tv Squawk on the Street CNBC May 15, 2018 9:00am-11:00am EDT
>> every truck you go by anyway a scary moment. >> this is scary. >> it is you only think it happens, you know, scary things happen when they're flying y you have to be careful the wings clipped the tail of another plane. severing it in half. it sounded like a bomb went off, they said. >> okay. >> thanks, melissa. >> my pleasure. >> we'll see you tomorrow. "squawk on the street" begins now. ♪ good tuesday morning welcome to "squawk on the street." i'll carl quintanilla with jim cramer and david faber futures down about 154 points. home depot looks to trade lower. europe is mostly high. the 10-year yield now 305.
oil approaching 72 our program begins with futures pointing to a lower open after home depot sales disappoint. market at the highest level in two months dow comes off the eight-day win streak plus troubles for tesla. one widely watched analyst lowering his price target citing many problems. and shares are falling in the premarket. call it the bro mance. why larry kudlow is optimistic for a china trade deal the dow posted a 4% gain but stocks are set to open lower thanks to home depot being overshadowed by a miss the slow start to the spring selling season, they cited home depot reaffirming their full year guidance looking for a.6. you said, jim, the weather would
be a factor this morning. >> it's one of the situations where it doesn't matter that you tell people, i mean, everybody who is involved with home depot in any way, shape, or form i talked to coupling you knew it was a long first quarter when it comes to weather. long none of the things you thought could pan out did. and the weather wasn't great but, you know, i think this company deserves the benefit of the doubt when they said that may is a resumption. that said, the sellers at home depot, when they have come in periodically, i call made themselves right if you go in there and try to take the other side of the trade down 5 points, they'll come in and keep selling it. they'll say it's really high they want to get out they're ringing the registers. at the end of the day, what tends to happen, the lowest price is the one you get because the brokers want to say, hey, look how much better i did than the lowest price be careful it may not be the day. we're going to see other
retailers say this by the time next week when low's reports we'll say, shoot, that home depot was such an opportunity. they had the misfortune of being first. >> yeah. it looks to be the biggest gap down on earnings in six years. since may of 2012. but the five biggest gaps down on earnings all come on q1 prints so the winter really does, i mean, their mix of whatever it is shovels versus seeds is not good for winter. >> it's very difficult what you want is the gardeners to come out early. you had way too much cold. for instance, in the midwest there was snow on the ground in the middle of last month everybody likes to go there for the planting season. that's why they call it the christmas season and you didn't have the weather. if you didn't have the weather and it's being pulled through, then someone will say wait a second they missed the chance but that's not true. there's a stickiness to home depot. people come back
look at the performance of the stock. the performance of home depot. you know, you're greedy if you don't ring the register. that's one of the greatest secular stories. any time you sell this thing on this kind of stuff, someone just waits a day and they start coming in and say wow, you know, i got a chance to buy this. >> the overall retail sales number we got now 4.7 year on year a little light auto and gas but a lot of it driven by cars, which we knew. and do-it-yourself and furniture. >> right do-it-yourself i don't know do-it-yourself home depot. home depot is the place that the contractors go and contractors have said that the weather is not that great. one of the things that home depot has been do over low's is get the contractor i think the consistency of home depot is such that you're going to have to come back to this one. by the end of this week, you'll realize. when everyone cites the weather
you'll say who cited the weather and still did well that's home depot. >> you think we might hear echoes in walmart and jk penny. >> i think they'll say it. >> and home depot has more outside seasonal yesterday the restaurants were down here is what i heard, you know, besides the weather nothing wrong. and i said hold on, wait a second the weather was not bad. know how many situations someone said you know the weather was bad and it's like wow okay it means numbers have to come down. you're going to get declines then you'll get a second level decline and buy them this is the first decline for home depot. >> all right we're watching yields today, jim. 3. 05. seven and nine-year highs. gold today see it >> there are a bunch of things going a short term wrong
yesterday the cloud stocks were hammered in a way that let us down suddenly what happens when you have a bunch of stocks down we'll say, you know, three didn't matter but 3.10 mattered. the only thing i saw good for stocks today is larry kudlow's comments where he thinks that things could be okay with trade. but no i just don't think it's a kind of you have too many data points not great. >> you have the commerce secretary trying to clear up the policy on zte. >> let me know you have terry branstad say we're far apart u.s. and china as jim said, larry kudlow speaking to axios mike allen today. >> a little bit of a bro mance between president trump and president xi where it leads i don't know it may lead to a trade deal. it would make me happy. >> and do you think the bro mance is a good thing?
>> i do. bro mances are always good [ laughter ] >> we'll see where it gets us. >> remember larry is an optimist. >> okay. >> he's always been an optimist. and this time it's no different. there's enough yin and yang going on in this administration. we never know. i thought it was interesting the tweet on zte that seemed to be almost the president himself and he didn't tell all the people. >> that is the way his behavior sometimes is described he's sort of the one that sets policy, particularly when it comes to trade and despite us trying to figure out the tea leaves and where kudlow is and where mnuchin is it comes down to trump anyway. he seems to lead without necessarily everybody being on the same page. >> i know we have a sound byte from larry on zte we should listen to. >> i think the issue here is how harsh the remedies how harsh the enforcement.
and if i'm misspeaking here, i apologize in advance i think that's the intent. there are great nations. and the issue here is not just to let them off, but perhaps to do so in a manner that they could conceivably go back into business i don't want to get that far down the road, but i think that's the intent. >> see, now this is very interesting. peter th peter navarro is focussed on the 2025 policy for china which some say is steal everything we have. and the additional decision against zte is what happens when you let the chinese do whatever they want. they sell the technology to iran that was at one point, remember the president just kind of broke relations with iran. you really -- not that we had any formal relations but the inconsistency of what is going on is hard to grasp. >> yeah. it's important for people to
try. given its implications for so many different parts of the economy. i don't think you can grasp it you have to admit you're not going to know until you see something that is an actual deal just not going to know what the path is going to be like, if we get there at all. >> yeah. thing are press reports, so to speak. think about what larry said. larry said, look, you know, basically i don't know if i'm right on this. well, that's because -- >> right they don't have a uniform policy across the board they've been working on whether they're sharing the same goals and trying to advance the same agenda. that's always been clear i mean, think about what wilbur ross he said i think that's what the president said that's what you're dealing with. >> what happens how do you make it >> it works. i don't know maybe this, you know, north korea. >> interesting style of negotiating ends up with a deal. >> the bro mance, okay what is that the bro mance? >> i don't know.
