tv Squawk on the Street CNBC June 11, 2019 9:00am-11:00am EDT
steven moore, thank you for being here >> economy strong. >> wilfred frost thank you. >> i will be watching you on the opening bell you are wonderful. make sure you join us tomorrow, "squawk on the street" is next ♪ good morning, welcome to "squawk on the street. i am scott walker with jim cramer at the new york stock exchange, carl quintanilla is at the conference bringing us great news and david faber is off. the s&p 500 would open higher by 19 points. dow jones and industrial average good for about 160 at this
moment and the nasdaq is up another 76 our road map this morning starts with the stocks surge all time highs. it is longest winning streak big techs, big problem why the new head of instagram think breaking up facebook would make it a less safe space. share of beyond meat taking a dive after a downgrade the top is in only after 600% rally. someone else i know has been talking a lot about beyond meat which we'll get to a minute. this is a beyond incredible rally. the dow is up 1300 points in like six days. >> scott, great to see you first of all people came in your show describes it all the time. people came in short this month.
why? because may is so bad. >> why would they? >> the president goes off the real with mexican tariffs. things are just too out of control. they just have this whole washington, it is just nasty today how does things reverse itself the risks are in we get a piece out i don't know if you saw a 50% increase break up google. 50% increase if it breaks up what can i say apple is coming out saying don't worry about it, we can make our phones anymore netflix didn't have anything to say because nobody cares about netflix. >> all is well in the world again. >> this morning our president who's donald trump tweeting this could euro -- it smells like
bmw. he has not put on new tariffs on how many gigs? >> less than a handful >> he loves tariffs. he thinks tariffs are the answer remember ai was the answer for us the answer for him tariffs so i am looking for tariffs and i expect for it to happen because i know he does not think it is fair or unfair by the way, bmw and mercedes is opening gigantic plants in mexico, why not in michigan? >> when you are talking abo about -- talking about tariffs and actually putting on tariffs now are two different things you may have heard a zone caused by talking about tariffs on mexico or not putting it on mexico >> there are questions about
what the deal really is if anything >> the next time he says okay, let's put on tariffs on germany unless they come to the table. no, he has not come to the table. >> it is a market stock that puts tariffs on. >> tariffs on bmw and mercedes the president thinks when you put tariffs on, the other country pays and lower the budg budget it was not isle. you may offer an alternative fact shift it is largely i mperical and
incorrect. >> well, the market, the s&p is up 5% already in june. it is the best start since october of 2011. >> remember what happened in 2011 the market collapsed i don't think it is going to happen here. i do await some bad ideas that are coming by the way, goldman has been doing well i just really feel that -- steve liesman says it is a good time i thought it was interesting he's a saturday night fella. >> the market largely started to come backup in june because there was a belief that the fed come to the rescue if things got really bad >> don't say rescue. >> jay gave you just enough to
be able to say if things get bad, we are open mind. ken fisher, i really love him. the short term people do pay attention to it. the short term people determine where things are going we have a robust nasdaq tech market the thing that hurt us was faang. amazon, what can i say the stock is up everyday on absolutely nothing.n netflix is good. apple is able to make all at once the chinese have been relatively quiet, have they >> they have >> xi better show up at the g 20 >> i am not worried because the president is a great friend of xi can you give me other facts? >> he says if xi does not show up at the g-20 there is going to be
more tariffs again, he showed because he did not want mortar rife tariffs. >> his great friend xi is going to cave. what does it mean if he caves? it does not matter >> again, what can happen to apple and apple's stock is say nothing is going to happen if xi says we are done with apple in our country in return of what's going on -- huawei, companies are finding ways around huawei. >> apple is up 10% this month? people started thinking well, wait a second, this stock gotten too cheap and the sourcing story today which they can source all over the place and people could
not think they could i think a lot of people have been quiet that really helps. scott, the billboard went down senator warren's billboard went down senator warren spends a lot of time -- she's not your friend. >> tech and focus -- >> i think she wants to lower stoc stocks, senator warren what is she doing? >> some say if she or bernie sanders were elected president, they can come down to 30% or 40%. >> bernie sanders, all the stocks will be distributed to everybody. >> it is a perfect segway for our next conversation. let's go out to the code conference in arizona, carl is there with the highlights. >> reporter: scott, it fits right of what we are talking about at the code conference here in past years, guys, the conference largely has been
about innovation and elon musk talks about mars and jeff bezos talks about robots this is about breaking up a big tech the head of instagram over facebook was asked a question that's becoming pretty familiar to that company, what would we do and what would be the benefit of splitting up a company like facebook take a listen. >> if we split it up it may make my life easier and it will be beneficial for me as an individual i think it is a terrible idea. depending on what problem you are trying to solve or approach issues like hate speech and you split us up, it will make it more difficult >> so that's the viewpoint we heard a couple of times now. in a moment we'll hear some
sound from youtube and it is a pretty good lineup here in arizona. cindy holland, the vp of original contents of netflix we'll talk to david solomon and tomorrow we'll have on our air from delta, virginia if the doj were to help split it up, we are dealing with issues and big tech whether it is privacy, whether it is our own regulators, that has basically has of any conversations of new products and markets, innovation and growth which was the hallmark of this conference for many years >> it is fantastic yeah, when i always thought what happened in this country was we were doing poorly.
we made sodas and we are pretty good in movies these companies are aired to the world with the exception of china. no one is talking about innovation i am waiting for people to say when are you going to quit don't you hate your boss hey, there is just everywhere. we think the ftc and senator warren for all i know there is the only thing that unites trump with the democrats is hatred of these companies. democrats are too powerful >> i am not hear pricing are built in the stock right now it is all election year bluster
and at the end of the day, the company -- everybody is going to focus on what got these companies here in the first place. they're going to focus on what they are not focusing on at code >> these stocks are becoming radically cheap, verses octa. these are companies selling 50 or 60 times earnings exactly. >> i will look at facebook look at alphabet verses clorox you want cheap facebook and alphabet. clorox and hershey, what did hershey invented clorox -- >> they did put almond in the
hershey kiss >> that's very true, swiss have not invented anything. i have gotten tired of how great clorox in it because they got extra smelling these companies are selling 30 times earnings, what are they producing? what are they producing other than water >> oh, i was waiting for q q and i are both processing that >> sometimes scott, you have to sit back and let the magic happen >> exactly >> exactly y carl sort of reference enterprise verses consumers. >> i was going to bring up the fact of consumers ipo, lyft got a big upgrade today. the price targets to 80 bucks. that stock is up at least 3% it is not as bad as we thought
now there is a reason to buy hey, we are not as bad as we used to. let's get some of that stock beyond comprehension meat >> we'll get back to carl in a minute when we return, beyond meat. we'll fill you in. let's take another look at the futures. market is going to extend its winning streak at least at this moment and easily, too the dow would open higher by 160, s&p by nearly 20. live from post 9 at the new york stock exchange when we return.
