that they rented it out to individuals and small companies. they do wear clothing, though. we have 10,000 customers they're behind the firm 1 million customers by the end of 2021 >> you don't want your employers -- >> a very special thank you to kayla for hanging out with us. >> good luck have fun >> make sure you join us tomorrow "squawk on the street" begins right now. ♪ ♪ ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla and david faber. >> the president dials back on syria, and europe is green despite some disappointing industrial production numbers. jobless claims right in line and

our program begins with stocks and syria. futures up pre-market after a president says a strike may not be imminent. >> they're looking at a spin-off, public offering for at least his tradition business and ceo john flannery telling cnbc that everything remains on the table. cutting the cord, disney breaking from the traditional tv bundle launching the new direct to consumer espn streaming app stocks are on track for a triple digit open with trade and geopolitics once again in focus. now you can throw earnings into the mix as companies report quarterly results and we have black rock and delta this morning and banks hit us tomorrow, although volume, jim's been light and the range yesterday relatively narrow. >> look, i think that we're going to have a -- maybe we have an outburst of buying if j.p. morgan is good which i think is a very important quarter.

>> has anybody followed j.p. morgan i feel j.p. morgan if it has a good quarter it doesn't do anything for the market. am i wrong >> this time might be different in the sense that you have a very inexpensive stock in a rising rate environment where some of these companies have just incredible, incredible asset bases. they do, and then the other thing is there's just no regulation, no prosecution so you don't have the deadweight loss of a couple billion dollars like cancel fees. >> you did a piece on the number of enforcement actions out of the protection bureau and it's virtually gone to zero in the quarter. >> the consumer protection bureau >> yeah. >> i mean, they're not protecting that much >> no. more important to your point, the doj is long gone now and the settlements are all done >> no, where is he >> where would you most have your legal problems if you're a major non-public company >> i don't know. >> uber. >> really?

>> the "today" show which we'll hear later on this morning, but in terms of financials by the way, in terms of estimates, financials up 22 is one of the higher sector numbers and info tech up 23. so we're looking for good stuff. >> yeah. we are, but doesn't the curve, don't rates suggest you want to play regionals over money center. >> and i think p & g will be the standout if you want to mention that >> this is a weird setup we have black rock today and they didn't have very good inflows, but people liked it we have delta this morning and it was on squawk up 20% and people liked it and it was amazing given how much they used to burn capital. so far in this meager, numbers that we had, it was pretty positive >> byron mean joining squawk this morning that he thinks earnings will be terrific and would buy if we retest the february lows and larry fink

talked about investing, as well. tack take a listen. >> probably the bigger surprise for us is we saw huge inflows and huge outflows. we had one client who sold a big pool of money for an m & a transaction and we saw other clients that were selling assets for more capex we saw some clients selling assets for rising stock repurchases. so it was a combination of everything, but nevertheless, we did see consistent interest. we're seeing more and more interest in global investing >> flows are interesting right now. hedge funds trying to derisk a little bit as volatilities ticked up. >> i love that larry said companies are pulling money out to do buying things and buying shares look, i think that we have two markets. we have the -- we have the washington market, and we have the other market and when you see the tweets that the

president seems to walk back syria and the president says, listen, if he wanted to fire mueller he would have done that, that is the failing, fake. i've been trying to get a job there until i went into financial services it's a shame to see the times failing, but the stock says -- >> no. we made that point since he started saying failing, the nyt has done nothing, but go up. >> i think people are worried about syria, and he did seem to take it off the table, but then again, he's so wiley, he said may or may not >> it's not entirely up to us. merkel said germany would not participate. who knows what will happen this weekend? >> you would think that we would be headed down already in advance, but so far the tone of -- well, the tone of today

started about four hours ago we've had these multiple sessions within a day where it will open up great and then we'll fall apart and people say why did i buy the opening? but when you fall apart you have to buy josh brown at the half has had this nailed correctly. you've got to sell the ribs and not be too aggressive to buy the dips >> hopefully we'll get back to some fundamental analysis of earnings for a little bit. >> you think so? >> in between tweets >> it would be nice. >> you know what syria again, syria has made it so that it seems like amazon's not tweeted. >> no, i know, but i thought we outlined it well yesterday which is trade matters -- >> the most. >> and the constitutional crisis, mueller firing and syria. >> i think that's the right order. >> don't forget inflation and the yield curve. >> the things that matter to the financial markets. >> the things that can hurt you for numbers. china, it looks like there is a

chinese mission that says, hey, listen, we're not being conciliatory which i always think is -- >> joining us at 11:00, the director general of the wto. so we'll talk about whether or not that was a concession speech or not. >> well, i just think that we have to remember that the chinese have a 2025 plan which is not that pro-u.s. and i think that the president's trade people are always telling me, don't forget the 2025 plan is to take over, basically, everything >> okay, good. so we have that to look forward to >> did you read jack moth's piece? >> i did it was out yesterday morning >> what did he say is the ideal -- >> i'm getting all of these questions because i'm giving him answers in the form of questions. >> as you should. >> he said apple is the idea of the right one. >> right >> i thought that was very interesting because apple is what everyone is so worried about, but apple, bill's, in china. gap is 21% -- 21%, 22% buying in

china, but everyone wants to ratchet back because china is one of the places to buy vietnam is the place >> i've been hearing that. >> they're moving to vietnam because of lower costs. >> definitely lower costs. >> switching to ge shares, as you know, have lost half their value since john flannery was named ceo in august the company's earnings due out next week and last night at net net, susie welch asked him what he sees ahead for ge. >> ge in one year? >> oh, well, back to the basic ge that you always knew in our businesses, really strong franchises and flourishing we're in a show-me mode right you in all of the words that i can say or hope for or direct the reality is in one year we have to have proven and we have our first report card coming out on

april 20th and we have to have proven that we can run the company better and improve the results and get the essence of the company to shine >> now there's a ton of speculation out, david, that their strategy and divestitures and whether or not it will be more modest than we might have thought before >> i'm not in that camp. i've been reporting this for a while and without any level of detail, i'll fully admit, but the expectations amongst the details i've spoken to is that it will be not modest, and whether you get a great level of detail associated with it is unclear and i don't know if you will hear much on the 20th and i think we're talking later than that in terms of getting something more specific from the company in terms of -- i don't know if you want to call it a breakup or how you want to approach it, and jim, these things can go on over a long period of time and you and i were having a conversation yesterday about sort of the possibility of could you really

spin the aerospace and would you be able to reverse morris trust into another company where they had to spin, for example, honeywell. those things take a long time. nobody is saying you will get anywhere close to an announcement like that, but i do believe it will be about a lot more than transportation >> dan at honeywell will take another step forward from what dave cook did. he's an aggressive guy a smart guy. david, health care very much in play a lot of people would like that division >> the whole thing or the i.t. business >> well, the i.t. business, but they're doing these reverse deals. >> if you can figure out how to do it. >> that's part of the power and it will just stay and do its thing for a while. >> i mean, we'll see what the quarter looks like hopefully, i do believe they fully contain the long-term care liability and it's something that's monitored constantly given the metrics that are coming in and they don't seem to think there's anything more.

