your numbers but unilever went aboard with a brand i was involved in. they're taking an entrepreneurial brand to the next level. >> just like with my ties, you wait around, pretty soon protein is going to be found to kill you and carbs are what you need and you can start all over again. >> i don't think next week everyone's going to say, let's bring sugar back. >> really? remember salt, how bad that supposedly was, red meat? who knows. good for you. is that in or out? >> the tie? >> my stomach? >> in. definitely in. make sure you join us tomorrow. appreciate it. thank you, melissa. "squawk on the street" is next. good tuesday morning, i'm

carl king and jim cramer. state police is coming up. the first close above 2400 looking to add to it today. busy morning with retail mornings, 13 s filings. reports that the president disclosed classified information. europe is mixed. u.k. inflation the highest since 2013. back home housing starts down unexpectedly for the second straight month. the ten year around 234. home depot taking the street and gaining ground. the retail names taking a beating today. did president trump reveal classified information to the russians in the oval office? the white house is denying the story but the president's tweets this morning seem contradrikt t -- contradictory. how will the markets react. instagram announcing new reactions like face filters that seem like snap chat. it's coming off an 8% gain as it climbs back from the earnings plunge. first up, talk some home depot.

a bright spot on the retails earning front. depot beats the street with earnings results. u.s. comps up better than expected helped by an increase in traffic. home depot reaffirming sales growth guidance for the full year. they raised just a touch, jim. 715 from 713. >> in the last few weeks we've been hearing from people who say, you know what, even home depot is not immune from amazon. and what this quarter shows although it could be brought down, what this quarter shows is that home depot is still in a category by itself. there are still things that are sold there that you either need their help or, frankly, that are just not something you want amazon -- look, a lot of people, this is their season. when you go to home depot, you'd be shocked to see that hard of it is, indeed, gardening. talk about something that amazon can't do. it c

it cannot send you tomato plant flats. it's too granular, flowers. these are things that home depot sells us. >> when you say can't, you probably mean is not interested in doing. >> well -- >> for now. >> right? >> wow. if home -- if amazon were to be able to do a garden store where they literally would bring you plants, i guess that would be it. i mean, that would be hard to believe, but home depot is a place you go, you talk with the people, you spend a lot of time trying to figure out what to plant, and as far as i'm concerned, this is all about that they have a bit of a personality. i've been trying to figure out what stores do well. they have to have a personality. they have to be -- it's that personalization. when you go to home depot you feel that it matters. >> and where else comes to mind where it also matters? >> lowe's would have that, children's place because they have kids go through clothes. foot locker, but i have to tell you, we're going to have to talk

about dick's because dick's was very worrisome. maybe there is a recent foot locker although foot locker has done quite well during this period. but i have to tell you that the reaction is so vociferous when these companies miss that it is really incredible. kohl's did not really miss and the stock was crushed. macy's was a miss admittedly. jcpenney starts off by saying, listen, we're disappointed. nordstrom was confused. it is absolutely true that when i look at dick's, dick's is unhappy, but i come back and i say, look, don't give up on the consumer but the consumer seems to have everything they want when it comes to apparel. they seem to have everything. >> the argument for pent up demand is getting harder to make. last night you did say you thought some of these names maybe have come down too far too fast. >> kohl's has bought back 100

million shares. they are not in the mall. they can easily do some sort of a call ahead and we'll put it in your cart thing because of the logistics of it, but you know what, i'm trying to -- my travel trust owns t.j., tjx, we've been selling it because i'm worried about retail. we've left some on. i'm like, wait a second. even the companies that benefit from macy's and jcpenney from having too much inventory don't have much of a say. you look at a kohl's with a 6% yield that they can pay. you're just saying, listen, this is a dead institution and i'm unwilling to say that. they had under armour in they sold really well. that yield is safe because of the balance sheet, but i'm saying that we've gotten a little too negative and maybe home depot's going to help us here. maybe it will help us. >> when you mentioned buy backs i always think of bed, bath and beyond which we talked about so much. >> buy backs to nowhere.

>> the reduction in market caps of these companies is stunning. i haven't taken a look at bed bath in a while. only $5 billion market value now. down obviously as all of them are, but you -- >> you do keep wondering where is the bottom. >> you keep expecting the old days you would say, you know what, some private equity is going to come n. they've lost so much money in this sector. >> yeah. yeah. it hasn't been a great sector for p.e. to delve into. >> gave it the old college try for a while. >> they did. they still own some of the names. well, nieman got -- >> nieman, they -- >> j. crew. >> got sold. >> i'm for getting now. obviously j. crew is still owned. >> the added wrinkle that some executives are going to meet with the treasury secretary, try to go to bat against b.a.t. >> oh, my god. >> that's going to start to fire up here the next couple of days. >> i keep thinking about jcpenney. i know the quarter wasn't good, the balance sheet is challenged. you're talking about 100,000 people.

there's an article today in the wall street journal saying that there's labor shortages. i have taylor morrison homes on which is good. they are talking about labor shortages. there's a mismatch. there are people who will be working retail and they cannot go build homes. there's a terrible mismatch developing of workers in this country, between people who work with their hands and white collar people and the white color people, they are the ones including a checker is a white coll collar, people who have jobs that are not able to go shift into a world where we need people who drill, we need people who drive -- there's a tremendous truck and bus driver shortage, but you don't have the ability to shift if you're a checker, and that's something that we're going to have to talk about. that's going to be a very big theme over the next five years. >> i'm thinking back. the last nfib, the biggest concern was not inflation or taxes, it's canada's

availability. >> isn't that something? isn't that something? just the mismatcmismatch. i see it all the time when i'm listening to the conference calls. you will have companies that are constrained by not having enough high skilled people who can weld, okay? >> right. >> there's a company called illinois tool works, they have created a new kind of welding system that does not require an apprenticeship to learn how to weld because we don't have enough welders, but we have way too many salespeople at department stores. and what are they going to do? >> i don't know. >> and if we're not worried about this, we're still -- we've got our heads in the sand if we're not worried about these people. and i'm sure that -- i hope it comes up when they meet at the white house, meet with the secretary of treasury, we don't know what to do, but we'll have to layoff people if they do that border tax. >> one would imagine we're not yet -- the border tax is adding insult to injury. you can't -- that'll just put them all over the edge if that were to happen. >> it will. jcpenney and marvin ellison told our own courtney ragan in an

interview that that would be devastating. after the conference call the only thing that stood out was sephora. alta is doing really well. we're still in the world where you walk outside and the apple phone takes your picture and it's got to be absolutely perfect so you need that makeup. >> just to circle back to your point about private equity, buying some of these retailers some time back. >> right. >> i mentioned nieman marcus. there were talks potentially with hudson bay which is another leaf verdict levered up company. they never went anywhere with macy's. they were tossed with nieman marcus. $6 billion and it is not worth that anymore. >> apparel. apparel became something that amazon got very good at. and i think one of the things that people who don't use amazon should know, the return policy. you always had this nordstrom, you could return a faded shirt.

