they have been taking your data and selling it >> i don't think they know what's been done with it >> all right, that does it for us today >> it does >> i will make sure -- >> for us, not for you >> lucky healthy returns i cannot remember the last time i worked 14 hours. make sure you join us tomorrow, "squawk on the street" is next ♪ >> good wednesday morning, i am carl quintanilla and mike santoli from the new york stock exchange and cramer is with us in new york. big line out there the worst day for fang in about three years. europe is mixed and hong kong iis down about 2%. we did bust out 28 on the 10-yr.

gdp was revised up futures pointing to a mix open fang looking for a turn p around after the worst one day drop ever >> retail recovery lululemon and walgreen's zuckerberg prepares to testify in congress. has the damage been done futures are mixed this morning after yesterday's late day sell-off dow is back in correction territory. fang is in the worst day jim, we were looking back at the date, february 5th, 2013 when you coined the term, fang. take a listen. >> the four tech names, fang, fang, fang for short >> the characteristics of the stocks are moving higher

what's fang? facebook, amazon, netflix and google >> obviously, since that day, jim, betting against them you could get bitten, that was the whole notion behind fang they are up 400 or 500% more what does yesterday mean >> they are now unrelently negative what's happening is there are so many etfs related to fang that these are becoming pinata. it does not feel like these stocks have any defenses at all. this the day where they are opening down and there is not a stance being made. no one is buying alphabet today. no one wants to touch facebook yet. so this is the first day where i think you are full-tiinally getg

the situation based on nothing there is nothing bad news out there. waymo is good for alphabet this is crunch time with no news down big that's what you would watch actually positive one. >> mike, you were asking this morning of quarter end whether they want to show they own these. >> it is a general, look, we have a lot of money made in these large growth stocks. the growth portfolio is getting trimmed back it is what you also own and somebody else also own and it has been for sale for two or three days yesterday was interesting in this regard. amazon is up and holding nasdaq together for a while it could not do it we were talking about the last few days of how the market trying to dig the fire break between facebook and twitter and alphabet and the rest of tech. it became a general shake out

yesterday. >> i don't know if it is more than that. >> jim, facebook trades of 17 times. it seems hard to imagine at least 20% with decreases and margins and increase costs or whatever you want to throw at it nvidia about 33 times 19 earnings and apple at 13 times, 19 earnings. they are gross stocks but they are value stocks >> look, i did some -- facebook blown through every negative level. they are at the target breach level which was the benchmark for a long time. that was 18-point when target had a breach once they take these out, the only analogs, equifax which was down 2%. chipotle, we are close to the chipotle decline which was more than 50%

i say that very close because chipot chipotle then bounce, a quick bounce so it was from 700s down to the 550s i don't think the numbers you just mentioned if facebook mirrors that kind of decline >> i mean again, apple, just everybody presumes it. there is so much inventory in the system no hair on netflix yeah, david, you are talking about google being really cheap >> yeah. >> ten times 20 times eps for 2019. >> it did not matter -- i think there is a level of the growth guys are going to step up. today is a day where you would make a stand facebook did something good. alphabet did something good with waymo. apple, we know how bad their phones are doing

nid nvidia this would be the day and amazon's down huge and i cannot find the negative amazon store >> mike allen and jonathan sworn quoting five sources that the president is quote, "obsessed with his amazon. he's looking for ways to go after amazon instead of facebook, right? >> nothing new there in terms of amazon if we take a look at his tweets, it is clear that he does not have a lot of love for mr. bezos or the washington post or amazon somehow they are -- they're taking advantage of the post office >> the washington post, i don't know if it is labeled washington post fake news the washington post have been no fan. the president equates it first of all, i don't know if the president seems to remember.

>> although when it does come, i was quoting those multiples, jim. when it comes to netflix or amazon, you are never going to talk cheap >> as a basket, fang has a 654 p. >> if you look at nasdaq 100 as a general approximate of these types, it is about 20% premium and the peek has been 23%. everyone probably agrees it deserves the growth premium and the market in an unstable take in general is figuring out how much the premium should be on a day-to-day basis ultimately, this dynamic of not having a sense that there is a good place to hide is probably good and it is the making of when the marks aets are full-tiy fine >> jim, we want to get to that with you

lu lululemon beat the streak. walgreens reporting a beat at the top of the bottom lean drug chain operator raised the full year. i know this week you are talking to kohl's, what do you make of all of this? >> if you go to the lulu quarter, the conference calls are devoted to ecommerce very, very important restoration hardware does not like ecommerce, they want you to come to their gal practicallerg. when ecommerce is the thing, you don't want to be dumping amazon or alphabet. i am not saying these stocks are not going to get sold, i am saying there will be al time where why diplomat i sell amazon yes, the president did not like

it for the last 500 points >> rh beats, a strong guide for the year >> it was. it was nothing but negative but then you have succession of decent number on the consumer front. >> it changes the story a little bit about the sense that it is now of an economic momentum story. i don't think that's really been born out >> then there is this again, examination of the time of h&m and inventory of 7% year on year pockets of retail or apparel for chains who really cannot afford to have inventory bloated. >> they are the outlier. we'll hear from pbh. macy's did not have a lot of inventory throughout the mall. >> there is a surprisingly little amount of inventory

i think that's really important. h&m is a company that we are really surprised that. we thought they were doing much better we thought a lot of companies were doing much worse are doing better the other companies are far more in the retail camp that you need to buy h&m is a company that did not get that right >> finally, while we have you jim, let's wrap up facebook. this morning, they did unveil some new tools to delete, download and overall manage our ability to control your data a lot of this was spread over several screens, jim, over the past few years nearly 20 screens and cold dansolidate it to one. how much of this is constructive >> a lot of it i think the downside target would be about 135 if people decided that everything they did was wrong

and they didn't appoint someone from the outside to look into these things that would be relatively of a percentage space on and playboy today, they did not like the nudity policy offacebook there you go >> there is the line in the sand i have been waiting for. >> david faber >> yes, sir. >> do you question the no nudity ban. it is about time that someone spoke up and allow nudity for everybody. children, and sex -- >> just listen, that's true. although i did just conclude in europe of some of the great museums in the world they have beautiful pictures and some of them have naked people on them.

