time. >> what was it about >> google and emojis for hamburger. apple or google? there's a big debate going on. >> definitely cheese on top. >> where the cheese is loektded, cheese above or below the burger >> now we're out of time. >> it's 9:00 >> we've got to go >> andrew and the desert calendar for 2018. make sure you join us tomorrow "squawk on the street" is next ♪ >> good monday morning, i'm carl quintanilla along with jim cramer and david faber earnings and tax legislation and potential fed chair and maybe charges from special counsel mueller, more on that in a moment europe is mixed and bonds are steady and personal spending hits the highest since 2009.

our road map begins with more earnings on the way and counting down to jobs friday. >> goldman slaps a sell on gm after a very strong rally in those shares they are down now in the premarket. >> and first charges in robert mueller's special investigation are likely former trump campaign chair paul manafort has turned himself into the fbi this morning. stocks are beginning a new week after the major rally in big tech so far this month the dow leads the way and nasdaq surpassing the s&p thanks to the tech surge. if we can avoid going negative for the month, guys, the s&p is down one month this week by .4, almost a perfect year up every month so far. >> we're in some sort of sweet spot where it does appear on friday in any other market i would have said that's a blow off. you see incredible gains from the big nasdaq companies but in a blow off typically the numbers

can't match the stocks but the numbers were quite impressive and i know it's not the focus but when you go back over intel, intel has this business and always had this business since 1989 when they finally get it right, there's every incremental chip makes a huge amount of money so i think that brian kri san itch is a huge hero. last week i had to talk up satya. if you wants me to be your spokesperson i'm game but microsoft did well but intel was extraordinary and we're talking about the dow. >> exactly saying what you're saying, long under performer, look to outperform 58 target on finally what they say is operating leverage. >> you can't have a stock at 12 times earnings with those kinds of numbers mobile eye, brian kri zanitch i

getting intel back to where it was. >> mobile eye, the focus is on the card to a certain extent and they see that as very important to their strategy. >> i think it's so important what you just said a lot of people linked intel with the pc because they didn't do mobile. i'm linking them with the car. >> i think he's linking them with the car too. >> the data that's coming off the car is going to be huge. >> yes and it's going to come down to -- it's going to come down to intel versus nvidia. >> it could. >> investors are this morning are still digesting that incredible day on friday and i look back at amazon now and that acceleration -- >> oh, my gosh -- >> revenue growth and people started to up the estimates by significant amounts because this was not a quarter where they thought they would make money at all but didn't anticipate hitting it the way they did. >> you're so right

i look at the sad macy's downgrade and the morbid j.c. penney situation and amazon is almost one for one saying look, the brick and mortar is just such a depressing situation, just really depressing so you're right, amazon major negative focus. >> citi cuts macy's to sell. where's gimble's >> and then as jim notes, goldman cuts gm to sell and looking for downward inflection and product launches next year and this as they have ford as a neutral. >> and they like -- they think the new truck series is going to impact general motors, obviously they don't care about the first time -- j.d. power awards where people were amazed when you watch football. >> always amazed. >> again and again and again. >> they are not actors

>> they are real people. >> what kind of lives do they have that it's like wow, so i just think the downgrade is in sync with regard to a stock that went up a lot on just future cars >> back to autonomous vehicles. >> it's nvidia and intel, they are going to win, they have so many chips these cars are filled with chips. it's like a bag of frito lays. >> and talked about the bat of the screen in the back, you'll be sitting back there and do media consumption. >> netflix netflix was left out last week i felt bad for netflix not to mention you can be drinking in the back too. >> you could be drinking pot, the con stelation one day, when we nationalize the legal marijuana, you'll be drinking a -- >> you can do that too, whatever you want. >> we're getting there

this was a day friday was a day where the shorts i think capitulated, i saw a lot of that i don't think the people saw intel or microsoft coming. amazon, no one saw that revenue acceleration in the meantime, look what's happening away from that merck, saint moerk merck dropping like a stone. >> sun trust cuts merck to hold on keytruda. what's going on there? >> i have to tell you, a very negative test for a drug that was going to be for lung cancer, obviously going to be big. looks like brist ol. >> we don't need sun trust. >> i know it's sun trust -- >> he said sun trust >> brist ol merck, bristol is on top. >> a bad week for celgene and biogen was not great.

>> i live in summit where celgooce celgene is located it was a half mast day very tough this stock is down 40 straight points the drugs are disastrous meantime -- >> but why >> utilities and housing, not this time. why are they disasterous when you get off the desk and speak to the drug ceos, they feel there is going to be a sea change against them in washington. >> they do >> they really do. they are very scared. >> this mantra of high drug prices is over. >> mylan, not shkreli, how is he doing? >> shkreli i think he likes jail apparently. >> does he like jail >> the last i read i thought it was going to be -- turned out to be jail. >> speaking of the stuff, we are getting first charges in special counsel mueller's investigation in russia's role in the election paul manafort surrendered to the

fbi this morning and doj has a statement and details on these indictments on at least 12 counts eamon javers has the latest. >> reporter: good morning, we believe that paul manafort is here in the building behind me you can see the fbi police vehicles and he arrived this morning and we're getting a statement from special counsel's office detailing what the charges are against him for first time manafort and pro to jay gates indicted on 12 counts, including conspiracy against the u.s. and launder money. manafort and gates are being charged as unregistered agents of a foreign principal, making false and misleading statements and seven counts of filing reports of foreign bank and financial accounts foreign bank and financial accounts there being hidden by these two gentlemen, rick gates and paul manafort.

the chairman of the donald trump's presidential campaign last year. a key official during several of the crucial months in the summer last year, in recent months though, the trump administration has tried to distance themselves from manafort saying he only played a role for a limited period of time although trump has walked a fine line saying he thinks that paul n manafort is a good man back over to you. >> any intelligence on what else we may see today, either walks in and out of the building or further announcements from doj >> we don't know they are playing this one close to the vest. we'll show you the building. they are bringing dumpsters in this is the garage entrance on the back side of of the fbi's washington field office. you can see those fbi police vehicles there camera crews staked out at all sides hoping to get a picture

when paul manafort comes out no indication what we might see from the government looking into this case. they've been playing this one very close to the vest so at some point we'll get a detailed look at the indictments themselves, exactly what's been filed here and that might give us more information about what's going on here in terms of who else might be involved, where this might be going. the key problem for trump administration paul manafort is sitting inside this fbi building talking to fbi agents about we don't know exactly what. at some point he might feel pressure to flip in legal par lance and give up information about others inside the trump campaign or any details on any other wrong doing he's aware of. >> thank you we'll come back to eamon some of the text is being parsed now, looking at the amount of money. >> the indictment was made available through the link in the press release, and you can

see a lot of it between at least 2006 and 2015, acted as unregistered agents of the government of ukraine 'they generated tens of millions of dollars in income and in order to hide payments from u.s. authorities from 2006 through at least 2016, manafort and gates are alleged to have launderred the money through scores of united states and partnerships and bank accounts, that's the first paragraph relevant to the indictment -- in the indictment. >> it's going to potentially overshadow the president's trip to asia, the tax legislation we're expecting on wednesday out of ways and means. the appointment of a fed chair -- >> yeah, i guess it will i was looking forward to the fed chair announcement this week and digesting that. >> which the journal says will be powell. i know positive we wiwell for ae the tax, this was supposed to be -- the giant tax bill

