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tv   Squawk on the Street  CNBC  March 27, 2018 9:00am-11:00am EDT

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"return to paradise" >> i may have seen it. who's in it? >> vince vaughn is also in the film unbelievable makes you think, i promise. >> i don't want to think like you. >> not like me you won't. i promise. >> all right >> join us tomorrow. watch that movie in the meantime "squawk on the street" begins now good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer good to have the band back together looking for gains since march 9 after monday's huge bounce europe up nearly 2%. yield's up a bit dollar and oil, too. case schiiler is up 6.2 year on year in january. our road map begins with the rally revival. futures pointing to another
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higher open extending yesterday's huge gains the biggest percentage rise since 2015 >> plus, trump made me do it a whistleblower telling uk lawmakers the u.s. election was key to his decision to reveal facebook and cambridge analytica's controversial data practices. >> and apple's battle for the classroom. a major product unveil this morning at a chicago high school first, wall street pointing to a strong open after the dow posted its third biggest point gain in history. an hour from now we'll get consumer confidence data jim, you said how important it was to hold certain levels. >> it did it i think a lot of people are saying, okay, i missed yesterday. let me find something i can still buy. you can always buy facebook, by the way. >> excuse me >> there's always a chance to buy facebook zuck is the gift that keeps on giving in terms of buying opportunities.
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oh, i'll piss off london there are things going better than expected. this is not a day that typically should be a good day after such a big run. it should be a day where people take profits, the market is uncertain. i don't expect the opening to be robust, but the big leaders like apple, f.a.n.g., y.a.n.g. names are good >> should there be take away from the level of volatility we have experienced over the past few months >> yes i can't take it anymore. >> i think the average investor is saying last year was the year of capital maybe this year is labor >> last year nothing happening except mild gains or this kind of year. >> i think the president says we
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gave the ceos corporate tax reform and deregulation. now it is time to fulfill the campaign promise for the, work. no one is ready for that we loved 2017. bring back 2017. now steve mnuchin calmed the waters. >> on the sunday morning shows. >> saying everything is fine, it's just bluster. well, no i think it's not bluster i think the president is a tough negotiator what happened is we've got a good deal with south korea that was important it was really not acknowledged this is the year where they break a few eggs to get omelets. it was great last year we had omelets without -- we did egg beaters, i guess
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how didn't we break eggs last year >> low cholesterol this year, not so much. >> i needed you to play along with the analogy >> before all your tortured analogies. >> you would have given me -- >> egg beaters. >> we are about four minutes in. i was going to give you the first and get back to it. >> i believe mr. met may be in our presence soon. today or soon. i have heard he may be coming for a visit. >> i have three words for you. trust the process. >> trust the process >> what are we, marcus limonus >> no. mar co foltz. >> jim mentioned facebook. he's been all over it. there is pressure. the whistleblower testifying this morning before uk lawmakers
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in london. some say mark zuckerberg is declining to i a peer in the british parliament the ftc is investigating privacy practices and separately a coalition of 37 state attorneys general now demanding answers about the manipulation of user data by cambridge analytica. >> you said on twitter this morning, jim, because there's been no third party audit announced you would only not do this if you had something to hide. >> you have to bring in somebody like when fox was under attack they brought in paul weiss paul weiss went and found things you could count on him to find things ken fineberg would be terrific gmignition switch. mac caca macanda, 9/11. you have to bring in someone who says, well, they brought in the guy i would expect have him or her investigate everything when that's done, the congress
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says, well, gee, that's who we would have brought in. we're fine. >> wells fargo did that, too >> did you read the report it's devastating >> when you're wrong and you bring the outside counsel in, it's daunting. i remember the wells guy saying, did you read that report i read it over the weekend it was awful if facebook's report is awful then the stock -- that's how the chips fall >> right back to the bigger question for investors. having spoken to a couple who were battered and bruised. >> after five years of making a ton of money >> enormous amounts of money given the moves up in the stock price. those who believe it won't impact revenues, that overall people won't really leave the platform and that advertisers, given the scale, the efficiency
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of the platform also won't leave. >> it's the return on investment that's good for the advertisers. >> right the return on investment is strong. >> right >> $11 next year in earnings is that a real number? >> it's below market -- i don't think that's right geez, i was thinking nine and change even there you have a country valued well under kellogg, well under mccormick. great number, by the way you can put the frank's on a lot of things. there is no doubt that this stock trades as if it was the old greyhound bus. that's what you get. they don't want to come clean. i thought it was great they apologized it was a good first start. now you need the special prosecutor then you have a market multiple. isn't that something >> there's no market multiple. people will tell you it's safe
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others won't touch it at all is zuckerberg going to show up now? >> he's been asked by the parliamentary committee in the uk declining to attend. we are hearing from a committee chief who says given the extraordinary evidence we have heard it's astonishing that mark zuckerberg isn't prepared to submit to questioning. >> it was an ill-advised decision by his group. i don't know him personally. i would send him to the men's wearhouse, just for the record this is easy to clear up appoint someone everybody respects then you move on. >> right. >> unless there is something bad. if something is bad, the stock could go lower did you see the volume yesterday? >> yeah. >> geez. you would think everybody who wants to get out has gotten out. yesterday there was a story. i watched. the stock dropped eight straight points the word came out that there was
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an ftc investigation i was laughing because we already knew there was an investigation. but that didn't insulate this puppy. i mean, wow. >> so also asked to testify by grassly's committee along with the ceos, jack dorsey from twitter and the ceo of alphabet as well. >> those guys look great by comparison. >> google actually. >> do you think dorsey will be loaded for bear and say, listen, i want to say bitcoin and send square up another five bucks by comparison, dorsey will look like a true statesman. he's never been to men's wearhouse. he'll look great he'll have a t-shirt on and look like bond. >> you have seen the net favorability poll ratings on facebook down 28 points twitter down seven points. facebook 28, twitter seven >> look, people may have cooled
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on social media, but how do you cool on social media go on social media and say you have cooled on social media. wow, rebellious. >> my 12-year-old spends an enormous amount of time on instagram. >> that's not facebook, according to most of the kids i talked to. >> enormous. >> we had this discussion yesterday. stick it to zuck by switching to insta. >> some think they should change the name of the company. >> i'm thinking of getting myspace going again. >> instagram is the side business >> this is part of people's lives. i think if you asked the majority of people why they are leaving facebook, they would say, well, there's this thing -- the guy -- red hair, blue hair, he -- pink hair. zuck's been hiding and, well, i'm switching to instagram do you think anybody understands this it's like anything else involving the russians you know what?
