tv Squawk on the Street CNBC May 9, 2018 9:00am-11:00am EDT
toward your technology, to have it respond to your eyes where you're looking and have it substantiate, in other words have it physically in front of you and manipulate all of that for purposes of interacting with your technology. whether you're playing a video game, interacting with customers or colleagues, designing a product, or just simply, you know, gathering information or watching a game and getting information about the game. >> i'm intrigued you'll come back soon and talk to us more thank you for your time. >> thank you. >> that does it for us today right now it's time for "squawk on the street. good wednesday morning welcome to "squawk on the street." i'm carl quintanilla, jim cramer, david faber. futures up about a hundred or so as we watch fall out from the white house decision on a iran nuclear deal
a date and time is set for the north korea meeting. europe is mixed. oil approaches 71. producer prices up 26. walmart's megae commerce move and the biggest deal every and a direct challenge to amazon buying a majority stake in india's flip cart. stock futures and oil rallying investors reacting to president donald trump's decision to pull out of the nuclear deal with iran on the fox side, disney ceo bob iger tells he's confident the disney deal to buy fox assets will close. walmart, though, making the biggest deal ever in an effort to take on amazon. the dow component agreeing to acquire a 77% stake in flip cart, india's largest e commerce company. the remainder will be held by flip cart's existing
shareholders this is what walmart's doug mcmillen said. >> we're excited to invest in flip cart. india is one of the largest and fastest growing economies in the world. it represents an enormous market opportunity with 1.3 billion people, strong gdp growth, and a growing middle class we've been operating in india since 2009, and we're very encouraged by the progress we're seeing. >> second most populist country in the world with a lot of rules restricting how foreign companies can invest hence the structure. >> true but flip cart is number one in market and fashion. number one in mobile number two in electronics. number one in large appliances this gives walmart a market one of the biggest growth markets and we know that it's not where amazon is and amazon didn't offer, as i understand it $2 billion more
and they said no. >> why >> amazon wanted this. >> why would they say no >> because it's too examazon guys and they were happy to throw it to them. >> really? >> yes. >> $2 billion more >> that's my understanding. >> why is the stock down >> paid $16 billion. that's a lot of money. >> it's a big number for 77% i don't know what the numbers, i mean, i don't know what the profitability or lack thereof for the company looks like. >> it's more of an ethos than earning. this is about owning a market, david. and that's exactly what the shareholders don't want. >> market cap being erased today. almost the value of the deal others are saying, look, international is very tricky the ways engineer hop from company to company over there is more torn than the valley. and walmart is majority less.
>> i think walmart is a family-run business deciding they're not going to seed another toinch amazon. it's anti-death star i was with etsy in brooklyn. paypal this weekend with dan shulman. people are now saying, you know, it has to be stopped it cannot let it take over the world. >> does it need to be like the movie you like all the super heros need to get together. >> avengers infinity >> yeah. on the conference call they talked about how many super heros in there the cost of super heros. >> i didn't mean to -- >> the cost of super heros >> yes quite higher. >> freight is higher, oil is higher, super hero is higher. >> walmart -- carl pointed it out, they're largely domestic even though they've been trying for a long time with mixed results. but they seem to be taking
another side at rationalizing a lot of their international at this point actively managing that portfolio. don't forget, they did the deal last week. right. >> that was good deal for them in terms of trying to stem things. >> so, you know, they had a yeah mixed, or it fair. mixed performance international markets. i've been to china a couple of times as they were trying to build that business. doug mcmillion ran international. >> why is it that amazon, netflix are allowed to spend all they want. netflix the call we're going to spend $8 billion why are we willing to give a pass to some companies, tesla let them spend as much netflix. amazon then a great company like walmart family-run they spend and sundayddenly we don't like . >> it's a different shareholder base that has been with them for a longer period of time. amazon started with a narrative day one. look at the first annual report
letter future cash flows. >> the companies you mentioned are call options on growth they're not about discounting cash flow over time. >> but if you can own india, how many times did we listen to tim cook from apple say we're going to be big in india now that statistically the frequency that people move around that is difficult because we'll see this morning facebook shake up and it's kind of like wow! shake up. >> i think your theme about different companies starting to sort of say no more in pushing back against amazon is interesting. >> right like the fire is in the living room. >> paypal was saying -- >> whether or not it's coordinated. i doubt it is. they're making the same decisions. >> i that republicare. and paypal saying amazon is going to give a discount to merchants. and what amazon does, i learned from a documentary that amazon takes the partners and learns from them and tries to put them out of business. know the documentary >> i do.
>> the best one he did in the age of walmart. >> he should do about the -- >> i like the other one, too the one on the -- >> when you went to norway. >> yeah. >> the olympics in norway. >> yeah. this is an extraordinary time. when you have etsy saying there's a rebellion against amazon i'm telling you, the force is not with amazon. >> etsy great. what is the market cap today >> they got a ways to go to catch up. >> two things, guys. we'll talk to the head of amazon web services today. >> i can't believe you got him. >> john ford will bring him in we look forward to that. and the tidbit about masa son over soft bank's earnings. take a look at that. >> it's not officially announced yet. maybe i should have not
mentioned that well, i can't take it out. >> so that was taking some of the fire out. >> yeah. that's masa, he goes off script a lot. it drives his pr people insane. >> remember when super man was able to reverse the world like eight seconds. i thought he was a super man but he couldn't do it. >> masa? >> yeah. >> i don't know if he can fly. i'm not sure he perfected that technology yet but masa is like a tight rope walker ever look at what they're doing and how many different things they got going on and the bets they're making enormous bets. >> really? >> yeah. a man who likes to walk high on one thin wire. >> have you seen where t-mobile stock is >> hasn't done well since the deal was announced. >> that's how good the quarter was. is it dumb, dumber and suicidal? >> i don't know. it's a fair point to take a look
at the decline that stock had since the day of the announcement. >> magenta means red ink. >> a lot of companies are facing policy questions t-mobile, obviously, at&t, and now iran, which is affecting boeing or could affect boeing over time. futures are on the rise. oil hit a three-year high. a day after the president said the u.s. will withdraw from the iran nuclear deal. he's open to striking a new agreement if iran comes back to the u.s. with concessions. everyone is talking about the 39 billion worth of planes between boeing and airbus. >> yeah, well, you know, boeing has got about ten years worth of planes they can't make them fast enough in south carolina. okay let's go back in time. let's go back in time two and a half months. >> okay. >> ten year goes to three. oil goes to 71 market down 4 or 5%. now the market is up a%? are you kidding me
do you think this is right today? we would be 5% down. bingo. >> not to mention, by the way, wilbur ross saying things to bloomberg about things didn't go that well in china. >> far apart yeah. >> i don't know what the market is drinking. why do we like everything? i mean, are you kidding me they did put out a specifics about oil exports from iran. a lot of people may think it was 180 days until it hits they make it very clear if you want exemptions or exceptions under the defense department sanctions that also will go into place and things of that nature. the country seeking such exceptions are advised to reduce their volume of crude oil purchases from iran during what
they're going to call a wind down period. we have the language for you state department consider relevant evidence in assessing each country's effort to reduce the volume of crude oil imported from iran. i guess we don't have it during the 180 day wind down period they said we're going to be looking at the quantity and percentage of the reduction of purchases from iranian crude oil rightway in making determinations about what it going to happen with you now we got it. i read it. >> the location in the market? >> of course. >> i think people would be saying president trump we have all the oil they need in the country. we do but we don't have all the pipe we need i had the balken and it is well served they have 70% by trade and 30 crude by rail which is inefficient. you cannot build a truck with enough we need. >> you're saying that if the
saudis -- everything else being equal, the removal of iran would not change prices at all >> well, the saudis want to keep oil up because ofthe aramco deal this is where the president ehee wanted to call opec. he needs to call saudis. i know he watches the show religiously. but he needs to call the saudis now and said we're in line with you. you have to start pumping the extra million you can do now because aramco does not need oil at 71. take it down to 65 and start pumping because we are your ally and the president has to make the call right now because otherwise we go to 74 or 75 because of what you said trying to figure out where to get the oil. the country has oil the needs it get me some pipe. >> a lot of news out of the white house. it looks like these american detainees are way back with pompeo the president may meet them at
andrews. the latest on the battle between disney and comcast driving profits at amazon. we'll talk to andy jassy at 11:00 a.m. eastern time. the dow going for five up. the s&p poised to go green for the year back in a minute alerts -- wouldn't you like one from the market 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. i am an independent financial advisor. i left a traditional brokerage firm because i wanted to be free of their constraints. at my firm, i act in the best interests of my clients. i can tell them i'm supported by one of the world's strongest, most admired financial firms. fewer constraints, the freedom to do what's best for my clients. that's why i'm independent. charles schwab is proud to support more independent financial advisors and their clients than anyone else.
