good morning it's 8:00 a.m. at amazon headquarters in seattle. it's 11:00 a.m. on wall street and "squawk alley" is live ♪ good thursday morning. i'm carl quintanilla and morgan.

we're going to start with some commodities news we have eia data >> good morning, carl. the data flying in the expectations this morning. crude, we have a drawdown of 1.6 million barrels. we were expecting to see a build that would be seasonal for this time of year gasoline, we were expecting to see a drawdown we got a build of 261,000 barrels. production in the united states flat at 10.27 million barrels per day. you can see prices in wti were trading negative before this report they're raiding a little higher now, closer to 62 a barrel in terms of the price action that we've seen in crude overall, we've seen a 3% gain in the last month or so a 6% gain in the last three months we're waiting for the prices to sort of break out of this 60 to 62 range but right now we're still a little stuck back to you at post nine >> all right thank you. and stocks up this morning with the nasdaq trying to avoid the fourth negative session in a row. amazon's on a terror, accounting for 27% of all the s&p 500's gains this year. for more, let's bring in lead

internet analyst at rbc capital markets and denny fish from janice henderson good morning to both of you. >> good morning. >> good morning. >> mark, i'm taking a look at your price targets on facebook, amazon, netflix, alphabet and it strikes me that facebook has 45% upside from here based on your price targets compared to the others what is it about what you think investors are perhaps been missing about facebook's potential over the past several weeks and what turns things around >> okay, yeah. thanks, john there are two issues on facebook there is what i call big toeb risk, what i really mean is societal pressures, regulatory pressures. that's the one overhang. the second one is concerns that when they talk about more, a better interaction among users and the possible reduction in

engagement that people fundamentally are concerned that ad revenue growth will slow down i think the first issues solve themselves over time i think to their immense credit or to their credit, not immense, facebook management team is taking responsibilities in the market and size of the platform and events, i think they're taking them seriously. i think those over time the big toe tobacco risks, i think those will fade. i don't think there is any change in the ad revenue growth rates. i think you're at a great spot and facebook is a stock, i think estimates will go up and the multiple can go up i think it's the best stock opportunity here in large cap internet >> denny, you guys have facebook you also have microsoft and apple. and apple was down two weeks ago at $151 a share intraday it's up 14% since then does that move surprise you? and does it surprise you that

microsoft hasn't moved as well >> yeah. actually, both moves don't surprise me necessarily. if we're talking about apple specifically, you know, one thing coming off of the call, the numbers were relatively uninspiring. you know, given a lack of real unit growth in the smart phone sector giving repatation and the amount of stock the company is likely to buy back, they're in the market now i think that's giving the stock support. just gives the multiple relatives to the market and apple had really underperformed. microsoft on the other hand, it's actually still up more than the market year to date. their financial performance is really strong. it had been up more than apple so on a week to week basis, you know, stocks are going to move but microsoft numbers were really good. >> yeah. earlier we had roku ceo join us. he was talking about why his stock is down so much this

morning. maybe why it shouldn't be. take a listen. >> the stock is up a lot since the ipo. day to day stock trading is based on a lot of factors. but there is no doubt that we are the center of a huge shift in television moving to streaming and just a great position to be in. >> mark, he just raised your price target on the stock that had a lot of metrics moving in the right direction this morning. what is your take on streaming >> so i respect what anthony has built at roku and there is no question there is this big derivative play off streaming which is subscription streaming which is netflix great stock. we like it and then the question mark -- the question is, is there a great derivative off not subscription streaming built advertising streaming. if there is, it may be roku. our estimates did go up. they put up almost 130% platform revenue growth for the second quarterer in a row and it's a high gross margin business at 70% gross margins. that's worth a high multiple

