good morning, it's 8:00 a.m. at facebook in california and it's 11:00 a.m. on wall street and "squawk alley" is live

good tuesday morning welcome to "squawk alley." i'm carl quintanilla and jon fortt and megan brennan. the dow lower after breaking the four day losing streak investors digesting the tariff plan, news that north korea could be interested in direct talks with the u.s. and potentially denuclearization for more on that, let's bring in private bank executive director and global investment specialist pat schaeffer and senior portfolio manager and senior vp jim lacamp moderate shopping here, jim. we try to digest the headlines that may lead to policy directions one or the other. how are you handling there >> well, i think policy is a big issue here for the markets, not only on the fiscal side, tariff side if you look at the central banks not only domestically here but around the world, you've got policy chief amongst concerns. now you've got the tariffs

throwing in there. but, look, we don't think that that trumps the underlying story. inflation still very low interest rates still very low despite an expected maybe four rate hikes by the fed. share buybacks are accelerating and are running at a record pace we just saw in february the largest amount of share buybacks we've seen since april of 2015 corporate earnings set to grow at 16% gdp in the united states probably somewhere around 2.9% on a real basis after inflation. global gdp 4.1%. yeah, we have dark clouds out there. maybe even some canaries coughing in the coal mine. when you look at the weight of evidence, it's still squarely on the side of the bulls. >> pat, how does this recent trade turmoil change the way you recalculate the growth odds in different industries you look at tech, software, we don't talk about them as much as being potentially hit by some of

the reprecushions from this u.s. trade tariff move. how do you look at it? >> clearly, it's hard to draw conclusions in a meaningful way until we get the details of the plan later this week from president trump. but industries that have more steel and aluminum input such as autos, beverages will clearly experience the brunt of the negative impact from higher tariffs. sectors such as technology, health care, financial services should continue to do really well and experience the underlying earnings growth that has remained intact over the course of the last couple of years. it's not a surprise that those three sectors are also the sectors that are generally speaking leading markets higher to start the year. >> and, jim, if you take a look at what has been moving higher, it is the industrial names, the companies that would potentially see higher input costs from higher steel and aluminum

prices if we were to see the tariffs put in place, the fact that we're seeing names like caterpillar rally today, is this the market shrugging off the seriousness of the promised tariffs? >> i think the market is shrugging it off to a degree look, it might be a little bit inflationary it shouldn't be a lot. so if you look at caterpillar, it is a global growth story. if you look at the kinds of companies that are doing well and buying back their own shares, they're companies that have growth stories. i wouldn't try to trade the news i wouldn't try to trade whether we're going to have tariffs or not. what i would try to do if i was an investor trying to play the volatility in here that the news is creating is that i'd say what i do want to own technology, they're buying back shares financials, they're buying back shares buy those on weakness. we'll see more volatility. the market could sell off and retest the lows. use that volatility to buy what you want use the rallies to get rid of what you don't want in your port

foll portfolio. it is going to be difficult to trade the steel and aluminum stocks around the news this is a president that's been very unpredictable so trading around what you think he might say, i think that is going to be difficult. instead, focus on companies that are growing their businesses, growing their earnings and buying back their shares >> although, pat, we are sort of at a fork in the road. jim says buy what you want, don't worry about whether we're going into a trade war but if in fact we were to go into a trade war, that would affect all kinds of sectors that have nothing to do with in this case machinery or beverageors cars, right? i mean, if reprisals are significant, you're going to gret having boug regret having bought the names last week. >> that may be true, karcarl over the long term, jim is right. focus on the underlying growth those trends are intact. the repricing we experienced in the first half of february on the back of higher inflation and

higher interest rates data was of great buying opportunity. we added to equity exposure in the pullbacks. i would use buy -- i would use pullbacks in the market as an opportunity to buy on dips when we look at the underlying drivers of earnings growth across the s&p 500, it remains very much intact also, remember this is not the first time we've had trade skirmishes autos in the 1990s, steel in the 2000s. neither of the trade wars had a meaningful impact on economic growth over the medium term. it will create volatility. but ultimately, those periods of volatility should be viewed as buying opportunities in light of the underlying growth that we're experiencing and not just the economy but also corporate profits. >> jim, what about geographically we've been telling investors you guys have been telling investors i should say, be sure you're diversified ever since we had the shocks in the markets. now trade wars potentially or at

