10-yr note still yielding right around 2.8%. mike santelli, thank you for being with us today. >> we'll see you 11:00 to noon >> no, the cnbc guy. >> make sure you join us tomorrow "squawk on the street" is next ♪ good morning and welcome to "squawk on the street," i am david faber along with jim cramer, we are live from the new york stock exchange. carl quintanilla has the day off. let's take a look at the futures. we are looking down across the board here dow jones, futures down 116. european markets, not too bad.

nikkei already closed. italy is down after the key elections took place >> absolutely. >> 10-yr 10 yield and crude oil are up next, you can see we are hanging right in there around the 28 level and there is a look at brent crude coming off a wild week as u.s. trade hangs in the balance we'll give you a latest on the fallout and on what to expect this week. plus, we'll take you live to mexico city where nafta re-negotiations are taken place. plus, another twist and turns in that potential qualcomm/broadcom deal this thing is getting more complicated. i will give you the details on what the government is now doing to stop this thing or at least the meeting which has been

delayed both sides talking just hours ago, the president did tweet about trades in the wake of his announcement on steel and aluminum we have large trade deficits with mexico and canada nafta, which is under re-negotiation right now, has been a bad deal for usa, massive relocation of companies and jobs tariffs on steel and aluminum. >> he had a lot to say this morning. we got that tweet and more of the rhetoric from the president in terms of trade and many of this things since he's been saying since he ran for office

and now being taken seriously given last week, gjim. >> there is an inner circle of people i think the inner circle of people understands that a flat tax will only get us in trouble maybe, you can argue the defense aspect for steel, 232. the problem is we are negotiating nafta which is of course, free trade, and we are slapping tariffs on the free trader that we are dealing with. when i say there is a level of confusion, it extends all the way up at every level. we are going to speak to steve liesman. you cannot really figure out from the tweets what the plan is >> no, you cannot. we know this of course thursday was announced of what it intended to be and eamon javers covers this well for us in terms of the announcement and on

friday, we have the executosecrn and wilbur ross made the rounds yesterday. would this supply to every nation, allies he says that's what the president seemed to say. >> that's a great word he's not clear that the president has necessarily discussed it fully it is not clear at all >> here is peter navarro >> there will be an exemption procedure for particular cases where we need to have exemptions so that businesses can move forward. at this point in time there are no country exclusions. >> there you have it from him. >> he's right in the sense of

how do you get the chinese to stop over producing. we have been trying to get them and nothing really work. >> right >> theoretically everyone will go to china will you please start producing something else they're trying to put people to work in china. that's a good idea steel takes a lot. it is labor intensive business if they decide to put people to work on lithium batteries and solar panels they can do that i understand the concept, guys, start over producing something else please, stop over producing what's wiping us out that make senses sense. >> over the weekend, a lot of people are putting on job gains and job losses from those companies that rely on metals and on production and the number

does not equate to a certain extent and everybody can point to the wrong study and i am sure navarro and ross who are both in favor. >> right >> have their own view, we know that the commerce secretary pointed out a cost of a can of coke or can of soup are not going to go up much from that. >> the reason is because new core is the lowest cost producer of pretty much all the steel that we make they're autoa pipe and the big steel plate. the thing that's difficult is how can you be the lost cost not making any money the answer is china does not care >> they want to put people to work >> right >> so they picked this industry.

it is time for them to pick another industry >> solar panels, we already slapped tariffs on and washing machines >> maybe if they use the cost of production then they would be regarded as being fair traders you know it is funny korea, the imbalance of cars. at least there is a foreign policy imperative to sacrifice american workers why should canada and brazil be hurt well, the answer is why should we be hurt i wish there were more to it >> all right, come back to the markets for me before we get to steve liesman who's covering the nafta negotiations what do you do with the prospect that this is not the end of it but the beginning, jim that's the greatest concern. we still got a lot of things to deal with on china including the

301 remember that. >> the world trade organization may find against the u.s., that takes a long time. maybe you gravitate towards other parts of the market that are not as hurt betting the futures will take everything down and you can take a look at financials and health care the small universe of companies actually, public companies that exports tend to be -- the farmers, here is something that not a lot of people talk about farmers are subsidized i am just saying all these things are trickier which says to me by netflix >> that's it, buy netflix. >> could you go down the road that netflix is the corporation and we'll treat you your subscription and slap a tariff

on it? >> buy denney's. >> that's a concern if you get into a tip for tad which is not necessarily likely, if you do, that'll have effect of damping growth around the world, won't it >> i am not going say no to that >> okay, which means you are saying yes >> t >> tariffs can slow things down. being angry is not the game plan and obviously europeans are going after mitch mcconnell because of jack daniels. >> and the chinese will hit on certain rights and the soybean >> i think that our incoherence of our policy. that could be the opportunity. look at the rally we had on

friday which was led by cloud base because the grossing cloud is not hinder by steel i am just saying it is important to recognize that there are many areas of the stock's super market that's uneffected and money is going to gravitate. when you break things down, there are plenty of stocks that have nothing to do with this and if you are going to send those down someone is going to buy them >> okay. >> we should move on from this concept. yeah, we'll stay on trade. you and i have plenty of time. >> how do they know that we smou should move on right now >> they have a clock >> 9:10. it is time to talk to steve liesman, there he is, mr. liesman joins us from the mexican capital and he got more on the negotiations.