i've got to tell you, i return things for amazon. stick it out there, they'll pick it up. amazon's a little bit easier to try things on. i was at a gap recently. i don't know when the last time you were in a gap. >> i haven't been in a long time. >> that's a shock. that goes without saying. that's like nvidia not being up. i was in there and there were not enough changing rooms. not enough changing rooms because they scaled back that area. >> oh, i thought because they were all so busy. >> no. >> house is a better changing room. >> they were giving stuff away. >> j. crew i bought boxers for 4 bucks. they had shamrocks on it. it was after st. patrick's day. >> nobody sees them. >> yeah. >> well, yeah. >> chip says let's move on. i don't blame him. >> we're going to get industrial production. we want to get this in the a block. the white house is refuting the story first reported by the washington post which said the president revealed highly classified information to russian diplomats during their

oval office meeting last week. this morning the president tweets about the meeting, quote, as president i wanted to share with russia at an openly scheduled white house meeting which i have the absolute right to do facts pertaining to terrorism and airline flight safety, humanitarian reasons plus i want russia to greatly step up their fight against russia and terrorism. day 117 of the administration, jim. again, we're here looking at a market that doesn't seem to care. >> i think it doesn't care because to some degree like i said at the top of "mad money" we don't expect anything anymore. i spoke to chuck today -- what? >> we don't expect anything anymore, why isn't the market reacting to that? many people would argue there is a general expectation of things coming that will be beneficial. >> do you want to sell home depot because there may be no tax? do you want to sell stoettas. they are animal health. >> i know what they are. >> yeah, xu you asure, it wouldt if we got it. he was helped by the

deregulation. the deal wilbur ross made to sell cattle to china. our cattle are better than our cattle. when you look at these stocks, you don't want to sell them off of the president. you want to sell aig off the president. you want to sell -- >> help me here. >> coca-cola. i want to sell coca-cola because the president is busy treating about -- >> you're saying the market is not over valued. >> thank you. 17 times times earnings for next year. and what's he tweeting now? he's got a -- i don't know. >> there's been a few this morning. >> he's helping twitter. twitter is moving up. >> we'll get industrial production. we'll talk some ford reports of layoffs.

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let's get industrial productions. rick santelli. good morning, rick. >> april industrial production is a good number. yes. up 1%. up 1%. much stronger than we were looking for. utilization rates also stronger. 76.7. so that follows 76.1. the 1% follows a revised up .4. the market in terms of interest rates doesn't seem to be paying too much attention, but if you're a micro technician keep

an eye on 232 below the market. 235 above the market. if you're a macro guy it's easy. dollar index is down over half a cent below some very key levels. you really want to pay attention today to the dollar index. carl, david, jim, back to you. >> thank you very much. rick santelli. >> rick is so right. this dollar back to november levels and when i see these numbers the -- when i see the numbers out of the eurozone of 5%. >> oh, my god. >> really is a major move. look at deutsch bank. germany is very strong. i'm starting to see good signs in france. we're going to talk about ford. ford is not doing well. i tell you, companies that have business in europe, they're doubling what we're doing here. it's really a good story. >> euro at a six-month high today. u.k. inflation, two seven. >> they have to raise rates. look. draghi has to stop any sort of

quantitative easing and then they're going to have to reconfigure. i would rather -- a german bond, it should be three times -- >> german ten year yields .42. >> it should be -- it should be higher than us. they've got more strength and, look, we were going to do a lot of -- you know, i felt we were going to do a lot of physical -- we're not doing anything. germany will probably do more because of all of the refugees. they're committed to helping the refugees. they have a very big opportunity. i continue to like europe. i really like asia. >> china's doing on infrastructure. >> holy -- they have tripled the number of big earth movers that they bought last month. china's making major moves. if it weren't for china infrastructure, we would be hurting. cummings would be hurting. cat would be hurting. >> biggest user of solar power, too, in the world, china. >> they keep adding that. >> what can i say? china's -- china is doing a lot. they're taking lng, they're

taking liquified natural gas. >> speaking of lng, have you looked at shaneer. >> doing good. >> natural gas isn't hurting it. back to 50 bucks. >> there was a trade that people haven't been talking about where they gave natural gas to poland. why is that significant? because gazprom s could be sending coming from cheniere and then noble energy doing a pi pinscher move. you may not have a strangle hold on russia the way you do. >> that's important. >> this poland -- i mean, this -- i've got to tell you, cheniere, they're one of many -- we're going to have a very big dominion liquified natural gas

right here. >> wait. i'm sorry, we're going to have a what? >> do it on the east coast. dominion -- >> an export terminal? >> yes. >> there's also freeport which is a private company. >> right. >> enormous. >> but dominion's going to start in the fall and that will be liquefied -- they're all sold out. >> they all pre-sell for many, many years. it's like the japanese. you can raise the money and make it work, it's an incredible thing. >> i think we have to watch the strangle hold of russia. i have to tell you, if the president were able to focus on this stuff, there's a good story to be told. he's focusing. did he like our lineup? >> our phil lebeau has confirmed these reports that ford has to cut about 10% of its global work force. ford told cnbc it doesn't comment on speculation, that it's not announced any moves related to personnel, but that would be 20,000 people out of 200,000, mostly salaried they say. >> yes. key. there was a comment that wasn't picked up in the journal.

araj nair, he's the chief technical officer. he's saying he's willing to do a deal with weymo. why is this important? ford is spending like mad to do autonomous driving. if they're willing to partner with weymo, which is alphabet, weymo is way ahead of everybody else. ford is a distant, very distant in this. this would save them a lot of money to partner and take the waymo. >> waymo has partnered with fiat. >> they want to partner with everybody. >> they've announced a partnership with lyft. >> they hate uber. >> lyft is owned in part by gm. there's a lot going on in the autonomous driving world. >> look out. waymo is trying to be switzerland. you know who else wants to be switzerland? intel. when they buy mobileye they'll build the chips cheaper than weymo. this will be between waymo and

no longer ford and gm. >> names we were not discussing two years ago, that's for sure. we'll get cramer's mad dash after the break. we'll count down to the opening bell. s&p again coming off the first close after 2400. the dow has not had a record high of its own since march 1st. , there's no other way to say this. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced, our senses awake, our hearts racing as one. i know this is sudden, but they say: if you love something... set it free. see you around, giulia ♪

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bell, i want to talk pfizer. >> very cerebral piece by citi. pfizer, the numbers are way too high. they are well below everybody else. second, they have too much medicare part d exposure. that's something new. we started to hear that maybe some people, the government maybe a little bit sting jier. david, listen to this. we continue to believe that there is major transaction risk for pfizer that they have to buy someone. now we knew that they were going to -- that was their old pfizer. david, i find this to be a little bit -- a bridge too far in terms of why not to like pfizer. i don't think they want to do a big deal. >> i don't know. i mean, they certainly have not been afraid to consider the big deal in the past, whether it's an as stra seneca or allergen which they were very close to closing before the government basically shot that deal. >> right. >> specifically made rules that would doom that deal. they did the medivation deal.

>> no. >> not a large deal. >> they kind of critiqued that. they don't seem to care about that. now what i find interesting, david, is muerck reported some big deals. j&j, nobody cared. this group is under pressure. i wonder whether the hmos are not under pressure, the hospitals aren't. they're taking it out on the drug stocks, david. hard to understand, isn't it? >> yeah. >> we'll be watching those stocks and so many others when we get the opening bell a few minutes from now. stay with us on "squawk on the street."

