outperform, up nearly 3% welcome back let's get final check on the markets this morning the futures have been in positive territory all morning long the dow is up by almost triple digits right now up about 100 points above fair value. s&p futures up by 8. stick around right to "squawk on the street." make sure you join us back here tomorrow ♪ good wednesday morning welcome to "squawk on the street." i'm carl quintanilla cramer is at one market in san francisco. futures rebounding after tuesday's late-day loss. the president eyes some tariffs on chinese goods broadcom ends its bid for qualcomm and more. europe relatively flat theresa may expelling 23 russian diplomats over the poisoning of the ex-spy

stocks poised for rebound after a late day sell-off sent the dow and s&p down for a second straight day and ended the nasdaq's seven-day win streak. will the volatility continue >> broadcom withdraws its bid for qualcomm after the deal was blocked by the trump administration i've got the latest on what is next for this company. plus, the latest airline controversy coming from united airlines the continued deterioration of airline service and what that means for the industry first up, though, stocks looking to rebound from tuesday's volatile session which resulted in the worst day since the beginning of the month apple hit that high before giving up its gains. the race for a trillion dollars goes on. jim, the macro data, though, today, retail sales down as we said stumbling for the third straight month. the goods producing economy remains under pressure despite a

pretty bullish consumer. >> today may be the reversal of what's working maybe utilities work today or real estate investment trust that's not been in the playbook. this rally in the semiconductors is based on absolute nothing i think that the turn back in technology is pajama traders trying to figure out what to do off some strong china number about investment and sales so i'm not a believer. i think that we goy to other way because retail sales i really think you want to pick utility today, not pick your semiconductor. >> so absolutely nothing what is it good for? why that feeling on technology, jim, and the tech stocks in particular >> look, i'm still live with the chill of what happened with broadcom and qualcomm and with the market's lack of recognition of the intervention by the president in trying to stop a deal that -- before the qualcomm lobbying started which just

seemed like a regular semiconductor deal like we've seen over and over i'm trying to figure out which deals would have been blocked in the past so, therefore, when i start thinking about what broadcom is going to do, i want to know if they are now an outlier. and somebody in state and people in treasury have decided if you do a lot of business in china, you're done. you're not merging with anybody. >> well, broadcom in their statement where they finally did withdraw this morning did make it clear or did repeat the comments from the treasury secretary mnuchin in which he said the decision is based on the facts the national security sensitivities related to this particular transaction only and not intended to make any other statement about broadcom or its employees. >> you could have imagined in some way -- >> i feel better >> you could imagine, even under a different administration, given the heightened tension with china to a certain extent, continued concerns that a deal

like this might have been blocked by others as well. and what is the growing chorus in congress, of course we'll have hearings i think tomorrow on cfius and expanding his powers as well it's not as though this is new, the continued concern about them stealing our ip and take new technologies around the world and gather a lot more power as a result of that >> well, i think what's new is that you're willing to have your stock go 20 points below the bid. with the idea that you can make a 5g argument and that this was a brilliant and expensive lobbying effort by qualcomm. into making itself being maybe the most important semiconductor company on earth in order to -- what for the shareholderers? what was the plan for the shareholderers >> there's a column in "the new york post" today that argues ceos who befriended the president, for lack of a better word, or got close to him, are

not getting the dividends they would have expected. >> that november 7th come together with cannon and president trump, i don't know. he didn't even get a tweet at least tillerson got a tweet >> that he did >> he did. well, we'll see. i think if you're broadcom now and you well know you're going to redomicile here probably take a little time. and then get back on with it conceivably. that's being the roll-up that broadcom is. that would involve acquisitions. there is one other caveat which, of course, is this idea that perhaps there would be some interest from an intel it's unclear to me they did hire some banks to look at a number of things for them and certainly if they wanted to mount a bid, the financing is available given all those commitments are now gone those who are financing broadcom's potential bid for qualco qualcomm i'll be interested to watch your interview with brian krzanich

tomorrow intel is -- >> i'm sure he's going to give me his whole game plan >> they make a lot of different moves. remember altera? that wasn't easy even there, and that was a small deal. >> well, remember people were saying that zylinx is next that's another company that is very caught up with military micron reports -- i mean -- broadcom reports tomorrow. broadcom wouldn't report an even better quarter than it reannounced. how about a buyback? when you use that term roll off, i know that is with you a perjorative. you are suggesting in some ways, david, that broadcom may not be the semiconductor company that i believe it is. >> that might be a fair statement. you know me too well so you can share that on air and be right because you know it, of course, but, yes >> you can't call it the -- >> the only reason is experience, jim, all right

i mean roll-ups are -- you know the story. look at allergen right now it's always about the exit then you miss your exit and then you just keep going and the next thing you know, you're on the bridge going to staten island. >> well, at least you're not jumping off the bridge >> and it's like a $15 toll. >> bret saunders got $30 million so that shouldn't be that difficult to pay saunders being the ceo of allergen which is up a solid ten points after that decline of 100. why don't you take that into account? >> okay, i will. i just think that you do have to consider the long-held strategy that hock tan has had in being an aggressive acquirer cutting costs which was a certain from cfius itself cited that they'd cut a combined qualcomm and broadcom to the extent it would no longer be able to compete. but i wouldn't be surprised if

they got back on the acquisition train. they need to >> that's why micron was up $1 when cfius took -- cfius is the opposite of what morgan stanley did with ford today. morgan stanley took ford from sell to buy. it was a double upgrade. cfius took -- immediately they took broadcom from a buy to a sell because that's what they did. they took the wind out of the sails and everybody is speculating broadcom is going to buy someone right now. hock tan is thinking to myself, i'm done with that characterization roll up i'm doing what's write for semiconductors i'm going to report a blowout quarter and announce a buyback and boost. none of those could happen until the end. >> you implied -- >> yeah, i implied >> first, though, we've got to get to this trade stuff on china because that's part of the story, carl, in terms of -- >> before we get to it, though, jim, you've been all over the

