down about 1% right now. >> i was going to try to set up dinner with senator gore on wednesday night but i think we'll be snowed in again i don't think we'll be able to get there. >> that does it for us today, make sure you join us tomorrow right now it is "squawk on the street." ♪ good morning, welcome to "squawk on the street," i am wilfred frost with jim cramer. carl and david is off today. >> great to have you >> great to be onset today yesterday the nasdaq was down 1.8% and dow and s&p was down 1.5% it was the worst for six weeks for the s&p and the nasdaq and

tech was the worse sector, it was down 2%. utilities was the best but still down 1% itself european markets holding up pretty well. most are between 1% or 1.5% 10-yr treasure note for you, we saw yield slips in the first half section of 2.8. ended in the middle of 2.85 and 2.86 we see it picking up to 2.78 on the 10-yr. treasure yield is getting a nice bump it has been down about half a percent. our road map starts ahead of a fed meeting. investors are looking for clues as to how many rate rises could be in store this year. facebook is holding a meeting this morning of data misused by

a political consulting firm. let's kickoff with facebook shares down again this morning on news of the data firm cambridge analytica. >> facebook will hold a meeting today discussing of cambridge analytica. cambridge denied the misused data carolyn everson addressed this >> we are disturbed that our policy is violated i can assure you from mark and all through the entire company, we are going to pursue this

vigorously >> does that sound like a submission of guilt waking up to the problems in front of them? >> i am not familiar with this woman's work that's wrong pretty simple. >> he's going to have to talk. >> he's going to have to talk in front of u.k. parliament >> should he come out ahead of that and address the issue >> where the hell is he? >> i would say a couple of things when google, the old alphabet had issues involving grown-up issues everybody knew eric, he was steady hands when he say things, you know what, this guy is pretty serious. so if this woman who may be a genius or maybe she's going to be the person that puts the

first person on pluto. the fact is there are two people visible in the company, they have to come out this is not about whether they are a common carrier, this is about power. when you have too much power, this is what happens you put out your com top peopler get new top people >> what about zuckerberg himself? he's got total control and voting rights. is this a flash back whether if it is the right set up >> let's say he wants to ride oit out. regulatory response, he seems tone deaf. i want to compare to the financial crisis the company, everybody got called in, okay? and, when they got called in,

dimon, from jp morgan, made you feel like you did a good job once you get it over with, even with lloyd comb combative when i say jaime and lloyd and cheryl and chuck you don't mickey mouse it. >> let's talk about the price of share price move it is down again today why was it so big? is the business motto in question now >> at 160, you are talking about 17 people are going to put in multiple orders today. a balance sheet is going north

of 40% i know you laughed, maybe your statement will or may not. >> we'll dive into that in a moe moment >> i just had to we are human beings, that's one of the things i learn in this business, not to be some tv guys but be humans. >> steve bob when she was running microsoft, attacking the attorney general of the united states, bad call the people who run this country, all we know is that they need to be respectful. jaime dimon -- you better get pass this. >> the great loss that consumers face businesses, their number one priority is consumers. what is the consumers' best

interest at their heart at the moment >> i think it was not. i think they are in transition and the opt in and out is important. they are doing it in peace oh, opt in and opt out and data here and there okay this is an example of what i am talking about. to them is not a data breach who the heck are they in we got a lot of lawmakers we got 100 senators here, will there is a bunch of clowns but there is only 100 of them and they work in the u.s. senate here is the way it is. i am sorry i apologize and then they ask you second question, what are you doing? i apologize, i am sorry. then they say why did you do this i am really sorry. i apologize and then it ends go look at city group

testimonies. it ends. if you throw yourself on these guys listen, we screw up, it never ends >> when does it end? >> that could be six months time >> no, man, come on, headlines, you got to get it when it is hot. >> we got a tweet here for senator mark warner. it is time for mr. zuckerberg and other ceos to testify before congress >> the focus was bad for the stock market is that the nnot the same here. >> you do have senator warren in massachusetts, who's the senator of the anti-wells fargo senator.

she's the only one that takes it seriously and 100 page reporting. here it depends whether a lawmaker that has it in for them that does matter >> in the u.k., anyway, we'll see a little bit more about that >> what happens over there >> is it one of those things where i have seen the pm comes in and trash the heck out of them >> the primeminister won't be doing that the bigger question is eu got a bit between their teeth. these are national treasures it is easy for them to go after them whether it is sales tax or anything else. >> bingo this is about positioning, it is about how to handle a crisis it is about getting ahead in the narrative. it is not about sending some people who are smaller out there. it is about i apologize and we

are doing everything we can to stop it. i am not hearing it. i am hearing internally and there is a meeting they have to come out and have a press conference, we are going to go to the senate, we screwed up we apologize and it is not going to happen again. that's all you say to the united states senate. i have been over these testimonies over and over bagai. the people that throw themselves at the mercy senate, or tell the senate what they node eed to do. which one is better? >> at the heart of it is ca cambridge analytica, this is the ceo of cambridge being called out by reporters talking about the type of work they do in around the political elections >> yes, they'll they would offer

a lot of money to a candidate and exchange for land. we'll have the whole thing and post it on the internet. >> when you are using the girls for seduction, they're not local girls? >> i would not thought so. >> just an idea. >> now, i should say cambridge analytica denied all allegations. more of that documentary to air in the coming days this is not positive for facebook some of the measures that was

talked about >> that was suboptimal >> exactly >> the possible out in the short term for facebook. what if they came out and said we are going to ban all advertising. people do not mind so much as they entice to buy another coca-cola or adidas. people are worried of the possibility of the flouninfluenf the election >> you can opt in and give your name or opt out. press this button if you don't want to see it when you by the way pack of cigarettes which i never smoke on good company. it says on the side, its got kind of a stolen bone. they have to put a similar stiff to it. that's what they should do