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when you have stocks in the wing, jim. >> we had a sales force. a sales force is about to report this week. we're seeing some really gutsy reports versus raymond james saying buy sales force ahead of the quarter. they have all done amazing transformations. the workday yesterday hit a two-year high. if it's in the cloud or related to the cloud, it's artificial intelligence. nvidea, i don't like it being up two points before it starts. there is a sense that these companies are leaving the rest of the world behind. the rest of the world, by the way, not the rest of our country. they're so far ahead. my problem with that is how much of that is because we're not getting what we thought from congress. i don't know. >> as liesman pointed out in the last hour, these are companies that don't need the kind of capital other companies needed in the past. maybe that explains some of the

data. >> now at the same time, one thing we've got to watch is oil because i've got to tell you, oil yesterday, i have been dealing with a lot of companies that are selling oil futures heavily here. i think we might be stuck at this level. >> the big board. at the nasdaq, a global supplier . did you work your way through all the 13s, apple? >> you know, it's funny. i was looking at bristol-myers. janna was in bristol-myers. i know pfizer according to citi might be looking at that, and then they're gone. david teper had a big position in allergen. now tepper is gone. please be careful in trading off of these.

southwest air, there is buffet buying more. that's interesting. there was a lingering thinking that maybe he wants to buy southwest air outright. i think that is not going to happen. i want to put cold water on that. it's not a growing situation. >> you would follow the stock picking of so many hedge funds is beyond me anyway. >> it's because of what we hear like the front page article about people who make that mostly. most countries. >> yeah, the numbers are out again. "new york times" numbers. it says it will outperform. >> the greatest single strength in the market, not necessarily to have -- generate returns. investor returns. they're great at sales. sales is the most important thing i think when you come down to it so often. i think they have underperformed

the s&p so many of them for so long. >> i know. >> sometimes i feel like we don't question enough the underlying strength of their stock picking which is missing. >> they do seem to go in and out so much. they trade so much. >> why are you paying two twenty for somebody who just bought facebook? >> thank you. >> wow. really. get these institutions to recognize. the institutions are doing this. >> you do? >> yes, i do. >> until the fees drop down to where these companies and institutions are okay. the fee structure is too high. it's in a low earnings environment. i genuinely believe when you get in a low dividend environment, low interest, they should be charging less but they get away with it. it's almost like a cartel. >> it is amazing that assets really have not declined precipitously in the hedge fund

despite the fact of years and years of under performance. as you say, particularly with the high fee structures. they are coming under some pressure. >> it is more difficult to operate a hedge fund these days and to succeed at it in terms of making a lot of money, but it's still probably the most lucrative single thing you can do. >> guys, don't hold it against me. wow, maybe i should go back. >> don't, we'd rather have you here. your point earlier, jim, about home depot being in a class of itself is really being borne out. it's one of the top s&p gainers as the top 15, 20 losers are all retail. >> i went over these quarters and i really think that this is some sort of a sector giveup like i haven't seen. i mean, i think when you're with people, everyone knows that amazon has changed the structure. david, the malls, people are

very worried. i had entertained epr on last night. what they do is they help a mall by putting in a megaplex. you need experiential. this is starting to take on a world of its own. the experience of going to a mall is grim unless it has something else to it, a water park, a movie theater, apartments. >> movie theater? people still go to the movies? >> 40% in a megaplex. >> i like the reclining seats. >> don't you? >> you're competing against netflix and constellation plans with the modello and dominos pizza. oh, my god, i was at the bar the other night and a guy was so proud that he had cut the cord. there he is watching a game, watching a game on espn. is he really a cord cutter. he had to go to his provider to get that game, right? >> yes, he did. conceivably he's paying for it

somewhere. >> yes. so is that a never cord or is that a -- >> cord cutting. >> you made that transition flawlessly. >> people don't want to go to the mall. they want to stay at home. >> do you buy simon property group at 154 bucks is the question? >> i'd rather buy home depot at 160. >> really? >> yes. >> mall traffic itself is not down as much as you might expect. >> exactly. it's just that they go in and they go out. >> they don't linger. >> yeah. look, i would rather buy an alibaba. they're still shopping in china. >> yes, they are. we're going to talk about alibaba in relationship to yahoo! >> are we? >> yeah, in a little bit. >> the malls -- all i keep hearing about is if the mall has something experiential, it works. it's hard to figure out what a type b mall is other than the fact that the parking lot is empty. buy a sears or j.c. peppy. -- jcpenney.

>> i don't want to say anything about sears. >> it's our fault. >> it's your fault. >> it's my fault. >> it's yours? >> why, because i had like 100 bad experiences. no, i didn't. let's be fair. what happens is you go to sears and it's just -- it's a -- >> why does it exist? >> i think when most people hear cod ma or d mall. they argue a fifth of all malls will be closed or repurposed, in 10 years, a fifth. >> i wouldn't be shocked. when you look at jpmorgajpmorga talking about the slow bleed. it doesn't happen overnight. there's lots of leases. steve roth has a fantastic analysis of having a good mix of blocks where he just says, listen, let's not forget. if you have a great location and a jcpenney, he doesn't say this. if one of his tenants goes,

someone wants to fill that space. those are experiential in itself. manhattan is experiential. queens not as experiential. sorry. >> okay. no offense. >> i mean, maybe if you put a staud yum in a mall in queens and you pick the number 7. >> we have a nice stadium in queens. >> you need a stadium and mall. >> stadium mall? >> yeah. >> you guys mentioned dn and cable. espn up front. abc up front. we had -- nbc universal had ours yesterday. we'll hear more about the plan to invigorate programming. this crazy story about the wanna cry worm, the computer worm that apparently has held up at least some of disney product. >> i know and we had proof point on this morning, which is just a fantastic story. i think, by the way, one of the reasons why banks didn't get

hurt. there's the red team. they're constantly dogma nufrs. trying to attack this. the teams were well aware of this microsoft issues. there are red teams throughout many different banks and they cooperate. the blue teams cooperate against the red teams. literally, they have rogue guys in banks who are just doing nothing but challenging, challenging, challenging. >> as they should. >> red team. >> they spent a lot of money on it and i hope they continue to spend more. there's nothing more potentially -- >> weren't fooled by this one. >> scarier than all the financial data being at risk. >> we want lots of red teams. may i suggest retailers develop the red team concept. they should. red team. >> retailers develop it for what purpose? >> well, because, you don't want -- you can hack a retailer pretty easily. remember target was hacked? >> sure. >> home depot was hacked. home depot handled it well.

>> lots of hacks, yes. >> proof point is for empts maimai -- e-mail. a lot of the times when you go in and look at the e-mail. the amazon e-mail looks like it's from amazon but amazon doesn't send you e-mails. >> what do you have? >> some people say our audio is a little strange now. >> i've been hearing that, too. >> really? >> there's echos. >> he's sending an e-mail on his phone. he doesn't know that we're talking about him. >> where the hell is the video in is this good? >> we'll just pantomime. >> we have new highs on the nasdaq and s&p. home depot adding 22 points to the dow. so most of the gain is depot. let's get to bob pasani. >> good and bad news in retail. tjx weighing the retail industry down. let's look at sectors. we've been talking about this rotation. this is one of the reasons the market has been so strong. what's been the market lagards.

what were market leaders, yesterday and now again today. energy and bank stocks. consumer staples was a market lagard. it is a leader, the rotation again. health care, big market. leader. the retail index, xrt, take a look, now down about 5%. this time it's tjx. some of the discounters start losing their allure. people have been asking me about alternatives and can you buy into companies that are more into the ecommerce space. the rth, for example, much smaller etf that concentrates on 20 companies in a rules-based system. they own, for example, amazon, home depot, walmart. they're all doing really well. that's up 8%. there's different ways you can slice and dice this depending on weightings and one sector or another. home depot, i have emphasized this before. just amazing, amazing numbers.

