quarter as we approach the end of the quarter after a great january. that shows you what happened in february and march the nasdaq even even after last week, the last week still only -- >> still hanging on. the dow will break and first time in ten months that it has seen a losing streak have a great week. we'll see you back here on monday right now it's time for "squawk on the street. ♪ >> good thursday morning, welcome to "squawk on the street" i'm carl quintanilla with jim cramer and david faber. we'll put q1 to bed before the long easter weekend and despite solid futures the win streak looks to be in jeopardy. all of the big faang names in focus. 30-year yield falls below three and core pce at .6

u.s. futures looking to modest gains, rising rates and trade tensions remain in focus with stocks on track for a quarterly loss. president trump calling out the emers giant on twitter, amazon shares fell 8% so far this week. >> cook versus zuckerberg, with facebook embroiled in the data controversy, apple ceo takes a swipe at the social media giant saying i wouldn't be in this situation. it is the last trading day of the month futures rebounding and stocks remain on track to end a nine quarter win streak march is likely to conclude with the largest monthly losses for the dow and s&p and nasdaq since early 16 the market is closed tomorrow for good friday. jim, we've been talking about quarter end rebalancing, dressing for a couple of days now. >> look, this was the quarter where everyone decided that anything involving growth not just faang was overvalued. and then the money didn't shift

to something that was undervalued. it just kind of vanished some of it may have been margin money or money that says okay, short term rates are now high enough just get me the heck out of here. i can't take this pain this was the quarter where i really think people remembered what pain was like and it's just not fun. there's no -- there's really no medicine for it. you can't take two aspirin and it just stnt go away i mean, johnny walker black can't help this thing. which i like so -- >> what does help that kind of pain we know stocks going up to a certain extent, technology which has taken such a large portion now of everybody's psychic energy, not to mention portfolios. >> now we discovered how much everyone hated zuckerberg. they waited until he stumbled then they -- this is the most long knife thing i've -- i'm trying to remember, even travis didn't have to experience this.

>> travis might say differently. >> well, like i care what he says, i mean, when i met travis, i'm richer than you. >> okay. >> i think i was there for that meeting. >> he's mellowed a little bit. >> he said i'm richer than you >> he's more introinspective. >> is he more mindful than it was when he told me he was richer than me i'm jim cramer, i'm richer than you. it's always good, it's a starter. it's an opening or starter. >> an ice breaker. >> as someone said this morning, markets up nine straight quarters if you can't handle one quarter down, maybe it's not the game for you. >> people can't. there's a lot of people who can't. i wish they would leave because they are the weak hands and they are the ones that make it so a m micron can go from 61 to 51 overnight. they thought -- i thought that was a dodge truck, the ram they thought flash was grand

mast master flash and now discovering these are real things that go into things. >> right. >> nvidia. >> if you're at justing -- >> risk adjusting? >> love it at 21 times and 19 times and 18 times, 17 -- >> 17 times i'll own clorox. >> you start to get panicked if it's a large portion of the portfolio. >> now it looks like you're up because it's amazon's time do you know what i've been thinking the president hates amazon, right? >> yes. >> at least -- he used to like it when he had a book -- >> exactly i've got the package numbers congress doesn't like facebook david, i will submit to you supreme court doesn't like netflix.

>> what about twitter? who doesn't like that? >> twitter are you kidding me twitter -- >> other than amazon -- >> the fourth branch of government remember what he said on air he said it's vulnerable because it is vulnerable and that drove the stock down four points. i thought it was epic, like e.e. cummings, there was a vulnerable stock named twitter. >> stepping back -- >> who's doing that? >> i'm stepping back to try to -- we talked on this desk for months now about the risk to many of these names being this very thing, regulatory -- >> too powerful. >> too powerful. to some extent the idea of using the antitrust laws against the likes of an amazon at some point down the road as a possibility this has proven to be the risk that -- >> look, the people who are running standard oil, they were

doing a great job. >> not that they are going to break up -- >> they didn't think -- >> facebook is facing. >> standard oil, when they got the call or whatever back then from justice, it was like what are we doing we're really good at what we do? and one of things -- what's the growth area for the u.s. post office it's packages. including amazon but the president i'm checking the tweet there, he says it's costing money to pay little or no taxes and use our postal system as their delivery boy their delivery boy, they pay but the president he loves his form of twitter, andrew, don't listen citron versus trump. but you've got to get the facts -- to some degree this is a fake assumption. >> the amazon collect sales tax in every state that has them and it's kind of hard to argue that usps doesn't benefit from package volume, which amazon --

>> they clearly do and numbers are right here and they are very big. i'm sorry i have to deal with numbers. the facts are such a pain in the butt. >> there was one wall street journal editorial i believe some time back that claims that the postal service system costs are subsidizing amazon in part because of the way they keep their pricing in terms of percentage of the volume that is actually packages and therefore $1.50 more if they wanted to be fair amazon is getting a great deal. >> go raise your prices, i don't know. >> others say to your point, they are paying what everyone else is paying. >> they are paying what they are supposed to pay. when it comes -- by the way, if the government says you have to pay x in taxes any single one of them and you find a way to avoid paying more taxes than you should, the irs has said over and over again, that is legal. that is legal if you call the

irs, they tell you it's legal. if you evade taxes you're going to jail. amazon is doing what's legal that doesn't mean anything today because there's a tweet -- >> listen, if you want to look at the sherman act and say, okay, do they represent a competitive threat to a lot of different industries didn't always used to be about the consumer benefit it used to be about larger issues. >> in terms of overall competition, the idea that alphabet, facebook, amazon, prevent other competitors from emerging as one of the larger arguments that could be made and lodged against these companies as a reason to pursue remedies. >> average sentence in sherman, ten years, criminal. ten years. >> ten years >> sherman bad, very bad like sherman tank running over you. >> yes, but clayton act -- >> clayton okay.

>> tweet not so bad. >> nobody is going to jail. >> but you did talk about amazon -- >> sherman -- you talked to the united health chief about amazon and potential threats. take a listen. >> we're operating our business in an expansive market that will continue to expand over time we have a very strong track record of growth and expectations around growing in five critical areas pharmacy care services and advancing consumer centered benefits really advancing elsewhere digital and health information aspects of our business as well as going global. as i said before, there's millions of relationships you need to manage and obviously that would be just one. >> not too worried he's a confident man united health is a company that a lot of people think that if the bezos went to they could with that optimum data base, they will be good.