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i understand the russians in syria maybe. did putin find out that i liked -- i use colgate and therefore he said, you know what that guy is going to vote for trump. honest to god, most people don't know why they are upset. >> it's true. >> they don't know why they are upset. cambridge analytica. people have a short attention span. >> here's what wiley, the guy with the pink hair, told the committee. listen >> i wouldn't say it's just because of donald trump. but donald trump makes it click in your head that this has a wider impact i don't think military-style information operations is conducive for any democratic process whether it's a u.s. presidential or a local council race. >> that's the broader point. whether military-style information operations is conducive to the democratic process. >> if they appointed a special
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prosecutor to see if they are still doing this stuff, giving it to people you don't want, that's important >> to say we are not going to continue to have the larger conversation about privacy and that it's not going to continue to be an issue, of course it will be an issue in europe they have been way ahead of us. >> there is no -- it will continue to be here in the stapts as well >> there is no expectation of privacy on facebook. only an idiot would think there is i took a law school class and slept through the whole thing. what bothers me here is once again the people who are upset are trying to figure out what cambridge analytica did to make it so they voted for trump because they didn't. the people who seem the most upset are the ones -- i don't know anyone who's said i'm waiting for this i voted for trump because
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cambridge analytica figured out what i would do and changed my mind has anyone thought that that may be remember the first thing facebook said is it's no data breach that was ill advised who told them to do that >> does it matter though if an advertiser says we have changed the way p & g is apparently getting more scrupulous. >> ask amy chang on the board. you'll find out that google is a lot better than putting a flyer in a paper i saw -- i watched the march madness. i said, well, geez, apple is doing saturation bombing that makes sense you do a little bit on the web, a little bit on tv i don't know anyone saying, you
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know, i'm not going to buy anything when it's so easy to click. i bought things from facebook. you know what? at the same time i was subject to some optives because i bought some things. so what? there were people angry, very angry. i understand that. will they be angry if facebook appoints this person i told facebook, i told those two, why not come on and apologize. they did that. now they appoint a special guy appoint a law firm, sherman & sterling and say, listen, we have nothing to hide let's do that. then we win. like on facebook it's right i'm giving them an opportunity to make $100 billion they'll listen i have to do it dragging and screaming, but they'll listen.
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they always do >> when we come back, arizona suspending uber's self-driving car tests following the fatal crash last week. coming up, we hear from the ceo of waymo and when we come back, apple's pitch, a look at what to expect in chicago today. the premarket looking steady nikkei up steady overnight ♪ ♪ adapt supply chains based on trends, tweets and storms. and make adjustments on the fly. ♪ ♪ the ibm cloud. the cloud for smarter business. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. fidelity. or you could you cexperience it for realnship
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apple is hosting an event in chicago today likely to reveal new education-focused product. tim cook and the team expected to discuss ideas for teachers and students some say there could be a lower cost ipad in the $250 to $300 range. we look forward to getting a peak at it during "squawk alley" today. a lot of speculation in advance. >> yeah. the ubs evidence lab which i guess is ncis or something. >> sounds like a new series on cbs. >> yeah. ll cool j. my daughter met him and was like, do i call you mr. cool j
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they say why apple was confidence predicting a doubling of service revenue there is a little bit of issue with the evidence lab by saying this is not a reason to own it there is talk about how the service will help. i have said if you add 30% of your users in the last two years they are going to use the services this is the -- versus spotify or download pictures. i hope, david, you have downloaded your pictures you can lose them all. look at the service revenue and you won't look at the charge do you download pictures on the cloud? >> they're up there. i download some of them. i think i pay $2.99 a month. >> what's the gross margin on that >> 100%. >> you bet that's why the ubs evidence lab which is csi is saying that's a good business. evidence lab checked off on it
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do you think they checked off -- >> who is the star of ubs evidence lab >> chris o'donnell gary sinise? >> we're in the ubs evidence lab. >> just watch march madness. they'll tell you one of the 50,000 ads they run including the eight-minute break with a five-minute ad >> we'll get cramer's mad dash and count down to the opening bell after the break coming up on "mad money" don't miss jim with the ceo of nvidia. >> oh, my. >> do you know how long i worked at that? >> wow >> yes jensen huang do you believe it? >> that's a mic drop we'll look at the futures as well back in a moment
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we have seven minutes to the opening bell let's get to a mad dash for this tuesday. red hat. >> he usually appears on "mad money" but my feelings weren't hurt one bit red hat reported a great quarter. we've got a bmo. >> yep. >> deutsch bank and piper all raising the price target this is how to on board to the cloud. it's terrific. i have to tell you, if you like the onboard to the cloud go buy vm ware because of the tie-in
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with amazon web services these guys are free linux bring on to the web cloud king one of the things i want to emphasize is if you onboard which is a term i associate usually with united airlines if you onboard to the cloud you really -- it's going to be done with red hat or vm ware. these are cloud kings. i anointed them cloud kings while you were away. red hat is one of them it's the easy way to get on the cloud. free, too. >> their growth is commensurate with what? growth of what >> of the cloud. google -- >> cloud adoption by corporations >> david, did you read my mind it's digitzation, the cloud. azure. yesterday there was a piece you missed microsoft will be a trillion dollar stock morgan stanley
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these are the reports that you get after being down so badly on thursday and friday. red hat, it is now loved it's amazing what was it? >> not loved. >> hated >> i prefer not loved. >> okay. not loved. >> much nicer way to say it. the opening bell coming up lots of stocks and news to get to when you get back to us on "squawk on the street.
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you're watching cnbc's "squawk boon the street." the opening bell in a few minutes on this tuesday coming off the massive rally, the biggest one-day gain for the s&p since august of 2015 we talked yesterday about how m & a continues. in fact, again today, glaxo buying out novartis. >> making a lot of moves it was an important day because of the finish line deal. why? because finish line is in macy's stores why? because it was gave up for dead. i was doing some work. do you know express has no debt? got more than $200 million on
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the balance sheet, valued at $500 million fossil, unbelievable >> right. >> just want to make sure you are not talking about scrips, but retail. >> yes retail better balance sheet than you think. even zumi's. they hit a 52-week high yesterday. >> i don't know what that is >> that's impressive >> yeah. >> dsw, designer shoe warehouse. >> that i know. >> boosted the dividend. 4.4% guess, 52-week high. the mall is back even if gdp didn't get it. what's that face i gave you empirical research. it took all night and you that's your response? >> some malls never went away. some are completely going away
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the malls aren't back. the ones who didn't go i wa way. >> i'm going down to see kohl's. health and wellness. kohl's never had to close stores [ bell ringing ] [ cheers and applause >> when you go to kohl's do you notice the bargains? >> i went to a kohl's eight years ago. >> you did >> eight or nine years ago >> i buy all my gold toe socks at kohl's. it is worth it to go out of your way to save. >> it is >> kohl's is up 17% for the year >> that company is en fuego. the amazon deal is special look out for kohl's. >> there's the opening bell. s&p at the bottom of the screen. this morning it is green tree house group celebrating its ipo at the nasdaq. the shorty awards with the best
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in social media. >> can you use facebook? >> that's questionable microsoft leading the dow again today, jim another full percent. >> it's got to get to a trillion now it's a 6-1 shot to get to a trillion versus amazon i love this piece by loop capital. amazon is the beneficiary of facebook is there anything amazon isn't the beneficiary of think of it. >> i'm trying. >> amazon is the beneficiary of everything this is the kind of thing i read cambridge analytica debate another black mark for facebook. then they talk about youtube's troubles what do you do when you have those? you buy amazon >> you mentioned the consolidation in malls win dixie's parent, chapter 11 tough times in grocery that's an amazon story as well. >> we had a good story about kroger merging with target.