just to give you an indication, this company has $100 billion in revenues. do you know how difficult it is to increase 6%. that's an amazing fete. numbers are going up across the board. more people are spending more money. the average ticket is up 4 pe%. transactions up almost 2%. gaining market share. the home improvement group overall is spending more. this home price appreciation with household formation improving, it's firing on all cylinders. the final thing about home depot, other companies that are big buy back monsters, in 2004 they had 2.3 billion shares outstanding. today they had 1.3 billion. essentially home depot has cut its shares outstanding by almost half in the last 12 years and that means, folks, all other things being equal, they're earning more by the proportional

amount. home depot, 19% for the year. by the way, they raised their guidance 2 cents. they beat by 6 cents. talking 7:15. this is conservative guidance. that's also something the street likes to see. again, up 19%. let's move on. the stocks have been strong. we've been talking about reasons why. risk has been lower. global economy is improving. we've seen lower geopolitical risk. credit overall in the united states has been very strong. we've had the low volatility very well. good for the markets, not bad. we've also talked about supply and demand. lowrie which is the oldest technical analysis did an analysis on this. buyers has been good and sellers have not wanted to sell. if you look at the simple law of supply and demand, buying is strong, selling is low. that's an obvious reason why the

stock market continues to hold up. what does this mean for the overall market for the intermediate term, the next few months? lowry had the comment, bull market's a company by rising demand and falling supply historically carry a very low risk of failing. these are split into short term, intermediate commentaries on the market. the point being when the buyers still are in the market, david, and the sellers don't want to sell, which is why we see these sort of low volume days and very little movement in the markets, that's an indication right now at least that the bull market very much intact. 23 points up on the dow. david, back to you. >> thank you very much, bob pasani. >> did want to get to a story involving yahoo! that will remind people of the coming change in that company when the sale of its core business to verizon for about $4.48 billion is completed. that's going to happen soon and what will be left, of course, is a new company. this morning yahoo! announcing its plans to initiate a dutch tender for its shares, 3 billion

of those shares. and it's kind of got some novel structure to it because it is actually based not on just establishing a price parameters in which they will potentially buy the stock back at. you, of course, would say what you're willing to accept but actually based on a one day volume weighted price of alibaba. why? well, you know why. they own 384 million shares of alibaba. so this tender is going to be based on a ratio between .37 and .42 baba shares. it won't be legs than 37 bucks a share but it's not just based on a number that they pick.s than share but it's not just based on a number that they pick.s than a share but it's not just based on a number that they pick. it will be based on when the volume-weighted average price is calculated. in part that's because, you know, what's going to happen with alibaba's stock.

they have an earnings report between now and then. the tender will be out there. why are they doing it? the key is because index funds which own yahoo! are going to be sellers of that stock, all right? perhaps as much as 180 million shares for sale and this dutch tender, not all dutch tenders, by the way, this one is designed to stabilize the price, absorb that flow from the index funds to a certain extent. that's why there's not really a lot of a premium being offered here. typically on the dutch tender you get the higher end of the range to the current price, but here they're expecting there's going to be pressure on the share, jim, because of at least 9 billion worth of stock, perhaps even more being sold by index funds that will be for sellers once yahoo! is no longer an operating company. so this is designed to soak up some of that supply and we'll see who chooses to tender. a lot of current shareholders

are expected not to. >> that's worth doing work on. you're talking about an unnaturally down stock. >> it may be unnaturally down. this will be used to stabilize it in those days, going to have the close of the deal on the eighth, the vote, the close, the index fund sales. the pricing of the -- of the close of the tender offer as well all of which is designed to stabilize it. what are you left with is always worth going into, remember. altaba is going to be an investment company. the biggest holding company is going to be 50% of the alibaba. 35.5% of yahoo!, japan. that's not insignificant. that's a decent amount of money. 12 million in cash. they have a convert that's worth 1.4 billion. they can't return all the cash to shareholders so really what we're looking at is really 9 billion in net cash expected to be returned to shareholders over time and then, jim, they're

going to be dealing with trying to address the 28% discount that they currently trade at to the actual price of alibaba. it's kind of taxes. if we got tax reform, this is one of the big beneficiaries, that would be yahoo! itself. worth reminding people, this change is coming quickly for -- finally. it's been very slow and then it will happen. >> that's fascinating. >> from what will be a company run by tomm mcnearny. the ceo of altaba. marissa meyer stepping away. >> geez, i've got to do work on that. that could be an interesting recommendation. >> we'll see. again, what's the discount? what are the ways think can unlock or reduce that discount over time? >> right. >> and then altaba, who knows if it will exist two years after it's created. >> i'm sitting there talking to the ceo as i mentioned about celetis. here's a natural call on tax

reform. >> yes. >> that's very interesting. great stuff. let's head over to rick santelli at the cme group in chicago. get an update on the fixed markets. rick? >> hi, david. we always start out the fixed income markets, but not today. there's more action in foreign exchange. let's look at a november -- early november of last year start to the dollar index. you can see we've broke general some support levels, recent support levels. if you look at the euro versus the dollar, obviously rolling the mirror over, it is the same chart extended to the up side. but it isn't just about the fact that the euro is the highest percentage in the dollar index. there's weakness in a lot of places and there's strength based on the euro. look at the euro yen. this is at a 13-month high. doesn't stop there. look at the dollar versus the yuan. chinese currency. granted, it's not a huge move. that market has been pretty comatose. we do see it showing up on that

chart. now let's switch over to the fixed income. two-day chart of tens, howing starts and permits, rates came off. the long end, kind of melting like chocolate on a hot day. short end, 2s, 3s, 5s are very firm. only talking a couple of basis points. here's an interesting chart. why is it interesting? because you can see clearly on this chart that even though we're tracking very close, the boons have a little bit more horsepower to the up side. if you look at where it's trading now versus the low, well, for us we're 16 off the low yield. on boons we're 27 off the lows on that chart. i guess what i'm saying here, we want to watch the spread. those are certainly low rates in the mid 40s on boons, but mario draghi's going to have issues. even though most of europe and the emerging markets are

considered the great investment so that's part of the dollar weakness. it's taking a lot of negative rates to hold them here. they can't hold them there forever. i'm talking negative rates. back to you. >> thank you very much. rick santelli. still to come this morning, battle against global cyber hacking. we'll talk with fireeye's ceo. moderate highs for the s&p and nasdaq once again. ♪ ♪ ♪

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disturbing stock that hasn't been able to move at all. this morning. talking about currency, stocks that haven't been helping the cause. nike is one to report on. foot locker reports this week. one of the things that squeezed nike is under armour's come in. under armour starting to have a little excess inventory. we know that.

adidas remains the best in show. so when i look at companies that could really surprise, it would be nike. just not getting a good read. this is rather amazing because nike does not disappoint for lock and yet it's now been a couple of quarters. >> the worst dow stock. >> what's on "mad" tonight. >> i've got taylor morrison homes. we have fabulous numbers. they've been probably the hottest home builder, and i want to find out what the heck is going on because this group, alternatively it's weak, it's great. it's weak, it's great. >> see you tonight, jim. >> you bet. >> "mad money" 6:00 p.m. eastern time. when we return, mark mahaney and gene muenster on the run up in tech with the dow up 46.