other people said there are now 3-d pills being made where they could make their own pills amazon could make their own pills and that would save a lot of money. >> when they complete their logistics efforts, they won't need usps any more and that's taken care of. >> i don't think unh will get tweeted any time soon. sherman? bezos goes to jail for lowering the price to consumers everywhere >> the changes that have taken place in the application of antitrust law have focused on solely on the consumer and impact but previously it didn't used to be about that. >> but bezos. >> if you want to make that argument that used to be made -- not even that long ago, 30 years ago -- >> still adhere too. >> that then there is much more argument to say these companies are anti-competitive. >> what bezos could be -- if he disrupts like -- offline what are people talking about what do you hear about bezos i mean, bezos is himself a

force. he's like a country. >> he's a force. >> bezos of thinking of invading us >> what kind of defense do you have >> two underlying current, one this really is directed at the "washington post" and coverage they've been giving the white house which has been aggressive. the other is that as we watch the trial go on between at&t and doj, they try to distance themselves from antitrust and does this tweet offset that or not? hard to tell. >> unclear they were not allowed to depose certain witnesses, at&t was to try to build this case that there was somehow a direct interference from the white house in terms of influencing the department of justice, to bring that case against at&t to your point, carl, of course the president made no secret of his distaste for cnn and no secret of distaste for the "washington post." so it is important to see some of that criticism in that light. >> you know, i do think when we

look at at what amazon has done. >> there are laws you have to follow in order to prosecute a corporation in this country. antitrust laws that i mentioned earlier. >> why do you say that have you ever read anything about bobby kennedy's justice department >> not as much as you. >> there was a get hoffa squad do you think they had any law? bobby kennedy said get jimmy hof hoffa. it wasn't like let's have due process. >> okay. >> get jimmy hoffhoffa there could be a get bezos squad. why not? >> who's running it, michael cohen on that one too? >> don't get me started. that would be stormying, i'll tell you that much. >> outside a shopping mall and some guy will say watch out for your kids. >> nice online service you have, shame if anything happened to it. >> bezos has lowered prices for everybody, that is completely

unfair right? raise prices now. >> carl made a really good joke and you didn't even laugh. >> i'm still thinking about the sherman antitrust and ten years in prison for bezos. >> i'm going to look up sherman. >> very bad. >> sherman bad >> when we come back, we'll pivot from amazon to facebook and talk about what tim cook said about the social media giant and how it's handling the data scandal take another look at the premarket ahead of the long easter weekend say good-bye to q1 today more "squawk on the street" from post nine in a moment.

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facebook is under pressure this morning this time from apple's tim cook, slamming the company over the data privacy scandal. here's what he said in an exclusive interview with kara swisher on ms nbc. >> we're looking at every app in detail, what is it doing is it doing what it's saying it's doing is it meeting the privacy policy that they are stating, right so we're always looking at that.

should we raise the bar more we're always looking at improving and raising the bar. >> mark zuckerberg, what would you do >> i wouldn't be in the situation. >> also in facebook news the social media giant is cutting ties with data providers like xper onand axeiom. will ferrell saidize going to delete thinks faith. cook is not going to let this moment go to waste. >> i thought cook's statement were unbelievable. and -- >> you were surprised he came out strong. >>tempt tuous. the long knives are out and they have to get sheryl sandberg out there six weeks ago. the volume is up big but tim cook, i watch that and said, he didn't say that. i remember speaking to my executive producer, did he do that did he say that -- wow

now there is -- when i was out there two weeks ago, facebook does not have a lot of friends they do not have a lot of friends. and when i say that i mean wow, i've -- people disregard them as arrogant by the way, the guy who ran instagram, no, not regarded as arrogant so the important thing is for the state of instagram to succeed and nullify the relationship of facebook. >> i do find myself wondering when i hear cook talk about policy being so sank kacrosanctt apple. you have no privacy, period. >> there's no privacy. >> i did a documentary over ten years ago called big brother, big business for this network -- >> my dad loved that. >> the likes of axiom which will be down because they won't have access to facebook data, before

this thing even existed. before this existed and you still had huge questions about privacy. >> there's none. >> there's a constitution has -- watch out, that's my phone pay $10 a month to back up my pictures. >> they know i just did that they are aware and knew i threw it. >> they knew everything about it. >> open your health data as a step. >> i sometimes leave this under cars when i go and they think that i'm gone -- they do know -- there's no expectation of privacy. the first -- look, the constitution does not have -- it has a penumbra of privacy but there really isn't -- look, should they have been sending the leads to these guys? a lot of people send leads to these guys. >> they do and they put together a consumer profile for customers using access to facebook data and many others. >> right but facebook has to be holier

than thou. facebook, not an individual. sheryl sandberg did not say -- there's no one coming in from the outside to examine they -- other than apologies, they are still doing everything wrong. are they short the stock sandberg has some sort of short going? they are in the bunker >> you brought up dr. strangelove on twitter this morning. >> they are in the war room. there's no fighting in the war room that's what it's probably like there at the headquarters. did i tell you -- let's shoot the coke machine. >> bodily fluids. >> sterling, the name. >> some names there. >> we'll get cramer's mad dash and count down to the opening bell in a moment one more look at the premarket on the final day of the quarter. back in a minute

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seven minutes to go on this thursday, the last trading day of the week. opening day here for baseball in the new york area. >> yes. >> david, do you know what day cinco de mayo falls on >> the 5th day. >> what day of the week is that? >> it is a saturday. con stelation brands will blow out the next quarter like this quarter. it is back one of the things that happened, wine had been weak before and california rob sands might describe california fires, made people think i don't know about the harvest. they had cold weather in italy and got so cold, where lisa has her house, that some of our

olive trees died and not now it's back. this stock is taking off the shorts who got here, short, short, short on the buyback this quarter it was like they just stood there and bought every share. >> this stock really in many ways never looked back since the antitrust inspired deal. >> peabody and sherman, yes, they got -- stop it. they god kurano -- but modell. >> the new york police department. >> they are worth more than what i'm talking about so -- they are doing great and con stelation is doing great. that's what's happening. >> bar sam miguel is doing great? >> we have two tabs, modelo and kro corona we don't do a lot of bud. >> no? >> no. >> i've got a few things to

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you're watching cnbc, squawk on the street. live from the financial capital of the world the opening bell in two minutes on this final day of q1 ahead of a long weekend opening day for major league baseball we're going to watch that closely today. we've covered -- i mean faang has strong news on all of them we covered apple and facebook. amazon is now down a full percent in the fpremarket in the presidential tweet you know what, those who want to sell it,maybe they have insigh into something that most of us don't have, which is what's the next move unless there's a get bezos squad, i don't think it can happen not that i know of. and facebook, i don't know what the colonel will say today in the war room and in the bunker,

but there could be a day where nothing really happens other than someone says listen, i've had it with facebook, going instagram. but yeah, today's amazon's day again. i don't know if you can't really have two days in a row the president obviously must not be a member of amazon prime or wouldn't be saying those things. does he have the button where tide comes, tide and clorox? >> since march 12th, when tech was really at its peak, amazon is down 10 and facebook down 17. apple down 8 netflix 11, google 14. low double digit. >> this is the quarter it unwound. everybody hates these stocks and you know what, the quarter can't end fast enough. >> yeah. let's get to the opening bell, s&p at the bottom of the screen. you heard applause earlier, it's

the nypd celebrating the retirement of robert boyce, the chief of the detectives after 35 -- >> chief detective. >> 35 years of service our thanks to him and to the nypd at the nasdaq, we'll talk more about this, known as the netflix of china, celebrating its ipo today, it is the biggest u.s. chinese ipo since baba back in 2014 50 million paid subs >> is this part of the trade talks that they can come here and do a deal in our face? no. >> if you haven't noticed there have been virtually every day there's a listing of a chinese company, education company yesterday that listed here -- >> you think you should allow any company from china to list is that the way we play it now >> they want to use our capital markets, i say sure. >> i want peter navarro do -- >> i don't believe our trade

deficit is hurt by listed of chinese companies. whether or not you want to make arguments about the lack of transparency of these companies or really understand fully their operations. >> by the way -- >> knit picking. >> op-ed in china daily, the malicious practices of the u.s. are like opening pandora's box and there's a danger of triggering a chain reaction. >> i have to tell you, spotify is coming up. >> not a chinese company. >> forget pandora. spotify box -- they come -- they they sell how many shares of this stock >> 125 million. >> when we're an evil empire what do they call us >> selling at 18. >> sending bezos over there right now. some of this stuff is a little comical. >> alibaba. >> we have a chinese deal happening here and yet the chinese hate us? what am i missing?

