good morning it is 5:00 p.m. at spotify headquarters in sweden it's 11:00 a.m. on wall street and "squawk alley" is live. good tuesday morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan and david faber. we await spotify dow is up 218. the s&p 500 up almost 18

no bankers, no road show, no ceo on the floor many questions remain ahead of the open to spotify. joining us this morning with the insights, the dean evaluations and finance professor at nyu and early spotify investor and partner, good to see you both. fascinating day. overall, what do you make of the process they have chosen at the exchange >> yeah, so i think the direct listing actually signals a lot of strength by the management team and confidence in the balance sheet, growth prospect, the fact they decided not to go out and raise a bunch of capital in a traditional ipo but rather they got the cash flow, they got the revenue forecast, growth and balance sheet to support the targets. i think it says a lot about their, you know, confidence in ability to grow without taking dollars in >> do you expect a lot of exits? we heard through various reporting that the co-founders won't but still 90% is a lot >> yeah, it's a lot of shares coming through over the last year, the vast majority of shareholders have

actually been offered to sell their stock at probably around $125 a share so i think the hat's been passed around to everybody in terms of would you like to sell this is the price we're willing to buy at. so i think a lot of the sellers that would have sold have come out. just given the fact that everybody had a opportunity to sell at this point. >> so $132 reference price makes sense to you >> $132, i think the last quote we heard just an hour ago is about $145 to $150 at that price we are thinking probably four times revenue. netflix is trading eight times sales. so we think there is upside from that number too. >> speaking of multiples, how do you approach this one? any differently than another company going through a more traditional process? >> i don't think so. it's going into a business that's broken. the music business fundamentally is broken. i think spotify is the best chance for the music business to

turn itself around so i think you have to build from the basics again, revenues and margins improving over time is what is going to drive the value of the company >> professor, some say the music business is already on its way to recovery. in fact, for the first time i think last year we saw sales up overall for companies such as universal, sony music. and in part that is due to streaming. and it's only going one way here given the hours listened seem to be going up a great deal as well. >> i think that is, in fact, what -- when i said music business is broken, i'm looking at it relative to 20 years ago over the last 20 years, music business has lost almost half its revenues and inflation adjusted basis so clearly it needed -- it needed a savior. spotify has been a big part of what has allowed the music business to start to find the footing again. so i think that's what is spotify is building on of course, they're going to be

challenges this is a business where you have some players with deep pockets. you know, apple is not going to sit by amazon might enter the game. you're going to get big players with deep pockets come into the game the question is whether spotify can do what netflix has done of establishing itself in a position where it can keep the competition out. >> and on the one hand because there is not a traditional ipo, you don't have the institutional investors ahead of the trading beginning at the stock exchange. on the other hand, i heard this from retail investors over the years that they actually have a chance to sort of get in at the price that maybe all the institutional investors who are looking at this today would as well so i guess sort of from that stand point, do you expect to be more retail demand >> definitely. i think that, you know, the vision of the management team was to really democratize the process. traditional ipo, you have money raised and allocated to institutional clients that might be the favorites of the investment banks in this case, everybody can buy

in i think retail investors are really excited about getting a first crack at the stock even before the institutional investors get a bite at it. >> so whether we think about it as an investment, what should the metrics be that we judge price to sales some people want to say what you are using as your go to here >> tend of the day, it has to be on fundamental earnings or cash flow i think what investors need to focus on is subscriber growth. they need to get as many subscribers as they can. and investors should want them to spend money if the unit economics make sense subscriber growth is number one. if they go from 70 million to 200 million, we think margins can go up. they'll have more leverage with the labels as margins go up, they'll have better profit margins over time. right now the focus is subscribers and then later on margin improvement. >> do you agree? if so, where does that place them on the range of expectations about whether a company should turn a profit >> i think subscriber growth is the first piece of the puzzle. the other is the content cost.

keeping content costs going down which is what spotify has been doing the last couple of years is critical. and that's going to be an interesting balance. on the one hand you can't -- you know, it's true you want to bring the costs down on the other hand, you want to keep the labels and artists on your side. it will be interesting to see how spotify plays this game. they can't be too open about saying our object sieve to bring costs to 70% of revenues because you're going to get artists and labels up in arms about that but i think they will find a way to keep a balance. they both need each other. i don't see how one can survive without the other. >> yeah. interesting. they did make comments to cbs this morning about tailor swiylt and took multiple trips to nashville and to stockholm so you want the content costs as low as possible. enough to keep them close.

