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good morning welcome to "squawk alley." i'm jon fortt here at post nine with mike san thole and michelle caruso cabrera lots to get to this morning. we begin with the markets. real fears of a trade war have been rocking stocks. stocks have been down all morning. but joining us now, kanltor's chief market strategist peter chacini along with head of investment strategy joe davis. good morning to both of you. >> good morning. >> good morning. >> peter, you're looking at this and say on the one hand stock volatility is at bay because volatility in the ten year is also at bay. but on the other hand, tariffs are causing a wrinkle in all of this it's a push-pull which way do you expect us to be pulled most immediate sfli.

>> there's an interesting push and pull between monetary and policy issues. we're looking at short rate vol which has been a key to us all year for equity vol. and now we have this new concern which is a trade war you know, implementation of tariffs is a little bit like dumping sand into the gears of commerce if you will so i think it's laa legitimate concern. then we have a much larger deficit which in turn impacts the rate markets so there are real reasons for equity markets to have taken a pause. >> joe, you say that china's response to all this is going to be the most important response initially at least publicly china saying this isn't going to affect us that much when it comes to steel we don't export that much to the u.s. what do you think the response will be though to the kind of dislocations that could happen between the u.s. and its allies if this does indeed go through the way the president suggested it would >> i think we're clearly going to see, you know, some more discussions on this matter

i mean, i think it's, you know, it's still too early to tell whether or not we see a significant escalation in the rhetoric as well as tariffs that we're seeing i mean right now even if the tariffs go through, it's unlikely to alter the global economic momentum that we're seeing which is fairly sturdy as well as expectations for monetary policy. but the risk is nontrivial that we can see further escalation. that's why i think how china responds is important. >> and yet peter, the market has gone positive in the last few minutes. so the massive selloff that we saw late last week and we thought maybe might continue today doesn't appear to be happening. why do you think that is is the worst priced in with that selloff? is something happening that has eased concerns >> well, i think the most important catalyst for the selloff early in the year really was short rates fall the move in the two year, the move in libor, it does affect company's cost of financing. two year volatility and ten year

volatility stabilized. we haven't seen the ten year get out of control and go above 3% part of that is this sort of natural governing mechanism that occur wlz equity market vol picks up, money flows back into the rates market, keeping rates low. so i think that's really the most important thing to look at notwithstanding the importance of tariffs, rates really are more important right now >> joe, how would you describe this pullback in stocks right now? obviously trade tensions are just one on this list of worries that have now become really foregrounded by a lot of what is happening here you have rates going higher. you have little bit of a unpredictable fed path at this point. so is this just kind of a correction, penlt up selling from last year or do we have to worry about the overall environment turning more negative for stocks? >> well, i certainly wouldn't be dismissive we went into the year expecting this high 70% odds of correction technically, we got that this time last month. we thought the market was underestimating the cyclical bounce and inflation and growth.

again, we have that as well. i still think the federal reserve, the market is a little bit more reasonable in terms of the expectations for this year but if i had to pin .1 of the most significant risks to the outlook, i think, you know, these trade discussions worsening materially which again i don't expect, that would be certainly the biggest down side risk to the equity market. >> peter, we did have that correction it was quick we were out of it. how does that change the way you look at these particular challenges and uncertainties that we're facing now at this part of the year does that make -- does that make the ground we're on perhaps more stable or less >> well, i do think thatthe shakeout, if you will, it was very short lived in equities was healthy. i think the backdrop for growth is still very strong but that's offset by the fact that valuations for u.s. stocks are very high which one is of the reasons why despite a very strong earnings season we were still able to get a correction in equity. i don't think any of this really affects the fact that we're late

stage, late cycle right now that the risks are always there late cycle when interest rates are rising we're still fairly constructive throughout the lerest of the yer >> does anybody care about the italian election sfs? hung parliament, does that make life in italy any different than it's been for the last several decades? >> no. i think europe is one of the bright spots we're always going to be in and out of some concerns with respect to the longer term viability of the european union and of the euro. but it's not something that is in the top three concerns in the near term. what we're witnessing right now is very consistent with what i think many expected ourselves included we have a lower return trajectory over the next several years, investment receive going to be more challenges, reduce risk premiums and higher volu volatility i think this is part and parcel with a lower return environment

