the daca thing, he loves pointing out -- i mean, that resonates a little bit if there is a deal to be made, i thought the democrats really wanted that deal i don't know anyway, what time is it? >> makes for an interesting friday as we head into the weekend. we'll see where it gets us >> mike, great having you here this week. >> and we'll see you monday. make sure you join us on monday. "squawk on the street" is next good morning i'm scott wapner with jim cramer live from the new york stock exchange carl and david are off today let's look at futures. they have been all over the map today, down a couple hundred points for the dow early on. dow would still open lower by nearly 30 points there is the nasdaq down as well s&p with an implied open down about 2 1/2. over in europe, as the world really reacts to these new

tariffs on china, they are red across the board as well from germany down to spain. that is the picture there. take a look at yields this morning, we've had some economic data, durable goods report was better than expected take a look at yields, ten year note is at 2.83, wti just shy of 65 bucks our roadmap this friday starts with trade war fears spooking stocks a volatile morning for u.s. futures as we said reversing a triple digit decline the dow and s&p, nasdaq, all flirting with correction territory. and plus grocery wars. in the age of amazon, whole foods, a new report that kroger and target will mulling a merger we'll die secretary. a die secretary and drop box oig set to make its long-awaited nasdaq day bhu this morning. founder and ceo drew houston will join us live.

it is a volatile morning for futures. you say this is all about china. >> well, i think it will be drew versus -- in terms of the morning versus the tariffs because dwru is quirew is quite compelling i think that stock will change people's minds will tech remind people of the growth in tech what i was disappointed this is that the chinese, you know, xi who is, remember, china king for life, had a list that was so ready of what they are blocking. we're talking about cherries, gl grape, macadamia nuts. what i'm saying is that -- >> you're saying they had their list ready and we didn't exactly roll out a list. >> you don't wing it with the chinese. they are so ready for us one of the reasons why they dominate and have their 2025

plan to take over certain industries is because they are very smart about what they are ready for. so trump may have $60 billion, $50 billion, it is kind of like well, how about -- how many flavors of heinz, what have they got, 57 varieties? $57 billion, let's put that on the table. no china has ever state, they know where it is coming, the pistach pistachios -- they are so on their game >> i hope you still have left. >> do you know how many cases i went through and all i can tell you you is that when you see the numbers and what they have, mr. president, i never want to say he is out of his league, but he better be -- he better understand these guys, they have been in a war against us for years. okay and we just got up to the loop and we're sitting pretty here with general mcarthur and they are like, no, i'm going to send the eighth army over and here is the game plan. they are so ready for what we

have to do that it is embarrassing >> from a market standpoint, there is no doubt in your mind certainly even as some within the administration try and tell a different story that the china tariffs dragged down the market in which they did yesterday, down 700 points was due to trade, not sheryl sandberg and mark zuckerberg, right >> sheryl said i apologize and zuckerberg said i apologize. we never a special intern al investigator because we don't trust them they are in wells fargo territory. >> but even navarro was saying no, you guys are overdoing this trade deal with china. essentially markets, chill out that's what he said last week. >> markets chill out this is not -- they think this is greenbay? these guys are playing for keeps. the chinese are playing for

keeps. they had their list are. when we put out our next list, you know, you want to see the list that says iphone 8, not x you want to see boeing wide body, narrow body? do you want to read that the fedex will now be stalled on the tarmac, every plane stalled for two hours? do you think that they are not -- do you think that they haven't figured this stuff out why do you think they have crushed us for so long some because they have got a game plan >> you're painting it almost as though we've picked a fight that we don't know how to win >> well, no, i think that we have to up our game. we have to up our game they were more ready than we were i mean, i was hoping for a thrilla manila i didn't think that it would be a beatdown >> so what does the market do? >> the market will take its cue from a merger that i hope you

talk about -- a merger -- >> a fer ghchlt rchlferger >> and the dropbox deal which is fantastic. drop has 500 million customers people will say why do i hate facebook didn't they apologize. and until we get someone to come out and say don't you realize that you were part of the russian plan to elect trump, we're all going to be struggling with exactly what they need to do they are almost ahead of it. if they say we're appointing the same counsel that investigated tom brady, boom, stock takes off. >> stock was up this morning >> well, look, they came out, they wore the hair suit and cheryl sand bhurg dsheryl sandb. she said i'm sorry and i'm sorry and i apologize. >> she used the words bad actor like 40 times. >> she was fabulous. she did what i was saying that they have do but now they have to get an internal -- they have to pick

someone from outside to look and find out who did it. we need heads. we need heads. this is america. give us some heads >> let's listen to what sheryl sandberg said yesterday. >> we have a big platform. we have billions of people who use the service and that means that there will always be people trying to do bad and it means that we'll have to react quickly there is also a lot of good. that depends upon trust and depends upon us earning it so we know that we need to establish trust. we're not going to say that we are not going to have issues we know that there will always be bad actors on our platform. but we are going to work as quickly as we can to prevent those problems, disclose those problems and prevent anything going forward. >> that was sheryl sandberg yesterday with julia boorstin. the stock is moving into the green this morning >> we have to believe that they

have artificial intelligence which says that they are apologetic and sorry, people will move on that thing is based on artificial intelligence. and so therefore they have the numbers. and the numbers might show the more we apologize, the fewer people -- so they are getting it going. >> let me step away and go down to d.c we have breaking news on the spending bill. ylan mui has the story for us from washington. good morning >> reporter: president trump now threatening to veto that $1.3 trillion spending package just as the government runs out of money at midnight tonight. trump tweeting that he is considering a veto based on the fact that 800,000 plus daca recipients have been totally abandoned by the democrats even mentioned in the bill, and the border wall is not fully funded there is $1.6 billion in this spending bill for border security republicans saying that some of

that money will go toward new construction democrats saying all of that new construction is not a wall, it has to be see-through, it is more of a fence. and that has been a sticking point for the president. he was sort of luke warm in his support earlier this week. gop leadership thought they had been able to convince him to support it but now of course the president seeming to rescind that, considering this veto with just hours to go before a potential shutdown back over to you >> thank you so much ylan mui with the latest out of d.c. >> maybe some good news out of there. there is some consensus. >> well, the president vetoes it -- >> no, but the consensus among the republicans in congress that maybe they have to be a little more closer to the democrats i'm not hearing a lot of republicans say, you know what, our president is knocking it out of the park right now. i'm not getting that narrative i'm getting maybe we got to

compromise a little, we don't want to lose midterms. >> i think there is a lot of trepidation ahead of the midterms >> yeah. and i think people don't like china because china is -- the chinese government has been a bad actor, but they also don't want to lose over it they don't want to lose their jobs and i think that there is -- getting a little bit more consensus is often a sign that they may be abandoning the president. i just kind of get that feel and i want to respond again on the trade, i'm not saying that we do 60, they do 3. what i'm saying is they are ready for whatever it takes. you want to escalate against them -- and i don't think congress wants that. i don't think congress wants certain companies in their districts shut down by china they just don't want that. right now it is a lot of states that voted for -- first ones all voted for hillary. they are smart next ones will be voting for trump. >> i know you are thinking mr. it in the context of, okay,