chip story all week long we look forward to krzanich tomorrow night you talked to the ceo of applied materials last night on "mad money. let's listen >> we need the money to reinvest in r&d i personally am i big believer in fair trade. we have to have fair trade but china is very important opportunity for the global economy. >> now we've got this story out of reuters, jim, that the president is eyeing 60 billion in tariffs on chinese goods.ly him it be $30 billion. they came back and doubled it. china owns $1.2 trillion of u.s. debt so what does this all mean? >> look, it's absolutely true that applied materials has a gigantic business in china gary was on yesterday and talking about how they are the pr preferred partner for china. i don't think it's too hard to say the president is trying to

figure out with pompeo exactly where we can strike back against china, but china is so emorphous. china trades to everybody else and dumps here it's also very difficult to get a feeling for skyward solutions assembles a lot of its products in china do we block skyworks solutions i'm looking for the products we block. i don't see them or know how they arrive at the $60 billion number david, $30 billion, $60 billion, what do we have going here >> pretty soon talking real money, jim the focus -- and you've gone there. we all have, is this 3 to 1 examination that's going on by the u.s. trade rep and what that will represent whether this will be a part of that in some fashion and what the findings are going to be from that continued investigation into the thefts of ip and just overall what that trade is costing us, so to speak. but i don't know, jim. each time we talk about china,

i -- it feels as though we could be headed toward a real trade war as opposed to continued skirmishes i can't imagine that would be anything but bad for the world economy. >> well, i think it is certainly bad for the technology group which is what i'm looking at world economy, i mean, arguably, we're trying to put pressure on china worldwide to stop targeting our industries i always come back to a dan demico line, the ceo of nucor. we've been in a trade war we have just chosen not to step back larry wants fair trade china but he's very worried like you are about a slowdown in the world's economy. some of the other people who are arguing for strong trade sanctions against china are more concerned about jobs in this country. suggesting that jobs would flourish as we make people build

their plants here. and that's the real design >> we're going to talk about all of this with ohio governor john kasich later on "squawk on the street." we'll discuss trade, tariffs, the ongoing white house shake-ups as we perhaps prepare for other announcements before the week is up so a busy morning going on when we come back, another incident involving united's treatment of customers this time it's animals we'll fill you in. another look at the premarket and other news, too. walmart expanding home delivery. jim mentions the upgrade of ford google banning ads for crypto currency a lot to talk about when "squawk on the street" coming back this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed

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uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. a presidential tweet a few moments ago. he writes perhaps at no time in history have the business fundamentals of u.s. companies been better than they are today. david and jim, trying to think about the metrics he may have in mind the corporate earnings run rate at least what we expect to see this year. he may be absolutely right about that >> well, profits when i work with larry kudlow and we worked together for four

years at kudlow and cramer he emphasized profits, profits, profits as the way to figure out whether we're doing well the profit numbers are extraordinary. this is almost, again, we have not had larry kudlow named but this is a kudlow tweet i think it's going to happen, but it hasn't happened yet >> no, although it could be just days away in terms of them being appointed to gary cohn's previous position. >> i think so. i've got to tell you if you want to judge by the key metrics it is no doubt, of course, after the corporate tax cut, no doubt things are strong. also we've got to start doing more work on this. there are states it is simply too hard to find people to work. and the one that is going from last to first is indiana indiana has become -- i know we have kasich in ohio. these places need more workers and that's got to be a story that's told because there's other places where we have too many workers indiana, what a story. what does that say about

heartland? what does that say about jobs? >> well, it's interesting. we have mitch daniels on yesterday. former governor of indiana who pointed out the tariffs on steel and aluminum for his state where there are so many manufacturing jobs could be a negative, not a positive because of the potentially -- >> i listened to that. >> did you, okay you didn't seem to believe it, did you? >> no, i listened -- he's a fine man, and i followed his work for a long time. who am i to dispute an actual guy who ran the state but i'm talking about actual numbers that come out from the government and then speaking to a company like ford which is the largest maker of motor homes and it's just chill and numbers coming down why? because it needs to find employees in its major indiana plant and is having trouble doing so to me that's pretty interesting sign need more workers in this one we state. the reason i keep pointing it out. where is the vice president from very influential with the

president. it really does seem that there's a boom and i think that the boom is being discounted because a lot of people feel gloomy about other aspects in the administration >> manufacturing is added to payrolls, 15 of 16 months and construction just had 61,000 in february that's the most since march of '07. seven straight advances in construction your point is well taken >> these are miraculous numbers. we have a renaissance in the southeast. >> united airlines is facing a backlash after a flight attendant forced a passenger to put her dog in the plane's overhead bin that dog died during the flight from houston to new york in a statement united said this was a tragic incident that should never have occurred we assume full responsibility for this tragedy and express our deepest condolences to the family and are committed to supporting them. it's the latest incident involving united's treatment of a passenger.

you remember last year a passenger was dragged screaming off a flight united carries about 27% of all commercially flown animals 27%. 75% of the ones that died were on a united flight >> well, these are staggering. is there a pattern look, the stock is a cheap stock. it's not -- american sells at a cheaper price. but what i do -- this is a terrible story i don't know i read this one. my wife sent during the middle of the show and said why aren't you talking about this right now. you should break in -- i can't break in and talk about a dog that died. she said this is far more important than anything you're talking about. a lot of people in america feel that way 55 million pets. a lot of pets.

