before we start actually addressing the issues. >> wow. >> thank you it's great to have you here today. we appreciate it kevin, thank you we'll see you tomorrow. >> great to be here. >> mike, thank you for sticking with us. make sure you join us tomorrow, too. right now time for "squawk on the street." ♪ welcome to "squawk on the street." i'm carl quintanilla along with jim cramer and david faver 60 plus companies reported this morning. europe is red after tuesday's sell-off in the u.s. and the ten year above three the dollar near a three-month high road map begins with the boeing. stock futures erasing earlier losses as the dow delivers blow out earnings and upbeat

guidance comcast formalizes a $31 billion bid for sky. it sets up a show down with 21st century fox and disney and the biggest deal of the year takeda landing shire the 10-year yield at 3% for the first time in a few years. the futures are erasing most of their early losses thanks to boeing the dow trying to avoid a six-day losing streak. the raise on boeing's guide includes adjusted eps, operating cash flow, commercial airplane and this is after profit is up 57%. >> yeah. bowing is a brilliant company. what they did is take a look at what everybody said yesterday that screwed it up and said we're not the same including, by the way, the cash flow i mean, cash flow is important because lockheed martin said we're not raising cash flow. and lockheed martin reversed

terribly here is what is happening now at hedge fund desks they'll say wait a second, are they talking about commentary in china? are they going to talk about incredible backlog demand? are they going to talk about raw costs? i think someone who watched kayla. she's excellent. about aluminium will sate wait a second how much aluminium is being imported and will it mean a raw cost peak? so i think you have to instead of awaiting the call, you have to get through the call. big difference. >> yeah. the cat call and the high water mark comment you praised hasbro earlier in the week for being honest with investors prior to the print. >> right. >> was cat wrong to say that on the call >> i think that cat should have at the same time in this sentence -- we guided up too much and the cycle is incredibly

strong obviously, raw costs could be a problem. to say high water mark is to do one of these things where you're basically saying, listen, we're going to under promise here if we get any break whatsoever in raw costs. but there wasn't even the first high water mark. it was an analyst pleading just take that back please take it back and then it was the ir saying no you heard us right no it's the high water mark i mean, that would have been a great moment to say we didn't mean it. instead they pressed their bet and it was a one-two-punch you were down there giving the investors the business. >> having covered cat back in the day, they're bearish in their macro outlooks that's been happening for years. >> yeah. they were saying it's not that good yet you have the set up.

the second half is going to be great. and the high water mark analysis, it was almost like let's pick different words you know, let's say it's a profit if we get tariffs, jeez. if we don't get tariffs, though, we'll be fine. it was one of those calls if you were larry kudlow, you would, in a world of great granularity say, wow, you know, i got to talk to the other guys i got to go to peter navarro and said we had a major american company talk about raw costs thing navarro would have said get the hell out. >> don't you think that would occur? don't you think he would say "with all due respect. >> with all due respect. and it would be something like having your body of work. >> yes. >> your body of work but i have to say and, you know, this is an important thing wall street is not trying -- they're trying to figure it out the white house. so it's wall street versus the

white house. and the white house is saying, look, you have to take a hit don't you get it before we get this thing really right, we're going to have to administer some pain i think the forecast, to quote the great mr. t. is pain. >> we discussed this yesterday and we'll continue to discuss in the days ahead is how long or when will we have some sort of resolution the backdrop continues to be unclear. the chinese don't exactly know what they're dealing with at this point they have their checklist of responses. they may want to be somewhat cooperative in certain ways. there may be other things that they won't be. >> we just don't know the answers. >> i wish you hadn't phrased it the way you did. that is the biggest. we have a may 1 deadline on steel. who knows what macron said do you think the president wants

to continue with a 10% tariff on our cars and 2.5 on theirs what happens if he changes something there and then there's a tit for tat on the other side? you've got global growth slowing. you have stagnation. the narrative changed yesterday. and it changed, by the way, like 10:15. you asked me what you think of the open i think it's bad you said good or bad i said bad. >> what? >> yesterday's set up. when i was negative nancy. no offense to my sister nancy. >> carl and i were talking about your good calls lately you have your sure bet ones. you might as well call it the good ones. >> thank you so much i like a little bit of humiliation in the morning remember what we're seeing is conference calls where people are concerned about tariffs. they don't say it. no one wants to say, listen,

president trump makes a truce and these go away. we have not seen the high water mark you'll think, wow. >> to be fair, there's no due date there's a due date on tariffs but commodity prices can stay high for a long time. >> yeah. how do you have freight when you're a consumer package good is freight something that is secular. as long as we have amazon taking fedex. i mean, the trucking companies the intermodal line. i haven't looked when you look at csp was saying, you won't see any relief in transport and freight. by the way, that's something new. i remember the first time that freight is an issue. and it was phrased in this way of course freight is an issue. then i said of course! of course. and that was another scooby doo

moment. >> i'm being told to move on to comcast. let's do that. of course, i'll share the burden of talking mostly about our parent company. >> is there proof? >> yeah. the quarter was reported this morning from comcast we'll get to that. the bigger news overshadowing the results themselves is what is not or was not unexpected but perhaps timing wise some thought it might be next week. formalizing the bid for sky 61% of sky that is not already owned by fox and, therefore, competing head on with fox, which is already got a bid out there to buy that 61%. comcast bid stays the same 1250 they didn't raise it but it is significantly above, of course, the current bid from fox i reported weeks and weeks ago that disney and fox are going to challenge this and will come back but the timing here it's going to take awhile you've get some time to go by.

and the cma. approval will be next week b-y-e. fox will not introduce their formal offer until june. do you go to an auction mode they have that available to the uk take over code in terms of a formal auction we'll see. shareholders haven't liked this, jim. some say they don't fully understand the strategic logic for the pursuit of sky but overall comcast stock price has fallen dramatically since it began this pursuit that figures into a lot of things, including what might be its pursuit of the fox assets should the doj lose the case against time warner. by the way, this vote with skyy is not going to take place --

excuse me. the fox vote will not take place for at least another, let's call it four months we have the proxy next week. there will be plenty of time for comcast to choose to come back, if it wants to, to try to bid for the fox assets but its stock price could be an issue. remember when it made its initial bid, we assumed price of comcast was $37.09 i'm talking about for the fox assets not for sky. it's down sharply since then shareholders sort of understanding that ryan roberts, the ceo will do whatever he feels is the best long-term interest of this company, regardless of what it does to the short term stock price that has been paid for. >> it's important to recognize if you're in charge of a family campaign, you can take the long-term view a lot of people say hey. when it happens it's a lot of pain but, david, i was going over it line by line of the numbers and i like them. okay >> the actual price? >> yeah. >> the earnings? >> yeah. the reason it's important because when the numbers came out, the stock was at $33.10

