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

go to bob pasani the s&p turning negative. >> we got some problems, david, rates are only one of them four problems, in fact, let me show you what we're dealing with it's coming into view in the heart of earnings season number one, earnings are good, they're strong there is a debate as to whether or not they're priced into the market number two, rates are generally higher number three with we have consumer staple stocks hitting new lows finally, bank stocks are weak. earnings guidance full screen, i want to show you this you have great guidance from lily and lockheed martin and caterpillar, whirlpool, affirm, united tech and masco afirpd williams were a little iffy overall. the important thing is if you just look at this, you can see

pretty good numbers. take a look at coca cola and united technology. caterpillar, modest numbers. lockheed had great numbers it's down. 3m don't do anything about not affirming their guidance, it's a mess there here. so the other problem is the rates, flattish. you look at the higher rates the minute we hit 3% david is referenceing that the minute we hit 3% on utility, we saw the whole markets drip lower. there's how they reacted i don't have all new low, every accepting him day now. again today, new lows across the board with all of the big names here finally fang stocks are down a fourth day in the row, facebook, apple, drifted lower this has become a fairly regular event there. the only brake throughs are energy stock they continue to hold up modest new highs in hes

we need new rotation and leadership back to you. >> continuing along that earnings theme, google parental that bet reporting a big beat on revenues on the bell seeing costs reach their highest level in the company's history all of this as europe prepares to implement new privacy rules google ceo addressing questions on the earnings call about whether those new rules general data protection regulation gdpr will have an effect on google's business take a listen. >> it's extremely important. we care about getting it right we had a strong privacy program at google, too so we are coming at the meeting requirements may 25th and long term we are working with our publishers and part first and we

will update all the privacy policy and controls we provide to users world wide. >> joining us to talk about this and more scott galoway from nyu. thanks for being with us. >> thanks is there this google quarter interesting from the costs perspective. you seen a lot lately, costs rising companies try to tackle ai we saw microsoft had a reorg a couple weeks ago should we look at this as a signal of trouble or a signal of coming advantage when amazon spends money on distribution, it usually means they will expand revenue later, how do you see it? >> i think it's a signal of headline amazon the capex end quarter 7-and-a-half look where they were spending making the increment am investments. ai, the cloud, video i mean, effectively, this company is saying we got to

respond to amazon and the scary thing about everyone but amazon is amazon makes incremental investments in different businesses their operating margins will increase as google make incremental investments in businesses their operating margins will decrease. this is the beginning of the unbun laying where these companies begin leaking value to amazon >> it's interesting, because we talk about the amazonesque on retail, transportation, so many other sectors. you are basically saying there is an amazonesque to be discussed within it comes to tech. >> look at every place amazon bumps up on tech and hardware, apple. what was the most innovative product of the last two, three years? was at this time ipods, siri the iphone, no amazon's echo. >> which may or may not have money. we don't know they may make it

by selling more paper towels 20% of computing within two years will be done, 30% via voice in the next two years. amazon has 70% share a company that isn't a computing company will own almost a quarter of all computing retail the cloud this company is basically wherever it bumps up against any other company, even video, amazon went from number 7 share of video streaming during prime time the number from 2003. >> were you selling google and alphabet short youtube is a giant a juggernaut. they should, perhaps, be under the microscope for content stuff. facebook is under the microscope now. youtube makes a ton of money, unlike the videoests from ama n amazon. >> there is no getting archbishop it. people at amazon with investor, amazon or google

my answer is yes they're both amazing businesses. if you look at strategic advantage, if you look at any place they overlap against each other, amazon media group and media, we always think of facebook and amazon about a 4 or 5 billion business if med why. it's growing faster than facebook, so show me where amazon is bumping up against anyone else in big tech and where they aren't win something. >> smartphones >> not too well. i mean, listen, alphabet is coming from a high class area. it's a high class problem to have the margins they do and spend and take out the 4.2 billion on that chelsea building still, five, 6 billion a quarter. you don't seem to believe, though, they will be successful which is what you mean to be implying >> i think the stock is north of here it's an amazing franchise. but if you look at how they're responding few look at the headline news

