several hitting record levels, marriott hotels, ulta beauty, royal caribbean making fresh record highs. check out shares of microsoft in record territory as well. and for those watching amazon, the number here 999 to notch an all-time record got to get above there. we'll watch what's happening there. on the flip side, signet jewelers, we'll watch those names for sure. that does it for "squawk on the street." let's send it back downtown for the start of "squawk alley." back to you guys. >> dom, thank you very much. let's start off "squawk alley." it is 8:00 a.m. in seattle, 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ feels something like

summertime ♪ good friday morning. welcome to "squawk alley." i'm carl quintanilla with jon fortt, sara eisen at post nine of the new york stock exchange chlgt market taking a breather after a strong week. big tech of course setting record highs all week long led by f.a.n.g. stocks as amazon continues to flirt with $1,000 a share. nasdaq has only had three down days this month. it's on pace for fifth positive week in six. for more we're joined by scale ventures partner kay mitchell here at post nine as well as washington crossing advisors portfolio manager chad morganlander. guys, happy friday to you both. so much discussion, kate, about the nasdaq. >> yeah. >> the gains, a multiple of what the other indices have done all month long, all yearlong. >> exactly. >> and how painful this would be if it were reversed. is that a risk? >> well, it's always a risk. these are getting pricey. i would say it's interesting watching these companies. they're starting to establish by

on a relative basis incredible dominance not only versus obviously from a pricing standpoint their peers, but within their markets. look at what's happening to retail by a difference. look at what's happening to the auto companies as a contrast. they are moving further ahead of the companies they're competing against. and they're using tech to do that. so, yes, i think it would be painful if it reversed, but i think obviously what people are buying is growth. and their future investment into, you know, technology and markets that are beyond their core and are going to disrupt more and more of the rest of the s&p 500. so i think that's what you see competitors shaking in their boots about. i think from a pricing point of view you have to say is it overbought. >> chad, she's -- kate's basically describing secular change. and the question for investors is whether that can compete with fed policy and macro data and political noise. what do you think? >> so it can compete up to a certain point. valuations do matter. earnings growth does matter as well. the reason why a lot of these

tech names have moved quite to the upside is because revenue growth has been strong as well as earnings have been strong. and that's what's pushing them as well as money managers are crowding into that trade to try to beat their benchmark. what you have though over the course of the next 18 months is a change in fed policy, which is also going to provide some pressure as well as perhaps the global growth scenario that looks as if it's so synchronized may not look that way 18 months from now. so valuations do matter in the tech world. we are looking at old world tech, look at the oracles, ciscos and microsofts, predictability of earnings, predictability of the balance sheet. i think you can do real well there. >> chad, i'm looking at apple, for example, emblematic of amazon, alphabet, it's up 50% or so in the last year. if i'm reading this correctly, the forward p/e is around 15.6, close to the high of 15.9. that feels pretty rich to me.

and you can translate across to amazon and alphabet too. where am i wrong? >> you're not wrong. apple i wouldn't say is super rich because a multiple of 15 times price-to-sales of 3 times, when you look at a company like a netflix or an amazon or facebook trading at 15 times price-to-sales, then you're getting into nosebleed territories. so buyer be ware here. investors are looking five to seven years out on these individual companies with a high multiples. and if the earnings and the revenue growth do not kick in and stay in a sustainable manner, then all bets are off and the valuation adjustment occurs. you saw that back in the late 90s into the early 2000s, not that we're in a bubble yet but you have to be much more circumspect and cautious. valuations do matter. >> kate, i have a good stat for you that you'll like speaking of just how large these companies have grown in terms of market caps.