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>> i read that story. >> where would you put that? >> i don't necessarily believe that story, but i did read it with interest. then i moved on. >> right >> yeah. >> if you had been here maybe it would have been in denial. the target has a good delivery system kroger could tap into rodney may want to do that he's trying hard difficult to be in a department store. >> well the larger -- >> wawa just added 25 stores >> the larger issue of pressure on retailers as a result of amazon's increasing dominance is real. >> except for kohl's >> they have a tie-up, right what that does with whole foods, we know that i was away and amazon is the second largest market cap company around >> look out. microsoft is a mudder. >> they're coming up. >> they're a mudder. >> still in the fourth position. on alphabet's heels.
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>> it is letting the others go ahead. it will close strong it's a photo finish. david, i want to explain something to you. >> please. >> the same ill informed people who say i'm not using amazon for food, i'm going to whole foods are the ones that say, that's it i'm drawing the line on facebook call me instagram. this is when you get him out, right? >> right >> he had nothing to do with it. he didn't have pink hair. >> no, he didn't >> by the way, pink is from philadelphia let's get this straight. >> facebook is down again. we spent a lot of time talking about it i continue to hear from people who basically still say they don't believe engagement will be affected and they don't believe the roi for advertisers will be impacted at all. >> did you read the 78-page piece by moffitt >> i did not the three points of multiple you have lost already won't be gained back in a day, a week or
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a month. until they report another 35% number everybody will be like, okay, so much for that. >> you know, i'm not going to repeat what they need to do. >> don't. >> when they do it, i won't take credit i am a humble guy. >> they may have been thinking about it as well. >> no. >> appointing somebody to do it right here. >> unless the view of elon musk becomes more common. he was asked about deleting the tesla and facebook pages he said it's not a political statement. i didn't do it because someone dared me just don't like facebook gives me the willies sorry. >> do you know what gives me the willies? the city piece about tesla they said there is a 90-day window of potential selling. prompted us to open 90 days of down side catalysts. they didn't downgrade from neutral. why? they were worried about making a
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mistake. this is one of the great lines they said we really don't want to change the view that might mean we'd make a mistake. they are talking about model three perhaps maybe could be possibly -- you know, maybe disappointing. scenario one model three demand at the current price isn't that robust. well, that gives me the willies about owning the stock do you have the willies? >> not today. >> fair enough. >> snap not a beneficiary of facebook. >> another social stock with big names, high profile users have turned on it or said why they are deleting it, chrissy teigan yesterday, rihanna of course. >> i think snap is harder to use. they screwed up the interface. i like twitter twitter cleaned up a lot of the bad stuff. i had ned siegel on. he was at goldman. twitter is a guy
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they have done a lot right it's caught up in the vortex of facebook. >> here's a name i bet you guys haven't talked about since i have been gone ge down again. >> fell below 13. >> to me this is an amazing story. worth continuing to be focused on market cap of the company is now only $111 billion which is just stunning we are talking about what was and continues to be a widely held stock that's done nothing but go down 26% this year. jim, at $12.85 don't you finally say, okay, it's not too early. >> i take my cue from steve tussa who's been dead right. it's difficult to argue with his last piece about the down side the long-term care which was not -- look, it wasn't initially -- >> now i did a piece last night about natural gas.
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the world has turned on natural gas. people want nukes? remember when natural gas took 33% market share and was crushing coal and now -- no. the turbine business is big. >> in a month, month and a half or let's assume not long we get an announcement from ge that says we are pursuing a separation of the company in some way with no details. >> right. >> is that going to send up the stock? >> no. there is a problem with the overall coverage by the way, they still have polish mortgages the money. they got rid of the polish bank. so the polish mortgage is apropos. >> that was march of 2009. >> we were worried about the mexican houses. >> are you sure about that >> it's all right. >> really? >> yeah. >> the polish mortgages are okay, aren't they?
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fun. >> fabulous. the default rate there is unbelievably low emerson said they are licking their chops to buy a little of what ge must sell. this is david farr he's a gem but the sharks are circling. this is shark week you may have to spend four hours studying general electric. who spends four hours watching shark week >> the president. >> according to a source. >> he enjoys the sharks, watching the sharks. >> i love "shark week. did you ever see the il monstro episode? >> yeah. >> you bring it up and it's like a scab with you. you like to peck it. >> that's not true we have all followed the company closely. we all worked for the company at one time
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this was a widely held stock. >> it is a suboptimal situation. >> an incredible story broadly speaking in the business world. >> right. >> that's why i bring it up. >> yeah. incredible story. >> why are you looking askance at me like that? >> there is a little book called "appointment in sumar" by john o'ha o'hara there is a guy named julian english in the book. >> okay. >> he's ge i think when i look at turbines i thought maybe that could come back it was a big business. natural gas is on the decline. they do a good aerospace business they'll tell you that. i am worried about long-term care warren buffett i find him smart about insurance. oracle that was some bad quarter. oracle who misjudged the long-term care exposure they bought from aig. how do i know that ge didn't
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misjudge the exposure when -- i mean, not just the kansas regulators checked off i mean, come on. >> i hear you. >> if the late jerry fishman were alive. >> from travellers. >> would he check off on it? i remember he wrote a policy for me he knew not only the zip code but the building i think he would say i'm not sure about whether they have protected themselves he was a titan >> he was. >> great guy, too. geez nice man. >> we are going to continue to follow, of course, the trial going on in washington, d.c. between at&t and the government. >> how's that going? >> slowly. slowly speaking as somebody who was in the court this morning. >> wasn't the judge yelling at everybody? >> yeah. the judge was yelling at people. their take was this is going to take a long time amazingly slow thought it would be three weeks. now maybe as long as six
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we'll see how long it takes. an important witness in the government's case, a guy from sling testified a bit yesterday, more today although yesterday the government already came after one of the key projections that was made by the government's key witness about why prices would go up by 44 cents a month for subscribers of the company saying this assumption that 12.5% of your subs would leave if turner went dark was completely erroneous so at&t pushing back on different areas. they haven't started to present some of their witnesses. >> 5% yield, balance sheet. >> this will go on for a while this is not just important for at&t time warner it is important for whether comcast will come after the fox assets important for the fate of the aetna deal important for the fate of the express sig that deal. >> do you see signa coming back to my level? >> were you a buy?
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>> yeah. >> i've got that somewhere here, what the number was. >> 176. >> that's right. it was 176 there it is. 176.06 i found it. >> he has an elephantine -- when we look at the deal, david, that has the most chance of approval. people thought -- >> not that our viewers need to be reminded of it. many understand the significance of the trial it's not just about this deal. that will have broad ramifications for the media industry but it's about a lot of other things. >> well, i'm following it closely. if only just because it is amazing to me that they tried to stop it. the government plays for free. i never like to go against the government never. i thought you would talk about rubbermaid newell. well, just newell. >> the icon stuff?