and the reason the stock is down today, is because the capex tripled. the reason is a competitive response with a company to zero cost to amazon here's the problem if you can show up with a zero cost to capital and competing against me and my shareholders become used to me returning 20, 30 cents on the dollar, will you win. >> it sounds like what wal-mart was saying for years it's very similar who what wal-mart was saying with amazon, two completely separate ways to measure the businesses >> it's a better business model. if you can enter into a pact with fanatical investors in the market place, to say we are going to run our business at an roi hurdle rate of zero. it's just a better business. amazon, well talk about this is the business that shows up with 38 gallons of gasoline the original scent to have google was being profitable because now they can't go back >> could -- go ahead, morgan

>> so we're talking about potential amazonesque here and looking at amazon versus google, but google or i guess i should say alphabet's core business the google sales jumped 26%. >> incredible. >> does thisry more regulatory scrutiny to the advertising business in light of everything we have seen with facebook >> i don't think their soles e sales growth the additional scrutiny the best thing that happened is this tone death with ceo mark zuckerberg who has become the unwitting poster child for etching wrong big tech and taking all te arows. quite frankly, a few should go to google. they will stay out of the way and lethim be the poster child for everything big tech. google got very lucky. we'll see if it lasts. they have just as much data, their platforms are weaponized too. so far >> >> it's going to include google. it's not as if it will be carved

out to only focus on facebook. so i do think if you get legislation it will be across the board a threat to these businesses. >> it won't come out of d.c. d.c. demonstrated neither the will or the iq to take on big tech it's not going to happen where you might see it as a red state ag or out of europe. the fairness in advertising acts by warner, they wanted them to basically do the same thing the tv has been doing the last two or three decades, now no wrchl i think a whole lot of nothing will come out of d.c you are right, if it comes out, that i will come across all of them there is an unintended consequence here and as i was meeting with the ceo of a large big company, big businesses in magazines. he says these guy versus the money and the ability and consumers will say i opt in. i agree to give you many i data with google. they opt in when bizarre says you want to read bizarre magazine or marie claire

my legislation unwittingly helped big tech. >> opting in, amazon not only entering your home, now your car. the e-commerce giants kay nouceing a new element to livery service this morning allowing consumers to have packages dropped off inside the truck or back seat of tear vehicle rather than their home. take a look. >> you already know amazon delivers here, here and here, did you know now we deliver here that's right prime members can take convenience one step further, with free he-car livery from amazon key >> next amazon will deliver into your back pock if your wallet they'll put stuff. it seems to me the issue here is personal standards we don't have digital versions of look both ways before crossing the street. don't talk to strangers. maybe yes on an individual case, you do trust amazon to deliver stuff inside your car, but since

when did people sign up for gm and volvo to be tracking exactly where your car is, unable lock it for commercial purposes at what point do gm and volvo look at where your car is? do we get a log of how often it's been looked at, do they share that when amazon workers can see where your car is, all kind of questions here, i think, perhaps, if people could be asking your thoughts. >> amazon, so amazon is the most trusted consumer brand in the world right now. i thought the acquisition of ring was interesting and under high amazon is about to become the only entity in the world that can get into your house without your permission other than the police department and the fire department the police department needs a search warrant for the most part, if you look at consumer behavior, consumers have opted for utility over privacy and don't seem to be bothered amazon has this unique vision.