>> jim, their mission is to bring the world closer together. using that data that they have people using it in the election, could that something they could do keeping that at the top of the company's website? >> no. >> what about moving forward, should they be classed as a bumper to bumper li publisher? >> do they have to take the responsibility for that content? >> they don't need to be classed as a publisher, they have to take it upon themselves to be a publisher as opposed to greyhound bus. they are a utility until you are so powerful that you are not utility. when it gets this heated and you are that powerful, that does not ma matter you cannot hide. i am sure right now, it is ridiculous we are being held

there is a general counsel at google, it is ridiculous but we have to work that company grew up these guys have to grow up now, they don't want to hear that >> jim, quickly before we go to the braeeak, was it fair that t other stocks sold off yesterday, too. >> will, you know there are 10 stocks that have -- there is a bottom line. i say you buy it now >> it was down 6.8 >> this guy bought it higher and they're trying to figure out they don't want to panic and they're listening. all hands-on deck. we got to go they can do what we said you got a done hair susuit

>> jim, as we come back oracle is taking a hit. what does it mean for the company and the cloud war. futures are higher this morning, nasdaq is up 23. yesterday were down, the best rert of 2% of the nasdaq mo "squawk on the street," live on the new york stock exchange when we return. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life. i thyou never got the brakes looked at?l... oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think

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welcome back to "squawk on the street." stocks are opening higher and recouping some on monday dragged down by tech the dow has fallen back to negative for the year. let's start on this statistic. when you include the four fang names, throw in amazon, plus microsoft were down $1000 billion yesterday. is that too much market cap? >> no. 46% of the trading of this country is etfs. facebook is actually cheaper than microsoft microsoft is the most stable and done the least damage. they spent their time on the cross. it was ugly.

i think you may have been younger to know how diplomatic i am that was '99 and '00s. >> thanks, it was like '72 we got to the bottom of microsoft, jaime guroila got to the bottom of that and threw herself on it. do you remember what jp morgan said he said we were not only done, we were stupid if either one, sandberg or zuck said that, he can go to men's warehouse, they got three for two or something >> he said more of the lawmakers and public is expecting high speed -- >> you got to go to the center and look this is bad, i would like to go forward. that's google. she was amazing.

we screw up. if you walk down the steps of the u.s. senate or the u.s. supreme court court, we screwed up that's what you do they are very proud. >> let's talk about the stock markets. stock bottom at 162. the broader sell-off all 11 sectors of the s&p. utilities was down 7.8%. what was the spot for the broad market sell-off. >> it is interesting the more retailers held up. i do think that you are getting in a situation that the ftcs that's all over. there is a lot that was over done yesterday let's say it is non-fang

so that could put pressure once again. you had your eu tax which is not until tomorrow we have the ec, we have jay powell who we are hoping to have a good press conference. that's a one-two punch and maybe we'll get through it so maybe thursday afternoon >> much more cramer's mad dash is coming up futures are higher only 40 points >> and ftc took facebook down. >> "squawk on the street" back in a couple of minutes

♪ we are just a little higher than the premarket time now for cramer's mad dash so what i did was i went to the california department of mothor vehicles to find out miles for those autonomous vehicles, gm cruise of 131,000 in california. this data is very eye opening because it is clinical and i am emperical and it says before we decide to get rid of this, look

at waymo think of every single day it goes down when it come to fatalitie fatalities would we allow planes to crash everyday think of waymo and alphabet being responsible. >> and terms of the story yesterday if we mention uber a little bit more, it is crucial to them. >> yeah. >> they need that development to lower that cost and get rid of drivers ultimately and use cars 24 hours is this a turning point for self-driving in the future >> as terrible as it is, i am going to say it is one off there is a shortage and there is a driver shortage. we do need these -- more importantly, the data is so good they have to put the data out verses the fatalities that we see and that data will be good

facebook now is down five by the f ftc, okay, you just have to buy it and hope that zuck puts a suit on it >> where is capraa? >> we'll be watching all of that stocks in the opening which is moe mo mo moments away we'll be back in a few at the marine mammal center, the environment is everything. we want to do our very best for each and every animal, and we want to operate a sustainable facility. and pg&e has been a partner helping us to achieve that.

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welcome back to "squawk on the street." live from the financial capital of the world the opening bell is set to ring in about one minute. futures is pointing a little bit higher we talked a lot about most of the tech names at the opening and also, we'll be watching oracle >> remember the oracle call that was a bad sign one of my absolute favorites have been from goldman sachs

talks about micro management when heather belini says come on, we are macro managing because we are missing numbers >> there is the bell ringing it here at the new york stock exchange at the big forum of chicken soup for the soul. we have the positive opening that we expected the dow is up 67 points. s&p as well and nasdaq is higher by 0.1 >> don't get too carried away here when you have stock like intel which was actually finished higher yesterday and they do a lot of autonomous driving. i have hoping that stock would be up.

i was hoping this looks good but people did not like the guidance these are the stocks that we always have to deal with the hand, we got children's place today and oracle last night, they were not good they can set a tone as well as the ftc. you don't want the ftc to look at their business. >> let's get to the ftc, the u.k. is calling mark zuckerberg to the >> facebook is too powerful and they're starting to begin to realize that with power comes with responsibility. responsibility is when someone says you have a data breach, you don't say no, it was not a data breach you say boy, that's dumb, we are so stupid. that's a good analogy of what jaime dimon says nobody wants to do these things. we are going to work harder and

opt in, we are going to address this personally which is what alp alphabet is doing. zuck at the top of the last quarter did say they have to do and they did not do it this is the level where the chart breaks down. i do feel that 160 is where people are going to say okay, i am willing to buy it at 40 growths of a multiple that's almost like bad consumer products >> 168, the price of the moment is still a little bit of a gap more encouraging today is that it is not affecting the dow, 26 stocks of the 30 stocks. wall street journal reports, dropping their opposition into the merger between utx and rockwell >> well, that was a given. they were wrong to go against that i happen to have gregg and

technology when that deal closes, the question is, otis and arrow and i think they will. that's why i think the stock is a terrific buy after this data that i am talking about tomorrow where the europe attack us and attack the dot-com so to speak and we have the jay powell which presser, i think jay is going to be -- he's been preparing for this role as long as larry kudlow >> do you think he's going to be hawkish? >> jay powell is going to be exactly what ever is right he's the seasons player. wilbur ross this morning fleshed out a smart way on "squawk box." we got some loss and we'll identify them or punish them this was not we are tone deaf and everybody is punished.