>> you don't know? >> do we have have a bro mance >> a bit of a bro mance. >> there you go. >> we do a trade deal together >> yeah. i'll trade you the tie i like it. >> i'll take a couple of houses. at least for a week at time. >> i'll lend you some of them. >> beautiful i'll give you this. >> he gets to stay in one of your homes for a week, and you get every other guest from now on forever. >> done! >> no. >> i'll give you a couple of mexican homes. >> i don't like that deal. not taking that deal i want more. i'm going to put sanctions on you. verizon's chairman and ceo lowell mcadam today. we'll hear the interview later this morning a lot to talk about, obviously another look at the premarket. looking at the best may gains since '09 for both the dow and s&p. nasdaq best may gains since '05. back in a minute
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sure. mom,what's up son?alk? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. [ chuckles ] download the xfinity my account app and set a password you can easily remember. one more way comcast is working to fit into your life, not the other way around. >> it's the innovation cycle of 5g we're behind china this is not something we can allow. this will be the first company, because of our available 600 megahertz to build a nationwide coverage 5g service. guess what ctia says that the leadership in
5g can bring 3 million jobs. we're behind what we also hope to do is get dumb and dumber and comcast and others to step up their investment we expect they'll invest an extra $20 billion and we're going to invest $40 billion in the first three years. >> t-mobile's ceo john legre discussing 5g request us on the day he announced the deal to merge with sprint later this morning, stay tuned we'll have an exclusive interview with lowell mcadam here at the nyc. about an hour or so from now we're going talk, guys, about 5g as you might imagine, he takes issue with those comments with mr. legere 5g, for verizon, is at the center of trying to differentiate the level of service from that of the competitors and get a lead on them in a significant way. yesterday i had the opportunity to test out a number of
applications for it. verizon has 5g available they bring in developers from other companies to test the applications and things of that nature it is really going to be interesting. here we're doing something that would have the ability -- it's the lack of latentcy in 5g it you can where somewhere else and do the exact same thing given the fact it's milliseconds in terms of the signal and in this case, this is an application that can be used by a physical therapist to help them remotely with a patient there are so many other applications whether it's the internet of things, smart cities, whether it's jet engine technology and allowing groups of people to remotely look at a jet engine and see the same thing at the same time. make decisions based on that
moment and so we're going to talk a lot to him about 5g. you start to think about things, for example, being able -- the lack of -- no longer needing a box in your home think an xbox now. you need the computing power in your home. when you get to 5g, you won't need that computing power. you'll be able to connect right to the cloud and get that computing power there and so no more box. >> what happens if i have a parent companies like comcast. >> eventually, i mean, fixed wireless is another potential application. there's debate about it. he and i talked and will talk during our interview about can you see through leaves and trees and get the signal through into
the home they say up to as much as 2,000 meters, i believe it is. but you're right you're right the same way 4g created so many businesses or enhanced existing business models. you have to start at this point, even though it's a ways away, to think about what 5g will do. >> i think 5g will be great. two super bowls ago in san francisco, i spoke with lowell and he said 5g is like here. now they were sampling it in some cases. >> right. >> what do you think about what legere is saying >> i know these guys are spending a lot of money. there's another application for it, which is your video camera when it's using 5g and sending the data is able to capture every single face on the street. to the extent it's not -- a surveillance society like china will be important for them they'll be able to monitor every person in that country via
video. >> and orr well talked about that he saw that coming. >>ly say that, you know, they're going to be securities concerns and privacy concerns potentially around it. >> more than facebook and cambridge analytica? >> but they are starting to build out various cities around this country. >> i think it's incredibly important. >> it's something we're going to be talking about more at this desk as this year goes on and next year. >> it's certainly no more circles. remember how president obama hated -- >> every circle. >> yeah. #net neutrality. >> yes. >> windmill of death, as my daughter refers to it. >> windmill of death. >> yeah. we get it a lot on our apple at home. >> no bro mance. >> no? >> bro mance is over second block. >> second block of our show, the bro mance is over. >> it's done. >> yeah. [ laughter ] >> we can't wait to hear more from lowell -- >> verizon has a higher market cap with at&t. it's more than comcast
not that long ago -- >> we're going to talk about oath. >> yeah, sure. >> good. >> the combination of aol and yahoo! whether they need to get bigger in media verizon was the name referred to yesterday in the cbs lawsuit as having at least expressed interest in cbs. that was some time back. we'll talk about that. >> yeah. the cbs, by the way, is maybe the most interesting story right now in corporate america. >> yeah. i would agree. >> it's just animal house. >> i would agree with that. >> we have to have faber college right here >> don't forget drunk, fat, and stupid is no way to go through life. >> and dumber and dumber we're stepping up our game. >> when we come back, we'll get cramer's mad dash and count down to the opening bell. another look at the premarket here as the bulls are tested for the first time in about two weeks. more "squawk on the street" from the ncse in a minute
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>> signal keeps going out. >> i noticed that. >> there's a 20 second piece about apple and what happens to services growth. the services growth is what inflected. okay but i read this piece, you know, he's got a market perform on it. but this market performance is the most bearish market performance. it's been going on forever and he's talking about basically saying that maybe they relied too much on google and they have to worry about a contract renegotiation with google for getting business but right at the end we he says a doubling services to 49 billion by the end of fiscal year 2020. here is what i'm confused about, david. i read this piece and i want to go buy apple it almost reads i reluctantly i have to buy. i think you should go to a buy but he has really -- >> you've been praised him in
the past certainly. i remember with ibm. >> oh, tony is fantastic sometimes we can be -- we can be on the other side. this piece is a very positive piece. >> you think he doesn't want to admit almost in his rating that he is positive he has to stick with where it's been. >> why did you do what i wanted you to do. it's a bro mance again that's right i was hoping you would say that. i think tony feels like let's give him a benefit it did inflect his question on the call wasn't that negative. i think that he may think it's best days of apple are still in front of him. >> he's not the stock, right. >> he got a little cold feet ahead. he, too, believes the service revenue stream is inflecting in a way. it makes me feel like apple is really, really good.
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you're watching "squawk on the street." live from the financial capital of the world the opening bell in a couple of minutes. sbrersing set up this morning as the bulls have a couple of obstacles to get there one is the ten year now close to 306. and brent approaching 80. >> there's a piece today about snacking this is bank of america merrill lynch piece. i look at the stocks and say there's a 3% yield or there's a 3.5% but, you know, i don't want any 3.5% yielders without upside they're the ones that get hit. you know, kraft heinz created a minirally last week. i'm not going there. i think we have to be careful in that group it's not what i want i would prefer home depot on a discounten than i would any of
these. by the way, home depot finally talking again breaking, you know, the company breaking out the quarters and saying how good everything is and i'm glad that home depot on the conference call is making up for a statement that didn't seem good. and it's going to help the company that rings the bell today. >> stanley -- >> yeah. >> that's right. we'll see wk on podium they did break down february 56, march 59 april 22 because the snow cover in april in this country was in the top five on record. >> michigan is a great state to take a look at home depot. a big planting state you couldn't plant because plants die i mean, look i'm a gardner that tries to put it in the last week of april they would have died that's what was happening around the country, david [ applause ] >> never actually planted anything but i get it.