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go long™. ♪ ♪ ♪ good tuesday morning. welcome back to "squawk on the street." we're here at the new york stock exchange. dow with a 41 point gain.

s&p and nasdaq hit some new record highs. good numbers out of industrial production. home depot and a lot more to come. >> our roadmap for the hour begins with president trump admitting to sharing information during a meeting with russian officials. reaction from the intelligence community straight ahead. the fight over the possible border adjustment tax is back. retail ceos getting ready to sit down with the treasury secretary during a rough time for the industry. >> and disney held hostage. hackers claiming to have stolen a highly anticipated disney film. we've got the details for you. let's get straight to the big story of the morning. president trump admitting in a series of tweets this morning to have revealed information to russian officials during a meeting at the white house. our a man jaeamon javers is her >> reporter: bear with me. the president's tweets got a lot of attention this morning because they appeared on their face to contradict what h.r. mcmaster the national security

advisor said last night. the white house is saying that's not the case. let's walk through it step by step. here are the president's tweets this morning explaining what he shared with the russians and why he did it at the meeting last week. he said, as president i wanted to share with russia at an openly scheduled white house meeting which i have the absolute right to do facts pertaining to terrorism and airline flight safety. humanitarian reasons plus i want russia to greatly step up their fights against isis and terrorism. now here's what h.r. mcmaster, the national security adviser said on the white house driveway last night about two hours after "the washington post" initially broke the story that the president had shared classified information with the russians. here's mcmaster. >> the president and the foreign minister reviewed a range of common threats including threats to civil aviation. at no time, at no time were intelligence sources or methods discussed and the president did not disclose any military

operations that were not already publicly known. >> mcmaster said i was in the room, it didn't happen. we had a denial from dena powell, the deputy national security adviser simply that the story is false. now this morning i've been talking to a white house official who explains the apparent contradiction is not a contradiction between this morning's tweets and last night's statements and here's why. an official says no contradiction between the trump tweets and white house statements last night because anything shared with the russians was appropriate to share based on the judgment of the president and senior officials in the room. the idea being that this was an intentional and strategic sharing of information. now the question is going to be was that information classified? did the president have the permission of the country that initially gave that information to the united states to share it with russia? and when was the decision to declassify and share that information actually made? was it made spontaneously in the room by the president or was there a process of consideration of this before that meeting?

all of that still to come. we've got the white house press briefing later on this afternoon. you can imagine sean spicer will face a bevy of questions about all of this, guys. >> the noise spans in stark contrast to the record high stock market, eamon. for more on what all of this means for the intelligence community, u.s. global relations and the fate of the trump agenda, we're joined on the phone by john mclaughlin. john, thank you for phoning in. >> so the question we're trying to figure out this morning is the outcry, the controversy. how big is it. how big has it been in the last 100 or so plus days as it relates to fallout in the intelligence community? >> well, it's right up there with all of these other controversies. to be fair, we don't know precisely what happened. to really make a firm judgment you'd need to know exactly what information was shared, what country did it come from and all

of that. but allowing for the fact that we don't know everything, something has stimulated people still in the government to say something about it, which tips me to the fact that information was shared that may not have been -- may not, let me emphasize that, may not have been fully considered. i think back to my time in government and there were times when i was authorized to share intelligence with the russians. we used to give it to them on a piece of paper called releasable russia, but it had been carefully considered word by word by everyone in the intelligence community who had some equity in it and certainly if it came from another country and, frankly, i don't remember ever sharing anything that came from another country, but if it came from another country, you would need that country's permission. so, you know, i think all of those are the things that make this potentially a major controversy. again, allowing for the fact that we don't know everything about what happened here.

>> and one key is how the republicans themselves will respond. it's something that investors are looking closely at as we consider the rest of the legislative agenda. do you think it's a big enough deal? do you think the republican party will continue? the leadership could back the president or is this big enough that it will cause them to splinter? >> well, you know, what i'm observing in the republican party here is a wearing down of patience. we see this in things like senator corker's comments which clearly express frustration with this and, you know, if i were -- i've never been a politician and i've always been an independent. i've worked for seven different presidents of different parties, but here's my point. if i were in the political world, one thing i'd be saying to myself now is regardless of the explanation that ultimately comes out on this, the mere fact that it's become a controversy is something that drains away

energy from more important issues, particularly the congress is focused on, and the fact that the white house allowed this to become a controversy or created circumstances that generated a controversy that takes everyone off message and off central issues for the nation. so if i were a republican, i'd be getting pretty concerned about that at this point. >> mr. mclaughlin, back to the story itself, if it is true, what are the consequences for what conceivably i guess as we know is an ally of ours in the mid east that revealed certain things to us, what are the consequences of the president's revealing whatever it was he did to the russians? >> well, if -- if -- again, if he revealed it in a way that allows the russians to determine the ornl begin or anything about the message or the source, which

could be human or technical, that country will be very upset and very reluctant to share information. america is already known as a leaky society anyway. we have trouble keeping a secret, and particularly when you have a secret that comes from another country, you need to guard it with extra caution and extra fidelity. so, yeah. now you recall on terrorism, again, let me make clear, i have no idea what country this came from, but just to cite one example of something that has been previously acknowledged in the press or leaked or whatever. at one point it was the saudi arabians who tipped us to the fact that isis was trying to plant a printer cartridge bomb on an airplane and that enabled us to head that problem off and prevent it from happening. so information you get particularly on terrorism and particularly from partners in the middle east is extraordinarily important to disrupting those operations,

and, again, i have no idea where this came from, but you want to be particularly careful with terrorist-related information because, frankly, it's harder to get that information on major countries. >> perhaps one reason this has become so explosive. thank you for joining us, john. we're going to leave it there for now. john mclaughlin, the former cia deputy and acting director. take a look at stocks this morning. we've already pointed out dow is up some 41 points. we have a good number out of industrial production where the annual growth rate now goes to a two-year high at one seven raising debates over the state of manufacturing since we did get the negative empire number for the new york region. again, the new high list is almost -- it is a broken record. amazon, marriott, pepsi, adobe. >> new low list. retailers and it's the malls

that have the retailers in them for the most part. it's mace rich. simon property. bed bath & beyond, macy's, ralph lauren. >> home depot stands out at the top of the dow right now up 2% after 5.5% comp. we'll talk about retail in a moment. on your point about manufacturing, i think it's interesting that we have this whole debate about the soft data, the survey data reaching high, high levels. everyone was excited after the election. would that translate into the hard data. industrial production suggests that it does. it might come at a time where the soft survey data is starting to roll over, the negative print on new york manufacturing yesterday. so, yes, we're starting to see it in the good data. we are expecting a rebound in the second quarter. the question is, does that carry through beyond be that. we're going to have to watch some of this confidence data going forward. >> ten year was not impressed by that number. still at two three three. we had pimlico lower.

inflation forecast yesterday. price wars in apparel, telecom, even transportation to some degree just make it hard to raise prices right now on some big industries. >> i would also watch the euro today. it's a big mover. it's at a six-month high against the u.s. dollar. you did see a reaction, interestingly, in the dollar to the report that hit last night. the washington post and then "the new york times." the credibility factor or the trump train, the trump agenda. it's been most prominent in the currency market. yes, it's a half a percent move. there's nothing crazy and there's a lot that goes into the foreign exchange so i don't want to make too much of it. but if you're looking at a place, look at the dollar weakness. it's wiped out all of its poets election strength. the boost that president trump talked about, guess what, lost all of that since november. >> down five straight days in this run. when we come back, that battle over the possible border tax is back again. retail ceos are going to meet with the treasury secretary today. we'll get details on that.