>> yeah. >> so ten years ago exxonmobil, right now apple, microsoft, amazon and alphabet, those are the top four. i think facebook is number eight. it's totally transformed the economy and the market landscape. and i guess the question is, how long can they have this mantle? >> well, it's a good question. i think chad was right. if you're looking at short term also with vix being at historical low, if you're searching for a place to put your money, it's probably the best relative place to put your money but you have to wonder how long should you keep it there. if you're looking at a short run, a correction, a minor correction, a surprise politically could make this a scary bet. if you're looking at the five to seven years, i think what you're seeing is the continued dominance. the growth rate these companies are recording at scale is really not been seen in the s&p 500 before. these are companies whose businesses are growing 20% plus a year on average. in a couple of these cases.

and some of the fastest growing entities within them are big companies in and of themselves. aws is an example. at $3.7 billion growing 42% a year, when you start not worrying about holding it for a day or week, when you think about holding for a year or two or five or seven as chad said, there's real growth and these companies are disproportionately spending their cash which is why earnings don't look so great, particularly amazon famously because they're investing in pure r & d. more than you see out of government and a lot of academics. they're betting on the future and they're looking like they're winning in their new markets. >> kate, what's the impact on you as an investor of this parody we see in silicon valley among big tech? i don't recall a period like it in the past 20 where you have so many big companies that are strong. does that make it harder for you to pick growth winners, or easier because there's so many potential buyers? >> well, it's interesting. i think it is the first time we've seen this many competitors. i think it's great from a small company point of view. they have a lot of cash to

acquire a lot of companies, which is a good thing for those of us that invest in small companies in silicon valley. you also see this interesting pivoting all the time. who's competing with who? i think it provides a lot of market opportunity between them. and i think it keeps all of them fast on their feet. when you have one dominant provider in a market, it's easy to get lazy. they all are hungry. look at jeff bezos' letter to shareholders. he could have written that letter 15 years ago. >> right. >> it's the same letter any start-up entrepreneur would be reading. move fast, fail fast, stay close to customers and stay on top of markets and technology around you. that's i think made the whole pace of change not just in the start-up world but now in these big companies high. >> isn't the difference, chad, companies like facebook and apple who have a lot of cash on hand. >> yes. >> and others who are relying on the capital markets to help them raise cash which they will then burn and in some cases be cash flow negative, that's the

filter, isn't it? >> well, absolutely. you know, from a value investor an out perspective, google for example that has $80 billion plus of cash on their balance sheet could actually be a start-up unto itself. so that would be much more attractive for us as individual value investors or an apple for that matter. with $200 billion plus in cash. that's why what we would say to investors at this point is just shy away from the more speculative high test high growth stories and just stay more towards the value side of the tech chain. >> it's going to be a big question for investors all yearlong it would be our guest. kate, chad. >> it will be interesting. >> good to see you both. thanks so much. >> thank you. >> when we come back, another trade war looming. strong words from president trump for germany's biggest export industry. the netflix bulls are out. why one analyst says the street is underestimating the video

streaming giant. plus, prime 4,000 as we've said all day and yesterday, amazon flirting with another all-time high. "squawk alley" back after this. post nine is sponsored by fidelity investments. innovative ideas for serious investors. fidelity, trades are now just $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. anltry align probiotic.nade your digestive system?. for a non-stop, sweet treat goodness, hold on to your tiara kind of day. get 24/7 digestive support, with align. the #1 doctor recommended probiotic brand. now in kids chewables.

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quote, very, very bad. that is what president trump reportedly had to say about the germans specifically when it comes to germany's trade surplus. according to diwent onto say, s the millions of cars they're selling, bruce andrews joining us, you've got a perfect background to talk about this, bruce. how do you think given your experience the germans and the rest of the european leaders are reacting to this controversy from president trump at the start of g7? >> well, this is a time that we really need to be looking at not how do we build new barriers but most importantly how do we help the auto industry in the united states to be most competitive. and i think it's recognizing first of all that the auto industry is a very global business. that u.s. automakers invest around the world heavily in the eu, china, many other countries.