we think it's largely fully priced here. but i like to see the fund mentals so they can thin this trend for reasonable period of time you know, maybe we get more constructive on the stock. the story i fundmentally look better can they really take add budgets away from the two titans, facebook and google? that's a real question mark in my mind. >> denny, one of the stocks we haven't talked about this morning, amazon. i know you own that as well. there is a lot of focus on the hill walmart on the walmart versus amazon rivalry walmart's revenue last year, $486 billion, amazon $178 billion. but amazon is now worth about 2 1/2 walmarts from a market cap perspective. does that make sense to you? >> yeah, it actually does. for a couple of reasons. one is i don't think we can just compare the retail operations of

both companies importantly, a big driver of amazon's valuation is also the aws business which is now over $20 billion revenue run rate still growing, i think, 45% in the last quarter so tremendous secular tail winds there. they still have operating margins in that business in the mid 20s. very different than the retail operation. and i think another area that is starting to get appreciated by investors and i personally would attribute, you know, some part of this recent move in the stock is to the emerging advertising opportunity that amazon has and you know, it's small today but it is starting to ramp and it's an extremely profitable business as you can see by looking at the margins of alphabet and facebook. i think as you look at amazon on sum of the parts basis, it makes sense to me. >> mark, we talked a lot this week about the underperformance within f-a-a-n-g, facebook and

alphabet how does that change are relative to the other giants in the space, are they inexpensive here or is it all sort of -- does the overall trend in tech support what some would call rich valuations >> yeah, so i don't believe the valuations are rich. certainly not for facebook and google i'm sorry, you take those multiples and you adjust for the pretty material cash positions the companies have and then also in the case of alphabet, google you adjust for the other bets that they're making. you can buy both of those assets close to market multiples for what i think is very consistent premium growth i said this number before. i'm sticking with it it's 32 quarters in a row in which google and alphabet managed 20% revenue growth it is actually 23% it's been accelerating i don't think in history you can find an asset of this size that performed like that. these are what i call, you know, internet utilities, internet staples. i think they're worth more but what is the catalyst i think with google, the issue this last quarter is the margins were disappointing

but rarely does the company ever talk about forward expenses. this time they did they said that the traffic 5:00 sicti acquisition costs is going to moderate that will take the shares higher with facebook, it comes down to earnings and do they consistently outperform an revenue growth does it moderate more slowly than the market thinks i think that's going to happen i think it's more of an earnings catalyst driven by the revenue growth trends coming in stronger than expected. >> all right we covered a the lo, marlot. mark and denny, thanks >> still ahead, the coke brothers are taking on amazon over tam breaks for hq-2 the man behind that campaign is going to join us chip stocks are on a terror. two analysts will join us. and we'll go to south korea with more olympic updates for a gd oo day for team usa we'll check in with andrew whether "squawk alley" comes back

andrew sorkin is live in the olympics in pyeongchang, south korea. he brought us highlights and video of him inside a robot. andrew, that was cool. >> we're going to take you inside that robot right now. it is one of the most technically advanced cities in the world in this city not of pyeongchang, but in seoul. we have a company developing a robot called the method 2. we showed you pictures earlier this thing is 13 feet high it weighs 1.6 tons and you

operate it by climbing into a cockpit inside you're watching me do that right now. the company making it is future technology if the robot looks something out of a sci-fi film that, is because the company brought in hollywood special effects guy to consult on the design. and jeff bezos took this thing for his own spin last march and tweeted it was awesome he gave us an inspiration to go check it out the robot costs $100 million to develop. paid for out of pocket by the company's chairman yang-chin ho. it is not for sale the goal though is to make these type of robots but make them smaller. so it's a little sort of honey i shrunk the kids situation. they're trying to figure out how to do it in the mega scales much it's like being inside a transformer and then they're going to shrink them down. it may be operated by ai or joy sticks, not with people like

myself inside. so just wanted to show you that. it's fun in the meantime, before we go, we want to show you today's ask the athlete. always asking the athlete different questions. today we asked them if you could design a robot, what would you want it to do for you? ♪ >> i'd like the robot to make healthy meals for me >> i would love the robot to make my bed every morning. >> bring me some coffee in the morning. that would be nice >> i need a robot to make my kids' lunches for school the worst task every day >> to be able to tie my skates that would be great. >> the dishes, i think >> probably the dishes >> the dishes. >> wash the dishes, for sure i hate washing dishes. >> cook and clean. >> clean my flat all the time. >> definitely have a cooking robot. that would save a the love time.