you cannot put that on facebook? >> that shell should be from here all the way down. o outrageo outrageous >> i have no problem with the human form it is a beautiful thing, jim >> what are we getting into, a weird era here >> that's why playboy is so right. what a statement this is. nobody knows what is more right about nudity than playboy particularly when you are like well, objects. >> tim, coming back to the bigger issue of regulations and facebook itself. do you have any expectations at this point beyond their own self-regulations as to what can come that'll really hurt their growth and ability to grow in the future

i think still we are looking for alternatives notice that playboy again being a great analog, they stuck with instagram. i am sure they know it is facebook i continue to think that there is no place to be more likely to get your product out than on facebook they cannot stop that. it is still a great way to get your product out if facebook appoints someone from outside that looks into what facebook did, i think the whole story can calm down and people will say you know what, 17 or 18 times earnings, maybe i got to buy that. not yet, i do think we are on t oon on -- >> am i crazy? >> no, that's basically it, right? >> if advertising san franciscofrancisco

francisco -- >> do you need the platform or not? >> are they going to play more defense if it comes to acquisitions or things like that that's longer term in a few weeks when they report numbers, if you don't see big signs of user declines and all the rest of it, you know, i think we'll have something to focus on beyond the what ifs >> do you think that expansion of twitter characters is really what's going to make people go over that over facebook. andrew, i don't know where to hide other than instagram which i reiterate belongs to facebook. >> right i don't think facebook is losing the eye ball war, i don't think that's the argument. it is all about, it is kind of perception of the safety of the platform and i don't know if that's really changing their behavior yet >> today's show this morning

>> the e in pe is fine we need to know the multiple of what we need to pay. it is now below. general mills priced at a billion dollars stock today. i would rather have facebook than general mills >> jim, we cannot wait for today. shire news that's getting a lot of buzz, with el tae'll talk abt >> gotlieb is making the move there. >> when we come back, the president's tariffs and jeffery currie is joining us amazon is down 3.5%. >> we'll get to all of that when "squawk on the street" continues.

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attention is focussed on fang today after yesterday's

sell-off apple is down a full point tesla is down 5% we'll watch all of those names when we come back as well. goldman sachs is slashing its iphone sale estimates. what that means for the stock ensqwkn e re" comes back let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

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apple unveiling its newest and lowest cost ipad yesterday, compe compe co competing with google's chrome books. for more, let's bring in our i.t. analyst, do you think this

new initiative involving education is going to move the needle at all for the company? >> probably not too much, david. the company is concerned about back in the '80s and '90s, it became the computer for education and kids get used to macs in the classrooms tim cook was in chicago yesterday trying to reverse that trend for the new ipad and pencil and now software for classroom collaboration and amanda la management i don't think it is going to make any difference. this is one of the few areas where apple have been losing market shares. perhaps, they can stem the title a lit bit here i don't think it is going to be too important in terms of the stock. >> goldman sachs comes out and says he thinks demand for march

and june lower actual numbers than consensus, where do you come in on this, steve >> yeah, we lower number about a week and a half ago. the supply chains out of asia suggesting that demand is a little bit weak. i don't think it is a 10 i think it is generally a maturity of the market we do expect to see pretty flat iphone units this year so there is no super cycle. next year we could see a little bit of a growth. people are holding phones longer so it is a short-term negative and long-term positives. investigators are buying the balance sheet of apple we are expecting a higher dividend and big stock repurchase i think its got great downsize support and not great of a huge

catt catalyst >> thank you, steve. we'll hear the details next month. do you have specifics in terms of what you think investors are banking in terms of magnitude or buy back or dividends. >> yeah, mike, you are looking at use of 125 billion of cash overtime it is not going to happen at once we expect apple will bump up dividends. so we think you are going to get low to mid single digits which we corroborated with the services of report that we did yesterday which becomes the key driver in the place of iphones a little bit of net income growth and low tax rates of 7% buy back of stocks and maybe low level double digits. >> steve, we'll leave it there for this morning always appreciate you coming on. >> great, thanks so much >> steve frwe got the opening b

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you are watching cnbc's "squawk on the street," live from the financial capital of the world. opening bell, after the sell-off yesterday, futures trying to hold the line. there is been some erosions as the morning gone on. some hyper file name looking at a down open and tesla is among them what's the important line here >> we are watching the early february lows in the market and friday's lows got us pretty close to that. i don't think yesterday kind of invalidated monday's rally or unwounded entirely it shows you the sellers are kind of pressing the low end of this trading range here. >> definitely, markets are taking the path of maximum frustration for everybody. you don't see the kind of jump of the late day acceleration the market is very in decisive

if it is coming out of there, it is not coming into the rest of the market portiroportionally. >> the emerging of nvidia news yesterday, after we have been through a couple of days on social concerns. the limits and just exactly how long it is going to be before you get the rewards of it. i would throw the tesla news in there, too even if it is a debt downgrade and it was an accident and an investigation. it is still about how soon we'll go see the benefits of a lot of this and how much we capitalize today of the future benefits >> moody takes it to be three. they cite the model three shut down and liquidity pressure on them and journal pile on with a piece titled "clock ticking fast." basically saying the current pace, they usable

cash >> we have not seen in a while where eyes in terms of the years. that's where we are keeping an eye on it. >> by the end of the yea yeayear -- th market is not very generous to provide. >> slicing below 300 which have been supporting several times on tesla. there is the opening bell. china's one smart international education group celebrating ipo today at the nasdaq. it is bili bili >> i think it is such an easy sale to say here is the play to play, the growing class in china. not a bad export but you know, hard to tell one from the other

as far i am concern. >> how many people in the middle class for 400 or 500 million moving and education is the key differentiating their experience so to speak. you have to wonder what it means if we have real altercation with china over trades. >> shanghai is not the state pressure that we felt here look at the composites the last couple of weeks. >> talk about restricting chinese invest over years so it does seem it is getting beyond just exports and goods kind of talk at this point. >> might as well start off with a deal, guys, we don't usually talk about what it meant for the production

of oil it is about $9.5 million all stock deal each share is rsp. if you take a look, you will see rsp is higher significantly this morning. let's take a look at cxo as well and see how that is performing that's down 4.5% it is going to bring them down in the permian, largest 27 rigs and the largest drilling program in the permian basin with this acquisition of ours. >> the earlier action in terms of the banks kind of catch a bit, it seems like the bank were struggling and goldman sachs opening up 1%. market is kind of again, looking

at differentiate between areas that looked like they're hitting a little more head wings and others that seems okay for now anyway >> there is been discussions earlier in the week and last week that dc would be the issue to which the market be holden until we got to first quarter numbers and tech just emerged out of nowhere >> exactly totally dead i think that's one of the things that happens in these kinds of rolling corrections that we had. late january was, as long as the 10-yr does not get above three, the market is going to be fine we can scapegoat that for a while and it was the tariffs talk all of them are relevant and matter on a day-to-day basis, it is about helping to explain why there is not an easy rotation. we have to get to an extreme

negative sentiment at over sold to mirror in upstream upside who knows if you have to do that >> i think we still have three times as many bulls as bears >> sentiment wise, people have been treating this as a correction odds say that ultimately is going to be correct. it does not go according to script maybe that bounce monday morning off of that near 200 days and moving average level was a little bit too packed. >> we have the healthcare conference today that cnbc is sponsoring and mma, and remember this name, brought a lot of pain to the community when they had a deal potentially get bought. it was going to be an inversion and it fell apart. dekata from japan.