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>> the board members. >> this will be interesting. >> they have to make disposals and don't forget lowe's. stay on top of lowe's. >> i look forward to that. >> good news on the hunt for a successor. >> d.e. shaw. >> losing some of the premarket gains up 25. bob pisani hey, bob. >> we have a global rally going on the nikkei up 2% europe up 1% we were a lot more up in the premarket. futures were about ten points higher opened about even on the advance decline line look at the sectors. modest leadership from technology which is always a good thing consumer staples, materials, energy flat considering oil has been rallying. industrials not doing much either i want to point out what's been going on with oil. we are not getting help from energy as a leadership group oil hit $66 intraday that's the highest level since
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the end of 2014. yet energy stocks if you put them up isn't doing anything oil is up notably this year. oil is up 7, 8% for the year the white line is oil. look at energy stocks which normally move roughly in tandem -- doing nothing. energy is down, oil up at a multi year high. this is telling you that the street believes there is no leadership in oil stocks at all and no reason to own them even with oil rallying. we need other groups to come forward and oil isn't doing it as for the broader market i hear people saying this is a technical concern with the market they are not fundamental concerns i don't know seems fundamental to me. we have trade issues, social media crisis with facebook, rising yields and a hawkish fed, rising deficits and inflation issues gee, this seems fundamental to me
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the market keeps bouncing back because some of the issues may not be as serious as we think they are take a look at the trade issues. boeing is the poster child for trade issues goes up and down on this if you look at the analysts the numbers have gone nowhere but up december 31 we had 11. $14 today. nobody is seriously taking numbers now. tweaking around this quarter this tells you while the market may be concerned about it the analysts aren't coming out if you let a big analyst say i'm taking down the numbers 10% for the year on boeing, that would be huge. nobody is doing that because nobody believes it will have a dramatic impact. now the market has been taking down the numbers if you look at industrials you can see what's happening in march. this topped out at the end of february when the trade issues started coming to the fore they are down for the month. it's not clear how much it is going to impact them when you have the sunday morning talk show discussions the market rallies so much. meantime the good news is one
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issue that's gotten away is the high valuations. we complained about that one in january. that's gone away end of january we were 18.5 times forward earnings for the s&p 500. we are at 16, the low 16s yesterday. now the high 16s close to historical numbers. and a quick note about what's going on with the ipo market bilibili trying a video sharing website. that's on the nyse for tomorrow morning. right now the dow up eight points carl >> thank you, bob pisani let's get to the bond pits rick santelli in chicago good morning >> good morning, carl. there used to be a time when the equities started to get a head of steam especially after weakness interest rates would follow it down and then follow it up. not the case if you look at a two days of tens it's mostly sideways and looks to be day 23
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22 in the can. looks to be the 23rd session tens are in the 2.80s as you see. pretty sideways there. doesn't mean we are not getting movement we are scrambling around the range. in particular two-year note yields down three basis points the curve is rather parallel with regard to a shift in terms of lower rates and how it affects parts of the curve even though tens minus twos is stuck in the 50s you want to continue to pay attention. many times hyg, the etf for high yield securities really does become an escape valve when equities get rough riding. it usually shows that. no exception on this move. look at the one-year to get perspective on the hyg we now basically have a double bottom there around 85 it will follow equities and if they continue to get their sea legs this most definitely will work its way back up you're seeing somewhat similar
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but muted moves on the actual spread relationships in the credit markets you know, there was a lot of talk at one point and maybe the catalyst for that inflation talk was the one wage report a couple of nonfarm employment numbers ago. you can't dispute. if you look at the year to date of break evens on the ten-year it dipped a bit. a big pop and we need to pay attention. yesterday's low since mid february half a cent up today and the euro versus dollar looks like a 1.25 double to. back to you, carl, jim, david. >> rick santelli, talk to you in a bit. when we come back we'll hear from the ceo of google's autonomous car company waymo and more ahead on facebook mark zuckerberg refusing a request to appear before british lawmakers. "squawk on the street" will be back don't go away.
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dow and s&p looking for the first back-to-back gains in the a rst few weeks, dow down toh.back in a moment with stock tra trading. don't go away. you know what's awesome? gig-speed internet.
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let's get to jim in stock trading. >> before, facebook volume dried up waited for that. could advance. here's the deal. abbvie bought a deal for $500 million, $600 million, and had a small cell part of lung cancer, and they chose not to be accelerated. fda, don't accelerate. the stock dropped like a stone i'm watching this. i'm holding a panel for healthy returns tomorrow >> health returns, yep >> impossibility for public company to try something new abbvie says it's not necessarily big cap pharma's fault they can't create something new this is what happened when they fail stock goes from 114 to 94.
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let's remember, don't be hard on big pharma they took a risk, failing, and got what happeopped. >> that's a good lesson. >> yes thank you. >> what's on "mad" tonight >> going down to kohl's in princeton, new jersey, one of the new kohl's it's my favorite places to shop. why? affordable, consistent, amazon deal, health and wellness. and then, people -- you look at zoetis - >> humanization of pets. i listen sometimes >> on top of the game. >> you got him >> doesn't have to leave the house for the pet thing. right there. >> i got the dog >> ted wells, facebook, returning the call i know they call him he can't call them that's the rules of the game >> being here at the close, mr. met will be ringing the closing
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bell >> how many games out are they >> see you tonight, jim, "mad m money," 6:00 p.m., dow vacillating, again, thursday, "mad money," jim with the ceo of nvidia, and "squawk on the street is back in a moment don't do away. you know what they say about the early bird...