the chinese government not that the chinese hate us gsh -- >> did you hear what we've been saying about them? now he's -- >> as a war of words. >> the firm is 69% owned by bay due backed 28% market share concern for netflix given the international story it is or no? >> reed hastings says the more the merier he's always like that's fantastic, that's going to be more people coming on the platform so i would not -- unless chief justice roberts says a thing did narcos i would be okay with netflix. did you ever notice that they never actually deal with the merits facebook, okay, so what are the merits right now for instance, if sheryl sandberg would say i like to go to capitol hill and i'd like to talk, they are going to

fold like a cheap kmart suit, sorry, eddie that's what they would do. she would charm them but they are in -- they are in the war room there with the colonel backed -- i'm not kidding. they are hiding. zurger berg will show up and testify, right >> he should be saying i want my day in court, want to testify now. they also don't own any senators, you know that. >> now we're getting back to godfather references. >> lobbying dollars have gone way up this is a really -- >> i've got to tell you, david is right these companies are powerful and we're tired of it. the market caps are big. netflix is going down with the chief justice roberts -- no, it's off to china. we've got to stop with the -- we've got to stop putting the hate on big companies but that's what's going on. >> guys -- >> it's standard oil. >> standard oil was broken up and many would argue to the benefit overall of the u.s.

economy and to many other companies and consumers. >> not if you're a rockefeller. >> they did just fine as well. in fact, i believe the net worth went up enormously as a result -- >> ultimately -- maybe if they broke up instagram and facebook. >> i don't even know what you break up into. amazon i can imagine easily, aws and core service. >> amazon the advertising. >> and alphabet i could see breaking up in a few different things. >> absolutely. >> by the way, each of those things might create value. >> look -- >> not going to happen not going to happen but just saying. >> well, people obviously believe that amazon that there's going to be more from the justice department against amazon and stock wouldn't go down so much or maybe it's the citron thing it's vulnerable -- >> vulnerable -- i heard you earlier. >> last year, lobbying dollars spent by facebook, 11 million. exxon 11 million

believe it or not. senate for responsive politics. >> really? >> spending about what exxon spends on -- amazing, right. >> that's amazing. >> change. that's couch change to these companies. >> these guys, amazon, memo to amazon, you don't want a second headquarters, you need 15 headquarters in 15 different states then you get the senate. >> you get the senate. you need the senate -- >> you're making me more cynical by the moment and i started off pretty darn cynical. >> remember that one >> yes, i do that held up that julius caesar, holds up, west side story thing holds up too. >> it does it's been running on hbo a lot lately if you caught it. >> and spielberg is working on a new one. >> let's do pbh. up 5%, top s&p at the moment as

they beat by 11 cents revenue ahead. >> this was -- i'm walking down con stellation, i love it. this was the best quarter ever, everything is double digits around the globe synchronized buying of calvin klein and tommy hilfiger he went through hard times with currency and now the currency is just at a fantastic tailwind after being a head wind. all of the department stores said he singled out -- macy's said business is just incredible that's jeff beganet, but all of the department stores are doing amazingly well this is such a different narrative from what we had and i want to point out when i look at what pbh -- remember they own the shirt and tie business the calvin klein business is huge in europe and china is good china is really good he said, listen, we need fair trade but manny was the most enthusiastic i've ever seen him. he's been on the show for as

long as the show i just got to tell you, that stock is an up stock and going higher i think they at one point -- did they had trump's ties? >> i hate to -- >> oh, right, yeah. >> guys, a potential deal we've been following here for some time of course is whether or not cbs and viacom will get back together having been split up some time back the controlling shareholders national amusements wants it and the companies have been working towards that potential deal over the last few weeks they conducted due diligence this was the week that was pen simed as the week where you would get some sort of exchange from cvs or value or propositio to via come of the value they would be willing to pay. by all accounts i've been able to garner, there were meetings that took place around that. what the economics are at this point, i can't tell you, i'm not getting a lot. i am hearing from people close

to both sides that there is an expectation still of this moving down towards a potential announcement sometime let's call it in the second quarter which is only -- it begins next week and that you would see a deal announced prior -- certainly the end of the second quarter of this year. still in play though, not just economics and cbs getting some extent and pressure from shareholders of its own, saying we don't want to see you paying a significant premium for viacom beyond that is the larger questions, social issues are not rising to the level they did last time these two companies considered doing this but they are still there in the sense of okay, expected to run the combined company what do you have free reign? bob certainly now an established ceo at viacom would be the number two by all accounts but there are questions around how much free reign he would

have and how the company would be positioned to obtain certain cost synergies that would seem to be there. those become key considerations. we'll see how it evolves from here but it does still appear to be on track -- on track for working towards an official final deal can't give the economics at this point though, don't know what -- where they've sort of started to talk about price >> really? >> really. s. . >> that's all right. >> it's an update, not as much as i would have liked. >> people are keeping it close to the vest in terms of price. viacom has mocved up a bit but flat on the year both combined don't add up to 20% of netflix. >> come on i mean -- honestly, netflix is an international entertainment

company, not a domestic entertainment company. it's international and it has tremendous pull everywhere and people pay and you know, what can i say, cbs over the top, how is it look sng. >> it's done well. beyond what the expectations initially had been. >> i think it's done well. >> on news and entertainment too. >> how do you think disney is offering >> disney offering of over the top -- both the entertainment and espn, listen, the question on espn will be fascinating in terms of where do you really price espn over the top product that has everything including the regional sports networks if and when they close the deal with fox and what's -- i've heard pricing that could be as high as 25 bucks a month and get 40 million people. you can do the math, right and try to understand where that will end up as you watch espn subs come down over time. >> black panther accounts for almost of the year to date box office and --

>> the whole country. >> yeah. >> and roseanne pulls in almost 20 million -- the president called roseanne. >> he did? >> yes, to congratulate her. >> it's interesting. abc -- maybe the president likes disney could be i'll tell you that bob iger's instincts were right he told me "black panther" would be the biggest ever and i was like okay. giant. giant. >> jim, you were at the healthy returns conference yesterday and the shire potential deal, i don't know if people were talking about it at all -- >> yeah. >> got pushed back on this idea that this japanese company that wasn't obligated to indicate it had interest in shire hasn't sent a letter from anything i picked up. just sort of told the local press they were interested and story is out under uk law they have a certain amount of time to actually make an effort but shire went up a lot. a number of people pushing back to me saying how can they get

this done? shire has a cliff coming on adderall and takeda trying to buy their way out of being a mid cap farm ma company. they are also well levered because of the rexalta deal. do they want to own a japanese stock and have to have a dual listing and on and on from there? >> you think it was scuttle but kind of thing. >> i don't know where it ends up but there seems to be some doubts. >> got you. >> as to whether they can follow through in an effective way with a real offer that shire holders would want. >> all right, we have reclaimed 24 k just barely need about 700 points to break even for the quarter let's get to bob pisani. >> take a look at sectors tech stocks doing very well at the open