mr. elliot, what's your wiwifi?ssword? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. disney reporting better than expected quarterly results in
media, parks, resorts, and movies last night bob iger was asked about comcast potentially competing with disney for some 21st century fox assets. here is his response. >> i won't speculate about what they're doing or, you know, why they're doing it i can only say reiterate that, you know, we made a deal in december that receives unanimous approval, which is important by the 21st century fox board we're in the process of filing what we need to file to gain regulatory approval and shareholder approval we're certainly excited about that acquisition and remain confident it's going forward. >> "wall street journal" heard on the street today takes a crack at guessing what will happen they basically say we have no idea tough to call. >> listen, you know, we've been saying from the outset there's a hope on the part of our parent company that the very least something will fall their way, but they're serious. and serious with capital "s"
about moving ahead here, potentially. some details to share with you sort of, again, and, by the way, this is working already. it's overshadowing what was a great quarter for disney let's not forget that. we'll talk to jim in a minute about the quarter itself let me give you a couple of new things here. disney stock price will trade to a certain extent to the belief it will raise the bid by some level in order to compete with the potential bid that is coming from comcast comcast, as we were talking yesterday. potentially an all cash. if not mostly cash bid is what they would make. they feel they can add an enormous amount of debt to the balance sheet. look at charter in the industry. four and a half times levered. if comcast did that, they could have as almost as $100 billion in debt. do you want to do that i don't know but you could! you could. also, very important here. i made this point a number of times. previously, yes, they had offered more for the assets then did disney
but no deal protections. if you look at the proxy this time i'm told by people familiar with the situation there would be deal protections in there in other words, or reverse termination fee. the ability to say we'll buy all the rsn and we'll take on the liability of what needs to be divested things that really did give that fox board, as bob iger pointed out, when it anonymously said we prefer the disney deal pause when it looked to comcast offer, while higher, didn't have the protections. and finally you start to think about the debt you do it in a 30-year term. this company generates an enormous amount of cash flow would pay it down quickly. that's behind it what else is going on here well, the hope that somehow you get a conversation going i think between brian roberts and bob iger about how can we save our shareholders on both sides a lot of money is there something we can figure out? perhaps we can sell down the road or perhaps do something
with everybody is too hot to talk there's no conversations at all. it doesn't seem likely there will be any conversations any time soon about sort of, well, is there something could it be hulu maybe, you know, could it be skyy star india i don't know none of the conversation taking place, which raises the likelihood that comcast will likely come and see what happens. meanwhile the disney earnings, jim, strong. >> jeez. you know what is funny all of the companies that make movies have always tried to say, look, it's not openepisodic we can make big hits it was a one-hit wonder and then a bomb bob iger is not getting enough credit for this hit machine. but the hit machine is better than any consumer protect i've seen than apple.
of course, he's on the board of apple. it literally is like an iphone 6, 7, 8. i look at this and say just clear this up! everybody realize that this hit machine is worth a lot of stocks for espn, which you said is not as bad as it was in terms of bleedoff nine out of ten of the movies. i mean, the statistics he gives. >> for next year is -- >> oh, my! >> and the way they'll be able to pop late with the direct to consumer you have to believe it's going to have traction. >> ufc but then a line in the conference call said we have to spend on bam tech. like no! please don't spend are you kidding me look at the numbers. our studio delivered nine of the top ten biggest domestic box office openings of all time. do you think that tide and proctor and new tide think about gillette and the gillette that has a gizmo that, you know, is
nuclear and stuff. no >> still concern about them raising the bid taking over the stock price. >> you're right. >> and the need for comcast to have a consumer offer and some presence internationally and the fact those kinds of assets don't come along very with liberty global. >> i look at the advertise adisy no company has the ability to produce something every quarter. incredibles will be good. >> now that i will go see immediately. >> that's my top ten i love that. >> you're just doing it to apiece me. >> -- appease me. >> it's not about the ridiculous super heros. that's real. >> i love that movie. >> we'll get cramer's mad dash the count down to the opening bell we're back in a minute
- i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time.
- checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life. anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express, be the readiest. with dell small businessout your technology advisors you get the one-on-one partnership you need to grow your business. the dell vostro 15 laptop. contact a dell advisor today. your company is and the decisions you make have far reaching implications. the right relationship with a corporate bank who understands your industry and your world can help you make well informed choices and stay ahead of opportunities. pnc brings you the resources of one of the nation's largest banks, and a local approach
jeff and market volatility into retirement. isn't top of mind. that's because they have a shield annuity from brighthouse financial, which allows them to take advantage of growth opportunities in up markets, while maintaining a level of protection in down markets. so they're less concerned with market volatility and can focus more on the things they're passionate about. talk with your advisor about shield annuities from brighthouse financial- established by metlife. the opening bell is brought to you by brighthouse financial established by met life. we got about two and a half minutes before we get started with trading a mad dash we'll do it seated so we can get to the opening bell. the ceo of oxy had good numbers.
how about buy backs? they'll resume how about yield? 4% so this is the one that i think people will say i want to play permian. the stock can go higher. rather amazing because had it been in the doldrums. >> it had. it seems to had finally had signs of life. >> yes there's a lot of companies that figure out how to make a lot of money at 45.50 pioneer pxd is the great growth one. the large independence the smaller independence is fang it's faang versus faang. that's diamondbacks energy. >> yeah. energy is up 10% in a month. >> yeah. buy backs $7 billion year to date is more than double the year ago for obvious reasons.