they don't see a high end grocery store. they see a warehouse they don't see an automobile, they see a mobile ware house even if this doesn't work, it's another example of signaling innovation, saying we get it i do think this is going to work the idea of having stuff efficiently delivered to you in your car i don't know about you guys, in my house, it's chaos the doorbell goes off five times a day a nice man in a youthful, fedex, guy or gam. py kids think it's a videogame for me the dog goes crazy the idea of getting stuff in your car efficiently if they figure it out, it's a great idea. i don't think they will fall up the same concerns around privacy. consumers talk a big game about privacy. here i am, everybody, this is what i'm doing >> you default to convenience him every time. >> utility trumps. unless things surround your sexual orientation, your politic, your religion, other than that, consumers have voted squarely to say i will give up a

lot of my privacy in exchange for you futility. >> does that mean if you have access to this service you will do it? >> i don't, fascinating, if i don't have a volvo or a gm car, i say partnering with amazon, they partner typically with a virus part iners with a host it ends up going really well with one of those part nemplts in this case gem motors and volvo -- village motors and volvo signal they get it >> maybe amazon will let you mail them your keys. thanks for joining us today. >> thanks, guys. when we come back, glamour magazine's brand-new editor-in-chief is going to join us, why she turned down a job at facebook, why she plans to make rte lifestyle organization wohy more on "squawk alley" after more on "squawk alley" after this break.

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>> thank you for having me. >> i have this magazine here first question for you, i mean prince, it's been struggling for years now, everybody is trying to figure out how you make money digitally. why make the move from tv to print? >> for me it's interesting, taking on this job i look at being editor a new type of editor-in-chief. it's really over prints, which we have 11 issues a year, over the digital expansion for glam our, which is a huge character and over experiences, so glam our women of the year is a really big tenfold for us. i think we can blow that out into a bigger experience because as i look at what women want to spend money on, experiences are actually a big part of where they will open their wallets. >> of course, we on cnbc love to talk about money and finances. why did you decide to choose that for your first issue? >> i think women have a complicated relationship with money. so we earn less, we save less and we live longer and that just

doesn't add up soond in our survey, we talk to women about their deep, dark money secrets i think one of the things that came across in talking to a lot of women for this issue is that women don't openly as a whole generally sweeping statements don't talk about money as freely as men do. they're not necessarily encouraged to invest as much as men do we had some kind of scary stats come out of it 31% stayed in a bad relationship because they couldn't afford to leave. 71% stayed in a job that they didn't want to do again because they were untilly stuck. and we have this concept of this fallback fund that women need to really invest in only 41% of the women which talked to said they were untilly independent. again a scary stat and for those that were, it was their mother that taught them to be, but then on the flipside, the positive side, we talked about salary whisper networks, which women are getting more knowledge as they go into

contract negotiations. we talked to equipment about being transpart and asking the male and female colleagues had a lot of information going into negotiations one of my fate stories from the issue is we talked to the women on crypto currency, on he wasly they felt they weren't represented in mass media because there are amazing women in crypto currency, one of the interviews they talked about the all financial system being built by white men they don't want the new financial system to be built by white men alone. >> samantha, i'm not tra terrible lay glamorous target demographic. who knows? associated in one of those guilty pleasure titles, i look back this morning through a bunch of old covers. they tends to run the gamut from 16 things to make yourself more beautiful now and even things a little more racy do you risk losing a certain segment that wanted that guilty pleasure by taking a new

approach and maybe are there lessons from teen "vogue" which has gone through a similar translation and very hot lately in in there i think it has to do with the journalism. there is some amazing nags there. there is some smart beauty in there. i think women in particular are more conscientious looking for content with a brand that speaks to them. some of the stories we've done recently are not what you associate with glamor. we spoke to a k women in capetown, when have you no water, what does your beauty routine look leak? it is a little morell rate issed journalism >> your goal is not putting out a monthly magazine it's a digital is this going to go away at some point or at condenast are you committed to the publish ug of the magazine, itself >> i am committed to publishing

the magazine, itself a lot of consumers like print as a lean back experience >> that said you have to work harder to get people to part with their money at the news stand, everybody is aware of that for us, "glamour" is a brand for every part of their life whether they pick up at the news stand or something they come in on the phone and check in social or digital or they want to get involved with women of the year. we want to be a part of their life to your earlier point, teen vogue has done that for people and feel it is a part of their tribe and i dent i want to do that "flam our." >> i want to get your thoughts that apple is reportedly trying to launch a news and magazine subscription service do you think that's a good thing? >> do you think that will undercut music streaming >> i think it's interesting and it is a conversation we are having at condenast and at glamour is what will people pay for it right. when we look at diversifying our