>> not even in a box >>nothing. >> i would say it's a down day off the ten year and other things so, i mean, look i think that home depot can definitely trade up i feel up from down 5.of -- 6. joe dimaggio remember that 57th game he completely screwed snup. >> -- up >> yeah. he was hitting a double play or
something. >> might have. >> he washed off the '57 game. this is a great rally but i think it's okay that, you know, we have like the cloud kings yesterday got hit. i expected by the end of the day we'll have to, once again, i used to write 0 pitch areobitua >> one of your many things you've done. >> i can tell you faang will have an obituary today double "a. >> faang is the most traded with the third month a row. along with short treasuries and short dollar. >> it's true that's the problem with being right. most crowded train what is the least traded campbell soup? i guess i ought to plow into those. kellogg. i like upside but these come down yesterday sales force was down badly. at one point, adobe was down.
>> adobe >> yeah. that's okay. let them come in a little and stop freaking out! >> with that, all dow components are in the red now home depot leading the average lower. that lower we haven't mentioned tesla yet. >> morgan stanley cuts the target to 2.91 cuts some margin assumptions on challenges for the model three, he says. and goes on to say they expect the capital rise to be $3 billion instead of 2.5 in the third quarter, he said. >> this was an amazing piece. >> you're referring to ron baron yesterday on "squawkbox" said it would be a 20 bagger >> yeah. i think a lot of retail people
caught that yesterday are saying don't worry about it let's go buy more. this was a very damning piece. >> so many shorts crawling all over this name. >> times they can mislead but a lot focussed on, for example, the cash during the quarter. why do they only have 5 million in interests they should have had 11 in interest are they drawing it down to pay venn or its and bring it back toward the end of the quarter. does that mean or show, you know, they're closer to the edge than you might think >> that's one of so many different arguments being made in terms of the precarious nature of the balance sheet and many would say they're going it need to raise more capital, guys, before they get anywhere near free cash flow positive on the production. >> okay. let's say you're following intel. >> yeah. >> and you see the people who have left. would you believe that brian said what we're doing is flattening the organization.
that's why i love it it may be the 15 bagger, karl. it may not be a 20-bagger day. >> i like his line regarding all the conference call drama. musk reserves the right to do difficult things investors reserve the right to understand the costs. >> yeah. i think that, you know, for those that like shakespeare, he's trying to sound a little too much like richard iii. musk. >> musk takes to task those who are focussed on the crashes of the self-driving that was on, apparently, auto pilot was on in the utah crash what about the thousands of crashes that happen all the time why is there such focus? well, in part, they're not using auto pilot. >> i agree there are a lot of cars that have crashes but they're not using auto is the system safe or not? >> yeah. i'm not going to disagree.
>> 10 bagger >> wow. >> 20 bagger makes it bigger than apple. >> right how are they going to raise capital. how will they do it, jim i'm in the camp that says based on reporting that they have to. >> that would mean that directly contradict what elon musk said don't you think they have to raise capital. >> i think that -- >> yes or no question. >> like a police interrogation over here. >> i never had my rights read. >> how would you do it would you do equity or debt? even though their debt is up, obviously, trading well below par. >> it's not down thatch. i think you can do more debt i think you can.
>> you could. >> you could go to one of the bulls. who was the guy last week that said i think it's a great short squeeze. you can go to ron baron. >> very strong investor. >> i think from the looks of things he's rearranging a lot of different bond deals and collateral it may make it so you may say there's a division of tesla has to raise money but not tesla itself. >> he could say, you know, i told you it wasn't tesla it's our fremont plant which is very different from tres wilesla what do you think of that? >> i like that. >> they valued tesla at zero. >> yeah. energy at zero it's not minus five.
>> there is never any grounding. >> no gimmicky numbers. >> it's 175 to 19 0. not 100. 97 i like the decision. got to go with a number. >> the model it's going to a trillion dollar market cap. >> it is an ugly day. >> on a brighter note, ulta outperforms from 220 to 280 now. >> i thought that was good on two different fronts i thought it was good because i think that mary is doing a fantastic job. i also thought it was good he started out by saying, listen, i missed it. i should have recommended this awhile ago it's a great mind. you know, he says, you know, we're upgrading it
we missed our opportunity to upgrade at 220 level i like someone willing to say i'm kind of late i agree with everything in here. the piece i like was the morgan stanley endorsement of estee lauder it's a prestige brand. the world will pay up for prestige brands. from a fabulous analyst. we have to get him on-air. >> the day after the fireworks, right around 24 hours ago cbs is one of the few stocks up this morning. there's zero chance their calculators lead them to the viacom deal, which is utter
nonsense there's so many things that play here you can see cbs is up. there's going to be a debate and there's a completely different opinion of the charter and the reading of the charter that cbs said allowed it to issue the dif dent that would have the affect of taking down national amusements voting state to 17% mia said that interpretation of the provision is wrong in fact, they mean the company can distribute identical stock it was done to deserve preserve the ability to receive class a stock. that's one area for the judge when he's going to issue this tt tro tomorrow to prevent redstone from replacing the board as she might otherwise have done. given the sboboard is suing herd the controlling shareholder at mia she runs along with her dad. but her dad at 94 no longer in
control any longer you know, they reached an agreement on a ratio the economics were not the issue. they continue to not be the issue. as we said so many times we sorted reported months ago the issue is management of the combined company now it seems zerosome is what -- they could lose and redstone will get rid of the districters. i don't know why the analyst seems to think otherwise. and cbs, for its part, continues to say they did not agree on the price, but it's not what i hear. .1635. i have the entire bid history back and forth
but it doesn't matter. it's not what is really at stake here what is at stake is the future of this company. and, again, the court will make the decision and if they lose at cbs, that's it i would think she's going to replace the directsers and mr. moonves. how can she not otherwise? >> it's hard to get a tro. >> is it >> yeah. it's very high i think it's not a zero chance. >> right. >> i read what they're saying about the clentsiansing and delr law. >> yeah. don't forget there's an argument that the board concluding the special committee directors have a duty, as well, to their controlling shareholder. the duty doesn't just extend to minority shareholders. it extends to all.
would they jurn attorney precedent to a certain extent by allowing them to mitigate control of the shareholder it'll be interesting and have, obviously, implications far and beyond the fascinating situation. >> i just -- we know the procedures the chancellor >> i do. and i don't have it handy. but i did -- was told. >> because somewhat favorable. let me get back to you, jim. >> there are people who don't like there's a fairness component. >> yeah. i think there will be actually a little more subjective down there. it seems unfair to cram cbs down but at the same time that duty to the individual shareholder. >> yeah. >> jay-z is arriving at the sec's new york office for his deposition regarding the sale of
bravo wear to iconics. he was accused of ignoring a previous orders to testify the group acquired the clothing brand more than a decade ago but he's expected to be questioned about the brand, to what degree he was involved before and after the sale. that's a few moments ago at the sec in manhattan the dow is down almost 200 we'll get to bob this morning. >> good morning. happy tuesday. i don't normally start with the ten year i think it's the problem here. let's take a look at it. .03 was the important lie. we had retail sales out. well, that was in line the empire manufacturing was stronger than expected prices paid. employees rose strongly. i think that was the problem here because yields moved immediately on that and the stock market went straight down 8:30. i don't think it was the retail sales report let's take look at the sectors here you can see tech, the market leaders is tech. industrials are down health care is down.