you've got the tax cuts on one side and you've got the other side of the boat fills up heavily with worries about trade war. and all the good stuff that has been done about a of tbecause ot is at risk potential trade wars overdue everything that was done positively from taxes. >> my sources indicate that there are some people in the white house who say i just gave them all these breaks and this is what they turn around and do is complain? like who are they to complain? they just got big, big salary increases and now i try to go against -- so there is a little bit of like are you kidding me after all i've done for you this, is you how you repay me? and caught in all of that was the old nielsens of the dow jones. it is almost as if the president has decided that the rating system and the dow and the s&p is not really the one i care

about right now. and i think we all kind of got used to the idea thathe was fo a higher stock market. well, no, he's for those campaign pledges and i don't think those campaign pledges necessarily work with the republicans. especially because it looks like the chinese are saying here is our list right now these are all hillary states we'll get real serious soon. and it is not going to be $3 billion, it will be $30 billion and it will be fedex mens on p on the tarmac. go back to fred smith's speech they spent a fortune on a chinese hub. he is one of the big he is givegive biggest givers in the republican party. he is also a great man he ain't no fat cat. >> the dow is only two points away from correction territory >> yeah, the president doesn't

watch us, he watches something else but remember when he was like saying the stock market was good what happened to that narrative? >> do you n you. >> you don't think we're retesting the february 9 lows? >> no. that was because of the vix. abo >> but if tech doesn't get its act together, it's not possible? >> no, dropbox could save us today because it will open up. i mean i have valuations -- >> you said it could be a micron market we'll talk about that on the other side too >> dropbox could open up double and people get excited again >> we'll step away for a moment. we'll come right back. still to come, dropbox making its public debut today after a stronger than expected pricing for its ipo. we'll bring you the opening trade there followed by a live interview with the ceo let's take another look at

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welcome back a source telling cnbc there is no truth to a report of merger talks between kroger and target, this after fast company reported both companies are discussing a possible merger in the wake of amazon's acquisition of whole foods. the cnbc source did say kroger and target recently had meetings over the shipt partnership my own sources on this, jim, say it is totally bogus. haven't had any talks about a merger whatsoever. none, zero >> top merger reporter ruth reader said target and kroger discussing possible merger this is a top merger reporter for fast company are you telling me that she is wrong and you're right

this is ruth reader until this morning, i had never heard of her, but now i know she is at fast company so sewer andyou're saying she m have the story >> i won't comment on the reporter, but i will -- >> because i just did. >> i will say that the people that i've talked to this morning say this is absolutely not true. >> how about all the people who just lost fortunes on it what do we do with them? so long sucker >> both are still slated to open higher we're looking at it on the tv. kroger is up three and target up nearly two >> i could call this fake news it could be fake news from the failing, you know -- whatever. >> let's just spin this way then would a deal like this make sense? >> anytime you want to take on the death star, every deal makes sense. one of the reasons why these stocks go up is it makes such

sense. because you got to win on food all right? right now we know that amazon is looking to buy more big boxes to deliver more food. so why not just craft this i mean so much sense like hey, you know what, if you let the facts get in the way of a story when you're at one of these things, you are a fool we think there will is going to be -- do you know what this journalist will be like now down someone will indict her from the columbia journalism school i doubt it >> each side would benefit from the deal >> you know what, i'm thinking that heb -- of course they benefit. >> should they make a deal >> should brian cornell sit down with rodney and say listen, we can't win by -- rodney believes that he is winning droeger

kroger expressed great confidence bli brian cornell expressed confidence so the idea that they will somehow surrender what they think is soon to come to be the cereal aisle and new small form stores in they are not interested in that it is entirely possible that they listen to us and say maybe we ought to think about it but the fact is this story point blank says they are about to merge. and i'm uncomfortable with that. because it costs people a lot of money if it is not true. >> it says talks were happening in the summer and continued into the fall >> i don't know. it worries me -- >> i'm told point blank there were no talks. >> and i'm told there were no editors. >> up next, cramer's mad dash. let's take a look at futures this morning we're well off the lows. in fact the dow would open positively now by 40 points. s&p by about 3 and a third

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less than seven minutes before we open it up here at the new york stock exchange. time for cramer's mad dash ahead of the open. >> and we were talking about what could turn the market around because it was down 700 yesterday. and i'd like to talk about things that are good because when it is up 700, i

like to talk about things to worry about. micron last night, when you go over the conference call, prices still strong flash did get a -- we had the downgrade where they said flash down 10% quarter over quarter but goldman has a very good piece saying flash, which is their second business, was down 3% quarter over quarter. they can't agree, but it was down so the battle is how much better was d rams and they were incredible and how much worse was flash. everyone said flash would be plus or minus two. so we kind of came in in line. but this stock people think it could earn 11 bucks. it is at 57. and it will earn 11. that is not expensive. it did move from here to here when we heard that d ram prices had gone up since october when most people including hp, which is a huge buyer, said it wasn't going to go p up.

it is a data center play it is an ai play. >> they go to 100 bucks in the notes this morning they say that it looks like this company is executing better than we've ever seen before >> she athey and management is really -- i wish we could speak to management >> that would be nice. >> this was a really good quarter. it is hard to make the new stuff. you need a lot of semiconductor equipment. this is hyper convergence. >> sanjay will be on >> we have sanjay? by the way the editor is good now. >> okay. the opening bell is just a few minutes away and dropbox at the nasdaq celebrating its ipo. stay tuned for a live interview after the stock opens for trading. you can see they are getting

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street." dropbox drew houston and company getting ready to ring the opening bell in celebration of the ipo. as you know, we'll speak with drew coming up looking forward to that. >> i'm looking 35 bucks is a possible level it sells at 26 times sales there. now, remember they are about to have earning 230 times earnings is not the way to lack ook at it. but i think 26 times sales is actual it do open at 35 >> they are already cash flow positive, right? >> in 2013 they were doing well. this is a very good company. and we all use it. >> is this the ipo that tech needs to right the ship? >> oh, my, is it ever. yes. this is the intersection that could turn the game around no one saw it coming and it

could turn the game around >> because it follows what wasn't great, what hasn't been great of snap. so that is why it is interesting as well. >> and -- right. >> and you're watching the opening bell the s&p 500 real time exchange as we said, education group based in china celebrating its ipo today. big crowd here for that. >> is that a peace offering? or was that actually prepared? >> wilbur ross should be here. and the nasdaq also celebrating its ipo, dropbox deidre bosa will interview their ceo. we're looking forward to that. a big day for them congratulations in midtown and everybody here a couple of bookend ipos but this is important trying to get tech back on track >> we need to because lam

research that makes the machines for micron is down that is really important because what this says is that micron, there are too many machines and we'll tip in d ram price. so watch lam lam is more important. >> and speaking of micron, just to note, it has opened lower, but it is off its lowest levels at least in the plea mre-market. so maybe that ends up being a positive >> citi went buy to hold using a figure that i can't get for how weak flash was i don't know where they got it i think sanjay -- look, i think the interview is really important. he has to say that flash isn't as bad as people are saying. how about positive news? how about kb homes what a quarter california gold rush a lot of analysts are back on. >> wow, a big morning. >> i looked at a studio, 400

square foot studio for my daughter this san francisco. $3500. she thought it meant for the year i had to explain to her, no, it's for the month >> tudo you know what else is good nike up better than 4%. >> the conference call was so gla great. it started out with we now see a significant reversal of trend in north america's momentum of scale. new innovation in platforms and consumer experiences this was the quarter that if there was something that could turn -- now, greater china was up 19% >> international is ripping. but you said it though you said the key and i've never seen anything like this. i saw at least five notes this morning from various analysts on wall street who all use the word about north america inflectining >> and i got to tell you --

trevor everett very much involved the zodiac, don't tell anyone, but they now have consumer data and analytics in order to deepen relationship with consumers. that is what cherylsandberg an zuck had about you footwear won't laeblgts thelect the president. i don't know what the russians are doing. maybe they can -- i don't know how they -- maybe make some sort of moccasin. >> do you think putin is wearing air jordans? >> i don't know what kind of sneaks he wears. what have they got there in russia >> did you feel as though some of the gains that adidas has had versus nike are abating? >> roll back mark barker who by the way is a competitive guy, he is a velvet fist he has a velvet glove.