>> thank you very much the free trade agreement is very much on the brink as negotiators meet to talk under the threat of u.s. steel and aluminum tariffs and a tweet this morning by president trump linking the nafta talk to those tariffs. the question is whether or not it will open the door for canada and mexico or raises a bar that you negotiate partners reject in these talks. the stakes are pretty high bringibrin bringingbrin bringibrin bringing kevin brady here yesterday arguing for mexico and saying these tariffs amount to a tax. >> tariffs are taxes i think every move we make to try to convince not just the u.s. but the rest of the world to lower those tariffs is a good

thing. >> guys, these talks were complicated enough without the steel tariff, i want to show you some of the sticking points that were out there there is still a major issue of autocontent. there is issue of regulatory and labor practices trying to everyone them up between countries. issues of exploration of nafta canada seems to be against that. then there is specific industries of telecom as well as energy all of this pushed together, goldman thinks nafta is endan r endangered and morgan stanley on nafta. markets may have to reflect. that's why i think markets should be listening closely this afternoon and, when they take questions from reporters and we'll see what that real

linkages between the tariff talks and the nafta talks >> thank you, steve liesman. you have been a critic of nafta for a long time. i do what you say and of course your home in mexico and you watched the jobs there nafta is going down and flame is not going to be good, is it? >> the area that i am in used to produce 5,000 cars >> i know, but buonafta is going away, good or bad. >> it provides cheap cars and conceivably some companies that don't want to compete, i guess remember $5 an hour workers, no collusion control. >> after re-negotiated >> it was 4-1 on the dollar and now 18-1 how anyone can think nafta is still as good as it was for the people who solved it

it does not make sense >> all right >> i am sorry, it isn't. >> or on the board of town or in the agriculture country of this country, it is beneficial. >> look at the plans >> i am on tv and on the spot. >> when he does that, you know we have to go. when we come back, the u.s. is ordering qualcomm to delay shareholder meeting. i got some insights on both sides of what's really going on here and what it is going to mean for broadcom's offer to buy the company. here is another look of futures. we'll have the opening bell in 15 minutes we are back after this

welcome back, jim and i were getting ready tomorrow for the big meeting of qualcomm. how many broadcom nominated directors to seat and whether or not a majority of the board would actually be broadcom's

nominees it is not going to happen anymore. it is been delayed the committee to review for investments in the united states has stepped in and said we want to rule prior to any vote of your own shareholders. jim, it is complicated this morning. the only official announcement that we have is from broadcom which puts a release out early this morning saying they were disappointed >> are you kidding >> it is a very interesting word press release from them. qualcomm secretly filed a voluntarily request to investigate the deal that was the bump up in price before they came back down from broadcom to qualcomm

remember they went 82 to 79. that's just a sign of entrench broadcom is committed to become a u.s. company one cannot know certain that when it becomes a u.s. company, it would no longer fall under the jurisdiction there are some real national security concerns here, for example, the role out of 5-g services and qualcomm is one of the key providers there and the only company out there is wall way and we cannot buy anything because of national security concerns jim, it is going to be a while until we get a meeting here. it would seem, i don't know if they're going wait until broadcom becomes the u.s. company which they say they would be incorporated here by may 6th. we want to rule regardless >> can i tell you where i am

confused >> please tell me and i have something to share >> let's say the shareholder qualcomm i have a chance to make a lot of money if the broadcom did come throw. >> it is only 79 right now 79 over 63 would be a lot of time but it would go up. >> the stock of qualcomm goes down on things that qualcomm does david, at what point should qualcomm wanted stock to go higher or is that not really a much of an issue at the moment >> qualcomm would say they have been negotiating and good faith to try to get what they believe would be a fair or full price of the company and as well the assurances they need on the antitrust front and the national security front if you want to call that as well. broadcom and american companies you would argument it is no longer an issue. if they become an american company, will they drop it s

>> i don't know they operate in secrets. >> a couple of thoughts here the way broadcom release their words make you believe that they had no idea that it was even reviewed or a delaying tactic on the part of qualcomm because they believe they're going to lose the vote, meaning all six seats. >> that's what i was thinking. >> however, people on the other side submitted two written filings. one would expect that -- if you submitted two written files, you would know they were reviewing this transaction hard to know exactly who knew what and whether or not this changes the balance here >> what are we going to find out

tomorrow is this going to be three or four or five or six directors. >> no vote >> no time frame >> you got to hold a meeting since 13 months and their last one was in march come april they may be in a violation of that. meanwhile when broadcom becomes a u.s. company as i expect they will at some point >> we have to talk about why because we have xl this is ten times the size of that we have to spend time on it because qualcomm is the number one intellectual company it matters tremendously when i wake up and wait a second, there is no vote, i thought it was done this week that was wrong >> it was wrong. >> there will not be a vote for some time. are they using organizations to

stop chinese to be able to keep the vote >> they're a singapore based company. >> everyone hock tn though hocka u.s. citizen by the way. >> broadcom did file -- that's not right. they did file other things they were asked for -- >> okay, i am shocked. it came out. david, i expected to be a sleepy morning and there it was who was up at 4:30 to send that release out? >> somebody. >> you are ready for your "mad dash?" >> we got to go, we got to do the "mad dash" and opening bell coming up. let's take a look at futures of what could be or may be, a some what volatile week for wall street we'll be back.

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if you don't like their answer, ask again at schwab. time now for "mad dash" that jim covers in the "mad dash" today. >> i want top point out, a survey talks about the ecosystem strengths for apple. they believe the apple watch is doing better the only reason i mention this is there is fear of every company, people are able to look and see oh, that company is visiting china, let's sell the stock. a lot of phones are made in china. i am urging people another day

from now, it may not be front and center >> that may not change i keep on pointing out the 3-1 investigation. that's specific to ip in china >> right what i would tell you that it is a reflecting stock on friday morning and not reflected friday afternoon. >> right >> i think you have to figure out whether your company is really in the glass own or not >> the opening bell there for this monday, here at the big board celebrating international women's day over the nasdaq and dragon victory international the implications of a true trade war and nobody is saying we are

going to get to that but it gets scary. >> what i am trying to do is not scare people it can get scary and we can say listen, this is all the posturing that you get before you are trying to figure out the chinese or you know what, what do you need? what do you want us to do? you want us to cut aluminum? we'll do that. we are doing it in a way that hurts canada canada are our ally. maybe we should target countries that are definitively not our allies >> you mean like russia, maybe >> there is a lot of steel there. >> it is hard from the tweets to really parse what's happening, okay >> it is not a great way to communicate important policy >> but it is a way where you don't have to answer to anybody. >> right >> i can be able to sell anything my problem is that is then i

want some people to buy a lot of other stuff after they sell everything >> sell/buy to me is a loser >> end up with the immigration ban, for example, it was brought up very early without vetting from a lot of different departments and has yet to happen >> right >> that's a great analogy. >> i am torn on the 232-ish. do we have enough steel. it is possible that we would not one day. there is no way. >> why it is a nags buotional st at 2:00. >> well, they can destroy who ever does that because they targeted it them i think is that legitimate >> we would not be able to get that steel >> well, we could not mistake it

it -- but, you know we don't use gift wrap in the military. it is just something they picked they picked that business. they make great gift >> let's get to a couple of movers this morning. >> do i think trump understands what he's doing? >> i think the implications are the interconnectiveness of so many different things and intended consequences are very hard >> trump wants a hard market >> there is been job losses in this country and results of unfair trading practices and i am going to change that. >> he likes the stock market to go higher so before everybody gets too negative, remember that's an overall arching principle. he likes the market to be higher i am sure he did not like the month of february where the market is down