we haven't seen anything >> we haven't seen anything. they don't want you to see anything, that's the whole idea. >> the home builders have seen enough they are upset there won't be a homeownership credit. >> home builders and utilities were the stars last week and rates went up. there's a lot of things going on, very hard to fathom but home builders making a lot of money because of scarcity of homes but now we're waiting for more shoes, right >> i would think so. i would think so as we read through this indictment here as well. >> it's obviously more than one guy involved >> the idea typically is you work on the first set then you get them to flip on another and keep working your way up the chain. >> he's pretty high. >> mueller, listen, they have a lot of very well schooled people in a number of these areas, including money laundering which had been noted many times. some of the great experts in terms of uncovering. >> these are very black and white laws, it's not like you --

it's not surprise to interpretation anybody who is acts as a foreign agent and hides it, it's -- the law is pretty clear, you're going to jail. >> mueller's credibility both his appointment and his team he's assembled is under scrutiny and criticism. >> that's a great point, the country is a divided country he charges someone and immediately, well, he's on the table. who's left that isn't? he's like the last guy i think he's a strong figure >> when we come back, ge's board was reportedly kept in the dark about jeff immelt's use of the corporate plane. we'll take a look at the premarket. earnings this week include apple and master card and facebook and starbucks and qualcom and more i think it's terrific.

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kept in the dark about the company's practice of flying a spare business jet for jeff immelt and ge directors were not aware there had been an internal complaint years ago. immelt telling the journal he

wasn't aware a spare plane flew with him and if he had known he would not have allowed it. listen to john flannery with david earlier this month. >> it's not an insignificant cost but it's a message, we're not performing for investors, that's our task. we don't fly around planes and company cars to me it's pretty straight forward thing we have to tighten the belt and lead by example and we have to run the company like we own it for the benefit of our owners >> certainly the optics around this story outweigh maybe the actual practice and amount of money spent. >> i gave it -- teaching this weekend for the street and doing some real good things but the attack that ge -- i mean, people hate this stuff. this is eyesore stock in the market people are saying, jim, how could you have ever liked the stock? i think the answer is it's a great american industrial. it can be that again but everything has to kind of come

out. >> we follow the stock closely, of course. on that day, which was a week ago from last friday, i did that interview with flannery, the stock ended that day up then proceeded last week to be down, i think it was every day and lose you can see now below 21 bucks a share. >> yeah. he's got -- >> let's where do you -- is this the right price ifthere can be one given that the hopes that a lot of investors have that flannery is the right man for the job but the job is going to take quite a while >> i think this is not a six-month. i don't think it's a year. it may be 18 months. i think the dividend obviously is a huge amount of cash, they could use that the fact he put up locomotives, i can't tell you how many times i was begging the company -- meet with the company and say -- >> they haven't officially announced that -- >> no, but remember there's a big meeting coming up. >> 13th is the big analyst

meeting. >> and everyone feels maybe he cuts the dividend then they could go to buy. wanted to think of it as a hold or sell ahead of the meeting i think they can get long. it's interesting because tusa said it's a trap and people who buy it at 23 are going to get hurt. he's a very good analyst and very courageous. >> he's at jp morgan. >> he's very unassuming fellow. >> he is and he's been quite negative and points out the lack of cash flow particularly free cash flow. >> 2 billion cash flow. >> maybe it's more important that the board might have been kept in the dark by the $7 billion in cash flow versus 2 billion. >> two planes, i get that but it's that 5 billion in missing cash flow that the board may have been unaware of -- don't get me wrong -- >> there's a larger question amongst some investors about the ge way there were any number of us who follow the company for a long period of time knew they were

overpaying for certain assets and selling others perhaps at the lower valuation they might have gotten not too soon after he told them, okay, but the idea of execution, not as many people questioned the idea of ge still knows how to run these businesses really well, i wonder whether that now isn't being asked more often, given the performance of power. >> i really felt aerospace is run very well. >> you do? >> i think it's run very well. >> despite concerns you had about maintenance and accounting -- >> for turbine accounting, more worried there but no one has criticized the aerospace business, remember they paid too much for that. you've got a couple of businesses that i'm quite bullish on but they don't generate the cash flow that empower em pow -- in power is so huge maybe make it a little bit more

positive positive maybe >> positivity, sure. >> no? >> hey we'll get cramer's mad dash and count down to the opening bell more "qua"squawk on the street" minute ( ♪ ) whoo! ( ♪ )

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let's get to the mad dash here on a monday. we want to talk a little consolidation in home building. >> yes, we have linar, one of the things shocking people is the idea that rates could be going higher and yet the home builders and utilities are the two strongest areas when you look at the charts david, it has been on fire using their common stock to buy another company, which is in california home builder. you know what, there are so few home builders, this obviously, in 2018, so i question how much the stock should be down but stock for stock deal. >> cal atlantic. i have details i can almost grab for a second. >> go ahead, i'll talk about fleper cox and the worries i have with that david, this group is benefitting from the packet that they now have a deal with environmental laws and they bought a lot of land during the down turn, they

are discipline it's not like the old days where they used to -- if they have a couple of good days they start pumping out houses. >> .885 shares of lennar, i want to remember it properly and taking on $3.6 billion in debt and you're talking about total company worth about 9 billion. but they are talking as you might expect about serious savings and cal atlantic owns 26% of the combination. >> you're talking about a national -- home builders -- >> largest in the country. >> under the fabulous leonard miller, lennar did well and dominated florida and stewart miller is taking it nationwide it is incredible how horton, tolle brothers and len nar and kb homes, you have those as being national home builders that are doing incredibly. the analysts all try to find one they don't like. give me a break. stewart miller, david, is a

genius when it comes to home building when this country was falling apart, he was buying -- >> we have smaller deals to get to too for independent power producers when we come back on "stre "squawk on the street.

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you're watching "squawk on the street." the opening bell in just about a minute's time. futures are negative as we said earlier on rather high profile downgrades earnings will be the story of the week along with a ton of political news, whether it's taxes or a potential fed chair or indictments for paul manafort this morning this is a week that typically, this is apple's week and apple's first time in largest company in the world, almost seems overshadowed by all of this news i do think when i listen to the president talk about the fed chair, it sounded like a surprise, that's not what we're looking for is a surprise. no >> although, we'll get the bell

here and then come back to this. there's the s&p at the bottom of the screen at the big board this morning it is trans america, celebrating a recent launch of delta shares at the nasdaq, dow jones media group celebrating a 20th anniversary of market watch. congratulations to our friends over there the same outfit that gave us the concerns about the apple supply chain last week today says apple is now asking suppliers to increase capacity for -- >> i urge people to not pay any attention to these publications that say there's a shortage, they switch suppliers, they are like the fight club. you don't talk about apple so all of these guys are just -- they don't know anything and all they do is generate, they are about selling low and buying high and i urge people, please own apple. own it because it's an inexpensive stock making the greatest consumer products,

that's a consume product company -- >> any leak from a supplier about the chain is immediately suspect. >> apple changes suppliers all the time and do rope a dope and put this guy against that guy and they never talk about it and the analysts play this game too, they are always trying to downgrade it based on a supplier it's easier to follow paul manafort's clothing bill than it is to follow the bill of -- >> apparently i'm hearing $849,000 from a new york city store between 08 and '12 -- >> my wife comes back from milan, it's her birthday, wednesday. you know what, she's going to see that number and say, hey, i didn't do that kind of damage. >> do you have a landscaping bill you have a lot of homes does yours -- >> 400 bucks a month. >> and maintenance expenses -- >> i wish he would fix the house on the block i live in in