revenue stream, which every media company particularly in publishing needs to do right now. what will consumers pay the micropayments? "vanity fair" launched a pay wall for $20 million a year. it's an interesting way how do we get people to pay for advertising? some advertisers are spending their digital dollars with the googles of the world so i think it beholds the media companies to diversify their revenue streams. >> hey the new page >> right >> we'll leave it there. thank you for joining us "glamour" hits news stand may 1st. thank you. >> thank you still to come, spotify is giving away more music for free we will tell you all about their brand-new app and why it has the stocks slipping. taking a look at the dow, 3m dragging about 100 points off abbey itself after earnings.

"squawk alley" back after this stay with us play "do it like this".

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let's go over to domenic chu at hq he's got the european clothes. dom. >> europeans are mixed you see the dax, german business sentiment declining in april a different check of a sixth consecutive day of gains and the recent pull back in the pound contributing to that particular move higher. shire also among the big gainers in the uk as you have been hearing from of course, you, david, takada pharmaceuticals taking a fifth takeover in the uk you move on to some of the tech side of things the company dragging down some fellow apple suppliers, they have a slowdown site citing key customer complaints a different story with sap >> that reporting quarterly results at b and it's gaining

grounds on salesforce and oracle as well. you wrap up the earnings picture. volvo missed the swedish truck player says the supply train falling on to disappointing results in its uk franchise. then you get dutch paint saw its profit fall in the first quarter on weaker sales and higher raw materials costs as well. we are waiting for president trump and french president macron scheduling a joint news conference at the white house later on this hour a lot of stuff to keep track of in university. back over to you >> thank you, dom, dom chu the ten year note also had six dow comploents leaving the flood of corporate earnings report. we are joined by jim lowe and senior investment strategist brian leavitt. you are here sitting with us, originally when the are the was talking strong words about iran,

it sent the price of oilp a bit. how much do you pay attention to what's coming out of this white house? >> i think investors shouldn't be overly concerned about it we seen this only for the president to back some a few months ago, we were having similar conversations about north korea. as an investor, what we should be focusing on is a good earnings period a good growth around the world and barely accommodative monetary policy. so i'm more focused on that than i am on the rhetoric out of the white house. >> yeah. jim, of course, we were focused as well on the 3% we hit on the ten year we are back below that when you look at advice on your clients, you see 3% as a possibility. does it become more as an attractive area in terms of assets >> it's certainly not relative to the markets if you focus on interest rates, fundamental economic data, we are still over and against the

range of fear factors that we know are going to continue to haunt this market on a daily basis. but we don't trade on fear we trade on fundament also so far we continue to think this the a mark that will give us what we hope for, which is more reasonable gains >> and looking at some of the earnings we did get this morning. i mean to see names like lockheed martin trading lower. caterpillar up 2% is off its highs of the day we got some pretty strong numbers so far this season why do you think we're starting to see weakness or continuing to see weaknessin these stocks? is this shifting the conversation back to peak earnings or is this profit take something. >> i don't think it's peak earnings so much as it is having already bid up these prices on the assumption the earnings were going to be great the tax winfall was going to be seen in these numbers and the fact that the global expansion was going to lift earnings to fairly spectacularly heights. i don't think it's a conversation you have about peak earnings nearly as much as it is on the market and the rumors as

in the news. >> it's also a little bit of investors need to be careful what they wish for we think back eight, nine years ago, wages, some concern about inflation, a federal reserve that was able normalize and increase interest rates and ten-year rates, you know, moveing up, all of that good signs. we when at long period of time in 2017 without a lot of volatility this strong environment, this strong growth environment, brings higher rates, brings uncertainty around monetary policy markets will have some resetting. >> that is to be expected. ultimately these markets press higher i don't think interest rates will gop substantially there is likely to be ap tied for yield. >> you are not concerned about what is called a muted or less enthusiastic response that might have been anticipated for good numbers? certainly fang is in decline across the board you can expect more that's not a concern or a