>> let's move on from trade to a deal this morning. excel group, you mentioned it briefly. the price tag is about 15.3 billion u.s. dollars. it is also connected to the taking public of their u.s. operations >> which includes bernstein. >> from that and helps to fund this, $57.60 is what you get and stock is trading what you can see a bit below that a nice premium for shareholder >> companies with the euro is strong it becomes a new situation it becomes a big property and casualty worldwide insurer >> i don't know. to me that's a change. let's say you sold xl friday

because you heard of a possibility of a tariff. >> yes >> i am saying that xl is not a needle on the hay stack, i think you made a mistake i just find that i would like to be a little targeted in what i sell >> yep the steel company rolls down on friday, you would think they should have been up. they were down i am just saying be careful what you saw. >> apple already turned around >> because you mentioned the ecosystem. >> yes no, i did not. >> oh, i did >> it is a light market, it is a thin market. people want to sell because they are concerned over night now they come in and say no one cutting them until numbers are cut, david, it is very hard to get your arms around it. no one has cut boeing's numbers.

no one am i supposed to sell boeing because the selling got negative on boeing? >> you can sell boeing because it is been up an enormous amount and there is a long-term risk here that you may not appreciate which is we are getting to some sort of a bad trade war that the chinese is cutting back on their orders >> it is impossible to get a plane and someone else will take this order could it happen? i am not disagreeing i am just saying that boeing has a backlog. boeing would still do well air bus does not have enough planes to go to give china a break. >> why is broadcom down? why is broadcom down >> if this makes it less likely that broadcom could buy qualcomm, i don't know, some people would say qualcomm stock

would go higher. broadcom has been moving down on the prospect that they are successfully to a certain extent you went from being favorable on it to say maybe not. >> because of the price. >> what i would like to add a little bit there >> apple is now down >> qualcomm is not having their annual meeting tomorrow. there is not going to be a vote. what was it looking like >> that's what i want to know. >> jim, you cannot prejudge these things votes are starting to come in and index funds are important. you have to believe when it is four who's based on that, in exact survey >> if you are saying qualcomm may have gotten a break if they delayed this >> yes maybe? maybe it gives them more time or lose all six, i don't know >> david who's allowed to lose in the trade war >> who has a lot to lose

>> qualcomm negotiated some really good deals. >> qualcomm in china is huge >> you sell qualcomm because they don't seem to want the bid. no one is cutting numbers. >> no. >> qualcomm is in the cross hairs with everybody it is hard to -- >> this is one of the harder issues that i have seen. >> it is crazy, it is unprecedented that you have syphilis of the deal for itself part, they had to do it with redomiciliing. you got both sides here telling me some what different things of alleging different things but broadcom -- being true to itself

words saying they had no idea that they're reviewing this and qualcomm had asked us to be done in secrets >> jim, let's move on. >> remember last week, was it last week or the week before we were worrying of the 10-yr going to 3 looks like the 10-yr is going to 2.7. that was the principle thing we are focused on now, what we are focusing on is a tweet. we have to be careful of what is our principle focus. because 2.0 or 3.0 was the reason that everyone sold. should we sell right now in they're a canadian domicile company, should we sell lululemon. should we tell our viewers it is time to get out of lululemon >> i am going to say no.

>> you go from a focus of interest rates moving up and we are all focusing on tweets from the president or brief comments. what should you be focused on? >> i was thinking of earnings and strong businesses and thinking that this stuff will be resolved in a way where it is profitable for businesses. >> you think it is resolved in a way for american businesses. >> i think there is an producer out there is a paper tired >> if that's the case, great, well-done for everybody. >> thank you >> i think that's what happens i think the chinese blinked. >> you think they back down. >> yes if you have a million people died from respiratory syste system -- they can shift and make something else.

they can shift and over produce something else >> xi t, the leader of china. >> for life now. >> for potentially as long as he wants the job has been moving to clean up the air >> i am saying they don't want to be in this business anyway. this state-run company, cannot really stop them they did stop a lot of aluminum because that's the most pollution creating of all these but i am just saying that if you wanted to move them away from the steel industry and put more people to work, you can put them in the chinese -- remember when it became the way they employ people people were like fish in the ocean. that's not a song. now they're putting a lot in

steel. >> how many of the products of a company like newell made in china. >> one of the things that martin franklin talked about was on shore. martin is eloquent on on shoring of the part of new rubber made of what he bought from jordan. >> the reason i mention newell is we got all of the directors that star board is nominating to take over the entire board, they nominated all of them. i don't know if you had a chance to review them and a letter from the company from starboard this morning. although kind of not necessarily indicating that he's going to be wholly in with the activist

here, icahn, in his comments to scott. as for starboard, the company's performance continues to worsen. they go on from there who may expect to indicate why they should believe is a whole new board. >> it was a $50 stock. it was doing really terrific and johns johnson' johnson's, apart of the overall prestige that martin franklin has built. a lot of sporting goods though sporting industry has had a lot of turn down it got gun issues. this is one where the numbers are still too high

let's be careful if you are buying a stock if it is downgraded today probably because the numbers are too high >> let's turn to bob pisani on the floor for more of what's moving this morning. >> happy monday, better than friday look at sectors and industrials will be the hardest hit by the tariff concerns, they are to the downside banks have not done much since the 10-yr topped out a couple of weeks ago. energy is positive utilities are holding up better. that's part of the 10-yr story not going up nearly as much here italy is down 1% what this is telling you, you are not down that much in fact, they're all up here the uncertainty of the italian election is impacting local markets. it is not a europe wise story. that's what this is telling us the autostocks are down again.