and there's the other market banks up today it tells me an interest rate story going on today if we look at the regional banks that are more interest rate sensitive. i like to look at the year over year numbers internet is up 10% that's a steady number the internet sales increasing 10% year over year furniture sales are good still home depot talked about a slow spring selling season. i understand they said may sales were actually pretty strong. on the conference call but 4.4% of building materials pretty good. restaurant and bars slowing down a little bit department stores steadily keeps 1% is fairly common decline that we're seeing a lot of trends that are continuing there we're also seeing a spike in the dollar today that's hurting emerging markets. look at the big emerging market
etf. south african etf, brazilian etf, china the mainland china shares. that's the big emerging market speaking of emerging markets one of the big indexes in the world finally released a set of 234 companies in china on the mainland they'll be including in their big global indexes primarily the big emerging markets. this is a big market for china china will be a huge player in the global indexes remember the world is becoming -- is going out and buying etf it's a big factor in what people will owe. >> remember as we this slowly
happens and it'll happen over several years. not immediately but start in june people are going to have to sell some of the emerging market stocks to buy some of these shares you can see some of the companies like compliances and air-conditioning company big car companies. they've been buying the stocks to eventually start including them slowly in the indexes only up about 5% of the market cap initially. china is getting into the world. it's one of the things the chinese authorities have been looking for for a long time. just off the low the down dow 168 points >> thank you very much, bob. to rick santelli eventful morning where he is. >> it is and, you know, retail sales the headline number was pretty good. the control number plugged into other numbers like gdp was pretty good. it wasn't an a-plus. you know, i remember when we used to have one handle. we don't have very much.
there's a handful headline retail sales numbers over one. nonetheless, you know, if you look at the back to back with last month's revision, all of a sudden the retail sales for last two months is starting to look better and that is totally accepted by the market look at i can show you the two day of two they look pretty much the same 8:30 eastern they took off what is fascinating is how key 3.03 is. go back to june of 2011. that's the last sustained trade we've had over 3%. 303 was the toll keeper from new year's eve on 2013 it was the high this year. it's about the close, folks. we have to see which side closes look at year to date of 30 we can call it a lagger. others are making cycle highs. other maturities are making eichel highs we need to get through the
march, i believe it was the -- excuse me february 22nd it was a 3.22 highyield close let's look overseas to bunds those are treasury options boy they're having a big volatility session in there. if we look at bunds over the last three weeks it's enlightening the key is how much gravitational force and our higher rate will make mario draggi move. that would be indicative dollar index what a day. 24 hour turn on the data it. it rocketshiped. look at the one week chart 93.40. you can see we did five sessions ago a close on the other side. the north side would be bullish. carl, jim, david, big day. back to you. >> thank you very much, rick rick santelli.
when we come back, david's exclusive with lowell mcadam dow down 172 only walmart and disney in positive territory on the dow. back in a minute because, when you really, really want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies see it- and see it through-with digital.
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and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. i reference this u.s. i would say has the most impressive portfolio for snackers. that was kind of what is working. they have had tremendous growth over the course of the last two years, really fantastic. the p.e. moguls. i say if you believe in snacks as a theory my belief is the snack is in fact. >> what's tonight on mad >> world's largest real estate broker cbre.
they run real estate funds. and welbilt is a big restaurant equipment company. restaurants are being challenged by the weather. let's not forget that. people watching cbs and staying at home. >> not going out >> no. they are going out. the millennials spend on liquor. >> they are all drunk. >> pretty much. >> most the time they are drunk. >> and they are high if the state has pot, right >> this is also true, yes. >> there is a glut of pot in oregon that is just unbelievable. >> unbelievable pot? >> yes. >> thanks for the head's up. >> good tip, jim.
good tuesday morning. welcome back to "squawk on the street." worse day for the markets in about three weeks. we are sitting now at session lows early on down 215. ten year getting people's attention at 306 and change. let's get to rick santelli. >> march read on business inventories. we are expecting a number around up. down close on an inventory number. just as a sidenote that 0.6 in the rear view mirror we had one in january and february. both identical. you had to go back to the end of 2016 to find a bigger number. this has been rather tame. we are going to go back to sarah. >> thank you. we have more data out at this hour on housing. let's get to diana.
>> sentiment up two points. april's number was revised. that beats the street's expectation of 69. home builder sentiment was at 69. builders saying the record high cost of lumber is hurting the ability to produce cheaper homes. only current sales conditions rose up two points. both buyer traffic and sales expectations held steady. i want to touch on mortgage rates with the break through which loosely followed by mortgage rates. i'm hearing that the writing is on the wall. quote, this is a serious technical momentum hire. he expects lenders to end up for best scenario cases around 4.75% on the 30-year fix, the average for the best borrowers. for average regular borrowers he is 4.75 to 5% on the 30-year
fix. i said it, sarah. 5%. >> thank you. road map will start with quote very far apart how the u.s. ambassador to china is describing trade negotiations between the u.s. and china. a look at what is at stake as china's vice premier heads to d.c. legalized sports betting could begin as early as memorial day in some parts of the country. and the arrival of 5 g may be closer than some people think. we will have an exclusive interview with verizon ceo lowell mcadam. we start with stocks selling off this morning. dow down more than 200 points. yields rise. the dollar hits the highs of the year. michael santoli with us at post nine. was this just overdo after a hot streak or was there something more ominous >> i think we reached a logical
place for the market to pause and maybe pull back. the s&p was up almost four percent in eight or nine trading sessions. i think also we got up to this level that we fell off very hard from in mid march. along comes a couple of tests. yields going to a new high for this little stretch of time. and then the dollar. i think the market told you in the last month or so that it kind of craves moderate data and we got something slightly firmer than that. of course, around the world you have a little bit of upset market. i don't think it is really a game over. i think the rally is still okay for the moment on this attempt higher. it's easier to say that we put in a decent base than it is that we will have an easier road. >> so hard to figure out whether the market is trading off of the trade tensions. it's not like anything really moved last week but stocks were pretty strong. today you have trade
negotiations on china and looming nafta deadline. doesn't look like they will make that end. it's hard to tell how investors are gaming out the scenarios. >> it's eye of the beholder. last week i could have seen a scenario if the market was inclined to take basically no progress after this china delegation comes home as a negative and to sort of take it as an excuse to sell off. it was not prepared to do that. that's why i think the back of the mind psychological overhangs more than immediate catalyst until you get something on the ground. some kind of horse trading with china just to get back to where we were before in terms of agricultural exports. i don't think this is a market mover but it is about the dollar and pace of economic data. >> you think yields at this point and rick did a nice bit on technical levels here. you think the yields now are a disincentive to buy dips when they come?