reflection of people worried more of a backdrop >> it would be more of a concern if we saw more of a sustained rally in the u.s. dollar or interest rates on the longer part of the curve go up significantly. as long as, i don't suspect that will happen. are you likely, growth is likely to be strong, but the federal reserve is likely to continue to normalize policy i think investors are having a knee jerk reaction to a move-in rate to the dollar i don't think those get out of hand here. >> there is plenty to be concerned about, plenty to fear. i think it is a difficult time to be an investor emotionally, again if you get politics out of your portfolio, you will be able - >> i don't like politic, how do i do that? who knows where it's going next. >> if you look back to the kennedy administration the market does best rating is between 36 and 50. we don't need half the country to be happy. we don't have to worry about what the rhetoric s. markets will likely do fine so long as

the fed doesn't get too tight. >> remember those numbers. you guy, thanks and thanks for happeningi hanging around >> still to come, we are waiting to hear from french president emanuel macron tyou to the white house as soon as that starts stay with us.wbiel take you to e house as soon as that starts stay with ubiel take you to thee house as soon as that starts stay with u'biel take you to th house as soon as that starts stay with u'biel take you to th house as soon as that starts stay with uiel take you to the house as soon as that starts stay with uel take you to thete house as soo thastarts stayithl youthe e house as soo that starts stite yo the white house oon hat starts stay with u take you to the whie as soon as that starts stay with ul take you to the whs as soon as that starts stay with ul take you to the wh house as soon as that starts stay.

welcome back

we are going te comments from both president trump and president macron of france him okay the two are holding a bilateral meeting today, a steak dinner this evening. mr. macron a couple hours ago, first comments from the president involving, of course the focus they will have on the iran deal, we're quite bellicose. >> it could have been on another two hours. we discussed a lot of things, a lot of problems in the world, problems that we think can be solved we've come a long way just the two of us as understanding him we talked about iran we talked about syria. we talked about a lot of subjects that really are big, big, hard situations we think we have solutions to a number of them so we're going to continue that now and then emanuel and myself

will meet again after this meeting. but we wanted to get the penalties of some of the experts in the room. we have great experts on both sides. so we wanted to get the penalties of some of the experts. very good numbers are coming out on our businesses. you see the numbers really starting, our companies and our businesses are very strong the economy has been really incredible unemployment now is at the lowest point ever in history in many, many states the states were enumerated late last night. the numbers came out and we've hit the lowest unemployment numbers in many decades in some cases and in some cases the lowest numbers period, it was just replicated that unemployment for african-american families has been the best in history for hispanic families. the best in history, for women the best in 18 years

that's close to going much higher than that so it's really something very special. so we're really happy about that the president and i working on trade. the trade with france is complicated because we have the european union i would rather deal just with france, the union is very tough for us they have trade barriers that are unacceptable our farmers can't send their product easily into the european union and we accept their products so we have to make a change we understand that, we are negotiating, wilbur, steve, everybody, we're negotiating with the european union, but it's been very unfair for a long time we had a trade deficit with the european union of $151 billion last year. that's unacceptable. this has been going on for many years. that's unacceptable. the treasury secretary steve mnuchin will be going to china in a few days to negotiate on

trade. i think china is very serious. we have no choice but to be very serious. you know we've put on very substantial tariffs and that will continue unless we make a trade deal i think we're, we have a really good chance of making a deem as you know they just stated, president xi, a terrific guy and a friend of mine but he's representing china, i'm representing the occupation. president xi made a speech four days ago where he said that china is going to be opened up because it's not opened up right now. they trade with us we can't trade with them they did 504 billion last year we did 120 become. that's a tremendous imbalance. we can't have that so we're going to have a delegation at tear request go to china. they came here recently. we're going there. and that will be good. european union, by the way, we are going back to that, we are negotiating with the european union. they had their representatives come here.