we have intel, semiconductors doing well, banks up and streams doing pretty well. nice broad group here. the faang stock stabilized we had weakness in amazon but the faang stocks holding p up well we're right near the end of the quarter, folks and we've broken trends here. we're down 4% for march. haven't been down since october 2016 almost 3% down for the quarter haven't had that happen a down quarter since september of 2015. the trends for the quarter here, well, first big trend was the rates, not a surprise rates were higher but it was a surprise we had a flatter yield curve. the big trend was that short volatility unwind in the beginning of february, that took everyone by surprise now the big debate, the one that nobody has settled yet but fighting about, whether long big cap tech stocks is slowly being unwound. we don't know whether that's going to happen and analysts are not taking down numbers yet. if you look at facebook's

numbers for the year, all of the analysts are solid the knock here is well, market reacts quickly and analysts are slower to react. sometimes the market is wrong earn they have to unwind and not the analyst. we'll see. this is being fought right now individually with a lot of different kinds of stocks right now. for the week you can see the faang stocks down but they've largely stabilized and netflix which had the biggest gain this year, they've had no news but they are the biggest gainer overall on the year. not surprising when you take the sector down. part of the problem, look at the earnings for the quarter tech is 25% of the s&p and it's also a really big part of the earnings gains we'll expect in the first quarter. that's a problem you start playing with that and it messes with the whole market because the overall amount of dollars going into the tech earnings is much, much higher than everybody else. finally one note about the ipo trading today. the big china online and netflix of china, they've got a lot of

competition, wish them well. they'll trade around 10:45 at the nasdaq the chinese ipos haven't done well look at yesterday. everybody talked about this company, all of the genx ers are playing the game and it didn't trade above its offering price at 1150. it climbed below that. we'll see how the chinese ipos -- a lot of talk maybe all of this negative publicity around china is starting to affect the ipos. >> interesting thanks, bob. let's get to the bond pits with rick santelli. >> before we get to the day, the chicago pmi hitting the wires, 57.4, 57.4 you talk about a rocking disappointment, that's it, 51.9, 57.4 will end up being the lowest read since march of last year we'll call it exactly one year now, if we look at what's moving

this, we'll get into the internals in a bit let's get to the charts, of course, trading for this quarter and ultimately finding out what this quarter's gdp is is probably going to be a disappointment of some of the early signs hold up. could be sub2%, 10-year note yields have dipped a bit they are not in that range but they haven't fallen far from it. month to date chart we settle at 2.86 at the end of last quarter. here we are ten basis points light. if you look at -- consider a year to date of 10-year we settle at 2.41 last year still holding a large margin of gains. if you look at bunds, a bit of a more aggressive story of downside yields and year to date bunds reveal, here we are flirting with the lowest level since january and they settle at 42, only up eight basis points on the year. dollar index had a good two-day run on tuesday and wednesday and

little disappointing today as you see in the one-week chart. month to date, they finished off the end of last month at 90.60 we've lost a bit of ground but it is trying to regain 90. real quickly, one week dollar yen gave up a lot of ground in the dollar's favor we're coming from levels that the dollar hadn't seen since july of '16. carl, jim, david, back to you. >> talk to you in a bit. >> when we come back, the cme group making a $5.5 billion acquisition. we'll talk to terry duffy later on squawk ally and the final four weekend approaches and jim has speshcial insight into a few of the teams when "squawk on the street" continues. >> i want to say thank you to the amazing hosts at the villanova university school of business and all this -- you're the reason i get up and do the show every day whoooo.

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♪ booyah welcome to villanova >> march madness is nearing a close. the final four set to get under way this weekend in san antonio. of course, loyola will play michigan kansas, villanova. you don't look any different than five years ago. >> oh, please. thank you. thank you. that was the last one my father went to. had a great time met with the president of the school that was a really fun -- we also had jay wright up here when they won, ringing the bell. obviously i'm a nova fan my dad went to overbook high that's where wilt went, then played for kansas. kind of an old rivalry but yeah, i'm all in nova. >> you've already had a good sports year. >> we had a bad sports life.

>> doesn't matter. >> i get up every morning and think, what a hard day, healthy returns. five, seven, ten panels. but we won the super bowl. >> today is like the only day of hope i have as a mets fan. tomorrow it will be all over >> i like that joke yesterday where you said how many games back are they? >> i wanted to know. the playoffs are in reach, david. you're still not out >> no, we're not >> and the sixers, by the way. i didn't put the knicks on they just routinely beat the knicks now. >> everybody routinely beats the knicks it's been a very poor year if you're a sports fan in the new york area. it's been difficult. other than for the yankees >> yeah, true. yankees are underdog favorite. imagine that >> it's one of the great days of the year opening day, of course >> is it >> it really is. we're going to try to hang on to these gains. we'll get "stop trading" with jim in a minute.

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let's get to jim and "stop trading. >> tough downgrade for starbucks. below consensus. they take the price target from 70 to 56 they say china is going to fall below initial management

commentary same-store sales not so good, declining rate of growth it's a bad piece just said basically, you know, if they're using a $56 price target, i think it's going to get there. >> sentiment has turned on mcdonald's sonic had a rough print. >> that was a very tough quarter. holy cow i mean, if the president tweets about starbucks, it's going to take out the low >> jim -- >> how could he like howard schultz? he's a real democrat >> what's on "mad" tonight >> jensen huang, the shorts are all over that because it's been such a winner. and rob sands. trying to hold it below 230. this market, i hate to say it, but we're really glad we're off tomorrow people have to just calm down and cool it. they're selling things on a tweet. they've taken amazon down, what, 125 points and it'll probably go down

another 50 for all i know. the people who own amazon, holy cow, guys, it's not a river. it's a company >> jim, we can't wait to see you tonight. have a good long weekend >> you too >> "mad money," 6:00 p.m. eastern time when we come back, david has an exclusive with blackstone's president d anc.o.o. jon gray. down up 99 back in a minute today, the new new york is ready for take-off. we're invested in creating the world's first state-of-the-art drone testing facility in central new york and the mohawk valley, which marks the start of our nation's first 50-mile unmanned flight corridor. and allows us to attract the world's top drone talent. all across new york state, we're building the new new york. to grow your business with us in new york state,

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♪ good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with morgan brennan and david faber at the new york stock exchange. final day of q1. managed to reclaim 24k but have lost it the last few minutes, obviously, trying to get a break-even quarter that's going to be a lot tougher as oil is behaving, up about 14 cents. some data breaking as well after some this morning. rick santelli has that >> i'll tell you what, chicago is a bit of a disappointment maybe there's a little trade nervousness. university of michigan sentiment survey is no disappointment. 101.4. why do i sound so happy when it was just 102 because the 102 was a mid-month

number this 101.4 is the final number in both cases, they are the highest level going all the way back to 2004, january 2004, to be exact because 103.8 from january, any numbers over 100 are going to comp to that these are really lofty numbers now, if we look at the one-year inflation expectations, it actually ticked down from 2.9 to 2.8. if we look at five to ten year, it remains constant at 2.5 carl, back to you. >> all right interesting. thanks, rick rick santelli. our road map today begins with the markets. it's the final day of the month and the quarter. the dow and s&p on pace to break nine-quarter win streaks while the nasdaq has seen its worth month in about two years more on what the market holds this morning >> then from the most powerful investor in real estate to the heir apparent as ceo of blackstone we're going to talk to chief operating officer of blackstone jon gray here on set