>> okay. they do have -- there are some divisions that people are going to be interested in and they're also going up enough that baker hughes, a ge company, and halliburton broke out. we have a buy in wouldn't it be interesting if they got lucky sometimes it's better if they're lucky than good. >> there were not a luck over the purchases made over the last 15 years. >> what are you trying to imply? just what i said >> we'll switch to disney this morning launching its first big move outside of the tv bundle today. that direct to consumer app espn plus julia boorstin got a preview and an interview with espn's new chief. good morning to you, julia >> good morning to you, carl, in the face of the cord-cutting concerns, it's going with espn plus which launches today in the u.s. for $5 a month. the new subscription service may generate losses for a number of years and will be profitable in the not too distant future

according to kevin mayer who became the head of the business just last month. it will contain 10,000 sporting events and ox original documentaries and exclusive news and highlight shows including a new show from kobe bryant. >> you look at what we're offering compared to what's out in the market lace right now and what's coming, we think we're presenting a great value proposition and we really like our hand. >> the plus subscription is accessed through a redesigned eshg spn app which includes free scores and highlights and free live streaming channels. the term says espn plus is 180 mlb and nhl games and thousands of scouting and events won't cannibalize the tv business. >> we're looking at the espn app and the espn plus direct to consumer service as complimentary and additive to

the existing cable and satellite model. that model has been very good to our business and we expect it to continue to be so. we continue to invest in it and we are embracing it. >> but isi analyst and they're likely to contain cohort fans and they do believe the ability to monetize the service could make it a strong strategic move. back to you. >> julia, thank you. >> i don't think it's small. i was watching the phillies game and the stick figures go, and i'm thinking -- oh, and you see the blue line and the blue line means something and it's, like, either hit or out. i said, gee, i would like something -- if i had something more sophisticated and i'm going to see what kind of games they have because i'm a heavy user of espn if they had something like

thefter because i'm a fantasy guy. >> it would pave the way for the eventual ott platform which is espn and they buy the regional sports networks that come along with fox and they would raise the price on, as i would expect as over time the subscription levels for espn on cable comes down. >> that's the future that's what you've got to do >> that's right. we didn't talk about cbs yet today. >> thank you >> the cbs itt is good. >> yes, it is. all access is successful >> how many do you think you can subscribe to, reasonably >> that's a great question >> look, i'm like a lot of husbands, okay i can't put the tv on without risking a severe tongue lashing. i have to take divorce off the table, but i do like to watch it on this because i can sneak it she's not here -- let me just check that

>> what are you doing? i'm just texting david >> i don't want you watching stick figures of the phillies. >> they had the great -- between them, the sixers, the pirates and theeagles. what's next? >> nova. >> it's a house in time from philadelphia come is why i'm moving the show to philadelphia. >> did you see the misery index? the city misery index, where the lowest misery index is >> philadelphia. >> yes yes! >> every other major city is above. >> so far things are going pretty well in queens. i'm just saying. pretty good in queens right now. >> brooklyn, new york. >> yesterday there was a game i was watching espn for this i watch eshg spn i watch it constantly and they were projected to have 180 points in the sixers >> we're not done. the sixers aren't done >> is embid back yet >> he has a mask that is so scary that you don't want to

play him. >> he's scary without a mask. >> he's the best although when i met him and i was, like, yeah. same with k.d. i was, like, yeah. heroes. >> when we come back, what the ceo of uber is saying in the wake of the regulations surrounding facebook plus the u.s.-versus china trade tensions and we'll talk to the head of the wto we have costco, lennar, tesla. we're back in a minute is the monolithic view of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management

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was your data included in the data sold to the third parties? your personal data >> yes >> it was. are you willing to change your business model in the interest of protecting individual policy? >> congresswoman, we have made and are continuing to make changes to reduce the amount of -- >> no. are you willing to change your business model in the interest of protecting individual privacy? >> congresswoman, i'm not sure what that means. >> that's an example of the grilling that zuckerberg faced during his grilling on capitol hill as they tried to pin him. a lot of questions about his stamina holding up to ten hours of questioning and the lack of a theme from the lawmakers and any sense of how this regulation might take form. >> that was a great clip because

that's what people on wall street are worried about, will he change the model? by the way, if someone were asked on the facebook call are you going to change the model? no one on that conference call would say i don't know what you mean i think they would say right now we're an advertising model and we have to add people. i thought that was the most disingenuous of the answers in two days when we hear the conference call, that's what they say that's a heavy business congress call congress will come up with anything, certainly -- we're talking about midterms and not that far away at this point. >> no, you would have to take it to the ftc they don't understand it well enough you're not going to get a law and you might get a regulation and you might get opt in who knows? if you befriend the president maybe you're good or maybe you say you will add jobs here or there. who knows? that's the way it goes >> one of the things that i've said and a bunch of these

congress people were saying there is an expectation of privacy and i think that's just bogus. when you put something in social media, there is an expectation of re-tweet and of re-use. the expectation is that people will see what you don't want this is very different from russia trying to trick an election so i mean, that is the disingenuous part of what the congress people are saying there's no privacy to putting something up on the web. >> and no one's forcing you to do it. >> right people put something on instagram because they want very much to re-do themselves they're hoping millions of people watch it. not that nobody watches it in that sense, i didn't understand what they were trying to -- expectation of privacy >> we're going to get cramer's mad dash we'll count down to the opening bell in a few moments and take a look at the pre-market on this thursday don't go anywhere.

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time for "mad dash." counting down to the opening bell six minutes to go before trading on the nyse, bed, bath and beyond >> i often tell you when you have open rebellion by the analyst on a conference call, this stock can't go up raymond james just downgraded this to an absolute sell this was a very bad conference call it was bad because what they said is, look, we have a million concepts and they're all great and watch us execute, but oh, by the way, it will cost us a lot more than we thought so even though they have that and they have face values. i know you're a big shopper

there, what you end up with is are you kidding me guys? the only saving grace is the balance sheet. >> for quite some time, except perhaps not correctly they were buying back stocks and dl seemed to be a creepy lpo >> the that's how w-r-o-n-g i was on this. >> it's always good to admit it. it's always good that they would do an lbo, and not that they would have the trouble people will have. >> the amazing moment is when they talked the toys "r" us and babi babies "r" us are going out of business they say in canada they still exist. are you kidding me this is a very didspiriting conference call. they have all of this great stuff and amazon, in the end is amazon and maybe the president likes that bath and beyond

>> all right >> speaking of, who knows what tweets will come, but we do have an opening bell. that is for sure just a few minutes from now as we get ard thrangerathe nyse alerts -- wouldn't you like one from the market

