tell us i should have more bananas in the breakfast i travel the world i invest everywhere and, you know, this is the greatest country. and next time i'll bring on this guest who was a personal trainer who built a health care company and sold it for 38 times i got to brick him next time. >> you're the ultimate guest host we appreciate you having you here. >> thank you. >> we'll see you back here. >> yeah. >> you were wonderful. >> i enjoyed it. you learn something new every time i enjoy this show. >> absolutely. now time for "squawk on the street." see you tomorrow. ♪ good morning welcome to "squawk on the street" i'm david. i'm with jim cramer.

european marketing has been up for some time. you can see it's a mixed bag, really, with spain we like to see spain thanks, guys, down almost half a percent this morning the 10-year note yield was a key focus yesterday as we came ever so close to that 3% yield. but you can see backing off -- not really backing off at all right there. 2.99 crude oil, s&p cas case-shiller out home prices up 6.3% this morning. the road map this morning starts with the top futures pointing to a stronger open boosted by big industrial, caterpillar, united technology and quarterly fees from other dow components coca-cola. 3m no verizon. no. >> traveler, no. >> google a no and yes. >> we're all over that. >> no and yes alphabet

tops expectations surging quarterly profits. but, man, they're spending money. >> amazon spent money and everybody loves. alphabet spends money and nobody likes it it's hypocritical. >> trade is topping the agenda this morning as macron meets with president trump at the white house at this hour this can make you feel uncomfortable some of the responses we're getting? >> it does we see the earnings and we act as if there's no backdrop to it. but the backdrop is negative backdrop is one of tariffs looking for may 1 to fit in which raises costs the backdrop of everything looking at the ten-year which is starting to bore me. that's what people care about. people don't bother to read about the nitty-gritty what happens is they say wait a second why am i paying up 5 for

caterpillar? president trump hates china and that's the end because china is mentioned repeatedly they take a look as if it's the old days of six months ago and they just enthusiastically jump in. then other sellers come in because they say, whoa, this is my chance to get out ahead of tariffs. my chance to get out ahead of rate hikes earnings per share, trump for a few minutes, and back to the backdrop. >> it's not just confined industrials. even netflix had the incredible quarter come back, i believe, around the level it was prior to the reporting of the quarter itself i might be off a little bit on that but the theme is the same. you know, stock is down recently after, again, a quarter that was as good as anybody who could have hoped for if they were positive. >> absolutely. there's a tremendous amount. a weakness underneath where people say these are quick sand. then you get the proctors and

the kimberly call and you're like my god. colegate is on friday. look at clorox has come down very much. the bank stocks reported incredible numbers had i overseen a group of stocks do nothing on incredible numbers. united technologies fantastic. but then sherwin williams. then faulty homes stock is great but then the ten year looks bad. there's a yin and yang what people are concerned about they don't want to be the one who is caught paying up. >> no. >> united technology a possibility of those splitting them up. you have climate 10% you have aerospace up 18 -- 16 military up 20 people say you don't have to pay up and sellers come in. >> futures looking up this

morning. as you pointed out good quarters for both good quarters from caterpillar. >> monster but once again, david, in six months ago caterpillar will be headed to 180. but we're all afraid that -- it's fear. if the zte fear is what i call it you covered it the idea that we could actually be consistent in trying to squelch relations with china then we bring out people on the weekend and say, whoa! you're okay. but then the actual tweets and the message and we'll see from macron is you guys got to start playing fair now if you play fair, 550,000 elevators in china it's like, you know, in china we're not going to service those elevators. so what i'm saying is that -- >> who is going to clarify that, jim? we'll have a sit here and have the same conversation for some time if you are concerned about

where it ends up in terms of our back and forth with china >>well, what is going to clarify it is definitive agreement between china and united states where president trump can say it's different now. >> covering all things including intellectual property. zte are so much about that as anything else. >> yes. >> and perhaps a more important part of this dispute than just the overall numbers. >> totally for instance, there's a really, really good upgrade intel. very, very thoughtful upgrade. it's about data center and it's about all the things that i care about. plus pc is not that bad. and i find myself thinking wait a second before you say that and tell people intel it looks great on-air, beware that intel does a lot of business with china and i do not want to get too excited about any of it. now some of that is apple. but apple is china china is the achilles heel of

the market caterpillar is up because the u.s. is so strong. >> yeah. >> verizon is up because they don't have any phones that they're selling in china. >> they don't. it's interesting, though, because verizon, which is going to be up this morning after reporting what was arguably a certainly better than expected quarter. you don't see those kinds of numbers. because nobody is doing anything with their phones. i mean, cue the apple, you know, music, so to speak, if we had it there's no movement right now. >> no. >> people are keeping their phones they're keeping their service. by the way, service revenue did come in. did go positive in march wireless service revenue turning positive in march. people believe for verizon that's an inflection point you did have, as well, down margins above what people had anticipated and they added 260,000 now almost all of that is wearables they're losing phones but wearables are going up a lot

and fios added internet. >> the earnings are terrific i'm not saying that >>well, i've seen some growth at verizon, anyway. overall the earnings are good. >> if you look at alphabet i loved alphabet's quarter if people decided wait a second, they're going to spend big because they want to catch up with amazon web services maybe waymo. we don't like alphabet i think that judgment is wrong who am i to tell you a judgment is wrong a guy looking at the quarter doing the homework in the meantime, let's talk 3m. >> we have to talk about alphabet we'll do 3m and alphabet. >> 3m has been saying from 250 we have saw this almost like nobody heard it. they had a march flash that showed you it. it's not a shocker alphabet is terrific

nobody cares. >> we're going to kind of watch pictures here of live video, of course, from the white house president trump and first lady awaiting the arrival of the french president emanuel macron and his wife, as well. having the state dinner tonight. the first one. and talking about things that are important such as the iran deal and trade, and many of the things we're talking about here. >> this is the problem i want to tell people, look, 3m is down so much. it's down 55 points from its high do we think they're that stupid? then you say, okay, what will come of this what will come of this factor with macron? maybe something negative >> or maybe something positive get the president to hold off on the iran deal. >> then the ten year goes to

three and the market goes down i'm not talking about anything catastrophic i'm saying you're not getting traction in great quarters. >> yeah. >> let's end here this block here on google, jim. it's worth getting back to it, of course. the numbers were incredible. 22% revenue increase on $100 billion base think about that for a second. it is staggering, but also what is staggering is fx. they spent $2.4 on buying a building not far from here in manhattan. >> wow yeah. >> incredible. but still the spending for it's going to continue. it's not going to stop. >> $100 billion in cash. what do they want to do? if they start dividending know what i say they have no growth! if they're amazon, they can spend to win if they're netflix, they're allowed to spend a fortune, but they're alphabet i think ruth if ruth if she said we're going to have 30% cap x and done the