this is what you have to go through before you do something. does not mean they're going to follow through on it shire has and it has thought no shortage of potential shooter, i should not say no shortage but a handful of them out there and includi including includi including including vizer. >> shire does also may be benefiting from roche's drugs for patients in a part of the market that's still testing the drug for the non-inhibiter part of the market. we learned this morning because they reported the hemophelia federation, we got a statement from them, there was one

reported death in the study. relatively small study they do say or at least they say they determined that the deaths are unrelated of the use of the drugs itself but it certainly could in the opinion of jeffery which is the only note that i have seen raise possible safety concerns over this potentially key drugs. so, roche is down a bit and shire is benefiting from the dekata news. >> as meg says this morning is going to be a big topic of discussion largely domestic plays and comcast and verizon close to the top of the leader board. >> comcast and charter have had a rough road that's a conspicuous thing it was almost like all the kind of media and space got dumped

in, oddly enough with the social media side of things domestic, we talk about consumer stuff that seems like that part is holding up. it is been ay-to-day one day, that intuitive play when you worry about trade and then it does not work. comcast has been a lot of pain absolutely >> for those of us who owns stocks and it is our parent company, down 16.5% this year. it is a bit of a bounce. more or less nothing is going down the larger question, of course, it raised the minds of investors that does it mean somehow you have doubts but your core business, it raises yet again and concerns that we are talking about fully realized is the video business where is it going? what are the margins on it and can broad band be the key

product and can 5-g represent its products i can go on and on it is nice to see it is up >> i do think there is the other story line when it comes to the mechanics of who owns comcast and why going into the announcement which is these investors who says they're going to cap leverage and a balance sheet. they're going to nurse the margins so it is going to be a safe steady as you go strategy and it becomes -- we may actually be spending a big deal so you have a turn over. >> somehow they make history and did not see all the deals or the potential deals. but, you are right that's all the pendulum that kind of swings somehow people want to believe it is going to be different than it has been but it is not going to be the way the company has gained certain amount of dominan dominance. it is through aggressive

acquisitions and strategies. >> do you think at&t and time warner case have any bearing on this or just kind of hanging out there. >> it might. frankly it has real bearing on it night might in fact the govet loses, who knows comcast is in the potentially going yet again. that may happen. i am not talking competing for sky to go from a 2.4 to 2.7, i am talking at them coming at the fox asset trying to compete with disney if the government wins, that's off the table as by the way, anybody else buying time warner that you can imagine >> right >> and it will have ramifications as we have said for deals far beyond that even the life of aetna and cvs deal or cigna >> mike, i want to get your take

there is been some attempts to explain live board today, some are tieing it to the tax bill. what is commercial paper board and investment corporate bod spread >> right >> those are the trip wires that we are worried about >> it has been the point of concern here and it seems like it is largely for a series of technical and mechanical reasons with regarding to the over night funding market especially in europe and between the u.s. companies and maybe their foreign subsidiaries essentially, the cost of over night bank bar has gone up in the market it raises the costs of debt throughout the economy, a lot of loans tied to that that's less o f the problem as that kind of number staring you in the face that says financial conditions are getting tighter than the fed intended at this level. it is definitely a little pressure at banks on the

margins, it does not mean that there is some kind of systematic issue that fang has solve a problem and there is a credit problem rolling through the plumbing and financial market. and it may lead to quarter end massive issuance of u.s. treasury bills their cash flight instruments and they are soaking up a lot of the demand for short term dollar credit that you would otherwise be laying up >> finally, guys, i want to hit ge because we lost it yesterday. it was up dramatically yesterday. part of this rumor of buffett and pursuing a prefer, don't have a lot other than observations at this point one is while it would potentially benefit the seal of warren buffett, it is not clear that they would noeed to raise the money. we know buffett likes to get his significant yield, that was

during the financial crisis and things may not be good for ge but they are not as bad as they were then. if they are in the need of raising money, it is clear that they can do so in a cheaper way than selling a preferred to buffett. some of the financial assets that are there and taking a look at the common which indicated to becky quick of his last inter e interview. >> they do mistake heavy use of their paper and the cost goes up >> a.m.smazon is down almost 6% our gains are down, let's get to bob pisani >> we moved down the last five minutes or so. i want to show you an important day technically. we are sitting right near the 200 moving day average technicals matter, when you get a lot of fundamental confusion, technicals matter.

february 9th, we hit the 200 day movement and we bounce off of that right now we are hitting at 26.03. that's 16 points away. you break that, that's not a lot of report. sectors today, this is a defensive set up that we have. healthcare leading and banks are flatten down look at some of the big tech names right now. amazon, not technically a tech name the president does not like amazon but were down 5%. tesla, we had moody investor downgrading tesla and pushing car maker into junk territory and facebook fracturing positive and nvidia is down a little bit. it changed the uncertainty this week, it is more tech oriented we had the social media crisis and google and amazon and

technology and driver less cars and questions about regulatory actions, these are new they thinks that have come out recently on top of the old one of the trade issues still unresolved the big problem with tech is it is too darn big. let me show you right here apple, amazon and alphabet, together is 2.3 market cap think of this. three stocks, apple, amazon and alphabet, microsoft and facebook it is hard when you have tech that's not doing anything and the rest of the market is hard for other groups to step in. industrial and healthcare are the key swing group right now. look at the energies of the

material stocks, 15% they don't matter that much. that's a big issue with technology being so large right now. we are approaching the end of the quarter, we are down 4% of march. we have not had two straight down months since the first quarter since october 2016 we have not had a down quarter since september 2015, last time we had a down quarter, that's very important thank you for not moving back. nasdaq, and io trading and bili bili trying to video share websites that was in the middle of the trading. right now we are flat, exactly flat on the dow jones industrial average. carl, back to you. >> bob pauisani, let's get to rk santelli as well >> very interesting. we are a tenth away 2.9 from having our three quarters of the three handle the first quarter started the second quarter of last year.