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you're watching cnbc squawk on the street live from the financial capital of the world, the opening bell in just about 60 seconds a busy thursday morning as we watch the situation in syria continue to unfold oil's off the highs of yesterday. we'll see if defense names do the same, jim. >> yeah. i think that defense has been probably one of the best themes out there this year. the cell phone towers was the other until the sprint -- always curious to hear what you have to say about sprint, t-mobile and those have been the -- >> your opinion in there even though eurozoneindustrial production 2-9 versus consensus 3-8. >> it's been diminished. [ cheering ]

>> i'm wanot sure exactly -- >> this is a new one some chants for the opening bell >> we'll get a look at that, at the big board today celebrating the ipo the subscription-based platform and we'll talk to the ceo when it opens over at the nasdaq celebrating its centennial year. >> wow >> you guys were doing bed bath at the telestrator costco comp's up 8.6. >> and even gasoline very, very good numbers that thing is just such a horse. i don't think people realize the whole time costco is saying, it will get hurt by whole foods and it will be hurt by amazon. it has not been hurt and i just think the number is there, but the stock is well. >> there was an easter shift in there that moves the numbers. >> so complicated.

i was talking to art peck yesterday, and the numbers from the gap, particularly from old navy were so good in the fourth quarter and people forget. this group is one that the dollar store is supposed to be hurt by china, and there's a lot of crazy that's going on, but the apparel makers have all been strong and that's where the real strength is. >> how many stores has gap closed between banana republic. >> they're opening with many old navys which they're doing very well and athletta is fantastic >> and when you look at this lulu lemon, oh, my, is this a juggernaut yes, athleisure. do we have anyone who knows athleisure well? >> sarah lawson. >> cover of athleisure magazine. >> our ad spend, our marketing

media has pivoted away from traditional media outlets and much more towards social media, whether that's instagram, facebook, et cetera, et cetera it's super effective for us. >> interesting speaking of social media, jim, not to pivot too soon. barclays has a note out on snap today. they see revenue upside and they're adding to positions in advance of the print after the dau miss on the redesign. >> they said they're getting the business back to circle back to art peck, he said his favorite buyer is a woman who is about to have a baby and to reach them and to reach any one of the millennials, you just have to go online of course, i'm asking about z-man and he's, like, no come on. we have to reach these people and we forget that it wasn't just putin that uses facebook to try to get people to do something. there's, like, most of the

advertisers in the world and -- >> it's a very effective way to target people. >> it is >> and to know a great deal about them and therefore to be able to predict their behavior >> that's okay -- >> if you want some sort of opt. >> we have people who are saying they should pay us >> that's not going to happen. >> no. >> they won't even pay if you do a revenue share if you're doing facebook live. >> they don't pay for any content at all >> that's -- congresswoman, that's our business model. >> no inventory. >> content-free. >> yeah. >> margins to the moon -- >> and 40 billion in revenue. >> and selling half the market multiple of clorox what do you make of that >> i would think in most environments, that would mean it was cheap. >> it would, if you think there will be some sort of regulation. >> right >> what? that's why it's not up >> that's why it should sell at 20 times earnings, but i trimmed

it from my charitable trust because i said huge position up more than 100%. can't take it anymore and can't take it is not a good reason to do something, but there is a sense that these congress people do not want to be done because people pick them up and use them on tv and congress people are very excited about asking trick questions about where did you stay >> there was the issue of diamonds and silk and are the algoes loaded with a bias. >> he called it an enforcement error. >> he admitted that they made a lot of mistakes. look, someone could say very easily, listen to them that company is poorly managed they made a huge number of mistakes it's managed for profitability it doesn't seem to be managed for these issues that were brought up even though they're trying to get ahead of it. they need an independent lawyer to come in and say we've looked at everything. they're not doing that they're having -- at one point z-man was saying i hired these people and they looked

you hired them and you're not necessarily known as the nicest manager. you don't go in there and tell mark i discovered on on get that on virtual reality >> while those hearings were going in d.c. things were also taking place in a d.c. courtroom that may be long-term, more important certainly for the merger and acquisition business and whether or not we'll see more vertical mergers in this country. i'm talking about of course, doj versus at&t-time warner. the government presenting its star witness, mr. carl shapiro, a man who worked in the antitrust division you have to rely to a lot of different people and i'll refer to a note this morning from credit suisse. they've been following this closely given these trial updates. they say there are early signs and the weakness of the doj case and at&t's obfuscation efforts may be working they went back and forth and

said he did a credible job, mr. shapiro in presenting his thesis that, in fact, you would have an impact and turner was withheld from certain mvpds that those subscribers would leave and go to directv and that's sort of the crux of the government's case to a certain extent, but also pointed out that at&t came back and mr. petro chely came back forcefully on any number of different areas whether it was about long-term contacts and the post-arbitration remedies and significant advertising synergies and disconnect from reality and the fact that charter, for example, put off signing a contract until after the trial seemingly in contradiction to shapiro's model implying they have all of that leverage he didn't speak much during the hearing and when he did, his questions revealed confusion and distraction and this is according to credit suisse >> do you have any renderings or artist sketches? >> i would like some artist

sketches we have to get going on that the government wrapping up its case and at&t will present its witnesses and we still have a while to go and it will be quite some time until we hear from judge leon i think mid-june is a real possibility here >> this will be one very important ruling because it will not just apply to this case, but it would set the precedent for potentially vertical mergers as unprecedented as it was to see the government object here, if the judge were to come out and actually support the government that would send a chill to anyone considering a vertical merger. so t-mobile/sprint is horizontal express scripps/cigna. >> that, too >> there's a lot at stake here, and i will tell you, as i reported last week, the companies considering doing anything now are being advised by antitrust countsil and they can't tell with certainty what's going to happen because we have

this new world so they say, well, will it be on the front page of the newspaper? are you going to create jobs or not have jobs? any foreign influence here at all? you know, if you're not going to be on the front page, will it be in the front of the business section? is it a media deal involving anything touching the media? these are the concerns now that you have to take into account as opposed to simply the law. >> m and a was strong in the first quarter. >> it was. >> that's very important that's under cover this whole at&t -- it is so huge. >> very. >> it's affecting people's lives. in the meantime carl tweeted something pretty amazing that's a great gif, by the way all 30 stocks are green. >> they flick a switch and it all goes up. what's interesting, i think that zuckerberg should testify again today because today the stock's down >> i thought he did very well when he was on the -- >> he passed the touring test.