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be priced in." w you have been talking about this day for a while, jim >> it had $3 billion market cap. they are rational. we have seen stocks like this. we know it is hard to get a borrow you went to borrow stock before you short it the highest in this market so things have gone nuts i am glad ken goldman stopped it they're the banker it is absurd it is not just because it is okay you have to have massive number of finishxes. you need lettuce and tomatoes. let me tell you how to make the beyond meat burger totaste lik something. pa put a slab of bacon on it. >> they say they could bet plant based bacon. they'll make quote, "media
version burger." >> really? we need that the impossible burger tastes better it has a -- it feels a little more like meat >> is this all cows and methane? what's the deal here >> how much downside risk do you think on the stock >> millennials and vegans and vegetaria vegetarians. they love this i am sorry mr. musk here, you are fantastic. right now they are fixated on this it does not matter if you like it or not. >> vegans and vegetarians like it >> they like chemicals i rather go eat a dow chemical burger than beyond meat.
they have a lot of polly-propane in that. >> i had it, it is not that bad. >> what? it is chewy. chewy. >> how do you make a non-meat burger meteor? >> they add taste. listen, the impossible burger which i got in san francisco at the oracle stadium, it was killer tasted tasted fabulous. the worst is the nestle burger >> up next it is cramer's mad dash, and we'll be counting down to the opening bell. let's take another look at the futures. dow has been down seven days in a row. you got the best start of the month since october 2011.
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could not source anywhere but china. i think you see six today and not just three >> six >> this is a second term when it gets to third term, it will be up four. home stretch, five to six. >> when matt boss talks, people listen >> there is still a short position and that's pathetic the family dollar is turning arn around and i think it correlates with that. dollar general is like this. dollar tree is pretty darn good. making it a correlation move >> is it more of your view of the space in general rather than a particular stock that looks ready to break out >> the space in general, the market is costco it is walmart and amazon and it is a dollar tree >> walmart is 107.
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you are watching cnbc "squawk on the street," live from the financial capitol of the world, opening bell is set to ring in less than two-minutes. wells fargo downgraded, net interest margin is intensifying. do we know what's happening with interest rates the ceo search is not helping either the longer it takes, the more negative it is on stocks >> yields almost 4% which is
ur usually a good side. this is kicking astock when it is down. it is not like wells fargo >> it has been an easy target. you drop to 44 and you upgrade there are structural issues with the whole bank the bank is trading up and early market why is that? maybe the environment and people feel it, the economy can go a little stronger and repeal of disasterous increase >> it is not you know of the things you said are true they have been going through this executive search for a long time is the banks troubled? i think the bank is okay i think tim sloane is doing okay >> that was the straw that broke the camel's back maybe >> do you think she's rooting
for the blewruins? >> no. >> do you think she knows who the bruins are >> i don't think she heard of brad marshawn. >> all right, the bells are ringing. you are watching the opening bell at the s&p 500 at the cnbc realtime exchange here at the big board. it is a blank check company celebrating its recent at the nasdaq, china index >> that's what i want. analytic chinese stock because xi says he says. the president is great friends with xi. i can't think of a more perfect
stock. mark cuban has had unbelievable comments about how this is the way if you want to shut down chinese commerce stop having them bring -- >> that may be next? who knows? no more chinese ipos in the u.s. >> if you go with mark cuban, you may say that the president is really focused on mexico tonight. >> well, he was focused on the feds earlier he said they had no clue because inflation is so low and it is a beautiful thing. >> i feel bad for jay powell, he's a perfectly nice guy. >> you said something that caught my attention. you said quote, "disasterous rate increase. >> oh, that rate increase was awful. every single indicator that i have is slowing. every one of them. there was not anything -- when every single indicator is slowing, that's not what you need a rate hike
do you agree with the president now as they should cut rates >> absolutely. i don't think the president has the right to criticize the fed he did pick powell over yellen i thought yellen was doing a good job he has every right to criticize the fed. that rate increase did slow down the u.s. economy more than it should the president has a scenario where the economy is going to continue to get strong and employment number was not good >> goldman says you are not going to get any cuts. >> no. >> they thought you are going to get four hikes >> these guys are rolling the dice, really like the quiji board goldman does not know. i hope carl ask them how they're doing with that credit card with apple. that's a real non sta-start r n. >> what happens if you get no cut? >> you get no cuts as the economy is accelerated
>> the market will expect to cut until we get a cut because the market wants -- the market is kind of torn here. we don't have a lot of inflation. we got a nice goldilocks thing going. things are fine. i know people don't want to hear things are fine. >> maybe they're better than fine >> what are you going to do if you have a stock market hit another high you have a return of what some call animal spirits. you got sales force and tableau and raytheon and utx is doing deals. >> in the 40 years i have been involved in investing. there are fine periods we went through the uber period which i was worried about. february was really bad last
year then we had a nice run for a while. as long as powell just says look i on moderate data, we can go higher if he says data accelerate accelerated -- if he says i am watching and i am monitoring, that's a win it is a win. >> do you need to cut rates when things are fine in our words >> you are not going to do anything if things deteriorate is less than fine then we have powell on our side >> the president wants you to do some things. >> he wants us to do a lot of things >> he's not the only one >> some is calling for 50 base for july >> he's doing that powell has our back. we'll get another week of employment number for the month of june then powell will cut do you remember in december, you
were on and it was the low >> christmas eve >> that's when the president should been tweeting the heck out of this. if we get another week of numbers, right now we got powell where we want it >> the president thinks he has everybody right where he wants them with the tariffs. wilbur ross was on the network this morning listen to what he says >> i think eventually this will end in negotiation the g-20 is not a place for anyone to make a definitive deal a trade deal that's going to be thousands of pages at the g-20 and it will be a 40,000 foot level some sort of agreement on a path forward it is not going to be a definitive agreement >> i hope he's right
he's inaccurate of world war ii was -- tunconditional surrender. i think the president would like unconditional surrender from his great friend, xi >> if all xi has to do to avoid additional round of tariffs is to show up i am betting on xi, right? >> showing up is being on the president's side >> i am betting on the market. if you think xi is going to show, there is not going to be additional round of tariffs. what's going to get in front of this rally then? >> new supplies. they dump these new unicorn supplies we don't have good lock up, that could happen