at least for the next two or three years. >> keeping us on our toes. we'll continue to follow this, of course. peter and joe, thank you for joining us >> thank you >> thank you and a new twist in the qualcomm-broadcom fight. the u.s. government ordering qualcomm to delay its shareholder meeting this week another 30 days, originally scheduled for tomorrow, in order to take more time to review broadcom's $117 billion takeover bid for the company. the committee for a foreign investment in the u.s. is checking if there are any national security issues as broadcom is still officially domiciled in singapore the ceo of broadcom went to the house and announced plans to move the company's headquarters back to the u.s. after relocating to singapore a few years ago for tax purposes broadcom says this review was orchestrated by qualcomm and they secretly sent a cfius request in january to delay the deal they responded that broadcom is continuing a now familiar

pattern of deliberately seeking to mislead shareholders and the general public guys, the rhetoric is heating up here a lot of people in the industry and granted tech analysts tend to -- if they've been covering a company for a while, perhaps get attached to the management they're not necessarily for this deal because they see qualcomm as an r & d spender and innovator where broadcom perhaps more of a favorite of investors. >> sure. the other thing that is hard to handicap in terms of how this will go in potential negotiations and all the rest of it is just how much of it from qualcomm's point of view if they initiated this review is a tactic along the way to essentially have a stronger hand or is this actually, you know, really a defense mechanism in saying we don't want this deal to happen and, you know, it just seems like so many links in this chain. very hard to understand exactly what the market expects versus what the likely trajectory of this whole thing is. >> cfius is interested in anything related to

semiconductors, anything and we've seen that repeatedly and when you spend a the love time really looking into what f cfius has done is this moves the cfius review to pre rather than post when you read the journal editorial, the point is you no he there is going to be a cfius review maybe you should just tell the people who are voting about what the possibilities about that before they make the decision, right? >> does it become a mute point in may if broadcom is redomiciled in the u.s.? do they no longer have an issue a month later? >> that question remains to be seen but they're not there right now. and, therefore, look, the proponents of expanding cfius' per view are large there are many, many people in this administration and past administrations that want them to go broader than national security they want economic security. there is a lot of intervention

into this sector for sure. and this is reflective of that by the way, comes to the larger context of what we're talking about with trade steel and aluminum and china in particular right? it's all part of that. >> and, of course, if that's all, you know, kind of part of intellectual property discussion about, you know, that's what this -- the product is here essentially. so that would get beyond that whole well where is a domicile and really does the technology itself, you know, have any vulnerability to being exploited somewhere else >> exactly interesting. super interesting. >> yeah. huge issue >> the market is not caught completely by surprise both stocks down a little bit. who knows? >> all right coming up, iconic american brands being hurt abroad due to the president's trade policy former ceos of apple, pepsi and mcdonald's going to join us. more "squawk alley" right after this feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow.

with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

trump's trade policy is having far reaching impacts. we have the trade impact on defense stocks and on oil and gas. morgan, first to you >> hey, michelle so exactly 16 years ago today then president george w. bush unveiled tariffs on steel, tariffs that ultimately took infect for almost two years. now over that time the s&p fell 7%, dow fell 6%. the hardest hit stocks over that time period were aerospace and defense companies.

names like raytheon which fell 26%, boeing which was down 20%, lockheed mart ch lockheed martin which tumbled 16% and northrop grumman that is in part the sector uses steel and also aluminum to make everything from combat ships to armored vehicles to fighter jets but in a recent memo, defense secretary jim mattis did note that the u.s. military requires 3% of u.s. production which it comes to both steel and aluminum he did voice support for terre hautives dtariffs but said they should be targeted to not negly impact our allies. that is the biggest risk if you see tariff as cross the board for everyone, would some of our allies like canada or europe or others begin to retaliate? on cnbc, eric fanning also the former army secretary did say that is the biggest concern since aerospace and defense generate an $86 billion plus per

year manufacturing surplus and account for 2.4 million jobs in the u.s. exports, a much bigger deal of the overall revenue pie when it comes to defense contractors, whether it is raytheon or boeing or they have a big commercial business or whether it's lockheed martin which last year 30% of sales were international and as this media day goes on saying they expect that demand to continue. so many companies right now in this industry taking a wait and see approach meantime, we will hear from marillyn hewson later today. she's from lockheed martin we'll talk about tariffs, trade, areas of growth, tax reform, so much more. we'll begin rolling out that interview at 1:00. back to you. >> all right looking forward to that. thank you very much, morgan. jackie has more on how the tariffs could impact oil and