they were hit badly last week by these tariff concerns. bmw was down and daimler and as for where we are going next, the important thing is we saw on friday a real rally in the markets after the european market closed. a lot of people are wondering why we had a big rally, there were heavy selling out of the europe we saw heavy selling in the european etfs as well and i will show you that. as for what's i am pampacting t week is the tariffs news we'll have the central bank meeting, kuroda from the bank of japan were sounding hawkish this week we'll see if we can get clarification for that that started this whole mess the

last month's jobs and wage report, s&p 500 dropped 50 points of that february 2nd, that started the whole thing we'll see if that's a trend right now. you want to see hereis the 10-yr. the important thing is the 10-yr in the last month, we moved up dramatically after the jobs the report and we almost hit 3% and the third week of february, it sort of stopped. we have all these tariff concerns overall but a number of things happening banks were rallying if you looked at kbe have herbalessent stopped going up there is no rally there. then we see utilities they try to make a better bottom there and industrials have dropped we'll keep an eye on what's going on the important thing is going to be tariffs and the 10-yr off the lows of down 77 points

>> thank you, bob pisani coming up, what the tariffs plan could mean for consumers we'll talk to bill johnson as we head to work, bob just mentioned this movement treasuries of where we are right now. nobody seems to be talking about 3%, at least not now we got a lot more for you on "squawk on the street. stay with us weeds. nature's boomerang. at roundup®, we know they keep coming back. you never invited this stubborn little rascal to your patio. so, draw the line. one spray of roundup® max control 365 kills to the root

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. amazon is set to be considering financial services according to "the wall street journal. the company is in talks with big banks including jpmorgan chase to create a product.

they want to appeal to younger customers app those without bank accounts it would not involve amazon actually becoming a bank okay i don't know is that a venmo-like product in some fashion >> i've talked to paypal about that they don't want it checks are outvoted. but there are still a huge number of people sri a and mastercard, they have such great growth. that's what you want to know by the way, taylor, still working on the cost of capital that we spend in this country for steel versus the cost of capital in china, which, of course, is zero. >> yeah. >> it's hard to make anything when competing against china. >> i know. do you have a lot of people you talk to in the steel industry who have been upset? >> well, they've been losers for so long, it would be nice to think they can actually do well. >> do you understand that?

haven't there been benefits to having low prices of steel aren't there other companies who rely on low costs of steel, consumers? if we amexed canada and others -- >> are we doing that >> no, we're not doing that. >> are you sure? >> yeah. i've got houses down there. >> no annexation >> the peso is a real factor hindsig hindsight, 20/20, i've seen them do it. >> up next, we can't stop trading with jim, and we'll be right back that we could video conference and do it like that (snaps). if you'd have told me that i could afford a gig-speed. a gig-speed network.

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time for stop trading with jim. stock is up 8 cents. >> interesting, they have not move third headquarters to atlanta. interesting. this is a piece about why it's time to buy g.e. g.e. face regulatory rules

new board members are terrific past generation better than you think. this is the backlash, david, against the backlash of the natives. some say, are you kidding me they're the most hurt viable in the anti-globalization and that's true because jeff emmel was one of the biggest traders this does not jive with the thesis that is out there. >> it got your attention does it mean it changes your mind >> i still think that they need to raise capital, but nick is a smart guy. what i'm saying is there are now people who say it may be time. there are people who have been saying that for a while, but i thought there was a better reason. >> okay. >> like nick nick is a thoughtful person, and sometimes he's thoughtful too. steve tuezer is einstein

we have john for nucor we've got to find out -- they speak with one voice because they're not in the government. and then patty doyle what the hell happened to the pizza category remember papa john's remember he said dominos tasted like cardboard, and he did i'm a huge customer. >> we're watching "fast money" halftime. >> i try to beat david everywhere. >> dollar tree. >> there's a company going down. they stand to lose in the trade war because when you to dollar tree, there are a lot of things from china. >> see you later that's it? >> i'll talk to you at all times. stay in touch, please. coming up we have bill

johnson, and he'll talk about president trump's tariff plan, what's at stake for the consumer and a lot more

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good morning welcome back to "squawk on the street." i'm david faber. along with mischelle caruso cabrera, you can see we're down along the major averages a roadmap starts with in part global reaction. president trump's tough talk on tariffs dominating the market dominating the trade war you have to say it looms. >> yep speaking of possible trade wars, taras could be lifted in a, quote, new and fair agreement is reached by nafta we're going to take you live to mexico city where those

negotiations are live under way. >> we have another twist in broadcom's pursuit in qualcomm we'll have that straight ahead first let's get straight to stocks, of course. you saw all three indy sices ari the red. it's concerned the investors is it just trade that's causing the pullback mike santoli is with us at post 9 and he's taking a look at the overall cycle. mike. >> this is the context of the implications of trade, the interest rates, all the rest of it i think the premise coming into this year is we were in the late part of the cycle. you hear about the late market environment. what does that actually mean though right now obviously the employment is low. bull market is turning there's a lot of runway in terms of the economic expansion. where it gets complicated for

stocks is that the financial markets really ran well ahead of the real economy in terms of their growth rates and valuations and things like that. the bull market might feel as if it's a little bit older. it doesn't mean it's going to end. but you do get more volatility and you do get perhaps the valuation compression that we've started to see this year wit earnings rising strongly and the markets struggling a little bit. this seems to be the backdrop. i did have a little bit of a chart that bank of america and merrill lynch puts out 68% of them, 13 out of 19 of these indicators are flashing. however, you almost always get up to about 100% if not 95% before you get to that final phase when it's kind of game over so i think this is the market we're in so whatever the news flow is, it's in the context of is this the final little hurrah of this bull market.