it's a cnbc exclusive in just a few minutes. >> and finally, more on the fallout for facebook after apple ceo tim cook's criticism of the social network, we break down what's next for the company and the web of competition in big tech. >> closing out a rough first quarter for the markets. dow and s&p obviously in the red for q1 here with what we could expect for q2 is oppenheimer chief investment strategist. good to see you, gentlemen good to see you both so we have obviously f.a.n.g. under pressure you have the vix running at double the two-year average. some of these confidence numbers -- this is a good one out of michigan. what does it all lead to >> we'd have to think to actually some stability moving ahead. we think we've shaken out some of the worries we think that related to what has happened in social media over a the last couple weeks, it's really brought to a head many of the things we're concerning related to privacy

and otherwise. we think most of that will lead to some kind of regulation and some kind of a greater focus on the product than on the customer i think tim cook said it today what social media needs to do is what apple has done for years. >> are you saying it's not going to be as volatile? >> well, let's put it this way, morgan we can't really say if it's going to be as volatile, but we would have to say the recent volatility that we've seen is just a little bit over half of what we had at the peak so far this year in terms of the vix. volatility could always come back it's just a question of what the catalysts are. this market is always looking for a good justification for profit taking, we think. >> professor, conference board yesterday was interesting. percentage of those looking for increase in stock prices over 12 months went from 51 to 40 to 35 in march

has sentiment turned >> well, yeah, actually market observers would say that's a good sign. when you have too much optimism, that's when you're at a top. stocks are now selling at around 17 times earnings, 2018 earnings that's a very reasonable number looking forward. we have too many momentum players. i said so when i was on cnbc in january, just jumping the trend, particularly in the f.a.n.g. stocks and tech stocks a lot of those are shaken off, which i think is good for the market rotation is good for the market. so i think we're going to see a much calmer second quarter than we did on the first quarter. >> and in order to see that, do we need to have the yield curve unflattened, tightest level now since '07? do we knneed to see libor come f this 20-day run, commercial paper, investment grade spreads, stuff like that too? >> well, i think interest rates

are still going to be a challenge to the market. look at the jobless claims the job market is on fire, and the only reason we didn't get a big drop in the unemployment rate last month was a huge rise in the participation rate. a lot of the economists i talked to said they think that's just a one-month blip if it goes back down, we're going to see that a week from tomorrow when we get the march report we could get unemployment down to 3.9%, and that really does mean that the fed is going to continue to tighten. there's no question about it so it's not going to be a year like 2017 was. you know, i called 0% to 10% on the s&p last december and january. i know that's a pretty big range, but given market volatility, i still think that's what it's going to be. it's going to be no bear market but certainly no galloping bull market this year

>> a lot of focus on the 200-day moving average for the s&p 500 i know we're up today nine points right now, at least for now, right given what we've seen in trading recently how closely are you watching that technical factor, and what happens if we do break below it? >> we leave that to our technician, but when it comes to the market, we look at the fundamentals, morgan what we see in the fundamentals is no deterioration, whether it has to do with the economics or corporate revenues and earnings. we look like we're in a relative sweet spot for now, and with prospects, the tax reform may kick in and add to the liquidity for corporations, even as the fed remains committed to normalization. this could go on for quite a while in a positive sense, contrary to what many might expect >> so would you choose copper over gold and transports over utilities? all of these strange sector reversals we've seen

>> the answer to both of those is yes it would be copper over gold and transports over -- >> utilities >> yeah, we are cyclicly positioned and on a global basis. the reduction of sentiment out of europe, europeans tend to be conservative even as things get better, mario draghi seems to signal that, even though their central bank is saying things are getting better the european investors are cooling their heels a little bit, but that likely positions a rally in europe likely too as well >> professor, you know those two trades we were just mentioning is one reason why some believe the markets are trying to challenge the fed's renewed excitement about the economic outlook, at least as far as we heard in the press conference this month >> yeah, i mean, we talk about professor copper being one of the really leading indicators, the canary in the coal mine, so to speak you know, on the economic

growth, the truth of the matter is that the people i follow say first quarter growth, which of course we're just ending now, is going to be below 2% some as low as 1.5%. the big puzzle is with a great labor market, hiring payrolls, why is productivity so low why are we only grinding out 1.5%, 2% this has been a problem for seven or eight years we haven't solved it yet and productivity growth is still a challenge. >> professor, what is your take on the bond market, and specifically treasuries? we had the ten-year tick back below 2.8% this week some traders here suggesting that maybe we've seen the peak in terms of how high the ten-year yields will go this year what do you think? >> i think the ten-year is going higher what you saw is the ten-year has become the hedge asset in other words, when we hear the dow is down 700, 1,000 points, treasury is up two points.

a lot of investors use treasuries just as a diversifier. they really don't care about the yield. that adds a lot of demand, a lot of hedge demand. the fact is when we saw turmoil last week, treasuries go up. that just reinforced that demand that's why i think we're back down but i think when the markets calm down, as i think they will in the second quarter, i think we'll see a continual march up of the ten year. i still call the end of the year ten-year at 3.25 even though certainly it's gone down in the last couple weeks. >> 3.25. and your year end? >> 3 >> okay. >> that's if everything goes right. >> yes, yes. john, professor, thanks so much. good to see you. >> thank you >> thank you well, when we return, he is the c.o.o. and president at the private equity, really the alternative asset giant blackstone he built that company's real estate portfolio as well into the nation's largest, including the largest landlord of

individual rentals in the country. jon gray is next up, cnbc exclusive. stay with us at fidelity, trades are now just $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

you know what's not awesome? wigig-speed internet.e. 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. welcome back since taking over as the head of blackstone's global real estate business in 2005, jon gray took assets in that class from about 5 billion to over 115 billion. now as the firm's newly

appointed president and chief operating officer, he widens his purview across the entire firm jon gray joins me here at post nine nice to have you >> thanks for having me here >> thanks for making the trip down let's talk about the new job for a moment it's not as though you're unfamiliar with the firm you've been there your entire year, i think starting '92 >> '92 >> but new responsibilities certainly. has it been a learning curve at all? >> well, i've been very fortunate. i've only been at it now for 29 days, but yes, some learning curve. the fact is, steve schwarzman, tony james, they've been methodically planning this starting ten years ago, i joined the management committee, six years ago, the board three years ago they sort of brought me into the engine room and said, understand all the plumbing of the firm, the personnel issues, and they signaled to the outside world this was coming. all of that made this much easier so sometimes these transitions can be abrupt. this certainly wasn't the case >> no, and it wasn't a surprise, i think, to much of your investor base as well and people

who follow the company still, what i have found with people in your position is sometimes it's hard to let go. you ran real estate for so long. it was so important. are you able to do that? i know you're still keeping a hand in it but that part sometimes can present a bit of a challenge >> you know, the good news is in real estate, we've got 450 people, 29 partners, and the two new co-heads, kathleen mccarthy and ken kaplan, have been my partners for a long time i think they can do some even better things than i've done >> you think so? like what? >> well, they can grow the business even further. we've pushed that business from an on ppportunistic real estate business into core real estate it's just in the early stages in some of those newer areas. for me, yes, i have the ability to step back i'm really excited about the challenges and other parts of the firm spending time beyond real estate. i'll still keep my hand in it, but i think it's a healthy thing and an organization for people