>> of course and there are down stream implications beside just the streaming dollars at stake here. taylor swift is on spotify because that's where her fans are. the fans buy tickets spotify doesn't sell tickets today. but the point is maintaining a good relationship with spotify over time is really important. it's got implications all over in terms of billboard charts and where you stack up, you know, when you get played on the radio. ultimately who buys your concert tickets. we think over time it's not just about the streaming dollars that are at stake but taylor swift cares about where letter fans r they're the ones coming to the concert >> ticket sales and merch, that's where it's at >> a lot of money. >> professor, thank you. good to talk you to. we await spotify price >> taking a look at faang stocks after yesterday's huge selloff, it's been a you mixed picture. right now everything is higher we have facebook marginally, fractionally higher at $155.75 amazon after turning negative is up more than 1% today.

netflix is up 2% alphabet is up .3% so let's bring in dan niles, founding partner at alpha one capital partners dan, thank you for joining us today. >> pleasure to be on >> so given the fact that we have seen at least before today a pretty steep selloff in the faang names, are you looking at them as potential buys at the lower valuation sflz. >> yeah. i mean we actually are sitting on fair bit of cash and talking about our alternative investment portfolio where we can be long and short. we have cash there we got rid of or hedged out our facebook position when the braef breach stuff came out. we started buying it back. our belief is that this is a short term problem obviously, it has longer term ramifications but we don't think it's going to change the revenue profile or the profitability of the company that much. we think it's a lot less problematic than what we saw

whether google was showing ads next to extremist videos and we know that didn't really affect their business that much either. so for us, you know, facebook trading at a 17 times -- sorry, 19 times pe, you know, is pretty interesting to us given the s&p 500's trading around 17 times calendar '18 and to us, it's a great company at a really good price >> so you like facebook right now. what do you think is not as compelling >> well, i think in this day, the you have focus on which investors haven't cared about the last couple of years is profitable growth. and so profitability has not been something that's been really focused on. the s&p 500 was up for 15 straight months including dividends before we got into february and so at that time you can buy any momentum stock and didn't care if they made money or if the numbers went down. you'd be just fine i think going forward investors

are really starting to look at companies and saying okay, you know, we would like to have profit growth as well as top line growth. and so for us, you know, stocks like amazon or netflix where, you know, the stocks have come down but don't forget, amazon stock is still up over 50% year over year. the top line is only growing 30%. you look at netflix, that stock still up 90% year over year. and the top line is growing at about 30%. and they're not nearly as profitable with single digit operating margins as a facebook with 50% operating margins so for us, we're a lot more focused on profitable, highly profitable growth and dominant sectors. obviously, amazon is a great company. we get packages at my door every day i think from them. but, you know, at the valuation, it's not something i'm interested in. google is another one where i think, you know, you got great gross margins above 70%,

operating margins, you know, around 40% we like that microsoft, not a faang name but another one in that category so we're being very selective. we're short some stocks that unfortunately we covered too early. but i think it's a good -- it's good environment for stock picking. so we love this tape right now i think this is the best tape for stock pickers we've seen in several years. >> dan, it's always great to get your thoughts on this. dan niles. thank you for joining us today >> thank you still ahead, spotify from an artist's perspective, gavin rossdale, the front man of the rock band bush is going to join us why he sees value in that streaming service. and we'll give you a quick check on the averages, of course we're well off the lows. up almost 1% on the dow. you know what's awesome? gig-speed internet.