>> slumbergegh has a lot of cash i said it last night on mad munn t -- money baker hughes is a ge company and john flannery has been given a gift i hope he takes it he should monetize that bright now. get the bears. we get him from jpmorgan and switch the buy -- wait, like i'm working for the general electric corporations and that's where he's going to miss it. he doesn't see if they could use a ge company could be worth more maybe he's focussed on the fact that the philadelphia 76ers will be the first team to come back from 0-3 and play tonight. because the celtics have a ge sign on their jerseys! >> interesting.
>> yeah. there's distance between me and toosa. there has been for a long time better start putting a tie on and get with the program [ opening bell ] over at the nasdaq it's the lgte leaders conference we'll see how things shake out here a lot of dow components with news today regarding boeing and disney and so forth. >> boeing is such a battle ground people can say wait a second they might lose china. they might lose iran all it does is make it so other countries can jump the queue you're trying to make planes and why are you doing that it's not because you're trying to deliver to iran and china you're trying to deliver to the world. this, by the way, is also with
united technologies. with the geared turbo fan. general electric remember two out of every three departures is with a ge engine tell that to toosa. >> i will. there's ge up .25. >> .25 that's nothing. >> that's not nothing. for a stock that is down i don't even know how much anybody will take anything that looks green. >> year to date it's down 18. >> that's suboptimal. >> it's not as much as our parent company, by the way. >> wow you really are hitting it. >> i'm hitting it down 23.8%. >> what are you going to do? >> there's nothing i can do. >> that's right. you're powerless. >> we can talk about it all we want and it's not much to talk about in terms of is that stock getting hit. we mentioned disney, of course, which is up a bit. did you happen to see dish yesterday, jim
did you notice shares of dish which were down? >> david, they have declining revenues almost as if they are beta maxed. they're beta maxed i cannot believe dish. >> by the way, the stock was up. we were talking about it and then they had the conference call in a funny way the linear business isn't as fast as we thought. we did our spring cleaning over the last couple of years we got a little bit stronger base we got rid of weaker customers. >> right. >> so that actually we might be seen as a positive. >> no. >> but apparently everybody took it as a negative meaning really? he thought it would be -- by the way, to his credit he was the first guy to talk about the trends years ago and, of course, as our viewers all know, he's bought up enormous amounts of spectrum to create a wireless business that's where a lot of focus is a very positive analyst from wells fargo writes this morning,
by the way, an $88 price target on the stock that lack of any network partnerships agreements not being announced on the call was perceived -- that would have been perceived as a catalyst for the stock. they didn't announce any she said she thinks the comments and the no comments to amazon whether they would do something with sprint and t-mobile that real plans are being made. they continue to believe that the path to spectrum automation is a wholesale leasing model, hence the $88.50 target price at wells fargo. it was worth a mention it got lost yesterday. dish is down 39% this year. >> if you were a visionary, you would have bought cannabis. >> right. >> right in front of his face in colorado. >> yeah. >> by the way, wherever cannabis is legalized, beer sales go down. >> wow
speaking of beer -- latin america. united states was down 4% in the wholesale. so, yeah. >> but the rest of the world was okay >> rest of the world is on fire. which is surprising. >> after coors, which had volume down. >> that was the worst quarter of the year. >> down 18, as i recall. >> i switched to bud light after that i'm obviously drinking the wrong beer of course, i'm a corona guy. i sold more corona on cinco de mayo than coors sold. >> you had a good day in the bar. >> i beat january and february. >> jake and my wife. my wife was furiously behind the bar washing dishes me i was sipping a mezcal watching i'm the late stage capitalist. >> as you should be. >> yeah. >> you grease things. >> yeah.
i do oil services are all over the leader board here. would you say that oil and defense are your two favorites going into the back half >> every time the missile is fired this is raetzon's time they had a quarter i was at 220 it looked like better than expected almost everyone of the defense companies missed terribly. it had the high water mark this group got clobbered. >> amazon. >> amazon. >> nxp we need to -- >> i think we should hit it hard. >> anyway it's taking out more risk garbs. >> yeah. it crushed people.
i mean, just decimated a lot of hedge funds. maybe even worse decimated only means down by 10%. >> that came from the french. >> looking for my possible glimmer of hope. remember the zte the cell phone maker said related parties are actively communicating with the relevant u.s. government departments in order to facilitate the modification or reversal of the denial order remember we cut them off entirely by the u.s. government. it's a positive outcome in the development of the matters people at nxp looking at the zte thing for any signs of hope between china and the u.s. are that relations are getting better there's one, if you want we're still waiting. the clock is sticking but we got
80 days before nxp. >> at lot of people felt after you got it out the stock would trade on its own merits. the rest of the group did come down sky works came down a lot. people feel the best is over for broad come. >> they can't do another deal. that's the logic there. >> right. >> remember that period? >> of course, how can we forget? >> wasn't it something the way it ended it's remarkable. >> it is. >> right in the cross hairs. >> speaking of screwed up situations, xerox. >> yeah. >> have you seen that? i mean, what a mess. >> you're the only one who can understand that. >> no. i'm not sure i can xerox sends out a letter to the shareholders reiterating things but it's worth going over it they're in the fight with icann.
you have the new york judge basically threw the book at xerox and fuji in terms of their behavior in putting together that deal and what they thought was a failure on the board of directors to be a good fiduciary. they say in the letter today they're going to resume discussions with fuji for a deal on superior terms. yeah, they previously thought we aren't sure we can negotiate now we know we can we had a settlement but we haven't settled. now that's off we'll ensure shareholder voices are heard and appeal ruling litigation a lit update on what is remarkable situation. >> $8 million company that is in crisis. >> is there anyone at the helm >> no. how could there be they want you to believe there is. >> doesn't seem like it.