>> so as we've been doing all week, we like to ask the athletes then we like to ask the anchors if you could have a robot do anything for you, what would it do "squawk alley" anchors carl >> mow the lawn. i think that is one of the easy answers. morgan >> definitely all of the household things that were just cited by the athletes, especially cooking my husband is an amazing cook. i am not that would be nice >> wash the dishes i've got to go with the athletes on that one. andrew, should we be worried that the guy building the 10,000 year clock at enormous expense is also now taking a ride in this $100 million robot? these guys have a the love money and doing interesting things with it. >> that clock is fascinating the robot, i have to say, being -- it's like being tony starks, you know, factory almost seeing them build this thing they have three of them right

now. and then they have another one that they're building that you get inside and it almost looks like a car but you seem like one of the boston dynamic robots that look like dogs but you're inside it and it goes like that. it's pretty extraordinary. it just gives you a sense of what the future may ultimately look like. scary or not by the way, before i go, let's just show the -- go ahead >> i was going to say, after your trip to saudi where you talked to sophia the robot and now this, you're becoming our robotics correspondent >> you know, for "squawk alley," anything, really before i go, this is the last of the day. let's show you the leader board. guys, i mean it was an amazing day. i know carl you're an olympic fan like me. and it's something united states right now, we've got 21 we have a good chance. i do want to say, we got a good chance to beat canada. we have to pull a couple things off tomorrow and saturday. we should also note by the way in political olympic news,

ivanka trump is arriving in seoul tomorrow going to be representing the united states and is going to be attending the closing ceremonies on sunday. so i'm sure you're going to be seeing a lot of headlines about that in the meantime, i'm going to send it back to you. >> andrew, thanks. yeah, from our newly minted robotics correspondent in south korea. >> you know, i like that title i'll take it what happens if i get a robot to be me? >> you heard it on "squawk alley" first, folks. >> but can i get -- i'm getting a robot to be me then the whole game is over. >> okay. when we come back, the coke brothers are backing efforts to oppose tax breaks for the company's second headquarters. head of that campaign joins us and a look at the dow at this hour. the dow is up 265 points, near session highs. more "squawk alley" after this

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welcome back to "squawk alley. generation opportunity, a activism group linked to the coke brothers is trying to convince young americans that giving tax breaks to amazon for the second headquarters is not in their best interest take a look at their ad running on twitter, instagram and facebook this is in cities vying for the new hq and for more, we're joined by generation opportunities policy director david barnes. david, thank you for joining us today. >> thank you for having me on the show >> so i have to tell you, i would not have expected to see a group affiliated with the coke brothers basically making the same argument that the very left leaning mayor of new york city bill diblasio is making right now in terms of his own specific city and that being the fact that tax insentives shouldn't be needed to lure a company like amazon to build their new hq what is the argument you're making here? >> we're a grassroots movement of young people supporting more freedom and more opportunity i think our generation,

millennials, really values fairness i think government giving huge handouts to one of the world's most successful companies doesn't make sense >> okay. so i'm going to play devil's advocate for a second. we had the mayor of miami on last month he said -- and that's one of the cities in the running for this -- he said that he sees his biggest competition coming from texas, the reason being that both of these -- both of these locations don't have a state income tax and that makes them more competitive than everybody else that's on this list so i guess that sort of gets to this idea that taxes are not -- it is not a level playing field based on states, based on municipalities what do you say in response to that the cities trying to make themselves more competitive against a texas or a florida >> that's where states should really be trying to make themselves more competitive for all businesses they should cut tax breaks for everyone get rid of the loopholes and make things more fair for all people >> david, you feel the same way