what if the president does say tariffs coming on germany. >> if he comes out and says listen, germans are not paying their fair share instead of one, he thinks it is 1% for nato. they have to step up to 3% where it is going to put tariffs on bmw and volkswagon >> by the way -- >> he wants tariffs so he really likes tariffs. >> he likes the power he wheels with them. there is been -- people used to weaponize. >> what is that? >> i think he thinks that tariffs get things done. mexico folded. he thinks the chinese is going to fold. when he threaten tariffs people freak out. he's right if there are tariffs in all of our stuff. everyone >> ours will be next you are in the restaurant business >> i think it is really important to note that the
president is absolutely right. there are tariffs anywhere he's just talking about reciprocal tariffs i think that's fine. i think the market is not ready for tariffs on bmw or mercedes or volkswagon or maybe lamborghini. >> speaking of getting clobber, beyond meat is down almost 12% >> look, i don't like the mark cap. i think that's wrong as you said, we were gaining momentum what were we gaining momentum on we don't have a lot other than the fact that you break up alphabet you said it earlier though you said there is a put under the market >> there is. >> you will have the possibility to continue to go up and up. if there is a meeting and the g-20 with trump and xi and any
sort of progress >> there is great process. >> so that could be problematic because i see a real slowing this is why hershey is at its high and a lot of stocks are at its highs are stocks that are indicated. j&j backup to 40 where it was before the reuters and new york times -- some of these stocks are coming back. i think we should move onto qualifying >> is that because they told us to >> you are the regular here, i am just filling, i can go all day. let's go back to carl quintanilla, he's in scottsdale, arizona, at the code conference. carl >> reporter: jim always knows how to set us up big part of the conversation is this need of talking about the value of various pieces of
alphabet they put youtube's value at about $200 per share the ceo of youtube was here at code, i would say at times it is uncomfortable conversation about the potential break up of the company and what would it look like and the company gone under fire or content they did not remove the reporter who worked for box, the same company that hosted this conference and owns repo >> people want to change society for the better but it has all these unintended consequences. what i would say is important for us to be able to work closely with these different providers and different government and be able to explain how we can really implement it in a reasonable way and how to make sure there are not unintended consequences they did not think about.
>> response to a question from peter of the intendunintended consequences youtube is the best purchase that google or alphabet has made in the past 20 or 25 years here they are juggling all kinds of game theories regarding regulations and break ups. her appearance here at code was thrown into some drama because of various security risks that she's under as ceo of youtube. >> she's an honest person doing a good job her sister is great, her parents are great professors she to me is really the wrong person -- if i have a criticism about her, i think they should have bought the last nfl contract, i push them to do that the fact that she's being hectored is a shame.
i would like to hear it. we are working hard to try to make it right. remember they used to have contents susan, wow, she can take anybody's head off she's really smart i really like her. >> that made headline last night as we get ready for today, david solomon of goldman you want questions of the credit card with apple. that's coming up later today >> carl, they have to stop saying the following you know we are working on it. i want to know how many days they have and their algorithms for finding out what exactly is their loss ratio i want to know whether it is going to be capital one without the fees i am tired of them saying
nothing and apple saying nothing. i am tired of them saying hey, don't worry about it because i am worried about it. you can't just launch that i think a lot of people want the apple card, they do not have the infrastructure to handle the card no more dodging. >> the days of dodging are over. >> that's good >> no more dodging no pressure. no more she sahe says she says . >> carl, we'll be back to you. i don't think these companies have much of a clue when it comes to policing their sites. >> marc benioff, they think they are a house of idea and everything is fine and not a house of truce >> they don't know who to let on or kickoff or when to do this or that i don't think much of them have
any clue until after the facts c i don't think the fact that susan is a target of the program. they should have someone above her who says okay, we just cannot, who's the client we got to be true to the customers and everything will be fine netflix, true to their customers, facebook? who's the customer we don't know. amazon, who's the customer we don't know. we'll sell you out there is no selling out at netflix and sales force. marc benioff is not going to sell you out facebook will sell you out in a heartbeat, right >> if you say so >> i am saying so. >> let's go to the bond pit, rick santelli is at the cme group in chicago hey rick >> guys, it is so fascinating today to watch the yield curve
it is flattening a little bit. why is it so important seeing two-year note yield leading the chart to higher rates. look at the chart starting on may 10th, it is not quite a big bottom, we'll get to that. it is certainly turning. you can see the reversal it is all about the fed. equities are looking better. the notion of the fed and built in into the keg. it is changing every minute. if you look at the ten-year, now you can see what i am talking about. same date, may 10th, more define double bottom. it is the bottom, we are going straight up in yields. it is a bottom nonetheless
now foreign exchange is future ca fascinating. there is going to be much worse for not having that chapter. the euro currency is doing better because the notion is st stimulus whether it is china or europe or loans. reflecting on this chart starting on may 1st, i will look the reversal of that the year of kuscurrency -- you see and this is really a drop pattern for the dollar index many believe the euro can test 114 which means we may have another penny and a half or so to the outlidownside on the dolr index. >> rick, thank you very much uber shares are rallying this morning. it is still down 4% since the ipo. the ceo is weighing in on the company's stock volatility since going public take a listen. >> i think that's the timing of
our idea was very much align with our tariffs war the same day. i think we got caught up of a bit of a market quarrel. there is nothing you can do of that in short term the market can be a voting machine i think we are focused on the waiting. we have a six-month mock up. nobody cares what the stock says right now. it is a bunch of traders going in and out if we work on building a great enterprise, the market will take care of itself >> all right, that's dara at the economic globe of d.c. it is all tariffs. >> the first quarter was not a great quarter. there were people who thought of major buyers and there were no major buyers last quarter showing of deceleration
a lot of people felt, it could be facebook. let's price it so it does not go nuts but the tariff data. >> tariffs or no tariffs, there are still legitimate question of a road map of profitability. >> if it is an ecosystem, it goes higher. everybody wants ecosystem. they want an ecosystem platform. all ridiculous things people say on-air they can't be a catalyst >> lyft is up 3% and the upgrade we spoke about earlier $80 price market >> united technologies and raytheon keep ongoing down >> a different perspective on beyond meat. we'll talk to former whole foods ceo walter robb.