and many of the national automakers have heavy investments and heavy production here in the united states. and all of these companies have global supply chains. so what we need to focus on is how do we make the industry most competitive. and a big important part of that is looking at bringing the barriers down. and i'll give you a very concrete example which is in the obama administration one of the things we did was the select usa program to try to bring foreign direct investment in the united states. and at one point one of the international automakers was looking at where they should put a new production plant. and at the time we are encouraging, we are actively trying to get them to put it in the united states. and in the end they put it in mexico, but not for the reasons that you would expect. in the end the reason they put it in mexico was because mexico actually had more free trade agreements with other countries because they wanted to be able to use it as an export platform. so i think it's really important to recognize what is it that we can do to be most competitive

here in the united states. and that's not building new barriers but it's actually taking actions that will help our companies to be competitive. >> but specifically on this point, bruce, about the german automakers. germany had a $65 billion trade deficit with the united states last year. yes, they do have plants here that are sold to americans, but they also have lots of plants in mexico. does president trump have a point that they can do better when it comes to fair trade practices? >> well, i think the important thing we've got to recognize is first is the most important thing we can do as a country is outcompete and make our companies to be competitive. and i think the concern is this is why -- this is the exact reason we should be pursuing trade negotiations with these countries and we should be trying to open up their markets and make sure not just with germany but around the world the competition is fair. and i think we've got to remember there are three parts to the trade agenda, right? one, obviously enforcement is very important. but i don't think there's

actually been an allegation that the germans are somehow doing something that is anti-competitive. we also have to remember that u.s. companies have investments around the world. and so we need to trade -- we need to be looking at how do we open up these markets and frankly make sure u.s. companies are able to sell into them, not create new barriers here in the united states. >> bruce, we're talking about the auto industry in the united states. that's the phrase you used. but exactly what do we mean when we say that? are we talking about jobs in the united states related to companies that could be based anywhere? is that wa we ought to be angling for is, you know, healthy good paying jobs in the united states? or is there some other way that we should be defining the u.s. auto industry? >> well, i think you can't break it down into this -- into the individual component parts because the reality is the auto industry is an incredibly global industry. the u.s. auto companies are invested around the world. international automakers are invested here in the united

states. they all have global supply chains. so, yes, jobs is obviously important. it's something we want to look at. but we want to make -- what we should be looking at as policymakers is how do we allow, a, u.s. companies to be most competitive, and b, what are we doing to attract investment into the united states and are we making policies that make the united states a place where people want to frankly come and create jobs. i think that is something that we need to really focus on having policies that are encouraging companies to invest here. which will create jobs, but it's also research and development. there's a whole bunch of factors that go into, you know, the success of these global companies. >> is cut in the corporate tax cut one of those elements? >> well, i think making the corporate tax rate competitive globally is something that's obviously an important piece of looking at this. you know, as companies there are a whole multitude of factors that go into investment decisions, but the corporate tax rate is clearly one that has to

be considered. >> what else do you suggest that we do? and do you think that the trump administration is pursuing the right policies on this front? >> well, what i would say is we have to remember that 95% of the world's consumers live outside the united states. and 80% of the global gdp is outside the united states. and that's only going to grow over the course of time as we see the explosive growth in asia and africa, the middle classes around the world. and so what we need to be focusing on is enforcement is incredibly important and getting our trading partners to live up to their trade agreements, for example china and living up to their wto accession agreements and commitments they've made over time is incredibly important, but we also need to be really focusing on how do we help u.s. companies to be successful in markets overseas? because as those numbers grow, those 95% of the consumers, we need u.s. companies to be able to access those markets and to be successful.

so doing the multilateral, the bilateral trade agreements that help american companies to be successful in those markets is incredibly important. i would also note -- >> yeah. >> sorry, i would also note that also certainty in recognizing that there are global supply chains, you know, things like brexit which have the potential to create huge uncertainty and frankly problems for u.s. companies who are invested in the uk and in the eu as well. so addressing these issues and frankly doing it in a multilateral way i think it's really important to remember that we need to work closely with our allies on all of these issues. and this is why these trade agreements and other discussions are so important. >> maybe that's what they're talking about inside those g7 working sessions right now. bruce andrews, thank you for joining us. >> thank you. >> today on this trade relationships with the u.s. former deputy commerce secretary and vice president of ford. jon. >> all right. and straight ahead, flirting with $1,000 a share, playing

harder to get today than yesterday. amazon on the verge of breaking through that psychological level. and then why one analyst says the street is underestimating netflix's long term potential. the case for netflix 190, about 20% higher from here, when "squawk alley" returns.