and then when we got -- and early morning trading. >> yes. >> when we got confirmation about the fox news -- sky news the stock quickly dropped 80 cents. clearly the short term people are happy. and the longer term people say i'm fine but then the short term people give up. >> yeah. well, they've been reminded yet again that there are going to be efforts undertaken to secure the long-term future of the company. at least in the opinion of ryan roberts. they'll keep coming. it would be my sense at comcast. i've said it many times, ryan roberts want to be in the game how it will end up, what assets, if any, comcast will end up with unclear. they're going to try to shake things loose the sky bid, the potential for coming back. we'll see. and there are plenty of complications there including the unwillingness to take on the full regulatory burden on the comcast side that will figure into that decision or what had

been the unwillingness to do so when it comes to things like the rsn. meanwhile, the stock is down a lot. they lost almost as much value as sky is worth since they mounted the initial bid. now formal in nature. >> i was so excited about the lines. i know no one cares much about video. >> video lost $96,000. >> four consecutive quarters video lost. >> yeah. we can pick at things that didn't work. and this could be some people say listen this is like espn versus the rest of disney. i don't think that's fair. i like want internet number growth which was super. >> broadband growth continues. >> it was fantastic. >> we may get that cleared up on the call perhaps having to do with weather but the trend was up -- off trend in terms of the cost high speed, broadband was strong that's the story they want you to focus on. however, people still seem to be

focussed on video. >> video come out 5.2. they came in at 5.7. i think this is a situation where a lot of us would have felt -- wait a second, it would have been one of the largest buy backs we've seen if it weren't for what you're talking about. >> not to mention the big beneficiary of tax reform. one is the biggest is comcast. it's a domestic taxpayer and many other reasons. >> olympics and super bowl nbc revenue up 21. >> film and entertainment, though, if they had a couple of big movies, you would have been blown away here. this is the only time i've heard -- >> that's the music whispers. >> maybe there's something you talk about they never tell us. >> music under the whole. >> yeah. that music is being -- >> time to go. when we come back, a lot more on the m & a front. the biggest pharma deal of the

year and exclusive with kevin mansell. amazon has a new alexa we'll talk about that and more another look at the premarket. the dow is down 424 points "squawk on the street" continues in a minute. at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. & so this won't happen. because you've made sure this sensor and this machine are integrated. & she can talk to him, & yes... atta, boy. some people assign genders to machines. and you can be sure you won't have any problems. except for the daily theft of your danish. not cool! at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & this shipment will be delivered... hey ron! they're finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard.

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being down triple digits earlier in the session let's get to a story we've been following for a couple of weeks now. takeda's continued pursuit of shire seemingly getting closer to success shire announcing the revised proposal and extension of that put up or shut up deadline to may 8th. between now and then, they're going to be talking to takeda trying to firm up in a number of different areas. agreement of certain other terms of the revised proposal from takeada. satisfactory due diligence they're on a road that would seem to be approval by the board for this deal. it amounts to about 49 pounds. and another 21.75 in cash. concerns among other shire shareholders about the shares you will be getting, certainly if you're a uk-based shareholder

in a japanese pharmaceutical company. the numbers are very large, jim. i had larry robins say to me the other day 35%. and then there's some questions about the takeada board. but nikkei articles indicate that eight of the 13 board seats are external directors you have 0 make sure you have the full approval there. but this is moving closer to fruition. >> if larry robins in that excellent interview you did did not sound so positive, i would have said take the money and run! don't take the stock and run robins is a serious practitioner it made me feel like it's good for both my problem is, again, how many times did they bid were there any other real bidders? >> there weren't alan was never there in a significant way.

there was a hope they might be i thought perhaps there was another but it didn't show up. there was interest in certain parts but it's not like you can take the company apart particularly bat salts that can't be sold unless you take on significant tax marks. >> if you look at the drug stocks, they need to do acquisition. >> they do and takedas aggressive look at the stock price. it's 7 percent. >> they're not family run. >> no. it's not pretty. given how much of the composition of the offer almost 55% is in stock. plus a highly levered company. some people embrace it and say it's the time to take on debt certainly at low rates very low rates but nonetheless, it puts them in a more highly leveraged position some investors may not like that. >> okay. i just can tell you people hate the drug stocks.

there's a positive note. >> yeah. and earlier in the week. >> yeah. meric's new products in the food business >> do you think innovation is plateaued in drugs, tech, and consumer products? >> to some degree. >> really? >> to the moment i mean, there are plenty. >> immunology. >> the little guys but a lot of people felt some of the big guys had something good. but they have to buy everything and they pay a fortune to buy. >> that's the way it works. >> i know. i'm saying that i would have thought that some major company would have said, you know, i see value in shire

that's all. >> right. >> we're going to get jim's mad dash we'll count down to the opening bell after a short break today tim cook is back at the white house after a attending last night's state dinner. we'll talk about what he and the president may talk about another look at the premarket.

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six and a half minutes to go before we get started with trading at the nyse. it's a hump day! >> mike, mike, mike! >> i want to talk about texas instruments. t.i. it has a lot of different names. is that, david, a lot of people were short this. betting it had to be one more downer in the semis. but texas had fabulous conference call. they're talking about, really, automation cars, internet of things, factory semi, and that is still strong. what's amazing even though people think we're peak auto, we're not peak in the number of chimps in a car. so this was a great phone call i felt terrific after it and said as negative as i am, remember there are companies doing things -- talk about innovation texas instruments is innovating and they're taking share and it was a glorious call

glorious. >> a car is going to be largely made up of chimps? >> yes by the way, the number of chimps that go into aerospace you're not allowed to talk about. that's something to keep in mind, too. flow when i look at texas instruments, i said to myself, can there be a rally in the chimps based on texan? and what intel sing is going to happen is data center. and i would say if there's going to be a rally in tech, this is the key to this -- sorry to this market i like it. >> i like it, too. >> chinese don't have texas instruments. companies like that. >> how much they do for shareholders is joyous this was a joyous call i remember the days when this and motorola. >> we have an opening bell coming up. more to cover including earnings from twitter and viacom. oh boeing again we'll take a look at

stay with us "squawk on the street."

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you're watching "squawk on the street." the opening bell in about 60 seconds or so. busy earnings morning, once again, with boeing, twitter, an comcast. tonight will be even more bananas between facebook, ford, at&t, paypal, and chill popotle. >> ebay will be the sneaker we think is good. chipotle has a new ceo ford i'm looking for them to get out of all weak markets. and facebook is, frankly, jump ball jump ball. >> in terms of whether or not it had meaningful impact? >> yes i think there will be a moment they can't talk about the business model anymore because zuckerberg said i don't know what you're talking about business model. >> let's get to the opening

bell t >> what we'll see tonight twitter is already out dau is up 10 mau is up 3. u.s. down one. >> i know. we can pinpoint on that because they had to spend more money to keep bots. i think twitter showed you very good daily average user growth i like it. i think it justified the rotten. i think people are saying, you know, this one got pushed down in a frenzy. it's certainly a up and comer that is going to deserve to be in a round one day. >> yeah.