number -- >> by the way, they have a big business in europe, too. as we know dealing with potential privacy things there's macron as they arrive and are greeted by the trumps outside the white house. >> you mean to tell me verizon is up big and google is down that makes no sense to me. >> where in the world, right does the lack of operating leverage potentially add google as they spend more and more money give you pause >> the defense department contract could go to amazon, even though the president doesn't want it to google web services needs to catch up and you got to spend to catch up with amazon, which has been because amazon is allowed to not make money but alphabet is held to another standard pe continues to shrink. >> yeah. >> united technologies is bigger. >> yeah. >> great case. a couple of other things to keep in mind. i don't know if they're spending more cap x you can write it off as a result

of the new tax law it's something to keep in mind reclassified nestle brought it in and there are losses associated with it. it's having the affect of taking margins in a bit you have to account for that. >> i remember david cody said he would sell the climate division. they overpaid. down 10 i think it's headed i would be a buyer they could have turned off some of the spending. they have to do a bit of a drunken sailor spend quotient there. we thought ruth and stanley would come in there with a action b ax but she's using a plastic knife they give you. >> they're spending. 85,000 employees now 74,000 last year coming up, we have the interview with coca-cola ceo james quincey.

he'll discuss moves and the earnings paying off for his company. >> that's like 3%. a% growth. we'll pay anything for that. 18 minutes from the opening bell we're set for a higher open. we have more "squawk on the street." >> yh.ea we're not done. >> just getting started! 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.

the trump administration hosting its first official state visit welcoming french president emanuel macron to the white house. the two leaders will hold a bilateral meeting followed by a joint news conference. jim, we mentioned earlier, you mentioned the backdrop to so much of what is going on in the market as we move through earnings season, and some of the very things they'll be discussing. >> yep. >> are the reasons that investors, perhaps, as you pointed out, are given a bit of pause. even in responding to what are positive numbers from some of our larger industrial companies. >> exactly and there's also, david, an endless fixation to pass on costs. one of the reasons why united technologies is up big because they have pricing flexibility. no one will say no to their engines, okay. but there's no pricing

flexibility the consumer package stocks are acting like food stocks they have higher inflation coca-cola managed to bucket those. and, by the way, diet coke coming back. i'm anxious to hear the 10:00. you take 3m and they cut forecasts. i have to tell you, i feel like a moron liking that stock. i put it out there. >> moron m-o-r-o-n. >> yes. >> ridiculous. there's no tolerance for anybody that doesn't get it right. even when you get it right, people say, you know, maybe storm i'll wake up and there will be a tweet like amazon. >> right all though the tweets the life of a tweet is not that long. >> right it's kryptonite in this market. >> it is 3m you've had the ceo as a frequent guest. >> yeah. >> do you feel bad or no.

>> bad >> no bagged. >> like sometimes you get had? i thought everybody recognized it was going to be a weak quarter. that's where i made my mistake they gave you a flash. that's why i think it's a buy. anybody who is informed knew it wasn't going to be good. but you take a look, you know -- >> like hasbro yesterday. >> yeah. look at coca-cola coca-cola was good, david. and the stock is down. it was good. chico is good. >> i don't know what that is >> mexican mineral water. >> i'm sorry i didn't know that mineral water. come on, market. you feel like saying come on like alphabet. did you think that ruth wasn't going to spend that's what they do. they spend and they spend and then they spend some more because they feel like amazon is allowed to spend all it wants. why can't we >> speaking of amazon and spending

they have a new solution to combat thieves who steal packages from porches. they're going to deliver things to your parked car, jim. take a listen to this. >> you already know amazon delivers here, here, and here. but did you know that now we deliver here that's right prime members can take convenience one step further with free in-car delivery from amazon key yeah to your trunk. which i guess you can open remotely through your on star or whatever. >> that's a gimmick. yes, there are some great on usp the deal with usp. after the president goes through it, what it's going to discover it may hurt amazon best case but minus .4%. worst case minus 2%. so go ahead and sell on that, you idiots i feel that amazon is a compelling story but even that, david, is subject to interpretation.

there will be some clown that will find something wrong with amazon that's what we keep doing. we keep finding things wrong. >> they're happy we've aired their entire ad. they get us every time. >> they do. >> every time. it's incredible. whatever nonsense they've got, we put it on we run it. >> we have a sign on the door that says, listen, and then she wrote a curse word, you know, whoever it is, stay away from us usps, fedex, and united parcel, please do not leave it there anymore. >> you're right. i know our executive producer is giving me a hard time. >> lock heed military spent. >> yeah. >> you don't want to save it for the mad dash now you have to come up for one. >> coming up next, we have jim's mad dash of course, we count you down to the opening bell take another look at futures, by the way, as we get nine minutes from the start trading here on

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see how aflac helps cover everyday expenses at aflac.com. all right. we have seven minutes before we get started with trading at the nyse it's time for jim's mad dash ahead of the market open where are we headed? >> they blew the numbers away. premarket increased 270 basis points a value of net new orders. well, you know, we ought to throw the president in the middle. >> that happens to me a lot, too. president trump welcomes president macron from france. >> members of the french delegation and distinguished

guests, welcome to the white house. mr. president, melania and i were honored to visit your majestic country last summer now we're thrilled to host you and your wife here in america. the wonderful friendship we have developed over the last year is a testament to the enduring friendship that binds our two nations. it is truly fitting that we're holding our first official state visit with the leader of america's oldest ally, the proud nation of france.

[ speaking in a foreign language ] this morning we send our prayers to the bush family as we wish former president george h.w. bush a very speedy recovery. i also want to express our deepest sympathies to the canadian people following the horrendous tragedy in toronto that claimed so many innocent lives. our hearts are with the grieving families in canada.

[ speaking in a foreign language ] your visit, mr. president, comes at a critical time for our alliance along with our british friends, the united states and france took action to the syrian regime's use of chemical weapons. i want to personally thank president macron, the french military, and the french people for their steadfast partnership. they were absolutely incredible. thank you very much, mr. president. thank you

[ speaking in a foreign language ] the long friendship between the united states and france began 241 years ago this month when a 19-year-old frenchman named lafayette set sail to join america's fight for independence he quickly won the trust of george washington, fought bravely in the battle, and helped secure the aid of france for the american cause decades later, president andrew jackson wrote that the memory of lafayette will be second only to that of washington in the hearts of the american people.