>> i think it is a little bit of restraint. i don't think it is about people putting stocks -- it's also true that it raises the cost of capital throughout the system and i also think if you think about an investor that has a stock bond portfolio in aggregate the world has a stock bond portfolio, the value of bonds are down along with stocks a little bit today. there is no incentive to rotate into stocks. you are no longer overweighted in bonds. if you don't have the natural reset because values seem to be moving. >> what about cash as the alternative? that becomes more attractive when you have the yields. bank of america fund manager survey just out shows average cash balance around 5% above the average. >> it is. that to me shows caution. i read that as a net positive because it shows you there is buying power. at the margin people say i will
let it sit there for a while longer. so there is less urgency to buy because i'm getting 2.5%. >> financials the only positive sector. michael santoli. it is a big week for retail. home depot down after reporting a miss on revenue and comps. competition from amazon continuing to heat up. for more on what is next we are joined by ron johnson and the ceo at j.c. penney. welcome back. good to see you again. >> good to see you. >> you're familiar with how weather effects retail. the month by month comps that home depot is giving today, traffic fell off a cliff once snow pack started to cover most of the country. >> home depot has a very seasonal spring quarter driven by gardening and people getting
out in their yards and some home improvement projects get delayed. it does have an impact. at the margin it sounds like it did impact on this quarter. >> you think it will be equally applied to apparel or not? >> i think it probably will be. they tend to go together. i think home depot had a great quarter. any company that is 4.2 comps with improving the margin that can resume guidance for the year i think is in a pretty good place. >> that's been a common thread today. a lot of established retailers would love to miss at 4.2. what did you make of retail sales coming in pretty good? tax cuts maybe starting to take effect, people paying down a little debt, saving a little bit, spending a little bit. you think consumer is showing signs of health despite the string of misses
>> i think the consumer is in a great place especially the younger customer who tends to love the shot. i think they are finding more exciting things in physical stores than they did for the past few years. i think the consumer is very healthy. i expect them to continue that way throughout the year. >> even with $70 a barrel oil? wti this morning marching towards $80 a barrel. what's the threshold here? >> i think oil is a small thing. the stock market is up. people are employed. people have a lot of confidence and the merchandise is exciting in stores. i expect the consumer to continue to spend. >> we will get macy's earnings tomorrow. biggest department store chain in the country and then wal-mart earnings later in the week. last year everyone was selling department stores and buying wal-mart. where do you want to be within retail >> i think i want to own wal-mart for the long haul.
i think acquisition of foot cart was a brilliant move. i think it has a high expected value. i expect wal-mart to take this large store base and successfully navigate the move over the next decade. i think the physical department stores struggle with too large stores, indistinguished merchandise and a lot of bad real estate. i would be careful on the department store segment over time. >> it is interesting time because the consumer seems to be very strong so some investors might be lulled into a false sense of complacency that all retail will be okay because spending is up. you seem to believe that the trend will remain the same that you need to have a significant online presence if you are really going to succeed. >> if you are going to win you have to create an ingamgiengagi experience online and in the
stores. i believe companies that have a big physical presence have an inherent cost structure advantage once they learn to use that with their online experience. target is focussed on that. wal-mart is focussed on that. basically a store is like a warehouse that is a few miles from the customer and theu customer is doing all your logistics for you. when you have to shift it is a lot more expensive. >> a lot of people are looking at debt maturities for specialty retailers in apparel especially going into next year. i think in an era where we are watching short term rates rise. do you expect a raft of delinquencies, bankruptcies among -- or highly leveraged retailers. >> there are two things to look at, debt maturity and their leasic operations. what happens to a retailer every time you update the lease you
are committing for a five or ten year period of time. that is when you make the decision i can't make it. you have to look at the maturity of the strategy and there is not a lot of room for error in specialty retail. >> now we are seeing some storied brands start to sell assets that you might call the furniture in the living room. not to point fingers specifically at sears. in its most dramatic fashion how will this present itself >> i think we're in a massive reduction of square footage. companies like sears and macy's and big department stores are trying to rationalize that real estate asset. because there is a lot of alternative uses now there is good growth in office and need for housing. if you are going to take real estate off the table it seems like the opportune time to do it. >> appreciate your insight. there is a lot to watch especially this week as we await
earnings from other big names. hope to see you soon. >> i look forward to seeing you soon, too. have a great day. more on the impact of a potential trade war on retail. we will talk to the ceo of stanley black and decker next. and later wilowell mcadam. dow off session lows still down 187. a bachelor. and that's how he intended to keep it. then he met the love of his life. who came with a three foot, two inch bonus. for this new stepdad, it's promising to care for his daughter as if she's his own. every way we look out for those we love is an act of mutuality. we can help with the financial ones. learn more or find an advisor at massmutual.com
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stanley black and decker the world's largest tool company ringing the opening bell as american manufacturers continue to try to gauge the impact of tariffs and trade on their business. for more we are joined by stanley black and decker's president and ceo celebrating the 175th anniversary of the company. >> 175 years. so exciting. it's really impactful when you think about 175 years, 32nd oldest company on the new york stock exchange. >> that is quite a history you have. sort of speaks to changes we have seen in american manufacturing and current trade debate. how is that impacting you? >> the trade debate is one that we look at it and we say on one hand the goals are excellent. on the other hand the way of getting there is volatile,
creates volatility, creates uncertainty. we don't know from day to day whether there will be tariffs or a trade war so we have to be agile. i think that is the most important thing. >> we have seen tariffs on steel and aluminum. does that effect your component costs? >> that would have been about a $50 million operating margin but for the exemptions. >> what about the threatened tariffs with china given global nature how could that impact? have you done research in terms of quantifying it? >> we have a strategy to make where we sell. so we have been moving towards making sure that we manufacture where we sell for several years now. you could tell there was nationalistic trend. we are moving in that direction. we are up to about 40% of made in america for the tools that we
actually sell in america. >> so it's not like you have seen massive disruptions. >> i think it would be more marginal at the edges of what we do. >> how much do you export? >> we don't export much at all from the united states. we import much more than we export. >> tape measure says made in the usa with global materials. you are still at risk to a certain extent. >> for sure. commodity price inflation will cost us $180 million of operating margin. we will offset that with $120 million of price increases. we have to understand that and manage that every day. a couple of years ago, the last four years we got hit with $550 million of operating margin issues from foreign exchange. if it is not one thing it is another. that is part of how we manage the business. >> any reason to think pricing
power increases to where you can make thmargin back? >> absolutely. we don't cover 100%. we have 3% to 4% productivity in plant system and are getting more and more of that through industry 4.0. it is agility, managing it. offset some of that and still get margin. >> capital spending seems to be on the rise perhaps in part because it is encouraged under the current tax reform bill. has that been the case for you are you ramping up capital spending >> absolutely. we have gone from running about 2.5% of revenues to 3.5%. a lot of that is related to capacity expansion. we have had a tremendous growth spurt so we are actually expanding capacity in 13 american plants. we are building two new american plants as we speak. so a lot of our capital spending is actually related to our growth. >> we have the home depot