stock up over 30% this year. as you point out, it rebounded dramatically from the lows not that long ago. at some point about to be a take over target. maybe it will come up again one day. for now i think shareholders are happy they didn't sell. >> yeah. video very strong. one of the things you mentioned about take over they're monetizing what i regard as being big data that will happen they did seem to temper expectations from the back half of the year. >> yeah, on the call the cfo said the gdpr the privacy standards could have impact on mau over time. twitter may make decisions over time that affect mau we just want to flag it. >> i think that the only thing that is interesting there is he's the only guy flagging it. they talk about spending money on bots. i think what matters is twitter is another place to advertise. we always want one other guy to

advertise with we don't want to have to give our advertising to one player. >> yeah. >> it's so small, i know. >> why shouldn't i be concerned about the fact they didn't growth monthly average users at all in the united states >> it's not positive. >> no. it's not positive. >> international is much bigger. >> yeah. i think that twitter is -- look, twitter's evaluation when it's relative to other companies in this business, it's kind of like saying, look, we're going to be a force. don't get rid of it. people can't get too excited because the number. >> all right. >> 3 $36 million monthly average users. that's a nice business what is the trajectory it feels like it's own. >> when i spoke to coca-cola yesterday, do you think coca-cola wants to advertise in m magazines? no. >> they would rather be on twitter. >> okay. >> they would rather be on

social media. >> yeah. >> we'll talk to dick about twitter later on this morning on "squawk alley. here we are with another test of an earnings giant. we'll see if it holds gains. >> that comes later this morning. we have learned that unless a company chooses its words carefully, it could get hurt but what people have to recognize is oleberg listened t the calls and knows what to say. by the way, the lock heed call was bad. >> it was? >> yeah. >> why >> because lockheed, like general dynamics done badly today. wall street, by the way, was on the fire which was different from what we heard from the other guys in terms of business.

but the reason lockheed i didn't like, you have the joint strike fighter. now you have the helicopter business remember, the great greg, not because he came on our show. he offered support now i'm starting to think it was a great move by greg great move great move. >> i hear you. >> great. >> not good. >> great. >> the third time is the charm. >> i have to do it sometimes he's so beaten down. he doesn't understand what great means. >> that's true but we got a draft coming up it's going to be big >> yeah. >> picking number three. mets are ahead of the phillies how did we win the super bowl? >> you were involved. >> the call was number ten i picked

>> i was under promise and over delivered. >> thank you very much speaking of delivery, viacom -- i don't know viacom reported earnings this morning. remember they moved this up the earnings day people thought well because they're going to show that the turn around remains in place that's largely what you're seeing it was a perfectly good quarter. network revenue was up 1%. domestic advertising up 3% international seemed to be relatively solid though it did get a boost from foreign exchange film revenue, you know, paramount struggled. have you seen "the quiet place" it hasn't figured into these numbers. it is the first they've had since "the god father. >> swung paramount to the black for the quarter. >> wow. >> big move. >> wow. >> and those numbers reflect in the current quarter. but as we know, the story here, of course, is the continued conversations or negotiations between the special committees of viacom and cbs about a deal

under which cbs would acquire viacom they continue to talk. they continue to go back and forth on economics it continues to be about something that has nothing to do with economics which is namely leslie moonves and jerry redstone who will be number two i told you the story i don't know how many times. it could be a bedtime story you tell your kids every night "good night moon." or maybe good night bob or maybe good night leslie. that's where that stands the numbers themselves from viacom this morning, you know, pretty decent beat across the board. some are saying research here from jeffreys. but the stock price will move to a certain extent on in the continued negotiations. >> stocks haven't done that well now we get an upgrade. disney by vemo i think at a certain point you want to buy disney there's another one people talk

about. i can't give you an answer all i know is that there will come a day but most people cannot be patient enough let me sell in the market. >> there come a day. >> verizon following through on yesterday. it did stay up yesterday despite the down and the broader market. you pointed it out to me robinson humphrey. >> best quarter. >> some of what we expected from comcast domestic company it could come down exciting sign ups. and the next thing you know, and i know john ledger and i had a look back and forth. john is not budging from his notion that verizon, oh, you thought they were going to do horrible and they did only did horrible i tell you, it's what people want in the environment. the highest yelling stock in the dow. you have a safety and investing company. i don't think trump minds them right? >> no. >> verizon

>> yeah. does he have a family plan >> i don't know what he's got. you do, when you bring it up, i think of sprint and t-mobile which continue to have their talks. complicated given the presence of the two companies deutsche on one side and softbank on the other. will they get to the finish line this time? we'll see. will it, if they do, be something that the regulators allow if we're going to 3. they'll be a stronger competitor to verizon and at&t. and comcast and charter, for example, in their mvno is becoming a competitor in certain areas of wireless and should be allowed. we'll get to that, when we do. by the way, guys, i've been keeping an eye on comcast reporting numbers formalized in the bid for sky. brian roberts did try to address the concern among shareholders reflected in the significant drop of the stock since comcast made the interest in sky public that they don't somehow love the

core business. listen to what mr. roberts had to say. >> love our core businesses and anybody viewing it as a diversion from that is not reading us properly, in my judgment we didn't choose to put sky in play or any other asset in play. that event happened around us. and the question is, do we take a look at it and engage? >> engaging is what mr. roberts likes to do. >> the core business, i mean, as i said, i was looking. i'm not going to focus on one line. >> comcast shares reversing what looked to be a significant percentage decline. >> business is good. i remember when people hated disney because of abc. now it's harder to hate -- like disney espn is bigger. >> yeah. >> number one show in the country. >> yeah. for the first time -- i think

"millionaire." >> "rosanne" it doesn't move the needle very much abc is not moving the needle on disney. >> and i watch the games on my hand held because those who are in a situation with our wives exercise a tremendous amount of tyranny, it's the only way. >> twitter has gone red. >> oh. >> mau, u.s., cloud. okay you brought it up. >> what do you want from me? >> you're okay >> moving ton a 5% move on the conference call we feel confident about our ability to price in the markets as the year progresses particularly in competitive. >> this is zerosome. when you hear freight like csx, you have to be thinking how do i get from here to there they're putting price increases through on the rails the truckers are all you can't find enough truckers so freight, freight, freight, to get it from the manufacturer

it's too expensive and you get it from the raw cost. >> you think the era of free shipping will start to close >> that could happen. >> wow. >> make it tough for some retailers to stay competitive. >> and when you talk to a lot of smaller guys, they're saying the president trump is really right. this free shipping is wiping us out. it's predatory would the justice department ever bring a suit saying it's predatory? wouldn't that be interesting >> what's predatory? >> below what it costs to produce. like the chinese do our country. >> i see i'm sorry. >> it's subsidized by amazon web services, subsidized by advertising. they lower the price of shipping until everybody is wiped out and raise the prices that would be predatory. the only thing i remember other than buying a lot of stocks from