[ speaking in a foreign language ] >> the beautiful friendship between the united states and france forged in revolution has changed the course of history. exactly 100 years ago this spring, americans fought side by side with the gallant french in world war i. a generation later, during the second world war, hundreds of thousands of young american and french sacrifice the together to save civilization in its hour of greatestneed

[ speaking in a foreign language ] >> 60,000 american service-members rest for eternity beneath the peaceful fields and hills of the french country side, and in the soil of virginia and georgia, french patriots whose names are known only to god, lie in unmarked graves today we meet to affirm this friendship that has through riched as an example to the world. [ applause ]

>> you've been listening to president trump welcoming french president macron to the white house. we're getting ready for the opening bell you can hear the applause. [ opening bell ] strategy shares at the nasdaq. jim, we were talking mad dash but we were also talking key to this market before we took the president, which you felt is -- >> yeah. it was remarkable quarter. robust buyer demand in the face of mortgage and financial market volatility david, what i'm saying is here is a perfect home building number watch this stock because it will go down if the ten year gets cranky and that's what i'm talking

about. you have a beautiful quarter and it may mean nothing to the cowards who bow to the deity that is the ten year. >> we haven't talked fixed income it was a focus yesterday as people started to adjust to the coming reality, many would say, of a above 3% yield. i think 3.03 is our recent high in the last five years, right, going back to '13 or' 14. does it worry you? >> no, it does not as you take a look at united technologies, what do you expect when you have residential incredibly strong what is supposed to happen rates go down. it's ridiculous. we have a very robust economy. all the bankers will tell you that but this market only knows the algorithms are set if it goes north of three, we got to sell. i am saying that's wrong but it has to go through it. let the sellers come in who are just machine guns and then buy

because there's a lot of companies doing well i using the example buy me out if it goes down a little bit you'll find, wow, are you going to sell it because 4% is not competitive versus the ten year? how about the fact they got it up to the second quarter nobody cares nobody cares >>well, i'm sure somebody cares. >> i care. >> you're not painting a picture i can feel confident as a and investor now if i feel the earnings have been strong for a particular company i've been following. >> you got it. >> i do? >> yeah. you got it. >> all right. >> take a look let's go back to alphabet. >> okay. >> it's down 2.3% now. but reporting an amazingly strong quarter full-timely worrying people with the capital spending. >> i could easily say they could have cut that spending and the stock would be flying.

but the fact is that they feel compelled to stay competitive in an arm's race. people say, you know, it will go down is that stock buy now 25 if it's down 25 it could be down 40 yes. yes, it's a buy. but not today. >> not today. >> and i think alphabet trades down for the quarter and goes down that's been the style as people get excited. they recognize, you know, the business is so great then they see how much they spend. then it goes down again. it's chutes and ladders. it's a game of chutes and ladders. >> what about some of the larger issues involving privacy this morning, i think, or recently senator cloeb shklobuc introduced a bill. i think these companies. everything has a shake

and six months ago, david, we would dismiss it here is what we would say six months ago alphabet must have so much opportunity. now we say holy cow. it must be so bad out there they need to keep up with amazon. it's a narrative question. people are negative because of the 10 year. >> they are. they are spending so much. it's cloud it's waymo tsa i. >> yeah. they are expensive propositions. they have to hire the best people and people don't want to hear it. when you're at alba fete you're competing against facebook for computers. there's only so many people in the computer science department of stanford. cal tech is not good enough. it's insane. >> they have to figure out somewhere else to get it from, then, aren't they?

>> overseas. maybe m.i.t. >> overseas is becoming more an issue. >> yeah. it's all finance. >> yeah. exactly. >> yeah. >> they're living in the old days hedge funds or bankers i can't believe it's down this much you know, they are literally lowering the guidance. ought to be able to get people i'm saying in sync to do well well for the second half and nobody cares there's no price they won't sell it at. even though at 259 there's a price they buy it at. >> yep i'm going to switch tactics for a sejd and get back to the story i've been following which is the takeda b takeda -- bid for shire. >> yeah. >> this morning takeda does confirm that it has made a revised proposal it would be the fifth proposal remember the last one was at 47.

now it's 26. stock 21 and cash. but they have made a revised proposal from shire. we don't know what it is tomorrow was the so-called put up or shut up deadline for them. they have to put something out see if they can get something done you can always go directly to shareholders if you meet the shut up or put up deadline and they've been trying to get shire to agree to a deal there had been thought to be a good amount of resistance on shareholders in terms of the composition of the offer particularly the significant amount of takeda stock and issues involving a flow back it goes back to japan. the lack of liquidity. yesterday i had an opportunity to sit down with larry robins of glen view capital. they're a significant holder of shire. not because they necessarily thought it would be taken out. because they thought there was value there. but interestingly, he did seem constructive on the potential

takeda bid take a listen. >> we would encourage shire's board to go through a full and fair process to compare all alternatives including things they can do with themselves. but we are not scared the concept of there being a transaction which, as proposed in the fourth proposal would be 45% cash and 55% takeda equity in the work we've done in the last several weeks, takeda equity had 12 times near one earnings it looks attractive in the longer term investment. >> yeah. >> that sounds constructive to me, jim. so it wouldn't be surprising, i think, if you saw potential deal and takeda may have a need to raise outside capital to fund a larger cash portion here, given the leverage they're going to be taking on. i thought those were interesting comments i think they're reflective of the shareholder base overall and shire probably listening to the shareholders. >> i'm surprised more companies aren't doing exactly what takeda is doing because these companies need growth. i think shire is an okay run

i like it. another large holder is larry newell and did a large part. >> yeah. >> speaking reality to ichan and smith. it was clear if you don't agree, carl, you're going to lose. >> i like that green my biggest fear with newell you would have a board of hot shots and it would be distracting. so whatever turn around he's trying to do wouldn't happen and it's good to see the egos get together now, david, what i'm referring to, of course, is "when the wolves bite. >> we'll talk to him in a bit. >> to have him say his son's college mate is not going to be on the board, i think was agoo one. i'm not sure how qualified that

young man would be. >> jim, back to the movers this morning. it's been awhile since i've seen verizon significantly in positive territory on a given day. it's down 6% the year. it was a good quarter. >> yeah. i think that verizon is kind of the berkshire. >> yeah. it's going to upset the president. he's not saying look i don't like verizon. >> no, he hasn't discussed verizon. >> you know verizon's moves in the future and what it chooses to do, we know it came fairly close to trying to agree to a deal with charter sometime back. we've talked about that and his concerns about 5g and whether it would have made the right fit.

not to mention price and the old aol and the old yahoo! i mean, it had a decrease about 13% in revenues for the fourth quarter or 17. $1.9 billion in overall revenues due to seasonally lower display advertising performance. it's ak accelerating their mobile first media strategy, they say. >> yeah. first quarter seasonally ingly thought it was interesting how many wearables they added. 359,000 other connected devices. that offset losses, by the way of 24,000 in phones and 75,000 in tablets. but most of those are wearables. that 359,000 i guess that's the watch. >> yeah. yeah today was the day no one cut numbers. or apple said apple is doing terrible or china is bad no, there was someone that hated the home pod that was good.