you know what's not awesome?

when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back to "squawk alley. the most streamed track on spotify last year, of course today spotify will begin trading on the big board at the new york stock exchange it's not like a traditional listing. bob pisani is on the floor with

the latest on spotify. bob? >> not only on the floor, we're inside the booth at citadel securities and only cnbc is inside we have new indications, $150 to $160 the dmm is over there on the other side he's gathering orders. and what they're doing is looking on the floor for indications of buying interest somebody will say i want 15,000 shares at $150 i want 10,000 shares at $160 they're aggregating the buy orders what about the sellers they're existing shareholders. there are new shares being sold. so the existing shareholders that want to sell are kpluning with morgan stanley who is being hired as an adviser. and they're trying to match up all the buy and sell orders. some people may say i'll sell 5,000 shares at $150 i'll sell 10,000 at $160 it's giant auction some people on the floor and some people are communicating electronically what is going on. we're hoping for that to happen.

i anticipate very soon, sometime in the next hour, they're going narrow the indications so instead of say $150 to $160, it will go $155 to $160. they'll narrow the indications until finally they get an opening price. one thing about that reference price, had a lot of questions. how do they come up with $132? morgan stanley was hired as a consultant and largely these are based on last sales in the secondary market and among the existing shareholders there's been an active small secondary market. that's largely how they came up with that. so keep an eye on all of this. the important thing is the process is moving along. don't have an exact time for you. but i'll bet it's maybe some time in the next hour. already getting peter screaming out some new buying and selling interest right now i'll be standing here and let you know as soon as anything gets close back to you. >> bob, thank you. we'll be keeping an eye for that and just for viewers out there, maybe don't realize, it is quite busy on the floor on the new york stock exchange. quite a gaggle as everybody

waits for this spotify listing to open up fears over a trade war was rocking stocks yesterday our senior economics reporter steve liesman joins us now with more steve? >> thanks, morgan. two themes run through economists view of the trump administration's protectionist trade policies, first, they're confused second, broadly and deeply negative on potential outcomes j.p. morgan telling me we've had a hard time pinning down a specific gdp number for the impact of terrorists on the economy, we don't really have a sense of how bad the policy developments can get that shows a view that economists are worried about missing the upside from the trade policies they're more likely to worry about bigger negative outcomes they see the impact small initially. moody's tells me the fallout from the tariffs will be felt but readily absorbed by the tax cuts however, there's an uncomfortably high and rising threat that the trade tensions escalate and do much more economic damage. the architect of the president's

trade policy says the market has it wrong they should focus on the poz in the economy from tax cuts and other policies and not worry about trade. >> the market is reacting in a way which does not comport with the strength of president trump's economy. everything in this economy is hitting on all cylinders because of president trump's economic policies >> maybe all this tough talk on trade is just negotiating tactics. but economists and investors, they seem to want more proof that there is method behind the president's trade tactics and think it's a safer bet right now to worry about the worst possible outcomes. carl >> interesting, steve. we did get some headlines today about china. formerly telling the wto about those retaliatory tariffs. what do you think the next stage is in this war or would be war? >> it's well to remember, i think what was announced sunday is in response to the steel and aluminum tariffs the president has said he's going to announce up to another

$60 billion of additional tariffs. and what most of the analysts who i talk to have said is that china doesn't want a trade war but will feel it must respond in kind so if the president does 60, china is going to do another 60. so that would be the next step and then the question is where do we go from here i think the concern, carl, is that nobody ever woke up in the morning and wanted to start a trade war. they just ended up there >> steve, thanks interesting stuff. we're going keep our eye on it our steve liesman. for more on the markets, let's bring in david rosenberg from luskin chef you heard what steve said. what do you think? >> look, i think that it's one thing to talk to the economists about down side macro risks to the gdp forecast but the equity market is always going to be susceptible to not just what earnings are going to be doing which is part of gdp but also the market multiple