not yet. >> how long does this little hurrah go for? >> that's exactly it how long can it stay late? that's what we don't know. if the market went sideways and earnings cash up, maybe it refreshes things i do think folks are blind-sided by the implications of a big tax stimulus in this environment does that prolong the cycle or does it make it more intense and therefore invite the end of it because the fed has to get more active that's the push/pull, i think. >> mike, thanks. mike santoli for more on these markets, let's bring in gab ella santos and john, chief investment strategist at oppenheimer. gabriella, i'll start with you since thursday you've been getting questions about trade. what do you tell them? >> what we're telling clients is at the moment, right, all of the

action we've seen on trade, solar pams, washing machines which came earlier this year as well as the steel and aluminum tariffs are still fairly small in scope so the actual impact on growth and inflation is still fairly limited. i don't want to get ahead of ourselves too much but clearly investors in the market are thinking how much further does this redress, do we see retaliati retaliation? could these impacts get exacerbated? >> our main interest, it's probably not in anyone's interest to exacerbate too much so the skirmishes end up fizzling later this year. >> is that why they behavior nobody's talking about 3% on the ten-year it's calmed down dramatically, the rise in interest rates is that because of the fear what could happen if tariffs get escalated if we see even bigger issues when it comes to trade? >> i think if we think about the past couple of days, the focus has been on the much more

potential negative impact on skirk mitchs on growth and why the ten-year has calmed down a bit. we had moved quite fast so there was going to be a pause on the tenure ultimately wethink the expansion continues, growth is still healthy. >> john, in terms of the broad landscape for the bull market, how you do view this latest concern about trade around the world? >> david, i think the concern is most certainly justified if the markets, if the investors had not shown this concern last week, i would have been worried. instead 've got an amber light on my dashboard when you hear

"protectionism" repeatedly. when it comes to steel stocks or aluminum, it doesn't bode well should it continue that said we're toward the end of a mid cycle we like to say because of quantitative easing, because of the techniques of globalization, we're in a mid psych thal is likely as wide as the amazon not as wide as amazon the stock, perhaps, but as wide as the amazon river. >> a mid cycle give me a little bit more context about what that means and when you talk about width, what you. >> we've heard for years now over the last 8 1/2 years essentially what we've got at nine years, we've heard that we're getting close to light cycle developments and essentially that would mean a recession around the corner,

topping out the area of late cycle sectors like materials and industrials. we don't think that's the case we think there's a lot more juice coming forth down the line from global economic recoveries, international economic recoveries, as well as a continuation of what appears to be a highly substantial economic pace in the states we think the issues around the fed, around what the president is saying, consideration of a new fed chair, markets concern, all of this contributed to volatility, which reminds us that essentially when we look at the markets or we look at life, there never is an all clear signal if there was, we haven't seen it in 34 years of this business. >> john, what has the market been telling us over the last couple of days when it comes to what it sees as possibly the worst trade scenario as

gabrielgabriela highlights you yourself acknowledge that as well clearly the market reacted very negatively that negative reaction, what is it pricing in in terms of what could happen and what it's worried about? >> it's just what you said it's price in the potential of what could happen if protectionists' actions were to be realized, retaliations began. already you've heard earlier this morning on cnbc, i think i heard one of the guests mentioning it appeared to be within the steel sector, it would be very positive for some steel companies, jobs would grow, but actually when you looked at the effects of protectionism, it would cut off millions of jobs so that's the worry. i think the market had to make the statement. it wasn't just the u.s. markets, the developed international

markets as well as the emerging markets really put their vote in very, very, very concerned about what was said last week. >> right. >> okay. >> we heard from mike, indications of late cycle. john just said mid cycle where are you? >> we're more in the late cycle camp i think when someone says late cycle, it means the recession must be around the corner. can be late cycle for a few years. that's ultimately where we think we are we have a couple of years left and there's an opportunity cost of exiting the market too early, thinking the recession is coming around a little too quickly. we would still think of being invested by being later cycle, it means more volatility and it means international over the u.s. >> during course of the bull market and the late cycle, do we get more of the move or is there any way to know how late cycle

performs in terms of the overall? >> traditionally late cycle actually -- just because it tends to last quite a bit, it does over the last, you know, couple of years of the cycle, you actually see double digit gains in terms of u.s. equities. so late cycle doesn't have to mean that the market completely freezes. >> petering out. >> right exactly. >> thanks to you both, gabriela and john. >> thanks. when we come back, hanging in the balance as businesses and business leaders try to make sense of the president's tariff announcement bill johnson is going to join us. getting another check on stocks, they're lower. the dow by 137 points, the s&p by 14 and sdnaaq almost 46 much more ahead on "squawk" on the street don't move stay with us

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business leaders around the globe are digesting president trump's announcement on tariffs. phil lebeau with how it may impact the autostry. hey, phil. >> the president tweeted on saturday that perhaps he would move to raise the tariff on european made vehicles that are sold here in the united states if there is, in fact, an escalation of his trade war. it brings up the question, what are people buying in the u.s. in terms of vehicles? where are they made? the vast majority are made in the u.s. at u.s. plants, 56% if you look all the way to the

right-hand side, you'll see 56% of the vehicles sold in the u.s. comes from europe. those not just from europe but germany in particular, 2.5% tariff is what those vehicles are hit with when they come in here it's 10% when built over here and sent to europe. angela merkel says a trade war is not wanted. some are saying if it's only 2.5% tariff for vehicles here, why is it so low >> we don't on trucks. it's a 25% tariff. that's been in effect since the early '60s it remains in effect that's why all the pickups you see in the u.s. are built in north america. there are also plants in mexico as well as in canada take a look at shares of general motors this has been a rough week for g.m.

this is a stock that's been under pressure most of this started with the trade talk happening last week first with steel and aluminum and then it accelerated with the possibility of tariffs being increased on vehicles exported and imported. >> two estimates 2.5% and 10% then people may say why are the americans so up in arms when the eu has higher tariffs? how dare they criticize us. >> look that was negotiated through the world trade organization and it's been in effect for a number of years. there are people who have said to me, we should have a lower tariff for sleeks we sell over there and we dwould better of there. what happened with general motors with their opal division in europe? they lost $20 billion between