3m made it clear things were good there were people that said holy cow. beware 3 m is ridiculous. it's a high quality company but nobody cares, david. they're putting the hate on it there's a lot of hate. >> your caterpillar is up 2.5%. >> what do you think about the fact i tweeted to john ledger neighbor verizon is smart and he's not responding. he's either on a plane somewhere or he may think verizon is better. >> not a chance. we'll hear from him. >> i think that's because someone is in my ear i wanted to talk more about ledger who am i >> nobody. >> i'm a puppet. >> yeah. potentially not even real, according to elon musk

let's head to rick santelli joining us with the cme group in chicago. >> good morning, david the hunt for 3% seems to be continuing as you can see on the two-day chart we're knocking on the door we're getting within, you know, fractions of basis points getting there. and it's pretty interesting, especially when you consider that if you look at the one-week chart low-to-we've covered 18 basis points and this being the fifth trading day. it's anon going trading day early in the day it's been a pretty firm run. granted there was a time where 18 basis points moves in treasuries weren'ted consider that big this one is. and maybe the reason you have to go back to 2011. releasing a sustained trade above 3% we can talk about the one session we closed above it at the end of 2013 or the interdate pass added in january of 2014 but this is more of a zone clearing the red zone of 3%.

and if you look at other things being dragged in with it, think about the hyg. if we're selling off on treasuries yields up hyg is moving down. and the 86.5 area it stopped at twice is now technically significant. doesn't stop there if you look at the investment grade etf, it's now trading at the lowest levels on the closing basis since mid march and then finally in 2016, quickly the dollar index a one-week chart and year to date chart the neat thing about the dollar index it's had a nice run. it's still stalling a bit. and you want to definitely look at 92 as a big area. jim, david, back to you. >> rick, we did hit 3% you see it there. >> you know no, i didn't i heard chip in my ear and i looked down. we touched it and we're back below it it is interesting and i'm glad,

actually, we have the extra second because what we want to do here, guys, is we want to see in the context of that one close on new year's eve of 2013 at 303, if we hurdle above that quickly or we spend a lot of time getting above that, i think that will have implications for how many horsepower gets when it eventually goes through. anyway, it's a significant day you know, it's not about where we go on the rollercoaster in between bells. it's about where it stops at the closing bell let's see if it closes above 3%. back to you guys. >> yep all though kind of fitting at least you were on while it happened. >> yeah. i know that's great and i almost missed it i looked down for a second thinking about what chart was next and i heard somebody in my ear. we don't want to miss this this is like right in my backyard >> there you go. look at that 23.001 now. >> woo hoo >> has the economy got better? >> i don't know. >> the economy i don't want that

better i want to be able to say coca-cola is a buy because the economy is bad what am i supposed to do if the economy is better i'm scared to death. >> take a deep breath. we'll take a break to sell 'tissing and have sco-- advertig we'll have scott walker join us. say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity

trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab. your company is and the decisions you make have far reaching implications. the right relationship with a corporate bank who understands your industry and your world can help you make well informed choices and stay ahead of opportunities. pnc brings you the resources of one of the nation's largest banks, and a local approach with a focus on customized insights. so you and your company are ready for today. at&t gives you more for your thing. your getting the best but paying way less thing. now get 50% off a smartphone.

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about potential investment opportunities in real time. fidelity. open an account today. you would like to be friends so we can invest together. >> i have no interest. you think i want to invest with you? >> i wouldn't invest with you. >> let's move on let's move on. >> turning now is our own scott walker host of qualify halftime report." you saw the interchange. it sparked everything for with the when the wolves bite." >> i'm right here. >> i was sitting in this seat it was happening. >> two billionaires and one company. wall street's most epic battle

it goes on sale today. scott, i'll take it a different direction. what i thought was amazing in the book was all you got actually on herbalife michael johnson surprise the at every turn by the egos why did he not get ahead of the situation until the end when alan hoffmann said listen! we're over matched. >> i think it was hard to fully understand who and what they're dealing with you're dealing with a company some 3,000 miles away or thereabouts from wall street barely anybody in the building there who akman was. i think they thought it was going to go away after a short period of time and it took them awhile to get their arms around what was going to happen. whether their best strategy was to punch back or ignore what was happening and, obviously, when icahn got involved and changed the game for them, they could have icahn carry the load.

then it was time they took the gloves off. >> bill ackerman entirely overplayed his hand. he had a win he wanted to get a royal flush he had a straight, right >> all though in fairness to him, the fairness to him the ga changed when carl got involved. the goal posts moved and it was hard to recover from that. that said, bill had always said he was going to go to the ends of the earth to win this investment, if you will. and he tried. and he did a lot of stuff to try to move the ball in his favor which i get into in the book some of which has never been reported before as well as what herbal life did behind the scenes. when hoffman got in there. you came in there and changed their strategy. i tried to get into a lot of that. >> knowing these guys as we all

do, one thing that comes to my mind is they are just relentless. that is what defines them. i would assume that leads to the conflict that you so well detail in the book. >> you know, it's about going to the ends of the earth, if you will, doing whatever it takes to win at all costs. ego, power, money, revenge. they all played a role in this story and there was a lot of money on the line. bill put a billion dollars short. carl has made more than a billion. it was dan low getting involved. david einhorn was in. george soros's firm had a big play. the investment i really detail how that whole thing came about. i broke the news on cnbc that

that had happened. i didn't know the back story and i detail in the book how the firm and a guy named paul over there made it happen. try to take you behind the scenes of every little twist and turn of what is a very public battle. i try to bring that to light in this book. >> to me it seemed like ackman so bent on destroying will go to any length. he needed some government agency to shut it down and he failed. >> he had to have that. the entire thesis was predicated on the fact that the government needs to intervene and shut the company down. there are a couple of issues with that. is the government going to act on behalf of a billionaire in new york city telling it to shut the business down? the ftc in the end came out and

smacked herbal life pretty good, fined it and made it change the way they do part of their business. they did not shut herbal life down. >> i loved it. it's a quick, reads like a novel. it is a novel. i cannot believe these guys. great job. i love it. >> good luck, scott. up next stop trading with jim. ten year note yield 2.998. we did hit 3.01% roughly. we are back after this. so, my portfolio did pretty well last year.

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for the first time since january of 2014 the ten year note yield at least briefly had a 3 in front of it. we had a yield of three percent. something the market has been acutely aware of. we are back below it now. you don't seem to care that much. >> in june of 2014 that was bad.

the economy was too weak. here the economy is strong. a strong economy means higher earnings. the only thing you don't want to buy the -- you want to see a better economy. can't live forever with a bad economy and people buying stocks because -- >> normalization. we have to get to what is on mad tonight. >> income. i have six flags on. i tried to put together a portfolio of 5%. people want income. not everybody wants to shoot the lights out. >> i will see you tomorrow if not sooner. i will probably see you tonight. >> we got to go. >> we have an exclusive with coca-cola ceo james quincy. keep it here.