home depot and tjx had erparnin. we'll talk about what lies ahead with the dow up 39. don't go away. what if technology gave us the power to turn this enemy into an ally? microsoft and its partners are using smart traps to capture mosquitoes and sequence their dna to fight disease. there are over 100 million pieces of dna in every sample. with the microsoft cloud, we can analyze the data faster than ever before. if we can detect new viruses before they spread, we may someday prevent outbreaks before they begin.

possible boarder adjustment tax. ylan mui is with us. >> reporter: sarah, this is the first meeting between retailers

and the secretary. the message will be clear, drop the border adjustment tax. expecting to see ten companies meeting with the treasury secretary today, that includes executives with jcpenney, autozone, chico's and ikea. they're arguing that the border adjustment tax would increase the funds and that would increase cost for consumers. retailers are saying that households could pay $1700 more each year if this proposal goes through. they're also going to be arguing that the border adjustment tax could erode their profit margin. that's in a sector that pays one of the highest effective tax rates of any industry, 36%. they're also pointing out that they employ 42 million people and this would be a big blow to an important sector for job growth and economic growth. retailers, however, may be preaching to the choir on this point. treasury secretary mnuchin said he does not believe that the border adjustment tax will work in its current form and there is heavy opposition to this

proposal in the senate, even among republicans. support of the border adjustment, however, they are not giving up. the american made coalition which includes manufacturers like ge, dow chemical, they're saying that a new poll shows 62% of americans actually support this proposal and they're saying that those who oppose it are just defending an outdated and broken tax system. now one of the reasons this debate is heating up is because congress is expected to hold its first hearing on tax reform later on this week. guys, we'll be keeping you posted on all the developments as we have them. >> ylan, thank you for setting that up for us. along with retail ceos meeting with treasury secretary knew dhi mnuchin, we have other reports here. let's bring in j. rogers and mike wallacer, broad line and hard line retail.

michael, i'll start with you. you cover home depot. 5.5% comp expand the industry. michael, is it as simple as people spending on home improvement and not improving their spring ward droves? >> that's part of it. to put it in perspective, the average amount of home improvement spending per household for last year was about $3,000. now in nominal terms that is on par with where it was in the prior peak to the session. now the housing stock has aged considerably. in 2007 the median age of a house in the u.s. was 31 years old. today it's about 39 and the value of the housing stock is a lot higher than it was back then. so consumers are re-engaging in this category, and home depot's picking up their fair share given the unique positioning of that business. >> you also look closely at leadership and execution when it comes to these retailers.

what have you found sets home depot apart? >> home depot is best in class and has been for a very long time. one of the things they did was they locked in the professionals and the professional shop at home depot, not at lowe's. that has been a big benefit to them across the board. they execute as well as any retailer has. i put them in the same category as costco. they executed better than anybody else. that makes a big difference when you're trying to run a retail business. >> michael, i'm looking at the valuation trading 22 times next year's earnings. is that the appropriate premium that this stock deserves? >> the way you should think about valuation is relative to interest rates. this is a sector that is sensitive to the interest rate environment and with the ten year hovering around 2.3%, that's a fair valuation given the growth prospects for both the sector and home depot. >> what about t.j. max?

weakest sales growth since 2015. this is a bright spot off price then. i thought that that was not amazonable. what happened here? >> no, i've been saying all long along it's amazonable. it's not being amazoned yet. tough for apparel. they were 4 percentage points ahead of the department store. i expected them to be 6%. they were up against a 7% comp from last year. i dot that anything really happened here but, no, i still believe down the road the off price base is just a four letter word and that's next, they're coming after the department store space. they will get hit by online selling, but i don't think that's what you just saw in the first quarter. >> you also have an interesting theory on etsy. it's just recovered the big loss it's had over the earnings report. >> i actually love etsy.

right now it's online and local. the buyer right now wants to feel like it's for me, it's special. it's environmentally friendly. it's produced by one person. sell on et cetersy don't like a. it's not part of this big machine that everybody says. to capitalize it. local. that's where they're going.

>> is it going to be all about the web business. it's very interesting. that increases about 30%. what we're seeing is that it's a real war going on. >> a lot of these. he's doing a good job. >> it's down and so it's harder to contend with what is -- the growth is achieving.

>> rapid fire retailer, dick's, it's having such a big move lower. what a disappointment that was. there were some high expectations on ecommerce. they stopped benefitting from the sports authority bankruptcy. what's going on there. >> i think you're exactly right. they quit benefitting the sports authority beneficiary. i'm still a form in dick's. i would buy them. they're a best in class retailer. they own the space. they're going to win. this is temporary. >> better than foot locker? >> i don't like anybody better than foot locker. that's a different category. foot locker is not an athletic store. they're a shoe store. in shoe store space, they're the best in class. in dick's class they're best in class. >> covered a lot there. thank you both. cam dixon and michake wallacer, thank you for joining us. planning to cut 10% of its

work force, phil lee bow has more. >> david, we talked with a source and they confirmed that ford is planning to announce it will cut 10% of the global work force. let's explain how this will basically work for ford. approximately 20,000 jobs. the important point here is that most of these will be salaried workers in north america and asia. ford will not comment on our report or other reports about these impending job cuts but it did issue a statement saying in part reducing costs and becoming as lean and efficient as possible also remains part of that work, talking about the work that they're doing to turn around the company. we have not announced any new people efficiency actions, i like that there. nor do we comment on speculation. in terms of the hourly work force, the assembly line workers, they are not part of the job cuts or plan to cut jobs at ford. not surprising given the fact that relatively strong demands fill in the market for vehicles

especially in north america as well as china and asia. year to date ford sales are down 5 point be poi 5.1%. not a whole lot of reaction here. the stock trading under $11 a share, near a five-year low. we heard it last week during the annual meeting. ford chairman bill ford, he said he's frustrated with where this stock is. let's see if this news as it comes out, the details over the next couple of weeks, changes things. >> good stuff. phil, thank you very much. phil lebeau in chicago. >> you bet. >> when we come back, disruption in washington. the president tweeting about revealing information to russia. stocks shrugging that off although the dow is back to the flat line after being up better than 40 points. we'll talk about all of that in a minute. i count on my dell s business advisor