first quarter is not shaking up. we have to wait to see about one month. the other number this morning, trade deficit. we have back-to-back well into the mid-70s billion minus range and those are levels that we have not seen since the fall of 2008 fed funds, forget percentages. when they rally, market thinks less fed let's look at valentine's day start the december fund, it is cumulative contract. it is at the highest price since the 20th of february which means that for all practical purposes, it may be sensing a slow down. look at the two-year no yiete yd it has not dropped dramatically but you can see tarmerlan tsarnats it flatten out. the run ended on monday at 22 sessions which began on the 23rd

of february, several days after the high closing yield, for the year it was established 295. is this a simple thing that give you guidance in sure lately over the last two or three years, consolidations, let's look at overs seas. it is not just us. let's look at bund, we settle at 241. bund is 49, they settle at 43 and basically a handful italian. they go down too they're now at 185 if you look at what's going on with the guilt in the u.k. it is now at 136, 207 and two-day dollar index yes, shocking, back-to-back gain on a dollar index. it is over three quarters of a percent in two days.

mike, carl and david. >> when we come back, goldman sachs slamming the president's tariffs plan jeff currie will join us to explain why. dow is 34 points "squawk on the street" is back after this ♪ (nadia white) the moment a fish is pulled out from the water, it's a race against time. and keeping it in the right conditions is the best way to get fish to your plate safely. (dane chauvel) sometimes the product arrives,

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goldman sachs calling the tariffs draconian in a recent note with us the author of that report jeff currie goldman's global head of commodities research >> thanks for having me. >> we want to be clear because we've heard a couple things. one is that the effect of the tariffs would be noise in the overall economic data. are we saying something different or not >> we wrote that piece back in the beginning of march, and that was the opening salvo of this trade war, is that those tariffs that were initially proposed were so draconian they were impossible to implement and distribute global supply change and create inflation to consumers and they would back off. that's what we've seen happen is a deescalation in the trade war.

that was the peak when we wrote that piece back march 9th somewhere at that point the time the world is a very different place. >> has the threat passed do we have to worry about anything else in terms of these negotiations that are going to be going on? >> we've seen the politicians are rolling over in a way that would be anticipated given the draconian nature that would be imposed by these tariffs when we think about the world today, global goods production is far more capital intensive than it has been in the past it means it's less price sensitive. to make this point steel prices are up 200% since 2009, production is down raising prices by 25 or 10% more will do nothing to supply. all it's going to do is create inflationary pressures for the consumers. take germany yesterday conceded that it would give on the 10% tariff of u.s. car imports why? because germany does not produce

big gasoline v8 suvs which are what is being imported it's going to do nothing for the production of germany but raises the cost of suvs to german consumers. china can do nothing about its imports of soy beans, likely it has backed off and went after pork we've seen a deescalation. everything targeted is far smaller than we initially thought. >> we shouldn't be concerned then or the market overreacted >> i would say the market overreacted. >> concern about inflation >> that is key you think about what's been driving commodity prices, number one is inflationary concerns, part of the mix of inflation nary concerns, better demand out there and then finally i would say geopolitical risk in our space is the biggest i would argue inequity markets, the risk a lot to the down >> is that tied to oil specifically. >> but it creates a negative cloud over the equity markets. in terms of oil, over this

weekend, we saw 7 missiles launched from yemen into saudi arabia which creates real supply concerns which is what created the rally we saw last week and earlier this week. >> i see ag prices at a record thanks >> thank you for having me. by the way, tomorrow, do not miss david's entire with blackstone's president and ceo jon gray dow, first 30 minutes kind of wild up 110 now "squawk on the street" is back in a minute. where can investors seek predictable income in an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential.

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you know what's not awesome? withgig-speed internet.te, 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. of the four fang components facebook is the only one that's green. we'll talk more about its new policy changes today and talk with a former member of virybook's data security adso board when "squawk on the street" is back in a minute.

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♪ good wednesday morning welcome back to "squawk on the street." i'm mike santelli with david faber at the stock exchange. the markets have been girly as we've been in the green red and green again. our road map will begin with the markets with the dow and nasdaq on pace for the worst month in

two years. >> facebook announces new privacy controls as it continues to receive backlash over its data breach scandal. the former ftc commissioner who served on the advisory board will join us in a few minutes. >> facebook, amazon, netflix, google, the fang stocks off their worst day ever closer look at some of the tech stocks that are performing >> getting some data on pending homes. let's get to rick santelli rick >> i'll tell you this is some strange data here on february reads for pending home sales look at the headline number, change month over month in percentage terms from national association of realtors you see up 3.1%. boy, that's a big number especially considering last month's minus 4.7 now stands at minus 5. here's the deal. up 3.1 best number since october of last year and anything over 3% increases pretty good but the mind is 5% replacing minus 4.7 both of the numbers are the worse to the all-time level of 18-year low which was

minus 30% in may of 2010 now if you look at month over month, that's 3.1. look at year over year, minus 4.4. this was the good news last month. the headline on month over month is good, year over year minus 4.4 not so much and last month's minus 1.7 was downgraded to minus 1.9. a mixed bag. if you look at rate of change month over month probably more important. we have righted the ship to some extent 10-year note yield the 2.75. morgan stanle mike back to you. >> tech stocks causing fear across global markets over concerns of possible regulation. joining us now talk about all the market stuff is jim paulsen, chief investment strategist and tracie mcmillan, head of global asset allocation strategy. good to see you both jim, i know you've been looking for a pretty extended rough patch in the market for a while. you also have been expecting maybe some kind of a shakeout in

the sort of overly popular parts of the market. how much more of this might we have to go are we kind of there yet >> well, i am starting to see some elements of panic creeping in, mike i think we need to find a true bottom you know, i just say that the -- it's not just the stock market which is delivering messages of stress i mean if you look within the stock market now, cyclical stocks are starting to under perform defensive stocks look at what utilities have done of late, for example, and staples this morning and that's really delivering a message of moving away from economically and moving defensively in the stock market. then go to the bond market it's suggesting credit fears with widening spreads here along investment and moving out as well and move to the commodity market and see the price of precious metals out performing industrial metals, gold is doing much better than copper, for

example. that's a fear trade replacing an economic trade then you go to the currency market and the dollar is up today, but it's been down against almost all currencies in the world, suggesting a -- not a very good profile for the u.s. i think it is broadening out and i think we might come to crescendo here at some point i would look at challenging the february lows and see if they'll hold and also look for elements of panic at that point and behaviors a rush to safe havens a sign we might have finally reached a bottom. >> tracy, all those signs that jim talks about in terms of risk aversion, the big question for an investor is, is that just an interlude, is that kind of this period of time that the market has to take a breather and gather itself and reset valuations or are we looking at a trend change at this point in the cycle? >> we think we're later in the cycle but bullish on the u.s. economy. we're mildly bullish on the

equity markets and cautious on the fixed income market. when we look at the u.s. economy, a good gdp read out of the fourth quarter, softer data here in the first quarter, but we think that will strengthen through the year we're seeing good sentiment numbers from investor optimism, consumer sentiment, business sentiment, and all of that really needs to follow through in some earnings improvement throughout the rest of the year, which we think we'll get and we'll see higher equity prices by the end of the year >> to that point, jim, we just had a discussion with a goldman executive about deescalation in trade rhetoric and we're a couple weeks away from q1 reporting. assuming that looks as good and the guidance as strong as we suspect how much of that would offset the environment we're in right now? >> well, i kind of fully expect earnings are going to be good. i could see the $150 earnings area, carl, this year.