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♪ good tuesday morning, welcome back to "squawk on the street," we're at the new york stock exchange, looking at the markets trying to put back-to-back gains on the dow and s&p for the first time in a few weeks. managed to dip into the red just briefly, oil behaving as well, dollar getting a bid let's get to rick santelli with breaking data at the cme >> march data. pretty realtime. talking manufacturing index, expecting 22 last month, 28, a bit of a disa poippointment, 15
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maybe some of the tariff issues crept into that. one thing they have not crept into, the consumer confidence for the month of march last month, some of the best numbers seen since november 2000 this month's march read, 127.7 now, that is down a bit from a very slightly revised. that number referenced released at 130.8 in february, now down to just 130, just, that's huge 127 partnersh 127.7, so it is a bit down they are lofty numbers, used to them since the november 2016 election, but they are powerful. 132.60 is the 25-year high, and that's what we are talking to, many of the numbers, that goes back to the fall of 2000 the response in the marketplace, it's kind of hard to pick it out. we are still a little bit lower in yields, but still in the 280s, only difference, equities don't have the horsepower and dollar index is up, close to
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half a permit. carl, back to you. >> thank you, rick santelli. road map beginning with the markets today. markets losing steam this morning after the dow posted a best session in three years. still, s&p is red for the month. what to expect for the today's trading next fallout for facebook continues with mark zuckerberg declining to appear in front of parliament what does the testimony mean for the social network a product announcement from apple. why the tech giant may be moving into the classroom later this hour first up, though, markets bouncing around this morning after the dow's third biggest point gain yesterday joining us, mona, u.s. investment strategist, and jana brown, great to have you here, good morning >> morning >> 2% moves two day in a row now. >> yes >> how much more difficult does it make it to decide on a call >> yeah. you know, i think last week's
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move was very much an outcome of the trade tensions that were going on this week's move i think is because the trade tensions have now dispated, and so, really, when you look at the fundamentals, we look at the earnings backdrop, the economics backdrop, quite robust for the marketplace and u.s. economy in particular 20% earnings growth, potentially 2.7% gdp growth. we're not looking at a down year by any means however, the one concern at this point in the market rs ha, have peaked here. 2018 looking okay going forward, fed in play, earnings estimates peaking out. that's what we are concerned about, 2018 looks fine, down the road, maybe a little bit more difficult, so expect volatility along the way. >> janet, on the trade front, all the fundamentals are embedded in the markets, but are we beholden to a chinese official that suggests trade tensions revamp? >> you know, the weight of the evidence is still positive i would say don't let the
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uncertainty put you off. most people want to feel certainty before they get in the market, and that's a mistake history's shown short term events rarely have a long term effect on the market, so invest based on what you know you know now what's doing well go with it get in i think it's a good buying opportunity. >> mona, back to this idea that 2018 is the peak, how do you position yourself short term, but how do you also as an investor position yourself longer term if 20% earnings this year is the top? >> so, a couple things we are telling clients. one, we think a shift to value names is kind of critical at this point in the cycle. we like, you know, things like financials and industrials, but generally as rates rise, value tends to do well we think longer term, winners from disruption are here to stay maybe not the facebook and some of the bigger fang names, but we like semiconductors, big in artificial intelligence, also
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consolidat consolidate, get better pricing power. longer term, we are actually focused on international equities they are behind the u.s. in their cycles some of them have very attractive valuations. we are looking at asia for disruption in growth, europe, dividend in value, and in the end, we like yields. yields are more attractive than the u.s. >> when i hear you mention "emerging markets and industrials," it makes me think you are not concerned about trade tensions flairing up, that the worst is behind us in terms of headlines and market reaction >> it's a tail risk for sure i do think there's a few outcomes potential for the trade war. one, you know, china and the u.s. negotiate behind the scenes as we've heard potentially from the "wall street journal" this week second is a base case you get $60 billion of tariffs from president trump and china retaliates with $3 billion the third is the bear case scenario, which is china really retaliates a little bit of that has been taken out of play at this point. the markets discounted that as
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well remains a tail risk, but not a base case by any means >> mentioning hesitance on fang. the stocks have performed multiples of what the overall market has done this whole cycle, so how cheap do they get before you get interested, if at all? >> you know, the actively managed funds in the china space have done very well, and they continue to be highly ranked in our system, as do most semiconductors and a lot of the tech funds i would say you can really avoid individual company risk by b buying basket of semiconductor tech spots in the volatile space, but i say look at the long term outlook and go for growth if that's what you need for your portfolio and ride it through. >> did yesterday's rally suggest to you the coast is clear by any means, or do you neat to hear
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preannouncements going into q1 results? >> yesterday's rally was just reaction to last week. i don't think we're in the clear by any means i do think we've already got a 10% pullback in february we got a 5% pullback roughly last week. the volatility's here to stay. >> you mean 600-point moves? what do we expect? >> i think when there is, you know, market moving news like trade in tariffs, absolutely, 600 point moves. just an ongoing market, you know, we shouldn't get that big of swings, but we see on average there's one 10%, maybe two 5% corrections in a given year. last two years are anomalies that's why this is normal and the market is adjusting accordingly. as fed raises rates, earnings, multiples compress while growth is great this year, multiples may not be as great. we are getting an offset >> and, janet, i mean, years with midterms in it have a
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scare, i mean, anice 15%-17% scare. >> they do and as mona said, corrections are an absolutely normal part of market action. we are way overdue, well overdue, and volatility's back, but that should not scare people off. again, it's normal every year, even the best years have substantial pullbacks we have had 10% now, but expect more that should not hold you back, though >> it sounds like you're a buyer as we get the pullbacks. are you? >> yes absolutely absolutely >> ladies, thank you so much >> good to see you both, thank you. >> thank you >> after quite an eventful day yesterday. after the break, mark zuckerberg declines to appear in front of u.k. parliament following the scandal, and what christopher wiley's testimony
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means. dow up 90 points, s&p up 7 and change after the largest point gain in history. more "squawk on e re" a nutethstetin obvious. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪
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let's get over to phil lebeau for breaking news for us on the autonomous car company, waymo, phil? >> waymo announcing they have inked a deal with jaguar land rover. this will be a jaguar car
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joining the waymo fleet of self-driving all-electric cars for the ride hailing service waymo and jaguar in the agreement extends through 2026, waymo gets 20,000 jaguar ipace vehicles they will be modified. you see the light and camera dome on top of the vehicles. they enter service in the united states starting in 2020, and, again, 20,000 through the year 2022 waymo launches the ride share service in phoenix later this year see the jaguar ipaces entering the fleet probably about 2020, maybe 2021 that ride sharing service will be in arizona. do not forget, guys, next hour, a first on cnbc interview with john, the ceo of waymo, talking to him about the new deal between waymo and jaguar, the expansion of the plans for a ride hailing service here in the united states, and a big deal
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between waymo and jaguar guys, back to you. >> wow >> phil, we are looking forward to that interview. that's must-watch tv are you going to take a test drive in one of the new cars >> reporter: eventually. eventually they still have to modify them it'll take a couple years. >> great, phil, thank you. phil lebeau. former cambridge analytica whistle blower testifying, and we have the latest, wilfred? >> reporter: we learned today that mark zuckerberg said he will not appear in front of the u.k. parliament's digital and sports committee the chair had this to say about that >> given extraordinary evidence heard so far today and the things we heard in inquiry, absolutely astonishing that mark zuckerberg is not willing to submit himself to questioning in front of this hearing given