the pay phone after the speech class was over and the gulf oil deal. >> you can get ahead of things in the pay phone >> in the pay phone. you would be behind someone who is, you know, who just done badly an an exam and they were like weeping men and women. i would say i have to get a trade through here i got to sit there they would call their mom. >> who were you calling to conduct your trades? >> fidelity. >> really? >> yeah. did a lot of trading with fidelity in law school fabulous. >> someone said i look good for 70 yesterday. >> dow is down 110 boeing is still standing but up a percent and a half now let's get to bob. >> yeah. boeing added 40 points to the dow. and the market is weaker than the indexes appear that's because 3-to-1 advancing declining stocks now take a look at the sectors

tech has opened positive most of the big tech names opened on the positive side. here they went negative a moment ago. you can see. banks were doing a little bit better they just have gone negative but those are the two biggest sectors. you have a little more positive there. they tend to move the market up a little bit and energy taking break. consumer staples, again. another story here new lows there utilities also on the higher interest rates i want to show the boeing chart. the market turned around at 7:30 we were notedly negative and boeing came out at 7:30 and we moved immediately. we went from 328 to 335 in 30 seconds on boeing. one thing you didn't hear about with boeing the conference call is 10:30 eastern time. you won't hear the cfo talk about peak earnings. it's not going to happen they did 364 the estimate was 258 they blew it away there. the rest of the year analysts are going to raise the numbers they raised guidance by 50 cents.

they beat by 96 credibilitieents thest mates will be raised in the next couple of days as analysts try to figure it out. take a look elsewhere. nor northrop did amazing things. they raise their guidance 40 cents and beat by 59 the numbers will come up for northrop as well good year tire talked about higher commodity costs there's the theme we've been talking about. it's a raw material consumer of rubber the stock is trading to the downside where are we four or five issues the market has to deal with the peak earnings. i said two weeks ago i think it's a quarter early to have the debate, but, of course, caterpillar made an issue of it yesterday. rising rates and inflation which is related to the rising rates the faang are 10% or more. and new lows every day on consumer staples

and lack of leadership so the market is being segmented into two groups. first, raw material producers and consumers. and the interest rate losers and winners. raw material producers oil and gas up 4%. oil service up 3% for the year steel stocks up 6% these people produce raw materials. they're doing better the consumers of raw materials they're having a tougher time of it consumer staples and home builders particularly home builders industrials in general you heard about caterpillar. talk about all sorts of industrials. then you have the winners and losers on interest rate rises. banks have generally been up on the year not as much as people hoped for. the loan growth is small they've been the winner. and losers the interest rate losers you see what is going on with the utilities and real estate investment trusts they've been to the downside

tel com 5 percent on the year. right now the dow sitting down 190 points >> thank you, bob. the bond pits as well with rick santelli. good morning, rick >> reporter: good morning, carl. if you're a technician or you're just fond of watching historical important areas in the marketplace in the past, this ten year rise, even the 30-year bond we'll get to that in a moment has been intuitive and exciting look at the 10 year. you see the high as we come into our time zone. it's 303 we're back down to 3%. the 303 is highly significant. we open the chart up to the end of 2013 and you'll see that long spike up there in left corner of your screen, yes, that's the one close. and that is 303. we settled on the nose yesterday at 3%. it's not only about our markets. it's a global bond sell-off.

every move in bonds lately is global really since the credit crisis i have a chart that goes back to 1989 it was about april of '89 since the width of that spread was this wide. the chart you see only has 1993 as far as the data base will go. look at dollar index year to date last time the dollar index was here, by the way, hovering around 9108 or so. it's one penny away from unchanged on the year. it has been elusive outside of early january. that's the last time the dollar index was at this level. january 11th looks pretty similar mirror image reverse guess the last time it was this weak the 11th of january. but it isn't only the euro which is so much a large portion of the dollar index

even the dollar yen. in dollars favor last time it's been at this level was about the first week in february can this dollar rally hold on? some don't trust it. les see if we can test with the momentum back to you. >> all right, rick thank you very much. when we come back, the ceo of rockwell automation. dow down 155 we've got boeing, apple, and disney in the green. all other components in the red. back in a moment 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.

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and going against some very big companies and being able to take a lot of share of the pc business is good big gaming business is good. one of the most impressive ceos in the country going up against companies that people have historically not been able to succeed against. look what she's done with amd. they were an also-in because of dr. su. >> they exist at the pleasure of big players. >> one of my old friends on the board at intel used to say, a lot of people think we keep them alive to make it so the department of justice doesn't investigate us that is no longer true, although the department of justice is reportly investigating >> waway is already banned from the united states anyway >> they make the point every day at the white house, they make the point about how it's not a fantastic time with the chinese.

and pretty soon, i think it's going to be mexico the nafta talks. i'm a little less sanguine >> we'll talk more about that in a bit and get stop trading with jim. dow briefly traded below yesterday's low of 23,828 and then got a small bounce. back in a minute ess. so this won't happen. because you've made sure this sensor and this machine are integrated. atta, boy. & yes, some people assign genders to machines. & with edge-to-edge intelligence, you'll know your customers love this color, & don't love this one. never getting grape again. & you can adjust in near real time. & if someone tries to breach your firewall in london & you start to panic... don't. you've got allies on the outside, & security algorithms on the inside. & if it's jammed up here, & it's hot in here.

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you know what's not awesome? gig-speed internet. 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. time for cramer and stop trading. >> there was a time you boosted your dividend from 50 to 57 cents and had a good story to tell i'm talking costco largely domestic being in the sweet spot, offering the best bargains but people are ultimately worried about tariffs. i'm not as concerned with costco because i want to take a longer term view. they've always offered you a great bargain which is the card so i am not afraid i am not afraid. >> jim, what's on mad tonight? >> last night i went to one of the greatest book parties ever i went to scott wapner's book party and saw carl icahn there and i'm having scott on. we're going to talk about the notion of how unimportant haeshlife was split today to the whole -- the whole conversation.

and also about -- about egos who won and who lost you think went to like 100 it was supposed to go to zero. it was binary. so we'll probably talk about that, too. >> see you tonight >> thank you great show dow down 140 boeing hanging on to a 1% gain we'll watch this game again today when we're back in a minute

♪ good wednesday morning welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber. stocks that are struggling to reflect that after the initial pop. our road map begins with earnings alert the busiest week continues a full rundown of the numbers and how they're impacting the major averages >> speaking of compast formalizing its rival bid for sky, setting up a possible showdown with fox. david has the details.