humanization of pets >> and 138,000 fly commercially every -- or at least last year this is d.o.t. statistics. of course, that dr. dao situation made a lot of news last year. we talked to oscar munoz about it last july >> it's a new era with regards to social media and something we have to adapt to and accept. overall, other than just being nice, we do have to train and develop and nurture a more values oriented customer service policy >> jim, so they got that, although traffic patterns overall for the industry looking good >> look. we have an oligopoly it's not like you'll say i'm not going to fly united. i'll fly somebody else at least he didn't say that objects shift and die in the overhead you can't -- you're locked in. no one is going to be able -- the numbers are not going to go down for united because of that

because we've created a pattern in this country of no route competition because we did so many mergers and this is what you get. no one can say i'm boycotting united because you can't get from point "a" to point "b." that's what happened in the country. it's a terrible story and life goes on. >> looking back at last july, stock lost about ten points as people worried about bookings after -- >> and it came back. >> -- the treatment of dr. dao >> it comes back it comes back because as long as they don't put a lot more planes in the system, as long as they're able to raise rates, look, we have no less than warren buffett saying the group is cheap my problem is that there is no way to punish an airline that you think is doing the wrong thing because you are just cutting your nose off despite your face. and that's what's happened you'd think southwest air would say we're going to go anywhere where united is and you can fly us our symbol is luv.

no, you can't do it today. it's a route structure so they don't get hurt i just think that these are not random they're just not random. >> it's a good point, jim. when we come back, your mad dash and count down to the opening bell take another look at the premarket as we try to reverse more losses. "squk t see ctiawonhetrt"onnues after a short break. you see it in the southern tier with companies that are developing powerful batteries that make everything from cell phones to rail cars more efficient. which helps improve every aspect of advanced rail technology. all with support from a highly-educated workforce and vocational job training. across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov.

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about 2 1/2 minutes before we get started with trading let's send it across the country. you have to come home soon it's getting too many days now, jim. what's the mad dash. >> i like learning i like being smarter excuse me. nomura instinet. it's happening right here. they've done a survey of merchants. square survey. they like the fact that square one accepts bitcoin at retail. it's the age of amazon and i know because i saw your documentary. they are doing something i haven't seen in a long time. like amazon in its early days, that's square. they are comparing square to amazon have you ever heard any company be in the pantheon of companies that could join amazon i haven't. this is an amazing report. amazing. >> you really believe that there's only one amazon.

>> that wasn't the point of my hyperbole. they think that square is amazing. no, i -- i just -- research. i thought the research was important. no >> you like the research >> this piece is going to move square david, this is not a fly by night company and square is going to take bitcoin, even if google isn't taking new ads for bitcoin ancillary products but this is an important talking about square i believe in square. i just don't like the comparison to amazon because nothing is -- should ever be compared to the death star it's a big mistake look at that chart, will you >> the difference in the way square views bitcoin and this google is banning ads for initial coin offerings for digital currency trading, facebook did a similar step in january. those are the two big ad sellers

in the world >> well, jack dorsey, they are the most open minded about what the cust merss want. what do the customers want to accept bitcoin even with so many people believe that bitcoin is not a real currency it's just speculation. >> the opening bell. at the big board today, a shipping company celebrating its 25th anniversary at the nasdaq, i.t. services provider converge one. jim, we want to check in with you on this morgan stanley upgrade of ford. adam jonas goes to overweight. calls it a cheap call option on restructuring and the line getting all kinds of attention is that he believes the valuation is at a point where the f-150 is 150% or could be 150% of the company's ev >> this is a staggering, staggering upgrade from sell this is just a worst to first

saying there could be self-help. many things that ford can do at 150, i felt that was a little -- it's kind of a show biz line because i don't think the 150 is worth 150% of ford. i recognize the consensus numbers have fallen to where morgan stanley could be right. do i want to buy ford? i don't know it's got a good yield. 12.5 could he go to 12.5? i don't like the autos at all. while this is a contrarian view, i don't know where it gets you when we have retail sales that show you that auto sales were terrible so i think it's an intriguing call contrary call. don't like it. auto dealers in the retail sales internals. auto dealers down 0.9 for the second month in a row. furniture down 0.8 department stores down 0.9 and that now famous chart of department stores versus e-commerce, that x just keeps getting wider and wider. >> and do we wonder about cignet

which is a mall-based company down five. every kiss begins with losses. this is a company that -- it just boosted the dividend but the numbers were cut and this is a mall-based operator. i'm not saying the mall is dead. i am saying that you are not shopping at the mall and the numbers reflect that and this is death star again and we keep seeing it. we are ignoring the story about walmart having to spend so much more to get the groceries to you. that's a seminal story walmart had bad e-commerce numbers last quarter >> david, walmart launching home delivery to 100 cities by year end. same-day service in new york they'll partner with uber. use jet. after we saw that slowing number on e-commerce last quarter and for a while the whole thing was going to be curbside pickup. maybe this is a shift. >> it does seem to be and takes

them into closer competition with amazon which is so focused on its logistics for so long that things can get to you within hours of having ordered them with amazon for a variety of things. but this does perhaps bring walmart more closely into that realm. stock not doing much today but as you point out, carl, if did not have a good reaction to the left quarter's ea last quarter's earnings. one of the worst days we've seen for walmart in quite some time >> biggest grocery seller in the country, jim >> yeah, look, the margins on groceries are so bad it was amazing costco did pretty well in grocery. but the step up in walmart is a sign that they fell behind after being ahead. i do think that we're just beginning to see what amazon has got in mind for whole foods. when you go to whole foods you start seeing prices that are lower. you are getting a break on the visa card.