>> he did. >> he used it yesterday, too >> joe kernen picked it up he used artificial intelligence. elon musk said -- >> does elon musk continue to worry about a.i., eventually making robot armies. we'll be nothing, but slaves. >> how about how his stock has done since everyone decided that it was the greatest short ever >> in terms of dollar short interest it's now surpassed apple if i'm not mistaken. i saw that from s-3 yesterday. >> given the difference in market cap that's saying something. >> i'm not recommending anything, but that's incredible. >> they said that they're not going to do -- >> i know, but when they do another offering >> she -- when they do another offering >> there would be no offering. >> now they're going back and forth with the ntsb about

whether or not they should be able to disclose the model x crash. >> they're a promotional company and that does annoy people >> we touched on delta, but they did beat cost per asm and you mentioned 20% fuel cost and how much are you worried about that and not to mention another story about emirates not being able to find enough pilots and truckers not being able to find drivers >> everyone is afraid to get into that business and they do artificial intelligence that your job's taking away and it's difficult to figure out what to do and emirates. i've flown emirates. >> congratulations there is a fabulous barn in the back. >> is this the new york-milan overnight. >> the only thing they're lacking is a piano player. you sit there and say hey, what have you got today mr. cramer, we've got your

johnny walker black. well, no, i like single malt oh, on your way! it's good to be back, lloyd. it's kind of like when jack nicholson goes to the california room in "the shining." lloyd? >> i know it i know it. i know it. >> until lloyd blankfein, the only lloyd i knew was when the bartender in the -- it was a california room. >> was it the colorado. >> i know, but was it the california room in the hotel >> it was an underlit bar. >> oh -- who were those twins in the hall >> i don't know. >> frightening >> dow up 2.26 and all of the components are green for now let's get to bob pisani. >> yes, we are green and again, geopolitics and the president tweeting helping the markets and sometimes it hurts the market, but we're getting blown around by geopolitics even though we keep trying to bring the

conversation back to earnings season which we all at cnbc care about. i keep circling things and let me show you this morning, 6:15 or so the president comes out with a tweet and he says strikes on syria could be coming soon or not so soon at all there you go and you see a volume spike right there you see moving 10, 12 points in the s&p futures in a very short period of time and that's 120, 130 dow points or so once again, geopolitics moving this time on the positive side here existing trends still, we're still talking about mueller, rosenstein and syria and china trade wars, but nothing dramatically different here are industrials leading the way. deere, caterpillar, northrop, honeywell, and consumer sentiment gets smack around because net flishgs is in that group and it's doing well and that's good. banks tend to be going into the first part of earnings season and we're getting a bucking the

trend here banks were slightly weaker yesterday. gold's had a great run the last few days and it's down on the lessening of global tensions a lot about black rock as you heard larry on our air this morning, always wonderful and good for quotes. here's what i care about that revenue growth, thanks to the etf business has been steady and this is why black rock has been an outperformer and you'll hear about the etf business might be slowing down a little bit because we had a lot of volatility the trends are pretty good assets under management up 17% and 21% growth in overall earnings those are pretty good and here you see ten percentage revenue growth for several years and it was flattish in the mid-2000s, and with it starting taking off, their revenues started moving to the upside they're all tradeing to the upside and some of the big names like mason and invesco all

trading to the upside and here's something very important to note they've not had a good year by and large. you look at asset managers in 2018 and the bigger names and yes, black rock has been up on the year because of the fabulous etf business, but the other big names generally are not and that's because a lot of these names are highly leveraged by the performance of the equity market and these stocks all fell apart here and a lot of them are in the active management business and the t. rowe prices of the world and black rock has been very, very aggressive and art fs artificial intelligence and moving the market forward and it trades at a premium. it's starting tomorrow and the best numbers we've seen at about 18% and significant revenue growths and this has been a story for a couple of quarters it's not just buying back stock anymore. we can't use that excuse and i have a lot more to say about where the revenue growth is

coming from. we're waiting for zuora, a cloud-based subscription ipo this will be a hit here. they upped to 11 to 13 and they priced it at 9 to 11 and they manage the subscription services online and do billing for a lot of your favorite magazines and online businesses. >> right now the dow sitting at the highs of the day 276 points on the upside. carl, back to you. >> full disclosure, the street.com which i found uses zuora and it's very robust and you put your name in it and i wa wanted to get it >> they do have a crowd today. >> i couldn't hear a thing they were saying. >> let's get to the bond pits and rick santelli. hi, rick. >> good morning, carl. the numbers weren't very exciting and not very enlightening either with respect

to claims and prices, although the year over year numbers were a little bit strong, but after a delayed reaction, look what happened intraday on a two-year chart, they started to pop not long before equities opened and if you consider a chart starting around march 1st for two years you will see the 2.34 we initially rose to is very close to the highest levels that we've seen basically it was in march, but by only half a basis point right now themiddle of the curve is what's overperforming for a change twos are up two and it's five and tens, and leading the way up was fives and if you look at the ten-year, we're back to the range area and the very either top of a new range or testing the bottom of the very old 22 section range. the dollar index, nice move today. it's up over a third of a cent at this point and it has really been on the slide in a very

non-aggressive fashion, but if you look at the chart starting in january for the dollar index, you can see what i mean. even though it's moving up today and like the euro, it's going nowhere quickly here, but there are components that aren't weighted as much that are actually moving andlook at the pound versus the dollar. granted it's not on the highs, but it's pretty firm there was news that in front of the finalized brexits that maybe china will do some extra financial business in london that seemed to be a bright spot with regard to the news and finally, let's look at what's going on dollar yen. from mid-february, we can see the dollar is making a comeback and it still has a ways to go and it's moving in the other direction and it is the beginning and the dollar index at some point will move higher and it's all about the euro getting above 1.24 carl, back to you. >> thank you, rick santelli. when we come back we'll talk the

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when everything's connected, it's simple. easy. awesome. it appears sales of home pod are not meeting expectation ps a source says by late march apple was lowering sales forecast and cutting orders with one of the manufacturers that builds the home pod for apple. store workers say inventory is building up and some are selling fewer than ten each day. the product was already after late by expectations >> it's hurting the stock, which is coming to 9 points off its all-time high. there's a lot of service momentum there's a new story. it is disappointing. the stock has some momentum to it, as does a lot of tech today.

>> as we know about the spring print on earnings when they talk about capital return, historical historically >> they had success in other products >> were the expectations -- it doesn't feel as though it was successful >> you can't wear two watches. >> i gave up on a watch entirely >> mine tells me all sorts of things >> my wife is checking in right now. >> it's about discretion >> you can sneak it. that's why i use it. >> you're not alone. not at all we're going to get stock trading in a minute. dow is is up 270 s&p is still aut 1bo0 point trs a three-week high. net awakens with signs of opportunity.