2000 and 2017. there are a number of factors that go into the fact that europe just does not buy a number of more u.s. built vehicles or american autos and some of those are cultural some of those have to do with the types of vehicles that are built there. but the u.s. has always struggled for the most part to do well in europe. >> got it. thank you, phil. >> you bet. >> all right so how could trump's tariffs impact american companies doing business overseas? wilbur ross made the point that the prices for a can of soup or budweiser would be pennies, if that what about the larger halo effect if consumers bought fewer iphones or pairs of levis or g.e.mri machines joining us is a man who knows a bit about canned goods, former ceo and chairman of heinz. bill, always nice to have you.

first give us your reaction to these proposed tariffs >> i don't think we know a whole lot to me. if you can explain to me, it would be very enlightening i think companies like the company i ran that depended on trade imports to help keep the costs of cans down, this is a big blow the reality is that if a pan cost goes up by any amount, one of two things will happen. the company is going to have to take the price or cut costs. margins are fragile in the food business as you know from our prior conversations, everyone is chasing growth it creates uncertainty and a little bit of confusion and it's going to lead to indecision, which is not going to be good for any consumer specific to the cans, then, just to get your take they said a penny or less. the overrecall cost of a can of

soup or beer or coke, it's tiny, bill are you saying it isn't? and if it is, it still matters >> it does matter. the you're a company pro produces 500 million or billion cans and you look at the cumulative impact, it has to be offset so, yes, it does matter. and in 2002 when bush tried this and pulled it back about 18 months later, we actually made the decision to get out of can making and farmed it out because the cost of tin plate coming in domestically was much greater than we could import back in there are repercussions that people can't determine at this point in time. and it's not just cans woe made a decision to go to pouching we changed some of our formats to go to pouches as a way to e

tine consumers it's got a rim effect. you say, let's see if i can take pricing across other spectrums in my portfolio andthese lead to decisions that ultimately don't benefit anybody. >> i understand all that, but if you could solidify the number on what the consumer will pay more in terms of a product that's canned if these go into effect. >> sure. >> is it just depending? >> no. it won't be a penny because it will come back to the case. >> how many pennies? >> my guess is going to be somewhere between 2 cents and 3 krenlts. when you're in very competitive categories like beans or soup, so forth, 2 cents or 3 cents makes a purchase decision. all of a sudden the consumer's price per sechgs is not two cents and she crossed the desk aisle that takes her to three figures as opposed to two. so the implications and impact

are far greater than a penny here or two cents there. >> that's very interesting in terms of consumer psychologist once you go over 99 cents. you said something else, chi found very interesting you said president bush tried tariffs, george w., and yet even though imported tin got more expensive, it was still too expensive to produce the tin here in the united states. did i understand that correctly? >> you did son and we may ultimately contribute to a decision to exit can manufacturing. we produced all of our own cans at the time around the world and it's hard to produce cans and ship them across the border simply because it takes up so much space we farmed it out and then we began to tune in and look at pet food and beans, and look at different format

pouches, plastic jars, other packaging that help us defray the cost and shift consumers' expectations a bit. >> tell me this. when you talk to members of the administrationing wilbur ross in particular, one of his frustrations is overcapacity in china. they subsidize steel, they subsidize aluminum, and therefore our producers are at a disadvantage and they want to be tougher on china do you have any sympathy for that argument when china act as what is against their own economic interest and therefore leads to huge amount of supply >> sure, i do have sympathy for that argument, but it's a real conundrum because matching them one way creates other issues down the road. two wrongs don't make a right in this case. let me give you an example if somebody put as tariff on beans, for example, we were the largest bean producer outside the united states. most of those beans came out of

michigan so navy beans were sent to the uk, new zealand, or zraiaustral. so if they put a tariff on it, not only does it hurt michigan but other arias. it's vicious circle and that's why i never liked tariffs. believe me, i totally understand the chinese conundrum because i dealt with them. that i tend to produce in the locals they can operate because they can source it more cheaply and efficiently. the other thing about production capacity suppose we put tariffs on and production starts to decrease. so somebody makes a decision, let's invest in capital and build a new facility or expand the facility three years from now we have a new president, new administration they change the tariff rule.

all of a sudden imports come back in and you've got in efficient production and capacity as a pittsburgher, i'm very sim pa thoughtic to it but i will tell you the name on top of the steel building is upmc, university of pittsburgh medical center, the iconic building that was built. that's what's happening. we're changing the economy. >> that, of course, the reflect that health care is a much larger part than steel you're on the board of u.s. steel and ups. are these things that have to take place in terms of a prospect of a potential trade war? >> well, i think it will depend on what the topics are and the strategic implications are of each of those companies. obviously ups is a company that ships products across the border

and this will be something we need to discuss in terms of its implications for us. pepsi is a slightly different situation. i don't want to speak for that board or endraw. they all become discussions in term os what you're going to to do overcome them. >> just so our viewers can understand, when you talk about the cost of the cain, you do have an understanding of it. overall, though, we spent a lot of time talking about the difficult time that certain consumer product companies are having selling in general, certainly those that are focused on the center of the stores we like to say, not necessarily the aforementioned pepsi i would assume then that any sort of a price increase doesn't help either given margins who are already under pressure, aren't they? >> i'm meeting with 20 investors to talk about consumer products center and food in particular.

it's not only just margins the industry is now shifting away from the growth and they're doing that by acquiring small startup companies or they're looking for opportunities in terms of creating their own niches by extending their own product portfolios to wherever they're going to on rate so the conundrum with this thing is really difficult. i wish pricing were easy to take i'm excluding pepsi from any of the products i machlkt i think pricing's been difficult and the industry is chasing growth. >> and finally give me a prediction where do you think this ends up going? >> i don't know. >> you don't know? >> i don't know. >> no sense at all >> my own view is i hope this just words and as a negotiating

ploy but the reality is i'm having a difficult time understanding anything coming out of washington i hate to make a prediction because it's probably going to be wrong is the wayite going right now. >> we appreciate your taking some time with us. thanks, bill. >> thank you, david. thank you michelle. >> bill johnson, former ceo of heinz. when we come back, a new snag in the possible deal between qualcomm and broadcom. the new intervention "squawk on the street" will be right back over 80 years.dent for call us or your advisor. t. rowe price. invest with confidence.