gas. >> good morning to you, michelle as we wait for the industry heavy weights to arrive here in houston, this issue of tariffs is certainly one of the key threads of the conversation down here members of the oil and gas industry are worried that they're going to see their costs rise if we do see a 5% tariff imposed on imported steel. now there is two ways to look at this this is an industry that struggled and volatile times in terms of oil prices to bring their costs down any kind of price increase, of course, is going to create a little bit of a challenging environment for them then there are those analyst who's are sitting back and saying, let's look at this in perspective. when you really boil it down and build the steel cost in over the finished goods, you'll see it's really a mid single digits percentage impact. it's not that much with oil prices over $60 a barrel these companies can absorb those costs. but the question, of course, the central question is if oil will stay over $60 a barrel that is the second piece of the conversation down here now you have iea out with a

report this morning saying u.s. production continues to ramp up higher that by 2023, just in five years, we'll see oil production in the united states at 17 million barrels a day. that could be impact philadelphia we start to seat costs rise you also have opec members descending on houston. their tone is different than what we saw last year. last year we were waiting for them to tell us what they were going to do. right now we're just trying to get a sense or a handle on where they see the market at this point. remember, you got the saudis, they brought the production dramatically down and the u.s. shale players are slowly starting to eclipse, producing more than the saudis are right now just under where the russians are so so many key themes here of course, we're going to talk about deregulation we're also going to talk about the impact of the tax policy for these companies. a lot to get to. but the other key thing is everyone keeps saying we don't know what exactly is going to happen with the tariffs. so like morgan said, we're in a wait and see mode here as well

guys >> yep yep. welcome to the club. all right. thank you, jackie. always super important oil production industry. so more on the proposed tariffs and the potential impact on the u.s. economy joining us from d.c. is the president and ceo of the american international automobile dealers association they represent all american car dealerships that sell and service international brands so that is bmw, honda, hyundai, jaguar, and mercedes good to have you here. >> great to be here, michelle. appreciate it. >> you don't like this idea. tell us what the impact would be on the membership. >> i think we're not unlike all the industries you've talked to today and over the last few days in that we're not really sure what exactly is going to be proposed we only know what the president said thursday. we know what wilbur ross and navarro said this weekend. it's looking like it's not going to be great for the retail automotive sector when companies like toyota, general motors, ford talk about the increasing cost

it's going to go into the steel that they need to build a vehicle. that cost is going to get shoved down the pipeline to the end user, ultimately the american consumer >> but i'm confused about something. don't they produce a lot of cars here right in the united states even though they are foreign brands so how would they be impacted? >> half of our vehicles that my members sell are built here in the u.s. in fact, toyota uses 90% of the steel that toyota uses is american made steel. however, there is about 10% that they can't get that they have to import so costs are going to go up. they're talking about $200 per car increase which doesn't sound like much, but we were very optimistic about the tax cuts coming through and what that was going to mean for 2018 and now you're looking at imposing a $3.5 billion tax on american consumers and the retail auto sector there is already been a flattening of sales. there's been real price sensitivity that we're seeing among consumers. and we're worried about what

this impact would have on that >> so when phil lebeau comes on, he says we have a tariff of more than 2% on foreign cars coming into the u.s but when u.s. cars go to europe, there is a 10% tariff. i mean on its face, you can understand why that would bother americans. right? why does that situation exist? >> there's a 2.5% car tariff and there's a 25% truck tariff on imported trucks that come into the u.s. which is why there are no imported pickup trucks. i think if there's an issue that president has with the eu and relates to tariffs, let's negotiate that out but again, i want to highlight the majority of the vehicles that we build -- we sell here are built in the u.s we're very proud of that fact. honda just had last week roll off the assembly line the 25th -- 25th million unit they sold in the u.s.en that needs to be celebrated. international automakers invested to date roughly $75 billion here in the u.s. we employ just over 600,000

americans. we're very proud of that fact. if they want to negotiate auto tariffs, let's negotiate auto tariffs on a global perspective. >> cody, what's wrong with the per item argument? you know, wilbur ross had the soup can and beer can. people will make the argument and break it down by car it doesn't raise the price that much why is that wrong way to look at it wlaen it and what is the right way >> extrapolate it over the units sold, it's a big impact. we were secelebrating the amount of money that american consumers were going to have in the pocket as a result of the tax cut package that was passed and we supported that but we're worried this is going to wipe out any positive confidence or positive money that consumers have to buy products, to buy american products here in the u.s. or anything else. so we're worried you extrapolate that out, how will consumers absorb a $3.5 billion tax in the auto retail sector and that's a real concern for