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these are questions of the fundamental importance and concern to facebook users as well as to our inrequestquirinq. >> reporter: he's sending chief technology or chief product officer as he's not a u.k. citizen, he can't be compelled to appear. this comes as whistling-blower chris wiley said it was donald trump's election victory that made him come forward when he realized the power behind what he had done. he had this to say about the relationship between facebook and cambridge analytica. >> it is categorically untrue, categorically untrue that cambridge analytica has never used facebook data it is -- facebook data and the acquisition using the app was the foundational data set of the company. that is how the algorithms were developed. >> reporter: cambridge maintains they did not use facebook data
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and deleted what data they did have in 2015 when requested to do so by facebook, adding by tweet today, that christopher wylie was a part-time contractor who left in july 2014 and has no direct knowledge of work or practices since that date, guys? >> thank you back in hq and for more on facebook, joining us at post nine, cnbc contributor, ed lee. thank you for joining us today >> yeah. >> heard more about calls from lawmakers and other officials in the u.k. regarding facebook and cambridge analytica data scandal. i want to make sure i actually have this right because i think the list continues to grow that's in the u.k. here in the u.s., ftc opens an investigation. we got 37 state attorneys general looking for explanati s explanations, three congressional committees demand zuckerberg testify in person what more could go wrong here? >> the big liability here is if congress is not satisfied with
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the steps facebook took to curve this data theft or data exploitation, they are going to come in and regulate and look at the eu, see what they're doing, adopt a similar model. up usual for congress, but it also also signal a big political wave against tech companies, particularly social media like facebook there's a lot of political will to look closer at these companies and make sure they are not doing things in a way untoward we're in an information war. we're in an information war, and people's data, like, those are the weapons, right and so if you think about facebook, it's sort of like, ooi i'm not saying they are defense contractors, but hold important, important things that could affect the country in significant ways that's underlying a lot of it, a concern, a fear, and mark zuckerberg is not great at public speaking, doesn't like it, and this is one of the moments, the leadership crisis moments that if he does not step up, it could be bad for the
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company. >> i was going to ask you, what's the most legitimate reason for not appearing in front of the parliament? he's afraid of messing up? saying something he didn't mean to say >> he had an interview with my boss, karen swisher, after the scandal, and said revealing things this is sort of part and parcel to his personality when we asked, would you testify? would you go in front of congress and talk about what happened he goes, yeah, sure, if i'm the right person that was very revealing. like, how are you not the right person you're the ceo you're the founder you're the controlling shareholder. everything stops with you. right? so i think he approached it from the sense, well, i don't know every little detail. that's fine. what you do, study, talk to your cto, staff, and i want to make sure i understand this top to bottom, but the reason he has to testify because he's the ones who makes the decisions. zuckerberg is the liability in that way the stock's going up and down, and the cambridge scandal, it took a huge dip, and it sort of
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tried to find where it's supposed to be i'd argue what you see in the market place right now is the zuckerberg discount, right if he's going to run the company the way he wants to run it without sort of the same sense of consequence that other ceos might have, it's always going to trade lower. you don't know where he wants to be with this he's not an in-front person necessarily, and that's the big risk factor. that's the big x-factor in terms of what's beginning on with the company. >> should he be doing more, the company be doing more to get ahead of the issue because it's snowballing aggressively >> yes they should be doing more. they made steps already, announcements to curb how data is collected, how third parties collect data, but not how the data could be used i think that's a big part of this in terms of, well, fine, you're limiting how the data is collected, but it could be exploited or used in similar ways from what we saw with cambridge analytica and other third parties as well, so they have not done enough to address
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those issues the other issues are, they said in the note, oh, we were informed years august about analytica getting data in a way not complying with the policies. we asked them to delete it why not tell the world, there's third parties using data again, transparency has been an issue with them. how the data's used has not been addressed, so if i'm congress, i want to know what you're going to do for those things if you're not going to address the issues, i'm going to step in and say, adopt stricter measures >> it's not clear that regulation would hurt them couldn't you make an argument if they took the regulation on, it could help them? >> legitimize. >> legitimize, make people feel comfortable with the platform to the extent anyone leaves it? >> the ceo had sort of said, like, you know, we're open to regulation if it makes sense and right. i think there is definitely sort of a bridge there that, yes, we could be open to that, could legitimize operations. difficulty with facebook and
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google, any online advertising is so much is data driven, right? it's long tail advertising these are not, like, you know, 5-10 million campaigns from major brand marketers, but $5,000 campaigns from app developers and startups and other small businesses it's hard to track that. facebook employs the smartest people in the world, they should develop a way to monitor that better it's not so much how the data id monitoring it to use it the right way. i don't see -- that gap has not been filled yet. facebook has not looked at how that happens instead of doing third party audits after the fact get ahead of it and see it before it happens or as it's happening. >> right stokes more questions. we'll talk to you more about this in coming days and weeks. thank you for joining us on the stock impact angle,
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let's bring in larry on the cnbc news line, good for your take, good morning >> caller: hi, carl. >> we talked this morning about whether or not we see a change in engagement the next quarter, maus, daus, or if, you know, volume's lower today, is 149, is that a magic number yesterday? >> caller: well, i think the situation will be resolved in neither price or time, and for me, carl, the price is 150 i think that discounts a worst case outcome the price right now is nowhere near reflecting what facebook has historically grown at. it's clear after this the growth is going to be less -- margins are less, adding 5,000 people, probably $200,000 ahead that are not going to produce revenue, so i think the numbers are not going to be good, but, you know, i think what is going on here,
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even more importantly, is the psychology, and i think zuckerberg made a big mistake with the u.k. parliament i think the proper answer was to get over there as fast as they wanted and bring with him a group of people to answer the questions. i think the response here is inadequate, and the reason i say that, carl, is that this is a control stock. this has one person in control, that's zuckerberg, captain of the ship, and if he wants that kind of control, with that control, has responsibility, and i think he's abrogated the responsibility here in a major way. i'm not happy, and i don't think the market is happy with the outcome. >> i'm not hearing you siay tha decision impacts the price >> caller: no because it's a thriller novel you got the play unfolding in two separate arenas, one of
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which is the financial arena, dealing with the numbers or what you think are the numbers, and, really, until the conference call, nobody's going to know what the numbers are you can put things on paper, but i think you're going to have to wait for the guidance from the people, and then you have the, you know, the political realities. right now, contrasting both of them, my absolute by point would be 150, 152 where it's trading right now, i'd say it's probably more of a buy than a sale, but you have to be willing to take bad situations happening in the real world arena, and i think anyone looking at this subjectively with the u.k. parliament has to say that mr. zuckerberg made a mistake. >> we'll see >> caller: that's my opinion >> yeah, larry, real quick, david, on the fundamentals here, though, i talked to a couple large investors this morning who own it and suffered the pain, but their point is simply they
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don't believe engagement is suffering at the end of all of this that a lot of people fall off the platform, or that the roi changes for advertisers or any of the things that maybe facebook such an incredibly fast growing company will really change you disagree with that >> caller: i think it's possible that you could have a bad outcome, low probability, david, where basically new people wouldn't be forced or would be reluctant to volunteer the information that now makes the facebook platform so efficacious. the thing that's driven this, which i've never, ever doubted from the first moment we bought the stock, which was in the $20 area, or high 20s area, that the advertising works. it's better at generating business than almost anyone else's, and the thing that drives that is the access to the data, and if the consumer doesn't have to provide the data, then the efficacy of the