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all right. welcome back showing you these two stocks here sprint is down more than 2% right now, jim, as at least ten ags, attorneys general, according to some published report, are filing to block this sprint/t-mobile deal. >> you buy t-mobile either way t-mobile wins either way the company has done incredibly well it can do it with sprint, without sprint i like the combination because i worry about 5g we've really put the hammer to chinese 5g with huawei it's really effective. no one can sell them anything. it's like you go to jail if you sell them stuff. you're supposed to get approval. 5g, we have to be team leaders it's really important. >> jim says buy t-mobile and that stock turned from red to
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>> what's on "mad money" tonight? >> i have eqt tonight, oil and gas. >> we'll look forward to that. >> the wells fargo having trouble getting a ceo. i'm a little jammed, but i can do that job in the interim. >> well, that's one of the reasons why there was a downgrade today on wells fargo so there you go. that stock was under a little pressure, too. >> carl coming up with more highlights from the code conference jim, we'll see you tonight keep it here (henry) i thought it was unfair. when-- when you hear those words that you get diagnosed with cancer. (osamah) successfully treating it still remains one of the most enormous challenges facing us today. we realized that, if we developed the technology that could take 2-dimensional patient imaging and convert it into 3-dimensional
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♪ good morning welcome back to squawk on the streak i'm sara eisen here with scott bopper in. carl quintanilla from the code conference in scottsdale, arizona. we'll take a look at the markets now. going for six days in a row for gains for the s&p. seven days for the dow nice 100-point rally june looking a lot different than may
nasdaq up .75% our roadmap for the hour starts with the on bubble brewing, shares falling on beyond meat. stock is up nearly 500%. former ceo of whole foods is with us. >> the dow going for seven stocks are rising as trade fears with mexico calm and hopes of lower interest rates from the fed. >> big tech, big problems. live from the cod conference in scottsdale we'll hear what leaders have to say about regulation, risks in the industry and a lot more. all-time highs back within reach. dow on track to extend its longest win streak in more than one year the president taking to twitter moments ago saying, quote, good day in the stock market. people have no idea the tremendous potential our country has for growth and many other things with us now, equity strategist
david costin welcome back. >> nice to see you thank you. >> can this rally continue at these levels >> three big issues that are related that investors are focused on we have trade. there's rates and there is growth in terms of the economic activity which trump is just referencing. so we have those three things. sometimes when there's less concern about those, the market rises. you said seven days in terms of a rally here and when there's a greater concern about those issues, the market tends to move lower at this juncture we're moving more on the upside it's a risk out in the next near term would be more tothe downside we look out towards the end of the year, 3,000 would be a target for the s&p 500, and that's modestly maybe 3% to 5% upside when you include dividends. >> is that a base case at this point, 3,000 on the s&p, if everything sort of goes according to plan with the
potential for upside. >> 3,000 target has been in play for the whole year in terms of since the start of 2019. i would say that it remains the base case forecast. >> even though you guys at goldman sachs don't think there's going to be a rate cut this year, pretty contrarian call >> if you think about what the dynamic is around the fed and the futures market the futures market is currently pricing the likelihood of a cut in the fed funds rate by july. not in the june meeting, but rather the end of the month, end of july. historically, not a lot of examples of this but if the fed does not go there, they would have to walk back the expectation in the investor mindset of a hike in that environment, only a couple of examples in the past the equities don't do particularly well that would be the baseline expectation. so near term, if you look out over the next month, if the fed would have to walk back or if it chooses to walk back that
expectation, that would be generally more of a headwind for stocks. >> i'm wondering how the kostin 3,000 target matches from the hats yas no cut from the fed if you get no cut at all, isn't 3,000 a grave risk how do you get there >> the growth. the economy is growing the economy is growing a little below 2% in terms of a run rate of growth. that is certainly sufficient when you think about most revenues of corporations grow at nominal gdp. if real gdp is growing around 2%, inflation roughly 2% that means your 4% top line revenue growth for most companies. you have companies buying in shares your earnings trajectory is around 6%. you have 6% in terms of growth rate that's what takes the market higher the market interest rates around 17 times forward earnings, so trading at a reasonable valuation. bond yields are at 2.1%. it's still support valuation wise of a market that's higher. >> it all makes sense until you
say, well, the market expects multiple cuts and isn't there going to be a potentially big adjustment if there isn't? >> as indicated in the past, 1990, 1992 where the fed of basically the expectation of the futures market receded from the strong expectation of a cut to no cut that environment, that's been a little headwind. that's why near term, think about the tactical trading, that would be more of a risk. if you look out longer term, there's growth economic expansion now is ten years old, likely to continue. >> does it matter for your s&p 3,000 target whether trz goes through on the next tariffs, $300 billion on china? >> tariffs is certainly one of the big issues, rates and growth of the others. we think about the tariffs, well, you saw expectation that was going to be tariffs on mexico that was of great concern for a lot of fundamental reasons
that got pulled back or delayed or now off the table, if you will that's important to the market moving higher. i think that environment we're looking out a few weeks. we have the g20 meeting towards the end of the month. >> you're assuming it doesn't happen. >> the base case scenario, i'm assuming, is that there is some tariffs on the amount of goods so far we've had a tariff on $200 billion in imports, but not necessarily the full amount as a base case. certainly a risk which would put some downside. >> you think there's going to be a deal that helps you have sort of this optimistic view that you do on all accounts, not only the market, but growth. >> they should think about the 70% of the revenues of most companies are domestic we think about what should portfolio manager be doing in this environment, you want to be thinking about more services based companies as opposed to goods producers, so you have less exposure to the risk of
tariffs, more domestic exposure as well. microsoft is an example. you have the financials where it's domestically facing, services-based business, less exposed to tariffs we're looking at where is the ability of a portfolio manager to reduce risks in an economy that's growing at a modest pace, where valuation is at 17 times earnings, there's not value support for the market at these levels. >> do you put retailers in that basket of less exposed or more exposed? because if they go through with the next tariffs, they're highly exposed. >> retailers, different aspects of that. in some cases production of products is coming not so much from china where the big focus is on tariffs. generally speaking, if you can find some other areas of the market, consumer discretionary would be preferable. media and entertainment, less at risk of tariffs. that would be within a consumer discretionary part of a portfolio. that's an area that would be of