and i think we're negotiating very seriously nafta as you know is moving along. they have an election coming up very soon and it will be interesting to see what happens with that election but we're doing very nicely with nafta. i can make a deal very quickly, but i'm not sure that's in the best interest of the united states we'll see what happens but we're doing very well. in south korea, on our trade deal, we're doing very well and as far as north korea is concerned, we are going to be having a meeting with kim jong-un and that will be, that will be very soon. we have been told directly that they would like to have the meeting as soon as possible and we think that's a great thing for the world. it's a great thing for north korea and south korea and japan and france and everybody so we're having very good

discussions. kim jong-un was, he really has been very open and i think very honorable from everything we're seeing now a lot of promises have been made by north korea over the years, but they've never been in this position. we have been very, very tough on maximum pressure we have been very tough on, as you know, trade. we have been very, very tough at the border sanctions have been the toughest we've ever imposed on any country and we think it will be a freight thing for north korea, it will be a great thing for the world. so we'll see where that all goes maybe it will be wonderful, maybe it won't if it's fought goinot going to d unreasonable and good, unlike past administrations, i will leave the table. but i think we have a chance of doing something special with respect to north korea, good for them, good for us, good for everybody. with that, thank you very much mr. president, would you like to

say something? >> thank you, mr. president for the words, we will have a meeting, we want together again before the press conference to say we have a very execution indeed on syria, iran, and some other important topics regarding our security and i think we -- we have to work together because we have always worked together it is very important to preserve the stability of this region i think what we want to do for the rest of our people is precisely to pre serve stability, sovereign states, without -- as for the trade issue, you presented your perception of the situation. you were fair to remind everybody of the bilateral relationship is balanced in france and the u.s. and i think it's very important to the bear in mind that between lies,

regarding the importance, it's impossible to make a trade war we have to do it with common global challenges regarding our 48 one of the global challenges is the capacities and we have to fix the situation. i think we have now to work fairly on that we need several executions and several exqueuings as you mentioned. i think our willingness is precisely to preserve the framework and to work the causes together in the middle and to the rest of the current destabilization of our trade executions as for the other aspects, the paris agreements and i'll come and challenge the climate and i have to say we work very closely

together and we want to increase this cooperation we know everything about the international agreems. beyond that, we have a lot uncommon to work on and we will follow this execution in the coming weeks and now we will go into details on a lot of these issues but thanks very much again, mr. president, for the very direct and fruitful execution we have, you and me and for the ability to deal with your vice president and your issues, thank you very much. >> we have a great relationship on just about everything and to better suggest us doing the negotiating for the rest of the world, but we have had a great relationship and our trade situation with france, by itself, has been very good the trade product and the trade deals that we do with france unfortunately, european union

represents to a large extent france and we've had pretty unfair situation with the european union, but a very fair one with france. >> that will continue. >> that will always continue we will always be very close to really our oldest allie when you think of it. france is our oldest allie and we will, we are going out of our way to do that i think we've really had some substantive talks on iran. maybe more than anything else. and we're looking forward to doing something but it has to be done and it has to be done strongly and they've very much been butchers. we can't allow that to happen. so we understand each other. we'll see how that comes out and we could have at least an agreement among ourselves fairly quickly. i think we're fairly close to understanding each other and i think our meeting our one-on-one went very, very well i hope you feel the same way >> definitely. >> thank you very much, emanuel.