so that's really what we're seeing this year is reverse of last year. it wasn't really such an earnings story, it was a hope story imbedded in a point and a half increase in the market multiple and what is happening now, whether you're taking a look at -- it's not just about tariffs and trade. it's also about ballooning fiscal deficits which most people weren't talking about last year. we're expecting it to be a revenue neutral corporate tax reform plan. we end up getting mountains of deficits and tighter fed policies so all these things are really affecting. markets all at once. i'm not saying it's just the trade soide. there were a lot of stocks down that have nothing to do with trade. they're taking the market multiple down. the market multiple down is really the poster child of confidence and certainly in the marketplace. that's really what is unwinding. the trade part is just, you know, one segment of it. >> david, i want to get your thoughts on inflation right now.

we heard that they don't see an inflation was really sort of re-emerging and rearing its ugly head maybe not so ugly head but on the flip side, when you take a look at something like tariffs, wee have seen steel and aluminum priz aluminum prices rising and so it seems to me there are signs of inflation out there what do you think? >> yeah. i think that it's very fool hearty to suggest that you're going to embark on tariffs of any kind and not expect to be some cost push inflation i think larry kudlow has been 100% right on that so, you know, look, if i'm a politician, which innavarro is a politician, i'm going to say we have a phenomenal economy which we really don't. growth in the trump period has averaged about the same as it did during the obama period. there is no escape philosophy. but the notion that actually we have no inflation or we're inflation proof doesn't bear up on the data.

when you look at ppi, underlying ppi, cpi, of course cpi and pc deflator, they're all moving up. there is no big breakout of inflation. but to suggest that we're not getting inflationary impulses at this stage of the cycle i think is ridiculous. >> david, you no he we saw some weak buying intent out of conference board whether it came to autos and appliances and homes. and then march auto sales sort of blew the roof off the building where do we -- i mean how do you square those two >> they're going out say closer to six months. you know, you never quite know how incentives are going to play out, especially towards quarter end. my sense is that we look at the intentions surveys and it's really beyond just the next four weeks. i think auto sales, i don't think they're going to collapse. when you think about it just in a range, take a look at the housing numbers that we've had lately housing starts take a look at new home sale

numbers. even with the pickup we had in pending home sale numbers, they're still negative year on year you're seeing a real deteriorating tone in the housing numbers as well. so it comes down to not just autos and maybe not just housing but look at the fact that you have real retail sales the past three months negative. we just had back to back months of relatively stagnant to down real consumer spending numbers it's very interesting to be watching the savings rate going up right now because that's a tactic that is happening on consumer's response to the tax cuts wlach cuts what is interesting is people are spending the tax cuts in aen anticipation of them in the fourth quarter you're seeing quite bate of softness across other areas of the retail sphere. >> you have written a lot about the surge in revolving credit going into the holiday spending season but is there a sense that might be elongated a bit >> well, i'm not so sure it's elongated. we're going through a period now where it's pay the piper time and pay the bills time i think you're going to be

seeing a reversal of that big increase in consumer credit last year i think you'll see probably the late payment rates, not just in subprime autos but also in credit cards you see the rates rising to seven year highs expect that the banks are going to start to tighten up the nonbank will start to tighten up then you see a lot of the tax cuts going into the water bill, into the gas tank and a lot of things that don't really drive, you know, sustainable economic growth in terms of consumer discretionary spending that is an underlying story that is very interesting. so everybody talks about how incomes are going up and how the tax cuts are so wonderful. but ultimately, gdp is driven by spending the savings rate after the declining from most of last year and providing some artificial impetus to growth is moving in the opposite direction this year that is what is undercutting the expansion. i think the savings rate continues to do what it's doing and the past few months which is to rise, i think a lot of the rosey forecasts are going to approach or be 3% gdp growth