brooklyn he has the house six houses from us, the place is a dump. for halloween it looks like a scary house. could he fix that up instead of buying clothes >> to carl's point, we're looking through of course this indictment that came out alleging money laundering amongst a number of other charges but detail to a very large extent where he was making payments, they say without having paid taxes on income. landscapers in the hamptons and antique dealers in new york and clothing stores in beverly hills, california, forgot to include that, that's separate from the new york men's store. >> maybe he imported clothes. >> contractors in florida, moreland escapers in the ham toppto pt tons. >> how much was that in? >> only 120,000. >> only has a 30 inch screen >> mercedes bens for 62 grand. >> he did well

they are like 85 range rover for $47,000. >> probably used they go for 50 >> all of the laggads are downgraded and merck will help -- >> they were already down on friday, two days bad there for merck. merck is having with keytruda a real edge on bristol and these are -- we all probably in our lives people who are experimenting with keytruda or optivo, as miracle drug as you're going to get and it's a tough disease. it's not one disease, there's all sorts of iterations and people hoped that keytruda could be used against everything and it's not going to be able to do that people help that and optivo, this is not a gilead, a dramatic

slowdown, they have other drugs but this was the bridge for merck. it's obviously not going to be able to do that. >> we can already establish at this point it won't? >> unfortunately this was a big indication for keytruda, i know people who this was the hope, this was a hope for late cycle -- for breast and lung and for a lot of different things. when you have this stuff, when you have these disappointments, the analysts are all in it because of keytruda, now they don't know want to highlight i totally get why the stock could be down and don't want to call a bottom. i'm afraid to. i'm afraid to. >> we mentioned one of the deals this morning in your mad dash, home building, should get to another one this morning that was talked about or reported on as a possibility last week independent power producer dnyagy and vistra energy

they are buying dynegy at the end of the day, you have a company 79% owned by vistra holders and 29% by dynegy holders. visstra is down 3% and dynegy is up leading independent power producer in the u.s. certainly will become the case you can see how they are splitting up the board as well and talking about, let's see, 500 to 600 million in net profit from tax, tax synergies and cash flow levers of $65 million after taxes. >> communicating back and forth with curt morgan, the ceo of s vistra, i think it's a very good deal but also, david, 2.9 million customers, it's a substantial retail business and dynegy was once on the ropes and they

always had the customers but they are big merchant power and eyes were too big for what they could do i like this combination. they have a lot of capital and utility business is finally starting to get together i think i've been waiting for the big communications, you had the texas utilities company -- >> both companies that have gone through their share of financial distress. >> yes, they have. that's important, they came out on the other side. >> they both came out on the other side. >> i'm thrilled for vistra, it's a really good company. you know next year -- >> yeah, a little bit. >> i felt they want to consolidate. there's way too many utilities and they need to consolidate some of them are doing better than others but a lot have great balance sheets, exelon made a very big acquisition and baltimore, and i felt they had spent too much money, they are coming back again. the entergy is one of the

hottest stocks i follow, a new orleans utility company down on its luck we're seeing major moves in a business that no one expected anyone to make any money other than from yield. again, part of a bull market we haven't seen. >> nrg -- >> they has come back. >> up 146% this year. >> maybe top five strongest s&p names in the first half. david crane, i saw on the sidelines two games ago had a big vision what nrg could be in terms of solar they changed leadership and nrg is going back to being a solid utility and texas even after the storms very strong. >> this personal spending number we got, 1% is a lot of people replacing cars after harvey and irma. >> i think people just misjudged how big these storms are i don't want to be too economically sensitive but the area that got hit by both in florida and in texas, wealthy areas. so it was not like they had --

everyone had insurance and when you have insurance, you just get a check and go buy a new car. i don't know if you buy -- what was the manafort. >> range rover. >> for 47 grand. >> for mother's day i bought my wife a defender, a 1994 defender with a lot of miles on it. it is just killer, go right through water. you know that dune road and you're under water, not with my thing. i don't know how to drive it though, it's a stick. >> speaking of comebacks, under arm or was down 4% premarket on the susquehanna note that said it was late and retailers were upset, concerned about the timing and managed to go positive by a touch. >> i think people -- this is the dispute whether the new curry shoe is big or not i don't know i think basketball is up for grabs this year. i've seen the cavs lose to the nets and to the knicks. >> that seems almost impossible. >> toshi don't know how that happened.

>> i think that under armour when it reports is not going to be great. >> jerseys keep ripping. >> nike -- >> i was on the sidelines at the eagles game, lots of people talking about nike last week sara eisen did a piece about nike you wanted to buy the stock. >> macy's remains troubled along with jcp and even twitter giving back gains they put together in october. >> i like that quarter. >> gm almost wiped out october gains. >> macy's piece, it's a really interesting -- macy's downgrade from the city, it's kind of brutal because it says they don't have anything going right. sales bad, xre interesting we believe the dividend could be at risk they have the free cash flow to pay the dividend but management wants to do the balance sheet. they've been buying back debt. >> with a dividend yield of 7. -- almost 8% right now, 7.8%, why even if you could maintain it, why would you? >> no, the reason why you woul

do it because it's a heavily owned retail name and people would really be quite surprised. >> does the stock come down if they have a dividend cut >> yeah, i still think it does. >> because look at j.c. penney, they are fearing it's a great secular concern where it's the beginning not the end. and i think they are doing a terrific job go to a lot of macy's they look better but again, this is amazon prime. >> think of the real estate alone, that building on 34th street, the real estate -- >> that's why i think, they've been monday tiesing. been doing everything right but it doesn't matter, amazon moves faster >> bigger and stronger and faster. >> yes. >> we are the guard. >> they are all seen, all being. >> i ordered something from amazon -- you know where they are going to be with artificial intelligence, they know what i want they'll send me a new set of

binoculars. >> that's the one example you give every time. >> because they are so good. we can see -- i was in the huddle, i didn't see the fletcher cox hit as well as the nfl which is reviewing it. ee zeek yell, there's a big move to get rid of the commissioner -- >> by jones is trying to -- >> squawk talked about this this morning. >> we should stay close to how the nfl is doing because it impacts so many different companies. such a big business. >> the argument this morning was that given how he's managed to spread the number of potential buyers in a more or less seamless way getting a good bit out of amazon, that if that tsunami was heading towards you, he handled it relatively -- >> i mean, i've been a huge backer of the commission, i think he's done an amazing job any decline in ratings frankly the games have gotten better and better the decline in ratings is much more to do with the cell phone

and people playing video games -- >> speaking of the phone, apple is up 1.6% it's only about 50 cents off its high. >> that's interesting because a lot of people were concerned there was a technician speaking this weekend saying this is the fabl double cop if they don't take it out. if they do take it out, there will be a nice squeeze up. i do think that apple -- this is not the breakout quarter for apple. anybody buying it, they are really buying with the idea that the 7 plus continues to sell well i think that there are other plays that you should have on the quarter not this one, this is a 2018 story with the new phones, with the x. >> people are excited about the x. the launch november 3rd launch. >> less than a buck from an all-time high. >> it's very significant because you've got amazon -- we forget alphabet had a great quarter and they are giving up some of the gains but all of these articles -- you pick up every paper and all they write about