greater preference. >> what if i wanted to play the risk-reward dynamic differently and go outside the u.s you like any markets outside the u.s. >> i think from a sharp ratio, the u.s. still offers a better prospe prospect there's a lot of social and political issues in europe there's not a technology sector there which is i think restraining the overall level of the market 5% of the european index is technology domestic it's closer to 15% or 20% depending on how you define technology issues in asia in terms of the trade. i would say are broadly speaking, the risks are less relative to the rest of the global economic opportunities set here in the united states. >> finally, the domestic trade isn't working too well if you're looking at the russell 2,000 those are the companies that are supposed to be largely insulated. >> you have the russell index rebalancing that will take place at the end of this month, starts july 1st you have 44 new companies
entering the russell 1,000 the big ipos will be new constituents in the index. number of fund managers already bought those in terms of the ipo and the distributions. s that an area historically that has been generally outperforming. >> david kostin, always good to check in with you goldman sachs chief economic strategist. let's get over to carl at the code conference from scottsdale, arizona. >> we are at annual conference code con big presence from fanning. we talked about interviews with facebook and alphabet. on a related note, twitter was here the lead counsel talked about the ompanies jack dorsey's meeting with president trump and twitter's focus on improving civility. cara swisher tried to get into that. >> we talked about a number of different issues we talked about the platform the use of the platform around
o specifically talked to him about improving the civility of public conversation and how important that was it was a wide ranging -- talked about a lot of things. it was also about 30 minutes so how much can you really talk about? >> when you talked about civility, could you sit there straight faced. >> she's doing it now. >> i'm excellent at straight faces. >> it's true. >> i think it was important for jack to bring this topic up. that was his purpose in attending these meeting, was to impress upon the president how seriously we take these issues and also to talk about what we're trying to achieve, whether that's our work around election manipulation and preventing that from occurring or about improving the health of public conversations and why that's important to us. >> interesting exchange, sara and scott, as we talk about the president's tweets just from
morning. busy morning a data presentation about the state of the internet and the industry we'll talk to david solomon of goldman sachs later this afternoon. ed bastian of delta as we hear a lot from these companies, but also old school and banking companies trying to get a piece of the mindshare of the piece of the technology that's all part of the code conference big day ahead. >> i know it's early but i wonder how much discussion or whether the tone will be different this year given the fact that -- i can't even keep track of everybody who is investigate gaiting some of these companies, there's a house panel today on free speech you name it. do they feel threatened? >> i think -- the answer is yes in that it's become the topic of conversation as i said to scott earlier this morning, normally you come out here and talk about new products i remember the year go pro came
out with the drone that was the lead on the first morning, this drone from go pro. wow. new markets, international expansion. all that has been shoved aside because of the issues that you're describing. there's only so much bandwidth that tech has. right now it's being consumed by the threat about china, about breakups, about regulation, about user content, things we talked about on the periphery a couple years ago but now at center stage. >> look forward to all the great coverage and interviews from you guys out there, carl we'll see you in a bit when we come back, beyond meteorologist bubble, shares up 500% since the ipo falling this morning former ceo of whole foods will weigh in still higher across the board. squawk on the street, back in two.
my degree from snhu has helped me tremendously. the flexible class schedules allowed me to go to work full time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we at southern new hampshire university are the ones who succeed. we are the ones who break through.
you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore... excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass. welcome back to "squawk on the street." president trump continuing attacks against the federal reserve. yesterday we spoke with former treasury secretary larry summers. here is what he had to say about the president's criticism. >> i think there's something depraved about his degree of dictator envy, his idea that somehow the fact that we have an independent central bank, one of the stronger financial traditions that the country has
had and that free countries all over the world have moved to, the idea that that's some kind of impediment i think is really a very, very dangerous idea. >> summers on fire, very critical of trump nomics and especially the war this president has waged on the federal reserve. mike santoli with us taking a look at the anatomy of a comeback. >> the tone of this comeback is somewhat encouraging, at least to keep the stock market at these levels we had a 6.5% decline from the beginning of may, down through very early june. we've had this comeback. here was the downswing this is from may 3rd to june 3rd. the middle line right here is the s&p 500. that's in white. the orange line is the s&p low volatility index, the defensive stocks you see how they did fine.
they held the market up, kept it from going deeper. s&p hb, that's the more aggressive stocks, the high beta stocks, they had a tough time of it that's natural as the market goes down. they did their job now, look at it since that point. this is basically the last six days or so that we've had this comeback and, of course, we have the reverse, finally especially in the last two days, we've had the more aggressive tocks, the high beta stocks leading the way. you have semiconductors, the transports yesterday that were doing their part the question is can the aggressive stuff, the more cyclical ones carry the weight as treasury yields rise that maybe you're going to have to offset those defensive stocks pulling back a little bit. that's basically your fix right here you see it's not as dramatic on the comeback but the s&p, high beta stocks up 7% and obviously you're having some underperformance in the defensive stuff right here as
the overall index guys, keeps bumping up against that 2900 level that we hit this morning. >> i guess a related point might be that bond yelleds have found some sort of stabilization which is why the defenses aren't working as well. is it enough of a confirmation from the bond market to get a green light for stocks all during may we talked about the big risk factor as a warning sign. >> you're still seeing a lift in bond yelleds this morning. i think there's room for yields to keep moving higher before it pinches anything the two-year note is at a high for june, 1.93% this morning, it bottomed below 1.8 at some point the ppi was on target, 2% core wholesale inflation. are we going to talk about maybe the market got too aggressive in pricing and fed cuts that's the toggle i think we're on. >> whether jay powell was right about that transitory comment.