i think the problem we have is, that we paid ourselves in the stock market last year for the earnings that are going to come this year. i mean we really didn't have much earnings last year. it was all multiple advance and that was basically on the better earnings this year now that the earnings are going to come through i'm not sure that stock exchange is already reflected that, if you will, and i think the real question and the risk for the market is, do those earnings estimates at some point this year come down. does wall street have to revise them down a bit. could be because of slower growth we're certainly seeing evidence of that in the first quarter it could be because of margin erosion. in the worst case for the stock market would be the growth does slow a little bit, say back to 2.5% but wages and commodity prices just keep climbing and puts you in a stagflation pressure for the stock market that might still materialize yet as we move through this year. >> tracie, you say mildly bullish on the stock market,

expecting the overall market to be a bit higher by the end of the year would you take this shakeout in the large cap growth stocks, the tech-led type sectors of the market as an opportunity to kind of reload in those areas or do you actually think that either other types of cyclicals or defensive stocks are the better way to go here >> yeah. so we would take this opportunity, this pullback that we're seeing right now, we view that as very normal volatility and normal corrective phase. it could last another couple months we would tell our investors that this could be a good opportunity to dollar cost average in to the market as a whole. we favor sectors that are more cyclically inclined, things like industrials, financials, health care and consumer discretionary. right now, we would be pretty neutral technology but if you're underweight that sector we say bring it up at this point. >> all right we'll see if anybody out there ended up under weight technology after the huge run

tracie and jim, thanks for your time this morning. >> thank you let's get over to meg who has headlines from cnbc's healthy returns conference for us meg? >> good morning, david we kicked off the day here at healthy returns with a conversation with dr. scott gottlieb when he took notifies may 2017 one of the mandate hess received from president trump was to focus on bringing down drug prices through accelerating drugs getting to market. we talked about what feedback he's getting from the president. take a listen. >> they've been very productive and he's very well informed about what we're doing and takes an interest in it. just on the whole i've had a lot of support from the white house which has really helped us advance some of our bigger initiatives things around what we're doing on opioids and tobacco where we've gotten a lot of support. >> now one of the things that the fda has been focused on recently is trying to speed biosimilars or generic versions of buy logic drugs to market gottlieb pointed out what he calls market schemes that keep

these drugs from getting to market and in effect stocks like abbvie and humira, players competing there, pfizer and j&j and amgen making bye logic generics we talked about plans the fda is laying out along those lines listen to what he said. >> there's no silver bullet here in terms of trying to really make this market go gang busters. we will come out with a set of policies, you know, multiple policies about a dozen policies that i think incrementally will each move the ball in the direction of trying to create more avenues for biocompetition. i think the biggest impediment is market access and the ability for them to get on the market. >> now the fda has been making big moves in tobacco trying to regulate the amount of nicotine in combustible cigarettes and there will be potential moves coming on regulating e-cigarettes

he also hinted to tomorrow seeing an announcement about nutrition coming from the fda. really focusing on public health moves there. a lot more coming up healthy returns today. we'll send it back over to you now. >> thanks so much, our meg terrell at our healthy returns conference when we come back automakers on the front lines of a potential trade war. up next live to the new york auto show. ceo of toyota north america will join us with his take. ayitus 92. st wh

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it's a big day in the auto business over to phil lebeau at the new york auto show today hey, phil. >> hey, carl let me bring in jim, the head of toyota north america the rav4 i know in the past people might say a rav4, it's a crossover it's your best selling vehicle last year. >> number one. >> it's hugely important it's the biggest segment in the industry, 20% of the market is small suvs we sold over 400,000 last year so we're really excited about what things will do in the market. >> you see no slow down in the demand for crossovers and suvs, do you >> i don't think it's going to ac be sell rate as quickly as it has in the past. at some point in time, a 70/30 mix is about where it's going to fall in line. >> about 30% of the vehicles being sedans in the united states. >> yes. >> let's talk about trade because it's so important, you and i have talked about this in the past as the nafta negotiations continue, there is discussion about whether or not they can reach an agreement in terms of

the rules of origin for the content in the vehicles. do you think there's much wiggle room to change where they are right now. >> we're optimistic they will come to an agreement the fact is today the u.s. at 62.5% is the highest of any country on automobiles so there's not much more room to move over and above that >> if not just toyota, but other automakers, if they tried to go up over 70, 75%, it almost becomes impossible. >> there wouldn't a car today that would qualify at those numbers. i think all of us realize how important it is that north america competes with asia and with europe. those are the three automotive hubs so we've got to make sure we can compete. toyota alone last year, we exported 140,000 vehicles outside of the u.s it's critical we're competitive. >> the auto industry gets a lot of specialized steel, particularly from asia, particularly from japan, some of the suppliers over there do the steel tariffs have much of an impact or do you believe given the fact that you've

sourced the majority of what you use here domestically, that you can withstand any impact >> we're 90% domestically sourced. we get about 5% from canada, 5% specialty steel from japan but the fact of the matter is, with the tariffs, even domestically sourced steel prices have gone up and will continue to rise. >> how much have they gone up? >> i don't know the exact number but if you look at estimates it's anywhere from $160 a vehicle up to almost $400 a vehicle. find a mid--point at 200, that's $3.4 billion. >> that's what you're passing on to customers or dealers have to pass on to customers. >> yes. >> i want to ask you about luxury suvz. so many are introduced here in new york lexus has a huge percentage of its sales on the luxury suv side is this a case where the luxury segment is simply catching up with the rest of the mass market >> i think it is lexus' case it's almost 70% luxury suvz.