about the efforts to lure foxcon to wisconsin is this an across the board effort where you're willing to join hands with democrats in order to get this policy goal achieved >> absolutely. whether it is amazon or foxcon or carrier, any of these different examples where you have government picking one industry that they want to get in and giving them special deals. that just doesn't make sense it's no the fair as a millennial organization, our generation really opposes these handouts and special deals. >> obviously these municipalities are making a calculation here that they're going to get back at least as much as they're giving how do you reconcile your argument with the fact that jobs, investment, street cred is a result of bringing amazon to town >> you have to look at history when businesses get the breaks and special deals from governments, you see they

promise a bunch of jobs that they usually can't deliver they promise a bunch of economic growth that doesn't happen and then once they're 5, 10, 15 year deal expired, they're looking to leave and reup the special agreements or move somewhere else >> what's a good example of that >> oh, i mean i think sports stadium subsidies is one example. where you have teams that come in and they say hey build us a stadium, give us a bunch of money. again, you have the very we will yj i teams and then, you know, they go through the break and then they're on market again looking for another buyer to get more subsidies >> looking at this campaign specifically, what do you actually hope to accomplish with this do you hope to get cities to pull out or take away the tax insentives are you hoping that millennials in those cities say i don't want amazon if they're going to be eroding the tax base what are you hoping to accomplish here? >> i think getting citizens to stand up and demand action and to demand that their politicians

decide to withdraw any kind of special bonuses and try to stand and compete on their own two feet is great. but just raising the issue that you have amazon is a great example of this but you see this all over the place in special corporate welfare for different businesses, different industries we want to make sure that everyone knows that businesses should compete and they should sell products that people want to buy and that's what makes our kp economy grow >> david, i believe you're also in favor of fcc chairman's moves to roll back regulations associated with net neutrality how much does that complicate your efforts to really gather millennial momentum? a lot of millennials that i'm in contact with are very much against what the fcc is doing right now. >> right so so-called net neutrality rules are real flash point whenever we talk about that, it's a really big deal but as we've seen folks don't really understand kind of what

the details of the restoring internet freedom order are about. don't really know that net neutrality is a new policy they think that's what we always had. so we talk through the history of the program and the sky hasn't fallen. you see all the minds change >> great we have to leave it there. thank you for joining us, david barnes >> thank you for having me let's get to seema mody and check out how europe is going to close. >> getting the chance to react to yesterday's fed minutes, european stocks are mostly pulling back on the worries about higher interest rates. you can see the german dax back in positive territory. keep in mind we did get weaker than expected german business confidence and a downward revision of fourth quarter gdp adding to that negative sent sentment policymakers won't change their forward guidance any time soon they also expressed concerns about a potential currency war with the united states and said volatility in the euro is a

"sort of uncertainty which requires monitoring. the euro higher at 123 against the green back stocks, one of the bright spots is barclay's the british bank announcing plans to resume paying the full dividend despite missing with the 2017 earnings. that stock up more than 4% but a much different story for finland's rovio. they're known for angry birds games plummeting after warning on profits and revenue on 2018 saying they expect the cost of new users to rise significantly. they're honing the investment in the cloud based gaming service will spur growth investors a bit cautious here. the stock down over 56% here jon, over to you >> maybe a new game, ang rinne ve angry investors. >> that's what we're hoping. still to come with amazon hitting new all time highs, tech valuations are once again being called into question henry blodget has been voicing valuation concerns for quite a while.

he joins us next and as we head to break, a check on the major averages at this hour the dow is up more than 1%, up 281 points s&p and nasdaq also up nearly 1% more "squawk alley" after this try cool mint zantac. it releases a cooling sensation in your mouth and throat. zantac works in as little as 30 minutes. nexium can take 24 hours. try cool mint zantac. no pill relieves heartburn faster. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