that's prime they're making it very easy to get stuff. i've got to tell you, walmart has to step up which means walmart's earnings will be crimped which means the stock is signaling the correct move they'll be a target which is doing better still got slammed. we have to be careful retail because it's been amped up anybody who does groceries you'll not make nearly as much money as you thought look at the kroger decline look at that >> yeah. you know what else to look at in terms of a decline and given the avalanche of news over the last few days, the cigna express deal faded quickly. so has cigna's stock price i think i recall you saying it was a buy and that was a lot higher than here that was on that first day down. it hasn't really caught a break yet. >> no. and -- >> the market cap is below that of express scripts which it is in a deal to buy >> cigna sells at 11 times earnings i just don't think it was as stupid as the market is saying

i was never a fan of express scripts but this is ridiculous i'd buy more cigna david, i'd describe myself as early. >> early okay is it going to stay early? is it a zhanga early like too early to buy >> you bringing up -- i think you'll bring it up every chance you can get. >> you know i will >> we haven't even talked about newell can we share from cigna to newell you know newell. >> i do and you do and, jim, we're going to spend a lot of time on this interesting situation as they move towards an annual meeting. a date they haven't set yet. we got the first fight letter back from newell against jeff smith at starboard and martin franklin who is trying to take over the entire board of directors. i'm glad you mentioned it. i want to caution here there's going to be a lot more reporting to be done and a lot more back and forth but it's worth taking a look at this, jim. newell says today in a letter

that through all of this turmoil, and remember they just had another director step down last week, conroy. put in motion by martin franklin's actions the only poor governance that's taken place relates to the decisions of those directors who were unsuccessful in making their case to the rest of the board. abruptly resigned their duties and somehow secured activist support on the very day their resignations were made public. they go on to question to a certain extent mr. conroy who was very supportive on the board and then suddenly steps off. citing financial ties of some kind this fight has only just begun, jim, between this company and jeff smith and martin franklin >> what do you think about the money commitment that these -- i've got to call them distance $25 million. this is going to replace broadcom/qualcomm as personal

and ugly >> i hope so >> i'm going to miss broadcom/qualcomm. truth be told. i'm going to miss it >> it was the worst -- >> you were against -- i loved it and then the cfius thing was so fascinating. and now it's over. so, yeah, that's sad for me but we're going to move on and maybe newell will be the fight we need >> is "general hospital" still on it was a rival then. >> i think it is >> i think "days of our lives" just got renewed for like the 50th season. that's an nbc property >> wow >> we have a fed meeting next week i wonder if the jobs number, cpi, retail sales today has taken any heat from the fire the worries about inflation. i think 11%. >> look. we've got the real wage figure

again as opposed to the reporting number it's flat. i don't know where all those bonuses went to or raises went to some on the east coast, some on the west coast but those were staggering numbers. if you're going to raise rates, we don't know where the inflation is please tell us where it is and i've got to tell you one place it's not inflationary. the stock prices of technology those stocks are reversing already and again, this is all about china. and a belief that we've got to shut down china and that's what's going down. this is lam research getting hit again. we are taking the stocks down. these stocks were bid up and that's a mistake and i'm focused on qualcomm because now qualcomm is back to the world. and will qualcomm ever be able to reach peace with apple? >> great questions, jim. i don't have the answer to either one of them on nxp, people close to the company don't seem to know at

this point what's happening. they aren't getting any heads-up from the anti-trust regulator there. typically the chinese follow the eu the eu approves the chinese also attach similar conditions. it wouldn't seem to be a problem here and so if you were to see china not sign off on nxp, there is a very easy argument to be made that that is a bad sign overall for m&a. certainly for chinese/u.s. relations. you've mentioned a number of times -- by the way, when it comes to apple, jim, we'll see if -- now that qualcomm is a national champion, apple, do they have second thoughts about continuing in the fight? one thing to keep an eye on, tim cook will be deposed at some point for the lawsuits that probably won't take place for another couple of months, but is he going to want to be deposed? does he really want to go through that we'll see. so both those things bear watching closely and are very much tied in, of course, to the

continued future and success potentially of qualcomm itself >> tim cook was on the hill yesterday with senator mark warner making the rounds >> did not know that >> very important story. by the way, can we do a little julius caesar, shakespeare united airlines is up. the dogs at work mark anthony shakespeare was right. >> jim -- >> there's no price war over dogs that's the point there's no price war over dogs united is not losing traffic or this stock wouldn't be up. >> your point on that was strong and you retweeted some viewers who wrote back and disagreed but in general, they are the outlier. >> what can i say. i'm focused on that. i'm focused on the dog story because of the horror. i like idex labs because they're part of the humanization of pets and tech cannot rally when we are trying to figure out how much we should block from china.

do we really think the chinese are going to say, i'm so thrilled about this nxpi deal. we'll let that sail through. this is what to watch about whether they'll fight back this is the battleground, nxpi and qualcomm needs it to be. >> on china you said a couple weeks ago that boeing would be the stock to watch in terms of canaries on chinese retaliation. boeing has not breached the 50-day since last may but did it yesterday and it's below today >> well, boeing is the nose -- to cut the nose off because the chinese need these planes. they need these more than anyone it's a real statement if they get out of the queue in chinese will need the planes but the stock is up from the 270s in decembers.