>> no. >> i don't know you're following it it's a great story. >> meanwhile it's going up the market overall is continuing to decline that xerox is a part of. >> right remember xerox owned the first pc. >> yeah. >> trip not doing too badly to start the day. >> no. making a come back. >> yeah. trip and trulia are the two. written off after uber left the platform and in large part left and trip advisor had been missing quarter, missing quarter, missing quarter i got a trip again trip advisor, right, and taser don't taser me, bro. it's now called axson
enterprises. aaxn. >> kinds of like tesla. >> yeah. that's where it ends in likeness. >> rbc we've seen the open letter to elon musk from rbc. >> he was the analyst who was his question was not answered. >> yeah. they slapped him down. he just -- >> basically challenges him to a web cast name the time and place and i'll be there along with every one of your major shareholders along with questions he said didn't get answered on the call. >> does he think he's aaron burr >> we'll go to hoboken and settle it over there. >> guns drawn. >> yeah. >> walmart has taken about 25 points or so off the dow up 31. we'll get to bob. >> good morning. a nice start to the day. we're off the highs, though, but some break outs starting to occur here energy, of course, there's been a break out. up 10% for the quarter on the consumer discretionary banks and semiconductors we talked a lot about the
descending triangle in the s&p technicals matter a lot. we're starting to break out. it may be positive we said look at the lower highs we've been seeing. in is for the year and now right about $26.81 you start breaking out of that pattern. people will start talking about it, if we can get above that we're right there at the moment. we go through the 50-day moving average. you look at other patterns semiconductors, for example, is at the highest level in three weeks. that's a group on the verge of breaking out a little bit. banks highest level since march yesterday. i don't want to make too much of it, but we're looking for the small break outs to get the markets out of the down range. you look at the bank sector, that was at the highest level since march yesterday. there you go moving up and, of course, energy stocks. up 10% on the quarter for energy we had the move up last month. a lot of people say the anticipation that the iran deal would be scuttled by the
president. you can see the big move up a month ago. they're the only real new highs we're seeing every day there's a small group. marathon, hess, c.o.p this is where the front month contracts are higher priced than the back month contracts so may at $70. december 2019 at $60 and you would think those contracts further out would rise a little bit that the curve would flatten a little bit but it doesn't seem to be happening dramatically i find it a little bit strange it seems to be more risk out there further on particularly if the iran deal clamps down in terms of restricting supplies from iran it doesn't seem to be happening. maybe we get oil people to discuss that elsewhere big ipo pricing tonight. haven't talked much about ipo. we centhave a large one axon will be floating their company in the united states
this is a $3.5 billion float that's a lot snap was the big one recently. will likely pass that number you have to go back to alibaba this is the biggest since alibaba in terms of the dollars being floated if we stay in the mid range. finally, just to follow up to my interview with gary cohn yesterday, i asked him if he felt there was any unfinished business since he left the white house two months ago. >> one thing we regret in not having been able to do in the original tax bill was the personal side expires. we would like to go back and make the personal side permanent. we believe that the individuals deserve a personal tax reduction
and we need that to be permanent. we don't the president to expire. >> i asked him about job offers. he's gotten a lot of them but he's been intrigued by one in particular he described it as not a public traded company but not a charity. i pressed him and he wouldn't tell me. hopefully we'll get information fairly soon. >> good stuff. bob, thank you at&t and novardis confirming they made payment to michael cohen's firm we are outside the white house with the latest. >> reporter: good morning. i asked the white house official whether the president knew about those payments between the number of entities and michael cohen, the president's personal attorney that took place both before and after the election. the white house not responding to the question referring all questions on this issue to the president's personal legal team, which also hasn't responded to questions. here is the story as it was laid out last night by the attorney for stormy daniels who was the
porn star who was engaged in a protractive litigation with the president of the united states over a nondisclosure agreement she signed in a pay out of $130,000 her attorney says that a number of entities paid michael cohen, the president's personal lawyer, in that time frame here are some of the payments. the most important of which is from an on secured firm called columbus nova llc about $500,000 that's linked to a prominent russian. novartis paying merely $400,000. at&t paying nearly $200,000 and korea aerospace paying $200,000. each of the companies issued a statement explaining or confirming the payments. here is what columbus had to say. neither viktor nor anyone -- the
company is 100% owned by americans. any agreements with the essential consult assistants, michael cohen entity, was entered before our current ceo taking office in february of this year and expired. at&t saying essential consulting was one of several firms we engaged in early 2017 to provide insights into understanding the new administration they did no legal or lobby work for us and the contract ended in december of 2017 so that's where we stand, as of now, from the company's perspective. i should say that michael cohen spoke to reporters and he said the document produced by the attorney for stormy daniels is inaccurate but no distinction on what he's saying is inaccurate in any case, we wait from the words from the president's attorney whether the president knew about the payments.
it raises questions about what the payments were for during that time frame. >> yeah. this idea of selling access to the president. in the hedge fund community, i'm aware that mr. cohen reached out to for the hedge funds and none took the offer helping people understand the way things would be thought about. this is not just about these companies. we know why at&t wanted to understand the thinking, perhaps, of the administration given what eventually became the court case to stop its acquisition of time warner >> reporter: sure. >> mr. cohen was reaching to others as well from the so-called consulting firm. i can tell you in the hedge fund community having heard about that as a possibility, as well. >> one of the key questions is what did michael cohen suggest he was offering to the hedge funds. what is the written communication around this? the question would be federal law enforcement has looked into the terms of the deals and whether cohen produced any work product. did he write a report for at&t,
for example, on what the administration was likely to do or think on some of these issues all those questions are unknown now along with who authorized this and how this payment came about. >> thank you for that. a lot more happening in d.c. today. the confirmation hearing and so forth. >> yeah. she can be an impressive figure but hear something like david said this is uncertain time what is going on in washington i don't understand that opening washington striving a lot of things. >> if you're at&t i don't know the decision or who it is made by they're employing a lot of people to try to help them understand the landscape they have an important deal they're trying to get through the regulators but -- >> you don't want to deal with the roster just the optics are quite bad. >> yeah. >> i'm worried about d.c
i'm worried about what comes out. i'm worried about what the president tried to get boiled down it's interesting to see what bob put up the curve. that's why i feel oil is overdone people are chasing everything here except for the cloud kings, which are going down they've been the leader in sales forces i'm not crazy about the market i have a stock that i like very much that i'm going to use for stop trading because it worries me. >> that will come after the break. speaking of the cloud giants, we'll talk to amazon's head of web services, andy jassy this morning as the company continues to build on the cloud. that's in our 11:00 a.m. hour. $25 billion in tens auctioned today. it could be the first auction at in about seven years back in a minute polk county is one of the counties
that you don't think about very much. it's really not very important. i was in the stone ages as much as technology wise. and i would say i had nothing. you become a school teacher for one reason, you love kids. and so you don't have the same tools, you don't always believe you have the same... outcomes achievable for yourself. when we got the tablets, it changed everything. by giving them that technology and then marrying it with a curriculum that's designed to have technology at the heart of it, we are really changing the way that students learn. and i can't wait for ten years from now when i get to talk to them again and see, like, who they are. ♪
but the s&p as well. we're going to get stop trading with jim in a moment dow up 62. >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
people don't invest in stocks and bonds. they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more.
favorite stocks for multiple years is nvidia. i named my dog after it because i love it so much. there's an article in "the new york times." one type of computer chip scarce this article said nvidia, amd going to do really well. nvidia reports tomorrow night because of crypto currency no this is not going to be a good quarter for crypto mining. this is almost a setup two points from breakout but it's almost a setup. he came on "mad money" and expects the crypto currency business is going to decline from the fourth quarter. so if you're buying this because of that article, you are going to get smashed it's the rest of the business that's strong. but, wow, crypto currency is not a reason to buy the stock. it's down. down, down so if i had to like write a story if i were short it would be like, hey, crypto currency is going to be really good and, bingo, it's going to happen and the stock would be down big. >> he's talking to his dog
>> bad dog >> wrong, wrong. >> down, down. >> down, boy he does love me. nvidia loves me and i love them right back picture of nvidia right now on twitter if you want to know what he says. he's feeling hurt. it's a bad call. no treats for him. >> "mad money" tonight, jim. >> i've got zebra, an incredible stock. brad jacobs, xpo and then josh silverman, brooklyn's own etsy for mother's day mother's day is coming up. go there and buy some stuff you can't get on amazon. >> jim, good hour. >> nvidia. >> we'll see you tonight, 6:00 p.m. "mad money." reaction to walmart's biggest deal ever. dow high was an initial 107. now at 47.