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about energy efficiency. we actually saved $50,000. and that's just one school, two semesters, three girls. together, we're building a better california. here's your cnbc news update at this hour donald trump jr. attending a ceremony for his family's

apartment complex in mumbai. there are 400 luxury apartments with prices starting at $1.4 million >> everyone else is doing business here has just been amazing. incredible experience. i think one that brings a lot of honor to the marketplace >> a government panel has recommended a new hepatitis "b" vaccine for adults the first in 25 years that uses an additive to boost the body's immune system and is given in two shots over a month the cdc must still review the recommendation before it can be added to the list of approved vaccines and one of picasso's greatest portraits is expected n whether it goes up for auction it was done a few months after his masterpiece was created. for now, let's get over to "squawk alley. >> all right thank you very much. amazon is fueling the s&p's

rally so far it accounted for a third of the gains since january 1st. amazon's now worth 2.5 walmarts. this raises concerns about tech stocks being overvalued among some joining us this morning, business insider editor in chief henry blodget and the president and former aol ventures president john broddard with us. good morning are you surprised, henry, at the resilience of tech i don't mean just this year but the nasdaq outperforming in 2012 and 2013 and 2015 and 2017 every -- several times this decade. >> no. i'm not surprised to see tech outperforming. that is where a huge amount of the value in the economy is shifting you're seeing this across media and retailing and google and facebook and so forth. so i'm not surprised by that amazon's valuations are surprising i say that as a shareholder for a long time. i'm noment t a trader i don't care fit gets cut back it's at a level where you have to imagine incredibly rosie

future on lots of different businesses including creating amazing new ones that we haven't thought of to get there. this is true across tech as you know, i'm concerned about the market valuation overall i don't think tech is outsized on that. but i do look at amazon and say, wow, folks are -- those are big eyes there >> john, when you look at what is lapg in t is happening in the content phase, what is the message overall? we've seen buzz feed stepping back from social content vox doing that as well s this a move to premium or is there something beyond that that all of the tech giants need to be paying attention to? >> i think it's largely a move to premium you know, video and premium content seems to be what's got the wood behind it where advertisers are going and i think that's the future. not withstanding the fact that facebook and google represent 60% of internet revenues in this country and half around the world. >> you think people are overplaying regulatory risk when it comes to at least alphabet

and facebook >> i do. i do yeah, i don't see regulations coming down soon for them. i certainly hope not i think they can continue to innovate i think they can to some extent regulate themselves and do a better job of that than they have historically. i think the spotlight is on them now and now is the time to act >> is part of doing a better job regulating themselves maybe rewriting theal g theal -- algos >> absolutely. we just had this yesterday where a top video was shared all over the world, conspiracy theories about actors in the school shooting it's just deeply offensive you imagine tradition alameda, legacy media companies ever participating in anything like that, they would be crucified. the platforms have to be get much better. hopefully we won't go so far that it becomes the legacy media

standard where you have the absurd rules about you can't have any nudity but you're allowed to show people getting killed all the time. hopefully we don't get to that level. but it's got to get somewhere in between where it is a much safer environment for clients and people using the medium. >> this is a threat for the platform people are weaponizing the platform i think, you know, if there is one positive about this, it's that this is going to keep happening. this happens every election, every national tragedy, every social movement, take a knee, et cetera, which will keep it top of mind for us and defeat the sort of quick news cycles that we're seeing on some other issues and so that gives me hope. i think, you know, youtube hired 10,000 moderateors yesterday twitter came out with a plan to defeat bots. i believe this is the beginning. i think it's going to take a while. nothing is going to be 100% foolproof. i'm optimistic that they will get their acts together. >> people point to yesterday's youtube algo as another sign of