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record highs for the nasdaq and s&p today. are investors and markets ignoring down side risks including from washington as the economic agenda slows. steve eisman says no. >> there aren't any, in my view,

systemic issues. citigroup used to be levered 35 to 1. that's like discussing the distance from mercury to pluto. you can have a problem in subprime auto. just find enough leverage in the system. >> joining us this morning, nicholas colace, senior vice president of director and credit, guys. good morning. good to see you both. >> good morning. >> we're in this environment that asset prices are up. people are taking less protection. breadth is getting narrow amid all the turmoil in d.c. are we ignoring something important, nick? >> i don't think so. stocks really discount two things, earnings growth and interest rates. as much as we have a very high valuation environment, 18 times earnings, we did have a very good first quarter for earnings, 13% earnings growth. analysts have taken down their expectations from 8 to 6%. that gives us the buffer that we should have beaten the second

quarter as well. as noticeably as this feels like, i think we're trading at the right level. >> the fund manager survey is out, 10%. those who look for 10% earnings growth over 12 months is the highest since 2011. people feel like earnings are going to continue. >> as it relates to fixed income, i have expertise. the growth rate is pretty good. looks like we're going to get somewhere around 3% global growth, 2% in the domestic economies. that's pretty supportive of credit over time. credit tends to do best when we don't have gangbusters because then companies put leverage on balance sheets. >> you extended goldilocks? >> also as it relates to credit. it definitely does impact earnings that rates are going to be lower. >> definitely. we did a survey at the beginning

of the year and asked when they expected tax reforms to occur. even then they said q dlgs 4 this year, q1 this year. it feels the market is giving the president a lot of rope. they don't expect anything to happen. then something does happen. organic growth of 10% and get it the next quarter. incremental push to the economy through lower taxes and more capital spending. behrents said buy europe? >> at 6% equities and 60% u.s. that was the case in q1. in q2 only 6% is flowing to u.s. stocks. the balance 94% has gone to over seas stocks. not crowded trade, very well known trade. >> how about in fixed income on that front? >> i wouldn't say it's as

crowded. rates are low. we haven't gone through tapering. the kind of taper tantrum impact that we had in the u.s. in the second quarter of '13, that's later to come. is it 2018, 2019, who knows? attractive opportunities but yields are low. >> what do you think draghi is waiting for? he got past paris. is he waiting for parliamentary. is he waiting for the face of brexit? >> i don't know. the last two times the ecb started hiking was 2008 and middle of 2011. >> yes. >> when they do start, i'd start to be -- >> and waiting for inflation. a lot of people, stock strategists we talked to, we asked them if there were any stock signs, credit market is calm. sending very positive signals. is it too calm? it's a question we ask about volatility but is it too eerily calm what's happening in credit right now? >> as i said before, spreads can

stay tight for a long period of time and people do need income. ultimately what matters in credit is do i get paid back at the end of the day. there are obviously weak spots. very slow part of the credit market and also the commodity based sectors. for most of the rest of the market leverage isn't -- we're not over our skis in leverage. we don't expect a lot of defaul defaults. >> do you worry about an inverted curve at this point? >> too far away. but one of the best signals in fixed income is when curves start to get close to flat, let alone inverted, you want to watch out. >> jet history has not been kind after an indicator like that. good discussion. thanks for coming in. >> thank you very much. time for sue herera and the cnbc news update at this hour. sue? >> good morning, sarah. good morning, everyone. here's what's happening at this hour. president trump is welcoming turkey's president to the white house for their first face-to-face meeting this afternoon. it comes as turkish officials fume over the u.s. decision to

arm the syrian kurds whom they view as a terrorist group. a new round of syrian peace talks begins in geneva with stefan dimisura meeting with the syrian delegation. it marks the sixth round that he has mediated since early last year. david friedman, the new u.s. ambassador to israel meeting with the israeli president in jerusalem. during the welcoming ceremony the two reaffirming the close ties between the two countries and looked ahead to president trump's visit which is scheduled for next week. and fire crews continue their battle against the wild fire burning in south florida. that fire started late sunday night and has burned more than 2500 acres near the turkey point nuclear power plant. no homes or businesses are threatened at this time. you're up to date. that's the news update this hour. sarah, back to you. >> sue, thank you. sue herera back at headquarters.

coming up, another day, another high. how far will the tech bulls be running this time. gene muenster will be joining us. a disney movie being held hostage. will ceo bob iger pay the ransom? details on that story coming up. "squawk on the street" coming up with the dow down 16 points. can we at least analyze customer traffic? can we push the offer online? legacy technology can handcuff any company. but "yes" is here. you're saying the new app will go live monday? yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes.

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welcome back. we're getting news that the press briefing at the white house going to be at 11:30 a.m. eastern time and will be done by mcmaster, not spicer, who will do an off camera briefing later this afternoon. when that happens, of course, we'll bring it to you. since the election the dow is up over 14%. it's the nasdaq rising over 19%. obviously the big cap names apple, facebook, alphabet at record highs. weighing in on that is gene muenster and rbc's internet analyst mark mahaney. good morning. >> good morning. >> mark, what do you make of these almost daily record highs

of almost a select group of names? >> you know, in the 20 years i've covered internet stocks i don't think the sector has ever been less controversial. there's something behind that. they've gone 16 quarters at 50% year over year growth for facebook. we've gone 29 quarters of 20% year over year growth for google and we've gotten 20 years of year-over-year growth. the sentiment has settled in. valuations are reasonable. but i think the fundamental support where the stocks are here today. >> gene, do you agree? >> i do. i just -- quick background. mark and i used to be competitors. i always have a ton of respect for mark. >> i know. >> and i would put him at the top of that list. and we cover a lot of the same names, and i think mark does a great job really looking at what's going on in the past and in the next year plus and what we're focused on is the next kind of one to five years in our new role.

i think that one of the pieces that's playing into this nasdaq, we have obviously the rising tide around oil, housing, corporate tax rate cuts. this fundamental next wave that's going to happen in competing. if you listen to the conference calls of google, apple, facebook, amazon you get a sense of where they're investing. i think that i do talk to investors who are buying these large cap tech names in anticipation of this next wave. i think that's -- >> mark, how do you see the next wave? is that ai? if so, how should investors think about it? who's best positioned? >> yeah. so, you know, a lot of pops right back to gene. >> ai, artificial intelligence, machine learning. vai, voice activated internet. don't forget all of those devices roaming around. there are three or four companies really well

positioned. i don't know how you wouldn't have amazon, facebook, google in that list. i don't know about apple or microsoft, but those three names i think are really well positioned. it brings down costs. you get greater efficiencies and it will create more revenue. google, facebook, and amazon are really well positioned for ai trends and for the next five years. >> with all of that said, gene, how are new entrants, relatively new entrants like snap supposed to make it when you're dealing with -- and tesla, for that matter, where the potential competition is coming from companies that are so much better capitalized? >> well, i think those are two very different stories. i think snap has -- they're right in the cross hairs of facebook right now. you're seeing that impacting their dau growth in the last quarter. tesla's a different animal. i think that some of those companies are going to have a hard time fighting. i think something like tesla, they're fundamentally changing the rule book. elan musk talks about one of the

features of the tesla company. that piece of it is going to make tesla one of the better off performers in the next five to ten years. i think each company has to look at -- the other big winners are going to be a lot of small companies, private companies that will be acquired by these big public companies. >> gene, i don't know, did you listen at all to that investor presentation from the ceo, nvidea. i know it's not a name you may cover but talking about ai, machine learning, all of these different advances, it was pretty stunning talking to him about how he thinks they are positioned in terms of autonomous cars and the fact that they're going to be generating seven times the computing power and everything else they possibly can. right now with their chips. is that another winner here? >> it definitely is. they're going to be a pioneer in this next -- it's going to be bigger than the industrial

revolution. just when you take the self-driving cars piece alone, they're going to be a key player how they're going to be powering the processing to drive all of these. i think they're going to be a big winner in this over the long haul even though the stock has done tremendously well. that's one that's fundamentally well positioned. >> nvidia, some of the things you were talking about, it's valuable to talk about where we are historically on earnings. you hear about nasdaq at a record high. can you put in perspective where we are in valuations and whether that limits the up side from here? >> what's so interesting about some of these names is that their earnings growth is really kind of over powered their multiples. you can take a shot at facebook and google at 23 times 2018 gap earnings with google you're paying 23 times for about 15, 20% earnings growth which is relatively reasonable. for facebook you're paying 23