exchange dow initially up triple digits but settles back here up 15 as we watch the decision to withdraw from the iran nuclear deal, the ten-year, walmart/disney and a lot more. our road map begins with walmart in its biggest deal. agreeing to buy a share of india's flip car plus, bob iger talking about what's booftsing his company's bottom line. and closing a deal with fox and losing a possible bidding war with comcast reactions from around the world. president trump pulling the u.s. out of the iran deal what it means. first, it's official walmart buying majority stake in india's flip cart for $16 billion. the biggest deal for walmart ever courtney reagan joins us with details and reaction pretty negative for walmart shares >> maybe it's a sell on the news this had been largely telegraphed for some time. many of those coming out of
india. it's walmart's biggest deal ever buying a 77% stake in indian e-commerce called flipkart combination of cash and new debt this is about five times the size of the jet.com deal walmart says it's still in discussion with investors that may join which actually could lower that percentage of that majority stake but it will still stay the majority stakeholder. the minority stake will continue to be held by the co-founder benny banzel leaders running the business will stay. the board will eventually change amazon reportedly also made an offer possibly pushing up the price. walmart's cfo tells me the retailer paid what we thought was fair for this deal the earlyiest the deal would be approved is by the end of the second quarter if it's aprufd it will have a negative 25 to 30 cent earnings impact for the quarter 60 cents for the full year
analysts haven't been able to evaluate that until today. walmart said india and china are the key growth markets walmart only has 21 locations in india. it only sells to other businesses, and that's because of various indian government regulations that restricts foreign direct investment in the country. but the restrictions don't apply to an e-commerce marketplace like flipkart. it's 11 years old. 54 million active users as of last year. 100,000 sellers. ships more than 8 million packages a month walmart is capturing a large portion of the e-commerce growth in india amazon prime is also a player. india is the second most populated country in the world 1.3 billion people a growing middle class that's increasingly mobile. so it's understandable what the opportunity could potentially be walmart doesn't want to miss out on that. >> potentially more valuable is that amazon also wanted this
just curious about the stock price. i mentioned at the top, down almost 4%. down worse a little earlier. walmart is a real under performer and the dow down 16.5%. big winner last year is the tide turning when it comes to the narrative on walmart getting grease identify e-commerce wondering what you're hearing. >> we saw that big leg down earlier in the year when walmart came out with fourth quarter e-commerce growth rate that had decelerate from the growth rates we saw before. walmart told us that was planned. and those comps. but there was certainly disappointment on the street and the call today with investors, the ceo doug mcmillan was on and said this doesn't mean we're paying less attention to what's going on in the u.s. that's a key growth market but we're being choiceful with our investments. that was mcmillan's words. this is a play for the long term but near-term pain
and the valuations and what walmart's stake could be are all over the place they didn't have a good way to model it until we actually knew how were they were paying and what that was worth and what the earnings impact could be >> it's not profitable either. courtney, thank you. great context. setting up the walmart story joining us to talk more about it, someone who knows the competitive pressures from walmart all too well former target vice chair, former toys "r" us ceo, now ceo at storch advisers. >> good morning. >> what is walmart getting with this majority investment in flipkart >> the leading share of one of the largest markets in the world. nothing short than a battle for retail global domination everyone believes e-commerce is the future of retail and walmart is very far behind in the u.s amazon is maybe ten times or more larger in the u.s. than walmart. and they've said they'll try to invest and try to catch up getting the lead amazon has in
the u.s. you have the largest market in the world sitting there with india growing rapidly. economy strong great future opportunity to buy the number one player and be number one with 1.3 billion people and that's why walmart did it. they're serious about it the stock being down by the way, look it's a trade-off of short-term versus long term all this investment making e-commerce has been hurting their margins and results in the near term. but they're looking long term and saying if we don't do this now, we've been waiting 20 years versus amazon the way there is but we don't do this now, one they we'll wake up and amazon will be dominant everywhere. >> you're framing this -- they missed the opportunity in the u.s. to dominate e-commerce but that opportunity internationally is still up for grabs? >> exactly it's there look who is aligned with them now in india have you seen the avengers movie? this is like the avengers against -- >> everything is about the avengers but it's walmart, microsoft. it's ten cent from china
ebay has a share in this and google is going to join. all these companies, plus toss in a few more. they're looking at amazon as a threat to their business amazon is not only a leader in e-commerce, in the cloud, it is a dominant force in search this is why it's so important for google to look at this and see what they're going to do all these companies are saying we better do something before long, amazon will be the king, queen and prince >> the e-commerce race in the u.s. is lost >> i don't think it's lost i think the only person who has a chant at scale to compete against amazon is walmart. and what you're seeing is that it's like a t-rex against a vel velociraptor you see that even before what's happened on this deal. they're going very strong. everyone else is going, we better align with either or both if we want a future to see all the other retailers, brands lining up one place or the
other, or both, saying we better be in both or we'll be invisible on the internet. >> we had a big discussion this morning about how companies like amazon are given a much longer leash to spend than companies like walmart >> it drives you crazy trying to operate a more traditional brand because you are held accountable as the people of walmart are for results quarter after quarter after quarter whereas amazon has had a very long-term time horizon. jeff bezos built a business that's made virtually no profit and still loses money on much of the physical product as they make money on digitize abable product they sell. your stock would crash somehow you have to invest in the future as you preserve the status quo this is why a lot of people talk about in many industries you have the attackers' advantage. it's accurate to go, i don't make a lot of margin but look how fast i'm growing >> walmart has been frustrated
by that disparity for many years. they have a controlling shareholder in the walton family that does give them the opportunity to make these kinds of investments i'm curious about international where they have faltered in the past are there any cultural issues they should be aware of or perhaps have learned from in the past that will make this a better investment? >> i think they're smart enough to do that they went into germany and famously had a terrible experience there and retreated i don't think that was so much cultural as the fact they bought a player who was a distant, number seven, number nine player very low ranked player on the german retail scale. in the uk variation, they bought a much larger player you'll notice they are basically cashing in some of their chips and merging that with s aye ssainsbury they're take something money off the table in the physical retail world as they're making this other investment in india
recognizing the growing importance of e-commerce they've got a lot of people at the helm of flipkart who are indian have a lot of employees who are indian they're not fools. they'll do that correctly. that's not so much the issue as is making sure they're on the right side of the ledger in the decline of bricks and mortar >> what about china? is that just taken by alibaba and that's why everyone is focused on india >> i don't think we've seen the last chapter yet. in china, it's been because of very strong local competitors. in india, it's been impossible for anyone but a monobrand you can sell vertically in india. if you are coach handbags you can open coach handbags but can't sell multiple brands by regulation in india. this is a marketplace. you can do that because you aren't actually the physical
owner of the product, if you pill >> you don't think alibaba and ten cent, it's over and done with >> i think you'll see me liances, more change, more merger ultimately, this industry is consolidating on a global basis that is retailing. you'll see more and more of that in the future. softbank sold the shares to walmart here a lot of them. so i believe you'll see much more revolution in this marketplace in the years to come >> amazon and walmart go at it internationally, where does that leave everyone else. you started target.com what about all the other big box retailers trying to make a go of it >> it's very difficult unless you align with one of the winners. when i was at target, we did a deal with amazon that deal fell apart over some differences between priorities there, but ultimately, what you'll see is all retailers, all players have to do business with these people you did mention alibaba.
