing tariffs. a lot of the weaker links in that supply chain were picked off at the end of last year. finally, in case we haven't noticed, there's an endogenous tricky feedback between the economy markets and the negotiations themselves. if things get bad enough in terms of the market reaction and the economy, then i think that's what facilitates them returning to the negotiating table there's a circuit breaker there even though bad news is bad news. >> at what price does that circuit break? >> we've already seen a bit of a correction more attractive entry points in the context of fundamentals gradually improving over the course of the beginning of this year china and the u.s. are coming from a position of strength, having started the year in a very solid growth trajectory
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as mentioned, i don't think monetary policy is really moving in either direction here that's a source of stability underlying financial conditions. i think there's a bit of risk, the pickup in the global industry cycle we saw actually is the victim of this whole thing and makes us think twice about the upside risk. >> you had a note earlier about global cap x starting to look like flash in the pan to a degree. >> at the beginning of the year we had cap x being weak, global manufacturing being very weak. arguably that was a freakout about supply clains in asia because of the expectation that tariffs were coming into effect. there's a real risk we cut off the upside on the economic rebound through these tariffs. but i don't think it's a downside scenario from here. >> noah, you have a target of 2950 for the s&p does that get add justed lower or do you think markets are going to recover >> we're highlighting the downside we thought of tariffs as mostly
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being focused on corporate margins, almost ignoring the impact for aggregate demand and focusing on price increases and what that can do we've talked about 2650 as a possible floor if we see multiples take a turn lower. perhaps rationally the market has gone halfway to that already. we're not changing our target yet. but even before the trade talks flared up, we had limited upside to the year. we thought a lot of the big catalysts had come through the system already that's probably where we remain for now. >> who is most vulnerable to that margin compression as a result of margin tariffs >> we looked at it in terms of how much of your input are imported abroad and how much imported from china. not surprisingly metals and mining, semis and autos float to the top of the list. domestic exposures, health care, software services as opposed to hardware and semis at the bottom end where we could still see some gains or less pressure at least. >> we have three new 52-week
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lows this morning. gap, nordstrom and macy's. how much of this -- are they tailoring their retaliatory impacts to impact the consumer as was suggested yesterday >> there's a real sense where you have underlying features of the economy that's friendly to the consumer in the late stage of the cycle that's somewhat working against the very tailored nature of the retaliatory tariffs. what happens in late cycle, wages start to accelerate as labor markets tighten. you are seeing that, notwithstanding the fact that it's relatively tame the labor market is strong consumer sentiment is fairly healthy. i think over all the consumer picture is actually all and notwithstanding the retaliatory tariffs. >> based on what carl just said about the lows, noah, do you think the market is taking it a step further and pricing in that the next $300 billion worth of chinese imports gets higher tariffs, something we know the trump administration has
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threatened >> i think that's where to look, how the consumer stocks behave that will be more of a demand issue. it's how china reacts, not the tariffs we're putting on china that's a place where we think we should be more resilient we agree with the way ben mapped it out. >> it is the u.s think about macy's how much of those products come from china a lot. they're all waiting in the wings if we gore forward. >> that's right. it's not only on the demand side but the price side the one word no one wants to say and no one wants to hear, inflation. fiscal policymakers have their own bind if that's what we're facing, i think that's a different can of wrms. >> maybe greenspan will be right. he's been calling for that for how long >> a few years >> clearly not a concern for you? >> i don't think it's -- to be honest, i don't think we get there. yes, $300 billion in tariffs is
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a big deal what is the china share within that group of products it's roughly a third it's impossible to not either take it on the margins or pass it through to consumers. my view at least in our baseline scenario is we don't actually get there. >> all right, guys all we can do is wait. ben and noah, thanks an important deal to tell you about involving parent company comcast and disney, both of which are the owners of hulu. they entered into a new deal this morning that has important implications for both companies. the deal itself is somewhat complex but will give comcast opportunity to sell a 33% stake in hulu by january of 2024 at a base price for hulu of $27.5 billion, it could be higher there will be the rights to actually have an appraisal of the asset at that point by both parties to determine, in fact, if and when there is a sale at that point, what it should be worth. an important deal in part because it does give comcast a
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free option on the continued growth of hulu over that time, and perhaps even more importantly gives disney complete operational control of the hulu asset right away. something we're clearly willing to see a higher valuation on hulu over this next 4.5-year period than was currently the case than when at&t sold its stake back to the company at a valuation of $15 billion disney takes control what does that mean? it gives them an opportunity, bob iger says, to leverage their content, overall, leverage all the technologies that they have for all their direct consumer platforms. data sharing as well, customer management here is a quote from bob iger this morning on the importance of why operational control is such a good thing for their direct-to-consumer strategy. he says hulu represents the best of television with award winning
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content, library of popular series making the service even more compelling for its part nbc universal is going to continue to provide programming to hulu at least for the next three years it can do so or will do so exclusively for the next one it can have programming featured then on its own direct-to-consumer streaming service within, let's call it, about a year three years hence, it can pull the programming and have it on its own ott service. in five years, the expectation, of course -- less than that, january of 2024, that they will exit, at at least $27.5 billion value. from 33% to 21%, should comcast choose not to fund any of the capital calls that may be
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forthcoming over those next 4.5 years from hulu? that will still put it at $5.8 billion value. both sides saying, hey, it's a win. disney, we get full operational control and now can control the complete future of hulu and use it as a part of our overall direct-to-consumer strategy with disney plus and espn plus, and for comcast, a free option over a period of time, getting paid while they wait to provide that programming as well. >> i'm very in to "killing eve" right now which is on hulu it's the reason i got hulu >> it's good. >> really good >> have you watched the new season >> i'm in the first season i'm a little behind. my question is do you know how it gets packaged in with disney's very ambitious streaming goals? does it get part of disney plus at some point? >> no. those are separate that's an amc, i believe, produced, bbc -- >> just hulu in general.