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welcome back to "squawk on the street." some breaking news. consumer confidence, we are looking for a read on april and the number is 128.7 following

127. this is a really good number. 128 and change is the best level since february's 130. 130 was best level going back to the year 2000. very lofty levels indeed. another lofty level. 12 minutes ago we touched three percent. you should be looking at charts on the screen. it wasn't a big penetration. we are still on the south side of that. it is a milestone nonetheless. we have an intraday jump over the border of three percent. haven't closed above it since new year's eve of 2013. one session. have to go back a number of years. it is going to be very important to watch where it closes with

regard to three percent. that will be significant and also to see if we get a momentum or other peripheral moves like the lqd, all the spreads in the credit market very close attention. we have more data yet. we are not done. new home sales for the month of march expecting a number around 630,000. add 60 stto that. that is a four percent jump. last month was added on to from 618 to 667,000. these are pretty good looking numbers. we know the person that will give us the real in depth analysis and that will be diana. what do you think? pretty powerful? >> pretty powerful stuff especially after we see existing homes failing so much. they don't have any sploupply. six is considered a balanced market. it is so interesting to see that

existing home supplies are barely 3.5 months. the median home price $337,200 for a newly built home in march. that's a pretty big jump from march of 2017 which was 321,700. the new home builders are focussed on the move up market and luxury market and not entry level where we desperately need the homes. new home sales are doing much better. not where we should be historically but at least we have supply in the new home market and the homes are selling. we have rising mortgage rates. we'll see how that plays out. >> good point. thank you very much. good morning and welcome back to "squawk on the street." live at post nine as always from the new york stock exchange. carl has the day off. we are seeing stocks rally here

led by financials for a change. we have a lot of good earnings. dow is up 83 points. we'll talk caterpillar, verizon, coca-co coca-cola, google and more. >> speaking of earnings, diet coke returns to growth in north america james quincy joining us to discuss the report and more. >> the chinese consumer and growing interest in american made suvs. a look at how tariffs can impact auto makers in the u.s. ton of earnings to get to this morning. let's start with a blowout and that is caterpillar beating big on the top and bottom lines. the equipment maker said it is raising its outlook. heard from 3 m. shares are lower as the company

says its earnings will be lower than previously expected and verizon beating on both the top and bottom line. the company says it sauce wireless additions of 260,000 which beat us big time on 165,000. caterpillar pretty strong. >> caterpillar is a big number that raised guidance in terms of guidance catching a lot of eyes. i think this is kind of last year's global synchronized industrial growth story showing up in the numbers. the market is interesting. it's not exactly sneezing on caterpillar's numbers. four percent gains shows that i think that psych logically the bar is pretty high even though earnings are coming in pretty good. the beats are expected if that makes any sense. they are better than expected but that was expected. i think that is what we have been deal wg. >> verizon

>> it has been a difficult year for verizon. still down about six percent for the year. a name that many viewers know well. a bit better on the margin. service revenue in the wireless business did inflect positive in march which was important and one thing that a lot of analysts were focussed on. you saw the net adds. a lot of it was wearables. i think that sort of broadly reflective of people aren't doing much with phones. they are not changing their carriers and are sitting still until another upgrade cycle hits when you tend to see people make decisions about equipment and perhaps change their provider. >> seems like the conversation is one i guess this government move to sort of suggest that there is something going on here trying to lower rates and trying

not to have people switch but also deals, potential deals. are they going to do something that verizon set out the big stuff. >> as i said earlier and reported previously they did come somewhat close to doing something with charter. this was a long time ago at this point. well over a year and a half. we'll see. there is still a big questionmark as to what they will choose to do with changing nature of wireless. comcast and charter getting together in and they are going to be trying to pose a real competitive threat to verizon in certain markets, as well. there are a lot of things coming that they will have to make decisions on. >> i like the ten year treasury yield. first time we have seen that number since january 2014. it's a big deal, a round number. strategists say it's not just a round number like dow 20,000 or 25,000 which is what we are closer to now. because it does inspire some

sort of technical move whether buying treasuries to push yields lower or the opposite and sticking with the trend. i think it is important that we are seeing stocks continue to rise because you have the push/pull. better earnings, rising interest rates and threats of a potential trade war. today it looks like earnings are winning out. it has been frustrating to bulls when they see the yields. as long as stocks continue to rise it looks like the 3% isn't a threat. if it starts going fast then you start to worry about profitability and the hit to economic growth. >> some of the tech names are getting hit on what were strong earnings. netflix after the incredible quarter kind of back to where it was. >> the market in general is kind of hard to impress. i don't think it is just hitting three percent but just the idea that maybe it is happening because of inflation or because the better part of this earnings

growth cycle might be in sight or at least the peak might be down the road. it's totally true that risk appetites have not been chasing the names higher. i also think when it comes to three percent in the market we were at 294 two months ago. we are up 3% now. the s&p 500 was 2,700 then. we are at 162680 now. let's get into some earnings. we'll look at google parent alphabet down this morning despite reporting a beat. the largest earning growth since 2009. ad revenue rising 24% from the same period last year. the stock now negative for the year. for more on the numbers let's bring in internet analyst.

guys, good to see you both. the market is kind of sneezing at 24% top line growth at this massive company. it's an accelerating growth trend in the last few quarters and obviously everybody pointing to the expense line and investments that alphabet is making. i guess the big question is is this a one time bulge in spending or doing a one or two quarter binge to kind of see new growth initiatives or new run rate of expenses and compressed margins we have to deal with >> good morning and thanks for having me. this is something ongoing with alphabet for some time. it is a continuation of a trend. challenge that alphabet has is the first business that they entered which was search is one of the best businesses in the history of the world and every business that they have entered since has a lower incremental

margin. i think you will see this business continue to grow. valuation is quite supportive of the stock at current levels. >> brian, that is the big question kind of not only are the new businesses potentially as good down the road as the existing business but are there threats to the existing business there has been a lot of talk about amazon being a challenger. didn't seem to show up in the numbers for alphabet this quarter. where do you think we have to be aware of what potentially could change this growth trend for alphabet >> i'm not so concerned about amazon at this point in time. amazon doesn't entirely have its act together with respect to advertising. there is nothing clear and present. i think the bigger issues relate to how does gdp play out what is risk around data