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advertising is going to fall, and the advertisers realize this very quickly, and withhold their ad dollars, and at the same time, engagement and participation may change i don't think that's going to change in the major way, but the behavior of the advertisers, i think, is the principle risk here these are risks, david, that have arisen just in the last couple weeks nobody was really even thinking about these things before, and, you know, that gives them more credence in determining the stock price. all things being considered, i still think, you know, i'm all in at $150, and i'm eagerly anticipating the first quarter conference call where i get some guidance on what the numbers actually are, and the financial impact of this becomes very clear. >> got it. >> we're all looking for that. larry, thanks. we'll talk to you next time, larry haverty talking about the stock impact on facebook
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michelle caruso-cabrera has news on the saudi's crowned prince's tour through the u.s. michelle >> reporter: i'm here at the saudi-u.s. ceo forum, about to get underway before it started here in new york, there were two pieces of news coming out, one related to the oil market and also to the possible listing of aramco opec is looking for very long term, perhaps 10-20-year agreements with russia, another ten non-opec producers with whom they have agreements to cut oil production that agreement, which calls for a cut of 1.8 million barrels a day set to expire by 2018, extended by a year, two years over and over again. what the crowned prince suggests is they are looking for something much more long term, perhaps decades. that would essentially be an engrarlargement of opec with a larger agreement of people joining the cartel or countries
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joining the cartel that could impact the oil markets depending how much we see shale producers here in the united states respond to whatever higher prices happen. the other piece of news is the crown prince says an aramco listing could happen add the end of 2018 or 2019 depending market conditions timing is not news what's news is the crowned prince is saying that and what's not clear if if he means just listing in saudi arabia or one of the foreign markets as well the market was forewarned this was going to be neighbor not as early as the saudis hoped originally guys, back to you. >> thank you, michelle michelle caruso-cabrera. coming up, why the rest of the tech sector is leaving facebook behind in the etf spotlight. squawk in the street" is back in one moment creating the world's first state-of-the-art drone testing facility in central new york and the mohawk valley, which marks the start of our nation's first
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♪ ♪ keep your most valuable insights hidden from your competitors. the ibm cloud. the cloud for smarter business. good morning, everybody. aye sue herera with your update at this hour speculation rising by a visit to china by kim jong un, an envoy was spotted under heavy
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security the trip could be seen as a precursor to kim's planned summit with president trump in may. house speaker paul ryan addressing the czech parliament saying the solidarity of allies in response of the attack on a former russian spy and his daughter in britain is more important than ever. >> this week, more than 20 countries including the united states and czech republic took action to expel russian dip plo malls. it is more important than ever, it's everything, really. >> russian president putin visited a memorial and laying flowers for the victims of a mall fire that killed 64 people. angry residents rallied for a full investigation claiming the government is hiding the real scale of the disaster. you're up to date, that's the news update at this hour, back downtown to you. okay thank you, sue, sue santolli
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>> if you really thought that this kind of weakness in facebook and the general sort of stutter step in fang was going to be that trigger for rotation out of tech, it's not really happened yet now, there's always ways to play that ultimately if that's what you think happens, there's actually an eft that's the s&p 500, everything in it except for tech in fact, except for tech and telecom. it's the inverse of the xlk, which is the tech and telecom that a lot of people look at a lot. here's you see the outperformance of tech is really held up year to date, even in a one month basis. they outperformed broader market as well as nontech s&p 500 stocks a reason for that, look at the xlk, it is 26% of it right now is microsoft and apple another 10% is alphabet, so facebook, only 6% of that really big, you know, xlk etf, a
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quarter of the overall stock market it's interesting how the market is really trying to quarantine facebook, and to a lesser degree alphabet from the rest of the technology because of the other teems, like semis and streaming and the rest of them >> michael, thank you. when we return, more on the markets as we continue to watch all three major indexes following their best day in almost three years,right now, the dow just turning negative, down 18 points, s&p down almost six, and veteran trader art cashin is on set next with the take stay with us
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welcome back to "squawk on the street," over an hour into
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trade on tuesday where we stand, trying to put back-to-back gains together for the dow and s&p for the first time since march 8 and 9, and the markets going to appear to hold us in some suspense, hugging the flat line more than we did yesterday >> absolutely. talking about that, optimism in the u.s., equities falling back down to earth after all the volatility earlier in the year steve joins us now from hq with the results from cnbc as all-american economic survey, steve? >> good morning, morgan. sometimes you're good and sometimes you're lucky we did one back in december when the market was near the all-time high, and one following all that volatility, and the decline in the market and, alass, as you say, optimism, american opiumism in equities has fallen to earth. there was extraordinary results back in december for the first time in december, did the survey for 11 years, 50% of the public thought it was a good time to buy stocks, and 72%
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of those who have a lot of money in the market and are wealthier americans, polled 800 americans around the country, they thought it was a good time to buy. it's come down, 63% and 41% for all adults it's not too bad, though, because if you look, the 41% is right around the average that we've had over the longer haul here let's look at who was freaked out the most by all this volatility those with the higher education, 28% change in net optimism others were, like, whatever, $30,000 less in income did not care higher incomes cared a lot the next chart, i think it's really important, but i apologize in advance it's confusing if you're a viewer follow the orange line that's the percentage of americans who tell us they own stock, any equities at all you can see there's a steady rise from 2015 up to 58%
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what's interesting, it did not fall off with the declining optimism in the market look at where the growth appears to have come from, and it looks like it's come from those with $50,000 or less in the market. while you had a bump up with more in the market, that's remained steady. it's a one track it's one survey, guys, but it's something worth watching as to whether or not, mom and pop, average joe investor, whatever figure you want to use, is maybe more interested in equities now despite what happened to the market it's something worth watching, guys, back to you. >> steve, what's amazing about the last chart is the idea that mom and pop are increasingly getting back into the market just as volatility picked up in a meaningful way >> i would expect people who are -- who say they own equities to, you know, track at least over a period of time optimism i'm heartened by the way you understand this chart. i had reservations about putting it up, but the idea that you get
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it, but you're smarter than average, there, morgan, but, look, 58% of the growth, those with $50,000 or less in the market, we have to track it. it's one track i thought it was worth noting because i know that wall street has this abiding interest in who is doing all the investing are regular americans in the market here participating in this what we saw, and i thought this was a problem during the whole boom from 2009 and beyond, average investors did not participate. then they seemed to have come back in, and we'll see how they last as to whether or not they can take ups and downs in the markets these days >> all right, steve, thanks. good stuff, steve leisman. for more, let's bring in art cashin here at post nine art, good to have you back today. did we hold where we had to? >> yes, yesterday's performance was quite good we talked about the challenges that could come at 11:30 when european markets close, we made the low and rebounded smartly
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from there, and still have not made up my mind whether it's consolidation day today. there's a little tiny resistance with the s&p at 2665, 2670 in that range not heavy duty resistance, but enough to get the market's attention. we'll see if they can hold on to gains. that's critical. it's not the end of the world if they go down a little bit, they just can't give up a big chunk >> how much does month end quarter end aft the next few days >> it will it's, you know, it's the end of the quarter as you know, so we'll get shuffling, a little rebalancing, you know, as it closes out, but historically, the day before a three-day weekend has a 65% upward bias, so we'll see if that holds >> back to steve's report, what do you say to the mom and pop