is the russians, the russians and the influence. i didn't buy -- >> they do amazon too? have i bought goods from russia i don't know. >> they don't make anything you want to own unless you're buying oil. >> they have -- they were using oil as a weapon then russia works in mysterious ways. >> they do and we're seeing some of that from manafort. >> dow has come off the initial lows, let's get to bob pisani on the floor. >> 3-2 declines to advancing stocks, a mixed open overseas a couple of the suppliers are all up this morning, honhai precision, up 1%, apple up, largan, they are up on reports that apple x sales have been pretty good. a lot of dispute and debate about that but at least in the stock market we're up in the morning here china markets, all down, they approved nine ipos in the next

couple of weeks in china concerned about supply issues, we'll have nine ipos this week as well between the nasdaq and nyse, we're getting a supply and it's about time on that. sectors kind of mixed but mostly to the downside. semiconductors opened positively energy and materials and banks slightly on the upside retail is down you were talking about that. office depot is downgraded and jp morgan it's down, macy's multiyear low, talking about that earlier and follow through the weakness we see on friday here but lennar, you have the swap deal, about $51 and the deal for lennar for cal atlantic. i'm the son of a home builder and i grew up in the '70s and '80s in this business and it's a lot different the way they run it the way i can remember it back in the old days you chased land and levered up, that's the way builders worked, bought as much land and subject to a lot

of cyclical shocks overall today you change it around, you chase profits, it's a different way of looking at the markets. the focus is on returning capital to investors and the focus is on squeezing out costs here these guys are big in california and texas and florida, both of them, those are the three biggest states, you can cut costs when you're big in california and texas and florida and that's what it's all about you take it out by deleveraging and focus on profit and not on the volume so much that's the way things have changed and you have this golden moment for the home builders now, you have a shortage of homes and improving company and companies are run better and this is what you get you get a home builder's return like this in the 50s and 60s and 70s range for the whole year because you have the beautiful combination of the shortage of homes and improving economy and facts they are run better like the airlines are run better these days and more interest in owning broader base.

finally the assets are growing they are opinioning money in and expanding. this etf has been expanding this year it's attracting more assets because the investor base is broadening because they are running the companies a little bit better it's very simple we're a little past the halfway point on earnings, passed that on friday, about 60% it's important to note that we were down at 4%, now we're close to 7%. i think we're going to end up close to 8% on earnings for the whole quarter. revenues up 5%, that's also a good number. it's not double digit like the prifr two quarters, still good numbers overall. i want to point out about the buy backs remain pretty strong here 63% of the companies reported have been lowering their share count. they have been buying it back stock, and a substantial group, 17% lowered share count, 4% or month. that means all of the things being equal, earnings are 4% better than they were last year. buybacks still very much matter here bottom line on s&p, we're up --

looking to be up nine consecutive months, down slightly but up for the month, still 15% for the year and boy, what a week we're going to have between the fed meeting and house committee set to release a tax bill, jobs report, a possible fed chairman. this is going to be a very busy week and a lot of things impacting the stock market we're down 44 points carl, back to you. >> thank you very much let's get to rick santelli as well at the cme in chicago. >> good morning, carl. most viewers realize we had powerful data in terms of september, personal increment spending and good chunk of that is built in the big data points like gdp but it doesn't hurt to pull it up and show. up .4 in income and second best number of the year if you look at the up 1% on spending, what's interesting is yes, best since august of '09. but if you look at 20 years worth of data, it's the fifth

best number in terms of its percentage change month over month in 20 years. fifth best in 20 years look at one week of tens, it's been drifting down we know 2.44 and so anything above 2.45 is a new point with regard to those paying close attention. we're higher earlier when we traded up to 2.63. it's important you know how many closes we had above that point one, thursday at 46. we didn't get the weekly close look for the market to struggle around this aerks might not mean it's going back down in yield but it's hovering in the zone. if you look at the one week of shots, two year in europe, rates down we notice on 10s minus bunds, it made it up to 2.05 there was a pull up in yields and mario draghi is done and now there's a pull down. foreign exchange, everybody has

a dollar bill in your wallet 24 chart, it couldn't hold or even get really above the 116 level. if you look at the one week chart you can see how important it is and june 1st chart, you can clearly see it's like hanging there like an anvil. if the dollar index can hold ground, that will give a little bit more of a downside in price and upside in rates to the way people are trading 10-year note yields carl, jim, david, back to you. >> talk to you in a bit. a ceo's perspective on a potential merger from cvs and aetna. dow is down 54 points to start what bob already said will be a very busy week don't go away.

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time for cramer and "stop trading. >> i have to tell you, morgan stanley was on a tear this

weekend. very kind of negative, one of their teams must have lost they go to an outright sell on advanced mike row. this is since the last quarter lisa has done a remarkable job there, but declines in consoles. gaming nvidia kailling it in gaming. nintendo switch had to increase the number advanced micro really taking second fiddle, and intel did a great job on processors too. it's really negative i have to tell you, i don't know they're using an $8 target this is very, very considered piece. and joseph moore blasted it to kingdom come i don't know i don't know i guess -- if you have profits still, you may have to sell this >> in their view >> do i want you to roll in nvidia nvidia had such a move, and nvidia, well, let them rest up and watch the patriots game. >> jim, what's on "mad" tonight? >> one of my absolute favorites

i used to talk about all the time with david. tractor supply i was jammed this weekend. it was jammed. i went to it, just looked at the cars, actually, and tim boyle, one of the people who has made technical close, technical mountain climbing clothes, people love columbia, and it's a niche business, but good to be back the downgrades >> yes >> then manafort i have to chick his house, see if that's for sale and check out the clothing, and what else do we want to check out >> landscaping, clothing the house near your place in brooklyn take a look. >> five houses away. >> some bank said it would be worth about $8 million >> it's worth about $2 million >> when we come back, record high for the naz dwak. record high for apple, for amazon don't go away. thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost

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with my advisor's help along the way, it's finally my turn to be the host. when you have the right financial advisor, life can be brilliant. ameriprise welcome back to "squawk on the street." i'm carl quintanilla with michelle caruso-cabrera. sara has the morning off the markets trying to come off the initial lows

a series of downknradz this morning for blue chip companies. another busy week for earnings and we're watching these indictments that have come out of mueller's office. >> our road map begins with the markets. the nasdaq setting another record high. a busy week for the tax bill, earnings, and jobs report all coming this week >> the president's former campaign chair paul manafort indicted the latest on that developing story next >> and finally, a big week for big tech we're coming off, of course, that monster rally from last year we have earnings this week, apple, facebook, and of course social media companies testifying on capitol hill >> all right, next up in the markets, the s&p and dow opening in the red for the first time in three days a lot of big downgrades, however, the nazdic hitting a record high. erasing earlier losses new highs for apple and amazon, as we awade apples earnings later this week. joining us is fidelity director of macro

good to have you here. we had a lot of high-profile downgrades today also have this indictment coming down against paul manafort which of those are most important to the market this morning? why are they falling does manafort have any impact on stocks today >> i don't think so. we know politics affects markets, but only to the extent it starts to affect the business landscape. nothing that's happening today is doing that as of yet. we and back to earnings. earnings surprises and downgrades, to your point, that's more important. >> what do you think is most important this morning why are we seeing this pullback? just these particular downgrades when we think of general motors or merck or macy's or is there something broader at work? >> a down morning after a 42% rally in the last six quarters really should not worry anyone the fundamentals remain robust earnings are growing certainly at a slower pace than they were in key one and two,