>> plus, general electric's annual shareholder meeting is getting under way. it's the first since john flannery took the helm dow down 178 day after a major sell-off actually, biggest losses since early april. and we're back in correction territory again. 10% off the recent highs a parade of earnings keeping investors busy this morning including boeing beating on the top and bottom lines. also raising its full-year forecast plus a busy morning for comcast following a blowout quarter and an increased bid for sky and then there's twitter earnings per share coming in four cents above estimates the stock is getting slammed right now as the broader fang basket coming off a rough day losing combined $85 billion in market value ahead of the facebook earnings, that stock down almost 2%. a little bit of a bounce for apple. and the ten-year note yield, ticking above 3% for the first time since 2014.

joining us at post 9 on all of this, we've got jpmorgan strategist alex striden and jeremy siegel, professor of finance at the university of pennsylvania wharton school. professor siegel, you are known for some of your big, bullish calls. as a bull, you couldn't ask for a better earnings setup than this beats across the board no matter what industry. hard to imagine the last time we saw this revenue growth and the market is not impressed. what does that tell you? >> i think the whole story is interest rates very honestly. and, remember, even last december on your show, i said this will be a much rougher year 0% to 10% was going to be the return a lot of people said oh, jeremy, you're way too bearish but it is an interest rate problem here and the ten-year going above three. rick mentioned it just touched at 303 that we touched three

years ago. that's a big challenge remember, stock prices are discounted values of earnings and, y that numerator, earnings are good, but it's all discounted by the denominator. those are the interest rates, and they're going up so it's a battle between which is rising faster the earnings or the interest rates and right now, we do have inflationary pressures you take a look at those commodity prices a look at oil, well above 70 the fed is not stopping. it's going to be a quarter point every quarter. that begins to add up. >> does that mean that you think three is more of a floor than a ceiling? >> yeah, i mean, i said last year i thought 3 1/4 was where we were going to end the year. who knows. it could be even a little higher but i do think that, yeah, we're going to be above three now is going to be the normal state and remember, the dividend yield

on s&p is lower than 2 so now we're opening up a gap over 1% for many years after the crisis, the dividend yield on the s&p was above all the interest rates, and people could sit with stocks now they've got to think i've got to make some gains there, otherwise i'm behind on the bonds. i still think stocks are the choice here for the long run they're just being challenged by those interest rates >> alex, do you agree with that call that includes the ten-year going well past 3% posing a big challenge for stocks >> the crossover point where equity get negatively impacted actually comes when we get closer to 3.5% on the u.s. ten-year a level we don't think we'll get to until toward the end of this year we're seeing inflationary pressure coming from a tight labor market with unemployment, we expect to fall to 3.5% by year end

that will generate some wage pressure oil is on the rise and the dollar is starting to fall boosting your import pricing costs. all of that pushes up the back end of the curve but it's noto the the only factor. they are now being barred from the fixed income markets in the u.s. due to the excessive hedging costs they have to pay you're seeing inflationary pressure coming through at a time when demand is not there. >> interesting one big theory about the year is that the fed is going to see all these pressures you just mentioned and will either halt or reverse or somehow pull back on their tightening, their qt. do you think that happens? >> no, i think we're in a very different environment in 2018 than we have been for the last decade over the last ten years, these financial markets have been supported by the central banks they've been like the training wheels supporting this rally fast forward into 2018

those training wheels have been taken off. central banks have said you're strong enough to ride on your own. you don't need our support that's ultimately a good thing, not a bad thing. it's a sign of strength, not weakne weakness but will trigger more volatility >> despite record corporate debt, levels of debt to gdp that we've seen that we saw the beginning of the recovery >> the debt to gdp ratios are definitely something we're keeping our eye on and definitely something that could weigh down on long-term growth but we need to dig below the numbers. it's the structure of that debt and it's being locked in at very low yields >> jeremy, what is it about earnings that you think is troubling? or is it just the fact that with interest rates rising you have to worry about profitability you look at a company like boeing boosting guidance, not using the high water mark that caterpillar did which spooked investors. you couldn't ask sometimes for a

better season and even a better outlook for some of these big industrial bellwether companies. >> i saw that so far 80% of the firms are beating estimates which is almost a record, and people are asking why? let me tell you because if you want to know the truth, analysts were very slow on recognizing the impact of the corporate tax cut on earnings. and they undershot it. now the market understood it and that's why it went up at the end of 2017. that was the rally then when earnings were good, people thought it should go up again, 2018. that's double counting it had already gone up knowing the earnings were going to be good yes, they are good but it was discounted in the market that's one reason we're not getting the usual bounce from those good earnings. analysts were slow at updating it they didn't know how it was going to affect it everyone else knew it's going to be positive. and then we got caterpillar

saying, maybe it's as good as it gets and people say, it'sa one-year thing that's going to happen in 2019 which i think is too bull iish n that's one of the things backing up the market. carl was right on the fed. if we see a meaningful slowdown, the fed will stop its raising. won't raise every quarter. but there's absolutely no sign of that. we would have to be systematically seeing 100,000 increase in payrolls every month, not the 200,000 we got. we're not there in any means yet. >> if interest rates continue their march north, is fang more at risk than the rest of the market because it's been the outsized biggest beneficiary of this low-interest rate world for years? >> i think stocks are challenged again. i think it's a volatile -- it's a choppy year. that's going to end slightly up in 2017. and we have a midterm election

in november. odds are democrats take over the house. what does that exactly mean? is that trouble for trump or any of the republican agenda there are those uncertainties out there that i think will keep a lid on stock prices. no bear market hold on. if you're a long-term investor, these are good values but don't expect another 2017 this year. >> we'll leave it there. thank you very much. not so bullish today jeremy siegel and alex dryden. it's been an interesting morning for shares of our parent company comcast having started down and now up sharply despite what is overall some weakness in the overall market at this point. comcast shares up over 3%. first, earnings from the company. but what overshadowed that or seemed to was the making of the formalization of the bid for sky, the 61% of the company, that company that is not currently owned by fox

of course, in competition with fox's comcast with this bid up 1250 it's the same bid they offered in formally but now under the uk takeover law it's made into a formal bid where does this go from here disney and fox are going to mount an increased offer, it would seem likely, for that 61% of sky that fox doesn't currently own. but that's not going to take place for several weeks. let's call it june at some point when they'll need to formalize their offer and will increase potentially to a level that equals if not exceeds what comcast has out there. much of this has been creating consternation amongst the shareholder base at comcast. investors wondering, are you running away from your core business wanting to know more about the strategic logic for a deal to acquire sky and overshadowing what had been scent ndecent nums from the company, including this

morning. revenues were up 10.7% net cash from operating activities $5.5 billion. they did lose 96,000 subscribers of video services. but had gains that were significant in terms of broadband overall. and so on the call, it would seem brian roberts did address some of those concerns, particularly this narrative that has comcast running away from its core business. take a listen. >> love our core businesses. and anybody who is viewing this as some diversion from that is not reading us properly, in my judgment we didn't choose to put sky in play or any other asset in play. that event happened around us. do we take a look at it and engage >> of course, as we've eported there's also a likelihood perhaps that comcast will choose to re-engage or try to re-engage with fox for those assets it's under contract to sell to

disney that won't happen for some time. they have to wait for judge leon to render his decision some time let's call it mid-june we expect that if, in fact, the doj loses that case, comcast would try to come back and compete we saw the proxy last week indicating they made a higher bid but did not offer the regulatory concessions that disney was willing to. that will become an important part of any decision comcast makes if it tries to re-engage the performance of a stock price and if it continued to go down, after initially making the sky bid, that, of course, would hurt any opportunity it had for what is an all-stock offer for the fox assets in the sky bid, it's all cash. so the performance in stock has not been an issue for the overall value of that. a lot going on >> this is a very tangled threesome that we've got here. so looking for potential bidding war for sky and maybe another