ghood good morning, everyone i'm sumer rare rah he says his coalition has won the right to govern italy. this after garnering 18% of the vote in sunday's election and it is enough for salvini to form talks. they're making advances

today in ghouta. the syrian government says it has achieved significant progress in its military operation, seegz about 36% of the region. walmart is expanding its meal kits nationwide after testing some of the services in some of its stores the ready-made meals will be available in more than 2,000 of its stores and they feed two and are priced between $8 and $15. >> and the first person to break the 4.0 mile roger bannister has died his family says he passioneed a sunday in the city where he broke the record many thought it was humanly impossible he passed away at the age of 88. that's the news. aisle send it back down to you. >> thank you, sue. sue herera. this morning shareholders of qualcomm woke up to unexpected news, ail thoerk it was shared

by broadcom. its current bid for the company is 79. tomorrow it was scheduled to vits annual meeting in which the shareholders would have its annual meeting in how many to seat on the board if all six were elected they would represent a majority of the directors on qualcomm's board. but that meeting's not going to happen this morning at 3:40 a.m. in the morning broadcom put out a press release in which it said it was informed sunday night, this being yesterday, that back on january 29th, qualcomm had secretly filed voluntary request with cfius they're the committee that investigates foreign investment the u.s. it's the "f" that gets me every time

at this point it's expected to redomicile here in the u.s it has not yet done so why was this undertaken at the last moment? what did broadcom really know about this cfius review? that remains in question broadcom was answering questions from cfius, but broadcom believes those were solely related to its plan to redomicile here in the u.s another key question, of course, will be if and when broadcom does eventually redomicile will they hold the annual meeting because cfius will no longer be in play? i don't know the answer. i also don't know if the record day for shareholders is going to be changed as a result of the pushback from the meeting. i also don't know whether or not given qualcomm may violate the 13-month rule if it goes past april what it may do about that. why don't i? first of all we haven't heard from qualcomm at all

as for the vote at that meeting, that was going to be the key the index funds, retail fund, where were they all going to come down here would it be three directors? four some, michelle, looking at this saying, gee, they must have known, it's a very entrenched move they made here although it was done on the 29th of january, prior, by the way, to when qualcomm raised its bid to 70, so that may give a little bit of relief. >> let me ask you this does broadcom think that if the deal did get approved, there would not be a cfius review? what i see here is nothing but a moving of the calendar date. >> they're a u.s. company. >> but they haven't redom sized. >> that's right. >> okay. >> if they haven't redomiciled -- >> i don't ever recall seeing a sif yis review take place prior

to that. >> right you're absolutely right. >> that's not the case it never happened. it's happened now. >> okay. but if the vote had gone their way, broadcom do, they think they would not have gotten a cfius review they absolutely would have. >> they're a foreign company if they signed the deal up, they might have although you could make the con tension that their quest is to redomicile and therefore cfius would wait. >> sievous is very concerned about the semiconductor industry and if you've been paying attention to cfius for the last couple of years, i'm astoll issued that they think they would not have done a review. >> once they redomicile, they would no longer be part of a cfius review. >> no, but i would think that there are other issues that the u.s. government would try to find within this i think they're very, very

concerned. >> what about to u.s. companies? >> we'd have to see. >> we have a lot of questions, but now it's time for our etf spotlight. >> that's right. body bob pisani is taking a look. >> a lot of this was due to etf involvement and what was going on in europe i want to show you what happened on friday. we saw a notable downdraft on concerns over what was going on with the tariff situation. but then once the european market closed at 11 k34r07b, markets turned around and stocks began lifting. we saw european etfs france, for example, had very heavy vacuum there's the turnaround the french etf had very heavy volume going into that they were selling the market we saw the same with sparngs ewp, some of the italian etfs as

well so people were using the etfs to express their concerned. so obviously they're very worried about the tariff issues. by the way, be careful about what etfs, you choose. they made a major mistake on friday they bought the slx but that's not the etf you want. that's mostly foreign stocks and they didn't do as well everyone they should have bought is the u.s.-based steel stocks it's on the top. the orange outperformed the one on the bottom, the slx look at what's in the slx. that's a very good example it holds mostly foreign names. that's the one a lot of people bought on friday wrong one to buy xme. it holds mostly u.s. based names. good explanation of why people need to be very, very careful when they start buying these

particular products. guys, back to you. >> good warning. thank you, bob. when we come back, president trump's tough talk on tariffs dominating global markets. so is a trade war on the horizon? ian bremmer weighs in next don't go away. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman?

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welcome back to "squawk on the street." i'm david faber along with michelle caruso cabrera. let's take a look. we're well off the lows. the s&p started the day down around 0.4%. you can see a .10% loss. nasdaq is down a quarter of a percent. generally speaking, a rather quiet trade. president trump's tariff announcement are likely to dominate the nafta talks that are going on today

steve liesman is there with more hey, steve. >> yeah, michelle. what's the word higher than dominate overarching is a way to think about it we have a tweet this morning in which the president linked the steel tariffs to the youtd come of the nafta talks, the nafta taking place in context of those steel and aluminum picks now we have our first response from the economics minister of mexico he's saying, quote, it's the wrong way to innocent advice the creation of a new and modern naf nafta. he's linking the nafta and tariffs all together in addition to wanting an exception. let me show you who the three players are. guajar 'do o is one of them along with chrystia freeland and

robert lighthize r >> i think countries like canada and mexico who are terrific customers for our american made steel fit that bill for exempti exemption. my thought let's take a breath and see what the final ruling by the president is and then we'll address it from there. >> guys, e don't want to totally leave the economics out of this, pnc writing out their worries about the effects of the tariffs. on the one hand they don't think if it stays limited it will be a big effect on the u.s. economy retaliation does that on the potential downside risk for economy but they see it as a single amount of retaliation