least tariffs have impacts on other countries. does it change the way you look at asia? does it change the way you look at latin america i know you're talking about not trying to trade around domestically, but what about internationally? >> look, internationally we like global growth. if you look at global trade right now, it's very, very strong i think there's a powerful disincentive for trade wars to grow from here i don't think it's going to happen using that as my template, i like global growth and arab yach -- seich asia there are still problems in the countries. but when you look at the data out of europe, it's pretty strong the valuations are pretty good the growth rates are pretty good so we like global growth we particularly like the emerging markets and i would agree, if this trade talk creates more volatility along those fronts, then i'm more likely to be a buyer

particularly of emerging markets than be a seller because i don't think they're going to grow into a global trade war with global growth and incentives as strong as they are right now. >> finally, jim, when we get headlines out of the eu like we got on friday targeted bourbon and harleys, does that make you second guess yourself? >> you're always second guessing yourself i do that every single day i still say that the weight of evidence is very strong. if you look at the deregulatory environment in the united states, you're starting to see that spread across another areas of the world could this grow? could this get worse yeah, it could i just -- i'm not operating under in a assumption now. if we start seeing the charts break down and start seeing the global moving averages slip below the 200-day moving averages, if we start getting the message that we have a bigger problem here, absolutely i'm going to re-adjust my thinking

>> jim, pat, thank you guys. obviously so many unanswered questions as we move through the day. we'll talk to you guys soon. thanks so much >> thanks, carl. shares of target drifting lower after the retailer missed the mark on earnings courtney reagan is in minneapolis with more. >> hi, john. good morning i think there is some disappointment from the market here target wasn't able to take the stronger than expected sales and translate them into higher earnings so it was a mixed quarter for the holiday quarter. earnings missing by a penny. pressure there from higher wages, also some higher expenses, margins being crunched a little bit by the cost of digital fulfillment that is more expensive to fulfill the orders. revenues though, however, were stronger than expected and so were comps first quarter, the current quarter earnings guidance, that was a little below what analysts are looking for. the full year earnings guidance was a bit above. if you look at comparable sales though, up 3.6%, that's the strongest growth rate that we've seen from target in about three

years with january actually stronger than what we saw in november and december. and then if you look at the digital sales component, something target is really working on, digital comps group 29%. online sales ended up making up 8% of target's total that number does skew higher during the holidays. but that 8% is also above where target was in last year's holiday quarter. that comp growth was split in between the stores and online. that's an improvement in the holiday's 2016 the stores actually were quite drag on that overall comp number. that is something improved because of stronger traffic in the stores now here today in minneapolis target will be meeting with investors to update them on that three year, $7 billion investment strategy. there is a lot that goes into it but in the first year, target has remodelled 110 stores, added around 30 of those newer small format locations, added five new

home and apparel brands. that retailer also added a number of programs to speed up delivery they acquired shipped. can you get same day delivery in the south. also same day delivery for a fee in new york city plus, there is target restock and drive up those are in pilot phases right now there's a lot to talk about today. whether we s when we sit down and speak with the chairman brian cornell on "power lunch." between now and then, there is an investor meeting. we'll bring you the updates as we have them for now, back to you >> all right courtney, thank you so much. when we come back, trade top of mind for investors with the president saying won't back down on tariffs we'll look at the potential consumer impact with the former ceo of saks fifth avenue plus, former trade rep will tell us why he's against the tariffs. more "squawk alley" with the markets coming up, dow down 106.

president trump is not backing down from plans to impose tariffs on imported steel and aluminum this despite resistance from within his party. listen to what paul ryan said just a little while ago. >> well, we're encouraging the administration to do is to focus on what is clear clearly legiti problem and be more surgical in the approach so we can go after the true abusers without creating collateral damage >> fears of a trade war clearly

keeping politicians and many executives on edge joining us now former chairman and chief executive officer of saks incorporated and global automakers president and ceo welcome to both of you, gentlemen. steve, if you were running saks today, what is running through your mind with all of these rumbles about trade impacts? >> look, retail has gotten better we've got good trends. the quarter was pretty good for most retailers you got momentum tax reform is a positive and there is a fear that if you have these tariffs which are simply another form of taxation that if you get into a trade war with retaliatory action and it goes into things like apparel, it could dampen the effect and hurt the momentum that we have right now and people are very worried about it >> john, i imagine it's a busy week for lobbyists on capitol hill with republicans saying they don't like the idea of a blanket approach here. what are automakers doing kind of behind the scenes to try to