i thought that interview for why we have a decent opening here. the financials reflect the fact that powell is going to say things that's pretty good. >> we have more reports of tariffs going on china this time is not steel 2% of their exports going to the u.s. but on things like technology and fans are going to annoy them a little bit more >> especially when they're trying to play nice. it is when larry kudlow are going to have to surface and explain tous, we are going to be reasonable when people do things in china that we think is disrespectful. we are going to speak out about it i do think -- i don't know the logistics of how larry gets to talk now or later. the issue, 60 billions plus 30 billion tariffs. maybe it is drug cost. the president sets a high bar of 60 if he walks it back, i think

thursday, we'll have a nice rally. i don't trust this rally much yet. >> i thought sky work held up very well yesterday. yesterday was a really bad day for the semis and a day for fang if you want to know -- the semis are not caught up in the senate or ec. those are the groups and it is intel to watch intel acted so well. my interview last week, i felt so great about him he thought the pete and jerry's when he's talking about - about -- krystanin is doing a lot of good things he's the guy that does fantastic

work of driving those cars because he has the original manufacturin manufactures of his team >> what about the koreans, are they protected by -- >> we have always put them in a special place, i think, it has been since '53 when truman and eisenhower, we got to keep the koreans at bay so we'll support the south koreans. samsu samsung announcement yesterday they gave a couple of hundreds of millions to cornyn. what they are doing is they have subsidizing competitors. so samsung is a little more

let's say vulnerable than the autocompanies there. i know the autocompanies, we have terrible relations in terms of how many cars we sell there you brought up the tariffs yesterday in europe and for our cars the tone is better today and can children play spring down retail >> yesterday, we had five small stocks doing well. we had american and we had eight eo doing well and we had abe abercrombie doing well >> on the retail front of amazon >> frightening for the death star i don't know if you have been to a new whole foods since they taken over >> i have not. >> i am not a big food

take-over. i am deliveries. >> i get that. you are beginning to see much lower prices >> right >> you got to be shaking if you are kroger i made some comments about kroger saying at the end of their conference call, they're jovial this is the biggest fear in the world. if amazon goes more brick and mort mortar they're trying everything. >> does it hurt their valuati s valuations >> at the moment it is not comparable to retailers? >> i would say no because amazon is an add tvertising company. do you use amazon to deliver soft goods >> of course >> do you think they have threaten by this >> no. >> i was not being rough on you.

>> trends verses the real or the fake -- i don't know >> fake madrid is a good one in terms of amazon, netflix, do do they have a business model? >> i think amazon -- the bruce nordstrom, one of the nordstrom brothers, once told me amazon is the best customer service in the world. when you go to nordstrom, you can bring back a shirt that's worth two times. he says amazon absolutely has it i called him at 3:00 a.m do you have movies about sta stalling going to berlin and they came up with a stalling produced and directed movie that was simply horrible but they had it they're scary. they said mr. cramer, we see you like this and this, have you

thought this movie directed by joseph stalling. >> is that a cramer's specialist service is that available to all. >> anybody can call them and ask them questions i was blown away by their customer service >> usually their recommendations they don't get it right. >> you are british -- that's not fair they do know you like the crown, right? >> i do like the crown i got crown, cork and seal you crown, i am crown. >> i just think, yes, netflix rehastings is using artificial tell inten intelligence the other guys have all the stuff that tells you what to do. >> did you use the weakness of all tech names yesterday to bin buy netflix today. >> by amazon >> i used to say amazon. >> we'll teach you how to talk

>> we'll get you to watch more eagle games. have you had a cheese stick? >> i had a cheese stick, indeed and throw in the extra pudding as well, too >> let's get to bob pisani on the floor of more of what's moving you come to philadelphia, i will take you to jim's steaks, that's my favorite. take a look at the sectors, we need leadership. it is not emerging yet when was the last time oil was up 2%. that's help in the energy stocks finance is up a little bit, materials. oracle they are down 8% or 9%. that's a problem for the tech sector social media is still down and facebook is still down we started on the downside and mostly other big name, snap is down a little bit and groupon.

maybe we are starting to turn the corner a little bit on the whole social media issue there is no leadership in the market and has not been for a couple of weeks now. if you look just roughly two weeks here, tech and financials which had been market leaders have been given up and nothing has taken in place industrials are not and utilities are fracturely what's left? the issue is what's going to move the market forward or are we just stuck? the side way here. the buy backs are so strong, 30% this year, that's a big help earnings arriving at double digits for all quarters. mr. powell, that's a tough call because a lot has changed since the last fed meeting i mean a lot of the fundamentals

were different than they were back in december let's call a tale of two marks for the feds in the summer, we had low volatility now, we got choppier markets and we got trade war worries and we got generally perceived to be higher political risk. the question is what is powell going to do here the hope for for the bulls, powell is less hawkish than a lot of people. with the inflation expectations so low now, the risk of the fed will be a policy error by being too hawkish and tanking the m k markets and bulls are hoping that powell will be as calculated as yellen was powell will do nothing to push the envelope on those issues that's the hope for the market this is the fed meeting tlch there is a thing called fed drift. the new york staff did a people

noting that the market tends to go up of the two days going into the fed meeting. it was significant this was known as the fed's drift. the market will be going up and meeting into the fed right now right on track for those kinds of gains expected dow's up, 136 points. guys, back to you. >> thank you very much >> i have to correct something my wedding was catered by jim's steaks >> bob and i are very much alike. >> philly steaks on a wedding day. >> what the hell, what did you have >> i have not been married yet >> at the british wedding, you get bacon rolls at that type >> that's fattening verses cheese steaks.

>> facebook hits some levels where people say i want to buy it and semis are strong and we see consumer good stocks are coming back down that's good. let's not give up on this market because the right stocks are rallying >> absolutely. let's head with rick santelli at the cme group in chicago for us. >> good morning, looks like we are going to have day 18, that 10-yr note yield is going to settle into 280s we are at 288. we can pop through the top fed meetings always have the effect on treasures. yesterday we covered the low end of the 280s. really jumps out at you with respect to how tight the range has been over such long periods of time. the last chart was two years i want to bring up 233 at high

yield this morning but, in june, we traded 3% in 2008 so once again we'll be comping back to 2008 for a while. let's go over seas to the bund the bund lost yesterday. it is coming back a bit. we have discussed how these rates are going to move together but there is a bit of an issue there of late. you can see it on the next chart. now, keep in mind this chart that you are looking at shows the 235 high that was in march of 2016 but the point here is the reason is so important is 229 and 230 separates us 235 is the recent high water marks. you have to go back to 1989 with respect of relative values and interest rates, we are seven basis points away. we need to pay attention to

that let's look at etf, lqd, looks like it is making fresh new lows finally the dollar, the dollar lost its pivot yesterday at 90 we are up half a percent you do tend to see dollars strengthen in front of a fed meeting and you see the two-yr leading the way. the ongoing debate of course is how many hikes will there be are we going get better retailers ofthe economy. these are questions that strangers are asking chairm by the way, hensarling is going to join me today talking all things budget, back to jim and will >> also, coming up, walter

isaacson is weighing in on facebook we'll be back here on "squawk on the street." obvious. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

it should be the biggest tech raising. >> thursday is a fulcrum day there's a lot of good. we have drop box, we have the day after the fed. that is terrific we have the ec past us. >> top of the range would be $650 million raised.