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>> i thought you were asking specifically about "killing eve. hulu's programming will still be separate however, it can now be completely integrated as part of a package. let's say you want disney plus, which i assume you will, given small children -- >> still in baby shark days. we'll get there. husband wants espn plus. i know you're a huge sports fan. >> huge. >> there will be opportunity to have discounts on all three. they can share content across all platforms. at least in what they're saying and information which is more important. >> do they show "dodge ball" on espn >> no, they don't. i like to kid about that espn ocho. >> we'll tell you what sector may be prime for a bounceback. walmart undercutting amazon announcing next-day shipping on hundreds of thousands of products we've got the details. here is a look at e p thto
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performing stocks on the s&p 500. dow up 182 turn-around tuesday continues. we'll be right back. the latest innovation from xfinity
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president trump as you mentioned heading down to louisiana today to visit a new lng export terminal it's a $10 billion facility, 6,500 jobs this is supposed to be his backdrop to talk about job creation and america's energy dominance. the reality is this is also an industry feeling the pain from the trade war with china trump's tour is coming 24 hours after china raised tariffs on lng from 10% to 25%. we know china is one of the most important markets, ranks third the demand there is growing faster than anywhere else in the world. the trade war is taking some of the steam out of that market we counted 26 vessels that left the u.s. for china 17 left in the first half of the year only nine tankers left in the second half. in the first two months of this year, only two vessels were bound for china. a trade group for the industry
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told us certainty is key for u.s. lng timelines are years long and investments are worth billions tariffs can cause serious uncertainty about one of the world's biggest markets. china's retaliatory tariffs will take effect in june, but the consequences could be felt long after that guys, the biggest threat to this industry is it derails the second wave of investment that would increase export capacity back over to you guys. >> that's the important point here, as you well know, many of these trains, these enormous operations that export the lng, they have the contracts for years and years already in place. in fact, that's how they get the financing to pay for them. it would be years from now that we're talking about to fuel the next round, i guess, of building. >> absolutely. the concern here is that those investment decisions could potentially be delayed if they're not sure what the cost of exports might be. there are five facilities that are pending approval in louisiana alone, of the four regulatory agencies, those are
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some of the second wave that could potentially be in danger here. >> as we go to break, a check on recent ipos, ride hailing services lyft and uber up big this morning on the other hand, beyond meat you know by now up almost 200% since its own ipo, adding another 6% today dow is up 192, close to session highs. "squawk on the street" is back after this
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it's time for our atf spotlight. santoli is taking a look at the split in this recent selloff mike. >> carl, difference between cyclical and defensive offense and defensive. you see industrials and transports flattish over the last year. they were basically all neck and neck october of last year. utilities in the green pretty comfortably at a new high what you see with the industrials and transports is
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still below the old highs, but above the march lows that's what we're looking at pour the broad market. the little pullback from lower highs was below where we were yesterday. so i think a lot of the more cyclical names are still trying to hang in there above those lows obviously, if we start to essentially get better news on trade, we'll feel as if we've already priced in the issue for now. with what we know, you would expect the transports and industrials would probably be bounce candidates here i would note for the industrial spdr, boeing at 8% right in the thick of all this for transports, this particular etf of the transports, not necessarily the overall sector, but it's mostly rails and air freight and logistics. so not as much trucking and airlines, guys >> thank you we'll send it over to sue herera for our cnbc news update good morning, sue. >> good morning. here is what's happening at this hour everybody
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secretary of state mike pompeo is meeting with russian foreign minister sergey lavrov in sochi. it's pompeo owes first visit to russia, expected to discuss arms control, iran, syria and north korea's nuclear program. north korea says the seizure of one of its cargo ships by the u.s. was an illegal act that violated the spirit of a summit packed between president trump and kim jong-un. it demanded the return of the vessel without delay. another democrat throwing his hat in the ring. montana governor steve bullock becoming the 23rd democrat to enter the presidential race. bullock highlighting the fact he's the only candidate that has won a red state. former congressman anthony weiner has been released from a halfway house where he has been living since he was released from prison back in february he will have to register as a level one sex offender for a minimum of 20 years.