there's profit-taking as we wait to see how the chinese are going to retaliate and i think the idea that they'll just sit there and take this is a big mistake. they are not going to let that happen they are going to do something i don't think they know what to do because we've never fought back they're puzzled by president trump because no one has ever fought back against the chinese. we have some tariffs tariffs in steel 2001, 30% didn't hurt the economy. >> one final thought here. if people are interested, given we're going to be talking china and trade for a long time. look at the 2018 trade policy agenda in 2017 annual report from the u.s. trade rep lighthizer the united states must preserve our lead in research and technology and protect our economy from competitors who unfairly acquire intellectual property we've launched an investigation

under the trade act of '74 into allegations china is involved in reasonable discriminatory efforts to obtain u.s. technology and if necessary, we'll take action from china from obtaining the benefit of this unfair practice it's all there in writing. it's a long report obviously, it doesn't just involve china but will give you a sense of what to expect when it comes to this very important issue involved in the u.s. and trade around the world >> this is really important. >> jim, your point was good about tech being unable to hold the initial pop. let's get to bob pisani. >> we are up but the market leadership, tech, semis and banks aren't doing anything. that's why we're sitting here not up much. take a look at the sectors a nice move up utilities. not a good sign when that's a market leader. consumer discretionary,

industrials. and the smh which has been the market leader, not doing anything airlines, jim mentioned united it's up. remember something about the airlines they have had a great six-month run. the airline index is near a 20-year high right now looking at the xal, the old one. not being ark fecffected with te whole fiasco with the dog dying in flight. very strange february reports there. very autos, furniture, gasoline all down i look at year over year numbers. some encouraging things. internet remains strong. clothing i haven't seen a 4.9% year over year on clothes in ages. that's got to be everyone iseve nine years restaurants and bars, that's good department stores is flat. it was down for months for ages and ages it's stabilized. that's a minimal at least. a little bit of good news. and we heard the story about dick's and barnes & noble and books have been down

retailers mixed today. jcpenney, kohl's opened on the up side. barnes & noble, gap -- gap up a little bit right now but barnes & noble had a tough time recently the trend for the market remains up this week a quadruple witching very specific things that happen this wook. the market tends to rise in this week it happens four times a year our friends at kensho s&p. that's because of the market as the traders roll into their new position, market tends to move to the up side this is that quarterly expiration of stock and stock index futures that we tend to see and it tends to be up on other days more than other days not quadruple witching weeks we've seen interesting move for the market. but the main reason there's an up trend is the fundamentals are intact the kind of stuff that i watch every day that matters to me and

matters to the market all are positive the earnings outlook for the forward numbers now which is what matters to the market, up 23% potentially. these are estimates but huge numbers. and a good part of that is due to the tax cuts we've seen capital expenditures after being flat to only up small numbers are going to rise this year. dividends will be up and the most important thing, i think, buybacks have been flat for years. now we're talking about a big increase in buyback. these cyclical clothe p aal gros these are huge numbers this is the kind of stuff i watch and if you have one thing to keep up and watch in front of you, that's what matters the dow is up 30 points. carl, back to you. >> bob, thank you. let's get to rick santelli at the cme morning, rick. >> morning, carl you're spot on, right to the point. the minute the data was released, you can just see the curve flattening

if you look up at the board now, 228, up four basis points on a two-year, 284 unchanged for tens this could be the 14th trading day, two weeks of trading days we close in the 2.80s and the three-year bond is down. let's look at the intraday of two-year you see the way it popped. is it because ppi was tame and retail sales weak? a combination. that's how the macro vision should be on why the market is being affected the intraday of ten-year, the opposite we had a pop it just didn't last. if you want to have some fun with what's going on, look at a year to date of 10s minus 2s it's about 56 basis points now what's interesting is you see the low there in january that was 50 basis points actually like 49.9 you have to go back to fall of 2007 to find a flatter curve

these are very important areas and, obviously, it's a huge directional trade. when the curve is flattening, it's usually most dynamically driven by the long end although even if driven by the short end, the outcome is the same. you seem to have spongier rates that identify with 14 trading days in a row. let's look overseas. intraday boons they just did the same thing our long end did but more aggressively one week of boons. i'm going to pay a lot of attention here critical level you see what that low was in the wee hours of the morning 60 basis points. about a half or one basis point lower than it settled yesterday. and yesterday on the year to date chart it was the lowest settlement since the third week in january pay close attention to this relationship finally at 24 hour, the dollar index. everything starts with a small rally. it's doing pretty good until they post data still well below 90. that's the area traders will use as a pivot carl, jim, david, back to you.

>> rick, thank you for that. rick santelli in chicago when we come back, tariffs, trade and the white house shake-up we'll discuss all that and more with ohio governor john kasich dow trying to fight off boeing the worst performing compoennent down almost 2%, although most of the dow is in the green. back in a moment i'm not a bigwig.

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let's get to jim stop trading >> some very good names here including microsoft and disney cisco is to provide software and security call of the companies say cyber security number one risk for everything they do mostly about hacking

cisco doing manager about that in an environment up more than a percent cisco works for me >> jim, we have an anniversary in store >> yes 13th anniversary is always good luck for me. my daughter was born on friday 13th i think it is a very important gust but dan schulman and the stock is real cheap. >> 13 years. congratulations. >> thank you >> great guests as always. >> thank you i know you want me to come back but i have got to learn. you know, david is moving on your comments. >> keep learning >> we'll see you tonight >> when we come back, ohio governor john kasich, we'll get

his take dow is up 29 that's aep's road to the future. and the international brotherhood of electrical workers helped make that happen. the ibew's outstanding union professionals have the skills and training to get the job done right. that's good for our customers and for our bottom line. ibew members are our power professionals. they should be yours as well.