this was a great quarter and everyone loves nike plus don't forget, they did not even play up the world cup, which is amazing. earlier this week i had will frost on and he reminds me where the world cup is being played, where the first round is >> russia. >> due they got rid of the stalin thing >> and are you comfortable buying the stock right here?ue i thing. >> and are you comfortable buying the stock right here?e tn thing. >> and are you comfortable buying the stock right here? th thing. >> and are you comfortable buying the stock right here?then thing. >> and are you comfortable buying the stock right here? >> up three? as karen cramer would have said, i'm comfortable telling you you are an idiot because you didn't buy it yesterday a great tension. >> while we say that there is an inflection in north america, the story hasn't completely turned yet though that is somewhat concerning. do you buy the stock until you see better results 1234. >> that is a really good question this was a fabulous quarter.

>> they are killing it international. >> do i think you can buy it -- to say that you can buy something up two, what happens if the president comes out and says, you know what, it is not $60 billion, it is more like $90 billion. and they come back and say we'll put a tax on nike because we like adidas. what happens if the prc comes out in favor of adidas that will hurt nike. >> yeah, but they love nike in china. >> so you think that jordan is too powerful xi likes the jordan? that a could be. xi might like the jordan >> they like kobe and lebron. >> kobe's shoe is selling really well the lebron shoe is selling really well. >> how many trips did you see kobe make to china in the last many years of his career i think it speaks to what china thinks about not only our sports, but our basketball shoes, things like than about.

>> so it is beyond politics. jordans are beyond politics. okay i'll stipulate that. >> jordan was and i politicpoli most of his career because everybody buys tennis shoes. >> so ninike is above politics >> i'm watching the tech stocks to see when the sector turns itself around. facebook is getting a boost today. netflix is up. apple is still down. >> xi didn'tlike tshe doesn'xi . there is a fear that says apple is next. >> but you are putting almost every stock story in a trade prism. that speaks to how you think about the market right now. >> i just think our president has upped the stakes he has upped the stakes. we can't realdidn't really have.

i do think that when you see a micron open down and go weaker and you see a lamb oi research down, we are concerned the stock was up a lot here is something interesting. wynn is up big >> even though he was dumping shares >> and xi has to authorize any takeover of wynn, right? because it is macao. so that is something wofrth watching. >> so we have the tariffs supposed to go into effect on steel and aluminum today they get suspended until -- they will figure it out on may 1. but for all of these countries maybe the trade bark was worse

than the bite at least as it pertains to that and maybes it is the same with china. maybe just the old negotiating tactic >> that could be i think that is -- >> it is unconventional. >> and you pick bolton over mcmaster and bolton has favored war this north korea so kind of amps up the stakes. we forgot about bolton bolton is a different kind of guy from mcmaster. dereliction of duty by the way, excellent book bolton did not write that. but i'm watching and i'm saying against the china trade is so much good news that it is difficult. there is a lot of good earnings. the carnival earnings yesterday were so good so you've got travel and leisure good you have kbh really good i went through that darden quarter, that wasn't nearly as bad. a slight down tick for olive garden retail has been very good.

and so i think -- the mall has been good. and nike is sold on in the mall. there was a drug that -- >> all of that is being drowned out though >> conagra was good yesterday. >> all of that is being somewhat crowned out by trade fears ian bremer tweets probably the worst/biggest single day for geopolitical risk since i started eurasia group in '98 some concerns about bolton >> so when the italian ten year was at 7 going into the november debates that we had in michigan, that wasn't as bad >> his point is well taken we should be talking about all

the good things going on in the economy and instead we're talking about china. >> it's like i have to follow twitter. >> national security policy. trade wars everything but >> i think the weekend is -- >> the bread and butter of the market >> we're oversold. there is a lot of stocks thrown away yesterday that are doing incredibly well. we've got sandberg and zmuck apologizing left and right >> which you say is not enough >> i need to see a ken feinberg saying here is who was hurt. and you haif you want to opt ou it at the top. i don't know ian bremer, existence of his company? >> existence of the eurasia group for geopolitical risk. >> have you got that start date? watch boeing watch caterpillar. >> boeing is up.

cat is up. >> really? now watch united reynolds. >> these are fractional movers >> but i'm looking at the trade stocks that people think of. and, you know, i got to tell you, there are so many companies that are doing well that i just -- it is a little scary to be able to say you know what, everything will be blotted out by a trade war but that is what people are worried about. and i think that to be not worried is a little oblivious. >> i wonder if -- i know larry kudlow is getting up to speed in the white house. i wonder if his voice is needed in some respects to at least be heard from to maybe leave some of the fears that are out there about, you know, what is going on, certain aspects of

geopolitics. >> my take is that it is very much needed. i felt that the walk backe by t -- i think there was a quid pro quo. he has agreed that going against china is good, but he will not agree that there should be tariffs in europe. that is my understanding and i think that is really important. >> maybe one of the keys to the market today as we have already discussed certainly from a technology standpoint is dropbox's ipo. bertha coombs has a preview of what to expect >> and we should get trading first trade coming sometime between 10:45, 11:00 a.m. this morning. it is still a different day for tech we have the fang names starting off higher, rolling over here. the 11-year-old firm familiar to a lot of folks, 500 million users, they are cloud store think and file sharing they priced well above the range. and the range moved up at $21 a

share. selling 36 million shares. it will have the dual structure where 10 million of the shares will have ten times the voting rights of the overall float. meantime valuation is north of $8 billion this is a real coup for nasdaq which has had 29 ipos so far this year, but only four have been tech. one of them very successful a week ago also in the cloud business they wound up opening up about 80% above where they priced which had also been above the range. the market starved for tech ipos 24 year. nasdaq over aall, among the bes performers roku, that one up better than 130% from its debut. and stitch fix another one that has done well, up nearly 40% we'll be watching for that opening trade coming up at

around 106789me me10:45. >> thank you so much meantime there is an ipo here as well bob pisani is on the floor with what is moving certainly after a 700 point decline, not the greatest push out of the door this morning >> i think i think it t is an at negotiated away. it was ugly in asia. a lot of big names in japan for example. these big ex-porters all down the big conglomerates, all the stocks over in china were down but i think we have a more muted open here. $3 billion worth of american