who are ambitious and talented to be able to evolve >> yeah, let's talk more broadly now, given we can do that. although, i would probably ask you this in your old job as well china, you have a lot of experience there, both as a buyer in country and of course receiving money that comes from china to buy properties here in the u.s. are you concerned at all do you hear from your chinese counterparts, perhaps, a rising level of concern about the rhetoric that's going back and forth? >> you know, i think you have to step back a little bit and think about where these two economies sit. the u.s. has been a mature, developed economy for a long time, and it's had a very open market china coming as an emerging market, like most emerging markets, has been a little more closed off a little more protective of trade. but as they mature, that balance has to shift i think both parties recognize that there's some push and pull we're reading about that trade is interactive investment going back and forth

is positive. i think there will be a healthy balance at the end of the day. it may not be perfectly clean as we get there, but i think long-term, realize it's in collective best interests to get this worked out. >> so you think overall you're not concerned for the long-term nature of the relationship >> yes my view is it's in both parties' long-term interests to figure this out, to create a fair and balanced relationship where both parties benefit from trade and investment, but it doesn't mean there may not be messiness along the way. >> some say the chinese are the ones who will have to give up since they've guarded their marketplace a lot more than we have >> the chinese, i think, are going to have to open up parts of their market. i think that's going to be part of this as well. and i think they recognize that. >> chinese outflow they were big buyers of real estate you benefitted from that the waldorf astoria being one example. that has slowed, if not stopped. does that impact the values here and the way you think about potential exits? >> you know, in certain markets,

they were lead buyers, particularly in some trophy markets, new york and london, but the world is pretty liquid these days, both debt and equity so we haven't seen a sharp pullback in asset prices so no, i wouldn't say a big difference >> you don't think so? >> no, i don't >> and on buying, you think they're going to continue to develop the waldorf astoria the way they said they would, or does that come back on the market >> they've said publicly they will the government has taken over. it's possible they may look to sell over time i think it's too soon to say >> let's talk about some of the other efforts you should wundere firm i want to talk about retail, so to speak somebody with a million bucks to 5 million. you're not targeting them. it was said ultimately it could account for half the assets we manage half the assets of blackstone one day could be retail? >> if you think about it, the

institutional market, that's a $50 trillion market. they allocate about 25% of their assets to alternatives in the real tail world, individual investors, they're about 50 trillion globally, they're probably 1% to 2% in alternatives the idea that over time this could grow to be very large is sensible today we have about $70 billion in this area, and what we're basically doing is bringing blackstone quality products to individual investors so we've started this with a private read, which has got a very positive response, with some things in the credit area we think the blackstone brand investment process will be attractive to individual investors. >> so you do believe it's a real growth opportunity >> absolutely. >> you're not alone in this. goldman sachs has been addressing this market, some from the credit side as opposed to the investment side >> i think we may have to shift in some ways

there are regulatory changes or differences. there's liquidity differences. it's not completely the same as what we see in the institutional world. but we're going to have to create the kind of products. we're going to have to market to this universe. but again, at the end of the day, what people are looking for is favorable risk-adjusted returns. we've done that incredibly well for 30 years institutionally we think we can do it in other markets. you mentioned insurance. i think that's a real opportunity. >> you also mentioned reads. what's going on there? >> what happens is two things are going on one is interest rates are obviously cause of concern for retail or for real estate investors. shopping centers and the amazon effect, that's caused that sector to trade down quite a

bit. i think that pressure may stay for some time. >> and what about rising rates globally we aren't seeing it again lately with the ten-year back down to a level we've become accustomed to is it a continued concern? >> well, i think for investors, the key thing is we're shifting out of this lower for longer environment. that was a low rate, low inflation, low-growth environment. we now have wage inflation picking up we've got accelerated growth here in the u.s. so yes, i think rates likely to go up over time. the deficit is going to increase companies are going to grow faster to what is going to offset a tougher multiple. >> here's a question that we typically would not have addressed in the past. but as c.o.o., i can which is the stock price you went public, i think almost over 11 years ago.

about 100% return. almost all of it dividends the stock is more or less where it was people know how much you and mr. schwarzman make. they look at that. they look at the fact you added $108 billion in aum last year. a huge number. they say, what's going on? by the way, mr. schwarzman himself on your calls always makes a point of saying there seems to be a disconnect is there a disconnect, jon what can you do about it to improve the performance of your stock price? >> we do think there's a disconnect we think this is a very special business that deserves a premium valuation, not a discount. i think part of the challenge is the nature of our business in the short-term is more volatile. so our sales, the value of our holdings and people see public market investors see that short-term and makes them concerned if you look at the company over a long period of time, since we went public, our aum has grown from 88 billion to 434 billion we've paid out enormous dividends along the way. and we see a future that's very

bright given what's happened in the alternative space. we've got a business that's got more than 50% margins. we have got a business where we utilize very little capital. all of that argues for better valuation. i think what we're going to have to do is just continue to deliver over time, continue to execute on our business plan, and we're a persistent bunch we're not going to give up very easily and so i think at some point, our view is the market will rerate these companies, ours in particular >> do you need to become a c-corp. to make it an easier construct for investors to understand >> that is one of the challenges with the tax reform, it's something we're looking at we've said that publicly the negative, of course, is our tax rate would go up the positive is there's a bigger universe of investors who may buy the security and we're going to study that. we're not in a hurry to do it. it's a big decision for us we only get to make that choice one time but if we do it, it's going to be for the right reasons i think it'll take some more time for us to evaluate.

>> all right didn't even get to a number of real estate questions, but jon, we've got to leave it there for now. thank you. >> thank you, david. >> jon gray, c.o.o. and president of blackstone. morgan, over to you. >> thanks. great interview. i thought, carl, it was very interesting, the discussion about the push to draw in more retailers and the growth opportunities there. david said he didn't get to ask a number of real estate questions, the comments on this idea that not just rising rates and also there's pressure in retail and this amazon effect. really fascinating. >> got to china and the stock and a lot more good stuff, david. thanks to you. as we head to break, take a look at shares of tesla. the company on track for its worst month ever down nearly 25% so far in march. the worst performer in the nasdaq 100 today and later, more from tim cook on apple's privacy policy in light of the facebook data breach. stay with us

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welcome back now for our etf spotlight where mike santoli is taking a look at what drove the q1 downside where do we start? >> if you just looked at it point to point, it looks like a gentle downside, but it's the story of two quarters. ramping up in january and really falling apart after that so here's what really did drive the downside well, the upside first, i guess. the winners from the first quarter in terms of industry sectors were consumer discretionary, technology, and health care. of course, health care was only a relative winner because it was down 2.3%. consumer discretionary is largely an amazon story.

amazon, netflix. but it's not just that traditional retailers did pretty well, department stores and specialty as well. so the losers were pretty pronounced, actually energy, consumer staples, and materials, all down 7% to 9% that's been the kind of combination of, you know, bond yields going up. staples getting hurt there but there's another way to cut the market in terms of winners and losers, by size of company really, the weakness has been concentrated in the very largest companies. these are etfs that track different capitalization tiers the top 50 stocks down 3.2%. it's linear there. the losses go down so that's kind of interesting. maybe this is the long, awaited rotation into smaller stocks in terms of parts of the world, the u.s. underperformed largely. so you see the russell 1000, the

iwb, is basically down the same as the s&p 500 efa is all developed markets outside the united states. emerging marketed eked out a little gain. this is all coming into today's trading. the average stock outperformed the s&p in the u.s. by a little bit. so again, it's really the very largest stocks that took most of the pain >> yeah. we're going to get to that later on thanks, mike speaking of which, tech stocks are under some pressure today. amazon, netflix, and tesla in the red. although, the ndx trying to hang on to gains after ending yesterday's session in correction territory going to talk about that on pace for the worst month in over two years. later on, pulitzer prize winning columnist jim stewart is with us for more on the fallout over facebook privacy concerns.