bid from comcast for 21st century entertainment? >> correct we have to wait and see, of course we don't want to prejudge the doj case which many have said was not particularly strong, has not been particularly strong in court to stop that deal but we'll see. if in farkct, many think they le the case to stop at&t/time warner than they'd have the ability to come forward. the stock price, the way it's been performing could hurt it. its unwillingness to take on all the regulatory burden as it pertains to the regional sports networks which may not be able to be purchased, those are issues that they have to deal with disney already is dealing with so we'll see but for now, a very positive day for comcast. >> it's interesting because it was negative when they initially reported to go after sky maybe made the case successfully >> it's been down sharply from 40 or so ever since they made the case to go after sky

but this morning, i think robert's comments forcefully addressing their commitment to the core business and using the word discipline in terms of their approach to sky. perhaps giving some shareholderers a bit of peace. >> and 21st profit growth helps. >> yes, the underlying numbers were good. some like to focus on the loss of video >> the president is tweeting about his meeting with tim cook later this afternoon looking forward to my meeting with tim cook later of apple we'll be talking about many things including about how the u.s. has been treated unfairly for years by many countries on trade. some speculation about how that conversation is going to go, not just about china and tariffs and free trade but also the degree to which we see policy on automation the next several years. >> and cook has come out against some of the trump administration's policies on daca, on daling fre i bailing f

climate accord he hopes cooler heads will prevail. apple clearly has a lot at stake, not just in terms of its consumer growth of apple products in china but the global supply chain which is centered on china so little ceo diplomacy when it comes to trade, i'm sure >> to our etf spotlight. mike santoli looking at the money flowing into bonds still above three. >> building on what professor siegel told you about higher yields and emand for stocks, you've seen a big rush of new money into especially short-term bond etfs. this is something from one to three years. very safe investments in general. but now that they have a relatively decent yield with the two-year treasury note, this isn't the last month data according to xtf.com u.s. equity etfs, took in $5.2 billion. i'll point out this is mirrored by the official industry data on mutual funds as well where you saw a big outflow from stocks and something like $4.5 billion

last week into bond funds. short-term bonds such as the ones we're going to show you, short-term bond fund as well as s.h.y., short-term treasuries. also short-term corporate. all have seen good in flows. you see the array of yields available. they're also taking money from cash so essentially if you had money literally in deposits, it looks good to be in short term i don't think it's so much that people thought i had my long-term stock v.s ov investmer here i'm going to liquidate them, but at the margin it's making that tension a little more pronounced between stock and bonds. a little reverse of the great rotation into stocks we've been hearing so much about. i'm going to call it the rate rotation >> it's a good perspective, mike anybody who trades knows exactly what you're trying to get across mike santoli with the etf spotlight. facebook announcing changes to its content policy. we'll talk to the head of product policy and

counterterrorism next. plus, the chairman and ceo of kohls, kevin mansell will join us as we gets ready to step down next month back in a minute 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. facebook reports earnings tonight after the bell

the company announcing changes to its content review policy publishing new guidelines on hate speech and violent imagery. allowing users to appeal posts they feel were wrongfully removed. joining susfacebook's head of global policy management monika bicker in advance of the quarter, it's good to have you >> thank you for having me on the show >> this is all about the challenge that we know every consumer and user of facebook has. that is trying to understand the intricacies of these policies which are by necessity getting more detailed. so what is the headline for people who are going to read this >> well, the headline is that you can now see exactly how facebook enforces its content standards. our content standards, they've long been public and they tell people, for instance, we don't allow harassment we don't allow hate speech but people have asked us for some time what do we mean? now you can click on our

community standards and read the same detailed guidance that we give our employees when they're enforcing these policies >> tell us more about this appeals process for users. how is that going to work step by step if i feel like something i posted was wrongfully taken down >> well, for some time now if we've removed your page or your group, you can ask us to take a second alolook and make sure weo that decision right. we're offering that same appeal opportunity if we've removed your post or photo so if you post something on facebook and we remove it and we send you a message that says you violated our community standards, you can click on that message and ask us to take another look and we'll give it to somebody else if we got it wrong, we'll put that content back on the site. >> i went through some of the guidelines, and interesting you pointed to hate speech here's something from your new rules. sometimes people share content containing someone else's hate speech for the purpose of raising awareness or educating

others when this is the case, we allow the content but we expect people to clearly indicate their intent this to me seemsy to blurry and so ripe for loopholes. how can you possibly tell if someone is posting hate speech content or someone is trying to raise awareness for hate speech content and, therefore, will be allowed? >> it's often a challenge, and that's because we don't always have the context to know why somebody is posting something. and that's why we say if you're using, for instance, an ethnic slur to say we shouldn't be using this word or this is something i heard somebody call someone today and thought it was terrible, make that clear in your post and we'll leave it on the site if we see somebody attacking someone with an ethnic slur, we'd remove it from the site >> the posts related to, say, isis and al qaeda, and you say we find the vast majorities of this content, 99%, in q1, was --

action was taken not user reported. it was facebook. how effective is a user report of something they find offensive? >> well, technology is very good at helping us find some things if it is for instance a graphically violent video and we know about that video, we can often stop it from hitting the sitaltogether. it's much harder to find something like hate speech if you come across a post and it doesn't belong there, please report it to us so that we can take a look. >> how do you deal with fake news how can you possibly tell whether an article contains falsehoods or whether it's bias? it seems also pretty blurry when it comes to freedom of expression >> and you'll see in our community standards we have a section where we talk about how we're combating fake news. it's not easy. and we hear from our community all the time that they don't

want us in the position of deciding what is true and what is false what we can do is remove the fake accounts that tend to spread disinformation and also make it easy for fepeople to hae the context. if you're seeing an article on facebook and there's reasons to believe that news may be false, we're triying to provide more context, like other articles others may see around the same topic. >> i was talking to jon fortt my colleague upstairs about this. how do you determine standards that are different in different countries around the world as a global platform for 2 billion users. the social conventions around nudity are different in saudi arabia than they are in the united states. how do you make those kind of calls? >> the standards are so different around the world and more than 85% of people using facebook are outside the united states so in order to get these lines right, we talked to organizations and experts in subjects all over the world on a very regular base, i and we're constantly evolving our

policies, adjusting the lines here and there to make sure we're taking into account the way these issues might show themselves online in different parts of the world >> community operations. 7,500 content reviewers is over 40% more than you had at this time last year what is that job like? it's 24/7. it's having to make difficult human calls looking at content we'd probably rather look away from how taxing of a job is it? >> that job is a very serious job and those reviewers who sit around the world are reviewing this content in dozens of languages. so when they're doing that job, a post comes into them they look at it and they decide if it violates any of our policies using those detailed standards we have now made public >> monika, we'll be watching to see how all this evolves thank you for sharing this insight with us.