goods in tariff duties from china is not in a big. and this is only on steel and aluminum by the way. this is not on the 301 thing so energy is the leader again. that certainly good news it has lagged, but not a big sector and neither is materials consumer staples, that is already, but that has been a laggard. tech and banks is what matters here financials and tech are 41% of the s&p 500. materials are 3% is you can't move the market forward without having tech and financials as a leadership group and they are just not and we don't have them there. so everyone is saying that we have to get used to the new leadership group so utilities are up 2% this month. reits up 2%. this won't do it energy 6% of the s&p 500 it is 23450is that enernice tha better, but it won't do it either tech and financials are lagging and that is why the market has been having a problem for the last three weeks and we need to

fand find a way out of that s&p down 2.5% for the month. so market issue, we've gone over there. the main one is the trade war implications we have a more hawkish white house potentially that may impact that trade war fight. we have the social media in an existential crisis we've had the fed saying higher rates are coming all this is a lot to weigh on the markets right now. but here is the big thing. the earnings we're talking double digit earnings increases this year this is j tis why the markets hp so women 18% for this quarter 20% for the second quarter q3, 22%.eomen. 18% for this quarter 20% for the second quarter q3, 22%.lomen. 18% for this quarter 20% for the second quarter q3, 22%.lomen. 18% for this quarter 20% for the second quarter q3, 22%.men. 18% for this quarter 20% for the second quarter q3, 22%.en 18% for this quarter 20% for the second quarter q3, 22%.n. 18% for this quarter 20% for the second quarter q3, 22%. 18% for this quarter 20% for the second quarter q3, 22%. this is what matters trade wars are hard to model about that we can't figure out what percentage of the industrials will get affected. but if q3 goes from 22% to 15%,

you have a problem with the market we don't have new inputs into the numbers. look what happened to u.s. steel. was 34, it went to $47 and then it went all the way back down to $34 a complete round trip. yesterday they said we'll good empty a lot ex-empty ex-e xhch of companies dropbox, we're talking about an average insider price of $1.78 here $21 is the price there $1.78 is the average insider price for dropbox. an amazing story back to you guys >> there will be some champagne corks popping at the nasdaq and beyond after that ipo.

let's go to chicago and rick santelli >> you know, if you take a step back, most maturities this week are down close to unchanged. both on the day and on the week. twos on the day basically unchanged. fives unchanged in the day if you look at tens, up one on the day. down one on the week 30 the same, up doone, down one. considering all the volatility we've had in other sectors, i think it is something that is giving us information about treasuries if you look at a honesty to date of two year note yields, yes, we've had a little setback it has come off a bit, but still a pretty much 45 degree rate incline on that chart. now, if we look at a month -- february 22 of tens, this is going to be in my opinion 21 sections, today would be the 21st, we close in the 280s you see on that chart. i really think that this is a big dynamic to pay attention to. here we sit basically up 42

basis points on the year let's look at year to date of bunds. they are hovering in the low 50s. they are up bharlyarely a dozeni points maybe that is why monetary policy will look a whole lot more harmonized with the european sector as time goes on. let's switch to foreign exchange it is such a high portion of the dollar index, but sideways for the most part. unlike the next two charts, pound versus dollar, wow, pound having a good time even though mr. carney did not raise rates yesterday, the setbacks in the currency was small now let's switch it, this is a dollar versus the yen which means the down chart is in favor of the yen against the dollar. so a lot of the dynamics keeping the steady dollar index aren't really giving you the whole picture. jim, judge, back to you. >> thank you so much we are on ipo watch.

cloud storage company dropbox making its public debut. stay tuned for the opening trade followed by a live interview with the ceo "squawk on the street" will be right back ♪ feel that? the rhythm of the world. global markets, but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

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there is the s&p 500 heat map. somewhat split a little more green, maybe i mean it's a slight gain for the s&p. >> it's early. >> jim cramer doesn't have a problem with the way things are going thus far would rather see it this way than a big rush out of the tegas. in fact, we'll get stop trading with jim up next you know what's awesome? gig-speed internet.

you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him,

ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. time for stop trading. what do you got. >> i want to go over drop. the most important story today i'm looking at my cloud kings, you look at adobe systems, the best, price to sales basis 10.4. people are excited about drop. if they beat 35, that's 10.4 i think that $35 is the valuation of what the best one is adobe and eight time -- you can go back and do eight times 2019 sales and that would be $30 and that's really equal to my cloud king number.

understand that anything above 35 and you're paying north on sales of any company in the cloud. but that 35 is probably what people will pay. >> there was a time you had to have mobile, social or cloud remember those days. >> mobile? >> social? >> mobile is app they're dead social is facebook they're dead. >> cloud. >> boeing is up so it looks like the chinese are going to stick with almonds and apricots for now and canbusiness. i lived next door to the sacramento tomato juice factory. >> what's on mad tonight >> drop is the most important things that happen i think it could go to 35 and be equal to what adobe. >> market is getting a pick-up dow up about 100. >> we like that. by the way, kroger and -- what was that >> target. >> yeah. okay i'm going to shop at both and see if they merge this weekend.

>> dropbox's opening trade, a first on cnbc inteiewi trvw thhe ceo as well. ceo as well. keep it right hereooming auto i. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerts. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.

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new home sales for the month of february, many people look at the number as important, handle with the rise in interest rates and new things going on, tax policies it was about as expected 618,000 seasonally adjusted annualized units here's a big one, 593 last month goes up to 622,000 so pretty much lateral, down 4,000. but it's a decent number if you go back we finished off last year at 643 so it's been pretty steady, not much drift. to find out exactly what's underneath the numbers, we head east to diana olick. diana? >> i am looking at the median price, 326,800 for february a big jump from 298,000 a year ago. that's all the builders talk about how they cannot build lower price homes because the price margins are affected by higher tariffs, labor costs, costs for materials from the tariffs that is, and so that's

what you're seeing in the price. the question is going forward, will home buyers be able to afford these homes they're mostly going to be move up or higher-end homes, nothing on the low end we have mortgage rates rising in february as well this is the first good read, new home sales based on people out shopping, signing contract, not closing. people out shopping in february with those higher mortgage rates. we managed to kind of stay a bit flat and as you said that correction up from january so solid home sales could be higher, of course, but what we really need is more supply on the low end and with those prices that is not what you're going to see back to you guys. >> all right thank you very much, diana olick. scott wapner, i can hear him talking about kb homes. >> already up on earnings leading the with way, up more than 5%. as diana was reading the numbers i was looking at all the other names and whether it's pulte or toll, they are up across the board. >> good morning. welcome back to "squawk on the street." i'm michele caruso-cabrera scott wapner here as well. knew that already.