thank you, everybody >> a notable warmth there from president trump to 47 president emanuel macron, macron calling it a direct and fruitful conversation let's go back to the table. all right. well, the president exhibiting quite a bit of warmth with french president emanuel macron. macron calling eight direct and fruitful conversation. they covered syria, north korea. president trump talked about jobs data and trade, john

harwood, what's your take away from this? >> well, it sounded to me as if emanuel macron was making some headway with his strategy with president trump, which is flattery, friendship, emphasizing special relationship, trying to bring president trump along and president trump responded in kind, talking about the special relationship with france, our oldest allie, talking about how well if macron and i could make these deals, everything would work we have a good trading relationship with france, but the eu is difficult. all that sounds to me as if the approach that macron has taken of trying to woo president trump has some possibility of success. it's impossible to judge at this point whether or not he is going to succeed, because the president's approach to this sort of thing generally is to say things are going well, we're

talking, we'll see what happened so is he going to stay in the iran deal? are they going to try to come up with side agreements on ballistic missiles and iran's conduct in the region? i don't know the answer. macron even mentioned the paris climate agreement. i would not expect president trump to reverse himself and go back in. but who knows what that is going to result in what is the outcome of their discussion on tariffs going to be -- he was very conciliatory on france, it's hard to see them not providing an exemption from those tariffs for france and other european allies after that conversation but we're just going to have to wait and see it's difficult to chart a path from the words that this president uses, but the body language as you said, john, was positive, was warm and to me that suggests some progress by emanuel macron

>> john, i'm curious your take on the language that the president used distinguishing france from the rest of the eu when you put that alongside the approach on a number of different issue, including direct negotiations coming with north korea, are we beginning the see more how president trump feels about multilateral versus one-on-one conversations with leaders and negotiations >> well, he is consistently indicated that he likes individual deals rather than multilateral deals, because he regards himself as a high quality negotiator and thinks he can best these people one on one. but i think the fact that he was praising france as compared to the european union has a lot to do with the fact that the president of france was sitting across from him, rather than the head of the eu this is a president who is responsive to physical presence and the last conversation he had

and people who flatter him, stroke his ego and emanuel macron has been doing that quite aggressively >> john harwood in washington. thank you, john. >> and still to come, google moving almost 4% on earnings, moving down almost 4% two analysts join us to discuss what is concerning investors? "squawk alley" will be right back you know what they say about the early bird...

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i'm scott wapner coming up today on "the halftime report," as the ten-year pushes past 3%, we'll debate how stocks will continue to react if it stays there. plus, what today's big earnings from cat, united technologies verizon and more are signaling about global growth. we'll also have an interview with the winner of the sohn idea contest. we'll see which stocks put him over the top and what he likes now. that starts at noon eastern. we'll see you in eight minutes >> we're looking forward to it thanks, scott. >> getting a news alert on facebook shareerize down 2.5% let's get over to julia with more >> morgan, motherboard reporting facebook hosted ads for stolen

identities and numbers that were posted on the platform the article says public facebook posts advertising the sale of dozens of people's personal data could be done with a google search we have not heard back facebook shares down 2.5%, down along with the rest of the tech sector >> thank you, julia. for more on this and alphabet earnings joining us are colin sebastian, managing director with baird, and brent is a manager director with jeffries thanks for being here. brent, let me start with you there seems to be some concern that google is spending an awful lot of money to compete with the likes of amazon, for example, in things such as cloud and a.i should that be a concern for invest investors? >> i think short term, yes, if you look at historical years where they have spent big in op-x, you have seen the stock underperform google doesn't provide guidance. that's one challenge that is in front of investors right now but yeah, look, the revenue

growth has accelerated four quarters in a row. the margins are down, and there's no color in ters of what they're going to spend for the rest of the year the fear every investor has in google is they go beyond core advertising into the home to compete against amazon, to autonomous and other areas that those inherently just won't return the same type of return that they saw in the core ad business so short term, this is sidelining the story, i think, over a period of time, the stock is very attractive at ten times ebitda trades below the market multiple we're still positive, but the direction and where the company is headed, but shortterm sidelined by the spending issues >> is this purely because of the guidance issue, that investors react this way we have seen leading companies invest amazon, a prime example. also facebook investing cap-x in particular, and then you see the profit growth eventually is this a buying opportunity for