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♪ this week we got news that tom cruise is shooting a sequel to "top gun." we sat down with a long-time producing partner of cruise and former head of two studios, fox and paramount. she talked about her relationship with some of hollywood's biggest names. take a listen. biggest star you worked with who had the best mind for business? >> well, many.

but the first person that comes to mind is both ironically -- there were many, so i would have to say michael douglas had a great mind. he was a great producer. i would have to say mel gibson, because he was also a producer/director. there's so many, but i'll tell you why in a second. so mel gibson and i have had a lot of amazing battles over the budget for "braveheart." when it was over and we came to a compromise, i remember calling him and i said, wow, you must have a dart board with my picture on it and you must be throwing darts at it. and he said, huh-uh, you were doing your job and i was doing mine. and now we get to make the movie. so that's somebody who understands both sides. and finally, tom cruise. when the first "mission impossible" came in, he had a huge fee, obviously what he deserves. he was the biggest star in the world, i think. and the budget came in too high. and he said i'm forfeiting my fee.

i'll take a piece of the gross instead. and he turned to the director, who ironically was brian depalma at the time, brilliant director, he said, okay, what are you going to do now? >> fascinating. we talk about the proliferation of buyers for content these days with all the disruption, but it's given stars like cruise who've been producers for years even more options, even more control. so their business acumen is a bigger part of the equation. >> but it's gotten trickier too, hasn't it? i was thinking about there aren't bankable hollywood stars in the way there once were. looking at the list, the top three are all in for super hero movies that are kind of more about the brand and story than they are about the star. mila kunis is probably the highest on the bankable list that isn't doing super hero movies. >> she didn't say leonardo dicaprio, didn't she do "titanic"? he has done well.

>> i didn't realize. "top gun" has a sequel. >> they're doing it. val kilmer's in too. >> straight ahead. got as close as $999, that was yesterday. what will push amazon over the edge? we are eyeing that $1,000 mark. it would be the first time ever for amazon, $994 right now. plus, mark zuckerberg's message for the class of 2017. we discuss. "squawk alley" is back after this with the dow down 14.5 points. ve how usaa gives me the peace of mind and the security just like the marines did. at one point, i did change to a different company with car insurance, and i was not happy with the customer service. we have switched back over and we feel like we're back home now. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children, and that they can be protected. we're the williams family, and we're usaa members for life. call usaa today to talk about your insurance needs.

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good morning everybody. i'm sue herera. here's your cnbc news update at this hour. masked militants riding in three suvs opened fire on a bus packed with coptic christians in egypt killing at least 28 people and wounding 22 more. the attack came on the eve of the start of the muslim holy month of ramadan. president trump -- tillerson commenting on britain's anger with the u.s. regarding alleged leaks by the u.s. in the attack investigation. >> the president has been very strong in his condemnation and has called for an immediate investigation and prosecution of those who are found to have been responsible for leaking any of this information to the public. we take full responsibility for

that. and we are obviously regret that that happened. >> former president obama playing golf at st. andrews historic course in scotland. after warming up with a few practice putts, he joked and shook hands with the crowd before playing the third hole. this is his first trip to scotland. that's the news update this hour. back downtown to "squawk alley." sara, back to you. >> what a coincidence that he's there and trump's there at the same time. >> yeah. they've been all over europe, just not together. >> juxtaposition. right. thank you, sue. let's get to seema mody right now at hq with the european close happening imminently. seema. >> hi, sarah. european stocks mostly in red on this final trading day of the week being dragged down by the banks. the london ftse dragging down to an all-time high. the pound weakens. currency falling to a one-month low against the dollar.

here's the reason, with two weeks to go until the uk general election, the latest poll from ugov shows conservatives lead over the labor party has narrowed from nine points to five, that news fueling concerns that prime minister theresa may won't win a large majority as she prepares for the upcoming brexit talks. also want to look at the pound against the euro falling to a two-month low. now as you've been hearing this morning german automakers lower today after a report that president trump complained to eu leaders about germany's trade surplus, especially when it comes to cars. but bmw, diamler and volkswagen currently off the lows of the session. let's end with what we're calling the chart of the week, luxury player ferragamo down 12% on a disappointing outlook. a sign the retail trouble we're seeing is not limited just to the united states. however, bernstein analyst came out today defending the stock saying ferragamo is an attractive takeover candidate. stock down 2% in today's trade.