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good morning, everyone i'm sue herrera. here's your cnbc news update at this hour. north korean leader kim jong-un will meet south korea's president moon on the border between those two nations on april 27th the announcement following talks between representatives of both governments. british prime minister may embarking on a tour of the country one year before britain officially leaves the european union. she visited a textile factory as she begins a whistle stop tour to the four corners of the uk to stress her commitment to brexit. italian police arresting five people connected with the tunisian who carried out the 2016 berlin christmas market attack and was later killed in a shootout with police in italy. 12 people were killed in that terrorist attack the family of the woman killed by an uber self-driving vehicle reaching a settlement with the company terms of that deal were not released the law firm representing the family said the deal was reached earlier this month details on that crash are still

being investigated you are up to date that's the news update this hour i'll send it downtown to you guys >> thanks, sue spotify ipo next week. the company is out with a strong forecast for 2018, and in a new note this morning, rbc lays out a bullish case for the streaming music company. author of that note and rbc's lead tech analyst joins us now mark, thanks for joining us. >> good morning, morgan. >> all right so you've got an outperform rating on spotify ahead of this direct listing on tuesday. you got a price target of 220. given this is a direct listing and in some ways very unprecedented, we don't totally know where these shares are going to price, how do you get there? >> yeah, so i'm sure that this is going to be a very volatile stock coming out of the box. that's part of the risk involved with this. but look, we look at an asset that's got -- is the global leader in streaming. we think streaming as an application is going to become

more and more popular. we've already seen this with video and netflix. we think we're now seeing it with music spotify are the leader in the segment. clearly 2x as many subscribers as anybody else. what the stock is going to trade off of is gross margins and subscribers. but on gross margins, that's inflected up we think this asset deserves a reasonable multiple, not as high as netflix, but a reasonable multiple we got 220 as a price target based on five times sales or dcf. i think we're going to see a lot more spotify going forward i think this will be an enduring asset that will get bigger over time >> given the fact they are doing this direct listing and a lot of people here on wall street, a lot of investors are watching this not just because it is the world's biggest music streaming site but also because of the fact that this is an offering that we haven't really seen to this magnitude before, what do investors who are potentially looking to buy into this stock next week need to keep in mind >> well, i'm not sure in terms

of the trading dynamics. i don't know that one needs to put in an order right away i assume this is going to be very volatile, up and down it's a matter of figuring out what price you want and how large of a position you want to take these are uncharted territories. i haven't dealt with a direct listing before but the rest of it, the fundamentals are still in tact build out your model, figure out the catalysts, the pros and cons there's two major pushbacks investors should really think about, the competitive risk for companies like amazon and apple and how high these margins are camp, how much leverage they really have versus the labels. we gained reasonable comfort on those two issues, but we're going to keep debating those two particular issues, competition and leverage versus the labels that'll be the major hot button issues for the next three, four, five years >> you mentioned amazon, which we've been talking a lot about for the last couple months and the fact we've seen

deterioration in the leadership there. but amazon, up until this week, had really been sort of the outperformer still it seems to be changing right now, looking at the stock down another 2% today on this tweet from president trump, really casting shade on the company how much of a risk is that >> yeah, it's a risk i've never -- this is also uncharted. i've never actually had to put in risk factors, presidential obsession. i guess we'll need to do that. amazon is paying taxes they paid $957 million in cash taxes last year. they've been collecting and remitting state sales taxes across the majority of the u.s. since 2014 and across 80% of the u.s. population since 2016 so i found it a little bit surprising surprising, some of the content in the tweets. but that's amazon. it's unusual risk that i've seen i think the fundamental story here is one of the strongest if you're going to pick one asset in the internet space to buy and hold over the next five to ten years, it would have to

be amazon. i'm in the flinching from that position >> you know, mark, back to spotify for a moment they're asking their potential investor base to accept the fact that because they believe as long as customer lifetime value is higher than subscriber acquisition costs, they're going to keep spending a lot of money to get new subscribers you seem to believe investors are going to go along with them, that they're not going to worry as much about profits up front >> well, okay. so a couple points this is a company that's done two years in a row of positive free cash flow they have a very nice working capital benefit to their model i think they'll get a little bit of credit for that it's actually ironic you can look at netflix, which has positive gap earnings but negative free cash flow. you've got this company that's got negative gap earnings and positive free cash flow. i think what investors are going to focus on is that gross margin line they couldn't have gone public with the gross margins they had

two years ago. once they broke above 20% and showed the 30%, if you believe that path to 30%, and we do, but that's a big if, you can buy the stock. the valuation case can be made >> mark, thank you >> thank you, morgan meanwhile, apple ceo taking a direct swipe at facebook over its ongoing privacy scandal and response here's what tim cook tosaid >> we're looking at every app in detail what is it doing is it doing what it's saying it's doing is it meeting the privacy policy that they're stating so we're always looking at that. should we raise the bar even more we're always looking at improving and raising the bar. >> mark zuckerberg, what would you do >> what would i do i wouldn't be in the situation >> for more on that, we're joined by pulitzer prize winning columnist jim stewart, whose

column on the saga will be published later today. i've gotten to peek at it. jim, good to see you you talk about how facebook was widely owned, priced for perfection, loved by analysts, expect maybe outsmarted those analysts by ai it's an amazing piece. >> well, yeah, it's incredibly interesting to see that there were, i think, two analysts who had sell recommendations on facebook, and one of them was a robot, an artificial intelligent analyst who's sort of the brain child of ken sane at wells fargo. so he was kind of in the awkward position trying to say, well, you know, you can't entirely rely on the robots i do feel it's an interesting situation here, both on a public policy standpoint and from an investor standpoint. this is a huge black eye for facebook but the market reaction, it shaved $100 billion off the market cap from its peak, 70 billion just since this incident, but nothing really has happened yet there is a regulatory threat

people are waking up to how data can be used. but these are complex issues i think are going to take a long time to resolve. >> do you expect to see changes in engagement, time spent, average users, anything we'll get a print on in a few weeks? >> everybody i've talked to, even the people who are on the bearish case here, really don't think facebook usage is going to go down over this. i mean, i've seen it myself. people complain about it, and the next minute they're glued to instagram again or looking at their facebook feed. i don't think that's going to happen the advertisers are using it to maybe leverage a little concession, but where are the advertisers going to go? how can you replicate the effectiveness of this targeted advertising? the big question i think is regulation europe is already moving to this consent model, very complex. the u.s. is going to be taking this up. is it going to be do you have to con seventh to u consent to use for commercial

but not political? it's going to be costly, divert management attention i think facebook's reaction has been totally flat footed i only see a marginal impact to growth >> i'm glad you brought that up. we've been hearing this from analysts and investors in recent days, that even if you don't see the user metrics decline, what you're probably going to see is facebook spending more and hiring more positions at, you know, tech salary prices that aren't necessarily going to be contributing to growth >> well, their legal bills are going to go through the ceiling. no doubt about that. their regulatory, lobbying, they're going to have to ramp up in a huge way. it's going to be costly. but there's still a big addressable market out there they still have high-growth projections. by the way, now the multiple isn't priced for perfection. they're kind of at the market average now. several analysts were pointing out that in that universe of social media internet, they're by far the cheapest stock right now by most metrics.