failure. they've been at this for a while now. when do we start seeing changes in how the things trend? >> i think the spotlight is on now. not only is government sort of applying pressure but advertisers are starting to apply pressure we saw unilever threaten. >> so you don't think they're trying to talk down the market >> look, the big picture here is silicon valley and media, the media industry have always been oil and water. silicon valley says just a platform all that content stuff is other people's problems. with very nothing to do with it. and we're now seeing the extension of that which is when you build media distribution platforms that are this powerful, you have a responsibility to use them responsibly. otherwise, you're helping forces in the world that they don't want to be associated with >> so the take away from the reaction yesterday, on the one hand, i mean come on who didn't see this coming the conspiracy theorists around the school shootings it is crazy that youtube let that go up but then youtube's reaction

pretty quick and facebook said by the way, we're not allowing the posts attacking the high school students. they're not having that reflect it's just a platform it will police itself reaction anymore. >> that's right. i think they have learned. look, we're actually in control of media and communications worldwide now. we need to take this step toward responsibility to jon's point, it's going to take time. and carl, to your point, yeah, it's a ailure. it's another opportunity to get better and i think the way ultimately they resolve it is you just come up with tiers. there are media producers of a certain quality that you trust they go in the tier that is pretty accessible most of the time and distributed and then do other things bubble up occasionally that have that merit and should get the same distribution power sure why not? that's great but you don't have to immediately spray them everywhere >> now you're getting into another fraught conversation about who deserves a blue check and who doesn't. >> i'm sorry, it's only fraught

if you have this -- you come at it from a completely idealistic libertarian oh, who are we to judge view point as opposed to saying, no, this is the reality of the media business. this is why television has been so regulated for so long again, i hope we don't go that far. some of the regulations are absurd but it is just the responsibility you have this platform yes, you have to take responsibility for what is on it >> okay. i get this argument that regulations maybe television we don't go that far but we're talking about facebook as if it's a media company facebook likes to think of itself as a straight up tech company. so at what point do you see some of the those media like regulations, maybe not the crazy ones, come in to play here >> i think we're seeing that shift. the response from yesterday is important to note. and so i believe over the next 12 to 18 months we'll start to see some of this and if not, you know, the government is going to step in advertisers are going to pull out. and potentially competitors can

come in and disrupt. so i think the spotlight is shining brightly this is going to remain top of mind because it is systemic. and that gives me hope >> again, look at the speed with which the companies reacted. it's good. it's a big change from a year ago where they were saying, just tech company we have nothing to do with this. they are starting to embrace that response biltd. tsz goi it's going take a while. we created the technology monsters you have to get under the hood and figure out how to do it. >> it had a legitimate news organization's content in it so we thought it was -- it wasn't a legitimate news organization that posted it. so why didn't you look at that >> but this is part of the problem. this is complex. it's not simple. we're going to try -- they're going to try different things and fail and false positives but they're finally owning up to this and i believe we're going to start to see -- >> in the meantime, i mean, until solutions bare fruit, is engagement at risk we had a long discussion about

what happened to facebook's core app engagement in the last couple of months, the last year. >> i think one of the changes facebook made where they stripped out a lot of videos and professional content, i think a lot of people don't like that. and others, maybe there is less engagement they warned about thafrment bt. but on the surface, maybe there are small changes. but pretty much every improvement to the civility of the dialogue has ultimately increased the value to everybody. twitter, they have done some stuff to make it a little more pleasant to be on there. they still have a long way to go but the more restrictions they put in place, the better everyone loves that. >> i think that's right. i think potential short term hit and engagement medium long term not. >> one last question can i ask about kylie jenner's tweet? >> do it >> snap is down 6% we pointed out it is worse than when citi went to sell on tuesday. henry? >> kylie jenner is powerful.