numbers out this morning. some disappointment on the sales figure as it relates to the weather and late arrival of the spring season. bears might look at it and say maybe the housing market is peaked out. >> i feel like bears are totally missing that one. we don't see any issue are respect to underlying market in housing, in diy. we had our own weather problems in the first quarter with our outdoor products. the street took a whack at us. we were down seven percent that day. >> your stock is down about 15% for the year. >> we were up 48% last year so you will take a little froth out of it. there is definitely a sense that there may be slowing in the consumer or slowing in auto. you folks are very familiar with that and so are we. what i'm telling you is number one, it's not happening to the extent that the market is telling us. more than -- about 50% of our
sales are overseas and markets are solid over there for the most part. emerging markets are pretty solid. europe is hanging in there and still has growth. there is a lot of positives around the world. i don't want to get too hung up. there are questions about rising interest rates, energy costs inching up. that's all real. >> you brought in the tape measures which have the craftsman name. we talk about brand fragmentation and how that hurts toothpastes and dog food. brands like this not so much >> craftsman is an iconic american brand. so many people have it in their garages and homes, auto mechanics have it and construction folks have it. it's a brand that we are revitalizing. it was sort of trapped in its retail environment in sears for many years. we liberated it. it is going to be implemented in
lo lowe's. we started trickling products in. you will see a big push in the second half. 2019 we will paint the store red for lowe's and it will be a great initiative. it's a great feeling to take the brand that has been neglected for a while and re-americanize it and bring it home. >> i do love a good tape measure. the president and ceo of stanley black and decker. >> when we come back legalized online sports betting may be coming with billions of dollars at stake. for a look at possible winners and losers we will go live to new jersey. check on major averages as dow continues to settle in close to 19ssion lows down 0. back in a moment.
here they have been at the forefront getting ready for years. they spent millions of dollars getting the sports book ready. they think they are ready to take bets in a couple of weeks. we talked to the ceo earlier today. here is what he said about how much money is involved. >> we think this $400 billion market is going to convert into new jersey sharing in about 10 billion dollars of gross handle and the different tracks and casinos throughout the state will all share in that revenue. new jersey stands to make a significant amount of revenue to help our taxpayers. >> so it's interesting if you look at how much money taxes raised at a place like colorado in terms of marijuana or other states like oregon, montana, delaware with small sports betting. new jersey officials said they are planning on raises income taxes. there will be some tax revenue
but not that much money. $150 billion is the estimate for how much money is bet illegally. if all that money were to come on shore the margins are really small because most money gets sent back to winners. amount of money left for taxes is small. look for winners and losers to be different. the rule says you have to bet only at a casino or race track. other states may have more permissive rules. new jersey will face a lot of competition, delaware, maryland, new york, new jersey, pennsylvania. all these states around new jersey will want to get in on this game. this is something to watch over the next weeks and months. >> everybody wants a piece of this. it will be fascinating to see how the leagues try to fight for it. more to come on that winners and losers story. thank you very much. and that will take it to the etf spot light. supreme court decision having a big impact on stocks.
vaneck tracks performance. down this morning after gaining about three percent on the news yesterday. scientific games up. that company develops tech based products operating in lottery and gaming segments. a quick look at other stocks. caesar's up two percent after being up over six percent. pen national gaming up. slot machine makers also winning. international game technology trading in positive territory, as well. everyone got a boost on this. i wonder which ones are ready to hit the ground running in some of these states. that will further separate the fortunes. >> a lot depends on how each state takes this rule. do they require physical presence can they do it online? >> he is confident in the team's
valuation. an exclusive interview. lowell mcadam is with us. "squawk on the street" is back in a minute. dow is down 193. there was an idea. to bring together a group of remarkable people. to help save the universe... from paying too much on their car insurance. hey, there's cake in the breakroom...
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president's meeting with british prime minister may. starting july 1 american airlines will institute new restrictions on emotional support animals flying with passengers. it will require passengers to notify the carrier 48 hours before flight and then sign a waiver stating the need for the animal. i will send it back downtown to you. >> 5 g is the next generation of wireless service and may be closer than many people think. yesterday lowell mcadam and i to understand how a world functioning in the 5 g network will impact health care, gaming and how we cross the street. you can see some of it. joining me now is lowell mcadam on the floor of the nyc. thanks to the tour yesterday.
not too far from here you have basically 5 g coming into a large setup where you have software engineers and applications and trying to figure out how it will work. how far are we from seeing this stuff hit the consumer or business >> i think we are a lot closer than people think. we have announced that we are going to do three to five cities. we are locking in on four. two are sacramento and los angeles. >> los angeles is news right now. that has not been shared previously. l.a. will be the second that we know about of the four cities that you will be rolling out in. when are you rolling out >> we will launch by fourth quarter. that's our plan. we have had great partnershipwise forward looking mayors, marty walsh in boston is a good example. mayor gar settee in l.a. we want to show the scale of 5 g and the impact it will have on people across all applications.
>> and while yesterday i saw a lot of potential applications, so much has to do with the lack of what we call latency. there is no longer lag time. everything is immediate and that allows for so many new applications in terms of not just for people at home but more for the internet of things and connecting people around business decisions. >> there is a lot of confusion about 5 g at this point. there is going to be different flavors of it. what you experienced yesterday is what we call ultrawide band g. we bought 36 million miles of fiber. we are putting fiber out there so we can have big pipes feeding the cells. then we bought a lot of spectrum. so we will literally have hundreds of mega hertz to deliver full suite of services. you don't get latency and the thousands of times improvement
in capacity. 5 g will deliver a mega bit of service for about 0.1 of what 4 g does today. that allows us to push out to markets at a good cost that we have never been able to do before. >> let's talk about the push out. sacramento and l.a. what does it mean >> we will literally have over 1,000 cell sites up and operating on the global standard. we have cpe for a fixed wireless application. the intelligent home and you experienced what is going on with home appliances and broadband, alexa, siri, things like that. we will quickly in first quarter as mobile devices come available move into a mobile environment. the beauty of how we are architecting our network is it is a multipurpose network. whether we offer fixed wireless or mobile or enterprise service it doesn't matter. that allows us to drive our cost
down. >> you mentioned the devices themselves. that's the thing. they are not in anybody's hand right now. and in 4 g it took some time, as well. people are holding on to phones longer. i don't know if this promulgates -- >> if you look at how smart phones started out -- i remember the discussion with steve jobs when he said we were going to ten. now delivering a giga bit to the hand set you will not have all of that with the first device. that will be another long opportunity for us to penetrate the market and get customers new and exciting services. >> john ledger, of course, was on our air when they announced the sprint t mobile deal taking into account at&t and verizon in terms of spending and saying they will spend far more and were far behind china. how do you respond to that criticism? >> i can't say where they are in
that process. this is a three year journey for us. we started with global standards. we worked with other carriers around the world and equipment suppliers. we have worked with the cities like l.a. and sacramento. we had 11 markets up last year in test wg hundring with hundrel sites. we have been plowing money into this within our capital budget for the last three years and we are going to be commercial. i'm not sure what is not happening in the market. i think china is working hard to stay with up us. >> i got to experience what would be more applications on the internet of things, machine learning, connecting connected devices. so many people are focussed on what this will mean for fixed wireless in the home when the day comes that you can deliver a giga byte there.