>> when we come back, former ceo of whole foods on the beyond meat craze has the company announces its new meatier berg ger. carl sitting down with the chairman and ceo of vox media. chairman and ceo of vox media. don't go away. is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. every day, invesco combines ideas with technology, data with inspiration, investors with solutions. because the possibilities of life and investing are greater
welcome back to "squawk on the street." i'm carl quintanilla live at the code conference at the venetian resort in scottsdale, arizona. john ford is here. high temperature today, 107 degrees. got the short sleeves going. >> absolutely. >> we talked a lot about the company we've heard from so far, facebook, twitter. but susan woj jik i can's
talking it what was the mood. >> i think everybody was tense for her. she seemed to be bag on her heels for the whole conversation granted, she was taking incoming pressure from just a number of different fronts she was talking about the possibility of a breakup she was questioned about that. didn't really have an answer for that a lot on content policy though and how youtube makes decisions about what to leave up, what to demonitize, whether it's capable of figure out what content is out there. here is her response to a question about exactly that, how they deal with content take a listen. >> at the end of the day we're an information company we have the access to google, some of the algorithms there we have the resources to deploy. we've committed to having over 10,000 people working on controversial content. so i see how much progress we
have already made. we made changes to our recommendations algorithms as well for not violative content but borderline content we've seen a 50% reduction in the views coming from recommendations from that. >> that access to google, carl, is a key point here. you heard this -- echoes of this not only from susan woj icky, but also from instagram and amazon this idea that the fact we're connected to this bigger company is good. it allows us to get ahead of problems, to have answers to some of these issues even when she wasn't directly talking about don't break us up, that was the implication. >> you mentioned andy jassy, ceo of amazon web services who took a nadella-type tone meaning you respect the client and their willingness to share stuff with you, in return that you get some of their information, very much
a currency exchange of sorts. >> he's really sitting pretty right now. amazon web services, growing 41% year over year more than a $30 billion run rate just for aws he wasn't under the same kind of pressure because that's an enterprise conversation. in this era of internet of things, people reason sernt about where their data is going, it's interesting he talked about how customers need to be able to trust the provider take a listen to a little bit of what he said >> the promise and the capabilities can provide customers is really amazing. you're going to want to make sure whoever you use, that you understand their rules on privacy and how they manage their data and you have to believe they're going to keep the data secure. if you don't trust that company, you shouldn't use them. >> the difficult thing here,
carl, is the things that are being sold to consumers, these smart speakers and the homes, some of them have screens, they're set up as being simple on a telephone metaphor. a lot of people aren't thinking about where is this data being stored, what other data is it connected to maybe enterprises companies are more savvy, but the way companies are using these cloud platforms to deploy these information gathering systems, i think there's a question of how much are they going to have to disclose about what they're keeping on you. >> you go through netflix and their suggestions for you. that's not random. it's coming from behavior patterns that you are providing the the company. >> at least on netflix it's based on behavior patterns on netflix that you're providing to the company. i think peep's concerns are, when you're dealing with google, with facebook, a lot of people don't realize how the like button is able to track you across the web, other things you're looking at. people have become aware of retargeting, hey, that thing i was looking at on amazon or this
random site is showing up in facebook are they following me? yes, they're following you if you use a device in your home, i think it's unclear how much they're followed there, too. >> we talked with cramer about where liability really lies in terms of regulation, crackdown from governments here and abroad is the line enterprise and non-enterprise, is it about companies consumer facing and those are the ones that need to lobby up >> i think it depends on what type of regulation, what type of changes you're facing. andy jassy said, well, if we're forced to break up, we'll break up we're a u.s. company we'll do with it there is potential impact for andy jassy and aws if certain regulations come down. certainly on the privacy side, that seems to be more of a consumer focused issue. >> obviously taken over the
conversation at code in ways we haven't seen, you and me, in half a decade of coming to these conferences. scott, a lot more to come later this morning up next, former ceo of whole foods is with us to discuss the fake meat kraes and more shares of beyond meat are down this morning 20% let's get a quick check on where the major averages stand this hour as well a little steam coming off the open dow still up trip digits s&p up .5% nasdaq, tk continuing its out dealer performance, up .75%. "squawk on the street" is back after this good morning ever.
to ten years in an iranian prison for cooperating with a foreign enemy state in october of 2016. he just landed in beirut vice president mike pens said monday he supports the administration's move to prohibit u.s. embassies from flying the rainbow pride flag during lgbtq pride month telling nbc news, quote, it is the right decision >> the state department indicated that on the flag poll of our american embassys, that one flag should fly and that's the american flag, and i support that red sox legend david ortiz has been transported to boston by the team plane 24 hours after he was shot in the back at a nightclub in the dominican republic he was taken to massachusetts general hospital and the surgeon who operated on him in the dominican republic says he expects ortiz to return to life the same as before following recovery we wish him the best that is the news update.