investors who continue to believe in alphabet and google >> we think so in fact, the revenue growth just cited is probably a better measure in terms of how google's investors over the past three to five years are now driving that growth and if you think about how quickly the pace of change is accelerating in areas like a.i. and voice and certainly cloud services and other areas, i think that it's incumbent upon google to continue to be innovative and to invest so we do think that over the long haul, this will pay off for google the short term investors will have to digest lower margins >> brent, this headline from motherboard, facebook has hosted stolen identities and social security numbers for years, which julia broke down for us. what is your take on that, and given the results in advertising we did see from google yesterday, is facebook's loss google's gain?

how should we think about that >> i mean, clearly, it's just another negative data point. we don't believe that facebook is doing anything unlawful we think zuckerberg's comment about doubling the number of content reviewers and security staff year on year to go after this, these are the things that are unfortunate that are going to get posted but we think they'll be quick to resolve this i don't anticipate this to be a big issue. clearly, just another nagging headwind for the company given everything else that's gone on not a great thing to see, but i don't think it's going to go anywhere >> colin, this seems kind of egregious, though. anybody who was searching, even on google, much less on facebook, for stolen social security, personal information, could have found this. so why facebook with even its basic a.i. capabilities at this point, wasn't seeing it? is that an issue of concern?

it seems like they should have been able to find this >> it's a great question and the fact is you brought up that these postings also showed up in google's search results, suggesting neither company was able to filter those out but of course, actions will speak louder than words. if we take facebook at their word, then they're deploying a lot of resources, including machine learning, to help filter out these posts. and we'll have to see over time if they're successful at doing that >> colin, you have any concerns overall about the group? investors seem to take a wait and see approach, despite, these were great numbers from google, certainly at least when it comes to actual revenue growth yet no real response do you expect that will continue through the quarter until the next quarter when we hear results? >> i think that most important for investors beyond just a couple days or a few weeks is at the secular growth tailwinds still continue here for google,

for facebook, for amazon and so there can be these speed bumps around quarterly earnings, but if investors have longer time period, we think they'll be rewarded at current levels, not just with google with also with facebook over the long haul and amazon >> all right, guys appreciate your sharing your time with us colin and brent. >> thanks. we're going to take you back to the white house right now we're waiting on a joint press conference from president trump and french president emanuel macron so far, between these two presidents, we have heard a lot of talk about trade, a lot of sort of mutually warm and fuzzy commentitary about the relationship between the u.s. and france look at the s&p, down about 6 points right now, but it did briefly turn positive the last time we were showing some of this video from president trump and macron specifically, the headline that treasury secretary mnuchin would be headed to china in a few days

to negotiate on trade. also getting comments from president trump about kim jong-un and negotiations with north korea, told that the meeting is going to happen as soon as possible, that north korea is looking for it to happen as soon as possible that that leader has, quote, been very open, and i think very honorable for everything we have seen also talking about nafta and saying, doing, quote, nicely with nafta, and he could strike a deal right away, but he's not sure that's in the best interest of the u.s really interesting also who was seated in the room and where they were seated next to trump, we had deputy secretary of state john sullivan, but next to him, defense secretary mattis then also john bolton and larry kudlow beyond that. >> then mnuchin on the other side >> yes exactly. >> the things that investors care most about, we know trade is certainly number one, and relationship with china, given

the tumult we have seen in recent months now at this point, that's clearly number one. iran and some of the other issues are important, but not quite as important as trade. >> although the comments on iran definitely seem to push oil prices higher. >> indeed, we are down about 142 points on the dow. s&p and nasdaq also down fractionally that's it for "squawk alley. "halftime report" starts now and welcome to "the halftime report." i'm scott wapner momentarily, we will take you back to washington to the east room of the white house, as we await the president of the united states, french president macron for their news conference we're focusing at this moment on interest rates the ten-year passing 3% today for the first time in more than four years stocks which got out of the gate strong quickly retreated after