say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

good wednesday morning welcome back sarah is off today dow trying to hang onto a slight gain a busy morning with ppi and retail sales and now other numbers. let's get to rick. >> yes business inventories expecting a number up about so back to back those are powerful reads .60 is a road. you have to go back to january 2016 to find a higher number

back to you. >> all right thank you very much. >> let's get to our road map it begins with a potential for a trade war heating up we'll check in with ohio governor john kasich talking trade and the shake up at the white house. and aparticipaparent winner declaring a win in the heart of trump country. first up we'll take you to a live shot at schools around the country which are staging walkouts this morning this walkout is expected to last about 17 minutes it seeks to honor to lives of the 17 students that were killed during the parklands high school

shooting we'll keep track of that as students leave class all around the country today. >> would you say mulling tariffs against chinese mports they want to help calculate an uncertainty. how much of this is knowable >> i think for this case a lot of this is a lot more bark more than bite. he gives is very broad idea. we'll go out there and others om to backtrack by saying we'll

have some exceptions we saw it saying we'll desert fi rig -- decertify right away >> and on this this is something we always thought we would happen we have to wait and see what comes out. it makes it a little worried we don't have the choice about talking about the protectionist measures in the white house. when it comes to $60 billion i mean the context of this and i understand what he is saying in terms of backing it out and walking it back but the context is this is squarely directed

given the fed interest rate hikes later this year, is it time to reevaluate where you are in your portfolio? >> so as we look at it we enjoy volatility we are focused on picking individual stocks this reminds me where the administration will go out and say really aggressive comments so we are trying to get through all of that noise. what it creates for us is opportunities where mostly we are focused doe domestically we are seeing a lot of

opportunity particularly when we get reactions and lot of volatility >> it sounds like your altering. you're saying that you want to be more exposed to the technology companies that don't have the exposure to a trade war. >> so i think that's part of it. the other side of it is i think the smaller you go in this market the more value you see. if funds have taken over a big part of the market they are focused on larger so we see a smaller cap as a real opportunity. i think there's a real opportunity on small cap with p private equity they have -- but yeah, we think let's stay away from a lot of the noise and take advantage of the volatility that's where we think our 36

analysts, their focus is trying to take advantage of that noise. >> so on the larger picture of trade itself, clearly you both agree to a certain extent. we look where we may be. >> let's see what the europeans respond with if the president has threatened to come back then we are beginning to escalate. we still have big key sessions out there. it could be what triggers more of the volatility in this. >> what about china? >> of course if he comes out with a

$30 billion to 60 million the chinese response will be really important. the u.s. has had a lot of grot on this. -- growth on this. a massive increase in spending all of that growth is there and maybe some of these will be factored >> i don't know why we are focused on this prod tradewar. >> if it happens i'm sure the white house will respond in time my view is this comes out

forcefully and ends upscaling it back you saw this on china being labeled a currency manipulator >> i'm curious on your kmept about separating the truth from the noise. what constitutes noise now there are tweets from the chief executive of the country >> yeah. it's taken a while to get use to i think maybe we are onto the administration a little bit

this is from my point of view. the bar is high. the bar is really high right now. it has been interesting to try to figure it out >> some traders love it and have missed it and others might be scared of it good discussion. >> thank you very much as we mentioned, there is a walkout going on this is live shots from across the country. students at stone man douglas and across the country are staging a walkout. it will honor 17 lives taken in the parkland shooting. it is also a call for elected officials to act out on gun

violence coming back we'll have much more and later united airline under fire again a look at the controversy sparking serious backlash. the former chairman will join us huge show ahead. don't go any where gglobal bonds, and high-dividend strategies. sure, these are investments. but they're not what people really invest in. what people really invest in, is what they hope to get out of life. but helping them get there takes a pure focus. because when you invest their money without distraction, hidden agenda or competing interests, something wonderful can happen. they might just get what they want out of life, and maybe even more.

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anchts live shot this is a national school walkout. obviously not limited to schools specifically we'll keep our eye on that >> it has been 4e8d for the past 14 years john joins us now with the very latest, hi john. >> hi. it appears the democrats have gotten not om the cake but extra icing. the cake is coming close the icing is that it appears connor lamb has won he took a lead of 600 or so

votes last night he claimed victory last night. >> we did it we followed in the mar rens. leave no one behind. republicans are on alertd for this reason. reps need to carry seats in order to win the house back. there are 23 republican health seats and another 37 seats where donald trump won by 10 points or less remember, donald trump won this one by 20 points as a result you have republicans in a meeting talking about what this meant keen cramer came out and said this is a wake up call for all of us. if you don't knowledge that you're lying, guys >> all right thank you.

nice to have you here. is it a warning sign i'm very very pleased that young people continue to speak out so politicians can't go and hide. that's what they tend to do. it makes me feel so good that we are beginning to see an age of activism you can see the number of young people that are out there

>> why do you think it will be any fwhert time? >> you didn't have crowds like this there's one other thing that they are using very very effectively. that's the power of social media. i don't think they are going away at least ahope they are not going away there are absolutely legitimate things that can be done to bring about greater gun safety >> attention spans are very sport because of social media. how do we make sure they feel

their efforts are paying off >> i'm not so sure the attention spansover young people are any shorter than the attention spans of adults. have you been watching what's happening in this country? by the way, as i was looking on the skrocreen here i saw a shot from moon township this is as a kid that went to high school. this election demonstrated people are not happy with what they see happening in washington they are going to the ballot box and making their feelings known. i think people are getting sort of tired of the partisan ship. you can't get anything done, the chaos, that's what it sort of says to me i still don't understand that district i have not looked at it carefully. when trump wins by 20 and romney w wins by 17 it tells me about that difference.

it is really an amazing result >> we have been talking about increasing tensions with china it has been maeking moves near technology >> you know, are we headed down a bad road in your opinion >> it is very easy to demagogue tray activity. the greatest map to be small and medium sized businesses. we know it benefits the consumers. are there some jobs that get lost two things one is we need to make sure we

have an opportunity for people that lose their jobs to get retrain. how is that working? terrible we need to fig twrur out what is effective trapg. the traping programs, they don't work give me the power 57d figure out what are the skill you need? a you all know, by the time a tratd case gets resolved and maybe even to the wto, by the time they tell me, yes, they dhaeted you, the jobs are all gone trade is critical not just for economics but also for the go politics think when we left specific trade agreement. it created a vacuum. who is chilling it the chinese. they decided they would have a guy be the leader for life it does matter >> if these worries are so acute