but it looks from my data that we could be at plus six, plus seven, plus eight percent for the s&p q3 earnings by the time earnings season is over. that's still a very respectable number, close to the long-term trend. and liquidity conditions are very very accommodative, although they are starting to tighten with the dollar up and the fed leaning more hawkish >> safely invested in stocks or no >> the stock market to me, when i look at what causes a cycle to end, it's ultimately inflation, and then what causes the cycle downturn to get bad, it's excessive leverage we have neither inflation nor in my opinion excessive leverage. my sense is that the fundamentals continue but at a more moderating pace i don't think we're going to repeat the kind of rally we have seen over the past year and a half but that doesn't mean we're going to have a correction of the bear market either, although obviously, a correction could happen at any time moderating fundamentals, i think, still suggest a decent

market >> what do you think, samantha you agree with him, moderating fundamentals suggest a decent market >> we would agree. every is looking to the end. we're not close to that. we had a gdp print of 3% last week we think the expansion continues but we know we're later stages of the cycle clients have to reset expectations around what equity market returns look like we think that's high single digits and the need to be more selective. >> rising rates. any concerns there, samantha, as jim was highlighting last hour even with interest rates going up, the home builders seem to be buying all the bond proxies seem to be okay at this point >> so it's not rising rates that concern us because we think that's priced into the market and everyone seems comfortable and at ease with that. it's when does central bank roll off of the balance sheet starts to hit liquidity and the mark. kicking the can down the road, that's october 2018, when the big central banks were going to

have central bank balance sheets declining to the point where that could affect markets. >> jp morgan says we do remain under way uk and expect it to remain the biggest laggard in part because i imagine poised to hike, brexit, other unpopularity, what else? >> uk equities tend to be tethered to energy and those large uk financial institution which we are not so in favor of that we like a more global financial story. and then energy, i know energy has been a big driver of earnings in this quarter for the u.s., but broadly, we're not that excited about the sector. >> any concern about the big selloff in chinese bonds we have seen and the rising yields there. is that some canary we should be worried of i understand the chinese economy is very much walled off because of the way they control the economy. at the same time, it's huge. and it's their largest bond market in the world. >> yeah, i mean, so for me, the chinese economy is a very big part of the global story

and i think it's actually a bigger part of the story than what's happening in washington because china reflating back a year and half, two years ago, pumping in over a trillion dollars to credit the economy, that was really the catalyst that kind of started the whole process cycle up again and the degree to which they can keep that together without causing too much tightening, which then slows the economy, that really is part of the story here that we need to keep thinking about in terms of earnings and i think what happens in china is they try to rein in some of the lenders and then the system tightens. they try to put some speculators out of business, but when push comes to shove, they'll ease again and allow the system to recover. there's too much at stake, and as you obviously all know, the chinese government controls all the levers, the central bank, which lends to the commercial banks, which lends to the state-owned enterprises and

other businesses so my guess is that they will keep things going there. and with capital controls still in place, and actually maybe even tightening, it does remain a walled off system, as you mentioned. i would just say about interest rates, interest rates can rise as long as earnings growth is robust there is a little bit of a risk that the market is being complacent about how much the fed is going to go, and if the fed is going to hike more than the three times that are priced into the fed funds, we could see a little more of an adjustment higher that net would tighten financial commissions a little bit, but probably not enough to do this rally. >> one last question on oil. because jpmorgan raises their '18 target by $11, and then it's raised a couple bucks for '18. good news on the earnings front or should we think about it in terms of a higher cost input >> it's still good news on an earnings front we want energy companies to be profitable there is a sweet spot. it's not over $100 a barrel, and

we know that anywhere in the range of $50 to $70 is reasonable for gasoline prices for the consumer and for energy companies to want to do new investment and want to grow. >> thank you good to have you here. >> thank you the president's former campaign manager chairman paul manafort surrendered to federal authorities this morning we have been following the story and we're joined with more good morning once again. >> reporter: yeah, good morning to you, carl we're outside the fbi's washington field office here we believe that paul manafort and rick gates, the two gentlemen who were indicted this morning, were bought here early this morning for processing by the fbi. that includes a whole series of steps including fingerprints, photographs, interviews and the like they will move to a court appearance later this afternoon. we believe paul manafort has a court apeerps at about 1:30 later on today here at us district court in washington, d.c. but the list of charges here for the two men is extensive take a look at exactly what they have been charged with this morning, including conspiracy

against the united states, conspiracy to launder money. acting as an unregistered agent of a foreign principle, false and misleading statements under the foreign agent registration act, false statements and seven kountsd of failure to report on foreign banks and financial counts the indictment unsealed this morning says about $75 million flowed through offshore accounts controlled by paul manafort, and about $18 million of that was laundered ipplaces like the say shells and this is a complicated set of indictments. the white house saying for weeks that the special counsel is moving far more quickly and deliberatively than people have been reporting the fact that the special counsel is actively performing its duties does not come as a surprise to the white house.

importantly, we should mention none of the allegations in this indictment, and they are only allegations at this point, concern anything to do with the 2016 presidential campaign or russian interference in the 2016 elections. these are indictments on other matters relating to paul manafort's business and his consult work for the ukrainian activists. so one of the questions here will be, how does all of this tie in with what the special counsel has been investigating, which is the 2016 presidential election, not clear at this point. we may get some more details later on this afternoon. michelle, we'll see paul manafort in court later today. he'll be asked by a judge whether he understands the charges that he's facing and we'll see whether the federal government decides to keep him in kudy or let him go later today. >> we'll be watching for that. thank you so much. so he laid out really a lot of what's in the 35-page indictment when you read it, it's very focused on the work manafort did for viktor yanukovych, the leader of ukraine up until 2014. you may recall, take a look at

this video cnbc was there when viktor yanukovych abandoned the country after a round of assassinations that occurred during all of the protests in the uprising against the yanukovych government. this was where he abandoned, it was loaded with extravagant materials, landscaping i don't know, a dozen coats hanging in the closet. all kinds of stuff, and it had been taken over by militants, young kids who were acting as, you know, random military equipment to protect the institution and to try to save it for the ukrainian people. but this was some video that really astounded the world to the degree that yanukovych was living quite well as the head of a very, very poor country in ukraine while paul manafort was working for him. >> interesting color added to

all of this. joining us this morning at post nine, former assistant u.s. attorney for the eastern district of new york, tom laurel, now principal at the laurel law firm. make some sense of the indictment as written. how would you characterize the scopef it? >> very aggressive it has nothing to do with the campaign let's be clear about that. a historic indictment that deals with tax evasion over a long period of time, dating back seven or eight years but a very serious indictment. he's being charged with money laundering, with tax fraud he's being charged with not registering as a foreign agent they also did something which was very significant they threw in at the very end an item about his son-in-law. and they're going to press him like to no end they're going to put pressure on paul manafort to flip or to cooperate in the investigation >> like the prisoner's dilemma almost >> absolutely. that's what they're doing. the significance of the indictment is it gives mueller cover going forward. nobody is going to touch him because paul manafort is under indictment and it gives him an