this year are going to fall flat on their faces >> david, finally, you sound like you're setting us up for a recession in the next, i don't know, 18 months. are you? >> i wouldn't be surprised if we have recession in the next 18 months a lot of it is going to be dependent on -- i don't think the trade side or the tariffs are going to push us into recession. you know, the fiscal side is the question mark because what happens with interest rates matters a lot more than what happens with fiscal stimulus people tend to forget that we had reagan tax cuts beginning in 1981 and because the fed was raising interest rates, we had a recession that lasted six quarters and nobody saw coming i think the key is always going to be the fed. the fed has already told us they think inflation is going to rise faster than they thought before. they've already upgraded the gdp forecast they already put in a couple of extra rate hikes the question is going to be especially with the yield curve flattening as much as it has been, how far will the fed go and to me, every single

recession in the past all of them in the period had the fed's thumb prints all of them irrespective of what is happening with trade policy tariffs or fiscal policy that is going to really be the key. 4% unemployment rate we're already long in the tooth on this cycle. you know, the fed hasn't even pushed the funds rate above zero in real terms which shows you how far behind the curve they are. the fed behind the curve, that has to catch up with the curve and they have to do more than what is priced in which i think is a serious risk. and then with call it a six, 12-month lag, you're talking about a recession. it may be 24 months, not 18. if you ask me what the recession odds are for next year, i think they're pretty high. >> david, we'll leave it there for now. to be continued. david rosenberg. thank you. when we come back, a test case for tech. we're going to continue to wait on spotify's unconventional market debut indications $150 to $160 we'll discuss what the listing could mean for other tech companies looking to sell shares take a look at bitcoin

had the worst first quarter ever with over $119 billion wiped off the market value dow is up 213. alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you!

every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com

already. let's get to seema mody back at hq with the european close >> european stocks beginning the second quarter to day following the easter holiday and it's their worst quarterly performance in two years we did get some disappointing economic data. final euro's on pmi numbers did slow across all nations. now today's decliners are not nearly as steep as yesterday's selloff in the united states but those tech worries have reached europe take a look at chipmaker stmicro

in the red today one of the catalysts for the drop, a published report saying apple is planning to use its own chips in mac computers as early as 2020. those names in focus today now for most of the major european markets, the first quarter was underwhelming. london's ft-se 100 posting the worst quarter since 2011 the german dax saw a 6% drop followed by a 4% decline in spain. germany and spain are in correction territory markets in paris down 3% different story in italy higher by 3% led by a rally in the country's banks. speaking of bright spots, uk paid tv operator sky is on the rise today, 20% trade fox is mulling separating sky news from sky. fox also says it could sell sky news to disney now the proposals are aimed at easing uk regulators' fears about the murdoch family having too much influence over british media. fox is seeking approval to acquire the 61% of sky

it doesn't already own shares up just about 2%. and, of course, here nlt united states, here's one swedish company on wall street's spotlight and that is music streaming service spotify making the public debut today it has yet to open for trade what does spotify, minecraft and candy crush saga have in common? >> they're all swedish companies. >> yes, they are you're too smart >> exactly >> sweden seen as one of the big european tech hubs >> right yeah it is important to point that out. of course, danielle ech makes stockholm his home now to send it across the newsroom and send it over to contessa brewer. away from my news quiz at the end of this. here's what is happening this hour china is firmly opposed to trump's tariffs and a foreign ministry spokes certain says that the u.s. interested in pursuing a trade, what china will fight to the end. there was no elaboration on what the end might actually be.

a spokesperson said beijing will defend its legitimate rights and interests. french rail workers marched through paris as a series of rolling strikes began. the national rail authority says only about 12% of trains were running. the strike expected to last three months a fire in a teahouse in southwestern iran killed 11 people and injured six an initial investigation showed the fire was set by a disgruntled former employee who started the flames using gasoline he was arrested quickly. major credit card companies will eliminate the need for shoppers to sign receipts from credit and debit sales starting in two weeks. the encryption within new card chips helped increase security without the need for signatures. and the news quiz now, david the real question is how many signatures can you actually link back to the person who wrote them it doesn't all look like chicken scratch? >> it does >> what percentage >> actually have to give you a percentage that can be linked