regulation in the united states? i characterize data and targeted advertising as the original sin of internet advertising that most consumers have absolutely no idea how data is being used to target them. search is a relatively clean product but not entirely clean. a product like customer match does use e-mail addresses to target ads. it's not without any risk on that front but the risks do seem more prevalent in europe than the u.s. >> i guess how do we as an investor, how can we characterize that potential risk down the road? it seems like consumer harm here is super relevant. we will call that as the way that alphabet does it. if everybody is playing by the same rules doesn't search advantage still hold up? >> it's an interesting topic. i think we will not get to

resolution for some time. the way we think about it is in terms of relative exposure google has a private relationship with its customers which to a certain extent has led to security and privacy capabilities built into the business and probably protects it more than facebook which has a very public relationship with its customers and is incentivised to amplify content and led to issues that have now catalyzed this whole situation. in terms of risk if i'm ranking them i think facebook is much more exposed than google but kind of everybody in the industry is given the way the models were built. >> i haven't heard anybody mention cap x. that number 7.3 billion aided to a certain extent oo the purchase of big real estate here. they are going to keep it up. is that a good thing or bad thing? >> it helps them build motes around their business. the reality is it was an eye

popping number above and beyond the chelsea market. i think the problem is google can spend whatever it wants without constraint. it does help defend their business. you can argue it lowers the risk. you have to count for it in your valuations. i think higher cap x rather than lower is going forward. >> it does seem to be on the minds of investors. that stock down a little bit this morning. thank you for your time this morning. >> thank you. when we come back, coca-cola on the move after reporting an earnings beat. coke ceo james quincey joins us to talk about the earnings. "squawk on the street" will be right back. you know what's awesome? gig-speed internet.

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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. coca-cola out with earnings beat helping dow component beat on top and bottom line. the stock is lower now. we are joined by coca-cola ceo james quincey. nice to see you again. >> good morning. thank you. >> five percent organic revenue growth really marks a turn around in the results of coca-cola. what is the biggest fundamental shift in the business that you are seeing that is driving that? >> i think actually in a way the

biggest shift is our willingness to be bolder, to innovate, to try more things in the market place and to follow the consumer. the results are coming across a broad spectrum, we are growing in all geographies and all categories we compete in. it's the result of a lot of focus and execution of the strategy by ourselves and bottlers. >> including diet coke which a lot of people were surprised to see is making a comeback in north america. millennials going for artificial sweeteners >> look, we have been trying a few things on diet coke. it has been a while since it grew. we have been learning what will engage existing and millennials. i think the team has done a great job in finding something that really has people's attention whether packaging, marketing or new flavors which i think are more millennial relevant. what is really interesting this quarter is not only is diet coke

growing but coke zero is also growing. i think there is a big play coming back on low calorie beverages. i hope the trend continues. if it doesn't we will learn and we will be back. >> it is interesting to see that you saw growth in sparkling given that soda consumption is at a 30 year low and continues to go down every year. how do you stand above that? >> look, i think it is about making it relevant for today's consumers. i think some of the things we are doing on diet ecoke, some of the other low calorie beverages people still love bubbles. there are sparkling categories that are growing strongly. they haven't got calories. we are seeing blurring of the categories and that is allowing some of our sparkling brands, the ones we have known for a long time to come back and be

relevant again across a broad spectrum of consumers. we have a broad portfolio play going on in north america. we grew in sparkling. we grew faster in zero calorie sparkling. we grew in other categories, as well. we grew in teas and waters and coffees. we have a broad portfolio play that is really engaging with consumers. >> not so hot for water and sports drinks. what is going on with that category we saw weakness there, too. >> we are doing a couple of things in the hydration category. we are deprioritizing some of the lowest priced waters around the globe. that is having a negative impact on volume. that is part of the strategy to focus on what creates value and what works for us as a business system. we are seeing more emphasis on premium brands, international brands, acquired brands and we

have given up a little on some of the low value water. we are getting better value even with pressure on volume. >> apparently he is not in on the trendy drinks. cramer was all over it. are you disappointed, james, with the stock market reaction i just checked almost two percent lower. i know the ten year is at three percent. why do you think the market is not giving you credit here >> look, i think that the market is pricing in the good news. clearly i would love the stock to have gone up rather than down. that is what we are focussed on. if you look across the last few weeks or the last year we are up. coke company stock is up. most other consumer staples companies are down. part of this is the market is changing and pressure is coming on the stocks from the treasury yield. we are outperforming the sector.

long term goal is to make the stock go up. >> your stock has outperformed. so has the business. five percent organic revenue growth after earnings last week, after general mills. when you look across household products and food companies why are you doing so much better than everyone else in this category right now >> i think it is a combination of a couple of things. first the beverage industry is a faster growing industry partly because of characteristics. we are broader in terms of more geographies and more countries. it serves more channels and more customers. i think that is keeping innovation and interest and keeping the industry buoyant. we also have a clear strategy. we have been following a clear strategy for a while. we are executing against it following the consumer and that is allowing us to consistently gain market share in one of the

faster growing categories in consumer products. that's a great place to be. >> we'll see what pepsi reports on thursday. what would a trade war mean for your company you operate in more than 200 countries around the world probably source ingredients from everywhere. how are you thinking about this risk >> i mean, one of the things that we think about when we look at trade friction is on one hand we are a very local business. in other words, 95 plus percent of everything you drink was manufactured in that country. we are not at the front of the queue in terms of problems. it does dampen overall demand. therefore our point of view is global trade is good. trade deals, none of them are perfect. they can all be improved. more trade will be better and it is up to governments and society and all of us to work together to mitigate any negative consequences. we are very much in terms of let's make things better and

work to bring society along with us. hopefully that will be the outcome. we will continue to be a very local business and to make everything that we sell largely in the country. >> what about aluminum prices? seven year highs. they have definitely come down as we have seen a little more lenient sanctions on russian companies. are we going to pay more for a can of coca-cola because of the spike we have seen >> i think alum insulinum is on. it is about 20% of our packaging in the u.s. we are not super exposed to aluminum prices. there are a lot of other inputs of you shouldn't see a big spike in pricing given what is happening on aluminum. it is part of the -- it's not a blowout factor from our point of

view. we would like it to be less but it is manageable. >> mr. quincey, it is david faber who didn't know -- i do now. tax reform. obviously large companies like your own that operate all over the world certainly potential beneficiaries. have you explained what your plans are as a result of the lower tax rate the access to capital abroad and everything else involved with that >> we have certainly tried. the tax reform had a number of takes from the company's point of view. clearly tax reform was something we were in favor of. we believe it is positive, makes american businesses more competitive. we were in favor of seeing kind of the geographic territorial system be brought into place at a lower rate. from a company's perspective, from our investor's point of view we had cash overseas on which we had to take a tax