facebook's vice president of product policy and counterterrorism when we come back, the outgoing chairman and ceo of kohl's, kevin mansell, joins us for an exclusive interview his thoughts on the state of retail, the consumer, kohl's future and more. another check on the major averages here. dow is down 76 cutting some of those big major losses at the open s&p 500 down 0.3%. the nasdaq is getting hit the hardest down 0.6%. "squawk on the street" will be right back well, it's earnings season once again. >>yeah. lot of tech companies are reporting today.

and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

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when everything's connected, it's simple. easy. awesome. good morning i'm sue herera here's what's happening at this hour it's a busy news day the maker of a much-debated e-cigarette which is popular among teenagers now says it will spend $30 million to keep its products out of the hands of children the announcement from juul labs comes one day after the fda questioned the design and the marketing of the company's

vaping devices bill cosby arriving at court where jurors will start deliberating at the entertainer's sexual assault retrial. it comes a day after more than five hours of closing arguments that portrayed cosby as either a calculating predator or the victim of a multimillion-dollar frame-up the russian military says it will supply the syrian government with a sophisticated air defense system after condemning a missile attack launched by the u.s., britain and france no coalition aircraft were hit in that strike and the gop hit the baseball diamond early this morning for their first practice of the year it is also the first time they've practiced since a gunman walked up to the field and opened fire wounding five people, including house majority whip steve scalise it's hard to believe it's been a year since then. that is the news update at this hour. i'm going to send it over to dom chu with the inventory report.

>> the official government data weekly oil inventories is out. we're seeing a build of 2.2 million barrels of oil that compares to analyst estimates for a drawdown of 2.2 million barrels of oil also on the gasoline side of things, a build of 840,000 barrels there. the estimates for gasoline inventories down 2.2 we're watching oil prices move on this particular data on the heels of private sector data last night that also showed a build of 1.1 million barrels of oil. back over to you >> pressuring those prices a bit here dodge dom, thank you kohl's has actually seen its e-commerce business grow to $3 billion and sales over the past decade the man at the helm, kevin mansell, now set to retire at the shareholder emeeting next month. let's get out to kohl's headquarters in wisconsin where courtney reagan is

>> thank you very much i'm here at kohl's with kevin mansell, chairman and president, for just a little longer this is effectively your exit interview. really happy to be here with you today. it's been a really strong 2017 got very strong in the fourth quarter. you had positive store traffic and sales. obviously, online sales growing. you've made some changes you have a plan to continue to drive traffic and you're looking to drive sales and traffic q1, you're handing over the reins to michelle goss coming up are you handing her a company that continues to strengthen has the trend continued? >> i think we are. together we've got kohl's in a great place. great finish to the fourth quarter and the holiday season in 2017. but the strategy, the plan that's in place, you alluded to the initiatives around driving traffic. really focused on driving traffic to our stores. got a bunch of initiatives in

each of our pillars, product, savings, personalization they are working they are lifting sales a lot of momentum in our business and we're much more positive if you go back to our guidance at the beginning of this year much more positive as we go into '18 as well. we feel good about the year. >> that is good news >> you have done some things a little different than what other department stores or retailers have done. you're leaning into your stores. right sizing some of them making them smaller you mentioned savings. promos still a really big part of your business you aren't necessarily afraid of amazon because you've partnered with them by accepting amazon returns and about 80 stores. you are also looking to sort of use the space a little more effectively. you've talked about having all the grocery stores in about 11 locations. you'll be a landlord what other tenantses are you looking for to take up that space? >> well, i mean, at its core, we think our biggest asset still remains our stores we have almost 1200 stores most of them are freestanding.

strip center stores. not in malls so really high quality real estate most of them are 10 to 15 years old so they're new, fresh. so we think amplifying the role and relevancy of our stores is the right strategy for us. as part of that store optimization it's essentially optimizing the stores we have and we do believe that we have to compete in an amny channel world so embracing the digital competitors is a good strategy. bringing in tenants who drive traffic. you talked about grocery the aldi partnership that's coming fitness blends well. we're not afraid to compete. we're leaning into our stores, but we know we have to compete in an omni channel world >> if you have active and wellness as part of your strategy working to accept amazon returns. would you put a whole foods into some of that kohl's space?

>> i think any well-capitalize ed business is a potential partner of ours. ones that drive traffic i think will lean into the most. grocery is one of those categories whole foods is a great retailer. of course we'd lean into that as a possibility. but it could be regional in basis. could be more national >> do you think there's any danger into department stores becoming mini malls in this way if you are selling groceries very nearby to clothing when mall traffic is down >> you know, the most important thing if you're invested in a big way in your physical assets, the most important thing is to be a headquarters for people to shop at. and so driving traffic still remains the number one priority for us because we do a good job converting that traffic. when people get into our stores, we can convert them into a sale. so i don't think we're afraid of

competition. we embrace it, but it has to be in an omni channel way >> when it comes to customers you spoke recently about how you really needed to work on grabbing new customers that customers are always going to sort of fade out as the natural cycle of life progresses but you hadn't grabbed on to those. so are you still getting new customers and the ones you got in fourth quarter, are they sticking with you now? >> we are. >> at the end of the day, if you look back at kohl's over its history, the thing constant in the great years in the growth years was every year we'd gain more new customers than those that lapsed. we retained most of our customers always, but how many new customers are we gaining versus how many are lapsing out of kohl's for one reason or another? in the last two or three years, sales struggled a bit more and

in the last year, we've really been able to make progress on that new customer acquisition up double digit there are more people shove shopping kohl's. >> so women's is a really key category for you it's about 30% of your business. and that has legged some of the other categories pretty strong in the fourth quarter, at leefast stronger th it has been. that's a key indicator for many people of kohl's success >> it's driven by two things the lean in that we've had on active and wellness. definitely been a driver we're in the categories where people will shop at kohl's and our women's apparel business is disproportionately penetrated in our own proprietary brands so the impact of our efforts around speed and localization, so putting a relevant product by store and improving the speed in the supply chain is making a difference that's going to drive the women's business in the future

as well. >> michelle is going to take over the reins for the future for the women's business and all of kohl's. thank you kevin mansell for joining us congratulations on your retirement 35 years at kohl's thanks for being here with us today. back to you guys at the new york stock exchange >> thank you for that interview, courtney when we come back, we'll take you live to general electric's annual shareholder meeting. it's the first since john flannery took the helm of the qumpany. "sawk on the street" will be right back your company is constantly evolving. 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.