in fact, in new york, we're launching another new one, the ux, just below nx, so i think we've got a great portfolio and a great suv to offer any custom customer. >> that doesn't slow down. >> doesn't slow down. >> jim lints, he talked about the importance of suvs and the demand walk around the show floor and you really see it this year. that's for sure. back to you. >> all right phil, very strong theme. we'll see you again soon, i'm sure let's get over to wilfred frost who has more on the sharp rise getting so much attention. good morning. >> the london interbank offer rate the main rate at which banks lend u.s. dollars to each other in the short term to meet their liquidity needs. many loans globally are often priced off libor as well it's risen sharply in recent weeks to its highest levels since 2009 libor rose around the financial

crisis the reason back then banks were suddenly concerned about each other's solvency and didn't want to lend to one another which was one of the reasons some banks ran out of liquidity and ultimately failed. but this time, it's not rising because of any big red flags like that. there are clear explanations for its rise firstly simply the rising fed funds rate huge amounts of treasury supply outpacing demand lifting short-term rates and the u.s. tax law changes and making dollars more scarce to overseas participants hence rising costs of those dollars rising libor. the reasons behind the move not too worrying but does mean a rising cost of capital for companies who have loans tied to liebore acting as an early test and small warning sign of the impact rising rates can have on companies, particularly those in europe and asia yet to exes persons rising scentral bank rates yet. this chart shows how corporate

spreads in europe have risen suggesting rising corporate risk but still below their highs of the last year and much less pronounced spike than in liebore recently guys >> those factors that you laid out there, are any of them potentially somewhat fleeting? is this a transition period with things likes the tax law, treasury bill issuance and repatriation effect going to work through the system here or do we have to get used to these levels >> very good question and the ultimate answer we'll see in three to six months time or something, but all of them or certainly one of them you can see as being fleeting the repatriation of u.s. dollars from abroad if that's a one off move and then as companies start earning more tax the sort of coffers of u.s. dollars of foreign companies will rise again. the fed funds rate factor is not necessarily fleeting we might stn continue to see that rise and this comes in the shape of the yield curve which has flatted out a bit recently.

>> absolutely. good stuff, thanks appreciate the perspective on that see you soon. when we return, the fang stocks coming off their worst day ever since the creation of that index we'll take a closer look at some of the other tech heavy etfs and their performance coming up next "squawk on the street" is back in a moment. ♪ ♪ fight security threats 60 times faster with ai that sees threats coming. the ibm cloud. the cloud for smarter business.

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all right. time to our etf spotlight where mike is taking a look at tech stocks and the recent weakness with the fangs off the worst day ever mike. >> in five years since the coinage of fang, right now there is no fang etf there isn't any etf that's really particularly close to that because by the way, you actually have to have a certain number of stocks to support the index the etf is based on. look at a couple of etfs that list out that are a proxy for the kind of stocks, mega cap technology stocks, these dominant web platforms and other big theme type story stocks. one of them is the arc web xpo

funny name, half a billion in assets right now you can see the two-year performance trouncing everything, including the qqq which is the proxy for the nasdaq 100 often used as a little bit of a tracker for fang so you see, everything is kind of had that sharp gut check at the end, that little tail. much more pronounced in that arc etf. amazon, netflix, nvidia and chinese internet stocks all in the top 20 holdings of this etf. so the big question, obviously, is if whether this has just been sort of narrow segment of the market that got overheated and now going to shake out but going to continue to be leadership or if this is the start of some kind of bigger transition. and i don't know that it's particularly clear yet facebook is the big kind of worry point at this point, but it seems like it's not being contained just at that. >> no argument that people in this space are sitting on some pretty sizable gains most likely. >> for sure.

no doubt about it. and you don't know how exactly the house money effect will play out. for a while, why would i sell. if i have to i'm still way up. once it starts to reverse this dramatically and i think you had the sense yesterday that people felt trapped in these stocks now not in reality were they trapped but this sense of, look, these are going down too fast, i don't get why. netflix is down 6% down almost 12% from its high as we speak right now >> we'll, obviously, watch that. it's a key element of the story right now as we have rolled from concern to concern over the past few weeks. remember, it was inflation in february and then trade and now tech. >> exactly. >> we'll see what the earnings season brings. session high up 150, so we come back down, dow up 20 points. when we return facebook is introducing some new privacy settings following the backlash over the data breach former ftc commissioner who served on their data security me asory board will join us in mont

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and i couldn't ask for a better partner. good morning i'm sue herera here's your cnbc news update at this hour. president trump tweeting about the surprise visit of north korean leader kim jong-un to china. mr. trump said there is a good chance kim will do the right thing and he received a message from china's president that their meeting went well. the president added that sanctions against north korea will remain. a funeral procession was held this morning for a frinch police officer who -- french police officer killed after swapping himself for a hostage during a terrorist attack last week people lining the streets to pay their respects to arnaud bertrain awarded france's highest award by the french president. here at home stormy daniels' attorney michael avanity has asked a judge for permission to

depose president trump and his attorney michael cohen to ask them about the $130,000 payment made to daniels. a hearing is scheduled for april 30th. and space agencies around the world say a defunct chinese space station may fall to earth within days. it was launched back in 2011, but china says it lost contact and control of that station in 2016 that is the news update at this hour. carl, i will send it back downtown to you. >> all right thank you very much, sue herera. watching the markets this morning dow up 28, keeping a close eye on facebook which we'll talk about in a few moments and then tesla, which is now down almost 6% at 263.25 on the moody's downgrade. >> a lot of the big story stocks are kind of having the other side of what they benefited from in a long time you have the weird paradox where the dominance of the big tech platforms is a little bit seen

as a liability and just the overall markets very unstable. see these days of four consecutive 2% moves, it's kind of what happens around bear markets. >> yeah. keep hearing 2620 as an interesting line. >> one you need to watch you were in the 2620, 2630 has been that area you would probably get a little freak out on the way down there because you would have broke that average and all the rest of it i mean the 25. the 2532 i think is where you got down to. >> all right watch that, keep in mind, last couple days of the quarter that's, obviously, having some influence. when we come back we'll go live out to healthy returns conference where easter will join us after the break and get her take on jpmorgan, berkshire, amazon, that health care conxwlom rate and reaction from gottlieb at the fda. more "squawk" after this glomera gottlieb at the fda. more "squawk" after this

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we're building the new new york. to grow your business with us in new york state visit esd.ny.gov. welcome back to "squawk on the street." i'm jackie deangelis take a look at crude oil prices. carrying losses this morning after the eia inventory report telling us crude oil inventory built 1.6 million barrels. gasoline inventories drew 3.5 million barrels. u.s. production ticked up slightly a little bit over 10.4 million barrels a day. but a couple reasons that we're probably moving lower. the inventory report is one but also a little bit of a rise in the dollar you can see we're trading just under $65 a barrel it's been the geopolitical strife that's kept us supported here at these levels it will be interesting to see how crude oil prices continue to trade over the next week or so carl, i'm going to send it back over to you.