jon fortt. >> all right, thank you, seema. and amazon stock continues its march toward the psychological $1,000 a share mark with plays in retail, cloud, entertainment and logistics, what's next for this multifaceted company? weighing in we've got former amazon executive and boomer and commerce ceo and piper jaffray michael olson. welcome to both of you. >> hi, jon. how are you? >> i want to start off with you. you take a look at the trajectory amazon is on right now. they're pushing into grocery, into grocery pickup, doing pretty well in india, what's the front that investors should look to to really see if amazon's next step is going to be a success? >> well, let's take a look at amazon's business. they have two fledging businesses, amazon retail and amazon cloud. there are a few more that are

coming to the forefront, but break them down into each of them. the important thing to see is how amazon's able to get and nail the scaling function of each of these businesses. of course the cloud business is more than 24%, 25% net income positive. if you look at the retail business they're starting to turn the corner country by country. in the u.s. they have already hit profitability on that. and if you break that down, for any retailer including amazon, the scaling function is essentially profitable growth. if you look at both those things on growth and profits, amazon's been able to drive growth tremendously through their prime business. more than 50% of u.s. households actually start their shopping from amazon.com, right? and they have more than 80 million prime subscribers. that's literally $8 billion in cash flow. they've nailed the growth function. how about profits?

if you look at the cost structure of amazon, you break it down into the two businesses on amazon retail, which is first party retail and third party retail. on the first party retail they're starting to get a huge amount of retailer power, which any retailer dreams about. and are able to use analytics as a weapon to go out and really get that and consolidate that power. on the third party side they're starting to use programs like settle for prime and things like that to take cost out of the system. >> michael, raises a great question. i'm wondering whether or not you think the shift to a.i. and the way it helps retailers predict their customers' preferences, is that a more powerful dynamic than the shift from desktop to mobile? >> that's a good question. i think in general if you look at the shift to a.i., amazon's got a huge head start over anyone else just with everything they're doing with alexa and the data that they're collecting. and as we talked about before, you know, they're getting light

years ahead of a lot of the competition from that perspective. i think there's an opportunity for them to use a lot of that data for automated consumption and other areas that we think they can trend to in the future. and this really ultimately results in we're not going to all turn into robots necessarily and just kind of accept what amazon ships us, but there's a lot of products that are going to be integrating amazon going forward. whether it be a washing machine and detergent and figuring out how much you have left and sending you a bottle when you get down to a certain level, or your refrigerator or other things. it's a huge shift. is it a bigger shift than desktop to mobile? i think over time it probably will be. >> michael, you obviously like amazon, but your price target is just about 5% away from here. tell me what is amazon's potential achilles heel? what should we be worried about? >> yeah, the stock runs quickly. and that creates an issue related to our price target sometimes.

but i would just say if there's one risk at least in the near-term it has to do with the second half margins. if you look at the back half of this year, q-3 and q-4 margins do need to improve on a year over year basis. the reason for that is because we're coming off of really easy comparisons from q-3 and q-4 of last year where we saw companies spend more on fulfillment, india and content. they may not necessarily guide to that initially because they typically guide conservatively, but we do need to see it end up there. >> guru, you've been looking at some strategies retailers have been implementing to try to compete with amazon. we've heard on our air a number of times today that online retail sales still make up, what, less than 15% of total retail sales, maybe even less than 10% at this time? the question is how do other retailers make that their opportunity and not just amazon's? what have you pound? >> well, if you break that number down, the 10% to 15% number that you talked about, if you look at it by category, which is all the way from books,