carl, david and sara are all off today. take a look at the markets, dow industrials recovering some of the sell-off from yesterday, up 107 points we were down more than 700 yesterday. the s&p 500 is higher by 6 points the nasdaq is lower by 5 our road map starts with markets on edge. there's fears over a trade war shaking up global stocks a full rundown and where to put your money next. >> and it is the largest tech ipo since snap dropbox getting ready to go public, pricing at $21 per share above the expected range a look at what you can expect is stralts ahead. saying sorry, facebook's sheryl sandberg apologizing on cnbc for the massive data scandal. her exclusive comments from our interview straight ahead let's talk more about the markets mixed this morning with the dow hitting triple digits after yesterday's massive sell-off major averages still on track for their third losing week in four as investors fear a potential trade war with china the industrials by 102, s&p up

by 5, nasdaq lower by 7 as we continue to see tech drift lower and lower. for more let's bring in tobias, chief strategist at citi hey. >> how are you, michele? >> i'm doing okay. the market, i don't know, next -- so next year's s&p earnings, if you look at what the multiple is, s&p is trading below 17 times next year's earning because of yesterday's sell-off it's almost like the market is starting to anticipate that guys like you might cut your earnings expectations based on these trade fears. are you? how do you model in what could happen as a result of tariffs? >> you really can't model in perfectly well what you tend to do is when you set up your price targets and estimates, you think what could go a bit wrong and don't assume everything will go perfectly right. for example, for this year we're' at $151.50 on earnings,

when a lot of people are more in the 155, 156 area. we've built in some cushion for some things that don't go perfectly bell well. in addition 5% earnings growth, some are up 10%. it's too far to go out there to assume anything. the old expression when you assume you make something out of you and me so i think people have gone too far in their expectations in january this year. we were out there telling you people are too euphoric and seeing our sentiment metrics pulling back to neutral areas. keep in mind we have a 2800 s&p target for this year, we weren't out there with 3,000 or more we did think there were things that were going to be problematic and it wasn't going to be a perfect year. >> notwithstanding the fed people are trying to i think, still gauge where the fed's path is going to lead over the next year and a half. >> that's fair look, scott, we've been out there talking about inflation pressures basically looking at the gap between u 6 and u 3

unemployment rates as being a good gauge for what happens to the labor costs and don't get sanquine about the february wage numbers drifting down to 2.6%. we could see the numbers over 3.5% based on some models by the end of the year. the bond market has to react and fed has to react, home builders seeing labor costs going up, industrial companies are seeing it, energy companies are seeing it, material costs are going up with nothing to do with tariffs or trade that was already in place and would suggest the multiple on the market might have to pull in a bit this year. nothing terrible we will look for an up year, just not a great year. >> you had bostic from the atlanta fed this morning saying that inflation could get ahead of the 2% target i just don't think that people have a real good grasp on what inflation is truly going to do and how active the fed may be, even if the dot plot chart or whatever is for 3 this year and maybe more -- maybe fewer next year, the same, i don't think people have an idea of where

inflation is going in the near term >> well, again, a lot of our data that looks at things like tip break evens for the bond market measure, look at metal and oil prices if you start seeing some of the material costs going up more, if the dollar weakens more and supports that, it just puts upward pressure on inflation trends you can do some of that preemptive work. i think people just have been too sanquine about stuff and that was showing up in sentiment. it's starting to sink in and you're seeing people ease back on some of their expectations for 2018 which is appropriate. it's not -- >> you're painting a pretty rough picture. if i'm listening to you -- >> i'm not. >> you know, hold on, so you're worried about people being overly optimistic about earnings growth and then you think that the fed could be even more aggressive than people expected. so the e coming down, interest rates going up to provide competition to stocks, you said that you were getting more

comfortable with the multiple, 17 times next year y is that still too high what do you think considering all you said. >> >> let me give you some background if you look at 2 to 4% inflation ranges and go back to the 1950s the market trades at 18 times earnings on trailing 12 months at the end of the year it would be 18 times the trailing to 2018 numbers. it meant the market will be up 5, 6% this year. that's not a terrible return you do have to think about how you position yourself within the market more towards value, away from growth, and noting tech stocks slipping we're not a fan of tech as a result of some of these multiple compression ideas. it's a question of how you value those earnings >> got it. >> i really think michele was on it you don't sound like a person who thinks the stock market can be all that great this year. you're telling me the leadership

group which had rolled over, is not going to perform well. what's going to fill the void? >> so we think financials, we think energy, some select areas in consumer discretion like media, like consumer discretionary specifically on consumer services, hotel, restaurant, leisure, things like that have some real opportunity. there are places in the market where you can make money and some industrials, select capital goods. concern about trade which i think is a fair one to be worried about. there are places in the value space as opposed to the growth space, and, you know, we put on note a couple weeks ago called the bull and bears clothing i'm tarnished being a bear saying you're only going to make 6% money on the market plus another 2% dividend yield. if are bear if you make it 8% total return that tells you how odd the sentiment is in the market where people are just thinking they were entitled to more. >> point taken okay thank you, tobias. good to have you on. >> take care have a great weekend. >> all right >> you too.

the facebook fallout continuing this morning. the energy and commerce committee making good on its promise sending an official letter to ceo mark zuckerberg requesting he testify before the committee. this after coo sheryl sandberg spoke exclusively to julia bore stein and apologized she joins us with more julia? >> scott, thanks so much sheryl sandberg telling me that facebook will do what it takes, including hiring more people in order to protect its users take a listen. >> we are massively ramping hiring we are going to continue to ramp faster and hire more people. we are investing in machine learning and automation to help find some of these things. there are areas we've had great success. we take down 99% of isis or that kind of terrorist content before it even hits the platform. machines make that possible. our commitment is clear. what matters is our community,

what matters is the safety and security of people who use facebook >> sandberg warned that there will always be what she called bad actors they will have to protect against, but said she and mark zuckerberg take their responsibility running this platform very seriously. >> we have a job to do every day. mark and i come in here our teams come in here, we have dedicated teams around the world and we have the responsibility to build great products and to treat people's data carefully and we have the responsibility to disclose to people when problems occurred. we have an enormously large platform and with that, size and scope, comes real responsibility >> now, tomorrow is actually the ten-year anniversary of sheryl sandberg working at facebook the company has grown exponentially over the past decade now with $40 billion in revenue up from just $300 million when she started and with 2.1 billion users, when she started there were 145 million users

the company's employee base has grown from 850 employees to now 25,000 employees and counting. now perhaps most remarkably in how sheryl sandberg has helped lead the transformation of facebook, back then when she started, the company had zero dollars in ad revenue. now 89% of facebook's -- zero dollars in mobile adrevenue. excuse me. zero in mobile ad revenue. now 89% of facebook's ad revenue is from mobile back over to you >> yeah. incredible the revenue number alone in the ten years, $300 million to $40.1 billion, astonishing. >> just if you think about the transition from being a company that was desktop oriented to a company that's almost entirely mobile oriented it's really changing the way they do business >> got punished for a long time. remember all the hand wringing, will they monetize mobile. yes. and obviously they did it. julia, thanks. all right. when we come back, trade war fears hitting global markets

pulitzer prize winning columnist jim stewart is with us later the former chairman of goldman sachs asset management joins us, jim o'neill weighing in coming up. dropbox is getting ready to make its public debut we will take you to the nasdaq live and later on "squawk alley. we will speak live with ceo drewhousen "squawk on the street" will be right back right back do not go away well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