us >> well, $3.5 billion on 17 million annual units it would seem to me the membership is most concerned with how they stand competitively against others for example, you know, dealers that sell u.s. cars. is everyone not going to be more or less impacted in a similar fashion? in other words, it's not going to advantage one or another on the retail side? >> correct which is why you have seen, you know, you look at the impact of the tariff, they affect every car in the u.s everybody buys steel here, everybody manufactures some more than others. but you're going to see price increases across the board on everything you couple this with what does this mean? you now a supposed national security argument has been linked to the success of nafta that could also have real consequences for the retail sector and prices going up if that falls apart so that is something that again impacts the entire retail auto sector >> all right cody, thank you so much for joining us appreciate it. >> great to be here.

>> cody lusk >> up next, netflix taking home the oscar for the best feature what it means for lloohoywd and the competition. that is next stay with us 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.

netflix taking home a big win at the oscars. julia was there to see it. she joins us from los angeles with more on the winners and losers from last night hey, julia >> netflix shares did hit an all time high today. another all time high is netflix did win best documentary feature for icarus which mudbound had four dominations went home empty as was amazon nominated for "the big sick." fox is a big winner. they took home six statues, more than any other studio thanks to "the shape of water" which won four awards including best picture and best director. the studio that came in second place, warner brothers with five oscars going to dunnkir being

and blade runner universal pictures won four awards coming in third place including two for "darkest hour" and best screen play award for "get out." but what was really in the spotlight last night was the times up movement. a range of women spoke out about the need for diversity and inclusion with francis mcdorman and three of harvey wine steen's accusers took the stage to talk about diversity in film. other issues in the spotlight, immigration. the focus of deltoro's acceptance speech and a gun control message from common during his performance there were a lot of laughs for a running joke about a jet ski give away. there were no big upsets either with the awards or with the show itself as there was last year with that envelope snafu. we'll have to see what audience thought when the final ratings are out later today.

but based on metered market overnight ratings, so far those are down about 16% guys, back to you. >> julia, is there any thought out there that maybe one of the reasons the ratings were down is because it was highly anticipated that it would be a very political show? >> you know what i think one reason why the ratings were down is because there's generally correlation between how many people saw the movies that were nominated, sort of how big and how successful the movies are nominated for best picture and sort of how many people saw the movies that's going to direct how many people are going to want to watch the oscars so if you look back to a show a year where movies like "titanic" were nominated, so many people saw "titanic," they were really invested in the outcome of the show this year, altogether the nine movies nominated for best picture is the lowest box office in total for best picture nominees that we've seen in six years. i think that's really what is

driving the decline even more than the political issues. >> good explanation. thank you, julia markets are about to close in the uk. also continental europe. stocks recoup something losses from the friday selloff sparked by worries about president trump's tariff plan. germany among today's gainers helped in part by news that the spd voted to form a coalition with chancellor angela merkel's conservatives in italy stocks are in the red but well off the lows after falling into correction territory earlier in the session. the italian election results indicate a hung parliament but the populous five star movement received the most votes of any single party and the ruling center left suffered a major defeat on the m & a front, france's down on news of the $15 billion deal to acquire xl group the combination would create one of the world's biggest property and casualty insurers. italy is localized nobody's worried about it. >> it is i remember when southern europe was a big worry though >> yeah. >> we have so many other worries now or now that we've gotten all that worry out of our system

we're like something -- >> or we don't feel smart about worrying about the things that never really did have a huge market impact perhaps. i don't know >> one thing that is interesting. you know, every single party that was running wanted to spend more money right? they wanted to flout deficit rules. nothing. all of them want to spend more money. >> so they're following our lead >> and i also -- how do you say bond vigilante in italian? at some point you have to wonder, italy is now the fourth most indebted country in the whole world. very high debt to gdp ratios all of the politicians are dreaming >> probably vij lanlty gilante u say it >> let's get to sue herrera. >> thank you good morning, everybody. bill cosby arriving in court this morning attorneys for the 80-year-old comedian are trying to stop 19 of his accusers from testifying against him in his upcoming trial. his last sexual assault trial in june ended in a hung jury.