back >> yeah. i thought you could pull one out. >> i don't know, 45% >> sounds good to me that's the cnbc news update this hour >> when we come back, we'll talk with gavin rossdale, the front man of bush. they have more than 1.7 million monthly listeners on spotify that as we await for spot to begin trading at the new york stock exchange stay with us

racing isn't the only and with godaddy, i'm making my ideas real. with godaddy you can get a website to sell online. and it will look good. i made my own way. now it's time to make yours. ♪ everything is working just like it should ♪

we have one to two fires a day and when you respond together and you put your lives on the line, you do have to surround yourself with experts. and for us the expert in gas and electric is pg&e. we run about 2,500/2,800 fire calls a year and on almost every one of those calls pg&e is responding to that call as well. and so when we show up to a fire and pg&e shows up with us it makes a tremendous team during a moment of crisis. i rely on them, the firefighters in this department rely on them, and so we have to practice safety everyday. utilizing pg&e's talent and expertise in that area trains our firefighters on the gas or electric aspect of a fire and when we have an emergency situation we are going to be much more skilled and prepared to mitigate that emergency for all concerned. the things we do every single day that puts ourselves in harm's way, and to have a partner that is so skilled at what they do is indispensable,

and i couldn't ask for a better partner. awaiting spotify's first trade, the first indication is $155 to $165 per share we're joined from managing director and senior analyst rob sonderson who is initiating spotify at a buy with a $200 price target how did you get there? >> earnings and put a multiple of price to earnings on discounted back at 25% per year. that gets us $200 one year from now. >> and in terms of what you're expecting from trading today and as we go into the rest of the week, what are some of the things you're watching for, especially given the fact this is so unusual as a direct listing? >> yeah. well, the primary uncertainty today has been i think more on the supply side. you know, a lot of the affiliates and insiders registered to sell stock

but it's really unclear as to what the supply dynamic will be. and that is the larger concern it looks like that is moving forward orderly. it's not surprising it's taking a long time to open. but that's i think the biggest uncertainty that we're waiting for is just will there be enough supply to create a liquid market right out of the gates here? >> and this is a company that has not yet turning a profit so in terms of the metrics that you're watching with spot fi, what do you see is the most important? it is subscribers and subscriber growth something else all right. i think we lost rob sanderson. so we'll -- we'll continue the conversation with spotify. >> also talking about spotify, our next guest is the front man from one of the most commercially successful rock bands in the late 90s, a band capitalizing on the growth in streaming with nearly two million monthly listeners on spotify, gavin rossdale is the

lead vocalist for bush who just announced a new summer tour on monday good to have you here, gavin >> good morning. great to be here >> we should point out the announcement of the tour has a lot to do with spotify, doesn't it >> yeah. everything we do has a lot to do with spotify these days. >> explain >> very exciting times >> explain the tie in between what you're planning to do this summer and people who might subscribe to the service or just listen to it on the ad supported tier >> we get a lot of support from spotify and new users and i think people are going to be able to -- we're looking into it and i think they'll be able to preorder, prebuy tickets on spotify. so really, again, it's another example of spotify really trying to work with bands, work with artists to bring people a better experience >> is there something about this particular product that you think is preferable to the obviously huge array of competitors out there in the

streaming space? >> i think it's being one of the leaders really helped. and i just find it really usability and the way that it really -- the curation of the play lists and things like that. everything makes a big difference i enjoy the service and use it myself and have a family plan for me and my boys >> gavin, first let me just say that i am very excited that we're having you on the show right now. i'm a child of the '90s. i grew up listening to bush. so thank you for coming on in light of that, we had a number of artist onz here in the last couple of day who's have made the argument that spotify and the other streaming services are not necessarily paying enough to artists. do you feel that's the case? and if so, is that an issue with the record companies and publishers or issue with spotify? >> there's an argument to put that artists have never been paid as well as they could have been by labels and throughout