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i'm going to call this stock trading, why >> when you're on the trading desk and there's news, people say stop trading bristol-myers and it's bristol-myers i want to talk about i used to say that when i was on the trading desk, what does facebook have to do with the price-to-earnings ratio. this stock will be up a buck and a half because people love bristol-myers and i was going to deere which was doing well but no, i'm trying to school you nucor was good that's an unbelievable call. ufb amazing. >> so have you, jim, but we'll see you later today on madd money. >> you know herjavec from shark tank how do you say shark tank in british? >> it's called dreg gone's den in london.

started in london, they stole it out here. >> i'm pro-churchill for the record. >> good. /thought churchill did a good job. i don't know how you feel about halifax. >> the less we talk about him the better pleasure as always more reaction to the fallout surrounding facebook keep it here with "sawonhe stet re."quk t

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partner with pgim. the global investment management businesses of prudential. good morning and welcome back to "squawk on the street. i'm melissa lee along with mike santoli and morgan brennan carl, david, and sarah are off today. let's look at the markets after what was the worse day for the s&p and nasdaq since february 8. we are finding stability here as the fed kicks off its two day fomc meeting, the first for jerome powell. we have the dow, s&p and nasdaq higher our road map starts with facebook fallout after the latest day a misuse scandal. new calls for lawmakers for

social media ceos to testify and reports the ftc will investigate facebook's use of personal data. we have the details. >> stocks moving higher. the dow gaining close to 100 points a full market rundown is straight ahead. >> and rolling back dodd/frank banking regulations. house financial services chairman jeb hensarling joins us live this hour. >>. stocks rebounded yesterday with the dow up triple digits as investors await a rate hike from jerome powell's first fomc meeting. for more, let's bring in david zerv zervos, barry banister barry, i'll kick it off with you. what was behind yesterday's selloff and what changed today >> a lot of yesterday started with facebook which has been a market darling with the faang trade for years but part of it is trepidation regarding the fed's upcoming meeting and what

will powell do in terms of signaling for rate hikes as well as being more hawk iish. >> was yesterday's a pull back of the reflection of the markets digesting four hikes this year versus three >> i think any time we get close to jerome powell speaking or an event with this new fed the market gets self-reflective and a little worried about what this new fed is, it's a learning experience this is the first kind of -- first meeting but we had the first speech back in february and that really set a tone with the market that was pretty negative i mean, he came out very optimistic and that might sound good but optimism from a fed chair usually means more rate hikes and the market is having trouble digesting exactly where this fed is going compared to the yellen fed and it's a

learning process we'll learn a lot about jerome powell in the next 24 hours and that could be a relief even if it is hawkish because the market is priced for hawkishness. >> would you agree that almost anything short of outright tough love is going to be received well it seems like the stock market has been trying to figure out what valuation to put on a good economy, good earnings without knowing where rates are are headed. >> the markets priced in about 3.75 hike this is year including the one tomorrow i think there's the shorter term issues in terms of tightening dollar liquidity you saw the labor blow out overseas, there's asset liability mismatches in foreign banks, there's dollar denominated debt abroad. so there's a lot of issues going on i think the longer term issue i'm concerned about is the loss

of a fed as a put option i don't think a powell led fed is going to provide that kind of safety net and that means the pe is overvalued on an equity risk premium basis. >> i notice ahead of the press conference tomorrow afternoon tech stocks, facebook, sort of leading the downward spiral yesterday. we have regulators increasing their scrutiny of the tech company just today how much is the emerging risk in task a risk for the broader market >> i would say it's a risk, it's not a minuscule risk but i don't think it's the primary driver here i think the primary driver is what we've been talking about which is figuring out this fed and kind of the debate that my co-host -- my co-different over here from stifle just talked about which is is there a put, is there not a put, is the fed

less reactive to market turmoil and i don't think they know the answer to that question. the market wants to know the answer to that question when it can figure out the strike on the put. we don't know whether this fed is significantly different than the other fed. i would take the other side and say this is a fed that's been put in place by the trump administration, both the chair and vice chair and we'll get another vice chair i don't think this fed as powell and others coming on board is the one that wants to be seen as cutting this recovery short, as fighting off the growth-induced -- the measures that have been put in place for growth on the fiscal policy side i just think that the market is making something out of jerome powell that maybe really isn't

there and he's been put in to do a job by the president and i don't think that's to stop the recovery cold and create a tough love scenario. >> so there is a powell put, reading what you're saying sounds like there is a powell put even though you're saying we have to replace that put. >> i didn't say that, the other gentleman said that. i think there is one and i think the only thing we don't know is whether the strike is at 2500 or 2300 or 2200 or where it sits in the s&p or 2600. what we're trying to figure south where does this guy get nervous about putting four rate hikes into the market? and we'll learn about that at his press conference so the market wants to know that. it exists at some strike but what strike? that is where the market is pushing this fed. >> we'll know a lot in 48 hours. david, thanks to you.