get some influence into what eventually ends up happening here >> yeah, these tariffs, if they go into effect, they're going to raise prices on american consumers. they're going to invite retaliation. i agree with steve, they're going to set back the benefits of corporate tax reform that are now creating more investment into plants and equipment. so we don't want to do that. and i very much appreciate the leadership of speaker ryan, the senate finance chairman hatch and others who have really said, look, let's take another look at this let's get back to the drawing board and focus on the real problem here. >> and steve, sort of digging into tax a little more some of the biggest beneficiaries of the tax reform bill, if you see tariffs go in place and trade across the board and trade retaliation in return zshgs that wi , does that wipe out the positive effects >> it may well my estimate is you have five times as many job losses as you

have job gains as a result of the tariffs. right now we're seeing positive momentum the tax reform is allowing retailers to reinvest. you saw the fourth quarter being pretty good. january was good numbers you saw even target today who disappointed a little on the earnings said that january came in strongly. so consumers are in the stores the last thing we need to do is stop the momentum that we have >> retail is not a big steel using industry you're talking about knock down effects from consumers having less discretionary income? >> there is some effect. you're investing a lot in the internet internet takes a lot of warehousing. you have a lot of growth in that you have steel for all the racking systems that you're building for all these distribution centers so there is an impact on the retailers. i'm more worried -- i'm worried about that i'm more worried about getting into a trade war and you start affecting all of the products. we have a lot of imported products and retail that can't be made in the united states we don't have the capabilities we don't have the technologies,

the labor costs. there's a the love reasons why we're importing products >> and, john, we're talking about tariffs right now. the other big focus is nafta and the future of the talks around renegotiations of nafta. if that were to go away and there was all this uncertainty around trade in north america, given how integrated that supply chain is for the auto manufacturers, what happens then i would imagine some of these suppliers and components makers are already coming up with next plans, right >> yeah. you know, it's a double whammy right? you have the uncertainty around whether we can land a nafta deal that continues to support a competitive u.s. auto industry as well as these tariffs hanging out there. so i think it's really important that we get a balanced approach. you know, we're competing with major manufacturing centers in asia and in europe and we want to win that competition. and the key to winning that competition is having a balanced approach on nafta that supports

global supply chains which increase american jobs we're making a million more cars and trucks in the united states today than we did before nafta every year that's a great story for the american autoworker and for american consumers we want to keep that going we can't afford to get either of these two things wrong >> steve, some are -- they have a theory this is all a gambit connected to nafta and something they can use as a chip later on. is that something you respect or playing too much with fire >> this is playing with fire it's high stakes roulette. i worry about the consumer in the end, the consumer is two-thirds of our economy. we have a healthy consumer today. anything that we're going to be doing that is going to hurt that, is bad for the consumer and bad for jobs and a tax we don't need so i'm worried about it. and i feel very good about what was done on tax reform relative to helping corporate growth, helping the consumer and if we go backwards, we're moving in the wrong direction. >> story we're going to continue

to watch very closely. gentlemen, thank you >> thank you when we come back, the world's largest energy company is trying to get in on cloud computing. what the company's said exclusively to cnbc about disrupting the space plus, a special edition of "fast money" coming up tonight take a listen. >> fast is going west in search of digital gold. we're at the most important blockchain conference in america to talk to the biggest investors in bitcoin that's today at 5:00 p.m. on "fast money. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. and at $4.95, you can trade with a clear advantage. 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,