music, video and dvd which is the highest penetration online all the way to grocery which is lowest penetration online, it's a varied spectrum. books, music, video, dvd is more than 50% online and you saw the disruption in fact amazon leading a lot of that disruption happening already in the grocery, which is the other side, in fact a laggard in this online share of total retail, those industries are yet to be fully disrupted. and that's really the opportunity for amazon is really a blue ocean opportunity as they look at entering grocery in a whole different sense and starting from something which they really do good at which is a.i. first. can we apply modern technology to get into this market? we saw them launch and start to bid on things like amazon go, which is using a.i. first to start entering into these markets. >> right. michael, quickly if you can, when you see amazon opening up these bookstores across the country, they're opening them in

some pretty expensive locations, is that a good thing, a bad thing, or does it factor at all into how you value the company? >> it really doesn't factor at all into how we value the company. i think they're trying to have a physical presence in some cases whether it be for grocery or books or other things. could be furniture in the future to showroom some furniture. i think in general the key thing on amazon with various initiatives is just that their addressable market is kind of undetermined at this point. they're growing it and it's going to continue to be, you know, other categories that they're entering. and we think that's the exciting thing about this stock going forward. >> one of many exciting things. guru, michael, thanks for joining us. have a great long weekend. guru hariharan from boomerang commerce and michael olson from piper jaffray. >> thank you, jon. >> thank you. when we come back, how one chinese automaker is looking to beat the odds and be the first to sell cars in the u.s. you'll never guess the name of the company, but first dow's down 12.

narrowest range since december. rick santelli, what are you watching? >> you know, i'm watching how all the markets align. and we're going to do something different. we're going to look at seven different charts with the notion of what happened on november 8th. seven looks at eight after the break. at fidelity, trades are now just $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. and at $4.95, you can trade with a clear advantage. to growing businesses cdw broacross the city,tration increasing productivity like never before, which is amazing, unless you're a barista. cdw implemented dell poweredge servers with intel xeon processors to allow people to work from anywhere, so lucky me. so nobody wants coffee?! hey, can i get a couple copies? enhanced mobility by dell. i.t. orchestration by cdw.

we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. i'm scott wapner, coming up today on "halftime report," one

market watcher told us stocks could go up 50% from here, now it's siegel's turn to debate the markets. and why elliot's paul singer says all hell will break loose in the market. and the cell call that should make anyone investing in oil nervous. "halftime report" noon eastern top of the hour. carl, see you in about 20 minutes. scott, sounds good. scott wapner. 12 years after dropping out mark zuckerberg receiving honorary degree this week. he shared his thoughts on the new job market and what it takes to make ideas a reality. >> our generation is going to have to deal with tens of millions of jobs replaced by automation like self-driving cars and trucks. but we have the potential to do so much more than that. every generation has its defining works. more than 300,000 people worked to put that man on the moon including that janitor. millions of volunteers immunized children around the world against polio. and millions of more people built the hoover dam, and other

great projects. now it's our generation's turn to do great things. now, i know, maybe you're thinking, i don't know how to build a dam. i don't know how to get a million people involved in anything. well, let me tell you a secret. no one does when they begin. ideas don't come out fully formed. they only become clear as you work on them. you just have to get started. >> talked a lot about the process that founders of big things go through. but the mention of universal basic income although he didn't actually phrase it that way was a big moment i think for something that has been really rooted in arcane economic theory so far. >> it was a big moment, but i think also having lived in silicon valley, it's something that it's hard to see how it would work there. i mean people making $75,000 a year in silicon valley and san francisco right now can barely afford rent. so how would that even work?

it's one level to talk about these things, another to wrestle with how these companies themselves, even their success can effect an area in a lot of ways positively but also negatively. >> this idea of free money doesn't seem to be something that anybody outside of silicon valley is really talking about. they can advocate for certain policies, for instance, in washington, d.c., that would help close the inequality gap. >> really quick we're talking, the president having a photo op in sicily as the g7 meeting continues. already made some headlines with regards to theresa may. the president and may likely to work on a post-brexit trade agreement. what a week it's been. what a nine days it's been really as he's gone from saudi arabia to israel to brussels. of course all the coverage of nato yesterday. and today the g7. we'll see what the communique looks like this weekend. >> a lot of people drawing a contrast between the welcome he got in the middle east from saudi arabian ministers and some