jury selection in this trial is scheduled to begin on march 29th the u.n. says an aide convoy carrying humanitarian assistance started entering the rebel held enclave of ghouta. they're carrying food for thousands in need. 600 civilians have been killed in the last two weeks. for the first time since the vietnam war, a u.s. navy aircraft carrier is paying a visit to a vietnamese port washington and hanoi seeking to bolster the efforts to stem expansionism by china in the south china sea area and according to a new study by bankwright.com, less than four in one workers are unaware of the change in the paycheck. the new revisions allow for employers to withhold less money from their employees' paychecks. that's the news update this hour back downtown to "squawk alley." mike, i will send it back to you. thank you very much. when we return, former mcdonald

ceo ed rensi joins us with his take on the president's new tariffs and what it means for qu orss.merican brandsveea "sawk alley" back in a moment.

trade war looming between the u.s. and european allies over the president's proposed steel and aluminum tariffs and with it a possible backlash or even boycott against iconic american brands overseas to discuss the possibilities, let's bring in former apple and

pepsi ceo john sculley, chief marketing officer at rx advance and also with us is former mcdonald's and former famous dave's ceo ed rensi. he is the chairman of fat brands gentlemen, good to have you with us this morning. thank you very much. ed, let me start with you here mcdon ald mcdonald's and many companies spent decades becoming global brands if you were running mcdonald's now, would you see risk to your brand. would you have a plan in place to navigate this landscape where there might be tensions among nation that's have both very much a part of your business >> well, companies like mcdonald's and fat brands are largely franchised and all of the european outlets are owned by locals. so while there is a national indication because it's an american brand, the reality of it is it's more local than global and, in fact, most of the countries mi

countries mcdonald's puts the native flag under the arches so people understand it is owned in country. there is backlash in some of the bigger cities. there may be protests by people that are affected directly by. this but trump has thrown a boulder into a still ponld and ripples are going to travel for a while. and where it affects companies like mcdonald's and fat brands is in construction where we're building new restaurants we have to equip the restaurants a little bit in packaging. but mostly innew development so i don't think there will be a severe backlash over this. i think it's going to hit the automobile sector hard i think it will hit the defense pretty hard. i think consumer brands i think will probably be pretty good >> john, how do you see this playing out? i mean, do you think there might be any kind of chilling effect, any companies kind of rethinking either investment plans or just having some kind of contingency, you know, to try to make sure not just that supplies are affordable and intact but just

that the brands don't get any damage on this >> i think the impact will be relatively small the latest pugh research shows that while there's a lot of discontent with the u.s. government and its policies around the world, that people still admire the american people they still love the american media, music, the american dream. so i think for brands like pepsi, like apple, like mcdonald's that there is not going to be a risk of losing the admiration of people around the world. >> ed, what about the uncertainty dynamic here does this and the potential ripple effects increase the likelihood that you'll look to local sourcing and overseas markets if you are looking for agricultural products to feed into your supply chain >> it there is no question that the restaurant industry will source locally every chance it

gets because the fresher the product, the better the product so virtually every global food company retailers of commodities value added if you will are going to source locally anyway the best lettuce to get in europe is european lettuce the same with beef and so on so i think they're pretty well oriented towards local sourcing as it is now >> i wouldn't want my lettuce coming from overseas think how long it would take it would be wilted by the time it got off the plane you mentioned when it comes to the american brand, you don't think that it would be injured enough or impaired enough so that it would hurt sales of american branded products. but what about input costs you're the former apple ceo, former ceo and president of pepsi. if you were running the businesses today, what would you be thinkingabout the potential for higher tariffs on steel and aluminum >> well, of course in the software industry, do you have a large amount of aluminum because

of the aluminum cans and bottles. so that can be a factor. but the reality is that in the u.s. we're going to be sourcing those cans from either the u.s. or from other countries that could increase the cost of packaging in the u.s but i think for the most part that's a relatively small part of the total cost. and i think that the real risk would be if people were disheartened around the world about american people, american culture. we haven't seen that yet perhaps the middle east would come closest to that where there is some concern about government policies that carried over, particularly immigration policies, particularly issues about muslims. but for most of the world, i think there is still a very high satisfaction about the american people >> all right we'll end for now. maybe seems like manageable issues we'll wait to hear about any