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you're up to date. that's the news update guys, back downtown to you >> sue, thank you. when we come back, amazon on the clock. walmart ups the ante in the delivery wars. getting another check on where the major averages stand at this hour, continue to climb back, though we've got a long way to go to make up for yesterday's more than 600-point decline in the dow, 2.5% decline in the s&p 500. nasdaq up a percent, the rest of the averages up .75% or higher we'll be right back.
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the trade war is now more real than ever bulls pointing to the fact the s&p is only 4.5% off the historic high. for many companies there's already considerable damage done bob passan any has more on that. >> we want to take you into our new studio at the new york stock
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exchange and show you what's going on it's true, the s&p 500 in theory looks fine we're only 5% from the recent highs that we hit. that's not a bad thing necessarily. okay, a little bit of a correction that's true. but we've seen a lot of damage already from a lot of big companies. i keep pointing out, if you look at the big trade names, the intels, the boeings, the 3ms, the apples, we're 20, 25% off the 52-week high that's a pretty significant drop most is on trade concerns. i told you about jpmorgan's concern on apple apple would need a 14% increase in iphones to offset the tariffs. that's a big concern there the cost of the tariffs they said could reduce iphone's gross margins by about 4%. again, pretty significant members. the market has also flushed out the fact we could see erosions in margins already i put up apple
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that's why apple is down 8% so far this quarter that's a major problem that we've got here you see what the story is with apple. if you look at the rest of the world, everything is lower the entire market has reset lower. i look at country etfs china is 9% lower. this is just this month. south korea 9%, brazil 6%, mexico 5%, even germany. it doesn't matter. developed or developing countries, it doesn't matter, the whole market is down 5% to 9% that's because growth growth expectations are lower and the market is resetting lower overall. the question here is what exactly is going on? what is all this about two big questions you have to look at. number one, is this about elections or is it about trade if it's just about trade and resolving it, that's one thing if it's really about the election, this could be a much longer term process. that's part of the problem markets have reset lower on the
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tariffs and lower global growth. if you assume this is really about elections, there's a lot of uncertainty here. that becomes very, very difficult to model the second question is the hardest one to answer. are tariffs are permanent part of the u.s. economy or not we don't know. obviously the chinese are telling the president, hey, we want this out. the tariff is off the table if we make a deal with you. obviously the administration is pushing back saying, no, we want the option to reimpose that. that could mean this could be going on for a long, long time and which don't know the answer to this question that's why the global markets have been resetting on the uncertainty. when you have a lot of uncertainty, it means prices generally reset lower. that's the big issue right now back to you. >> bob, you talk to traders all day long is there any consensus of how much pain the president is willing to tolerate? >> everybody agrees he watches the dow jones industrial average carefully. no, there isn't any particular consensus. the hope -- and this is why the markets keep levitating
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themselves into believing this is going to go away, he fervently doesn't want a serious decline in the stock market because he views it as a referendum on how this is doing. there's no number around that. it may be more serious if his core concerns are trade because that's a core issue around the overall elections. that's why everybody is so uncertain. >> bob passan any, thank you for more on trade and the markets, what the strategy is from here, we're joined by michael see siz, morgan stanley head of u.s. policy, and jeff moon, china moon strategies founder and former assistant ustr for china good to see you both i'll start with you. how are you gaming out the president's strategy on trade and tariffs versus the market's decline? >> i think the first thing we have to accept is we don't think this is really about framing a deal there are substantial disagreements mainly around how
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to codify forced ip transfer disallowance and how a deal ends, vis-a-vis, do tariffs come off immediately or are they staged off over time those are issues the u.s. and china are far apart on we think the slightly more likely outcome is that in several weeks' time the u.s. and china will find a way to compromise, but probably gets prodded along which weaker risk markets or they can't find a way to compromise and risk markets have to sell off further because then we'll be dealing with tariffs on $325 billion worth of goods. the impact on the u.s. economy is more acute, more immediate. either way, even the lightly more likely outcome, still will weigh on risk markets. >> over and over again, jeff, we hear the u.s. has the upper hand look at the markets, look at the economy, they get hit harder should investors take comfort in that idea? >> i don't think so.