can you get through trees? can you get through leaves can you get somewhere where you don't need cell sites 25 feet from my house? >> those were the myths of millimeter wave. no one thought that was good. we are the only ones that have it now. it is to their advantage it was no good. >> he made a point of that. >> i am an sdwrooerengineer. we tested for well over a year so we can see every storm that went through. we have busted the myth that it has to be line of sight. we busted the myth that foliage will shut it down. that was back in the days when a pine needle would stop it. in the 200 feet from a home we are designing the network for over 2,000 feet from transmitter to receiver. which has a huge impact on our capital need going forward. those myths have disappeared. we are charging ahead.
the market will judge. >> i know you for many years as an engineer, somebody behind the building the network that helped define verizon and differentiate it for some time from your competitors and have perhaps largest subscribers. do you see 5 g the same in terms of being able to offer that? if so, how do you take advantage of it? >> i will tell you, i have been in this business since the first phone call in '84. i have never seen the technology that will be more disruptive and have more benefit for consumers than 5 g. it is so completely obvious to me. it won't be the traditional way where your hand set will get you all excited. rit it's the ability to do autonomous vehicles. you saw a couple of health care applications. the opportunity to lower health care costs and have better outcomes because of ag you saw
gaming console yesterday. because of latency of the network that means how responsive the network is, you don't have to have big gaming consoles or tethered devices for -- >> we are looking at pictures of it there. all that stuff changes. >> what i took away from it was i don't need x box in my home. there were going to be investment implications that our viewers would only start to understand. you think many applications haven't been thought of as yet. >> we have had some of these like autonomous vehicles in our mind for a long time. the ability to do it and do it well -- with the camera technology and communicating with cars you will be able to see around the corner so you can tell someone is about to step off a curve or it will map what is going on 100 miles ahead of you so you can plan. this has big impact on
sustainability, carbon footprin footprints, cost of the car even. no matter where you look it will have a huge impact on people. >> not to mention the data that will be generated and need to be stored and manipulated by ai. i would think that cloud computing will become more important. >> because the network is so responsive, the cloud can be out closer to the edge of the network which makes it more responsive. today's network takes about 200 mill seconds to gather information and come back. that should be under a milisecond. that is less than you can blink your eye. at 60 miles per hour and the amount of distance your car travels in the blink of an eye the computers can be managing that car for you. it makes it much more safe. >> some people say it is just a lot of hype. i can prermremember fios not th
is not a strong service but not much different than i'm getting from my cable company. how do you respond to those who say i believe it when i see it not to mention it will be many, many years. >> i think you are never going to convince some people about it. the early movers when i sit down with ceos and they realize what they can do with a giga bit of through put when they can see latency their eyes light up with the idea. the consumer needs to sit back and enjoy the ride. verizon doesn't need to lay out this whole path because people out there, entrepreneurs that you saw yesterday they have the ideas. i think this is going to be a game changer. i have used the term this will usher in the fourth industrial revolution for this country and i sincerely believe that. >> what will it mean for verizon? we have had discussions about
whether verizon needs to have a larger foot print in media or in content. you have gone down this road a few times looking at various companies. is that no longer the case do you no longer have to worry about that because you think you will be dominant >> we have looked at that ask we made our decision to go digital. we talk now about superchannels of sports and finance and news and some entertainment. we had the chance to go down the linear model either by purchasing satellite companies or content companies. that is not our strategy. our strategy is to get digital content out there at the lowest cost. that is why 5 g makes so much sense. >> a competitor like at&t which is on the cusp potentially of being able to buy time warner. different distribution or cbs. are you telling me when i hear the rumors in the future i
should disregard them? >> you have seen us act. we bought 36 million miles of fiber. you have seen us be incredibly active on the 5 g front. our actions outspeak anybody's speculation on what verizon is going to do. >> what about pricing and how should we view the coming model for 5 g? the network will have more capacity and you will have a lot more revenue or will you increase price >> the difference that people have yet to understand about 5 g is it is a bunch of different netur networks. if you want to invent censors in asphalt for traffic management you can design the network to give ten year battery life for the censors. if you need latency for an automobile you design it differently. we call that slicing the network. all of those use cases will have their own pricing. thinking about it is $90 or $100
per subscriber, all of that model goes out the window as you go into 5 g. it will be a very different approach. >> the analyst community i would think is starting to grapple with what they are looking at when they think about their 2022 earnings estimates. >> that's exactly right. you have to throw out the financial models. we spent a lot of time and you have seen some upgrades recently because as analysts really understand what 5 g can do and models for it, it is not the case where we flip the switch and everybody gets every aspect of it because in 4 g a lot of people monetized on our capital dollar as we go forward we will be customizing the network for the application. we will be much more involved in that model. >> you have to spend a lot more money to do all this >> i don't think so. the multipurpose network replaces wireless network and enterprise network and fios
network. now the fiber will carry all services so we can be a lot more efficient in our capital dollars. >> and finally just to come back to this content to make sure i understand. i saw you guys in the proxy, also. it didn't say your name, for fox. at least you seem to still have interest. you seem to be telling me you will not have interest. >> you assume that that was us in there. i can just say that we have looked at these assets over the period of time. we have made the decision that digital is the way for us to go. we have no interest in linear content company. >> always appreciate the updates. this is a significant one today. >> you are very competitive at these games, by the way. >> we had some fun. nice to see you. lowell mcadam, chairman and ceo of verizon. >> interesting discussion. listening with sarah about how disruptive this may be. >> fourth sdrindustrial revolut. i found it interesting that this
is a global war for 5 g. we saw this come up in the announced sprint t mobile deal. mcadam said china is working to stay up to us and that he has been investing in this for years. no surprise he would be against their main argument in terms of merging. i think that is a real question, who is ahead >> a big part of the trade talks right now. for more reaction to this let's bring in walter piecyk. good to talk to you this morning. in his decades in the business he says i have never seen a technology more disruptive that will bring more benefit to consumers than 5 g. >> that is what the whole industry is hoping. that is what everyone wants to happen in order to bring revenue growth back to service providers as well as vendors that are supplying these guys. it's great to talk about things like self-driving cars. we know the challenges that a lot of companies are having