why are small business surveys, consumer confidence, day are not everyday in the sur fay vey so r their expectations app their hires intentions >> well, look, i think there's a couple of things that are happening. i honestly believe that the bids community was so frustrated that just a change of pace -- that's why i think this market is up because of the loosening of m so of the restriblss that we have on business. it provided a buoyancy >> tax cuts? >> yeah. i think the tax cuts mattered. when they go in and blow up the deficit the debt goes higher it is almost like having one foot

on the gas and one on the brake. there will be a reckoning not just under this president but what's been happening over the years. i was the chairman of the budget committee when we balanced the bumg there's no desire, no interest so maybe these kids should have another protest. what am i going to have the rest of my life paying off? that's where we are headed it's not good. >> in terms of trade it's sort of a moving pargt. as you look out on it what arish slews that concern you host? >> of trade in. >> yes >> we are very close to being able to land this in our state it is an investment. it is a joint investment between thailand and south korea a reporter asked me will these

tariffs increase the costs of building that plant? hello. of course it will. i think it is appropriate to fight against unfair trade actions. i don't just walk in without having a process on this i think protectionism doesn't work chltd it means that we don't have the kind of innovation that we want. if you're goink to cheat mae i have to blow the whistle >> are the mexicans and canadians i wupt able to be onto audiocassette to my staff. they a greatest import/export

partner. i wanted to make a trade with them i wanted to say look, give us hockey players and we will give you some curlers i vice president been able to broach that. in all seriousness nafta has been a very good thing it doesn't take into account services we are moving more towards a service economy. my greatest concern coming is that in this digital economy with the loss of jobs and truck driving and cashiers and grocery stores or so many jobs can begin to replace people we know there will be new jobs that will come. but the bridge between i have lost my job, that bridge has not been built it isn't being built because businesses are not fully engaged and our education systems are not providing the skills to our

young people and people in our universities to be relevant and skillful >> you referenced the crowds around the country during the course of the interview a number of people moi pointed out you allowed law to places where it's legal to carry a concealed weapon do you regret that or how does it -- >> first of all, with concealed carry. i go for the assault weapons band it turned out to be in the very effective. i formed a committee. support the second amendment

reasonable limits. if you have not been changed by what you seen in this country you must be living in a cave somewhere. i have a committee that recommended if you see someone that can be a danger to themselves or others there could be a due process where law enforcement can seize those guns who would be against that? >> the nra >> well, you know, the president apparently is moving forward at something along those lines. i am not against all gun legislation. i'm against gun legislation that would create problems. now they have talked in ohio about moving stand your ground i said i'm not signing it. don't send it to me. you look at it and you try to use common sense when you're a decision maker

>> finally, the way the president constructed his cabinet. >> which one >> yeah. >> it's not clear yet. >> i can tell you as an executive i represent the seventh largest in the country if you have nothing but chaos, how do you think it would be doing if you could pt fig yaur out who the anchors would be every other day? you to have stability. you to have people that support youragenda

for seven years we have been very stable. we have money in the bank. we have helped people at the bottom of the kplik spectrum that's what i think is what we need to do and unify people i have had a lot to say this morning. >> and we have enjoyed having you say it thank you, governor. >> thank you >> thanks for giving me an opportunity. looks pretty good here >> thank you a quick check on markets here boeing is dragging dow down about 50e points a lot more continues in a moment don't go away.

taking a look at why they are under performing >> yes you have the tax cut lots of very large buy becoack

announcements. they actually have not outperformed the market. kwhou can see it there in the or rapg they are all lagging on a basis. they don't sh enough tax a lot of finance if you look at this similar proportions for the other ones tech being 25% it has been the leadership group. another piece of it is very mature companies are the ones doing the largest buy backsme the market as a whole loves the

idea into the market it recirculates capital. it has not been so simple as to buy the stocks that are doing a lot of it. >> the internal criticism is a disply i don't think it's necessarily the case it is not in the areas where you have great investment opportunities. >> all right thanks >> thank you by the way, watching the markets here we have lost our early gains dow down 46. when boeing is down 2 pk a lotover other come moepts are to work to mac up for it. >> the mt. is vice presidented let's get to sue who has our cnbc news update

>> good morning. here is what's happening at this hour we begin with russia calling britain's decision to expel 23 russian diplomats a hol till diplomat it is the single biggest since the cold war teresa may saying the diplomats have a week to leave >> many russians have made this country their home, abide by our laws and make an important contribution to our kre. to those who seek to do us harm my message is simple you have not welcome here. >> jim mattis. he was greeted his defense minister steven hawking has died.

his book became an international best seller. as a matter of fact it is the biggest sign eistein he was 76 years old. that's the news update this hour let's get the iea inventory report good morning to you. >> good morning to you gasoline saw a decline crude is strtrading close to $6a barrel the mark is weighing on what the tillerson exit means back over to you

>> thank you when we come back it's the latest controversy an airline after a dog on its flieg. he will join us to discuss we'll be right back.

a busy morning the dow lost we are watching it closely since the president is expected to tour a plant this week getting closer to the closer end. meantime united airlines navigating following the death of a dog placed in an overhead bin during a flight from houston

to new york. joining us is bob crandall who spoke to us. it is good to have you back. >> thank you how are you? >> i am good here we are again talking about united and that question blover or no that happen imhalk on bobsment. >> i won't have up paimpact on bookings for the airlines as you have seen in this particular case we don't flow what the facts are. we don't know what the flight attendant knew what we do know is that a lot of people are becoming awfully aggress ifr in terms of what

they consider their rights >> according to reports the dog was barking initially when first placed into the overhead bin so whether or not the passenger was fourth right in letting everybody know there was a dog there was noise coming out of the bin. >> i ges my immediate -- that's whole series of questions but the immediate is okay. you have to put the dog up there for takeoff. once the airplane has talken off take the animal and bag back out and put it at your feet and leave it there until the plane is ready to land and put it back in the overhead. apparently that didn't happen. why that didn't happen i do not