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fidelity. open an account today. it is day two of the energy summit in houston. we sat down for an exclusive interview with our brian sullivan let's get over to brian in houston. it's big oil meets big data, brian. >> yeah, jon you probably wondering why sullivan up here talking about oil on "squawk alley." because this is not about oil. this is about technology

obviously this is part of a wide-ranging interview with the ceo of the biggest company in the world. now obviously you think of aramco for oil and they do but all about drilling and geography and products, there's a lot of data and analytics and need for computing power so we sat down for an exclusive with the ceo we asked him, are they going to do a deal with google or amazon or somebody else to bring billions in technology to his company and his country. >> i think with google and amazon and other companies -- major players when it comes to cloud computing and we're definitely looking at all of these companies and looking at investment and growth in these markets in cloud computing i can't reveal more in terms of our discussion it is something that we are keen on and we're looking for the opportunity to enter that market >> so tech comes to the kingdom

is a possible headline >> data analytics and using data is something we have been doing a lot of work on and we will continue to work with our partners also to expand our operation and increase our efficiency and also cut our costs. >> you know we think about aramco as a supplier, they are they pull oil out of the ground and supply it to the world you have to also think of them as a massive consumer of service as well. i guarantee you guys when they go public, they're going have a lot of capital, john and morgan. the googles, amazons,microsoft of the world are salivating over the prospect of maybe getting billion plus dollar deals from aramco they're a big spender as well. >> absolutely. the number crunching necessary to make sure you're drilling in the right places, the efficiencies he talked about, every player is going to want that in their cloud.

zbl >> absolutely f you're the salesman that gets that deal, congratulations. much more of the exclusive interview all day long right here on cnbc we have shell, bp, a bunch of ceos we're just getting started back to you. >> all right looking forward to that, thanks. now let's get to seema mody at hq with the european close coming in a couple minutes >> european stocks are rising for a second consecutive day the main catalyst being north korea. suggesting it is open to talks with the united states giving up about giving up nuclear weapons. waning fears of a trade war also adding to sent as you can see here, the biggest gainer is italy. up almost 2% today following sunday's election. and this rebound is in reaction to reports that rival populous parties ruled out a coalition easing concerns about a potential hard line government yesterday the italian markets did enter correction territory briefly before rebounding up 1.7% today the euro is rising against the u.s. dollar with the ecb policy

meeting just two days away it's at 1:24 and moving on to m & a, europe's largest cardboard box maker is soaring. they got a takeover bid from international paper of the united states. saying the deal fails to reflect the company's strong growth prospects. that stock up nearly 20% and take a look at the uk grossers there is new data showing that text sco and morrisons each posted sales up 2.7% year on year outperforming walmart and germany's aldi are gaining market share on britain's big four supermarkets. sainebury is raising pay for the staff but eliminating breaks lastly, with all the trade talk, european steel makers are slow there are several that have yet to recoup losses since friday's tariff-related selloff all down 2% to 3%.

morgan, back to you. >> thank you, seema mody at hq. former trade representative ron kirk will weigh in on the likelihood of a trade war. meantime, let's get a check on the dow at this hour we're down about 137 points right now and what's been ssrangr volatile tdi seion. more "squawk alley" straight ahead. hi i'm joan lunden. today's senior living communities have never been better, with amazing amenities like movie theaters, exercise rooms

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good morning once again, everybody. i'm sue herrera. here is your news update at this hour south korea says north korea is willing to hold talks with the u.s. on denuclearization and will suspend nuclear tests while those talks are under way. south korea's president speaking at a graduation ceremony at the korea military academy says his country must engage in dialogue with pyongyang west virginia's governor and senate republicans have reached a tentative deal to end the nine day statewide teacher strike by giving them and all state workers 5% raises. to help pay for the deal, there will be a $20 million reduction in state spending. it is day two of the pretrial hearing for bill cosby. the 80-year-old arriving at

court this morning his lawyers are trying to convince a judge to block some of thinks dozens of accusers from testifying against him. and a johns hopkins study suggests using diseased kidneys could expand the number of potential donors researchers enlisted ten very sick people who were willing to receive a kidney infected with hepatitis c. they were given medications to clear the medication none of the recipients ever showed signs of the disease. you're up to date. back to carl all right. sue, thank you very much canada has a lot at stake in the vent of a trade war, especially when it comes to steel. but those proposed tariffs are all contingent on a potential nafta deal we're in ontario with more on that >> good morning, carl. a lot at stake especially here in hamilton, ontario, which is really the heart of canada's steel industry and no one knows that -- those stakes better than nova steel, the owner of this plant.