times earnings for 30 to 40% earnings growth. i think facebook is the most attractively valued large cap internet, maybe large cap tech stock out there. >> really? >> i want to remind you there are some losers in here. we've seen names. snap chat may fall into that category. we've seen it with twitter. we've seen consolidation and platform. that's a real negative. we've seen commerce dollars and retail dollars going to amazon. it's not like the internet sector as a whole is rising. it's a healthy sign it's a stock picker's market. >> gene, i'll give you the last word on that in terms of losers or land mines in this space? >> i agree with mark. snap chat, they have the right idea around the camera. unfortunately facebook has that idea. they've basically ripped that off and are running with it. i think that jury is still out. >> they're even doing the face

filters they announced. >> they're not even pretending anymore. good to have you guys together again. gene muenster and mark mahaney. >> thank you. see yeah, gene. >> as we head to break. take a look at shares of pfizer getting hit today. citigroup cutting the drug maker trimming its earnings estimates for the company. take a look at the broader market right now. reversing some of the earlier gains that we saw. the s&p and the nasdaq had hit new record highs. we've gone the other way. the dow is down 44 points. "squawk on the street" will be right back. points. "squawk on the street" will be right back. 6 points. "squawk on the street" will be right back.

the s&p 500 may be hitting new records but not every stock is rallying. we're looking at the companies hitting new lows and finding out if any of them are worth i don't remember money at trading nation, cnbc.com or "squawk on the street" next.

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some of the ladies and gentlemen on the trading floor really scrutinizing foreign exchange this morning. as i'm talking, look at a 20 year chart of the dollar index. i find it very fascinating to take a macro look. first of all, look at the deterioration. pretty much after the tech wreck all the way up in front of the credit crisis, dollar index was soft. maybe it was giving us an early warning sign but that doesn't really help us today. what you should notice on the 20 year chart is that we failed at 100. significant. make a tighter chart. look at a two year chart. that chart is probably what you're supposed to focus on after you get done looking at the long chart and deciding as many traders have to decide at some point, is this a long-term deterioration for the dollar index? if it is, the shorter term chart will probably give you different trading ranges. let's go to the white board. this is my rendition of your 20 year chart. we know there was lots of deterioration as i pointed out

in the first eight years of the -- from the credit crisis of -- from 2008 backwards until 2000, but there's so much room considering where we're trading. if you look at where some of these tops are, we're talking 91 handles here. that's way down there. i don't suspect considering we're hovering just around the 98 handle that that's going to come very quickly. so the two-year chart's most likely going to give you your best range. probably around 95 to 98 is the area you should look at. as you zoom in on this and get some more of the minutia, 20 year charts basically data points for the month. the shorter the time frame, the more data points you get. the reason i bring it up is that i think this chart is pretty much considering how this interseeinte intercekes.

a 95 or 96 handle, stage a rally. many traders like to do the pro active side. strength versus selling weakness. the only problem the test of 100 might have been your best opportunity. maybe patience becomes currency markets do get crazy. for the most part they don't get as crazy as commodities yet. david, back to you. >> thank you very much, mr. santelli. let's send it over now to. >> joe: fort -- to mr. john for >> the nasdaq's record highs and we have a software showdown coming between apple, google and amazon. it's the season of developer conferences. we'll talk about what that means. also, h.r. mcmaster, the national security adviser has a press conference coming up at

about the half point of the hour, take you there. probably updates on what president trump shared with the russians and what it means. finally, co-founder of airbnb, big disrupter on our list. all of that is coming up on squawk alley.

disney ceo bob eiger said hackers claimed to have stolen an upcoming movie, making the comments to employees during a company meeting in new york. he says the hackers are threatening to release the film in segments online unless ransom is paid in bitcoin. he didn't name the film but disney has refused to pay and is working with federal investigators. deadline is reporting the movie is "pirates of the caribbean dead men tell no lies." this is just the latest cyberattack targeting a media company demanding ransom. last month, a hacker stole ten episodes of "orange is the new black" and leaked them ahead of the release. guess it was either "pirates of the caribbean" or "cars 3" which is another big one set to come out. they are both potentially blockbuster summer films. >> they are. do we really think it would impact their ability to garner significant revenue at the box office? that's not clear to me how it would impact it if at all. >> if people could watch online? i don't know. >> i don't know either. i don't know how the north

koreans would plan on making it available assuming it is them. of course, given their history in hollywood and the sony hack not to mention they seem to be linked to the ransomware attacks that took place last week, may very well be them. who knows. >> bitcoin is a common thread. that's going to become more of -- >> you were a big bitcoin aficionado. it's moving up a lot as well. >> not in the way that it can perpetuate crime and ransom. >> no. >> for hacking. which is unfortunately one of the side effects of having an untraceable digital currency. which is also one of the appeals of it. >> right. you continue to be sort of supportive of the idea of it, don't you? >> for the technology of it. for the block chain, less for the actual investing, it's hard to put a price even though it has soared above $1800 per bitcoin. speaking about price, the market rally that started off this morning is basically deteriorated. all major s&p sectors are in the red except for consumer staples. you have some real weakness coming out of retail.

nike is the worst performer in the dow. >> interesting. nike continues to have weakness. retail is populating the new lows list along with of course those companies that are real estate investment trusts with malls. you name it, that sort of, your top ten losers in terms of at least new lows. that's a theme we have been seeing a long time. bucked of course as it is by home depot which is up over 1% on stronger numbers and that company of course continues to operate very well. $190 billion market value. that's more or less right at new highs. >> they continue to post pretty impressive sales growth. 5.5%. they said may looks good on the conference call. even despite some weaker housing data we got today. unexpected dip there. i would also mention crude oil continues to move higher just a bit. it was stronger a little bit this morning but that's been a source of strength interestingly

for this market. 2% move higher yesterday, 3% move higher last week. lot of energy stocks have come back a lot. >> to bring it back to one of my areas of expertise we started with disney, might as well end with some content providers. once again, they are having a very poor day other than viacom which yesterday was down sharply. disney down, fox down, cbs, discovery, and of course netflix is up. that sort of tells a lot of the story there in terms of cord cutting and what's going on. >> home depot adding 13 points to the dow. it is down now 22 points. coming up on "squawk alley" cnbc's disruptor 50 list revealed ranking the world's most ambitious and innovative private companies. topping the list, airbnb and we speak to the cofounder of the company. "squawk alley" coming right up.

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and we're looking for a few dreamers to join us. welcome back. consumers focus the retail etf, the ticker down about 1% so far today, around 5% in the past week. you have dick's sporting goods reporting weaker than expected

comparable store sales and lowering its full year sales outlook. not everything tied to the consumer is getting slammed. home depot shares, you guys mentioned jumping up, the earnings trading at all time highs. consumer staples right now, the only s&p sector higher. shares of pepsicomaking all-time highs on that list. certainly trades to watch in today's action. now let's send it to carl and the rest of the "squawk alley" crew. >> dom, thank you very much. good morning. it is 8:00 a.m. at apple park. it's 11:00 a.m. on wall street. "squawk alley" is live.