yet, they still -- if they can get through this period, they have really good growth prospects. even the bearish analysts had a target around 152. the stock was basically there this week. >> yep, 158 now. you know apple pretty well you had to have been struck by cook's comments yesterday. i mean, are they going to use this as a wedge of sorts >> well, i think -- look, anybody's going to use this for their own competitive advantage to the extent they can and i think there's going to be -- and this is healthy that the silicon valley ecosystem is going to be rushing out there to advertise to the consumer, we are going to protect you you can trust us that's what a lot of this stuff is all about and you know, facebook is kind of a natural monopoly, but it does depend on that user interface, even though most of the revenue comes from advertisers. i think you're going to hear a lot of this. and hopefully they'll follow up with actions i don't doubt -- and everybody i talk to, i'm not a tech expert myself, but everybody told me the technology there is there to protect the user

you do not have to have these breaches you do not have to have the companies you don't even know about, these strange operations in russia or people selling your data for those who are going to use it against you the guy who testified in london yesterday was brilliant in pointing out that data is like electricity. most of the time it does good things people like these ads. but electricity can also kill you. in the early days of electricity, it did kill people. that doesn't mean it's going away >> do you think that they have the muscle that they need to exercise here to combat this what i mean is they're going to be in front of congress. they're going to be dealing with things they haven't typically dealt with in terms of the image of the company the market may very well trade off of that for some time. they don't seem to yet have met that challenge >> well, they have been way behind the curve on this and i think -- i don't think they had evil intentions here, but they were plainly not prepared for this. it reminds me a little bit of

the wells fargo disaster when the problem came up with the unauthorized accounts. they just never seemed to get how serious that was and how upsetting it was to most consumers. then they had a disastrous appearance in congress so facebook has got to study that example they've got to show humility they have to show they have the technology to stop this. they've got to show they're going to self-police in a meaningful way if they don't, somebody else is going to police them with much more serious financial consequences >> one of the things we didn't really talk about, i'm not sure i'm going to say this name right, but the ira robotic analyst, fascinating stuff i just wonder whether we're going to see more of that type of thing and this idea of taking the emotion out of stock picking, what the results of that are going to be >> well, i think that's fascinating. i wasn't really familiar with this technology until i heard about the call on facebook but one of the virtues certainly is that it absolutely takes human emotion out of the equation i've noticed over the years,

like with everybody else on wall street, there is a herd mentality. it takes a lot of guts to stand up there and go against the consensus outlook. you've got pressure around you saying, well, why are you doing this when everybody else is saying that. i've often said as an investor, what you want is you don't want the consensus of wall street you want the one analyst who's right. that's often the outlier so potentially i think this artificial intelligence can contribute a lot now, they're still doing studies to see how accurate it has been. i wouldn't want to put my portfolio in its hands at this point. it's a fascinating development though >> there were some snickers when ken started it up. >> i think he's going to get more credibility from this >> jim, thanks can't wait to see your piece later today. jim stewart. when we come back, dow is on pace to break its nine-quarter win streak today, but we are hanging on to 24k. not far from session highs back in a minute

well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. 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.

time now to get to rick santelli at the cme group in chicago for the santelli exchange >> thanks, dadvid. i'd like to welcome john cochran. thanks for joining us today. >> pleasure to be here >> you know, all i've heard lately is stock buybacks now reaching close to $5 billion per day. i think 4.8 is the exact number. for the same period last year, we're running twice the pace the other thing i hear is how horrible they are. what are your thoughts on buybacks are they really horrible >> no, buybacks are a way of getting money out of a company that doesn't really have any good ideas into a company that does have good ideas this idea it's a payoff to the rich and so forth is crazy >> you know, you bring up in some of your writing of late that just because it isn't being put in future research and development doesn't mean, a, that it's a bad thing, but, b, you also write it doesn't necessarily make stock prices go higher

some would argue explain. >> it doesn't go into research and development, just a different company. it's like if your bank takes a thousand dollars out of your account and gives you a check. that doesn't mean you're any richer you just got to put it somewhere else >> i got about just the general level of stocks? you also make an argument that it's not one to one. -- we have to go breaking news, john. we'll come back. breaking news. >> all right breaking news is there is a reorganization at microsoft. some executive shuffling basically what's happening here is that the hardware group and windows is coming under the enterprise group under scott guthrie. scott guthrie was an executive vice president running enterprise and cloud now he gets windows and hardware also sha is over office engineering, experiences, devices microsoft's 365, other things

like that. terry minorson who was running windows and devices has been with microsoft for 21 years, he will be leaving the company. the ceo of microsoft has sent out an e-mail to the company about the formation of the two new engineering teams. he describes it as being centered on their move toward intelligent cloud and also artificial intelligence. he is trying to string all of that together in a way that accelerates microsoft's growth this reorganization a big part of that, carl. >> all right jon, we'll explain that more fully later on when we see you for "squawk alley. let's get back to rick >> all right john, let's go to another topic, john deficits, i understand the ire here we're issuing lots more short term maturities like t bills just more debt you make the case maybe we should be issuing more long term debt, different transmission

into deficit and interest rates. explain. >> it's just like when you get a mortgage on your house you can get the floating rate with the teaser or the 30-year fixed. if interest rates go up, then getting the 30 year fixed will turn out to have been a good idea f they go up and you have the short term one, you have to start paying higher interest rates fast same is true of our government if interest rates go up, then they have a massive deficit on their hands. >> interesting now in your "washington post" op-ed today, you joined force with some big guys i guess this article expressly says debt could turn out to be a bad thing. do we really want to put the transmission in neutral with respect to the effects of debt on interest rates? your final thoughts? >> i think the debt is a real problem. hopefully it won't bite us soon. but it will come to bite us sooner or later. the fixes are straight forward,

just time to do it reform the social programs, get the economy going again. >> excellent you know, we never bring up that latter point that you just made. allen simpson always brings it up if you want to get debt under control, especially long term deficits, you need to address entitlements john cochran, i thank you. carl, back to you. >> all right i'll take it, rick thank you, rick santelli we'll have more after this break. you could simulate craftsmanship

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welcome back to "squawk on the street." last trading day of the month. wall street is seeing a broad base rally leading the way, energy. 1.5% gain in early trading to day. but this is a sector that had a questionable start to the year in three months the sector is down more than 7%. now the direction of energy equities largely dependent on a price of crude oil, of course, holding around $65 and expected to move higher from here. today's big movers, marathon, hess, and noble energy all up by 2% now send it back downtown to you guys >> thank you very much watching the markets on the fibl d final day of the quarter, dow up 216. that's a session high. europe is helping.

dax looks like it's going to close on the highs of the session, up 1.5% facebook up almost 4%. doesn't hurt tesla trying to get back to the flat line. so something starting to work. >> yeah. certainly the outperformer today is the dow transports and those are very tied to trade and economic growth. it's interesting the small caps, it's interesting when you see them jut perfooutpm everything is still lower for the month. all right. coming up, the incoming ceo of go daddy will join us on "squawk alley" in his first ever tv interview. his take on the new facebook privacy controls and later, the president going after amazon again this morning over twitter much more on the battle between jeff bezos and president trump in just a bit. "squawk alley" is next > . president, are you prepared to take any actual steps towards amazon, sir?

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