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time for trading >> a new report out today. possibly 50% upside to boeing. this is important because boeing has been the most footballed stock because of china

if you think china is not going to be a major focus, this is the stock to buy i have been using a $400 target for mine but that was out 18 months this is a company that could have a good quarter. it's an important issue if you were to have tariffs right now it's looking okay. >> right now >> trying to get back to its 50-day average >> is that what it is? >> it cuts to that >> a guy came on the oh day and said facebook was going to have one of those crosses a lot of times those don't work out. i know you were a close follower >>. >> we have a company we have integrated software and peel like -- cloud kings are back i have to put all these companies on because they are

the companies that win they are the companies that people love, so i put them on. all i can say is those stocks are back too out of no where are. the best of these ipos was dropbox. i use dropbox and i love it. i think it's fantastic >> we'll see you tonight buckle up for tomorrow by the way, banks doing fairly well here. mpenng is the leading dow coont.don't go away.

good thursday morning. welcome back to "squawk on the street." we are at the new york stock exchange markets having a broad rally today led by boeing and some financials the president dials back the rhetoric on syria and the bank earnings hit us tomorrow the road map begins with the easing the president signaling an attack on syria may not be eminent. >> moving the needle on regulation, mark zuckerberg says it's inevitable. a look at how, when and who will

regulate big tech. >> and speaking out to cnbc, what he had to say about china, the u.s. economy and a lot more. >> let's start with the markets. stocks are sturge surging. the dow up 300 points with all the components in the green after falling more than triple digits yesterday larry fink joined us earlier this morning talking about the volatility we're seeing. listen >> volatility did change the whole dimension of the markets big paradigm shift we went into january over the tax reform it was a combination of everything, but nevertheless we did see consistent interest. we're seeing more and more interest in global investing >> let's talk about it we welcome the global investment strategist at jpmorgan private bank nice to see you both so how much did the tweet risks

play into the big market >> it's also geopolitical. we have a yin and yang and those are continuing all over the place. the tweets are really part of a larger thing of geopolitical and diplomatic risks that are going on and so i think as we came off something that may have caused more volatility, now where fundamentals start to impose themselves again i think that's where we're all wait i waiting tr earnings season because we think those good are going to start to override a bit. >> you're like the thousandth person to come on and say we're looking forward to earnings season is. it's going to be great earnings are going to grow 18% sales are going to grow. where are the expectations now if everybody is expecting a good season versus where the market is trading >> we think the markets are kind of not expensive now

the market is trading at 16 times earnings markets expecting 18% increase in earnings. we're looking at 20 to 21. we're looking at really beating those expectations and those are going to be positive so hopefully that's going to provide some good winds for our back >> do you agree this is a good opportunity, a rare opportunity for investors to buy into a less expensive market ahead of a good earnings season? >> i think what investors are going to do is if they are not stepping in here when we have touched -- you have to think a little technically you're talking about technicals before we have touched the 200-day moving average five times, six times since february the 9th if your forward outlook is good, you have had multiple opportunities to put sideline cash to work and i think if you haven't been doing that, if you haven't been lagging in down here, a year

from now you're going to regret that >> scott, some of these especially the soft survey data has softened confidence, now it's about the eurozone manufacturing boom. but the fed seems committed to their path i wonder is that why the curve has compressed because they are looking past what we think will be maybe seasonal weakness >> i think on earnings season, i still would argue that rather than the actual numbers, the outlook, are you going to do any cap x. how much of that is incremental, what are your clients going to be doing i think that's more important. unless you'd have ta total disaster on something like the financial sector earnings, tech earnings, something like that, i don't think the markets going to be -- if earnings come in anywhere between 14 and 17%, i think the market is fine with that we're still looking a little

forward. but the fed, if it you look at those minutes that came out, part of it you could certainly say, geese, they are hawkish here but in the minutes, it's like they are a little confused because they are concerned about a trade war and all these kinds of things. so investors, to a large extent, are cob fused because there's a lot of different things going on i think clearly from the minutes, the fed is confused as well so for us, what i think the most likely outcome is you see a little bit less than 3% gdp. you see cpi around 2.4, which is not the end of the world the fed hikes two more time this is year. and earnings are fine. so valuations, there's no cheap areas out there. the upside between here and the end of the year is okay. >> let's talk about the fed for a moment we did get the first notes from fed chair powell's meeting

there was a sense with janet yellen that she would have investors backs if things got too volatile, too crazy, too risky. there's a question whether chair powell is going to pursue that same policy. we expect con ji knewty in terms of the fed chair, but is there less confidence he's going toft markets back >> i think that's what the market is getting use to i was really encouraged in it his first press conference in the clarity, in the way that et he spoke, which i think was actually more clear of how chairman yellen used to think. he is going to impose kind of a forward guidance on how they are going to behave. and certainly he cares about effect quity markets. >> so you painted this push/pull between better economic and earnings fundamentals and then some of the geopolitical and diplomatic risks that we're seeing potential trade war with u.s. versus china

given that environment, is it still the strategy >> i think you buy now simply because it's not expensive i think long-term, you still want to be in equities but i'd like to talk about the trade war for a second because that's not just noise. if the trade war stuff continues, that's the kind of dedploeblization effect which would have an impact on growth going forward if it doesn't calm down with the china things going on, hopefully it's going to be a model. we got a lot about faf ta and how it's been terrible for the skpus now it looks like we're on track. if that's the model, hopefully we get through that as well. >> the fed is worried about it as well. we'll leave it there with the dow at 300 and nearly every sector green except real estate, thank you both when we come back, time to regulate facebook taking on lawmakers as

calls for regulation mount we're going to discuss that with a former fcc chairman and the former and first u.s. chief technology officer plus general electric reportedly looking to spin off the ipo its transportation business. what john had to say about the road ahead for the company "squawk on the street" is back in a moment. dow is up 295. great, another dead end. sarge, i just got a tip that'll crack this case wide open! turns out the prints at the crime scene- awwwww...did mcgruffy wuffy get a tippy wippy? i'm serious! we gotta move fast before- who's a good boy? is him a good boy? erg...i'm just gonna go. oh, you wanna go outside? you gotta go tinky poo-poo? i already went, ok? in the bathroom! as long as people talk baby-talk to dogs, you can count on geico saving folks money. fifteen minutes could save you fifteen percent or more on car insurance. at ally, we offer low-cost trades and high-yield savings. but if that's not enough, we offer innovative investing tools to prepare you for the future. looks like you hooked it. and if that's not enough, we'll help your kid prepare for the future.

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check out this market rally. the dow is up 315 points we have 1% plus gains across the

board. financials, technology are all in the the lead. we have seen wide swings in recent weeks the dow posting triple digit moves. 19 of the past 23 sessions but all in all, april is actually a green month for u.s. stocks despite the fact we have seen crazy moves what are you watching? >> the s&p is still down 5% for the last six months. it has not been a great period given where we started >> yeah, but clearly the reds have increased we are marching into earnings season, which many say is positive what's different is revenue growth set to see 7% sales growth so we'll see if the numbers can live up to those expectations.

18% profit growth. >> that was gold man's key for us yesterday saying don't watch eps watch organic revenue growth and pretax margin if you want to sense how things are changing. because the tax law reset the board. >> it's an increasing clarity on return of capital is going to be key in a lot of these calls. we have some statements about it from last quarter. but there's still expectations there's going to be more clarity provided by the way, 4.3% decline over the last three months in the s&p. but that's the key a lot of stocks will key off what buybacks will be or the dividend increases or cap x. >> and what the effect is on the market this blackout period we have seen into earnings is contributing to the volatility. we'll see if that comes back when companies are allowed to do so when we come becoack, a look at oil. oil is coming off of that multiyear high we saw yesterday. a quick programming note coming up on "power lunch", an

interview with the ceo of dan danone what he has to say about consumer habits. did you know americans are et weeangesyort have that and a lot had more in that interview coming pup up. and more "squawk on the street," when we come right back.