opportunity to press manafort for information. >> he can't be fired by the president of the united states, no way this indictment is significant because going forward, no one is even going to suggest that the investigation should stop or mueller should be relieved of his duties >> why do you believe that to be the case >> because paul manafort is under indictment now the investigation is moving forward. trump would be impeached the next day if he tried to remove mueller. >> for obstruction of justice? >> absolutely. mueller is now untouchable as a result of this indictment. that's the significance of it. >> i want to articulate very clearly what i think you're suggesting the framework for him moving forward is you have an indictment with paul manafort you actually have two guys >> absolutely. >> setting up another prisoner's dilemma. one could turn on the other. that in theory is the pressure that leads to something else right? this is just the first step towards trying to figure out whether or not there's some other level of collusion between the trump campaign and the russian government, correct? >> right, and here's how the conversation goes. mr. manafort, you're jammed up

okay, you're facing money laundering charges you're facing a long time in jail your son-in-law could be implicated we're ready to indict your son-in-law as well on this indictment what are you going to give us in return what are you going to talk about in terms of whether the trump administration, other business deals, or the campaign >> and they're saying the same thing to rick gates? >> absolutely. that's going on right now. >> the level of detail in the indictment itself, just curious, reading through it, it seems to be quite a significant level of investigation that's taken place in terms of the clothing budget, new york city men's stores, landscaping bills in the hamptons >> nearly a million dollars for one store. >> airbnb to rental a property they owned in soho instead of where they said his son-in-law and daughter had lived in it >> it's a very specific -- they call it a speaking indictment. and prosecutors do that in order to signal to the defense that we have a powerful case against you. which is very significant, though, this has been under investigation for years. it was turned over by another

part of the department of justice to mueller this is not mueller's investigation. let's be clear about that. now, mueller has it because it enables him to squeeze manafort and gates. >> the minute manafort's name showed up, all the paperwork found in viktor yanukovych's house was connected to manafort. >> last year, that's why he was fired as trump's campaign manager. does the timeframe this covers, is that significant, at least to 2016 >> even before no, it goes way back it goes up to 2016, yeah absolutely but what it doesn't do is touch anything he did in the campaign. >> but in reading this, it's funny. it's surprising it took this long if these allegations are correct to catch up with him he was buying apartments, buildings, and then getting construction loans that they had been falsely obtained. i mean, he was doing a lot of things for a long period of time one would think that justice might have moved more quickly here >> the one thick about the

federal government and federal prosecutors is they move slow, but they don't indict until they button down every hatch. >> you read over the weekend, to david's point, this kind of sat dormant for a while. it was the campaign and this investigation that seemed to reignite this look into manafort >> once you become an official for the campaign, you put a target on your back. you're in the focus of any prosecutor in the event you have some historic issue. >> can you handicap what the chances are they get to someone closer in the campaign and find collusion? >> who knows, but there's going to be a lot of pressure on manafort collusion is not a crime they'll push manafort about other information. >> sorry, carl, go ahead >> does the office use the timing of the release of the indictment or is it up to the grand jury >> everything is controlled by the prosecutor >> what does this timing tell you? >> to make a lot of fanfare. they leaked it on friday there was a lot of pressure building over the weekend. they came out of the box strong. this sends a message to everybody, we're serious >> do you think there's going to

be any investigation into the dnc funding the dossier? >> not by this prosecutor. >> why not >> i suspect there's going to be another prosecutor involved in it >> okay, but you think it will be investigated? >> the problem with mueller doing that investigation is he was the head of the fbi when it should have been investigated. so i don't think he's going to do it. somebody else has to do it >> but it should be investigated with the same questions? russian interference into the u.s. election. >> it's outrageous it hasn't been investigated yet. >> the next step is what should we lee booking for >> you'll see a lot of pressure put on manafort in the coming weeks. i suspect other indictments as well >> you want to name names? everybody asked over the weekend, is it manafort or general flynn? >> let me say something. anybody who is a subject of a federal investigation with dozens of fbi agents and 16 of the most skilled prosecutors, good luck to you >> john, thank you former assistant u.s. attorney

for the eastern district of new york when we come back, amazon reveals its home delivery system mixed reviews as the company prepared for the holiday season. the ceo of dhl global will join us on their efforts, amazon's efforts, all ahead of the busiest quarter. stay with us

the launch of amazon's newest delivery offering comes just ahead of the all important holiday shipping season. joining us is greg hewett.

greg, good to have you back. welcome. >> thank you it's good to be here >> i don't want to lead with an amazon question, but in this case, it is sort of the thing people are talking about letting these delivery people into your home when you're away. is that going to work? >> well, i think one thing amazon's priven over time is that they continue to challenge the logistics and supply chain group using technology and delivery services. so it will be interesting to see how customers adapt and adopt to it >> is it something that you would experiment with? you expect others to >> i think over time, we all have to learn from one another, and i never rule anything out. it's certainly not something that right now we have in our pipeline to try during this holiday season >> so as we go into the season, where do you think consumers are going to feel the broadest change is it going to be in that last mile or is it something more tucked into the logistics and distribution at the warehouse?

>> well, i think we continue to see more and more consumers shift and be comfortable ordering online. when you do that, what tends to happen is a lot of focus does come on to the speed with which those deliveries can get to them and that final mile at their home and finding good and easy ways to insure that that delivery is done successfully. so we have invested in technology, things like on-demand delivery that puts that back in the consumer's hands and allows them to tell us how best to reach them and get their package there on time. >> we've all become used to getting a certain -- the expectation of a certain delivery time for free if you really want it faster, you have to pay extra. i wonder if consumers are prepared to start paying more or if the freebies are still -- are going to start coming our way, so to speak. >> i think research has shown that consumers want choice so i think there will always be

a certain segment of the buying community that wants things cheap or at no cost. but then there's going to be others that wait until the last minute to order things and are more comfortable paying to have that delivery and paying for that speed or paying for a specialized delivery i think the challenge on us as providers is to find ways to work within the retail environment to insure a cost effective while also offering a high quality service so we can meet the consumer's needs and grow together with the booming e-commerce and e-tailor segment. >> we're watching, we talked about crude at our desk earlier this morning at $54, and a bunch of banks are upping their forecast is that going to get a lot more expensive for you, do you think? >> we're not -- i'm not expecting to see a huge lift we obviously hedge our fuel and do follow fuel pricing, but it's not one i expect a surge during the holiday season >> and then when the nrf says

we're looking at growth of about 4 or so, as they did last year, do you think that's undercounting or overcounting? >> well, again, i don't know that our -- because our business here in the u.s. is so tied to international demand inbound and outbound, our percentages tend to look a little different than overarching ones i'm anticipating we're planning for about a 26% lift in inbound volume this season over last year and that's above a current run rate of about 15%. we're planning for american consumers and american businesses to do well during the holiday season >> wow that's a nice -- a good number we'll see what happens over the next few weeks thanks for your time >> when we return, an inside look at what will soon be the largest company in the world our andrew ross sorkin takes us on a rare tour of saudi aram co.

that's next. resqwkn e re" right after this companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. for her compassion and care. he spent decades fighting to give families a second chance. but to help others, they first had to protect themselves. i have afib. even for a nurse, it's complicated... and it puts me at higher risk of stroke.