is it ever going to come to the u.s. in a serious manner in e-commerce so far we haven't seen a strategic intent to accomplish that so probably i don't think that they will, but they are one other company who is large enough that -- >> they're more focused on india. >> the battle in the u.s., amazon has such an incredible -- like you, like me, we probably just buy most of what we want and buy it on amazon and we're very happy with service, delivery it's more like it's trading bonds on the screen now when you buy product in the u.s margins have crashed they've been crushed by e-commerce and amazon is the bloomberg, if you will it is the screen and that's what's going on >> take your point jerry, great to have you here on this story thank you. jerry storch former vice chairman of target and ceo of toys "r" us dow is on pace for its fifth straight day of gains. oil back to the highest level since 2014 as the president pulls the u.s. out of the iran
nuclear deal for more, let's bring in keith parker and brian jacobson, from wells fargo asset management good to see you both >> keith, to what degree now, with oil above 70, do we need to watch that and look for drag on economic growth this year? >> yeah, we've been watching oil and important consideration to our positive view on the u.s. consumer by our math, the rise in oil over the last year or so has been a 40-plus basis point headwind to consumption growth but important offset is after tax paychecks rose 2% to 4% starting in february with the tax cut for individuals. >> ft had a piece that said for the bottom 40% of the income ladder, the fuel cost gains since 2016 are exceeding the benefits of the tax cut. but is that showing up in the overall data
>> in terms of the work we've done after tax paychecks boosts for the lower sort of 20% are in the range of 1% to 1.5%. you're still seeing some incremental but the lower end consumer may be under more pressure given the recent rise in oil prices. >> brian, how about you? how much of a concern is this and could it be later in the year >> sure, it is a concern immediately as far as just the abrupt rise. we see it at the gas pump when you go to fill up your car and it does have a disproportionate effect on lower income individuals i am a little concerned about what this might mean for some of the retail sales data we'll be getting out over the next month or so. but we view this is probably a temporary phenomenon my friends at the wells fargo investment institute with paul christopher put out a nice note describing geopolitical events seem to be propping up prices right now whereas if you actually look at the fundamentals as far as supply and demand dynamics in the oil
market, that should boed for lower prices as the year goes on as we know, what these geopolitical events, they can come and go very quickly the only thing that would really keep oil prices as high as what they are now would be if somehow president trump was able to convince the other members of the iran nuclear deal to go along with the u.s. as far as imposing sanctions but that doesn't look like it's going to happen. they said they're not going to go along with it i'm not sure this will have a material effect on supply coming out of iran or out of the middle east in general. if you see u.s. production increase, that should push prices lower as the year goes on >> keith, i think it is ubs today that says unilateral withdrawal from a multilateral deal does not necessarily mean the deal is over they point to tpp. is there a feeling that this deal could survive x u.s.?
>> we've had a unilateral withdrawal there's potential for renegotiation of the deal. that's what the trump administration had initially tried. so, like we've seen, you can see these deals continue to be renegotiated and as brian had mentioned, the last go around in 2015 with iran you had considerable international pressure where you saw iran production in oil drop 1 million barrels a day-plus an even greater impact on oil prices the chances of that happening this go around are much smaller. >> we're watching the ten-year yield. we're back at 3% and with that level, you start to question whether it stands in the way of this equity rally, the double-digit growth and profitability and all the positive fundamentals we're seeing what's your take on that what levels should we be watching >> i'm really not that worried at the 10-year bat 3%. could go up to 3.25% by the end of the year.
as far as my team, we look at it as we've wee had bebeen shortin ten-year treasury. how much higher does it go as it goes higher, it gets more expensive to short its but you have to cover the interest cost on it. we're somewhat neutral as far as the outlook for the ten-year we think it will march higher but probably very gradually. what's probably more important is what the fed does as far as the pace of rate hikes and whether they push the target for the federal funds rate up too quickly, too soon, which would be, in our mind, probably like around 3% to 3.25% doesn't look like they'll get there by 2020. as far as when would the ten-year become a headwind to the kweeequity rally i don't think we'll get there in the foreseeable future >> good to see you both, keith and brian. see you soon when we come back -- disney beating the street
we'll dig through those numbers. the stock has turned lower plus reaction from disney's ceo bob ooige iger the dow up about 44 points we'll be right back. i am an independent financial advisor. for our firm, it's all about trust and transparency. trust that we do what's right for our clients, without the constraints imposed by the traditional brokerage houses. transparency in the way we're compensated. our philosophy is one of service, not sales... that's why i'm independent. charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com
of the financials. julia boorstin sat down with ceo bob iger and joins us with more from that interview and overall on disney. julia? >> thanks, david that's right disney beating expectations thanks to the strength of the parks and movie studio ceo bob iger explaining investments in new attractions and big brands such as marvel are paying off >> whatyou're seeing at the parks is that our continued investment in that business, in many respects on the backs of some great intellectual property is driving growth in the business and we're seeing that globally, which is great people want to come to interact with the characters that they've come to know and love on the big screen and on the small screen that's helped a lot. we've seen no negative impact from the pricing increases >> i pressed iger on comcast reported interest in bidding $60 billion in cash for fox's entertainment assets to top disney's $52 billion all-stock
offer for fox. he wouldn't reveal what he and rupeert murdoch have discussed or the potential for a bidding war with comcast >> i'm not going to speculate about what they're doing or why they're doing it i can only say and reiterate that, as you know, we made a deal in december that received unanimous approval which is important by the 21st century fox board. we're in the process of filing what we need to file both regulatory approval and shareholder approval we're certainly excited about that acquisition and remain confident it's going to go forward. >> iger thinks disney's fox acquisition is different than the at&t time warner deal. when i asked him about comcast bid for sky, iger intends to hold on to the 39% of sky that fox already owns, even if fox's deal for the rest of sky does not go through back to you. >> thank you julia for more on disney and all
things media and entertainment, we're joined by kay, the founder and former chairman and ceo of usa network and the creator of the syfy network they had a great quarter at disney i've been talking, the stock is down because people think they have to pay more for the fox assets let's start with disney. you look at this quarters and what they've done, particularly on the movie slate as well, give me your thoughts >> they're hitting it out of the ballpark, i think, really on both the parks and the studio right now. the studio has these great brands that disney has bought that are doing so well for marvel and pixar and lucas film. a lot of content to go to for their studio performance so they're really out there and have had stellar performance the parks are great.