>> thank you so much jackie deangelis facebook announcing the new privacy settings this morning in an attempt to strengthen its data security policies deadria has been following that story and joins us live from san francisco. >> hey, carl this revamp is meant to make data and privacy tools easier to find and access and starts rolling out today globally and there are three major changes. one is a redesign of the settings menu on mobile devices. before it was spread across nearly 20 different sections across the platform. now they're going to be on one single page. two, there will be a new privacy shortcuts menu with a clear explanation how far these controls work. and three, facebook is adding an access your information page that includes tools to find, download and delete your facebook data including data you've already shared with the platform all in all, the changes amount to a more centralized system for users to control their privacy and security settings. facebook says the changes have been in the works for some time,

but the events of the past several days underscored their importance in a statement the company's chief privacy officer and deputy general counsel says, quote, the last week showed how much more work we need to do to enforce our policies and we've heard loud and clear the privacy settings and other important tools are too hard to find and we must do more. of course, they're referring to the cambridge analytica scandal that has rattled investors and users like and as the company continues to feel the blowback from lawmakers, both here and over in the uk, still, though, lots of questions remain like why has it taken so long to make these changes and will they be enough in the past facebook has promised simplerprivacy controls yet here we are again shares are up today just slightly coming back down from the highs of the day, but still hovering near bear market territory. guys >> and deadria, what's the best intel we have right now on a potential zuckerberg appearance in congress? >> several committees are saying that they -- he has been asked by three committees to testify

there was some reports yesterday that he may be appearing before one. they came back, the spokeswoman said they're still in discussion to find an exact date. we don't know which one or which date he's going to testify in front of however, it seems clear that he's going to have to step up and talk on capitol hill sooner or later >> we'll be watching for that. thanks a big story today. in a statement earlier, the ftc confirmed its probe into facebook's privacy practices for more on what the ftc may want to know and how it could affect the social media platform we're joined this morning by former ftc commissioner and former facebook adviser mosul thompson thanks for being with us today good to see you. >> happy to be here. >> nonpublic investigation, what do we think the ftc is after >> well, it's interesting. i think that they're going to want to know what happened, they're going to want to know why it happened and they're going to want to know who did

it so i think they're -- i'll put that on the backdrop of a consent order that was issued in 2011 now, in part of that consent order, facebook agreed to over the next 20 years, provide an audit every two years. so the ftc and facebook have a long-standing relationship and it's not just facebook, it's also google has similar things and snapchat so this is a larger question of what happens in the app space and what happens with apps who crib information and may use it for purposes that they even haven't discuss disclosed or haven't gotten permission to use the information for. >> right you make the point the ftc is in place to make sure businesses do not engage in unfair or misleading trade practices so what constitutes unfairness or misleading? >> well, one of the things that could happen is, if the company,

any company, makes a representation and then does something contrary to what that representation is, then that would be misleading. or if they do something that is unanticipated by a consumer, and the consumer doesn't have any transparency, or ability to effect the change, or to do something different, that may be viewed as unfair because they don't have the opportunity to either give consent or to have knowledge. >> and would any of these inquiries, any of these efforts to make sure that this transparency affect the entire industry for for right now would it just be focused on facebook's practices given the 2011 consent order? >> i think it's going to -- ultimately be larger it's going to be looking at the -- what happens with facebook, of course, but a lot of the issues that are involved here about what consumers expect happens to their data and how it's being used, even if it's

used by someone in a shady way, is a larger question that continues to evolve. it's existed for a while, but this sort of brings it to a head >> i'm curious, you know, obviously we're saying you are a former fastba former facebook adviser. if you were still at the company giving advice to mark zuckerberg or the management team in terms of how they should communicate around these issues, particularly in washington, what would it be? >> well, i always think that transparency is helpful. i'm happy to see that they're moving forward on that front giving consumers choices are also helpful but what i would also like to see in washington is a broader discussion about what is reasonable for consumers to expect and for companies to provide. we still haven't reached that discussion yet for example, even the discussion about what kind of information is mined about you for national security, versus for selling you

something. you know, one of the tradeoffs always is, is that if you expect a tailored experience on-line, that there's going to be someone who knows a lot more about you so this is going to be an interesting discussion and i'm -- it hasn't started here, it started years ago, but it still continues to evolve. >> yeah. as your expectation it's going to become more complex in a sense? i mean we spend a decent amount of time talking about facebook and privacy but there are so many other companies, alphabet comes to mind certainly, that know as much if not more about you than does facebook >> and a lot of companies that know a lot about you and gather data about you and they don't give you any permission or notice at all. >> right those third-parties you speak of and the sale of your data to them that you're not aware of, it is legal, though, isn't it? >> i think it could be i think it depends on what the

representations the company makes. what's not clear here is a third party cribbed information and they used it for a purpose that not even facebook or the person who cribbed it promised it would be used for. those are a deeper thing that the ftc is well equipped to look into. >> you talk about transparency i'm curious to know how your experience working with the company informs your view of just how transparent they are? this week alone we've had the refusal for zuckerberg to appear directly in front of the uk parliamentary committee. today these --the sim simm plyfycation of -- simplification of allowing users to delete or download information comes after extraordinary public pressure, just now i mean these things have been in place for 14 years what does that say >> well, i think that my

experience with the company, is you have very responsible people who really value a user experience now, that being said, i think that they want to try to get it right and that at times i think looks like they're being slow to respond. i think that's a concern but on the other hand, i think they get to the right place and that they have these concerns in mind because it's the core of what their business is i think that's always a challenge. you know, whenever there is something that comes up here in washington that it's always viewed as an instantaneous cry sus, but as i talked before, these issues are -- deserve a deeper dive because the american public deserves a more fuller discussion about what kind of right answer there is. i think that's a challenge >> yeah. i hope you don't mind me pivoting for a moment to another

story this morning, that is regarding amazon this report out of axios that the president, according to five sources, is, quote, obsessed with amazon and supposedly their power over traditional retailers, questions about whether or not there's anti-trust action that could happen versus that company separate from your ftc experience, how do you think stories like that fit in this big channel of mega cap regulation that we're now in >> well, i think look, as a former anti-trust regulator as well, you always look to figure out are consumers better off or not better off i think that that's going to be interesting challenge. disruption in competition is always really good the question is, whether it does something to actually benefit consumers and giving them betters choice and better prices i think the -- what's happening with amazon now, we're still at the early stages of understanding what that means

and what markets it's going to affect >> a lot to talk about hope you will come back. >> i would be glad to. >> appreciate your time. >> thank you. >> former ftc commissioner talking about facebook today we're in some chop once again. dow down 62 points, s&p right at 2600 as we watch the last couple days of the quarter art cashin with us at post nine. ubs financial services, art, once again, we're left with a discussion about where the important lines are. >> and i think everybody has their eye focused on the 200-day moving average in the s&p which is 2587 right down below here. it will be critical to the just technically but psychologically if you tested it could bring in some short covering. if you test it and fail, then i think you could get kind of a trap door effect on what's going

on again, in the sell-off in the beginning of february, he touched the 200-day moving average and bounced on friday they touched the 200 day moving average and basically closed on it but bounced from there with that more or less rally on monday this is deja vu all over again. >> a lot that gets thrown around at this time, no such thing as a triple bottom, maybe it has to test below, if you get that below. i think for broader context, the 200-day still heading up. >> at the moment. >> so it's -- it doesn't flip a switch to say trend is over. i guess wonder if there's so much fixation on this level acts as a magnet. it's like telling a kid don't put your ung tongue on the 9 volt magnet, they will do it.