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response to paul manafort's indictment this morning. sorry, but this is years ago, before paul manafort was part of the trump campaign but why aren't crooked hillary and the dems the focus so paul manafort managed trump's campaign for two months, three months back in 2016, and a lot of what's in this indictment, i know, all of you guys have been reading it this morning, date from 2012 to 2016. >> even earlier, '0ate >> that's true some earlier stuff there so he's trying to make the point that a lot of what's outlined in the 35-page indictment is from before the time that he worked, that manafort worked for the president on the campaign trail. >> well, as you heard from the former assistant u.s. attorney who joined us toward the top of the hour, potentially the first of what would be a number of potential indictments and pressure points that can be used yeah, it is focused on money laundering and a number of other significant charges as well. >> conspiracy against the united states, failing to register as a

lobbyist for a foreign country no connection to collusion, but as our guest earlier suggested, like you said, david, the opening gambit, you put a lot of pressure on paul manafort. if there's anything to be found, this will focus him to consider whether or not he's going to turn on anybody else within the campaign or turn over any other information that would suggest, and there's the president who just added yet a second tweet, also, there is no collusion, exclamation point. no collusion in all caps, as he likes to do. >> meanwhile, our andrew ross sorkin getting rare access into what will son be the largest public company in the world. got an inside look at saudi aramco in saudi arabia >> one of the highlights of my trip to saudi arabia last week was my visit to saudi aramco's headquarters where we were giving rare access to the world's largest company and went places no camera crew had gone before moments after landing in riyadh, we jumped on another plane

as we made our way to the empty quarter, it was remarkable all you could see was sand until all of a sudden, a huge oil and production facility in the middle of the desert >> welcome >> thank you >> one of the most striking things to see inside this oil and gas facility was an animal reserve. aramco trying to bring back wildlife and balance the ecosystem around this facility for the first time ever, aramco allowed our cameras inside the company's command center from this one room, aramco can control and manage and literally turn on and off with a switch the production facilities that produce over ten million barrels of oil across the kingdom. inside aramco's headquarters, we got a geologist lesson and saw new technology they used to extract oil from the ground aramco's headquarters are like a city within a city they include housing, their own hospitals, and schools we also took a helicopter over

aramco's oil and production facilities in the bay. a string of manmade islands that they created with aramco's expected ipo in 2018 and a valuation of as much as $2 trillion, this oil titan is pivotal to saudi arabia's plan to transform its economy. >> saudi aramco tells us it's still on track for its ipo in the second half of 2018. back to you. >> some great work there by andrew, as he made his way to saudi arabia andrew ross sorkin let's get to sue herera. >> good morning, carl. good morning, everyone as you have been hearing at this hour, former trump campaign manager paul manafort and his business associate surrendering to federal authorities this morning. paul manafort and rick gates indicted on 12 counts, including conspiracy to launder money. the two will appear in court at 1:30 p.m. eastern time manafort left his home this morning in alexandria. >> iran's foreign ministry said

the president turned down a meeting with president trump during his visit to new york to attend the u.n. general assembly in september it basically ruled out the possibility of any bilateral talks with the u.s. as long as their policies towards iran remain unchanged >> spain's interior minister hosting a meeting in madrid with the new head of the catalan regional police as well as other officials. it comes three days after spain began to directly manage affairs in catalonia >> in case you missed it, the houston astros beat the dodgers 13-10 in ten innings to take a 3-2 lead in the world series a single home the winning run with two outs. the game lasted more than five hours. it didn't end until after 1:00 a.m. eastern time. there you go that's the news update this hour michelle, i'll send it back downtown to you. >> all right, thank you very much, sue. when we return, facebook, google, and twitter set to testify on capitol hill this wednesday on their role in the

2016 presidential election >> recode executive editor kara swisher is going to join us on "squawk alley" on what to expect stay with us

again this morning with the nasdaq hitting another record high up nearly 25% for the year apple and facebook earnings now on deck. both report later on this week for more, let's brin in denny fish, portfolio manager, and walter price, senior portfolio manager. good to have you here. >> thanks for having us. >> undoubtedly for investors, likely facebook and apple reporting later on this week, are going to be the most important thing. but what about all these tech coes having to testify on wednesday? is there any stock risk in that, do you think, denny? >> well, i think what you're seeing right now is what i characterize as a tug of war in

some of these large names. what i mean by that is we're starting to see the signs of potential regulatory risk associated with data privacy you have issues that are going or regulation that will go into effect in europe next year, with gdpr you have the testimony that you just talked about. you have increasing banter out of governments around potential tighter regulation but then at the same time, the financial performance of these names is actually stunningly good and i think that's just the environment that we're going to be in with these names for some time and it will be really good financial performance against the potential threat of regulatory oversight >> walter, what do you do? you trust your got on following, as denny highlights, with this tug of war, follow the financial performance, which thus far has been very, very good, or do you pull back a little, wondering if regulatory risk is down the road

going to impinge their ability to make money? >> well, we've been encouraged by the fact that the companies are responding to the regulatory risk you have seen facebook add 1,000 people to eliminate fake news and to try to uncover it you have seen google do the same sort of thing with youtube so i think if the companies were just putting blinders on and just focusing on financial performance, that would be one thing, but the companies are actually responding to this pressure and adapting and changing their business practices, which i think is good. >> what do you want to see from facebook when they report later on this week, wednesday? >> well, i think they're going to have a good quarter google had a good quarter. and advertising is good. the economy seems to be a tailwind now for the tech companies. and for advertising in general >> good enough to justify a 56% year to date performance >> i think so.

i think facebook's actually having one of the best performances of all the tech companies in terms of growth rate and i think that's going to continue >> denny, what are you looking for from apple on thursday obviously, we're going to be talking about the iphone x in fact, we'll have somebody later on in the show who's actually got one and used it so i'm excited about that. but is it going to be any data we're going to get out of apple, is it enough to give us clarity on what's going on with the iphone x >> you know, giving the iphone x is just being released, there won't be any impact in the previous quarter so it will all be around the guidance associated with it. you know, there's been so much chatter, one week you hear they're supply constrained and the next week you hear they're selling off the charts as was characterized this morning so very reasonable results we expect there to be a positive reaction to the iphone x

and just once again, as walter highlighted, we have a general positive economic backdrop that these companies are benefitting from as well as this what we call digital disruption. and it's a tailwind for most of the structurally sound mega cap tech companies >> denny, it bears repeating that apple is at an all-time high, almost 3% this morning just specific to the stock price itself, at $168 or so, is it starting to get a bit ahead of itself, ahead of the print coming up? >> you know what's interesting, it's always hard to predict what a stock is going to do on any given quarter. i think that the trickiest thing with apple is it's still a very reasonably valued stock, particularly if you compare it to some of the other mega caps on an earnings multiple or free cash flow multiple, but what's a little different is this challenge of trying to assess what the near term cycle around the iphone is going to look like

versus what the earnings growth stream is going to look like as you get through this and start looking into 2019, 2020. and that's a little different than what you might see out of facebook or google or microsoft for that matter, where there's a real kind of secular earnings growth path over the multi-year. >> okay. something to watch for then. thank you. denny and walter, good to have you. >> thank you as we go to break, take a look at shares of lennar and calatlantic group. buying out its rival, valued at about $5.7 they create the largest builder in the u.s lennar down about 2.65 dow is down 11 more "squawk on the street" in a moment the friends, the independence.