the softness on the cable side, the network side, i should say, is really showing that there are some problems in terms of keeping the subscribers, especially on espn people have talked about that. but what is happening in the marketplace in this competitive environment with disney, comcast, at&t/time warner. it's all about content and reaching the consumer directly it's all about data management for these companies. i'd never want to bet against disney in that they don't have that experience. they're going into it now. it's a big move on their part but i'd never bet against them they are a great marketing machine and will learn as they go how to address the consumer directly they're starting off with the espn streaming service for just under $5 a month and a lot of people don't know this, but in your cable bill, if you are still a cable subscriber, you're paying closer to $7 a month for espn
a lot of people don't know that. i really expected them to come up with a higher price but they're really testing the marketplace and they'll find out more about it. >> right now espn, espn plus does not have the same programming available on espn. back to the fox deal, kay. you mention, of course, the seismic changes going on in the industry particularly direct to consumer. when we broke the story that fox was potentially going to sell most of its company to disney, the reason was rupert murdoch looked at the landscape and said, i'm not sure i can compete. which goes to brian roberts. i need direct to consumer and international. these assets don't come along very often do you expect comcast to follow through and expect there to be this fight given that there's not that many assets like this one around >> yes, i do i think this is a chess game going on i think it's not going to be over quickly whether or not at&t gets time warner or not, i think the chess
game is going to be played out with multiple players over time. this is a big battle for the consumer consumers in charge today, a lot of people don't look at it that way but the consumer is making the demands and these companies are trying to meet that consumer demand and changing technologies that's really what this big fight is all about and i don't think -- ryan roberts is not going to go away easily will disney raise their price? i don't know iger is doing the right things saying we've got a deal. i believe the deal will go through. that's what he must say at this juncture but is that what the 21st century fox shareholders are going to vote for again? staying with that deal or look at something and say an all-cash deal, not so bad, maybe we should do that i think that's what we're looking at here. a fight for the consumer >> kay, when you say it's a chess game involving multiple players, when do we start seeing
bids of scale from players other than legacy media companies. when does silicon valley and the googles and amazons and apples start to bid in a big way? >> the amazing thing is that they have built their own in the media business i personally have been amazed at the success of netflix not just do midwestically but on the international scale. pam amazon has come along with the big bidding. a bigger part of it if they got the fox deal done. but that is -- it's been amazing to me that they have really been able to come up with competitive programming. i think it's kind of the era of great writing in television. i call it all television it isn't the technology of television, but it's what people watch. and i think that all of these silicon valley companies have
really come forward with amazingly good product do they need to bid? that's a good question they seem to be doing well on their own. >> we watch netflix market cap approach that of disney. kay, always appreciate you taking your time and sharing your insights. when we come back -- the u.s. exiting the iran nuclear deal what it means for oil and the state of geopolitics we'll be joined by the president of the council on foreign relations richard haass. still looking at gains for the dow up 28 points if it holds, that would be the fifth straight day in a row, longest win streak since back in february
the air and he will greet them at andrews air force base at 2:00 a.m. thursday morning iran's ayatollah khomeini says he does not trust france, germany or great britain following president trump's decision to pull out of the nuclear agreement. he said trump's body will, quote, turn to ashes and become the flood of worms and ants while the islamic republic continues to stand, end quote. meantime, iranian lawmakers burning a u.s. flag at parliment. they also burned a piece of paper representing the nuclear deal and shouted death to america during the demonstrations on a much lighter note, a wax figure of meghan markle was unveiled at madame tussaud's in london that's ten days before the american actress marries prince harry. it also features a replica of her diamond engagement ring. nice to end on an up note. i'm going to send it over to dom chu for the eia inventory
report >> what we have right now is crude oil extending its gains after the government data from the u.s. shows an actual drawdown of 2.2 million barrels of crude oil stockpiles. also a drawdown of 2.2 million barrels of gasoline inventories as well. those particular numbers seem to validate the private sector american petroleum institute data we got showing draws as well as a result we're now seeing wti extend its gains to about 3% on the day. bren brent crude hovering about where it was before the announcement came out >> thank you, dom. sticking with oil let's bring in mike santoli. with the energy sector obviously leading the trade today. >> yes, leading today, carl, and both in the commodities and in the stocks that's been the case for a while. tail winds all across the whole energy complex if you look at different ways to slice it in the exchange traded products the ones that own crude futures. the uso against the -- that's
the wti crude futures, etn also one that owns brent crude that's the bno this is a year to date look. ixc is global energy stocks. it's essentially all the largest world oil companies and the xle is for the u.s. s&p 500 energy sector you see the actual crude futures in oil have way outperformed the stocks year to date. that's largely because you've had -- it's much more about a geopolitical trade i heard bob talking about the near-term prices are better than the longer dated ones. that tends to help those who own futures. if you look at a two-year look, it's a little closer still brent crude being the major outperformer but the stocks keeping up better all these different ways to play the lesson to me is that further rise in oil prices might not be dollar for dollar to the benefit of the stocks. because you're talking about
potentially unsustainably high prices, demand issues and geopolitical premium is not captured as much long term the earnings streams of these companies, guys. >> interesting so you think this may be as sweet a spot as it gets? >> you still have a tail wind for the stocks but in terms of them keeping up with the actual commodity if we go on one of these high momentum runs for new york it's not clear that's going to be the case. >> has been interesting to see the devergence in the price of the commodity versus the stock when we come back, more on the president's move to pull out of the iran nuclear deal one of the reasons oil is rising today. richard haass and the former special envoy for international energy under president obama amos hockstein both with us when "squawk on the street" comes back
at ally, we offer low-cost trades and high-yield savings. but if that's not enough, we offer innovative investing tools to prepare you for the future. looks like you hooked it. and if that's not enough, we'll help your kid prepare for the future. don't hook it kid. and if that's still not enough, we'll help your kid's kid prepare for the future. looks like he hooked it. we'll do anything... takes after his grandad. seriously anything, to help you invest for the future. ally. do it right.