whether tesla or others in bringing that to reality and to roll on top of that a new technology where you are relying on fiber to be run throughout all of these streets to create the latency to make it all happen. there is a lot of hope i think built into getting these 5 g networks built. >> so when he talked about throwing out the financial models, how do you make projections on pricing for services, hardware unit sales, pricing oflg those along with potential applications >> i'm not sure an investor looking for dividend yield is interested in throwing out financial models quite yet and 5 g services we are talking about are really just a fixed wireless business that has been attempted in this industry many times before. so if you think about this l.a. market great scoop by david to get that as far as second market. what they are really doing is going after a broadband industry
that has top line revenue stream of about 55 billion which compares to wireless business which is 175 billion. if verizon is successful in the very first application of 5 g, it's not clear that it will move the needle enough to generate the earnings and the incremental dividends that really is what investors care about today for that company. >> assuming it continues to grow as mr. mcadam predicts, where does -- he is clearly painting himself as the leader here in this technology. where does verizon rank versus some competitors both at&ts and samsungs. >> verizon is a juggernaut. unlike at&t it is truly a wireless company. these companies have taken two
different strataemg egiestrateg at&t is relying more on spect m spectrum. talked about doubling speeds they can offer by using additional spectrum on existing towers where verizon is more reliant on this common network, driving fiber as deep as they can to the end consumer. five years from now we can see very different results on which companies will be successful and truly enabling the 5 g services that people are looking forward to. it goes well beyond just fixed wireless service that we are talking about today. >> that's interesting. we talk about 5 g as a uniform thing. it will effect different players in different ways. of the bubbles in technology innovation he mentioned autonomous cars and health care applications. which do you think is the most likely to move the needle? >> everyone brings it up in the media so often and so clear how
that can change our autonomy. the reality is thinking about latency required and type of networks required to enable that we are many years away from that from the network side of things. maybe cars will be communicating with cars will be communicatin with each other. for most of us, that provides a glimpse. it's tangible that we think about. iot and millions of sensors that have to connect to the network and the big data creates that's very early stage and, frankly, that attracts companies like amazon or microsoft or google to think about how they need to compete with network providers, whether it's verizon, at&t or others at&t and verizon are effectively lining up to be effective competitors with amazon, google and those companies. they're basically lining up in terms of 5g today. >> walt, just real quick, any thoughts on -- clearly they're not focused as much, certainly,
on linear content. they're all making it very clear, don't expect us to go after a cvs, it seemed to me, and others any take away from you on that >> every time he is asked, he says this. then we see press reports or regulatory filings about how they pursued these different companies. so, we should take him at his word that he doesn't want to be a linear company if you're truly a wireless company and focused on network, should you be doing more with crown castle in terms of fiber investment should you buy dish for additional spectrum? there's other acquisitions they might want to think about in terms of strengthening their network position he has been very clear in terms of no interest in the linear business maybe what they should be doing is thinking about things like twitter or spotify as a layer on top of this new digital strategy that lowell talks about. >> thanks for the help, walt good to talk to you. >> you bet. >> walter piecyk, btig.
>> former nbc executive vice president tom rogers, currently ceo at winview how much of that revolution based on your observation of the industry is hype and how much do you believe? >> i don't think any of us are going to know the answer to that there's so many claims about different flavors of 5g and who is going to be able to push more by way of new services out there. and even have disagreement among well-trained engineers as to who is more right or wrong on that i do think the thing that verizon has probably been right on is its prudence in not jumping at a cable deal or linear channel deal.
those sectors have slowed considerably i think at&t will actually struggle, if it gets that deal done in terms of what's going on in the cable channel world obviously, the cable sector has had an awful lot of trouble as of late in terms of video subs slowing broadband growth and i think verizon will probably be rewarded for not having jumped into that game now does that mean that they definitely have the right strategy when it comes to focusing on the wireless network? i think it's too early to tell but i think they will get points for having avoided the pitfalls that others will be dealing with. >> tom, you're somebody who is a bit of an entrepreneur these days as well, right? you're developing some new applications and game-related
technologies is it an opportunity for you, when you hear about how quickly and the lack of latency? i kind of saw for myself yesterday. granted it's just a test site. i am curious about how people who are out there think about business think about the opportunity. >> well, yesterday supreme court decision is a great example. and executive chairman is deeply involved in that whole area. what's being miss there had is where sports gambling is going to go. it's all going to go mobile and mobile synced to the television set. lowell different mention is that they made major investments in the major sports leagues, nba, nfl. and all that as sports gaming and live sports plays out is going to be a huge opportunity and i think that verizon will probably be rewarded there for the focus on digital content, how mobile technology relates to the television as opposed to
buying into traditional television services or traditional television distributors in europe, that mobile tv market is $160 billion of consumer revenue flowing to it that the flood gates are now going to open in the united states in light of that supreme court decision we are already play in that space in winview but it's going to get much bigger and verizon is prepared as that market grows, to participate in a big way. >> tom rogers, thank you for weighing in. it was good to talk to you. >> thanks for having me. >> former tivo executive now with winview games is china beating us at 5g or not? >> i don't know. lowell says no. >> the other guys say yes. >> they do i said this earlier, though, watching what the ability of a 5g enabled camera can do -- in
other words, what it can capture and send, you would imagine the chinese have a great deal of interest in it, given the surveillance aspects of it, and their ability to track people there. so, it certainly will be of interest to them but i have no idea whether they're ahead of us or not but we have to start thinking about it at least the early days, to the point that walt was making, and tom, it will be years before this becomes something that is part of everyday life in a meaningful way for many people we have to start thinking about the business implications of it. it will dislocate a lot of business. >> you're a competitive gamer? >> i'm not. >> and you worked on a sunday. no, yesterday was monday. >> yeah. you were off that's all. >> verizon names aws as its preferred provider on the public cloud. all these names are colliding in so many interesting ways when we come back, a lot more on david's interview with lowell mcadam the mayor of las vegas is with us, how the new gaming laws may impact vegas
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good morning welcome to "squawk alley." i'm carl quintanilla with jon fortt. morgan brennan is on excitement today. david faber interviewed lowell mcadam he sticks around with us for some highlights. what sticks out to you >> the implications of 5g as it gets closer. when we say closer it doesn't mean in any way it will be ubiquitous any time in the near future sacramento as the rollout city, los angeles, one of the biggest cities in the country. they will roll out to four cities by the fourth quarter of this year. two others have not yet been named. i think mr. mcadam, trying to sort of at least introduce the idea of just how big this will be it's not just about your handset or a faster speed but the broade