welcome back president trump threatening to

veto a $1.3 trillion spending bill that was passed by congress only hours before a government shutdown deadline last night and also, just moments ago, the justice department charging 9 iranians in a hacking scheme eamon javers has more on both stories and joins us live from the white house. >> michele, on the cyber espionage situation rod rosen type has been speaking just within the past couple minutes announcing the indictments of the nine iranians. they're named by name in the court documents. it's unlikely, though, because they live in iran they will ever see a u.s. court here. this is the united states making it clear that it knows what happened in this cyber espionage case and expressing its frustration about it and putting some of the details about it publicly rod rosenstein saying these iranians hacked the computer systems of 320 universities in 22 countries, 144 of the victims were american universities

they say that the defendants also stole research that cost the universities about $3.4 billion to procure and maintain. a significant announcement there on cyber espionage from the deputy attorney general. meanwhile, here at the white house, aides still cram scrambling to respond to the tweet from the president earlier this morning in which he said he's considering vetoing the omnibus government spending bill saying i'm considering a veto of the bill based on the fact that the 800,000 plus daca recipients have been abandoned by the democrats, not mentioned in the bill, and the border wall, which is desperately needed for our national defense is not fully funded i can tell you aides here were surprised at the tweet because officials have been suggesting as recently as yesterday that the president would, in fact, sign this bill that he was pleased with what he got in the negotiations and it all was moving forward smoothly. now that throws a monkey wrench in the process aides figuring out what to say i have spoke on to a white house official who says this is about

the president's concern about a daca deal the president is frustrated that he thinks the democrats don't want to deal whatsoever they would rather go into the november elections with the issue hanging out there because democrats see that as to their political advantage. i can also tell you this official says that even though congress is gone, they passed the bill and most of them have left town. this official saying he's confident if the president asks for more in this bill, congress will come back remember the deadline is tonight for this spending bill to avoid a government shutdown. we're going up to the wire here, but a very frustrated president trump venting a little bit on twitter and we'll see whether or not this leads to a government shutdown tonight very unsettled moment at the white house as aides trying try to figure out what's happening and whether or not this reopens negotiations altogether up on capitol hill where as i say many members of congress have left town for the weekend >> all right thanks very much, live at the white house. we have breaking news on the death of a business icon

wayne huizenga has died at 80. he founded several well-known companies including waste management, blockbuster video and auto nation and he was also an owner of the nfl's miami dolphins, major league baseball's florida marlin's and the nhl florida panthers business man wayne huizenga, a business icon and certainly an icon in the state of florida dead at the age of 80. >> and often a frequent guest on cnbc when he was running those companies and i remember i met dan marino because wayne huizenga brought him to the studio, there he was in makeup because he was going to be a guest host with "squawk box" that morning. >> amazing bred of his career. waste management, blockbuster and auto nation, changed a lot of different businesses. >> and knew when to get out of a business, right, because blockbuster when on to its demise he had long been gone. an icon in florida, he had so much influence on bringing

baseball and hockey to florida >> that's right. a very, very big footprint in the world of professional sports as well. we will have more on the day throughout the death let's switch gears trade war fears spooking stocks. after yesterday's sell-off the dow, s&p and nasdaq are flirting with correction it territory we're joined by the pulitzer prize winner, "new york times" columnist jim stewart. >> nice to be here. >> yesterday was a day down 700 and everybody talking about china and a trade war. >> well, there was a lot to absorb there was i knee the renewed trade war fears, the interest rates state, the cracking of the fang stocks over the facebook thing and more turmoil in the white house. what more can you put on the table for one day. >> let's add the spending bill >> and now the -- >> the fact that there is so much money to put potential on treasury who is going to buy the supply. >> a cliffhanger we don't need

one of the biggest pieces of news that didn't get nearly as much attention even as, you know, he's imposing tariffs on china he basically undid most of the steel tariffs. he suddenly in one fell swoopts exempted all of the u.s. so-called allies including south korea. we've got the biggest importers of steel or exports in the u.s. exempt from the tariffs if you believe in free trade is great, but i think the market really didn't absorb that as much with fears over china. >> the steel stocks may have known that you went back and looked at that week, you know, from the day that trump made the big surprise announcement, this what is i'm going to do, to when they were implemented all the steel stocks were down, right they didn't get anything out that move. there was a foreshadowing maybe this was going to be weakened. the market still very worried about the china situation. >> well, you know, china is our second biggest trading partner after the european union and if china, you know, wants to slap big tariffs especially on our

agricultural products that will start to hurt. nobody like really wins a trade war. history is just that i've done a lot of research on it in the last few weeks and very hard to find anyone who wins one of these things maybe trump is going to get leverage with them to negotiate over the trade secret issues, the theft of intellectual property that is an issue with china that needs to be addressed. everybody agrees with that slapping on tariffs is a crude way of going at it it's going to hurt u.s. consumers no question about it. >> i mentioned a tweet earlier that ian bremer of the eurasia group put out saying this was the biggest single day for geopolitical risk, maybe, you know, combing with china tariffs, bolton getting his job, since the eurasia group was founded in '98 do you feel we are on the precipes of that level of risk >> not really. i don't think we should exaggerate this. it's hard to know with president trump how much is posturing and

unique and negotiating style, how much is talking tough one day and then quietly cutting some kind of deal on the next. you know, i don't think there's reason for panic or worry we're on the abyss, but, you know, look there are a lot of uncertainties here and the market has been priced for very good news. the technology stocks have been priced for, you know, tremendous growth going ahead and as i said many times on this show, an occasional correction is not a bad thing. the longer markets go without one the worse they tend to be. >> it does feel like we have shifted, though, from tailwinds to headwinds in a very big way and what do you think about what's happened with facebook in the last week? what do you think about the response from mark zuckerberg and sheryl sandberg? was that enough? it seems inevitable that their inherent business model is very much at risk they are able to charge money because they know your data and now it looks like they're going to be able to monetize that data less either because of their own choosing or because somebody is going to make them do that

>> i think their response this week shows they were surprised, they were, you know, weren't prepared for this. they have really been behind this curve when it comes to data security they've got all the r&d and got to pour something into this. they say we're going to find a way of stopping this, prevent this well how and where is there a technological answer to this i'm not an expert enough to know the answer but they better start coming up with convincing answers pretty soon. at the same time the facebook model is very powerful users are saying maybe we will boycott it well, let's see about that i mean the facebook users i know, they can't really do without it they're on that thing all the time where else are you going to go it is like a natural monopoly. i think the users will stay there. the question is, can they continue to grow the advertising using this highly tailored data? i think there is a way out for them, but i think the lofty growth, pie in the sky expectations for the next, you know, nine months to a year will

have to be toned down. >> before we let you go discuss your column. i think it's a topic that a lot of people are kicking around and maybe having a hard time with and this is martin shkreli versus elizabeth holmes. were they fair >> when i read the s.e.c. complaint on elizabeth holmes, it's an astonishing fraud. it's like you read count, count, count, lie, lie, lie fake demonstrations. i mean it was -- >> enron-like. >> massive fraud. >> they did not use that word lightly. >> the details it was truly massive and one way was based on this eddie face of falsehoods she and her co-defendant they raised over $700 million from investors. so okay, martin shkreli nobody likes him for good reason, a bizarre guy, he got sentenced to seven years in jail, he paid all of his investors back. many of his investors made millions that doesn't excuse the fact