>> i know. >> she dissed it she said nobody i know uses it anymore. that is a scary statement. >> exactly >> what do you think is being said at snap today >> i don't know. let's call kylie jenner and find out. >> maybe she likes the new version. >> exactly >> guys, thanks. henry and john, good to see you both >> pleasure. coming up, more on this rally in chip stocks but first, rick santelli, what are you watching to day? >> i'm watching a lot of really big numbers on my white board today. lots of zeros. you know, we're all talking about interest rates as we should and they're moving higher. but why does it seem so nervous with regard to the market response like equities hey, back when i got my first mortgage, they were above 14%. we're going to talk about all that aerhereft t bak ♪

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well, it'sonce again.eason >>yeah. lot of tech 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.

coming up, the stunning call one fwiirm is making about the e and interest rate. tsz the note everyone is talking about. we got our hands on it we'll show it to you in 15 minutes. plus, did fame market watcher seigel change his thesis dramatically he's with us exclusively today we'll find out and pete is spotting option moves in a big name financial stock. we'll give you the reveal on "the halftime report." carl, that's 15 minutes away >> sounds good, scott. thank you. let's get to the cme and get the "santelli exchange." >> good morning, carl. you know, watching the minutes yesterday, watching the ten year

note yield basically move from 2.91 before the minsz utes to 29 as the minutes were released it hovered there it didn't go bofrcrazy until 2:5 the minute traded above 2.91, the current, as of yesterday, the high yield close going all the way back to the end of 2013, early 2014, that's when it popped to 2.95 we also saw two year note yields move to 2.27 there's a lot of focus on interest rates at a time where we have a lot of debt there is talk this year that we're going to have a budget deficit with a trillion dollars or larger. let's go to the white board. look at these years. 2009, we had a budget deficit of $1.413 trillion. okay and then the national debt at that time was a whisker under 12 there are trillion 2010, just a bit under $1.3 trillion for the budget deficit.

$13.6 trillion on national debt. 14.8, 1.295, a little less than 1.3 in 2012. you know, a bit over, $1.087 trillion national debt at $16 trillion now the national debt is $20.24 trillion, estimated for $2018, $20.5 trillion. 82 in '09. 65 in '11. 82 in '12. where is the ten year note yield now? i can tell where you it's at it's at 225. so right now we're at 2.25 for this entire chart, where are fed funds? i can tell that you too. 0 to .25 now what are they? 1.25 to 1.50 the point of this is that it's not only this. it's not only that it's not only central banks and their thumb on the scale for the better part of ten years

what it is that all of this is happening at the same time the economy is growing and unlike many of these years deficit's, i think this deficit may have a chance to actually keep the engine running more smoothly, more horsepower, more gdp. but in the end, the real issue is the fed certainly helped finance all this back then it certainly isn't occurring right now. back to you. >> all right thank you, rick santelli when we come back, chip stocks have been on a terror two analysts are going to weigh in on whether or not there is velol opportunity to orcck in this space. stay with us re 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.

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semiconductor stocks are soaring, more than 80% in the last year, as you know the etf whose holdings include those two names and intel also ripping higher for more let's bring in rubin roy. guys, it's good to see you both. so many interesting stories swirling through the sector. overall, where are we in the cycle? if this is a traditional cycle >> yes, that's the number one question i get, how much longer. a lot of these companies are growing at rates way above seasonality, what do we think about the cycle. we've had so much consolidation in the industry over the last several years.

the supply chain has gotten a lot more efficient there's not a lot of big booms and busts from an inventory perspective anymore. i hate to say it, it's sort of a good time to be a semiconductor analyst. when you look at the data points that we analysts like to look at, inventory out the channel, lead times for chips, pricing, all of those data points are lining up in the correct ways. and so we think that from a cycle perspective, we've still got some runway. and the companies that have broad based exposure to markets that are growing, industrials, automotive, robotics is a big one nowadays, factory automation, these companies are continuing to do well. >> are you saying the cycle is easier to predict than in years past >> i think it is you don't have to worry as much about double ordering and inventory being built up with folks not being able to get product. if you look at lead teams, how long it takes customers to get