retaliation. john sculley and ed rensi, appreciate your time this morning. and when we return, kara swisher joins us after her sitdown with facebook's cheryl sandberg and the fallout for facebook stay with us with the dow up 153 'lbepots wel right back. but i'm not standing still... and with godaddy, i've made my ideas real. ♪ i made my own way, now it's time to make yours. ♪ everything is working, just like it should ♪

coming up on "the halftime report," is wall street overreacting to the trump trade

turmoil? we'll answer that question with jim cramer and the new name cramer recently bought and where stocks could go in the weeks ahead and the money manager behind boon pi boonz pickens esf joins us >> all right thank you so much, scott looking forward to it. let's show you what is going on with the markets we had a big turn around here. we hit solidly in positive territory. the dow was down 150 points. it is now up 180 add this to yet another day where we have larger than 300 point swings and mike san thoolsantoli -- >> we're right back where we were wednesday there was a selloff thursday and partial come back on friday. so you essentially got back that big kind of shock loss on thursday on the tariff announcement and everything. >> got it. >> right around 10:15 all three major indices, dow, s&p and nasdaq bottomed out and started

heading higher facebook chief operating officer speaking at the lesbian's tech conference addressing the me too movement to russian involvement in the election take a listen to what she had to say about the mood around silicon valley and social media companies. >> i think we have to understand what is happening. i think there are two major things that underlie this. one is that there's a real fear of and feeling of economic insecurity that technology has taken some people with it and either left other people behind or people are afraid they will be left behind and that creates a very legitimate fear. the second is that as the tech companies have gotten so big, we have a really deep responsibility and that responsibility grows as we grow. and so we need to address both sides of that. and that's what we're doing. >> kara swisher joins us now i wish i could have been there what was the big take away from what cheryl sandberg had to say?

she's usually so poised and knows how to address these issues is this one that's get ago way from her or did she nail it down >> well, i think she, you know, she didn't address it fully, obviously. nobody at facebook has i think they're trying to figure out a way to message this correctly. all these issues around russia and not just that but russia, tech addiction, all these issues where facebook is sort of in a target essentially and i thought she did a relatively good job. she did a better job obviously on me too and diversity. this is a crowd that was interested in these issues i thought she was a lot looser than she usually s you saw her interviewed a million times. i thought she was more forthright and more comfortable talking which was, you know, sheryl can be a little opaque. here she did a good job, at least trying to answer the questions. >> you know, you know how the conferences go the buzz in the hallways is the most interesting parts what was the buzz about this year for you

>> at this conference? this was a conference called lesbians who tech. so i think diversity and me too is a big topic here. sheryl talked a lot about this i was interested obviously in talking about russia a little bit at the beginning which we did at the top and so i think they really liked listening to her i think sherp expecting a different personality. she was obviously dressed more casually than she usually does in jeans and so i think she came because i think she wanted to be more out there on the issue. she hasn't been out there. i think mark zuckerberg is taking the lead here some other executives on twitter have talked a lot. and so i it this was sort of one of the first times she's really talked about it at length at least. >> you think they're going to be able to get their arms around this issue about controllingwh can actually post an ad or post in people's streams so that they know who it is >> yeah. i think they have to i think it's a critical part of

their business obviously, they're all facing regulation every day is different thing either it's youtube or twitter or on facebook i think they really do have to figure it out. i mean just "the new york times" wrote today that state department hasn't spent a dime of the $120 million used to fight this and so who is going to have to fight it? facebook, google, youtube, the big tech companies who are being used by the russians to manipulate elections and so i think it will be an interesting time but they certainly must focus people, technology, and really leadership on this issue because i think it's really tarnishing them i think they understand that very clearly now >> kara, you mention that sheryl sanldberg didn't answer every question you asked her including about tech addiction and this emerging concern out there that would seem to be one that people at facebook in general would feel as if it's very tough

to take on the construction of the product itself or the nature of the interaction of the product. is that something they're going to be able to leave aside for a while? >> i don't know. i think they talk about it a lot. mark talked about it a couple weeks ago. and sheryl talked about this idea of making facebook a better place to use where you're happier using it i'm not certain as i've said before the solution for facebook is more facebook but the solution for tech addicted facebook is better facebook that you use and it's more useful and it's more utility. when mark and i first met, that's the first thing he said to me. facebook was a utility and i think if you think of it that way it's like using any other thing that you might use and so i think they definitely have to address the idea of addiction and the fact that their business model is very closely linked to having people use it more. and i've used the term slot machine of attention they really do need to keep you there in order for their business to thrive and so it makes it difficult but