of these european leaders, but he's here to talk policy. he talked north korea with abe in a bilateral discussion earlier. talking trade. i don't know if he actually spoke about trade with german chancellor angela merkel, but clearly the europeans want to promote this idea of open coordination. which is a little bit in conflict, a little bit in clash with president trump's rhetoric. >> see justin trudeau. >> now we just get a beautiful shot. >> yeah, can't tell if that's a postcard. >> wish you were here, carl. >> let's get to the cme group and get the santelli exchange. hey, rick. >> hey, thanks, carl. you know, many don't know how a super charger or fuel injection system works, but most everybody with a driver's license knows when you hit the gas you go, go, go. tvs, anybody have any idea what's inside those really thin screens we all look at? no. but you can still watch your favorite program. you know, sometimes when it comes to markets let's keep it simple. i'm calling this seven looks at eight. seven charts looking at where

the market was on 11/8. i'm not going to make any big claims that we're going to necessarily have any magic as to the next move, but sometimes simple things are their own explanation. and you'll see what i mean. let's look at chart number one, the dollar index. it's pretty darn close to where it was on 11/8. euro versus the dollar, same thing there. pound versus dollar, really under the microscope now because maybe the polls are closing in a little bit with regard to prime minister may. but you can see the pound versus dollar isn't there, but it certainly aiming in the right direction. ten-year note yields pretty much close, aiming for sure darn close. you see all that volatility we had right there in the first half of november of '16. bunds aiming in the right direction, about ten basis points away. here's one that i really like. tens minus twos. so many channels into these spreads, whether it's the

channel of all the inventory around the globe of central banks and their various sovereigns, the notion of what our fed's going to do, the notion of how tens may be looking at the economy, twos looking -- all of that aside it's darn close to where it was. now, here's the two outliers, and maybe the most important information to glean this from the next two charts. look at the vix. off the charts nowhere near where it was on november 8th. and of course i picked the nasdaq. the s&p and the dow aren't doing bad, but the nasdaq is kind of the rocketship of the three. that's pretty amazing. so people are going to say, well, explain those. sometimes the market has its own explanation. they've kicked the can. the media certainly doesn't think the rally really should be here with regard to equities. we've had last wednesday where we really had volatility. i guess in the ends you're supposed to not necessarily try to dissect it, just watch the tv drive the car. stocks and the vix and the hyg, they're all doing something different, but the other charts are aiming right.

finally, i would normally wish everybody a great holiday weekend, barbecues and all that. and i do hope you have a great holiday weekend, but let's not lose sight of what the holiday means. if you see somebody in uniform, thank them. let's remember all those that gave their lives so we can all do what we're doing. or in the case of congress not do what they're supposed to be doing. in either case, we're all here and we all enjoy the freedoms that many had to pay a high price for. jon fortt, back to you. >> absolutely, rick santelli, thank you for that reminder. and when we come back, what's in a name? well, one chinese automaker with high hopes to export u.s. is going to find out. "squawk alley" is back in a moment. liberty mutual stood wite when this guy got a flat tire in the middle of the night. hold on dad... liberty did what? yeah, liberty mutual 24-hour roadside assistance helped him to fix his flat so he could get home safely. my dad says our insurance doesn't have that. don't worry - i know what a lug wrench is, dad. is this a lug wrench? maybe?

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several chinese carmakers have tried and the suv and the production line behind me is just one of the models that gac motor plans to sell in the united states. the tiny state run company has grand plans to have the first chinese auto brand in the u.s. u, but depending on your prix, the brand name could be a problem or a reason to buy. in an exclusive interview, the president told me that the name has absolutely nothing to do with the u.s. president. >> this is -- we called it trump

xi in 2010. we never imagined that the name would sound so similar to the name of president trump. >> it translated to delivering goodness. it was the fastest growing chinese car brand in china last year and jd power ranked it the highest in eququality among all brands in 2016. the president said that recent success here had given the automaker the confidence to believe it could succeed where other brands have failed and conquer the u.s. market. >> if with we can succeed in the u.s. market, we can succeed anywhere in the world. >> the plan is to first export cars from the factories in china. the company is considering partnering with a u.s. automaker to produce locally and possibly building its own american factory after the cars go on sale there in 2019. in addition to u.s. politics, they will probably face other challenges, such as fierce competition and touch safety