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so this meeting started just a little over 30 minutes ago in this building right behind me. john flannery, ceo and chairman taking the stage they're now moving into q&a with shareholders as we speak but really meet with the shareholder base and retirees for the first time in this position saying that -- reiterating the need to make ge simpler and stronger adding there are important changes at all levels of the company under way right now, including the board which is seeing its mixed change and its number drop from 18 directors down to 12 today at this meeting. also the quote, we are keenly aware of the pain our share performance and dividend cut have caused. these are steps we've taken with much deliberation. talking about the fact they are in the middle of a rede tailed three-year forward look and strategy for the businesses but saying that, quote, highly confident in the future of the

company. so flannery really sort of projecting the same type of message that investors have been hearing from him for several months now whether shareholders receive that, how they receive that, though, remains to be seen i'll tell you we spoke to a number of them before this meeting got under way. shareholders like ge retiree susan strauss. >> we are all very concerned about our security we depend on our pensions, and we depend on the dividends and they reduced the dividends by half and yet encouraged us to buy their stock when we were employees because they matched it 50% >> and have you sold any of your stock or are you hanging on to it >> i want to sell the stock. i should have sold it a long time ago but to sell it now i'd take an enormous loss. >> strauss was a machinist for the company for the better part of three decades she's not alone. many of the folks that we've caught up with here today are ge

employees, both past and present. folks have some from as far away as louisville and massachusetts to be here to meet the new management team and hear from them and meet with them for the very first time. so that's not to be overlooked because when you're talking about ge, you're talking about a company that retail investors like these folks comprise about 40% of share ownership back over to you >> such a great point you're making and such an important component of the story overall the widely held nature of the stock amongst retail and so many of these employees who unfortunately both relying on the stock's appreciation over the years, the dividend, their pension and didn't sell any along the way at all >> absolutely. and everyone we spoke to today said they're not selling right now either they want to hear what the management has to say, hear about this turn around and they're hoping the stock price is going to eventually go back up they don't want to sell right now. the word used a lot is

disastrous >> morgan, we'll see what else we get out of the meeting. morgan brennan joining us from pennsylvania today earnings is the story as volatility continues to run through the markets following tuesday's sell-off markets seem to like the bearish oil data we're joined at post 9 the ubs director of floor operations that gave us a midmorning reprieve >> we seem to be defending some key areas. we stayed in the s&p above yesterday's low. and right beneath that low is the 200-day moving average, which is at 2608 so for now, the bounce is that you've seemed to have held some technical levels something they've not been successful at for the previous five days. and we'll see. but it almost feels like they want to give it another retest so we'll wait and see if that can hold >> what do you make of the companies who were printing good

earnings, great earnings in some cases and seeing it fall apart on the conference call comments. >> the caterpillar story yesterday was an absolute disaster it was up above 161 and closed at 144 took 65 points out of the dow jones. so you've had those -- interestingly enough, the index that dropped the least was the russell which tells me there may have been an international trade component in some of the selling and certainly the three big losers in the dow are basically international traders with, you know, boeing and triple m, et cetera i think we're going to see the market in a test and retest. a lot of this has been about the internal technicals. >> everybody says a lot of people have warned that this whole new crop of traders on wall street has never seen a

period where interest rates are rising they weren't alive at that point. you've been through those periods. interest rates rise. inflation rises. what happens to stocks how is this market going to hold f up if we're in this regime change >> it depends how quickly they rise that will set things up. we're concentrating on the ten-year, the libor rate has been bouncing around a little bit more actively, and there are -- >> not a lot of sign of trouble in junk bonds or credit yet, is there? >> yeah, no, but you still have, believe it or not, you have adjustable rate mortgages and things like that out there that are still priced in that so you're seeing some things not showing up in the classic junk bond indices, but it is a little bit of strain but this does appear to be more about where things stand with international

trade than anything else as far as the rising rates again, it's how rapidly they rise if we get up to 3.5 or something like that, i think they'll get the market's attention very rapidly. >> if not before, art. we'll talk to you in a bit art cashin quick programming note don't miss tomorrow, 9:00 a.m. eastern time, an interview with amd's ceo lisa su. she'll talk earnings, chip consolidation and much more. we'll be right back with the dow down less an0 in he.th 2potser its show of strength... or its sign of intelligence? in crossing harsh terrain... or breaking new ground? this is the mercedes-benz suv family. greatness comes in many forms. lease the gla250 for $349 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

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there's a strange divergence happening in the currency market that could send the space reeling. find out on tradingnation.cnbc.com don't go away. much more "squawk on the streetstreet after this

let's get over to the cme group in chicago and check in with rick santelli and get the santelli exchange. hey, rick. >> good morning, carl. like to welcome our special

guest, senior portfolio manager at newberger berman. you had a nice quote, page one of the "wall street journal" today and the operative word is potentially, basically what you said is, is that the reit pricing of interest rates potentially could be a bigger headwind than -- for stocks than the economy at large dig down into that for us. >> yeah. you know, the thinking is the real economy, the u.s., we're growing at 2% gdp. this move in rates above 3%, unlikely to impact consumption, business investment to any great extent the u.s. economy is still growing at that 2 percentage type of rate but, the rise and risk premium what we're seeing in the dollar, there's a lot of things in motion in the financial markets and our view this volatility being created is going to keep filtering into the financial markets. >> you see it a lot from the professor on our air this morning, enumerator and denom mater, the interest rates in terms of forecasting your

potential to the future is going to take something away if you like your interest rates, make your enumerator grow faster than the denominator do you think that's possible on the earnings side? >> the challenge is we're in a rising volatility environment, caused by the fed hiking and central bank unwind and then potentially the bank of japan. that's with us for years that's just going to be a headwind to a lot of financial assets now, your point can earnings grow fast enough with tax cut and some of the other things we're seeing, that's the debate that will get resolved this year. >> we can tell we put a lot of this forward to me 2017 the large part was that and the low volatility is a testament to that. and the biggest problem that nobody seems to be talking about is, after february, maybe the vix isn't at its loftiest levels, but those strategies that pack more equities in everybody's portfolios haven't come back. >> i think we're seeing the impact of this rise of rates we've been talking about this. the impact that's filtered into,

you know, buy more spreads, filtering into currencies and emerging markets currencies. you can see the move in rates and reprising of risk premium and rates is leading to other markets and something that's going to be with us for a while. >> rates are low and still low and, indeed, they are, even at 301 they're low, but doesn't matter if they're low, only the rate of change, hence the relationship with the markets and potential discounting future earnings real quickly, do you think the dollar can hold on to some of its recent gains, given all the issues that face central banks in the foreign exchange markets? >> yes our view is that the dollar is, you know, looks attractive from a rate differential perspective and those rate differentials will drive the dollar near term more than recently. >> excellent it's always insightful to speak with you david faber, back to you >> thanks, rick. rick santelli. time now to send it over to jon fortt and a look on "squawk alley." >> david, well former twitter ceo dix costello is going to join us.

just reported earnings, upside there. lots to talk about when it comes to data privacy and silicon valley in general coming up on "squawk alley. alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

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i'm dominic chu. stocks off their lows of the morning. industrials leading the charge toll upside. a bit of a role reversal from yesterday. among the names to the upside, norfolk southern and rockwell and masco and a look at shares of boeing the biggest contributor to the dow this morning, guys. back down to you >> thank you very much when we return former twitter chief dick costolo is with us, twitter's earnings, the interesting price action today, recebook's data scandal and mo dow down 41. "squawk alley" starts in a couple minutes whoooo.

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good morning it's 8:00 a.m. at twitter headquarters in san francisco, 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