i'll send it back downtown to you, sara. >> thank you beyond meat shares falling this morning. jpmorgan downgrading the stock to neutral on, quote, purely a valuation call remember this is one of the more bullish analysts stock down 20% after the huge record setting rally from the ipo price. stock now only at 440% since its debut last month joining us former whole foods co-ceo robb. >> i think to stock has legs i think we're in the early innings. they launched their burger pack in whole foods yesterday or two days ago at ten bucks a pop. i looked at the unit movement. it's already pretty darn good. this is not a late inning thing. this is early on they've opened up in amsterdam
they have that facility working there. there's demand worldwide i think the investment community is saying we want some growth. we want a growth in the food sector where is the growth and here it is valuation will sort itself out we all know that it's a longer thing. that's where we are. >> is it difficult to quantify the total addressable market that really exists for something like this? you go from running a supermarket chain to you have your legs in the restaurant industry we were talking earlier as well. so you know the market from all aspects well. >> remember, this is an ingredient, a consumer product and also for the restaurant channel. they have multiple paths to market i don't know brands as well as i know retail. but i just think it's got a fair amount of potential because the demand for plant protein, both alt dairy and alt meat is huge. >> does it pass the walter robb test of being good for you, clean? i hear a lot of people saying, there's still a ton of calories
and there's chemicals in it. what do you think? >> in truth, the con argument is it's made up of a number of isolates from pea, rice and sun flowers. but i know they're moving in the direction of it being a complete whole food it has a lower environmental footprint, so it's got that going for it nutritionally, i think it's a little stronger in terms of salt and sodium and fat i'm a whole food guy, so that's kind of my first choice. >> how do you think ceos of supermarket chains, grocery stores are thinking about a company like this and products like this more broadly >> it's clear to me the capital markets have woken up to food as a space in general they've been silent for the last number of years. a lot of money pouring in, i think almost 300 deals last year it's clear to me that they're saying food is part of touching health, touching technology, all these different sectors. i think it's got a real future.
>> when you walk in the grocery stores, will you see all the meatless products all next to each other or will there be one or two winners out of the pack >> that's what's interesting it's actually in the meat department here is the alternative protein and the rest of the proteins most of the action in new food, if you will, is in the alternative dairy and alternative protein. that's about a third to 40% of that it's being merchandised as a protein. the customer is saying i want that choice. >> that's kind of what i was going to ask, how high is the barrier to entry to make these things >> this has been ten years in the making for this product. it's not like it just showed up yet. it takes time and investment there's been a lot of money that's come in before it went public hey, for whole foods, remember, we were kind of in the shadows for ten years. the same sorts of questions that are being raised about beyond meat were raised about us.
hey, you guys will never have enough to sell, you're going to run out. once the competitors get in, you're going to go down. very analogous for me when i think about the situation. i think seth and ethan have a lot of promise ahead of them the market has woken up with this stock so you're going to see a lot of competitive entries happen over the next number of years it's going to take a few to get it right these guys have a nice head start. >> so from in the shadows to the intense sunlight of amazon on whole foods now, there's nowhere to hide anymore. has amazon made whole foods better or worse? >> i believe it's made it better i believe the fusion of the digital and physical through the prime now has digitized. the physical offering we've developed over 30-plus years and made it more available to more people i think it's a big question you're asking. we could go a whole show just on that, but on balance, it's taken the whole foods quality standards and brought them forward to a much wider audience retail is in a tremendous state of disruption right now.
you're seeing amazing changes like we saw yesterday. walmart says we'll put it in your fridge. you have to work for walmart for a year amazon says we're going to drop a drone at your house. are i don't okay with that >> not in new york city. >> we're seeing iv, traditional mid market stores. we're seeing people say i've got to try to find a way to innovate and get some growth. if i cost-cut you have a kraft heinz situation where you're going nowhere. the innovation is the order of the day. i see a tremendous amount -- i see capital markets saying i want to get in on this. >> i want to ask you about some of the news today from amazon, they're getting out of the food delivery business, so competitive with the grub hub. what do you make of the fact that they're bailing >> let's be clear. they brought deliveroo which the largest in the u knchtsz
remember with prime through whole foods, you can have your food delivered within an hour if you choose to do so. they're still delivering foods, just through those other mechanisms their effort at amazon fresh didn't really succeed for the last ten years there are some areas where i think they cut their losses and say we'll focus over here. what i make of it is this is an incredibly robust area nobody has figured out the financial model yet. nobody has figured it out. the only place it sort of works is when you combine them with a physical store so that the inventory, the supply chains can be merged. what i make of it is a rational business decision on their part saying, hey, we'll focus on these other areas. >> what about uber eats? isn't it growing like crazy? >> that's part of the larger uber story i don't know your views on that. to me i don't see a pathway to profitability there, but i don't know uber eats seem to be -- the customers clearly said i want my stuff -- probably you, sara -- >> i order a lot of delivery that's true. >> i think they're one of the
folks that survive z because they have the capital behind them grub hub is doing well, door dash is doing well look at the valuation on door dash the business model hasn't been proved out yet. >> i find it getting more expensive by the week, these new restaurant deliveries. >> a starbucks latte and have it delivered and the cost was the same but the customer is now in charge the customer is saying let me have the option. >> always good to catch up with you, walter. >> thank you for having me good segue, talking about food delivery. uber eats an companies like that, speaking of ipos big bucks for investors, lesley picker is back at headquarters following that story. >> it's been more than 30 days since uber's ipo they've passed the certain deadline to sell more than a
billion of stock in et pretty much every ipo it allows underwriters to purchase 50% more stock and offer it to other investors in the market. in some cases that allows the issuer to raise more money in uber's case, it was the venture backers that would have cashed out in this deal. softbank, and several uber co-founders were among the many investors looking to sell through the greenshow. the option expires 30 days after the debut. underwriters won't typically exercise that option unless the stock is trading above the ipo price. as we know, uber's stock price didn't do that last wednesday it came close, sending the day at the $45 per share offering price it tumbled after that. instead the greenshoe was used to support the stock after it began trading. the insiders waiting to sell have to wait for the lockup agreement to expire in another five months. >> lesley, thank you so much
now back to carl quintanilla at code with a look at what's coming up. carl >> when we come back this morning from the venetian live from code, vox chairman and ceo jim bank kof will talk about the changing media landscape you don't want to miss any of the action live from the venetian and code con. don't go away.