charge. that will be offset by lower tax rates in the coming years. for the first seven or so years it is pretty much a wash. it doesn't mean it was something -- we were in favor of seeing a simpler system and we think that supports growth. >> mr. quincey, i wonder if you have observations about the advertising world. we have been talking about the effectiveness of various platforms. have you found any changes in your ability to do things on the social networks, on facebook, on google obviously, you are not a company that needs to target individuals or look for hidden private data that other advertisers might be doing. i wonder as your dollar mix might shift how you're thinking about these platforms. >> clearly the advertising world or the way to engage with the

consumers is changing rapidly. it's very dynamic and as you say most of our brands are large brands. we are not looking to target very niche amounts of consumers. as an example we did a couple of really big digital campaigns in china that were super successful. a billion points of engagement. we tend to look for big scale things. digital will be an ever increasing part of what we do. we tend to be targeting or trying to talk and engage with a broad number of consumers. >> always like to get your view on the global economy. i just came from an imf meeting where it was practically a celebration. everybody is growing together nearly four percent growth. seems like you are seeing places for the first time in a while. give us your snapshot of what we are seeing across global spending right now. >> i think clearly the economy is getting better particularly

some of the emerging markets that have struggled in the last few years. the trend is better. i don't think it should be necessarily a cause for celebration. i think there is a lot more work to be done to make economic growth sustainable. it doesn't feel as robust as perhaps it did in the past decades. i think there is a lot more work to be done to make it sustainable. i think there is a lot more work to be done to make sure the benefits are shared broadly. from a consumer products industry we are looking to see all consumers benefit from economic growth. we are trying to talk to all of them. we don't want to see benefits go to just top 20%. yes, more fundamental work needs to be done to sustain economic growth and more work to be done to make sure everyone benefits. >> we'll leave it there. thank you for joining us on this earnings day. >> thank you very much. good to see you again. >> good to see you from coca-cola's atlanta headquarters. with the stock down less than two percent. >> and the market back to flat.

as we head to break take a look at shares of united technologies still up. the company did report better than expected earnings both revenue and earnings. organic growth saw strongest first quarter performance in seven years. and utx raising full year outlook. we will have more ahead on "squawk on the street."

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when everything's connected, it's simple. easy. awesome. bob pisani is going to take a look at earnings and dividends with more than 160 companies reported earnings so far this week. >> we are in the heart of earnings season. through have been many attempts to create growth rather than just market capitalization. one worth looking at is earnings 500 symbol. weighted by earnings. so companies with higher earnings have a larger weight. it all sounds good. these kinds of etfs tend to outperform when earnings are moving up rapidly and biggest

companies are doing well. that was most of last year. when that reverses it doesn't outperform as much. another way to play earnings season is buy companies that are regularly hiking dividends. this consists of companies that have typically raised dividends consistently for at least 25 years. none of the fang names are here. you have affleck and con ed. the markets rewarded momentum stocks over slower growing companies that consistently raised dividends. there is a number of etfs. the power shares, market cap weighted index. u.s. firms purchased at least five percent of shares. that sounds good. a diverse group of companies here. again, it's not outperforming

the s&p. it is about in line with the s&p. the bottom line is etfs have allowed many ways to slice up the stock market. getting outperformance over the boerg o boring old index is not easy. >> thanks very much. appreciate it. it is 30 minutes past the hour. let's get to sue herera. >> good morning everyone. here is what is happening. president trump welcoming french president macron. they will sit down for private talks today covering a lengthy agenda. iran's president repeating his warning against the u.s. pullout from the landmark nuclear deal saying the u.s. will face grave consequences if it decides to withdraw from the 2015 agreement. south korean president moon says declaration of end of war can only be achieved through

agreement between north korea, south korea and the u.s. north and south korea have technically been at war since the 1950s. this follows a conversation on the upcoming interkorean summit. dramatic video of migrants being rescued after a wooden boat tipped over. that video released by the italian coast guard. 63 migrants were rescued during the incident. that is the news update this hour. i will tend it back downtown to you. >> thank you. when we come back what is moving the market a look at the big earnings movings plus we'll take you live to the beijing auto show. >> reporter: after years of requiring auto makers to build cars and suvs here in china to avoid a huge auto tariff the government may be changing the policy and it could be a huge boost for u.s. a fei ao ndorgnut

makers. i'm phil lebeau in beijing. that story coming up on "squawk on the street." 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 on the street." stocks are now negative. the dow is down about 50 points despite a raft of earnings cear. s&p is flat. telecom is leading thanks to verizon. you have groups like industrials, consumer staples and materials which are lower. >> fang is significantly lower. facebook, apple, google is down 3.5% right now. netflix down over 2%. starting to mucove away from th bid despite strong numbers from

alphab alphabet. people might be concerned about the bid. there were big numbers. >> the market is scrutinizing everything very closely. i think they felt the -- >> we want to take you to the oval where president macron and trump are speaking. >> it's a great honor to be here. we have a very special relationsh relationship. we have to make him perfect. he is perfect. it is really great to be with you and you are a special friend. >> thank you. thank you. thank you very much mr. president. i want to thank president trump and your country, people for this very warm welcome. indeed, both of us just reminded how great our common history is and that each time we work

together in order to protect liberty and freedom and our peace. we have a lot of challenge ahead of us regarding our two countries. terrorism, security and a lot of other issues we will discuss. we have a lot of work to be done together. i'm very honored and pleased. this relationship is stronger and on top of it we have an excellent personal relationship. i want tothank you for that. >> what would you like to say about iran >> we will be talking about iran and many things, terrorism generally. we will be discussing the iran deal and i know the president wants to speak with me about that. we will be discussing probably the paris accord and various other things. we have not much time to do a lot of discussing, but a lot of

things will work out. we have got a very special relationship. i don't imagine it has ever been closer in the history of our two countries. and that's a long and beautiful history. so we will be talking about a lot of different subjects. the iran deal will be one of them. >> will you consider staying in the iran deal? >> we'll be talking about it. people know my views on the iran deal. it was a terrible deal. we could have made a reasonable deal. the iran deal is a terrible deal. we paid $150 billion and gave 1.8 billion in cash, barrels of cash. it's insane. it's ridiculous and should have never been made. we will be talking about it. >> what about michael cohen? are you considering -- >> thank you very much. stupid question.

anybody else [ speaking foreign language . >> iran deal is an important issue. we have to take it as part of a broader picture which is security in the overall region. we have upcoming relation in iraq. we have the stability to

preserve. what we want to-do is contain. >> it just seems that no matter where you go especially in the middle east iran is behind it. wherever there is trouble, yemen, syria. no matter where you have it iran is behind it. now russia is getting more and more involved. iran seems to be behind everything where there is a problem. you just have to take a look. you look at what is happening. you look at the fighters. iran is always there. we're not going to allow certain things to happen that are happening. the iran deal is a disaster. they are testing missiles. what is that all about. you look at ballistic missiles that they are testing, what kind of a deal is it where you are allowed to test missiles all over the place what kind of a deal is it when you don't talk about yemen and don't talk about all of the other problems that we have with

respect to iran especially look at what they are doing in iraq. you just take a look at what is happening in virtually any place in the middle east iran is behind it. what kind of a deal is this where it wasn't even discussed i know john kerry made the statement that he didn't want to discuss other things when making the deal. he didn't want to discuss it because it was too complicated. that is not the way to do it. we made this terrible deal. >> iranians say they will restart their nuclear problem? >> it won't be easy for them to restart. they won't be restarting anything. if they restart it they will have big problems, bigger than they have ever had before. you can mark it down. they restart their nuclear program they will have bigger problems than they have ever had before. thank you very much, everybody. thank you.