welcome back to "squawk on the street." president trump announcing his withdrawal from the iran nuclear deal and the snap back of economic sanctions on iran the move drawing concern from global allies like france, the uk and germany while getting praise from israel and saudi arabia iranian president rouhani vowing to stay in the deal with support from europe. what should investors make of all of this. joining us is amos hockstein who led energy sanctions for the state department as special envoy and richard haass, council on foreign relations president and author of "the world in disarray." thank you for joining us am amos, you ran oil sanctions against iran for the obama administration obviously, you would be very critical of this move. what do you think the ripple effects are going to be? >> thank you for having me on. i ran the iran sanctions on oil from the beginning in 2012 through when we had to do the
unwinding of those sanctions there are a lot suggesting we could learn the lesson that we can essentially snap back to 2015 before the sanctions were remufd, but that's -- there are critical differences between where we are today and where we were then. the first and most important is the fact that europe is not following with their own embargo or sanctions on energy which means that the -- for the first part of the sanctions implementation you won't have this big takeoff of iranian oil, 650,000 barrels that will come off the market, even if the european companies do comply the second difference is that some of the transactions around the world, specifically with the lar larger consumers of iranian oil are not necessarily done in dollars. they're done in euros or -- that could change as well we're looking at very different environment of the oil market and the consumer base of iran than we were in 2012 which will make it more difficult to
implement these sanctions. >> very quickly. haven't been able to get an exact straight answer but almost how many barrels per oil do you expect to come offline as a result of the u.s. withdrawal of the deal at this point >> yes, i would say probably at the first instance which is 180 days from now you're not looking at much more than 200 to 250,000 barrels a day. if you look at who is planning to do some implementation, who is not so i think that will grow over time perhaps but not much more than that. at the beginning but i would draw your attention to something else that could be interesting to investors is that there is a tension on the use of dollar for oil there have been countries who wanted to move away from the dollar as the currency for oil trading. this may be the moment that after 100 years of trading we may see a change of whether the euro wants to take advantage of that the chinese may want to use the
r&b for that so there could be unintended consequences of this and i think that's already happening in the conversation that i've had over the last 24 hours. so i would watch out for that. >> that would obviously be a humongous deal how are you looking at the implications this could force a showdown over iran's nuclear program now instead of two years what does that look like >> the agreement plays critical constrantss on iran's nuclear program for another roughly ten years, give or take. after that, we didn't know what iran would do. if they started up certain activities, we would have had a crisis on our hands. what we've done in the absence of them starting up any of these, we've declared we're not going to wait for ten years. we're going to press the issue now. we've introduced the immediacy nothing that iran did. so the real question is what iran does. their first instinct will be to
preserve the agreement that will depend how the europeans go but if they find the sanctions are hitting, if the united states imposes sanctions and the europeans aren't able to shield their firms from those sanctions, then i think iran will essentially have to choose between paying an enormous price economically or trying to put the pressure back on us. the two ways they can put pressure back on us are, one, starting up their nuclear program, or, two, amping up what they are doing in some neighboring countries such as yemen or syria. >> richard, there's continued economic problems in iran, despite the removal of the sanctions a couple years ago unemployment is extremely high do you think there's any chance that the ruling party would be under significant pressure to figure out things at home and perhaps roll out some of their foreign adventurism. >> economic growth is plus or
minus 4% oil output has been high inflation is high. unemployment is high in certain parts of the country the easy thing to do for the regime would be to dial down some of their foreign programs, and that would be well received. the question is whether politically those who have their hands on the economic dials have enough pressure over those who are running important aspects of iran's foreign policy. but i think that's the big question mark. >> theircurrency actually hitting a record low today in the free market. amos, what does this mean for europe europe again humiliated by trump struggles to defend its interests. is europe going to be forced to side with iran over the united states and for that matter, take it even broader when it comes to trade, side with china
>> it's a very complicated position that europe finds itself they don't want to defend iran's negative activity in the region. what they're doing support for hezbollah, control of lebanon, etvia cetera. they have a strong belief they were not able to influence this process whatsoever they signed a deal they want to stick by it the question for europe is going to be if they want to stand by their rhetoric of saying we're saying in the deal, what does that mean? for iran we know what staying in the deal means they've continued to cooperate with the iaea. if, for europe, that means they have to not participate in reimposition of sanctions but some of the european companies, even some of the state-owned european companies, will have to make a decision. what is my exposure to sanctions with my assets in the u.s. in up stream, in other physical assets in the u.s., and do i, therefore, implem emt it way and
the iranians will have to be in a position of saying, you're in the deal but in reality your companies are already implementing the u.s. sanctions. de facto, you're in violation of the agreement. and from the other side of what your question was on china, yes, i mean, i don't know what the chinese position is going to be. i can tell you that in 2012, '13 and '14 when we were pushing the implementation, we had one advantage, and that was that the negotiations with iran, so-called p5 plus 1 members included china so when i went into india or china or any other country, i can argue that, look, we're all in this together we're negotiating, trying to put pressure on the other side to reach a deal but now it's open ended. so why would they comply with the sanctions? so i think that there's a very difficult tension here of what's in it for them and what is our ability to
impact sanctions on those economies. >> amos, we've got to leave it there. thank you for joining us and richard haass as well, with a big call from amos on the end of the petros dollar potentially. a developing story out of washington stormy daniels' attorney alleging the president's lawyer michael cohen received $500,000 from a russian oligarch shortly after the 2016 election. robert frank is watching that for us robert >> the question is who is viktor vekselberg, and why is he paying trump's lawyer $500,000 now? like most oligarchs, more questions than answers around vekselberg he's the nineth richest man in russia worth around $15 billion. he was a ukrainian scrap metal dealer who stripped wire for its copper he's the chairman of an investment group that owns a stake in russia's largest aluminum company also includes airports in
russia, a swiss conglomerate that makes industrial pumps and a u.s. affiliate that invests in real estate and other assets he was sanctioned in april in response to russia's attempts to destabilize western democracies. treasury cited his company's role in a bribery scheme but the white house has since softened the impact of some of those sanctions. earlier this year, he was stopd by federal agents at a new york area airport when he stepped off his private jet. those agents were working for special counsel mueller and they questioned him and searched his electronic devices maybe a lot to come from that. reports now say the company linked to vekselberg called columbus nova transferred $500,000 to michael cohen's llc. a lawyer for nova said the company is not controlled by vekselberg and the payments were for consulti ining services on sources of capital, visinvestme and real estate. it had been listed as one of the
direct subsidiaries and companies. it's also owned by vekselberg's cousin the firm did donate $300,000 to the president's inauguration fund and victory pac and vekselberg was at the inauguration himself vekselberg is a name we'll hear a lot more of. >> robert frank who has covered wealth for us and for the journal for a long time. thank you for that when we come back, the executive exodus continues at nike as more top-level employees leave the company. facebook announcing its biggest executive shake-up ever got some details on that and the dow holding on to moderate gains of about 37 points. don't go away.
they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more.
continues its investigation into accusations of harassment and discrimination inside that company. a fifth employee who worked in marketing has left the company the departures include nike's head of running in north america, head of marketing in its performance categories and director of sports marketing. if you're keeping tabs the exits raise the departures to 11 shares are down a percent but broadly hasn't affected the stock. i'm told this concludes the number of departures we will see from the first phase of the investigation. no more comment from nike on that >> all right meanwhile, let's bring in jon fortt who joins us on set this morning and awfully big interview coming up in just a few minutes on "squawk alley." >> good morning. that's right we heard from satya nadella at microsoft, their developer conference monday, heard from google yesterday, but today, the biggest of them all, amazon in the cloud, when it comes to
a.i., when it comes to the booming cloud economy. andy as andy jassy here with us on-site on the new york stock exchange coming up on-site. >> where stocks are this morning. dow gains are fading up 2 points s&p 2678, hahes ld pretty well above the 50 day "squawk on the street" is back in a minute. so, what's new? we just switched to geico and got more. more? they've been saving folks money for over 75 years. a company you can trust. geico even helped us with homeowners insurance. more sounds great. gotta love more...
welcome back to "squawk on the street." i'm dominic chu. energy front and center today but we're keeping a close eye on the material sector up to half a percent today in early trading among the names leading the sector to the upside, free port, and dow dupont and international flavors and fragrance. shares of ingredient producer higher by more than 1.5% a day after striking a $7.1 billion deal to buy israeli based fruderom back down to you guys, sara. >> i will send it back to courtney regan for a market flash here. >> sears right now is holding its annual shareholder meeting and they are announcing they're taking their relationship with amazon a step further. so now sears says if you buy any brand of tire on amazon.com you
can have them installed at a sears auto center. it starts at just 47 cents in 8 metro areas rolling out to all 400 across the country sears gets an installation fee for this and they will begin selling their die-hard tire brands on amazon.com for the first time remember, previously, they agreed to sell kenmore and die hard products on amazon. that happened about last summer. back over to you guys. >> that's on top of this lenar news to build model homes empowered with alexa interesting day for amazon by the way, andy jassy of amazon web services is with us on "squawk alley" in a couple minutes.
holiday inn express, yes or no?gin. do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.