>> speaking of the fed, the exclusive results are in from the cnbc fed survey as the first day of the fomc's two-day meeting gets under way steve leastman joins us now with the results. >> we'll look at what the 40 respondents think about the mark market 60% say it's a healthy part of the cycle and 30% see it as a red flag and expect more selloffs to come hold on the this thought because now let's look at what they forecast for the s&p. all the way to july, you can't see it on the paper, they have raised each successive survey, their outlook for the s&p and this is the first time we've had

since july that their outlook has come down so certainly the volatility has had an impact where would that be from here? the 2839 would be about 4.4% the 2920 for 2019 would be 8%. jim bianco, president of bianco research says the source of recent market volatility is rising inflation expectations, the highest in the post-crisis period fearing global central bank balance sheets will pull back. that's the reality another theory is interest rates, you see that reflected so on the one hand we have a lower outlook for stocks here's the higher outlook in the past for interest rates, from 285, we'll call it 287 this morning to 317 on top over 3% the end of this year and over 3.5% on the end of 2019. so that's the outlook, less on stocks, more on the yields and also the fed and you can read about this on cnbc.com

morgan >> thanks steve. we'll stay tuned continuing to follow the developing facebook story, shares down again this morning on news that data firm cambridge analytica harvested info from millions of unsuspecting facebook users julia joins us with the latest julia? >> morgan ftc is reportedly probing facebook for use of personal data, that news sending shares 2% lower today after the nearly 7% decline yesterday. the ftc says no comment. now, in about three hours, facebook is hosting a last-minute internal meeting with paul gruel, facebook's deputy counsel he's expected to lead the meeting and take employee questions. it's my understanding that ceo mark zuckerberg is not expected at today's meeting but he does host an all hands meeting every friday afternoon he's sure to face more questions then yesterday facebook shares -- that decline of nearly 7% was as a range of lawmakers from the eu, uk and capitol hill raised red flags and asked for investigations and for zuckerberg to testify.

while analysts are questioning the impact of potential regulation and the response of advertisers and consumers. though cambridge analytica, the data firm that allegedly illegally purchased data from about 50 million facebook users denies wrongdoing saying it was working in good faith and cooperated with facebook after it was alerted that data protection regulations were broken facebook also denies any wrongdoing, the only exec who has spoken publicly is facebook's vp of global marketing solutions. she was asked questions about this at a retail conference yesterday. >> if the allegations are true, this is an incredible violation of everything that we stand for and nothing is more important than protecting people and we will do everything we can to make this better >> we've heard no word from either zuckerberg or c.o.o. sheryl sandberg. they're likely waiting to have more word on exactly what happened we'll keep a close eye on their

facebook pages for any updates melissa, back to you. >> thank you very much before you go, julia, is there any backlash on social media against this and against facebook the problem is that a lot of people don't think that advertisers are going to curtail their spin on facebook because of this and the thinking is that people don't really care but is that -- i mean, are you seeing that? are there any campaigns under way, for instance? >> well, i think it's still very early days and people are still trying to figure out what to think. it's interesting we sent reporters in the field to a to talk to people for a package we're doing and a lot of people were mixed, some said i know facebook has my data, i'm not surprised. others said i hope they take it seriously and do a better job of protecting my data so this is not the first time facebook has had to deal with privacy issues the question when we look at this stock decline is whether

this issue is different. 50 million people, data being harvested without people realizing it so we'll see whether this is new territory or just another situation where consumers have come to realize their privacy -- that their data may not be their own anymore >> julia, thank you. jew when we come back, much more on facebook as lawmakers call on mark zuckerberg to testify and a top executive might be leaving the company. that's in the wake of the data scandal. plus, new revelations on cambridge analytica after a secretly taped video of top executives is revealed we have all the details. "squawk on the street" will be right back don't go away.

the fallout over facebook's data scandal is continuing there are reports that facebook's security chief is leaving the company. josh lip top is joining us with the details. >> investors have questions for facebook's mark zuckerberg and sheryl sandberg but there's another senior executive at the social media giant now at the very center of this latest controversy, alex stamos facebook security chief now plans to step down as you mentioned, melissa, from his post in august according to repo reports. in a tweet, stamos said he was still employed but his role changed to "emerging security risks and working on election security." facebook did not immediately respond to request for comment stamos tweeted several times over the weekend in the

aftermath of reports detailing cambridge analytica's use of data saying that big tech companies have been too optimistic, he said, about what they build and the impact of those products stamos has apparently been fighting with other facebook execs about how much the company should have been disclosing about the efforts of russian-backed propagandists to manipulate the platform. stamos wanted more disclosure which reportedly conflicted with a more cautious approached a separated by facebook's policy team headed by sheryl sandberg stamos is a silicon valley veteran who is all too familiar with the impact of russian cyber activity before facebook he was the chief information security officer at yahoo between march 24 and june 2015 yahoo, of course, was hit by the massive data breach in 2013. the company later revealed all three billion of its accounts were hacked in the theft the u.s. government did charge russian intelligence agents and two hackers with masterminding at least one of those breaches

guys, back to you. >> josh, thank you josh lipton. in another development in this story, new revelations about cambridge analytica from a secretly recorded video of executives michelle caruso-cabrera joins with us more. >> cambridge analytica is a consulting firm that credits itself with helping donald trump win the election and facebook accuses them of violating facebook rules for harvesting user data. hedge fund manager and top republican donor robert mercer is a major investor. steve bannon who worked in the trump white house is reportedly on the board today cambridge analytica is in the news again after channel 4 of the united kingdom unveiled several pieces of video that shows the ceo, alexander nix, speaking with a man he thinks is a potential client

>> what's curious is cambridge analytica prides itself on creating destatailed profiles of people on social media but the bribes, use of women on tape are much more old-fashioned. cambridge analytica explained that conversation you saw this way. "assessing the legality and reputational risks associated with new projects is crate cal for us and we routinely undertake conversations with prospective clients to try to tease out any unethical or illegal intentions the two cambridge analytica executives humored these questions and actively

encouraged the prospective client to disclose his intentions they left with grave concerns and did not meet with him again. the company once again denying wrongdoing back to you. >> so they try -- they're saying "we were joking, we wanted to see what these guys would say in response"? that seems pretty weak >> that is their argument, that they are trying to figure out if this person who was posing as a sri lankan businessman or potential i have lasri lankan bn wanted to do bribery >> so they delve into 007 on the side michelle caruso-cabrera. so reports of a potential ftc investigation into