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all right, let's show you what's going on with the dow jones industrial average lower by about 6 1/2 points. a lot of that having to do with merck. let's show you what's going on with the rest of the major averages the dow and s&p are in negative territory. not by a whole lot the dow has come off its lows. the s&p down by about a point and a half the nasdaq, last we checked, still in positive territory, as we continue to see technology gaining from the gangbusters upperings we saw last week high anticipation about facebook and apple later on this week and presumably little fear there's stock risk related to their testimony in front of congress coming up >> meanwhile, walmart rolling out more robots in more than 50 stores to replenish inventory faster, save employees time when products run out the two-foot-tall robots scan

shelves for missing, misplaced, and mislabeled items and pass that information on to employees. the company said the robots but not replace workers. and there's this sort of bubbling narrative that the more we install some of these robots, they actually end up creating more jobs for those who have to monitor all the data that's coming in. >> makes the employees work much more efficient, right? if they -- i'm watching that video. it's clearly reading all of the bar codes there. it can make an employee that much faster when they know exactly what they have to fix instead of having to do it themselves >> yeah. listen, we're dealing with what's going to be one of the key debates, isn't it, over the next decade or more? as automation and robotics make their way into the work place in an ever more present fashion will it replace workers? will, as so many ceos will happily tell you, now, we believe all of these changes, these inflection points in technology result in more jobs being created. i don't know >> you know what i always think

about? remember when, and it was women mostly who sat there and switched, you know, to make a phone call you had to actually -- if you watch old movies, right, if we still did it that way, you know what all of us would be doing? that would be our only job because we do so many phone calls. it's just -- it evolves. technology helps us go on and do other things >> yes, indeed >> nobody makes a phone call anymore. you just text. >> i pick up the phone sometimes. good point okay >> all right, let's get to a man who i bet still does make phone calls. rick santelli at the cme group in chicago at the santelli exchange good morning, rick >> good morning, david aloha, charles in hawaii thanks for taking the time today, sir >> thank you for having me >> i want to start with flows. >> yes, flows. give me the flow rundown, both equities and fixed income. >> well, it's been a surge of flows. this month has seen the most money going into equity etfs

since december also, bonds are seeing huge inflows. the biggest one-month since march of this year, so people are investing money in stocks and bonds. >> all right jobs we have big jobs number coming out. the last couple have been distorted a bit. on the light side. what do you see in the crystal ball regarding jobs? >> well, we track withheld income and employment taxes and from there extrapolate how many people are working to pay taxes. our estimate is that over 200,000 people added to pay rolls last month that makes the fifth months in a row that we have seen more than 200,000 jobs being added, according to our data. and we don't use bos numbers at all. >> i got you now, let's get to something very juicy. you have two charts to show us one is macroeconomic activity chart. what are we looking at tell the viewers what that

means. >> well, ever since the election, apparently small businesses have become much more optimistic and are doing stuff. we're seeing lots of activity at the lower level. and it's evidenced in our macro economics index, which is like 20 realtime data sets, including income tax collections and various realtime data from around the country and as you can see, other than there was a slowdown around the hurricanes, but we have caught up and made up for that slowdown it looks like we're heading to new highs. the economy is -- the u.s. economy is stronger than i would have thought i mean, basically, trump's reduction in regulations and the optimism that his fans and small businesses is helping the economy along. >> all right >> and if there's an - >> our final 40 seconds, charles, i want to get to the next chart i have used it myself. when it comes to understanding why the s&p 500, many stock

indices are where they're at, it always helps to follow the money. this is the balance sheet of central banks. wrap it up as we look at this chart. >> well, if the economy keeps growing, and if the tax cut happens and the economy grows faster, all of that central bank accommodation, money printing, $130 billion currently between japan and ecb, is going to go away if money printing stops, i think, you know, you're going to see the chart and see the s&p go down as well bond prices are going to go down we could see, you know, there's been a disconnect between the market and the economy so far. the disconnect could continue with the better economy and worse financial markets. >> charles, thank you very much. it's always fascinating talking markets with you david faber, back to you >> okay. thank you rick santelli. let's send it over to john and get a look at what's coming up

on "squawk alley." >> david, the good times are rolling to start the week for amazon and apple, hitting all-time intra day highs, but a couple other names, twitter, facebook, heading to the hill. which narrative is going to win out in the long term we'll dig in and find out coming up on "squawk alley. we're going to find out coming up on "squawk alley" it lets you know where your data lives, down to the very server. it keeps your insights from prying eyes, so they're used by no one else but you. it. is. the cloud. the ibm cloud. the cloud that's designed for your data. ai ready. secure to the core. the ibm cloud is the cloud for business. yours.

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the insurance industry is grappling with a troubling trend when it comes to boat theft. coast to coast investigators are seeing thievery on the rides, targeting specifically the engines. contessa brewer and the cnbc investigates team have more on these power boat pirates >> so, michelle and carl, long time investigators estimate that these thieves have made off with $10 million in boat engines in just the past year they say they've never seen anything like it, the sophistication, the similarity, or the success of these burglars, who sometimes hit the same target over and over again. most of the time they are after valuable yamaha engines. here in the wealthy south florida enclave of gables by the sea, we see expensive boat after

boat docked on the intracoastal waterway, and so many of those highly sought after yamaha engines. >> unfortunately, with the amount of waterways that we have here in miami-dade county, it is a target-rich environment, and sad to say it is very easy for someone to try to steal a vessel like this, or engines. especially engines we've been having an influx of stolen engines and units they can pull up, out of the water like this one, take off six bolts, take the lower unit and take off >> florida sees more boat thefts than any other state surveillance cameras routinely capture those burglaries in process, yet the recovery rate is just 36%, according to the national insurance crime bureau, and that's for the boats engines are easier to transport and to hide. >> believe we were just watching two subjects trying to take a boat motor storage unit. >> we spoke with one texas businessman who owns six boat

yards. he's been hit four times and lost $600,000 in yamaha engines. yamaha says they are the top stolen outboard because of their reliability and the higher resale value it sells at a system that's a press of a button on a key f.o.b. or remote and disables the motor. the insurance companies may give a discount because its theft deterrent system and the boatyard owner got hit by the hurricane in houston, as well, then thieves targeted him after the hurricane. we were both in south florida. you know how important boating is down there. well, now it looks like, and here's some of the photos i took in the florida keys of some of the engines i saw. it looks like a triple whammy for the insurance, the insurance industry, because you're talking about boat claims from the storm, fraudulent claims from people who make a claim their boat got damaged in the storm, then the thieves taking advantage of the vulnerability

of the engines just sitting there. so they are really looking like a top -- a top target now for the insurance industry >> that's a great story. thank you, contessa here at post 9. really quickly, reuters running with the headline citing a white house official saying the president is expected to announce his choice for fed chair on thursday. the journal this morning goes even harder on the idea it will be jay powell, but until the president makes his choice known, we don't know >> markets are on tender hooks for this because there's a real belief depending who he could pick back when it looks like mr. taylor, john taylor was more likely, there was more concern about rising interest rates at a much faster clip jay powell is probably more closer to what the pace that we've been seeing. so, thursday, yeah, big day, finally. >> yes be nice to have that -- been such a looming uncertainty for the markets. a lot of invto wl esrsilbe happy

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1%, half a percent at this point. a number of these tech stocks hitting fresh all-time highs, including amazon, apple, facebook, nvidia and mastercard just to name a few s&p is the best sector this month and this year. that does it for "squawk on the street." let's send it downtown for the start of "squawk alley." back to you. >> thanks very much for that it is 8:00 a.m. at facebook headquarters in menlo park, california, 11:00 a.m. on wall street, and "squawk alley" shrive live ♪ ♪