the history of music but i think that you get a sense that with spotify that they're trying to reverse that and there is a maybe a stopgap between spotify and the labels that needs to be clarified a little better. like all these technologies, things are improving all the time >> do you think that the day when you stop buying music or downloading music, do you think that day is coming and it all just goes to streaming? >> i mean for me personally, i would say so, yeah i think that's very much the case i think the only thing that can save it possibly is looking at ways to make buying things -- buying dvds more attractive including, like, you know, live footage, live contents, documentaries or something like that step it away but really streaming is such a logical way to listen to music >> gavin, it's been my

understanding that bands can benefit from all the data spotify has about their fan base and really can direct them to what might be the best venue for a concert, the best area has that been your experience? do you expect that to grow over time as spot ify has more nifgs about t information over the likes of the listeners? >> what i do love about spotify is the desire to continue to make it better for the listener. continue to improve the experience so we're just in this sort of early, earlier stages. i think it's all possible. and to understanding what the people want and what the listeners want is really the key to just building it for us as a band a great relationship with our audience and you can even look at the numbers of players the songs have and almost work out your set lists to see what is the most popular songs things like that and really just the people

keeping community going. the way that technology is going sometimes it can go against social connections but this with spotify, it's a way of bringing people together. >> interesting it's also seems like a way for bands that have been around for a while like yours and we had gene simmons on earlier this morning to branch out into current generations that clearly are not listening to radio and you can almost sort of make your fan base longer over time if you go where they're listening. >> absolutely. that's what the best part is that if someone hears your song they can investigate you without having to give up a lot of hard earned money or, you know, money for chores or whatever you might call it. and i think it really allows people to discover the width and breadth of artists they like i love it for that >> in the last two decades we've

seen basically the record industry kind of decimated so many companies have folded or been merged and brought together the economics to real yinld of make money in the music industry especially if you're a new artist, it's a very high hurdle to mount the days of development deals seem to be for the most part gone i can't help but wonder whether it's spotify, whether it's apple given the fact they have dr. dre over there as well, if these are companies that are going to become content creators and sort of the next generation record companies in much the same way we see netflix create stuff for television and films what do you think? >> i think that's -- i was going to say spot on, apologize for that i think that is obviously a way forward. again, it's just about improving the experience for subscribers and i think by the end of this year there will be 100 million subscribers to spotify and that's a lot of people listening and a lot of power and a lot of control you have over

people so why not make the experience great? >> are you going to invest in spotify or you are invested in this market in general >> you know, i think that if it will be a great thing to be invested in, for sure. >> doesn't sound like a yes or no >> yes i said yes and i'm invested emotionally >> a lot of investors might feel the same way once their buy orders go through which we will watch for later on this afternoon. gavin, it's a pleasure thanks so much >> okay. thank you. >> gavin rossdale from bush talking about spotify. still indicated $160 to $165 now. >> for more "squawk alley" coming up. first, let's get to rick santelli what are you watching today? >> i was just listening to bush much he seld that he's invested emotionally. that's exactly what we're going to talk about after the break. how we're all emotionally

invested in the interest rate complex.

coming up on "the halftime report" is president trum bp to escalate the war with amazon snt author of an explosive new story with us live today on how the battle with bezos could get hotter plus, what's to blame for the recent stock selloff it is trade? it is tech we'll tell you who looks to be in the administration's cross hairs. and spotify opens for trading, we'll tell you whether it's a buy or buyer beware.

could open any minute. that's at noon eastern we'll see you in just a bit. david? >> all right thank you, scott we're getting new indications on spotify. for that, let's get over to bob pisani who is monitoring what may go on for a while. i don't know bring us up to date. >> we're getting closer. this may open a little earlier than i anticipated i was thinking maybe 1:00 eastern time maybe a little earlier than that they narrowed the range. that's why i'm saying. this remember the early part of the process, reference price $132 and then they gave various indications $145 to $155, $155 to $165, now it's $160 to $165 now they're talking about a $5 spread in my experience, that's a sign they're getting closer we don't have an exact time right now. what impressed me is how orderly the process has been very clear steps going towards slightly higher price but not dramatically there hasn't been big, big price swings we haven't seen indications suddenly at $180 and then at