facebook's use of personal data. how does this line up with the missteps from other tech giants? john fort is here on set that was the question yesterday. the if there's regulation on facebook, is there regulation on alphabet, amazon, twit, anybody who collects our data? >> the most famous case of tech running afoul of policy and government is microsoft and the antitrust case and, you know, the popular wisdom is that that derailed them as we moved into the internet era others, google in particular and facebook, surged past them in key areas. but usually when tech giants make big missteps it's not in the policy area, it's in the technology vision area think about my space it was out after friendster but ahead of facebook and didn't open up its platform at a time when it seemed to be important that got sidelined deck, digital equipment corporation, famously missed the

client server era. yahoo at a time when it had relationships with google and others in search didn't really push far enough ahead in that arena. but at the same time when companies get tangled up in policy issues that don't completely hold them down, maybe even antitrust concerns, intel was held up by nvidia and amd as a bad actor, even though they never got cracked down on, one could argued the an impact on the stock. for example, over any extended period over the past 30 years, despite the fact that microsoft got hit with more antitrust sanctions, it outperformed intel. >> john, it would seem that if there's any actions that they're going to have to take to tighten up the use of data, whatever they need to do to have affirmative protections, perhaps, even if it's regulation, would it get to the core of the business model at all? is there any sense this is an existential thing for facebook or just trying to tighten things

up around the edges? >> it could. you look at what happened with, say, apple and i tune, it was held up as a potential violator for the way it had closed itunes if apple had to change the way it dealt with i tune, you can imagine that causing major problems for the iphone rollout eventually but they did manage to side step those legal issues. >> so the comparison to apple and itunes versus apple and how it sells iphones, there's a distinction there? that distinction was on purpose from your point of view? it seems like from facebook data is at the core of their business so this would -- their ability to use this data and monetize the data would get to the core business model of facebook whereas a lot of these other issues it doesn't test the core of the business model. >> absolutely. my argument would be that for apple, the itunes i shoe got to the core of its vertical integration. it was looking to tie the songs to the software platform and

organization and then essentially to the ipod. now that same chain led up to the iphone if they had had to disrupt that and let other people in, they wouldn't have had a strong foundation investors may have to be concerned with that for facebook but bottom line, tech companies don't let things get that far. look at google it's made enough adjustments over time that the eu hasn't clamped down on them in a way that's ruined its search model. >> john, thank you john fort? >> as we head to a break, take a look at shares of oracle the business software giant's results did beat the street but revenue missed and the company gave a lower-than-expected cloud computing revenue forecast for the current quarter. stock down more than 9%. gives up all stock gains year to date oracle ceo mark hurd will join "squawk alley" thursday at 11:00 a.m. eastern "squawk on the street" will be right back don't go away.

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leadership weekly news conference ylan mui is in d.c. with the latest ylan >> the waiting game does continue here on capitol hill. republicans expected to release the details of a spending package to fund the government over the next two years before midnight tonight house speaker paul ryan says they will meet the friday deadline to avert a government shutdown and this no additional stopgap funding measure will be needed however there are still open items being negotiated including border security and immigration as well as a potential bill that would toughen background checks for purchasing a gun house speaker paul ryan also saying he received assurances from president trump on a separate matter, the mueller investigation saying president trump will not fire robert mueller, he has heard that directly from the white house. so, again, a waiting game here on capitol hill as congress once again tries to avert another government shutdown.

back over to you guys. >> once again, a race against the clock. ylan mui, thank you. ylan in washington, d.c. now for our etf spotlight. dom chu is back looking at trading volumes relative to today's rebound. >> one variable that some traders are keeping a close eye on is trading volumes. during yesterday's selling pressure, volumes elevated but fell below recent averages if you look at the bigger sector-base exchange traded funds, no surprise the spdr tech etf had 9 million shares trading yesterday, an average of 60 day for a trading history is around 14.7 million shares so above-average volume facebook weakness likely a huge driving force behind the trading. couple that with weakness in computer chip stocks, traders also saw relatively higher-than-average volumes in the spdr utilities fund and the

spdr real estate fund xlu and xlre so perhaps some risk aversion in those more defensive sectors. maybe not necessarily a wide sign of negativity in the market at least not yet >> dom, thank you very much. for more on these markets, let's talk about it. orders on the close firmed up the market going into 4:00 we have this bounce today. anything behind it is a market just kind of pulling itself into a neutral condition before the fed or what's happening here >> a couple things we're benefitting from something called the fed drift and that is a two-day meeting the day before and the morning of the second day. prices on stocks tend to are drift up going into the statement, kind of anticipatory hope that something nice will come out so i think we're getting that benefit

secondarily, i think the market is checking its own condition. it had a mild heart attack yesterday, wants to see how's my temperature, how's my pulse, how do i feel, can i walk more than a block away so i think you're seeing that in testing and retesting here if the viewers were looking at one thing to keep an eye on, i would keep an eye on the s&p, it opened up, it rallied back again and then on the second pullback it made a slightly lower low so you watch that series, if it makes lower highs and lower lows, the next critical point is does it go negative. if it goes negative, what happens in 2700 where it put up a fight yesterday? so watch the market keep checking its own condition here to see what's going on rather than a news event. you are getting a benefit from energy stocks, you get a pop-up in crude and the energy stocks you're helping carry the day

i think they're the leaders on the upside so far. >> so you have facebook down another 3% today and we certainly saw it bring down the other faang stocks with it yesterday. the tech sector is positive despite that today but overall lo loo look. >> it could be a big look because price appreciation, tech represents about 40% to 45% of the value of the overall market so it's a key indicator. i think the potential abuse of data they're talking about could -- you're seeing that legislators as far away as london are asking zuckerberg to come in on reports the first thing they have to do is are they going to take a trumpian look at that and send in surrogates or are they going

to go in there and talk and what will happen if they become far more restrictive of the data going in it's alerted people that you have something like cambridge analytica can come in and massage the data and take from it things people didn't realize they indicated and do it without anybody's permission if they decide to crack down on -- in a regulatory fashion, that could have some difficulty not just for facebook but for people like google and others. >> facebook definitely in the penalty box, we'll see about the rest thank you. >> my pleasure. a new report says female employees at nike circulated informal surveys over alleged inappropriate behavior by men at the company, a move that preceded the ouster of two top executives last week here's more. >> hi there, so yes it became