that allegedly he defrauded some of them out of about $10 million. okay we've got 10 million shkreli, seven years, $700 million elizabeth holmes so far elizabeth holmes has been barred from being an officer of a public company, pays a $500,000 fine and still the ceo and chairman of thernos and that's it. she could still be charged but settling the s.e.c. case usually means there's not much happening on the criminal front. we'll see. i don't think that's fair. >> it's pretty telling i thought one of the most interesting things in the entire column was the quote from shkreli's lawyer brafman, i've never had a client who did more to hurt his own standing with the court than martin shkreli. his behavior and comments probably added several years to his sentence. >> shkreli basically confronted the prosecutor's, taunted the prosecutors, impugned the justice system, attacked law enforcement. now does that sound familiar is there anybody else who might be learning a lesson or two from

this i'm not going to say anymore about it but the lesson is, do not take on the prosecutors and the government outside the court leave that to your lawyers he was outrageous. he -- his bail was revoked after he advertised on facebook for -- he would pay $5,000 for a hair from hillary clinton which they interpreted as an invitation to assault her. he thought that was funny. you know, even if he did, that's something he should have kept to himself. >> maybe he wanted to test her dna or something. >> great to be here. >> when we come back, we're on ipo watch awaiting the first trade out of dropbox we will take you live to the nasdaq and have an interview with the ceo "squawk on the street" will be n'gowaba dot ay. mercedes-benz glc...

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america that could be where traders battle it out with regard to the prospects of the market going forward given the rhetoric around trade and trichs these stocks in particular, one that have a lot of revenue exposure to china specifically, not every company breaks out its revenue exposure by geography or country itself but these do according to data from msci john deere a farm equipment maker gets around 8% of total sales from china caterpillar construction equipment, heavy machinery, 9% of sales come from china boeing, we know this has been one of the company's hugely in focus as we talk about trade and tariffs, 11% of sales come from china. 3m, 13% of their sales and the auto parts side, 13% as well we want to focus on these three names right here caterpillar, boeing and 3m the big etfs in the u.s., exchange traded funds that track the industrial sector and industry groups those three

stocks always rank among the top ten holdings of the biggest etfs that track industrials, two of them are the spider select industrials that ticker xli and the vanguard industrial. those two etfs are the larger ones in the u.s. and have a lot of exposure to namely boeing, caterpillar and 3m when it comes to funds those are ones to watch in the battle over china, tariffs, trade and how it plays out in the market. back over to you guys. >> so if any holders of those are wondering what happened yesterday, good explanation there. thanks so much. let's get to sue herera a cnbc news update at this hour. hey. >> good morning, michele thank you very much. here's what's happening at this hour, everyone some late details on that armed man who took hostages in a su r supermarket in southern france today. the attacker killed by police but the french interior minister said the shooter killed three people and the french president macron is calling it a terror attack a major cyber attack hitting

atlanta and everyone who has done business with that city may be at risk the attack causing an outage of various applications including some customers use to pay bills or court-related information. a new york city firefighter was killed while fighting a five-alarm blaze last night. he was a 15-year veteran of the fdny the fire broke out in the basement of a building that was being used as a movie set. and it's a bird, it's a plane, actually it just could be a new amazon drone the tech company issued a patent for a drone that can interpret gestures and voice commands, among many other things. reports say that drone cameras and sensors could recognize a person waving it towards them or perhaps shoeing it away. no guarantee the patent will actually lead to a product but it's intriguing nonetheless. that's the news update this hour michele, back downtown to you. >> all ight. thanks very much, sue. if you're hearing all that noise down here, there's a big

celebration at the post behind us so when we come back -- >> ipo. >> what? >> another ipo. >> dropbox is getting all of the buzz for obvious reasons but there's a big one down here. >> when we come back, fears of a trade war spooking investors a rebound today, but it's only slight dow up 77 points, compared to the more than 700-point dropoff yesterday. that's not a big comeback. former goldman sachs asset manager jim o'neill will weigh in on the markets and fears of a trade war next fire fighting is a very dangerous profession.

we have one to two fires a day and when you respond together and you put your lives on the line, you do have to surround yourself with experts. and for us the expert in gas and electric is pg&e. we run about 2,500/2,800 fire calls a year and on almost every one of those calls pg&e is responding to that call as well. and so when we show up to a fire and pg&e shows up with us

it makes a tremendous team during a moment of crisis. i rely on them, the firefighters in this department rely on them, and so we have to practice safety everyday. utilizing pg&e's talent and expertise in that area trains our firefighters on the gas or electric aspect of a fire and when we have an emergency situation we are going to be much more skilled and prepared to mitigate that emergency for all concerned. the things we do every single day that puts ourselves in harm's way, and to have a partner that is so skilled at what they do is indispensable, and i couldn't ask for a better partner. welcome back i'm michele caruso-cabrera along with scott wapner, live from post nipe at the new york stock exchange an hour into the trading session. where we stand, industrial averages off the highs and lows as well. higher by 81 points. the s&p 500 is higher by 5 and the nasdaq composite lower by 2.

so not regaining anything from yesterday as those fears about fang continue to hang over this market beyond all the other trade stuff. >> global sell-off fueled by fears of an all-out trade war after president trump slapped a new round of tariffs on u.s. imports. hi, eunice >> scott, i'm coming to you from u.s. trade deficit central this is where american companies have been relying on manufacturers like the one i'm in right now to produce for them men's shirts, for example, toys, television sets, and to eventually sell these to american consumers today, the word to describe the mood in this export zone is nervous. we woke up this morning to have mediate reaction from beijing with tariffs that are seen as a warning shot of things to come now these tariffs are not a direct reaction to president trump's announcement yesterday,

but instead, to the steel and aluminum tariffs that were announced a couple of weeks ago. and the chinese really did select the products very carefully. there's an interesting pattern and that is that the chinese are going after president trump's political base, american farmers, as well as swing states for example, if you look at nuts in california, they are going after almond country which went for trump during the presidential race. in wisconsin, the same story there, where wisconsin is a producer of american ginseng and american ginseng was produced in a part of the state that went for president trump. ethanol is also on the list and a lot of people tell me within the agriculture industry that what the chinese are doing is hoping to rattle the corn growers in the midwest in order to get a reaction for them because they had been very optimistic about ethanol and

selling ethanol in china now that's the overall pattern and what was also interesting is that the chinese state media today had said that they hoped to see soybeans hit next i was speaking to one american executive who is in the agriculture business here and said if soybeans are on the table, then we are, indeed, in a trade war. that's really what business people on the ground have been concerned about. they're telling me that tariffs, we don't know which tariffs are going to be hitting which products and they understand that the trump administration wants to hit high-tech goods that are being targeted in the made in china 2025 strategy for beijing but worried it's going to hit a broader array of goods and for them, they will have to find other ways to survive during this time guys, over to you. >> all right insightful stuff thank you so much. live in china for us for more on the potential trade war with china and its impact on the market joined by jim o'neill former goldman sachs asset