standards. the chinese have been attempting to build a globally competitive auto industry for years, so the foray into the u.s. will likely be seen as a test as to o whether or not chinese carmakers can truly go global. cnbc business news. >> thank you. and speaking of the president, he's ending a busy week on the first overseas trip. john harwood is in washington to wrap it up. >> hey, carl. there were some awkward moments on the president's trip especially in europe. there was the fierce handshake with macron, whose election had disappointed him. the moment when he shoved aside the leader of montenegro in order to get to the front of a photo opportunity. and then the president declined to specifically explicitly specifically embrace article 5 in nato, but did chastise nato members for not paying their fair share. >> 23 of the 28 member nations

are still not paying what they should be paying and what they're supposed to be paying for their defense. this is not fair to the people and taxpayers of the yit. and many of these nations owe massive amounts of money from past years. >> now, when president trump returns home next week, he's facing a raft of difficulties. first of all, the fbi investigation which seems to be picking up speed since the appointment of special counsel robert mueller. secondly, you've got a health care reform bill which is very unpopular, the polls show. not clear where that's going to go. senate hasn't come out with anything. internal divisions within the administration and congress on tax reform and finally, you've got an accelerated request by treasury for an increase in the debt limit by the august recess. house freedom caucus says they're not going along. going to be difficult and one of

the conscioequences is that democrats have increased leverage in this situation. we'll see what issues they can bring up to bear. >> subject of your column this week, john. the leverage on the democratic side. does montana, is it in any way a touch stone for either the loz or the gain of the democratic leverage? >> well, republicans are certainly pleased. they held that seat. it is a very republican leaning state. in federal elections, although there is a democratic senator from montana. but the issue for democrats is can they sustain the enthusiasm that they have generated this spring into 2018. the democratic candidate ran relatively close to forte, though he lost in the georgia special election, the first round, the democrat in a very republican district did

extremely well, led the eventual republican nominee by a lot. now, the run off is on june the 20th. democrats will very much want to win that. if they lose that race, it will be much more of a disappointment to them, carl, than the montana result because the georgia race is a suburban district with a lot of college educated voters. those are the kinds of people democrats need to pick up if they're going to take the house back. >> on the first foreign trip, you made points about the fact this is being painted at president trump ruffling some feathers at nato and at g-7 call ing for them to spend more, but if you look at these meetings, g-p, g-20, they rarely accomplish anything. maybe he needs to shake them up and if if they're going to talk about increasing threats of terrorism and russian threats and aggression, maybe that is the solution to increase their military defense budgets in a way that the united states has dope. i just wonder how we're frames this whole foreign leadership and weather foreign leaders were in fact really ruffled by it.

>> well, it appeared they were, but we can't really know. we'll see how they behave after the meeting. it has been an objective. american presidents to get other nato members to increase their share of defense spending, so, as to make a greater contribution to the common defense. if that is achieved as a result of what the president did, that would be a positive result from a u.s. point of view. >> john harwood, so much to die jest this weekend. on this memorial day. thanks so much. in washington. when we return, amazon briefly turned negative in the search for 1,000. meanwhile, the dow remains in the tightest range since the day before christmas vacation last year. sidewalk we're back after this.

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we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. dow is down 21. narrowest range since december 23rd, the day before christmas vacation last year. you strip out the day, got to go back to 2014 to find a day in which the dow has traded in a fewer number of points. >> it's before a three day weekend and we're still looking at a strong week for stocks, where going in, it was up almost

1.5%. the nasdaq has been the star performer, up 2% for the week. i would mention you have strength in groups like consumer staples and you tillties this week with yields lower thap they were this time last friday. >> and it's been strong month for tech, auto desk and others, up 25%. >> to the judge and the half. welcome to the halftime report. i'm scott wapner. our top trade this our, our continuing conversation on whether this market is in danger of overheating or if if it is about to go into overdrive n. a week where famed market watcher robert schiller said here on this show, that stocks could go up another 50%, we welcome another market guru. also,