at the far end of this very large room they have been just recently invested about $5 million in brand new equipment they invested another $5 million at their plant in montreal they were caught completely off guard when trump announced tariffs and then also said that canada would only be excluded if they played ball on nafta negotiations and agreed to american terms now this is something that you just heard treasury secretary mnuchin reiterate. he said the united states wasn't trying to start a trade war. guys, many people here in canada disagree with that we're already seeing the impact of the threat of tariffs and a larger trade war on the canadian markets. the canadian dollar is sitting near 8 year lows and the ceo of this plant of nova steel tells us that the spot steel market on the canadian side has ground to an almost complete halt because of all the uncertainties we also talked to workers at this plant they say they are very worried have a listen. >> it's a big stressful time

because they don't know what their future may hold for their jobs and job loss and downsizing >> everybody is worried. it's -- that's the talk of the town everybody is not sure what's going to happen, right uncertainty is killing everybody. >> now the cities of hamilton, the chamber of commerce says as many as 40,000 jobs direct and indirect could be affected by the tariffs. now where canada stands, they're trying to separate the nafta negotiations with the idea of tariffs and an exclusion whether they get there, no one knows they're all just waiting to hear more details like everyone else. guys >> that does seem to be the approach watch and wait see what happens thank you for giving us that context from canada. steve mnuchin wrapping up testimony where he had a heated exchange with david young -- dave young, excuse me, who asked him how much he actually knows about tariffs. take a lins.

take a listen >> i can tell you the president loves farmers and the agriculture community. >> it doesn't seem to with some of the policies that are coming out. and there's great concern with folks in the heartland and concerns as well with retaliation and what may mean to our economy. we've seen the tax cut in jobs creation act was great we're really feeling the benefits of that and there's a fear out there that any kind of a potential trade war, retaliation could really blunt the positive effects with the economy from the tax cut and jobs act can you comment on that? are you concerned at all with that >> again, i'm well aware of the fears of trade wars. i can tell you i've had very specific conversations with several of my counter parts. we're trying to deal with this on a case by case basis. we've -- the president very

involved in this again, i look forward to having the details, the exact details of this released we're trying to get it out as quickly as we can this week. again, i think when people see this, again, i want to be clear, the president does want to make sure we protect the steel and aluminum industry. he does understand the potential impacts it has on the economy. and i think we have a way of managing through this. >> for more, we are joined by ambassador ron kirk, former u.s. trade representative under president obama. thank you for joining us today, sir. >> good morning. thanks for having me >> so you just heard the commentary from the treasury secretary. we're not looking to get into a broader trade war but we need to make sure that trade is fair and that our steel and aluminum industry is protected. as somebody who spent time in -- on the hill and in the white house doing just this, looking at trade, what is the best means to protect u.s. aluminum and steel and not get into a trade

war? >> well, i think we have to do a number of things one, and i think you can surmize that i'm not that impressed by the current administration's approach just because it seems more impulsive and we don't need to be doing this by tweet or off the hand comments this needs to be thought out within the administration, announced as part of a rational strategy i certainly don't quarrel with the president's desire to protect jobs i mean, i was privileged to work for a president that gave the steel and aluminum industry the best hope they could have gotten by saving the american automobile industry. and we had one of the most robust enforcement programs of any administration but we also realize the united states can't hide from one inescapable truth. 95% of consumers live somewhere else and we believe and have faith in american businesses to innovate,

invest in their workers and go out and compete. so we're not just consumers, whether it's of steel or aluminum or anything else. but we're selling those products and my concern is what the president has done i mean, he takes offense at something and then puts out a policy, wants to use that as a billy club whether it's in the nafta agreements or with korea and it really helps -- hurts us in so many other areas and we know the last time the united states engaged in one of these tariff wars that the president seems to think is easy to win most economists agree was probably the worst thing that happened and prolonged a great depression for years so there just has to be a more aware approach to a broader strategy and we also need to be honest with workers that i know are hurting. the reality is that most jobs lost in manufacturing in this

country over the last 50 years have been because of automation and introduction of robotics we need to honestly look at how we retool these workers so that they can be productive and be gainfully employed in an economy in which we're going to use fewer and fewer workers in the production of manufactured goods. >> and certainly automation say big issue here a lot of the companies i follow are rolling out plans to reskill the workers. i want to dig into this idea of tariffs just a little bit more we have actually seen certain types of tariffs in recent years. we've seen targets tariffs on the solar side, towards chinese companies under the administration you worked in, the obama administration in 2012 and 2014 more recently we've seen duties levelled on steel import steel and aluminum coming in from places like china, south korea, italy, india and taiwan in recent years what would make these tariffs so much more detrimental to the