$140 some different. it's been very, very slow and ordererly. the big question after this opens is how many people are actually going to sell remember, we're dealing with north of 90% of the shares that will be available to trade there is effectively no lockup it's very that will be available to trade the bottom line is what we don't know is it may open at 160 for example, but we have no idea of how many people are actually going to sell at that price and that's what everybody's trying to figure out now. that's the one little x factor here we're getting close though back to you. >> all right, bob, thanks. monitoring waiting for the open from spotify now, over to the cme group joining rick santelli. >> thanks. david. back to gavin bush he said he was emotionally invested in the market emotion is huge. i referenced we're emotionally tied to the interest rate complex. i'll get to that in maia minute

there are about five things that explain why stocks in general have had so much volatility. we'll start out with multiples we've had many people today, david rosenberg included, talking about it's easy to understand what's going on this year we'r lowering the multiples what can affect them maybe momentum when they're plowing through a field like it's dry hey and there's lots of fire around. in reverse, the multiples become the big discussion because absence the magic of the fairy dust, the math seems to get more important as everybody tries to find their gps. listen, i can tell you this. i'm sure the multiple argument is a good one. especially tryingi into explain behavior but in the end, this economy has a lot of hidden treasures. the tax cuts seem to have been

part of that but yet, as they filtered through and really deliver, that's in the chapters ah head debt and deficits. a sub text would be supply to me, we can say multiples are a big issue for stock, but the emotional investment we have in interest rates is tied to debt, deficit and hence supply why do i say that? because if you've looked at the way treasuries have traded since early february, not to say they weren't affected by the squishiness of eck wiwiity, but wasn't the dramatic effect many have seen in the past. the most memorable event was the '87 crash and how the interest rate comet plex rallied for days pushing yields down. that doesn't seem to be the case this time. the reason, because we are all emotional about the size of the debt with regard to the one-year budget deficit, which is going to be in the neighborhood of 800 billion or more. the future cost of servicing the

debt and the $20 plus trillion deficits yes, inflation, data and trade add in, but it's always been the opinion of mine that the u.s. is the disrupter at this point and they turn the market they did it in november of '16 and they can do it now, but don't think that the fear of some of the negatives isn't a big floor to keep us from trading much under the 270s and ten-year note yields carl, back to you. >> thank you rick santelli this morning take a look at some of the big names who have not jumped on the spotify band wagon more "squawk alley" straight ahead as we await the debut, 165 to 170 stay with us ♪ you know what's awesome? gig-speed internet.

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

these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. stay with us as we await spotify's direct listing latest indication, 165 to 170. more "squawk alley" straight ahead. ♪ today is a good day to make a plan for your financial goals and your everyday ones too. pnc can help. we'll be with you every step of the way. let's start today.

welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com

let's get to bob on the floor for the latest on spotify. >> we are still waiting. we got close we were at 160 to 165 then at the last second, they upped it to 170 what happened? it's possible a bunch of new buyers came in with new bids it's also possible some sellers withdrew their offers and said we're going to hold back and wait maybe things will get better later on it's hard to say, but right now, we're trying to see how narrow it's going get usually when you get within $5 on a price like this, it doesn't have too far to go, but something like this, you know,

we'll be on top of it. back to you. >> all right, bob. look forward to that meanti meantime, volatility has remained a constant today. we were up 200 plus now fading a bit again after the s&p went negative briefly for a couple of minutes there. dow up about a third of a percent. over to the judge and the half welcome to the halftime report i'm scott wapner our top trade this hour, tech turmoil as faang stocks try to bounce how much of your money is really hanging on big tech's turn around with us today, joe, stephanie, jim, jon and cnbc contributor, ron insana is with us, let's begin with our eyes on the markets. stocks are looking for some stability after all three of the major averages closed in correction