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when everything's connected, it's simple. easy. awesome. mark zuckerberg wrap ped up two days of testimony. yesterday's house hearing proved a little tougher for the facebook ceo check out this exchange with congressman frank paloan >> i'd like you to answer yes or no will you make the commitment to changing all the user default settings to minimize to the greatest extent possible the use of data. i don't think that's hard for you to say yes to unless i'm missing something. >> congressman, this is a complex issue that i think is deserves more than a one-word answer >> that's disappointing to et me because i think you should make that commitment. >> the question is what's next for facebook joining us this morning is reed hunt and aneesh chopper.

thank you for the time reed, did you hear anything to suggest there's a path to policy here being carved o ut by lawmakers? >> so facebook is the most important and the most powerful communications platform that's ever existed and democracy can only operate on a communications platform so all the politicians who were talking to mark zuckerberg know their own elections depend on the use of facebook or the misuse of facebook and because we don't have a national popular bill that chooses the president, the president knows the swing votes in the precincts depend on the use of facebook or the misuse of facebook for these reasons, there's no doubt that congress will continue to pressure facebook. what really needs to happen is is a law has to be passed that creates or uses a regulatory agency to establish a number of rules that strike a bargain

between the public interest and the commercial interest of facebook >> so fresh policy, fresh enforcement, is that what you heard? >> i heard that it's a desire. i don't see an immediate o outcome, but it's one we should work towards there's this line between european style regulatory processes and the free market let it all figure out on its own. the middle ground is really the american way where we have the commitment to build codes of conduct that can be enforceable through regulatory bodies. having a baseline agreement that we have guardrails on all internet applications to respect consumers' ability to control the collection and use of their data feels like a rational thing to pursue, but leave the private sector to the details of how to execute that that doesn't feel that complicated. it's a u.s. approach that would work well and i'd love to see

more attention paid to the opportunities here >> it sort of raises the question, as to which agency would regulate facebook. if it's a publisher, it would fall under the fcc mark zuckerberg was asked that question he was saying it was a technology platform. so who oversees that >> facebook is a communications plat tomorrow. it's a great one it provides a great public service. it permits you, me and 2 billion other people to communicate to whoever we want. it's free. we love that part too. it supports itself with adverti advertising. it looks like television from the old days and looks like a telephone company. it is a communications business. if congress wants to give the job of regulating it to the fcc, that's not a bad idea. if they want to create a new agency that specifically focuses on supering a gators like facebook, amazon, google, that's

not a bad idea but congress does need to recognize that some agency with expertise has to become expert in the exact rules that are appropriate for balancing the public interest and the commercial interest. >> i wonder if you thought there was any disconnect between mark zuckerberg saying we're a tech company, not a media company, but at the same time saying, and this was new, we are responsible for the content. not the people posting the content. >> i would argue that we're following in that gray area where in areas where we have little clarity today, the default standard is the industry should say something we commit to do the following things ask it they lie to their customers, that today is subject to oversight by the federal trade commission this is how the obama administration handled educational applications we called this the student privacy pledge this allowed organizations to

say, look, if you give us access to the students' classroom information, we pledge not to do these things if you agree to that pledge and companies like google and apple ask others have already done so, violating that pledge gets you enforce enforced by the ftc. that's where the middle ground lives today absent new congressional action >> reed, we here have been talking about the price action on the shares. which were up during the course of the testimony but i wonder if it you think maybe that was because the issue of breaking them up entirely or forcing him to give up some responsibility was never really addressed by lawmakers >> mark zuckerberg got good grades from investors, but i'm sure he should not take that as the end of the story the europeans are regulating and they are way ahead of our congress the chinese, they run things their own way and they are much, much more draconian in the way they control their companies

a regulator who is concerned with awl the issues involving all the supering a gra gators would negotiate to have a single rule apply to the whole west and would help our companies get market access in china that's the way to go that's the way that congress should direct its impumss. and there's so many different issues democracy is one of the most important ones the idea that a few voters and a few precincts and a few swing districts can be manipulated by those who want to use facebook, that's fundamentally a threat to democracy. if the national popular vote elected the president, we would be on safe ground. but as long as we have this current system, we really need to be concerned with how democracy is manipulated >> speaking of the current system, do you expect there's going to be any legislation that actually comes out of congress you have been there in d.c. for a long time. some of this seems hard to imagine in the near term

if not, does the regulation you're potentially talking about come from some regulatory body ask which one would it be? >> here's a really bad solution. facebook being the only company with its turn in the barrel and it's subject to isolated and different kinds of legislative and litigation driven efforts from states and private parties. it has different rules in europe than in the united states. all of that is a nightmare it's a nightmare for the american people and it's a nightmare for facebook so congress should act >> we're going to continue to watch it what a week it's been. thank you for helping us sum it up >> thank you >> we're keeping a close eye on crude oil. yesterday it hit a three-year high as fears over continued conflict in syria, saudi arabia, all of that seemed to scare investors. jackie has more on oil >> good morning, that's right. yesterday's crude oil move was

significant. it reminds you how much geopolitical aspect cans rattle the market is is the rebalance playing out as expect canned is some of the access oil being worked through investors have reasons to think things are on the right track. then most recently you have kruds correlation to the stock market fears over trade wars taking stocks down because it questions demand but right now those are going to sit on the back burner as the concern there will be more military conflict in syria sits front and center the president tweeting this morning never said when an attack on syria would take pl e place. could be very soon or not so soon at all. another geopolitical factor, you mention mentioned saudi arabia blasts over riyadh from yemen. the saudis are happy with the market that was echo ed in o'pex march production numbers the group pumping under 32 million barrels a day.

it's enough to get the market excited. but you can see we have a little pullback on our hands today after yesterday's move the market is waiting to see what comes next. >> a weak dollar also pretty helpful for the price of crude sticking with oil for our etf spotlight today, mike has a look at that. >> the broad energy sector is on track for its best week in two years. actually it is still the best sector for the week, even though it's a little bit as oil is is taking a breather. you see the different etfs that track different parts of the energy sector. xop is expiration and production companies. it's basically leading the way along this front i do think you want to try to separate how much geopolitics has to do with this.