u.s. kmaeconomy and the global economy now? >> part of it is the way it was announced. our administration did use a separate tool that allowed us to put tariffs on tires but the president -- president obama did that in the very targeted way i think our tariffs were 2% or 3% i heard a lot of commentators say it led to increase on price on tires and loss of jobs. but the reality was because of that action, we had the first new tire plant built in this country in almost 15 years the bush administration put tariffs, as you noted, on steel and aluminum it was done in a very targeted way in compliance with the law that congress put in place that authorizes president to do this. and it was done for a specified period of time you never had it done this way in the manner that president has done and then when he backs it up, it feels like almost daily or nightly with another tweet and the another threat that just

teams to not take in consideration the reality of how business is done and in particular -- >> sir -- ambassador, i'm wondering, the national security rational behind this in particular, how much is that going to change the way other countries tried to react in various situations whether they're imposing tariffs or other things that might seem to run afoul of the wto? >> a real fear there is that that is such a broad blanket and in many economies that don't play by the rules, that we have successfully sued at the wto once you just blanket everything under the guise of national security, that will be used defensively against the united states whether it's in places like china or other emerging economies that will keep our products out of their markets. and i know it's difficult for us but the united states is a country most admired because we

are -- we lead with the rule of law. we believe in having transparency, in telling people what the rules are, and trying to get everybody to play by that that's what makes our organize s in the world trade organization so successful and then when we take the kind of actions that at least to now the president is proposing, it sort of punches holes in that and it invites mischief by other members of the wto that then leads to this unraveling of the entire rules based trading system i think that would be horrible for american businesses and their workers. >> ambassador, we have to leave it there thank you for joining us >> thanks for having me. >> ambassador ron kirk, former u.s. trade representative under president obama. thanks when we come back, facebook under fire again the shocking question the company posed to users straight ahead. and a quick check on the major averages the dow down about 135 points.

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coming up on "the halftime report," exclusive reporting on how divided the white house has become over trade. we'll have the latest on the fight, facts and why your money might hang nin the balance and one analyst on mcdone

algdz and t mcdonealds and we'll see you in about 15 >> can't wait for that, scott. thank you very much. facebook's under fire for asking users if it'sokay for adult men to solicit sexually spl explicit pictures from underage girls? the company's vp of product said we run surveys to understand how the community thinks about how we set policies, this kind of activity will be and completely unacceptable on facebook we regularly work with authorities of identified and should not have been part of the survey that was a mistake facebook stopped the survey. joining us to discuss is former chief digital officer of new york city and the met and colombia university. good to have you the history, the recent history of facebook executives on twitter is checkered >> facebook executive for twitter is their favorite platform to speak to the public which is interesting this survey, i mean this

question definitely looks like it was spun out by anal g algorm >> what kind of an algorithm spits that out >> here are the issues do you like it or not like it? i think they sort of -- >> how is that an issue? what should we do if an adult male solicits pictures from an underaged girl >> they like to see everything in terms of columns of issues and columns of, you know, actions, what they do one way or another. i'm not saying that's what happened here. i think it speaks to the general tone deafness of silicon valley and how they approach things and facebook in particular in that, you know, they always keep saying they're not a media company but they have all the problems of a media company and even worse in a lot of ways. it's user generated stuff. they have to figure it out >> i think we're seeing all the problems of facebook come home now. the power, the reach, when you have two billion people doing all kinds of things, there are going to be issues and now you're seeing the companies going to have to focus to say how are we going to get ahead of this? some of this is unforced errors.

some is self inflicted just this morning i was on a call with a journalist in india asking the same questions. >> really? >> this is reverberating around the world. but not just this particular issue. it seems like there is so much going on with social media all the time this feels like especially fraud given everything happening in d.c., just adding to the tension. >> feels like every time we talk about the company and it's about how do they slow things down how do they put up gates how do they establish human curators that's the opposite of the tore i had growth we were in a couple years ago. >> every move they make is about how they want to make evaluations without then making the evaluations. meaning, facebook executives are facebook people. they want the people to make the evaluations which is why the surveys are stemming from we want you to decide what you think you trust or what you think is on facebook i mean that is problematic you get surveys like this but you also sort of end up getting a chaos of values sort of circulating out there. there is no way to actually sort of decide as a company what the next big step should be for