news to most of us about the alleged inappropriate workplace behavior at nike last week but for female employees within nike, apparently this is something they've been aware of or at least concerned about for some time. >> the "wall street journal" reports last year female employees at nike circulated a survey about alleged inappropriate behavior by male colleagues the report says the women were concerned about pay disparity, gender imbalance when it comes to the highest-ranking officials at the company nike ceo mark parker was alerted of the survey which the "wall street journal" says triggered the review of workplace behavior and practices by an outside firm gender parity is an issue at many companies, including the sports giant, there are two women among the total nine executives at nike, interest interestingly, the head of human resources is a female and nike's general counsel. there are two women on nike's board. beth comstock is the former ge vice chair along with michelle

palusoo. there are 11 men including tim congress, john donahoe, former ceo of ebay and the former ceo of eli lilly a memo was sent to employees at nike saying allegations came to light in recent weeks and this a review was under way in that same memo, president trevor edwards is resigning and retiring effective in august he was largely considered ceo mark parker's successor. later nike confirmed a second executive, jamie martin, who reported in to edwards and was no longer with the company but no explanation was given for either of those two executive departures cnbc has reached out to nameky for comment. so far they have giving us a no comment. i will say that at shoptalk, none of this was addressed, there's no q&a from the audience. >> thank you courtney reagan now let's send it over to diana

olick for a cnbc news update at this hour. the weinstein company has filed for bankruptcy lanner the capital has agreed to buy their assets they're ending all non-disclosure agreements that silenced victims of alleged sexual misconduct by weinstein in a statement the company said "it has been reported that harvey weinstein used non-disclosure agreements as a secret weapon to silence his accusers effective immediately". according to a survey, the average streaming customer subscribes to three services and they spend collectively $2.1 billion each month on the subscriptions. disney has announced yet another live action remake, this one of the animated classic "lady and the tramp. unlike their previous live

action remakes including "cinderell "cinderella," "the jungle book" and "beauty and the beast" this will be sent right to their streaming service. and jeff bezos took walking the dog to a new level at amazon's mars conference. bezos tweeted out a shot of his stroll with this robot dog built by boston dynamics that's our cnbc upnews date. >> the plus of a robot dog is that you don't have to clean up after it. >> diana, thank you. diana olick. when we come back, facebook fallout. a look at how political campaigns use their data plus jeb hensarling talks "s a me.onndor quawk on the street" is back after this quick break

facebook fallout continues to grow over the massive data scandal. john harwood joins us from

washington with more on how political campaigns use data. >> first of all, the use of data to target voters and identify likely voters. and they say it's been going on for decades and before people would buy subscription lists to certain magazines or figure out what your preferences are and use that to figure out whose likely is your supporter, who you may turn out the more you know about somebody, the better you can target your campaign but then the question is how do you use the -- first of all, how do you get the information? did you steal the information or did you buy it legally one of the questions about cambridge analytica is did they take things either by deception, by having a questionnaire that wasn't what it was purported to be or did they steal it from the facebook platform. and what do you do with the information once you get it?

do you use it for truthful persuasion turnout efforts or do you use it for fake news or do you give it to a third party who may be doing something they shouldn't do one of the questions i think bob mueller is going to be looking at in the special counsel investigation is did cambridge analytica give this information to russian actors who were trying to target their own efforts which included illegal hacking and theft of information? so all of those are questions, but at the core, the issue of enriched information, psychographic profiles of voters, that's done routinely in campaigns and has been done for a long time. >> all right, john, thanks for that perspective john haar word rwood in d.c meanwhile, ammoeamon javers hasr information. >> i was talking to a white house official who says the white house expects americans privacy rights to be protected you get the sense in talking to

officials at the white house that they are going to take a relatively light touch approach here to the facebook issue i asked this official if the president was aware of, if the white house was aware that the president benefitted in any way from this facebook issue and the official said, look, it's not typical in campaigns that the campaign is aware of all of the action of every vendor's vendor so establishing sort of a distance between the trump white house and this issue over at facebook but you also get the sense that they're going to wait and see and let congress and the regulatory agencies take the lead here. this white house official saying we expect the privacy rights of americans to be protected. >> eamon javers, thank you let's stay with the aspect of this story, pressure growing overseas, the uk parliament calling on mark zuckerberg to testify. so will international regulators step in and curb facebook's business let's bring in ian bremmer, founder and president of eurasia

group. thank you for joining us today. >> sure. >> so we've got increased scrutiny on facebook and mark zuckerberg from u.s. regulators and lawmakers but also across the pond in the uk are we sort of standing on precipice of a broader regulatory crackdown on facebook and other big tech companies not just in the u.s. but globally? >> certainly it's not going to be as easy for them, i think at the very least there could be consumer backlash in terms of to what extent they want people to consume their product, that hurts their brand, hurts in the united states, hurts in europe, too. on the regulatory side, there's a little bit of an "oh, my god, i can't believe there's gambling going on in the casino." we understand facebook is a huge advertising company, that's how they make their money, they are selling their data they have said repeat they are not a media company, they are just an advertising company and

we know that data is how they make their money so there's no shock here the governments don't know a lot technologically in terms of how they would engage in regulating if they wanted to so i think your previous journalist said a relatively soft touch from the u.s., i think that's right this is about brand and the damage that mark and facebook can do to their own brands than facebook getting squeezed from a regulatory per speckive in the u.s. and uk. >> facebook's self-styled mission and also twitter's for that matter is to be this kind of global instrument of transparency and openness and connectedness and they try to make this as part of a larger effort to basically i suppose empower people all over the world and perhaps help democracy. i wonder if there are governments around the world that not because of misuse of private data but because they don't really like the potential

connectedness and empowerment of people who might use this as an opportunity to crack down. >> i think that's probably true. though they've had plenty of opportunities to do that over the past year. we've seen erdogan who in principle turkey is a democratic country, he's been willing to shut down social media routinely when he feels like there's a political problem he wants to have control over domestically in other words, i don't think you need this facebook scandal to give latent authoritarians a reason to crack down also let's keep in mind the biggest internet market in the world, china, with almost a billion people online, facebook has virtually no access. there it's the chinese company ten cent it's very interesting that as we in the united states are talking about concerns of privacy, facebook has too much power, they're a monopoly, in china