they can make it a better experience, i think for sure >> kara, i thought sheyrl's answer on that was interesting she seemed to suggest it was people's economic fears that were driving their concerns. fear of job dislocations versus just the idea that some of us might feel this sisn't good for us what did you think of that response versus there is something fundamentally wrong with spending that much time on a device >> i don't think that was that link, jon. she was talking about the generalized feeling in the country right now. we were talking about how -- i think that is what she was talking about. i don't think she was linking it to tech addiction. she was talking about the mood in the country right now we were talking about the idea that tech companies in general when they're worried about ai and robotics and automation, that's what she was answering about. >> okay. thank you for clearing that up kara swisher from rico thank you for joining us let's get a check on the

markets. the dow jones industrial average higher by 188 points s&p 500 higher by 21 nasdaq higher by 52 points we've had a big intraday turn around yet again we completely erased everything we lost on thursday and then some some so back off to the the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

welcome back to "squawk alley. vegas casinos are getting nervous about the laundering of

legal marijuana money into the their businesses who else but jane wells to cover this in las vegas. hey, jane. >> hey, we want to separate our sins in sin city can cannabis and casinos mix no, say the casinos, slons pot is illegal at the federal level. look, we've seen new scienigns there's a new warning that there's no pot allowed and if they find evidence of it in your room, you're going to face a $50 room cleaning charge but look, pot is huge here in the eight months since it became legal, there's been over $200 million in sales. the problem is, it's an all cash business so here's what happens the ceo of a major cannabis company told me guys will come in with the cash turn it into chap chips. gamble bable with a little then cash in the chips for a check that they can put in the bank account laundering legal at the state level illegal at the federal and so the casinos want to weed that money out and even companies

which don't fiphysically handlet are being impacted the ceo of mass roots, a cannabis news and review website, he was banned from the wynn for life after listing his company on an application for a lail loyalty card >> i would like to not be banned from these institutions and it was very embarrassing to be escorted off the floor even though we're a business that is complying with all regulations and compliying with state laws it's disappointing >> all right the wynn wouldn't comment, but dietrich says it sent him an e-mail saying the customer due u diligence procedures identified your business as a marijuana related entity that derives its income from marijuana. unfortunately, this puts your source of wealth in the marijuana field as this is being paid from business of the sale

from marijuana bun interesting exception. allowing casinos to continue hosting cannabis trade conventio conventions. gu guys, that kind of money from pot is okay, i guess because kwacasinos aren't changing from. they're not handling the cash then turning it into chips and check. back to you. >> jane, the big concern is they could lose their license right? this is what worries all casino companies. >> absolutely. they are regulated in a sense as federal, financial institutions. with federal regulations becaus they're lend iing you money. they're exchanging money this puts them at risk in pot is legal at the federal level even though this is completely legal money at the state level and for these industries, they cannot take this cash and put it in the bank. >> jane, are they being tougher on pot than they are on prostitution prostitution isn't legal at the federal level, but if the

ordinary person of one of these came would he get escorted out zpl no you're right a casino is not going to lose its license for issuing a bunny ranch owner a loyalty card for something that the state recognizes i don't know if the bunny ranch would do that. but this is something where they're handling money they're changing money and they just don't, they're being very conservative about it. so funny because of all the industries in america, the gaming industry perhaps more than any other makes sure its is are dotted and ts are crossed when it comes to the feds. >> thanks, jane. when we come back, an amazon checking account more on the report that is causing some firms to sweat. stay with us hi i'm joan lunden.

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appeal to younger consumers and those without banking accounts it's the latest sector amazon plans on entering after a busy year that saw the giant get into groceries and move into health care following j. ining morguejn b. people familiar with the matter say this kdoes not mean amazon i looking to become a bank the stock up more than 1% this morning. that does it for "squawk alley." now time to head to scott wapner and the half welcome to the halftime report top trade this hour, the tariff tip. what trump ice trade battle means for your money and whether stocks which are teenastaging a reversal are overreacts. with us today, joe, josh and krji cramer the dow had been looking at its fifth straight down day before the big turn around