>> yeah. it has a double importance even though the average is moving up, when you go below the 200-day, the rate of return is historically nowhere near as good as it is when you're above it. >> therefore, some traders say okay back away from the market, see if it settles out. the risk/reward doesn't look as good. >> absolutely. >> do you think the money market and bond market spreads are as acute today as they were last week >> no. i think the nagging concern remains libor and it keeps inching up and it can potentially have enormous effect because it's lots of mortgages, you know, adjustable rates and things like that are affected by it it hasn't had the sweeping impact that many people feared but it keeps inching up and that has people rather nervous and cautious about it.

>> 275 is a change from the last few weeks. >> no question there are people who believe that we've seen the high for the year >> on the 10-year yield? >> yes i think joe back on march 7th said this may be the high for the year you know, i'm a bit of a bull on bonds so i'm leaning that way myself i think we may only get two rate hikes this year. we'll see what happens >> thanks. we'll see you soon. >> my pleasure. >> over to john fortt, get a look from him at what's coming up on "squawk alley. john >> david, blackberry ceo john chen will join us. they had earnings, but perhaps more important, their qnx business about autonomous car, in car technology, that's a growth driver. how is it going to be affected by the recent headlines. we'll find out coming up on "squawk alley. you know what's awesome? gig-speed internet.

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now you can get it, too. welcome to the party. welcome back to "squawk on the street." i am jackie deangelis. one of the sectors bucking the trend is real estate that group of stocks is up by more than 1% after two pieces of bullish news out this morning on housing market

mortgage applications jumping 4.8% last week, home sales surged more than 3% in february. positive indicators for big names, realty income and simon property group back to you guys let's get to kayla tausche with headlines on trade. >> reporter: hi, carl. the white house checking off one of the many trade boxes open, that being successful re-negotiation of six year trade agreement with south korea that happened in the last few days the administration touting this as a win, even though it is a relatively small economic situation compared to other trade deals currently outstanding. here's what they renegotiated. they kept a 25% tariff on korean small truck imports. that lasts until 2041. they doubled the limit for u.s. auto imports into korea, despite the fact that u.s. auto

manufacturers haven't been meeting the previous deadline. but the administration says once that limit gets bigger to 50,000 vehicles per manufacturer, that will make a difference and move the needle for those companies most important development is on the steel and aluminum tariff front. they kept the aluminum tariff, 10% for all exports from south korea to the u.s., but instituted a quota instead of tariff for steel the administration feels that will limit volume to about 70% of what we have seen out of south korea in recent years and will stem some shipment issues the white house is complaining about. this is a relatively small deal, a relatively small trading partner compared to some oir trade deals that are outstanding. namely, nafta. the top trade official said he was optimistic a deal there could be reached soon. >> at this point i would say i'm hopeful.

i think we are making progress i think all three parties want to move forward. we have a short window because of elections and things beyond our control, but if there's a real effort made to try to close out and compromise and do some of the things we all know we should do, i am optimistic we can get something done in principle, in the next little bit. >> reporter: an interesting phrase, considering the president wrote to extend the window for three more years for talks. we will see whether he can get counter parts to agree to a deal in principle in the next few weeks. guys, back to you. >> thank you kayla tausche outside the white house. let's get back to cnbc healthy returns conference where industry leaders are discussing the most exciting and investable opportunities for 2018 and beyond joining us from the conference, executive founder ed venture holdings chair esther dyson, nice to have you with us.

>> good morning. >> conversation involves recent effort announced by berkshire, amazon, to try to lower the cost of health care you have said or in the notes indicated real leadership needed in health care is for those gentlemen to create companies where the health of employees isn't thought of as a cost but asset that needs to be holistically managed and improved what does that mean? >> what it means is long term you're getting a bigger return by lowering the need for care rather than just making it cheaper. besides that, you're going to get happier, more productive employees, it spreads to their families which means your customers are healthier, buying more books, fewer drugs, use their credit cards for more interesting stuff than medical care it's really about the long term return to society and to taxpayers rather than short term return by squeezing the

insurance companies. maybe they should be squeezed a bit, but ultimately we would be better looking at health as an asset, an economic asset that pays dividends rather than waiting until people get sick and invest paying money for care. >> how does that show itself in terms of behavior of the corporation and its relationship with its employees >> it shows it in terms of they provide solutions, there's a subtle issue around surveillance, but give them solutions to manipulate themselves rather than trying to manipulate them. provide healthy food in cafeterias, provide child care, provide elder care stock market high level employees now have ailing parents and whether they're physically caring for them or simply worrying about them, taking a day off to take care of

them because they need a mental health day, the opioid addiction crisis is not just those people, it is your families, your employees. maybe it is you. all those things if people were healthy, you would see the cost of health care go down dramatically, but you would see productivity increase and fewer people going to jail. it is so blindingly obvious but so long term that it is hard to get people to focus on it. they rather fix tomorrow and see the stock up the next day. >> what would be the vehicle for trying to spread this type of behavior would they be the insurers, employers? i know your experiments with these communities are relatively small. >> we're trying to get critical density in well health vehicles are things like amazon which employs so many people or

berkshire hathaway, employers, entities like ymca delivering diabetes prevention program, smoking cessation things walmart could be holding classes for diabetes prevention or exercise classes in their break rooms. it is like institutions are really important, it's not institutions are evil, institutions are the distribution mechanism, but for a different way of living, different quality of food. you know, it's not easy. that's why it's interesting and challenging. it's also really important people talk about global warming. i talk about global sickening. and we have to reverse it. >> esther, i am afraid we are out of time. appreciate you joining us. enjoy the conference and thank you, esther dyson joining us. >> thank you it's been great. thank you. we're going wchtoat the

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