but the risk is the 1930s style and that's what they're worried about. talking about progress, there has been some progress rngs apparently according to roitders, they've agreed on food and safety and animal health parts of nafta why does that show you that? the people doing the negotiations were making progress and that might have been until the bombshell and tariffs landed squarely on the talks here in mexico city, michelle. >> yeah. it would certainly be an overhang thank you so much, steve. for more on the president's trade plan, we're joined by ee miami bremer, president of eurasia group. where do you think this is going? >> nobody really wanteds that is qala torrey round. they've expected these steel and aluminum tariffs for some time

now and they're ready for it certainly not anyone around trump. i mean those that have birthday advising him and his big donors, most of the republican governors, mayors that talk and have access to him, none of them are in favor of this and so as a kwens kwens, look, it doesn't mean trump is going to suddenly do an about-face and say, okay, i'm not going to put these tariffs on, but it's very drnlt to have a single round where we don't know where we end up and then suddenly say we're in a new protectionist environment. i think we're not that. >> so the collateral damage right now if these were to go into effect is on our allies, canada and mexico. but if you've been listening to the administration for the last year, particularly wilbur ross, he really feels a lot of this is about china and their overcapacity they a've got a large overset of capacity we've at chart here from dan rosen of the rhodium group that shows how much capacity got into

china. wilbur ross has been incredibly truss sfrated by this. china doesn't act in its own economictry by subsidizing uneconomic capacity and yet it does and therefore it depresses steel crisis what if anything should be done about that >> well, it's interesting that unlike the enormous pushback from "the wall street journal," the ceos, and all the watchers of your show on protectionism at large, there's a lot of support from the corporate community to hit the chinese for both lack of access to the chinese market, for promotion, chinese promotion of state owned enterprises and privately held national champions that leads to uncompetitive behavior, and certainly i think we are going see a much tougher trade environment, more broadly toward the chinese. i think it will play out more directly not on steel and aluminum i think it ooh going to play out

on intellectual property and what is considered national security interest from the americans and there i think you are really going to head to a much more challenging relationship between the americans and chinese, but still most recently trump has been careful in talk about the need and support of chinese and north korea. he's been linking that he hasn't moved away from that yet. >> you're referring in part to the 301 investigation that was undertaken by them last august. >> correct. >> it could take as much as year in but we could hear something sooner than that or action on that do you have any expectation on that when we get the reports from the u.s. trade representatives? >> i'm sorry to interrupt. this is about intellectual content. >> property. >> property. >> right. >> it's interesting when you talk to their leaders. it is an expectation you probably saw peter navarro,

the most hawkish, has been promoted to be the lead adviser on trade in the white house. that bodes very badly for garry con gary cohn. i think the willingness to expand emergency regulations from trump which he can do individually in saying that there are broad areas of the american economy the chinese will just not have access to, i expect that and i think they could easily become is cla torrey. >> all right thank you, ian good to have you on. ian bremmer, eurasia group. when we come back, baseball legend a-rod is investing in the next yen racing. we'll have a look at how he's attempting to shape e tuthfure of real estate "squawk on the street" will be right back

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all right. welcome back story we've been following this morning, qual come's decision to delay the annual meeting they issued a statement. there is a lot of back and forth between the two companies. let me read you qualcomm's statement. they say broadcom's rhetoric notwithstanding, this is a very serious matter for qualcomm and broadcom that means the review that is taking place and this transaction, broadcom's claims that it was a surprise to them has no basis in fact broadcom has been interacting with cfius for weeks as i reported earlier, however, broadcom indicated that th written submissions were in relation to the redomiciling in the u.s. and, therefore, they did not know in their own statement, broadcom said that it's critical that qualcomm stockholders know that they did not once mention

submitting a voluntary notice to cfius and says this brings qualcomm's engagement theater to a new low. they love those words. i like it too. engagement theater >> m & a trash talk there. >> you got it. all right. thanks, david. there is a new program teaching inner city kids how to invest in real estate which is drawing some heavy hitters to yankees stadium. dia diana olick joins us >> this is a principal at the carlyle group who wanted to give teenagers a path out of poverty by teaching them how to invest in their own neighborhoods so he started in detroit then partnered with former yankee alex rodriguez who now runs his own real estate investment firm and they pbrought it to the bron with bronx native j-lo >> i was born right down the street in washington heights and i've always loved baseball and love real estate and real estate is a way out of

the hood >> i've been in entertainment industry and in branding for 25, 30 years now you want to have conversations about that, we can talk all day. but this is a whole other language that most people don't know and to be able to teach this to kids who are not going to have the harvard education or don't have that opportunity is to me a beautiful thing. because it's not just about kind of your light, it's about owning your life. it's not about owning a property it's about learning how to manage everything about your life >> now the kids attended seminars, learning how to value and finance apartment buildings, then they pitched their offers for two real buildings, shark tank style to a panel of experts in the yankee board room including blackstone's president and coo jonathan gray. >> i think this works pretty much p anywhere. what you need obviously is some people on the ground, some people in the community, the business community, local real estate people who say i want to take some time i want to try to educate some kids and give them some

opportunities. >> now project destined actually buys the buildings and the kids get dividends from the investment in the form of scholarship cash if they keep with the program keep taking more courses online. it's really, really a great idea back to you. >> cool, cool story, diana you can catch more of a-rod's and "back in the game" which premiers next tuesday. you know where j-lo first learned to dance, david? >> where >> the upper west side >> i should have known the answer to that you're very involved it's a great organization. all right, let's send it over to jon fortt and look at what is coming up. >> with tariffs on the horizon, there is a new global picture for american bndras. ed republican ed renzy is going to join us coming up. you know what's awesome? gig-speed internet.

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much more ead ahon tariffs and trade. "squawk alley" is up next so don't go away.

good morning it is 8:00 a.m. at qualcomm headquarters in san diego. 11:00 a.m. here on wall street and "squawk alley" is live ♪