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when i think about who has the upper hand, i think of the prosability -- say you have two prize fighters who fight for ten rounds, one wins by a single price and both spend two months in the hospital. i don't think anyone is going to win in this scenario this is lose-lose all the way around >> jeff, following up on that, though, this idea that the chinese could become sort of more nationalistic in their tone and even translate that into somee talk about boycotts we vshaven't seen anything like that yet does that become a possibility as this goes on? >> it definitely does. there's a major change that needs to be noticed within the past day the communist party propaganda department every day calls the media and tells them what stories to cover and what tone the articles we've seen within the past day are very intentional, a high-level change of policy. there's precedent. you can look at 2012 with japan,
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2017 with korea where they're not just official actions, but there are investigations, boycotts, protests, even violence i'm not saying we're going down that road, but i am saying this change in tone is the first step in that very unfortunate path, and i hope that china, just as they thought carefully about this message, will think very carefully about where it goes. when those events unfold, very hard to undo the consequences. >> we were mentioning the nationalist tone that their state media at least has taken as far as i've seen so far, they don't reference specific companies yet. but if that were to happen, how quickly does the street take down numbers on individual names? >> i think it would happen almost immediately this is in a broader context where morgan stanley thinks the equity market is a little overpriced coming into all of this and priced to perfection. wilson, for examples thinks we're about 5% to 10% over
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the hit would be pretty short term of course, it is totally possible that both sides could undertake these sort of non-traditional measures one thing that's sort of under the radar here is the u.s. increased its own activities with regard to non-tariff business years the new reforms that came through last year are already starting to interfere in some ways in multinational transactions that's a feature that's probably going to endure one way or another that we have to account for. certainly that's part of another ramping up if this thing goes on for the rest of the year >> if it looks like it's working to the president's mind, does that mean he's more open to taking on the europeans and cars, for example? >> i don't know that these things necessarily influence each or with the exception of the idea of a market feedback loop to the extent markets are lower, we think that changes the payoff in the president's mind of having to deal with china and the payoff in general of escalating further markets lower might sort of help
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defer auto tariffs in lieu of that, we think the u.s. is pretty apt to go along with auto tariffs. mostly because they're at an impasse with europe. >> jeff, what does that look like, if we impose those tariffs on imported cars, how does europe react, respond? what about the economy >> they're going to respond very negatively frankly, the best and most effective strategy dealing with the china situation is for us to unite with europe. your cannot do that for reasons like this, involving the cars. that's just going to gum up our relationship unnecessarily and cause enormous problems, exactly when we don't need them. we don't need to be picking fights with all of our allies when we have real differences with countries like china. >> despite this, dow up 213. jeff and michael, thank you. when we come back, firing
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back at amazon walmart announcing it's rolling out next-day delivery. get your details on the cost free obviously, and the cities, when we come back. ♪ ♪♪ ♪♪ ♪♪ the cloud i need? it has to keep up with sales, supply chain, inventory - ♪ ♪ it needs to track it all, from cincinnati to singapore. ooo! ♪ ♪ and protect it all. customer records, our financials, they better be secured.
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one top strategist says the recent tour moyle in the markets is creating a big opportunity for investors. find out what 'she watching on tradingnation.cnbc.com more "squawk on the street" is coming up.