joining us to discuss the changing economics of digital media and big tech's growing influence, vox media ceo jim bankoff. congratulations on a conference that feels bigger. >> it is a little bigger here in scottsdale, a great crowd and so much to talk about. >> so much of last night's conversations have been about companies on the defensive from regulation, privacy concerns, content concerns how much of the conversation we're used to having about innovation and growth and new markets is getting displaced >> i think some of it is tech goes through cycles and sometimes there are big cycles of innovation. we'll have jet packs today, new forms of transportation, new forms of ai. we're always going to focus on what's next. but we would be not diligent if we weren't talking about how tech has really taken over so many aspects of our lives. in fact, our recode brand and vox brand have come together to
really talk about how tech influences every part of society, every part of politics, every part of culture. the tech story is not just about devices, not just about servers and software it's about our lives, and we have to reflect that if we're going have an honest conversation. >> is there an argument starting to coalesce about how companies will respond if these threats come to fruition in the next year or two? >> well, there's good discussion on stage yesterday we had leaders from instagram, youtube, aws, from twitter. and everyone has different perspectives i think the constant theme -- and there are some hashtags about this stuff -- we're all trying to figure it out. when we have leaders of the companies saying we don't have it right, we don't have it right, i think that's a persistent theme that no one has the roadmap for the future and there needs to be conversations. that's what this conference is all about. that's what we try to do with many of our vox media partners,
too, provide that forum. >> big tech overall, lobbying dollars have gone 3x in ten years. i would assume -- is it fair to say they're girding for battle, or are they still doing white papers is it that kind of mentality >> i'm sure they ears assessing all their options and trying to figure out what they can do best for their shareholders, their customers and different stakeholders but there is a big reckoning, a reckoning of their responsibility another constant theme is we're about 10, 15 years into this cycle of these major fang companies growing up this is a year of humility and year of reckoning for these companies trying to understand what it is that they built which i think undoubtedly -- i'm a tech optimist. undoubtedly we've done a lot of things to advance us, to help so many people, give a voice to so many people in particular in social media but along with that comes a lot of responsibility. they haven't always lived up to
accepting that responsibility. now you're seeing them try to grapple with that, try to do that, understand what it means for regulation if they don't do that a lot of them are asking for regulation which i think is interesting. but one way or another, they have to solve it >> let's talk digital media for a moment you've been busy on your own projects growing within vox. >> yeah. >> what lessons are you coming to in that space >> well, we know there's a lot in media generally all the big mega mergers happening. if i see rupert murdock and fox feeling they have to consolidate with disney, i know a company like ours has to innovate and create opportunity we have big growth areas in our company, whether it's podcasting, where we have vox media podcast network, whether it's our for ray into tv where we have a huge hulu deal partnering with david chang, chrissy teigen to produce a
whole food network within hulu, or whether it's focusing on our advertising business, digital growth and other areas we have a technology business called chorus that provides a platform for digital publishers. we're looking to consolidate in different ways sometimes it's about buying companies. sometimes it's about providing platforms for advertising and technology so other companies don't have to make that investment themselves. they can get better product from us at a cheaper cost. >> in terms of creating content, you mentioned david chang and teigen, why would you want to get into that in a wharkt where people say we're in peak content mode so many hours, we stream more than we watch television now. >> at vox media we pride ourselves on being the leading modern media company what does that mean? that means we tell stories wherever modern audiences want to consume them. they clearly want to consume them not only on websites, on podcasts, but on streaming platforms. we have to be there if we're going to fulfill our mission
there are huge growth opportunities. look at the billions and billions being spent these companies are coming to us because they know we're talking to their audience. call it millennials, cord nevers, cord cutters we have brands that resonate, we have talent that knows how to produce it and we want to be us. >> interesting one last question. you've had an interesting month in which you've been working with your own employees. really over issues of pay, right? >> you know, i view it as making it a stronger workplace. all sorts of things. yeah, we just came to a great agreement, great in terms of making our company stronger and making our employees having getting them a better work mace. we assigned an agreement on friday and we were really excited to do that we think it's going to heed to a better workplace and a stonger box media and help us fulfill our mission. >> were you surprised by, i don't know, the way they coalesced on social media to talk you to, the boss? that's a new way to handle your labor disagreements, right >> yeah, you no he what?
i think in a mostly respectful way they took to social media to tell stories about why they love working and how they think box media is a stronger play i think all of them start off by saying i love working here and here's how i think it can be even better. and i'm glad that we were able to work with them to do just that i couldn't be more thrill. >> juggling that and the conference and coming on here, jim, thank you very much >> carl, my pleasure thank you for joining us here. >> we love it. sarah, over to you >> all right thank you, carl. see you at the top of the hour want to give you a check on where the major averages stand dow is up. although, we've seen the gains more than cut in half really over the last hour or so up 38 points still most sectors in the s&p 500 are green lead by communication services and consumer discretionary
200-day and 100-day moving averages, longer to near term measures of momentum facebook is a big part of that story due in part to positive comments that is lifting alphabet as well a key sector to watch in today's trade. i send it back down to you at the new york stock exchange. >> yeah, we're watching the gains. they faded a little bit. dow up 17. "halftime report" coming up in an hour. >> we'll be here we'll kick around what dohm is talking about. the facebook upgrade is interesting from moffett nathanson, highly respected firm they list four worry points in the past when they downgraded the stock. they say those eased now which is why they upgraded it. april apple is up 10%.
financials led the way in june as well. we'll assess where we're going >> it will be interesting to see if they can escape the overhang of regulation and the political football going into the election. >> yeah. whether it's election year bluster or if it's really something that has legs. we'll see. >> coming up on "closing bell," we have another analyst making a big call today, the one that downgraded beyond meat he'll be hear to break down the call he has a good record so far. the stock was up 113% since the overweight initiation. >> the stock is getting smoke today. >> on the downgrade. >> the person wall street turns to on politics, ian bremer predicting a geomill recession and also more on halftime. carl, what's up next from code >> sarah, if you come to code, there is one person you want to talk to and that is kara swisher. we have her live next when we're back in scottsdale [leaf blower]
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