>> thank you. >> president trump with some tough tack on iran bashing the deal that was made, called it a terrible deal that should have never been made. you were noting threatening iran. we have seen oil prices spike on the back of this exchange between president trump and president macron in the oval office. iran is a major oil producer. >> saying there will be trouble for them if they think about restarting. the possibility that would be discussed at length it would seem between macron and trump would be whether or not we recertify the deal or walk away from it. >> may 15 is the deadline. let's go to eamon javers who is

covering all of this and has more on what we just heard. >> that really sets the tone for the negotiations over the future of the iran deal. the president calling the current iran deal insane and ridiculous and says we will discuss it because he knows macron does want to discuss the united states staying in that deal. he is giving macron at least the ability to put it on the agenda, but, boy, his attitude toward it came through loud and clear and that threat, a very bellicose threat to the iranians if they were to restart their nuclear program in the contingency that the united states would get out very much saying the iranians would have bigger problems than they have had before. there was a little bit of small moment that passed by but the president was asked if he is considering a pardon for michael cohen, his attorney who has been under some legal pressure in new york state. the president didn't answer that and glared at the reporter who

asked the question and said stupid question. the president clearly did not want to get scandal related questions in the middle of the -- >> i want to correct the record. may 12 is the deadline for the pact that we are awaiting frmpt trade likely to be on the agenda. big story for us and for investors. interesting that we have seen this friendship. i think that was cemented when trump brushed the dandruff off of macron's shoulder. merkel is coming later this week. france has really taken the lead for europe in terms of the prime friendship with the united states. if anybody will convince trump to extend the exemptions it's him. >> we make a lot about the personal relationships. angela merkel not having the warm personal relationship with donald trump. emanuel macron does have a good

relationship. look what happened last week when we had japanese prime minister abe. he was hoping to get -- japanese prime minister leaving last week empty handed despite having what is described as a bromance with the president. we will see whether the bromance with the french leader can lead to an actual deal. we'll see whether they have that. >> they certainly want that exemption to be permanent. wrapping up. we just heard from macron and trump. >> we had backed off a little bit. 3 m is down dragging the dow down now about 31 points. did mention oil did pop above $69 a barrel on some of the president's iran comments. not a dramatic move but already

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i don't think the advertisers lead until the consumers lead i think there is a window here to regain trust. >> you get go long commodities. >> historically when you go into a late economic cycle. particularly when you start getting closer to a session,

commodities actually go up a lot. >> i seen very few short positions. which i'm sure is pretty emblem atic of the market >> rates are on the rise, fear not, veteran strategist art hogan says stocks still look pretty fantastic him find out whole interview. more "squawk on the street" right after this

. let's go straight to chicago. rick santelli at the center of the universe with the exchange rick. >> reporter: absolutely, sarah, thank you. that's correct jerome snyder, thanks for being my guest sarah aptly pointed out, this space the treasury futures, this cash is the epicenter. we have an interest rate since early jean, 2014, haven't had a close there since 2011 what does 3% mean to you when you talk to investor, jerome

>> basically, it's a single we are continued growth in the marketplace, we should expect term premiums. which is effectively the incremental premium you earn >> you stack the short >> exactly >> you will take a little more interest exposure. as a result we see the market calibrate to higher expectations meaning interest rates will continue to increase when the fed policy permeates itself over the next year or so. >> sometimes i'm stubborn, off camera you see how stubborn i can be the big elephants in the room are central banks. it's not an easy big condition september to talk about every single time i'm on, but to think that we're excited, nervous, wondering are we going to trade a lot on the other 3% have central banks, which have propagated all of these positions to keep rates down and equity markets up, at least that is the effect. >> that is ending. we have to be cognizant.

you can look at inflation growth that's a big variable. >> without a doubt inadvisors have to be very cog my sapt this rate hiking cycle will be different. we are coming off the zero balance the quantitative easing and tightening it's creating a circumstance, which will create a little more volatility, whether you are a retail investor, equity, real estate or fixed income we all should be preserving our optionality to -- >> optionality means keep your powder dry because changing conditions will offer you different opportunities. >> opportunities exactly. opportunities in the marketplace today will be very different than the opportunities tomorrow going forward. so simply as we see approaching 3% on the ten-year rate, we should focus on the entire yokeer >> jeff said 50 basis points between 10s and 2s >> that doesn't excite me. too many risks to take it. you are saying the same thing,

go to the short end. explain what >> ultimately for investor, they need to understand, is this the beginning of the end of the process in if it is? they think about derisking do you derisk by trimming ex equity exposure? when you look at the short end, you see short ends investments currently yielding 2.5 to 3% while taking less of one year -- >> the price structure those investments down >> exactly >> they're short term, you hold them you don't do that back to where the rest of the curve is >> ultimately, next year you get an opportunity to re-invest. >> excellent jerome, you are always great in expaining these favors. the beijing auto show is kicking into high gear trade centers are front and center phil lebeau is with us from that auto show in beijing phil. >> reporter: david a lot of discussion about what china's

25% tariff on imported autos means to the people buying vehicles look at some of these numbers. you will see the difference in price between the u.s. and china. the base model sells just under 80,000 over here it costs 50,000 more the bmx in carolina starts over 57,000 in the u.s., that same vehicle sells for almost 120,000 over here. yet there is no slow down for demand of vehicles shipped out of south carolina coming over here this year the expectation is for almost 90,000 of those suvs to be shipped over here real quick, i want to point out, gem motors reports on thursday, likely a question or two whether or not it will explore doing business alone without a joint venture partner in the future. don't expect them to say that's their plan guy, back to you. >> okay. phil le beau in beijing.

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good morning, it is 8:00 a.m. at google headquarters in

mountain view, california, 8:00 a.m. on wall street and "squawk alley" is live [ music playing ] [ music playing [ music playing >> good morning, welcome to "squawk alley," i'm morgan brennan, david faber carl has the morning off >> also with us this morning on set, nyu professor of marking an l 2 founder and "new york times" best selling author scott galoway. >> before we get to scott, let's