one way to do that is look at the global energy stock compared to this stock market you see they were generally running together until yesterday when you had that pop in energy and oil prices you took the energy stocks up, but then you had a big move down in the saudi stock market. obviously, that's kind of one way to measure how much oil is is going up. what i think we consider for the wrong reasons. just a secondary point about energy leadership, i don't know that it's the kind of thing investors should wish for energy to be a leadership sector just because it's only 6% of the s&p. it doesn't have that much. it tends not to be at this theses to correlate with broader risk appetites or even forward earnings i do think it's if energy goes up but you don't want it to be the only game in town. >> delta would back that up. one thing is for sure. they are going to influence earnings expectations year on

year >> it's a big portion of that big jump we're seeing in energy going up also weak dollar, it's been on its heels. there's a lot of things filtering in >> it's also got caught up a little bit in the trade war story. not only is china the biggest energy consumer so any weakness in the economy would put pressure on prices there, but it finds itself in the cross hairs in the tariffs >> it totally does and also just the shear math of the united states trade balance is tremendously influence d by oil. we're still kind of an importer of oil for what we refine. it is right in the center of all the things that are swirling around the markets >> it will be interesting to see whether china could use that as a weapon which they have not yet done >> when we come back, a look at the road ahead for general electric what john flan are you told

about the impact of the trade tension. then we'll go live to china about the impact of tariffs on their business we'll hear from the creator of an undersea drone. we're right at levels where the s&p failed tr about three weeks. 2674 would be a three-week high. we're going to watch that. back in a minute you know, i used to be good at this. then you turn 40 and everything goes.

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good morning, here's your news update at this hour the kremlin is warning the u.s. and its allies against any military against in syria. a foreign ministry spokeswoman saying no one authorized western leaders to take the roles of what she called global police and at the same time investigators, prosecutors, judges and executioners.

the taliban triggered a gun battle that killed 15 including three top local officials. before they drove afghan forces out. they planted mines to prevent is reenforcements from coming in to help bill cosby back in court following testimony during his sexual assault retrial three prosecution witnesses testified. cosby used pills and alcohol to incapacitate them and molest them this is some of the coolest video. nasa released footage of polar storms over the north pole the animation uses imagery collected by a mapper which was aboard the probe during its fourth pass over that planet that's the news update this hour send it back down to you guys. welcome back, everyone, to "squawk on the street. we are live from the new york

stock exchange we have a big market rallien our our hands. the dow is is up 300 points. nasdaq up more than 1% it's groups like financials, technology and industrials in the lead all dow stocks higher. >> you always see them at the top of the leaderboard >> john flan are you, the company's ceo spoke at the net event in boston. morgan brennan has more on what was said >> the ceo once again reitera reiterating his strategy to turn around the company >> we know we have great franchises we know we can run them better so there's a nuclearous of strength and improvement that we see in front of us i also said it's just too many things at once so there's too many businesses

the world is too complicated keep them all open throttle at the same time. management, let's narrow the scope to our aviation business and then last thing, this is where everything my core responsibility is to make sure those businesses flourish in the future for employees, customer cans, investors and in that context, i'm open to any way i can make that happen. >> so not exactly offering more details about his long-term plan for the core industrial businesses, but also not exactly ruling out the possibility of a broader break up add to that "wall street journal" report that as ge looks to digest in assets, they are being more seriously explored. the question that raises is ge having a hard time finding buyers for asset ises like transportation the company not commenting on that but he did say again last night that everything is on the table.

so expect more to be revealed to get earnings by tomorrow first quarter results next friday and then we get the shareholder meeting on april 25th so a busy couple weeks >> then there's the big meeting may 23rd, i believe, as well another opportunity to sort of communicate what exactly is the plan there seemed to be a lot of potentials here in terms of at least moving to do different things with the different businesses you have watched that stock give up a lot of ground over the last couple years >> the story has changed as to whether you can determine the stock has finally been washed out. it's kind of the bad news. wait for the november investor update we did get more detail and then tvs wait until december. and now it's about next week's results and those investor updates. i think investors are hearing what they want to hear in terms of open mindedness to try to

heaarvest value it should be a good time to try to lock in values of global industrial businesses given where the rest of the industry kind of trades right now but there's not a lot of confidence they are going to be able to do that and not compromise the earnings base of whatever is left >> there's this note that says liquidity is efficient but zero equity value at ge capital. >> that's the big question what's going on at ge. capital. is it capable of tributing anything and how much in terms of liability at ge capital is the parent company on the hook for. you have had a number of analysts come out and be critical calling it a black box terms of the financials and liabilities. >> what i'm hearing is they seem somewhat confident about at least having a handle on the long-term care issue, which came up and the number was et nnormo. almost $22 billion over a number of years

but they feel as though they have got that contained. it wouldn't be the worst thing if somebody were to come along and take all the assets and liabilities for nothing. it would relieve the company of the stress it is a possibility that you could find somebody who is willing to take that wholistic approach to taking the business. although seemingly unlikely. >> do you think somebody would take it? >> a buffett would be a name you have to consider as a possibility. >> certainly, we have seen the stock trade higher in recent weeks on speculation that maybe somebody like buffett would be amassing some sort of interest in the company >> i think thaw may have been misplaced that et he would be looking at those assets. >> i wonder how the market would view this idea of doing this hybrid deals you put your assets along with another company. i guess on one hand you don't want to just have a straight spin off where you have organ

busine orphan businesses. you don't want to have this stub end business >> if you can be the biggest company, a large stake >> it's all about streamlining the trend in industrials is about streamlining and pure play businesses and bolting on to those businesses, but also maybe potentially separating them. we're seeing this in many companies who don't necessarily add to the value of the broader whole. >> stock is still down 56% over the last 12 months >> 25% this year >> thanks, guys. china, meanwhile, promising to fight back if the u.s. steps up trade tariffs the threat of a possible trade war speaking nspooking investors ask causing concerns for chinese tech companies r more in a bit with more on that that's an ongoing discussion

we'll talk to the director general of the wto in about 20 minute s about to what degree was the speech a concession. are they truly a developing nation, if it that's really the wto's definition of china right now? >> and how does that impact any potential ruling or what kind of treatment they get my big question for the wto is who has a better case. can the u.s. complain about the intellectual property and other sort of trade barriers they get from china or can china complain about the tariff threats >> that's in about 20 minutes. >> this is a major manufacturing hub and it's been famous for making shoes and apparel but now the government wants to upgrade the exports here to high-tech products this chinese start up makes underwater drones their first model is called the five fish. they are hoping to sell it to

u.s. customers and also they are hope ing ing to sell it to amat divers as well as companies that are hoping to go on underwater inspections. or go on rescues the drone industry is one of the technologies that's been promoted by the government and its made in china 2025 frprogra. this is a big national plan whereby the government has been targeting certain industries for support like artificial intelligence, electric vehicles as well as drones and robot. icices president trump thinks this plan is unfair and that's why he's slapped and announced all the tariffs for chinese high-tech products however, the founder of qyc believes the tariffs are unfair. this is away she had to say. >> for the whole industrial environment is a good thing. if we do the government and we

can't have this technology >> she is getting some money from the government. the fwoft is helping her in other ways but president trump's tariffs really could cause her some headache for her big u.s. plans. the tariffs have not affected her yet. she said that her products are not on the list. but she's worry ied they could . and she has plans to put out her first shipments in june to the u.s. market. but because of all this, she's not sure what's going to happen next and is thinking of diversifying japan and europe. >> thank you very much when et we come back, a look at the state of the u.s. economy. former chief economist will be join iing us and don't miss our interview with christine lagarde next thursday from the spring meetings in washington right after warning against

trade protectionism and saying trade definicits unlike the tru flti oayarnoa ss e t reeconf unfair trades. "squawk on the street" will be right back anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express, be the readiest.