know most flight attendants are not going to endanger the lifeover an animal. >> the question of why it was allow today happen is strange. some of these d.o.t. numbers, united carried 27 prg of commercially flown >> if i was running yietd let's find out what's goichk on. most of those i suspect were consider ri not in the panszier come har but i dppt they shoud go and have a hang look at that. >> if you put this in what's

going on with united starting with dr. david dow, i mean is this a bigger problem? does it sort of revive the anger that had been directed at united >> every year i must say i have been out of business a long time united had seechl to have had a bad roughen the last year or so. my guess is that they are tearing up the patch trying to figure out what's going on and why is it going on let's face it. every big airline has a c constituency they don't want this kiep of

thing # they have no way to decertain what the problem is. >> one of the problems made this morning is you pay be upset to fly on it with your dog >> it would be a very very rare where you only get from point a to point b on one airline. you might not -- it might only be one that flies a nonstop flight at the time you most prefer there are certainly lots of people to photoalternative

routes and i think we have talked about that before. one of the things that's happened in the last few years is there has been a lot of consolidation. it has had the effect of diminishing the very intense price competition that went on in the airline industry and which caused as a consequence many years when the airlines couldn't make any money. >> right bob, it's always good to get your takeme we'll talk to you soon >> thank you bye bye. when we come back, apple continues to hit market highs. a look at much more and here i

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your brain changes as you get older. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. >> we are keeping our eyes on apple. the stock is down again this morning but still up more than 28% over the past 12 months. for more let's bring in hardware analyst. great to have you with us. i wanted to ask you what's going on in d. krchc. do you think apple might have a d.c. problem on its hands between what's happened and the tariffs that are being proposed

on $60 billion specifically targeting goods? >> i think our take, this is more of specifically the 5g and the desire to keep it as an independent u.s. asset it will be interesting to see how this comes out the trouble with apple the they do sell a lot of iphones to kind that but they also make a lot of these products to china. if china goes in the other direction, if it effects it i could we if he can the local economy there as well. >> if you got word that washington was going to exact 60

billion on telcom and consumer electronics, what would you message be to investors of apple that there will be blow back >> if it's 60 billion i would argue that am may not be the material the clal leng is where does this escalation end i think that's it 60 billion in tariffs am should be able to nafr gavige that pretty well >> we'll have to cut it short. we have breaking news. we do have breaking news >> hi. the u.s. attorney's officer announced a former equifax employee has been indicted on insider trading charges. she was the chief information

officer for u.s. informations solutions division and allegedly sold more than $950,000 worth of stock before the company announced the breach which attoe saying friday, august 25th, before, a couple weeks before the breach was announced, that he texted a co-worker about the breach saying it sounds bad. we may be the one breach and the following monday, he apparently conducted web searches on impact of experian's 2015 breach on their stock price, and the next day, august 25th, according to u.s. attorney's office, he exercised all available stock options, sold more than $950,000 of stock. we reached out to equifax for comment and are awaiting response from them share price right now is flat. back to you guys >> thank you very much let's send it over to jon

fortt. >> john fox has a big ipo coming up in a few days is bigger better we check in with a couple of cs from top firms coming up on "squawk alley. you know what they say about the early bird... he gets the best deal on the perfect hotel by using tripadvisor! that's because tripadvisor lets you start your trip on the right foot... by comparing prices from over 200 booking sites to find the right hotel for you at the lowest price. saving you up to 30%! you'll be bathing in savings! tripadvisor. check the latest reviews and lowest prices.

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welcome back to "squawk on the street." i am dominic chu utilities are on pace for the fifth straight positive day for thesector overall. lower interest rates one of the drivers of the gains make utility stocks relatively more attractive. edison international, sempra, and nextera. we'll keep an eye. back to you. >> interesting action. thanks very much. lawmakers are pushing for exemptions for businesses on trade as tariffs begin to impact business we spoke with ohio governor kasich earlier in the hour about that listen to what he said >> i think it is appropriate to fight against unfair trade actions but to do what they've done on the basis of first of all national security, and secondly no process. i don't just walk into a room somehow and announce some big action without having a thorough process. there was no process on this

>> kayla joins us from indiana where it is an enormous issue. good morning >> reporter: good morning. we are at look trailers, it is indiana in trump country growing economy led to more demand for cargo trailers that carry cars, motorcycles, commercial equipment this is a heavily regulated industry because of tariffs, more competitors are shifting to u.s. materials as well, that's driven up demand and increased costs in a big way, quicker than any mills can reopen or rehire matt arnold who is president of look says that turned an immediate wrench into his business. >> the abruptness and nature of the way this is happening seems heavy handed we don't have the flexibility and ability to raise capital, so it is very important for us that

this not be so shocking, so strong >> reporter: customer order backlog goes through may arnold can't predict what steel, aluminum will cost or whether suppliers have any left. it raised prices 9%, expansion plans and raises are put on hold to keep production costs down. we asked about what happened when the steel tariffs went into effect under the bush administration in 2002 he said at that time his father was running the business and did the same thing, and in response, he raised prices 10 to 15% demand suffered, full-time employees had to be cut to three days a week, he wants to avoid that happening again guys >> yep, that's one reason some of the tariffs were allowed to expire earlier than some thought. good angle on the story, it is a

huge one, kayla. we'll come back to you later today. "squawk alley" starts in a couple minutes dow is down 55 points. got a look at ipos coming down the pike don't go away.

good morning, it is 8:00 a.m. in san francisco 11:00 a.m. on wall street. "squawk alley" is live ♪ i am carl quintanilla with jon fortt and courtney reagan. busy morning we'll get to the