they are a monopoly, the chinese firms and they're not being cracked down on, they're being promoted there's no privacy, there's no presumption of privacy, the state has access to that information. those companies are getting much stronger so there is a competitive aspect here between the united states and china that over time is likely to have real market impact. >> it seems like the bigger market impact, ian, would be potential terrorists on chinese goods that could be unveiled as soon as this friday. if facebook wants to try to ever enter the chinese market, igniting a trade war won't be the path for facebook's business in china, certainly. >> facebook is incredibly frustrated about the fact that they can't get into china. i don't think they have any naivete that they were going to get in any time soon that's obviously true for google as well, it's true for amazon as well these are big american companies. the big difference between u.s. trade with china and u.s. trade

with other countries around the world is when you were talking about nafta or trv tariffs on europeans or even brazil, you had a lot of republicans in the party, business people, executives that were pressuring i trump and his advisers saying don't do this, you're going to cause damage whereas china you have people willing to say we don't have market access, we want you to take a harder line elon musk made that public statement a couple days ago, he walked it back, the ceos i talked to in the united states, i'd say more than half at this point are very concerned about the level of access they have, the relatively non-level playing field and their ability to have a long-term business in china and they're willing to tolerate the americans taking a tougher hit on china in a way they aren't with other countries. >> so taking a tougher stance would open more market access?

we've seen boeing sell off in recent days over a trade war with china. >> look, any time you hit the chinese or hit anybody else there's always greater danger they'll hit you back and the chinese government feels like they're in a strong position xi jinping, paving the way for him to be president for life it's an interesting strategy trump's not only planning on hitting them with a $60 billion number on tariffs, some as much as $100 billion. clearly the chinese at least in the near term would hit us back but also you see the trump administration increasing the diplomatic record of taiwan saying they'll be willing to send senior level officials directly there the chinese, i promise you are reacting more severely to what the u.s. does and says on taiwan than they are on tariffs they'll hit us back harder on that it's unclear whether this is part of a strategy of max mull pressure and provide some effort

to negotiate face to face or whether trump really just thinks he's going to hit them hard and doesn't have a second act, doesn't have a plan "b" and when the chinese start hitting us back we'll look worse, end up in a spiral of escalation this is more dangerous the companies want to see us take a tougher line but it doesn't mean it will work. >> we have to see how this plays out. ian bremmer, eurasia group founder. when we come back, jeb hensarling joins rick santelli and tomorrow on "squawk on the street," starbucks ceo kevin johnson joins us frohis m company's annual meeting "squawk on the street" will be right back don't go away. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent.

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in chicago and rick santelli with the "santelli exchange". >> thank you i'd like to welcome my special guest, especially today and especially in front of friday at midnight, house financial services committee chairman jeb hensarling congressman jeb hensarling who is retiring and many will be very sad to see him go thank you, chairman, for joining me >> thank you, rick thank you for having me. >> all right so s 2155 barrels out of the senate with note worthy issues 17 dems backed i believe the vote was 67-31 a bipartisan rollback of regulations. it seems kind of historic. but you're on the receiving end. what do you think a 2155 what? what do you need to do to alter it to get it to pass the house i read somewhere that you want to put 30 other bills in it that have already passed and incorporate them explain it all to us, chairman >> well, number one, i

congratulate my senate counter part, mike crapo who did an excellent job of sheparding this legislation through the senate as a member of the house, we're always impressed when anything gets done in united states senate so this bill is note worthy. it is a bipartisan bill that has some modest regulatory relief and some pretty good pro growth measures in it but, you know, under our constitution, there are two different houses in our legislative branch and as "the wall street journal" opined in their lead editorial twheekd, the house is not a potted plant and so we passed an omnibus piece of legislation last june called the financial choice act which was a complete repeal and replace of dodd-frank. it's a beautiful piece of legislation, it's not going anywhere we laborously over the last five or six months broke that down into bite sized pieces and worked with democrats to see what would gain bipartisan support. and so, rick, we're up to 33

different bills that do with business development companies, small m & a brokers, sarbanes oxley for early growth companies. a lot of really good pro growth measur measures tailoring act to make sure that is tailored to size and complexity they got 426-0 to 377-34 >> let me stop you a minute. let me just stop you a minute. i want to save time here i guess my question to you is, a lot of us are familiar with part of the bills that you want to incorporate in but the real issue i sense is that maybe those 17 crossover dems don't want any changes to their bill so what i'm really interested in is after you tweak it, what is your thoughts as to whether the senate is going to be receptive to those changes or will we blow

right past deadlines and throw all this back into committee >> well, with all due respect to my friends in the united states senate, again, they're going to have to deal with the house. i offered to negotiate with senate democrats before the bill if they wanteded to have on to bill the phone didn't ring. we'll have to negotiate this after the fact we're not putting in any poison pills in this bill the bills we're trying to add to this are work are all strongly bipartisan bills and, in fact, the ranking member maxine waters and i who almost agree on nothing actually supported a number of these bills. and so this is the way it works. i mean i'm surprised that anybody thought the house would ever rubber stamp the senate's work >> not a rubber stamp. >> no. >> we're out of time, congressman. there is one topic i've been dying to talk to you about i was very excited when chairman jay powell, the new fed chairman, rolled over to the hill and came to your committee

and you discussed interest on reserves from the vantage point of where the heck did this come from never read any congressional testimony on it. there's no talk of it in any of the committees where did this come from should you be using it and how did this become a piece of monetary policy tool? quickly, tell me about interest on reserves. >> well, it started out as a bill in 2006 because we know that various banks are forced to keep a certain amount of reserves at the fed. it only made sense that they were paid some modest rate of interest for that. then we fast forwarded to 2008 and had the emergency crisis and then all of a sudden the fed wanted to pay even more interest and now all of a sudden, we shae this tool of interest on excess reserves they're not just mandatory reserves we now have the fed paying largest banks in america, they're paying them not to lend. this is the main monetary policy

tool >> i'm out of time i'm out of time. before you retire, make sure you find some younger member to carry this torch i think it's an interesting topic to dig deeper down into. thank you. back to you. >> rick, thank you a lot to chew on there let's get right over to a quick sector story >> i see what you d a turn around story for the energy stocks the sector is the best performer today. watch what is happening with that particular sector after the selloff yesterday. we'll keep an eye on those particular issues given the middle east tensions developing over there back to you. >> all right thank you very much, dom when we come back, we'll have much more on the facebook fallout. why a former insider says the company should be "embarrassed." "squawk alley" is up next. don't go away.

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