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investors looking to get into the market right now >> well, i think, you know, you can come in, break up what you got to put into the market don't do it all at once, and, you know, dollar cost average a little bit put a certain amount in by the month, the two month, whatever your time frame would be i'm always a fan of putting in a little at a time to average different prices >> why are small cap stocks, russell 2,000, under performing right now? >> i think -- it's kind of a reverse. it was overperforming when they thought there was going to be a tariff war because they don't have many multinationals now it looks more like trade negotiation and not a tariff war, so they don't have the sponsorship they had that's why they are underperforming. >> people talk about being oversold on friday m&a's been steady. seasonality -- it's a good time
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historically for the markets this week? >> yes, it is. this week is an excellent week, and even going into next week, you tend to pick things up, so we'll cross our fingers. i think we probably have successfully retested the lows, and that's going to give us a little breathing room her. >> 200 day still remains an important life >> no question about it. i prefer not go to back and retest that, but, you know, you bounced off it twice, and that's what gave people an awful lot of courage yesterday. >> art, thanks see you soon >> my pleasure >> art cashin. live to chicago when we come back for a preview of what we might expect from apple's product announcement today set to kick off at the top of the hour later on, ceo of google's waymo joins us on "squawk alley," don't miss that. dow's up 61 points . with an ingredient originally found in jellyfish,
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welcome back, let's get to the cme and join rick santelli for the santelli exchange, take it away, rick. >> thank you, david. former dallas vice president, thank you for taking the time. >> thank you, rick >> all right, you know, when it comes to trade, and all the volatility that has put into the market, i can only harken back to the campaign of the president. it was major platform in what he expressed to the crowds that used to support him. in my opinion, he's a negotiator, all about leverage, but the issue becomes what's the miscalculation factor of using that leverage in global trade, and i would like you to address what you think or how high or low that miscalculation factor
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can be >> well, the miscalculation isn't focusing on the trade deficits and not the causes of the trade deficits this country has always run trade deficits because we've always had inward investment we've run what's called a capital surplus, by that -- that was all going into investment until the last few decades now we're borrowing from the rest of the world to finance budget deficits, transfer payments, entitlements, and that's unsustainable, so you might say the president is looking at the wrong deficit he should address the budget deficits in order to address the trade deficits, but he doesn't want to go there >> you know, what you're saying makes perfect sense to me, and there's been many economists on making that argument that using individual countries actual quantitative trade deficit is not the right approach or economically correct, and i'm not going to challenge that notion, but do you believe in the substance of two issues?
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that it was the easy way to put over a platform or thinks there's a certain lack of fairness, and he needs to address the notion that we can't keep importing capital to support that yes, it's a bit con that lewded, but it could be the simple version of what's happening. your thought >> well, i agree with the fairness issue he's on good ground in attacking china for stealing our intellectual property, so that part of it, i agree with him i agree with you and as to whether this was the political way to address an issue, i accept that as a possibility. >> i got ya. now, let's keep this theme to me, if there was a miscalculation factor, investors should be worried about, it wouldn't be trade. i think it would be central banks. you know, you talk about how you think balancing reduction ought to be a bigger case right now for the fed, maybe help steepen
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the curve. i question the whole notion that central bank policy globally could have such detrimental effects on us that that particular miscalculation factor is exponentially larger. >> oh, well, yes the central banks have been running amuck, and instead of engaging in monetary policy, they engage in credit allocation policy that's dell tearous. it's the enforcement of dodd-frank doo-frank has been a disaster for small business lending >> now, when it comes to small business lending, hopefully we'll see some upside. almost out of time, so i want to take this global >> yes >> the ecb recently has been under pressure they are not moving fast enough do we have a huge risk here in this country that central bank
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coordination may mean that we're coordinating and tangling ourselves up with bad policy and our fed's more correct in their path at the current time >> yes i am suspicious of central bank coordination because it mistake, everybody makes a mistake. >> i understand. you know what? we're going to havetime for on more quick question. if you were king for a day and you were looking at our snugging up with regard to central banking activity, what advice would you give mario draghi whose term ends in late 2019 would you have him speed up with regard to balance reduction or have him start to raise rates or you would say he's calibrated about right? >> i would -- i would give the same advice to him that i would give to the fomc concentrate on balance sheet reduction. if you move too quickly on short term interest rates, you could invert that yield curve. >> excellent jerry, we know there is nothing any bank or central banker fears
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more than short end rates popping. it always has credit crunches tied to it thank you so much for your time. david, back to you >> thank you now time to send it to jon fortt and get a look at what's coming up on "squawk alley. >> driverless car technology very much in the news. not uber we're going to have wamo itat is google's self drive car un the ceo is going to join us on "squawk alley. you know what's awesome? gig-speed internet.
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welcome back to "squawk on the street." markets are high oern wall street one of the sectors not participating in the broader rally is health care shares of that sector off fractionally in early trading. the worst performing group in the s&p 500. there are some names in the space all down more than 1% so far today. now back downtown to you guys. carl, back to you. >> all right thank you very much. apple making a move toward the classroom as the company prepares a product unveiling set to take place in a few minutes our josh lipton is in chicago at the site of the announcement and joins us with a preview of what to expect. josh >> carl, we are here at lane tech high school in chicago
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where apple ceo tim cook is expected to take the stage right behind me here now today cook is anticipating to unveil new products and tools aimed at teachers and students, carl trying to broaden apple's reach in the classroom specifically, we're looking today for possible new low cost ipad that's could attract school administrators we know that overall tablet market has been under pressure shrank 7% last year. they control about a quarter of the market apple's push into the classroom, remember, it's not just about the hardware it is also offering software like the so-called classroom app. that allows teachers to manage the apple devices that students use. so, for example, teachers can make sure that kids really are working on their assignments in the classroom not just surfing the web or playing games april zl have a big fight on its hands here it knows it. analysts say google has gone gang busters in the classroom. in 2017, devices running
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google's operating systems on chrome books and android tablets held combined 58% of the u.s. education market according to idc. now windows took the silver at 18%. apple staying basically flat year over year with ios accounting for 16% of shipments to classrooms. macos at 6%. google is not standing pat they're looking to offer a reconfigured version of its own classroom app for business customers. apple's keynote is going to start near a few minutes at the top of the hour. we'll be here monitoring it and bring you headlines as they come back to you. zblfr we' >> we're looking forward to that when we return, the ceo of wamo joins us on "squawk alley" as well following the company's major announcement this morning. his take on uber autonomous vehicles, data security, so much more but first, a final check on th markets as we wrap up "squawk on the street." the dow is higher. we're in session highs right
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good morning, 8:00 a.m. at wamo headquarters in mountain view, california it's 11:00 a.m. on wall street "squawk alley" is live ♪ and i am telling you ♪ you're the best man i'll ever know ♪ ♪ there's no way i could ever, ever go ♪ ♪ no, no, no way on living without you ♪ >> good tuesday morning. welcome to "squawk alley." we're here at post nine of the new york stock exchange. ma mike santoli is here. the dow and s&p 500 trying to post the first back to back gains in a few weeks we're going to talk more about this later on this morning


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