that >> you're essentially surveying some of the very same users that are causing some of the issues on facebook. >> right >> that's the irony. >> absolutely. we're seeing that time and time again. and the wisdom of the crowd is only works to some extent. when you're a company that can change the world like this, you have to be super careful about what you're doing. it's not just facebook but all the companies have to be aware of this and paying attention. >> ed, it seems to me that one of the issues -- i'll ask you this i already peppered you with questions about the sense or lack of sense behind this. it seems to me that issue here is why are they even asking this question what are they trying to figure out policy wise about adults contacting children for sexual images that's going to add to their body of evidence we talk about human beings taking over for computers who are making questionable decision or being duped but a human must have pushed send on this survey.

i'm worried about the humans now. >> i would say what ed said was right. this is the culture of silicon valley there is no wrong questions. there is no -- you know, the data is king and the data is all that matters. and so if we can establish that 99% all that matters so we can establish that 99% of people are against ped pefeel area, then it's wrong. how many times will this happen? and they have 20,000 people to work on deleting the fake news accounts and thins like so, so they are trying. but 20,000 people sounds like a lot. it is nothing. >> you're so, you have such good nuys on all the the various platforms. i wonder if you notice a plateauing and engagement on the core app of facebook >> i think we sense some facebook fatigue, but what i tell people is that facebook is

in the long game it's going survive a lot of people keep asking is facebook going to be okay. don't worry, they'll be fine >> you mean the company? >> it's going to be fine even if if youngest people are not on facebook, they're on instagram, snap chat, et scetera they're going to go to college become alumni, become parts. more and more people around the world with joining facebook. i would worry about what are the policies, how are they engaging. same thing with twirt. same thing, today, i reported a couple of bots on my account and within an hour, they said they had blocked it they always tell us, trust us. >> we know what we're doing. why does this matter facebook case in particular, comes d down to advertising it's many they're trying to solve it for there's still a drek response, so buy this, click on that if you're coke, you don't need to advertise on facebook b as

much as much because the point of what you do is to remind people, they're a brand advertiser like us kind of a thing. not trying to buy it right away. so facebook b is less attractive for all these problems it has. fab facebook is trying to fix that to tell them we're safe space, don't worry. >> that's why the unilevers and p and gs of the world. >> actually, didn't affect our sales. we're going to spend more on tv. so that's -- >> these guys like to hear that. >> sree, thanks, guys. and before we head to break, breaking news out of target. the company is increasing its minimum wage to $12 an hour this spring more "squawk alley" comeing up you know what's awesome? gig-speed internet.

you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig-

really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. president has invited video game leaders to the white house. >> when the white house said last week it would meet with the video game industry to talk about gun violence after parkland, the tri was unaware of the plap, but now its trade group tells us it's sending its ceo, mike gallagher, to the meeting, which is happening thursday esa issuing a statement saying quote, numerous authorities and scientific studies have found in connection between games and real life violence

like all americans, we are deeply concerned about the level of gun violence in the united states video games are not the issue. entertainment is distributed globally, but the u.s. has a higher level of gun violence than any other nation. now we don't expect the ceos of the largest game companies such as blizzard, interactive arts or nintendo to attend the meeting those close to the situation tells us invites are being sent out as recently as today this isn't the first time the video game industry has faced scrutiny families of victims of the columbine massacre sued 25 companies that make an distribute games and a judge dismissed it and a california law was struck down looking to restrict minors to access games. the court finding that video games qualify for first amendment protection back to you. >> coming up, an uptate on the

infamous pharma bro, martin shkreli, when "squawk alley" returns. ♪

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. they call it turn around tuesday.

dow's down 101 looked bre eed pretty good there >> what meltdown 52-week highs. up near 50 bucks a share >> transports have been the outperformer and so have the industrial names that b efb was so worrieded about with tariffs. >> target, the s&p laggered, making news about delivery services let's get to the judge >> welcome to the halftime report we begin with a developing story this hour u. war in the white house the internal battle brewing over the president's tariff f talk. a fight that's pitting some of the biggest names in the administration against each other with the outcome potentially impacting the markets and your money eamon javers on the north lawn for us with new reporting. gl there is real and intense disagreement among the president's staff about exactly how this tar itch issue should play out