gold is trading near a two-year high. eaut on the verge of a massive ado tradingnation. don't go away. "squawk on the street" will be right back i was a c130 mechanic in the corps, so i'm not happy unless my hands are dirty. between running a business and four kids, we're busy.

knowing that usaa will always have my back... that's just one less thing you have to worry about. we are the cochran family, and we'll be usaa members for life. opening trade for us the company going public here at the new york stock exchange pricing an ipo at 14 that was above the expected range. as you can see adding 41% to that in the first few minutes. we're going to talk to the company's ceo in a few minutes from now >> dow is up 290 let's go over to chicago >> good morning, and thank you opinion i'd like to welcome my special guest dr. ken rogoff

>> thank you, rick >> listen, i have been quite excited to have you on because i think you're the perfect person to answer a question and some of my personal concerns i will express on behalf of traders i deal with. the fed kept interest rates 0 to 25 for seven years first tightening, we have had six. the range is one three quarters. how much is enough and is there a negative side to trying to make up for lost time if they do too much too fast >> there's defily a negative side because if they tilt the economy into recession and often overly aggressive things are the impetus for recession, they don't have a good plan for what happens once they try cutting interest rates because they

don't have much room and frankly i don't think many economists have great faith in these unconventional tools that they tout so absolutely. i don't know why they are not worried so much about letting inflation drift above 2% for a little bit it's like they are going to lose their membership in the central banking club it would be better to lay back, let the economy go, let inflation drift up when you're sure that inflation is really, really pushing above 2%, it's rooted, then start tightening interest rates. >> your point is well taken. your point is well taken you can't make up -- if you made a mistake by starting too late, it's a bigger mistake to try to make up for it you have to doll out enough like that everything is cope this theic. now you add in the nervousness regarding debt now i understand that servicing

the debt for many years, the last president added $8.5 trillion to the national debt. not much press on that but after the humongous spending package, there's a refocussing there. what's the debt ramifications if the fed does overplay its hand to combat inflation that you suggest hasn't really me it's a sized yet? >> i think it makes a little bit harder to add stimulus into the economy through fiscal policy if we run into a recession. the debt is high it's also very short so that if global interest rates rise, it's a vulnerability. and also it's another weakness in the u.s. macroeconomic tool kit. but i think there's no reason they need to be over aggressive yet. so what if inflation goes a bit above 2% it's been below 2% for a long time so i'm puzzled by why they were so aggressive. it really surprise ed et me.

although i et agree the u.s. economy is doing very well they have been slow to the game in realizing that. i think there's some payback as the financial or we get some clawback after losing a lot of ground in the financial crisis growth could be good for awhile. whether inflation krooep creeps up remains to be seen. they should be patient >> excellent we have just a little time left. we have to make this one quick one other issue. when it comes to trade, there's talk that it could propel inflation. we don't know how it's going to turn out does that change your notion of them being more preemptive make it quick, doctor. >> it also throws a lot of risk into the system. so yes, i would say it makes a stronger case to weigh and not be preemptive even though you're right the trade tariffs are going to drive prices up but they create a lot of

uncertainty. >> excellent thank you. always fascinating to discuss debt and how it may affect the fed in the future. david faber, back to you >> thank you, rick when we come back, opening for traiding for zuora a few moments ago. the ceo will join us next on "squawk on the street. we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings.

giving us the ability to add on for an important member of our family. welcome home mom. with the right financial advisor, life can be brilliant.

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welcome back to "squawk on the street." i'm kate rodgers geopolitical tepgss in the middle east, financials are making waves on wall street thanks to financial earnings from black rock, shares up almost 2.5% in early trading other bank names joining in the rally, zi (bons bancorp.

we're right behind post 18 zuo, co-founder and ceo of z zuora. it's been quite a few days for you. paint a picture what you're hearing from investors at this time i put you in the category with zen desk, building blocks for the mobile and cloud economy they're all doing well. >> i think investors are realizing if they look at our customer base, the general motors, caterpillars, hbos, fords, there's a big secular shift going on where companies aren't selling products anymore. more and more it's services. you're accessing services on your phone what investors realize is that investment in us is investment

in the entire secular shift, the entire portfolio. >> a lot of companies wait a long time to go public now granted, you guys have existed for more than a decade. >> just over ten years. >> right around the same time as drop box and spotify. >> yeah. >> why now a lot of companies have been staying away from the markets for a while. you've had a pretty strong id start. >> our vision is to build a multibillion dollar company. we have the opportunity to do that with the secular shift to the subscription economy we need to learn how to be a public company, something we worked on two, three years now. >> subscriptions are big as i look through your numbers, one of your challenges will be running an efficient sales operation. you're still taking losses but, you know, sales and marketing, one of your biggest categories of spend what is the game plan for doing that, getting that efficient and

growing that top line so we may see profits efficiently? >> investors really like sales and marketing are kept relatively flat and having an accelerating growth story. we're not coming to market and saying we're going to double, triple our profits the productivity is already there, the business model is already there. that's why we think we're ready to go public right now. >> a little more volatility in the markets lately than we've had before to what extent, if at all, is that affecting you and the way you're doing business, whether it has to do with trade tensions or mark zuckerberg on capitol hill and tech being viewed anyway different light >> interesting being on a road show, stock market is going up 500 points a day we're focused on the long term we believe there's a long-term secular shift to a subscription economy. this is what we do we're the only company that provide ace set of tools to help companies be successful, to power their businesses that's a long-term journey we're focused on

we're not worried about the short-term shift. >> any color you can give on what shifted when that range was 9 to 11 to opening up to 20? is that something that investors really latched on to >> i would say before they really heard the story, they thought of us as a billing company. we certainly do billing and it's critical for the subscription businesses, whether it's box, hbo, general motors. what they really liked and really realized is this long-term shift, athey all feel it, you feel t i feel t we're the company really powering this and uniquely positioned to benefit from the secular shift. >> you can find out more about him on the podcast he joined me in december. >> jon, thanks. when we come back, we'll talk to the director general of the world trade organizations about these trade tensions between the u.s. and china and whether the bulls can push us past the levels that have defied us for about three weeks "squawk alley" is up next.

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good morning, it's 8:00 a.m. at disney headquarters in california and it's 11:00 a.m. on wall street "squawk alley" live. ♪ ♪ >> good thursday morning welcome to "squawk alley." i'm carl quintanilla, morgan brennan, jon fortt we did hit the highest levels of april. s&p trying to push through a three-y