management chairman. good to have you here. when you look at the market yesterday, that decline of 700 points seemed to be pricing in a lot of potential retaliation was the market right what do you expect from here on out? >> well, as always, when i'm on with you guys, the caveat i'm not in the markets anymore and don't look at these things day to day it may mean i know less than i ever did with that caveat, i mean, i think the markets are basically suggesting that can't put any more than this, your economic leadership and those surrounding the president's instincts don't really get modern global economics. it's not obvious to me what rationale thought is going on at all here i mean, maybe 25 years ago, china would do something like this, would make sense, but, you know, we're living in an era

where the united states most iconic and i think highly valued company apple sells as at least as many if not more iphones in china than the u.s it's sort of ridiculous. >> supporters of what the president is doing and critics of china might come back and say, you know what, china forced apple to put all its consumer data within china. the fight right now is about ha to do about intellectual property theft, we can't find anybody who disagrees that's what china does, so how to stop it, i guess, is the question we've been trying -- whatever we've been trying for 20, 30 years hasn't worked. the administration says they're going to do this instead are you arguing with the premise or the methodology >> well, i'm sure there is some genuine issue about aspects of the technology issue, but it doesn't look to me as though the united states, particularly

suffers from anything china does in this area let me bring in -- i don't want to get too economic geek-like, not least because, you know, we all know the limitations of the social, but the u.s. external deficit is a consequence of having a very low domestic savings rate relative to its investment needs. you know, i've been looking at this stuff for far too long, for a very long time, and people used to chart out these kind of arguments about japan 35 years ago. and so if for so some crazy reason these measures did succeed in reducing chinese exports to the u.s., unless it does something about its savings rate will import from other countries like vietnam or bangladesh or somewhere else i mean it's kind of crazy. >> you're not suggesting, jim, this is scott, that we shouldn't just let the status quo continue

as it is and just turn a blind eye forever to china stealing our intellectual property, are you? >> let's take out the intellectual property rights issue. the whole basic approach, and clearly the people, at least this week, got the president's ear, they're mindset is stuck in a world of 30 odd years ago. the u.s., where is the third biggest export market for the united states in the world here's a question. do that as a q&a for your audience because, obviously, i'm implying the answer to why i've asked it. china is a really important export market to the united states these days. and ever since the crisis, china -- ten years ago china's account surplus has gone from 10% gdp to about 1.5%, and it's

the increase in chinese middle classes are -- as the most dramatic story going on in the world economy. a friend of mine from beijing suggested to me a few weeks back, but there was already 20% of china's population worth $40,000 a head that means they've created people, 260 million people, with the equivalent wealth of the likes of the uk, and that means that they've got more people of that wealth than any other country in the planet than the united states. what country in the world is best position to explore the benefits of that consumer as it becomes bigger and bigger and bigger as we go forward? the answer is the united states. so why is the u.s. -- >> except there are so maybe -- because, jim, we hear complaints from ceos all the time that when they try to exploit that very lucrative potential market that's there, they must bring

their intellectual property, they must hand it over, and then they see a chinese company take it, use it and then they, the american company, are out of business, and no longer b ben fitting from that -- benefitting from that lucrative market. >> how come then -- here's the answer to the question, how come china is the third biggest market for u.s. exporters? >> ten years ago it was much less and so, obviously, there are some clear instances in some industries where that is the case, but to go down what is essentially a populist driven path to try to what i would guess is seek further support in social media driven opinion polling and some marginal -- in a located u.s. state it's just not sensible. >> i hear all your criticisms and we hear them from

economists, but i guess i would say at the very end, i think that ultimately i would give him the benefit of the doubt they're trying to improve the american middle class even if the methodology doesn't work for that intention. know what i mean. >> when we come back, it is the largest tech listing since snap. dropbox getting ready to make its public debut we're going to tell you what to expect ahead of its first trade and then we're going to speak to the ceo on "squawk alley." "squawk on the street" will be right back alerts -- wouldn't you like one from the market

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amid the market volatility five dow stocks are in bear market territories we'll reveal the names and worth trading now. more "squawk on the street" coming up.

we are still awaiting dropbox to make its public debut. the data storage and

collaboration company pricing its ipo at $21 a share, that was above the expected range >> scott, there is definitely a lot of excitement here at the nasdaq a lot more than ten years after its founding i briefly spoke to the co-founder drew hausten getting ready to become a public company ceo. he was acknowledging this moment this morning in a tweet and reposting his founder's letter that was in the company's s-1. in it he and the co-founder say that they started the compan started the company with the idea that life would be better if the most important information lived on the cloud and now they will get to see if the wider markets and investors agree. the stock should trade within an hour or so the question is do investors value dropbox as a publicly

traded company or private startup? scott, remember, the ipo priced above expectation. that closes the gap between its last private valuation in 2014 its s-1 revealed it achieved more than $1 billion in annual revenue and habaneroing its losses as for the markets, this is just the first day so we'll see what happens and what a time to list. more pure play crowd stocks are faring better like at work day and sales force. they've outperformed the last year we'll see if dropbox can follow suit in its debut. back over to you. >> big day atank you, looking forward to th interview see you shortly. much more ahead on "squawk on the street." don't go away.

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welcome back to "squawk on the street." i'd like to welcome my special guest for the last day of the week, charles beaderman. thanks for joining us, charles. >> aloha, ricky, how are you >> we have a delay i want to cut right to the chase. here's the topic i want to discuss. everything i read lately is

worried about labi libor, and i understand back in 2007 they asked me on the air what would be the big thing for 2008 and i said libor and they looked at me like i was crazy. what do you see in libor that's disturbing and getting so much ink on the blogs and newspapers? >> it's not just libor libor started rising the day the market peaked in february and since then we've also seen a slowdown in m-1, m-2 which are money aggregates, money being put into savings accounts, we're seeing a slowdown in bank lending and we're seeing a slowdown in wage and salary growth which started in february and we haven't been sure why but there seems to be -- it looks like the fed is draining funds libor is going down.

money is being added to the markets.takeovers are up dramatically so we have two conflicting trends we have money coming into the market from companies and the feds draining funds which looks like it's slowing the u.s. economy. >> charles, we have a delay here so now i want to say something and you finish off i want to be the devil's advocate of course this will happen when the biggest stimulus by central bank is going lower than standard if i look at six month's libor and if you have an interest rate stock with semiannual payments, i understand that's your financing rate and part of the equation but libor is up 59 basis point this is year 59 since the last day of 2017. two year note yields are up 40 basis points since then. are we really making this much excitement over 19 basis points

over performance since the stock peak in february you finish this off? >> well, if libor keeps rising from here as the fed keeps draining funds from the system in order to fund the rate hikes yes, it could be dangerous consider that a lot of leveraged instruments are leveraged against libor. they borrow at libor so as the cost of money goes up, the leveraged instruments that they've bought like junk bonds and all that, it could be in trouble. >> i understand, sometimes getting rid of leverage isn't a bad thing. charles beaderman, have a good weekend. michelle, back to you. >> thank you rick santelli. we are wtiaing for dropbox to go public we'll speak to the ceo drew houston next on squooel. obvious.

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in drug stores nationwide. prevagen. the name to remember. good morning, it's 8:00 a.m. at dropbox headquarters in san francisco, 11:00 a.m. at the nasdaq where we are awaiting the stock to open in its first trade. "squawk alley" is live ♪ hey, you, get off of my cloud hey, you, ♪ ♪ get