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welcome back to "squawk on the street." rick san tell any live on the floor of the cme special guest brad tate, global head of fixed income. >> good to be here, rick. >> just the man on just the day. you have a global perspective. it seems as though everybody is trying to handicap what happens to the deal. i don't know, president xi and
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trump, it's hard to get inside their heads. that's where the deal is let's look at other things there has been an ongoing recalibration of supply chain lines and also in my opinion a whole move to maybe diversify away from china. those things aren't going to go away no matter what happens with trade between china and the u.s. >> exactly it's been going on for a while, at least since last october when trade started to heat up at newberger, a number of my colleagues travel every year, that's where we hear about supply chain diverse kachlgts based on the latest dust-up on trade, it will excel braet from here. >> off camera we were talking. we've all had a lot of bosses. some we like, some we don't like you still do a good job. they're your boss. >> exactly. >> maybe a lot of politicians and leaders around the world don't like trump, but in your travels, how do they feel about
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the issue that trump wants to tackle the china issue at all. >> there's a lot of support for the action in europe where they may not like him as president of the u.s., but they respect what he's doing with china on trade. remember, europe has a number of economies very dependent on trade. >> germany is the number one exporter to china, netherlands number one importer from china. >> very good italy a huge exporter of luxury goods, as is france. china is a big destination. >> if your opinion, if this continues to be an unknown, so we go to the g20 and don't have anymore information than we have today, is the stock market going to be as for givigiving oranomay >> i think yesterday could be the precursor. six to eight weeks from now, we're still at an impasse with no progress. >> basically g20 is a window,
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when they're together, that's still within the terms before all of the next wave hits, considering the first wave is still on its way here, and that takes a couple of weeks. >> exactly things really heat up late june, early july that's the window for imposition that's when the g20 happens. that's when the excitement really gets going again. >> brad, thanks for all your thoughts on china and trade. join me next time when we know more maybe we can talk about the deal back to you, squawk on the stre street. david, trade continues to be an issue with this market. we've got senator marco rubio coming up. the gop used to feel a certain way about trade and tariffs. now that'shiin sftg. we'll see if that calculus is shifting that's coming up on squawk alley.
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welcome back to "squawk on the street." i'm kate rogers. stocks are trying to claw back some of the steep losses we saw in yesterday's session but the s&p 500 is still sitting 25 points below its average
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consumers discretionary stocks continue to be one of the relative underperforming groups. the sector is a fraction on the day but a steep decline for ralph lauren is capping gains, reporting a 7% drop in north american sales last quarter. macy's and nordstrom's under pressure today, hitting 52-week lows back to you guys walmart beating amazon to the punch, rolling out next day delivery for 200,000 items our courtney reagan has more >> hi, carl. this less than a month after amazon told investors it's spending $800 million just in this quarter to try to get to one day shipping for prime members. walmart is offering next day first. walmart put out a tweet the day after amazon made its announcement, you remember, suggesting that one-day shipping was coming it's here. walmart is rolling out free next day shipping with orders of $35 or more starting today in phoenix and las vegas, and then
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southern california in several days from now, with a gradual rollout in the days and months to follow, meaning 75% of the u.s. will be able to get next day delivery by the end of this year so to start, between 150,000 and 220,000 items will be eligible for next-day free shipping walmart's head of e-commerce mark laurie told me that's just a start. for context, that's more than the 100,000 items a typical walmart store sells. laurie says one-day delivery has been part of the plan all along so there hasn't been and won't be what he calls a step change when it comes to costs to execute the faster shipping. lori explained it's actually less expensive for walmart to ship one day rather than two days how is this possible well, the eligible items are located in the same fulfillment centers, so they'll chip in one box. and most of the orders are going to be coming from six main fulfillment campus than are located close enough to consumers to make one-day ground
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shipping quite feasible. but the big questions now are, will one-day shipping get shoppers to buy more will walmart attract new shoppers and will it hurt amazon? lori thinks it will be a positive change in consistency expectation for shoppers but retail experts say it's really same-day that will really make the dinnefference >> courtney, reading a note from our markets team, xrt is down 7% since may 3rd, this whole trade fight escalated. 83% of the etf in correction levels, down 10% from their highs. i wonder if this walmart announcement and the new fight for next day shipping, pressure on margins is coming at a bad time when they're about to face a lot more pressure on the trade front. >> right, so margins is definitely the biggest question when it comes to tariffs if retailers absorb it, margins
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will go lower. wall mart did tell us that this year, 2019, will see bigger digital losses than we had seen in the previous year but this next-day is more expensive, are you paying more for it on what you had planned on lori said no, this has been part of the plan all along, we had to get the infrastructure right and the resources and talent in place. at least as of now, walmart reports in two days, they're not changing their guidance for margins or the expense of this next day but you're right, this comes at a tricky time for retail >> interesting thank you, courtney. at the nysc, a big afternoon. we'll continue to monitor this rally after two very large down days, sarah, what will you have in the closing bell? >> beyond tracking every ticket to the close, we'll talk to the
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ceo of tilray, stock is up 3 1/4 percent today. we'll talk to the ceo of sinclair, talk about his $10 billion deal to by the rsns, the regional sports networks from disney, the market liked that work, he'll also weigh in on disney's contract with hulu. also just in, david favor. just having you on the show will be big >> thank you so much for saying that, sarah. >> you're enthusiasm is riveting "squawk alley" is next, don't go away -driverless cars... -all ground personnel...
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