shipped, the lead times are extended but not abnormal. yes, i think the cycle is a little easier to predict these days >> which one is the story of chips right now in this era? is it qualcomm nxp or qualcomm avago? is it about the vertical intergraduation and the big guys getting bigger or is it about the pretty big guys getting bought in scale plays? >> good points hi, rubin, hi, everybody, thanks for having us here i can't disagree with what rubin just said. i also want to remind investors and viewers that this is an economically sensitive group turning over to your question, the big story, i think consolidation rubin pointed out, continues to be a story that's driving these talks, partly it's a combination of we are in a pretty positive economic environment. that's one second, the group as a whole is

a lot more profitable. and also very shareholder friendly the third thing is there is an underlying bid, as we have all seen no company is safe, even qualcomm, there is a bid out for qualcomm as well i think it's a combination, as the story -- clearly there's a lot of debate and discussion around broadcomm's bid for qualcomm, and thrown in the mix is what happens to nxp as well >> so given all the consolidation we've been seeing in this sector, what's the next potential takeover target? amerish? >> i'm sorry, the question is to me yes, everybody is a potential takeover target. i can't speculate on who will be the next target. but safe to say that market cap or size is not the limit

>> you mention automotive. i thought i saw something yesterday that suggested more cars are being brought on line than phones in some cases, if you look at various metrics. i just wonder how automotive is changing the demand equation >> the content of semiconductors in cars across the scale of cars, high end to low end these days, we're seeing content doubling, tripling obviously you have the electric vehicles that have semiconductor content, you have lower end cars these days that have lower end content for safety teaches and that type of thing if you look out a few years from now, autonomous driving is in the mix. the number of processors and cameras and things like that that you need in the car is really mind-boggling where is a few years ago the average semiconductor content in a car would it have been 2, 300 bucks, we're seeing numbers upwards of $1,000 today, with room to grow when you look at the markets

that will be growth drivers for semis, in the past we had pcs, smartphones. a lot of those markets are maturing you look at autonomous vehicles, and certainly artificial intelligence plays into what's going on with autonomous vehicles i mean, it's going to be a big opportunity. >> amerish, intel had a tough start with the year, it's up again at 46 a share. is all of that behind them now, do you think >> yeah, we like intel a lot we think it's out of consensus call, it's an underowned stock intel is finally doing what we have been basically crying out for intel to do, is to show us some earnings power, and also free cash flow and capital allocation so as far as meltdown and specter are concerned, this issue is far from behind us. but i think until the rest of the industry, they are addressing it correctly, to the

extent they can, and again, we've been pointing out that this is not an intel specific issue. the entire industry is affected by it. we like intel stock a lot. >> sector is having a good day this morning, guys thank you so much, good discussion, rubin and amerish. >> thank you as we head to break, take a look at the nasdaq, trying to avoid its first four-day losing streak since november 2016 it's currently up 9/10th's of a percent. stay with us

markets close to session highs here, dow is up 337. every component is in the green, led to a large degree today by large cap industrials. names like utx, even ge having a good day >> ge up almost 4% right now caterpillar as well. cyclicals in general energy rocketing higher, that sector and the s&p up 2.5% crude breaking above 62 bucks a barrel >> good thing kylie jenner didn't have anything bad to say about the industrials. snap on the other hand still down, almost 8% at this hour just not getting better. it's getting a little better for roku, off the lows but still

down 15 1/2. >> a slow erosion for snap for the day, now down, as you say, almost 7 1/4 collateral damage, twitter down more than 2% viewers ask if kiley has a newsletter the response is, if she does, she's got 20 million subscribers. >> she's got a makeup line, make the investors can put lipstick on it. >> let's get to the judge and "the half. welcome back to "the halftime report," i'm scott wapner fed fears. why one firm says five rate hikes could be in the cards this year what that would mean to your money, even as stocks resume their rally to highs as we speak. joe terranova, pete in addition jarria jarrian. stocks are higher this hour, dow jones industrial average higher by nearly 350.