begins right now ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. i'm melissa lee along with joe kernen and mike santoli. becky and andrew are on assignment becky will be back tomorrow with from the berkshire hathaway koc conference call. and on monday, the berkshire summit let's take a check on the u.s. equity put pictufutures. we will some slight gains on the back of the fomc session, we gave some of that back

the implied open for the dow jones is down 11 s&p down one and in asia, trade taking center stage there with the u.s. delegation arriving in beijing hang seng was down 1.3%. nikkei was closed for a public holiday. in europe, big disappointments, particularly from adidas, the dax is down by a third of a percent. similar losses across the board. on treasury yields, we backed away from the highs of 3%. on the back of the fomc decision, we lost ground here on the yield side of the ten-year note 2.95% on the tens. a u.s. trade delegation has arrived now in china for tariff talks. the group is led by treasury secretary steven mnuchin and it will meet with china's vice premiere to discuss trade practices as well as intellect

cal property rights and state subsidies for tech development upon arriving at the hotel steve mnuchin declined to take questions, only saying he's thrilled to be there -- actually he said thrilled to be here. thank you. the u.s. officials will remain in china until friday evening. we'll talk to a china expert from the you'eurasia group at te bottom of the hour we have mnuchin, lighthizer, who's that one guy next to mnuchin? oh, yeah the great american, larry kudlow wilbur ross is also there and xiaomi is filing for a massive ipo in hong kong the smartphone maker could raise up to $10 billion.

dupont, really did that happen? >> just crossed. >> how did they come up with that name? >> very creative >> earnings out from dow dupont. quarterly profit of 1.17, coming in 7 cents above estimates revenue beating the street forecast the company says it remains on track to split into three separate companies next year not much movement to these earnings and the corporate buzz story of the morning, elon musk's unusual performance on the tesla conference call. phil lebeau joins us now with more see, phil? it pays off to do that stuff, sit around on conference calls, asking questions you were first to witness it was it bizarre >> bizarre is the perfect word for it strange, odd i'm looking at a slew of analyst reports this morning, almost all of them say the same thing, rbc capital, elon's defensiveness spoke volumes.

adam jonas at morgan stanley says it is the most unusual call he's seen in 20 years. tony saccanachi said the call raised some more boring and not cool questions than it answered. that was a play on what elon musk said yesterday. let's talk about what news there is for investors that you want to look at and focus on. the numbers within the earnings report from tesla. gaap profitability in the third quarter, his expectation they plan to restructure the supply chain in the next month or so. unclear if that means executives will be leaving the company. elon musk about 35 minutes into the call, he said these questions, they're killing me. they're too dry. here's how elon musk looks at the view of tesla when it comes to people who only have a short-term view of the stock >> people get too focused on what's happening in the space of

a few weeks, a few months. you should not be focused on short-term things. you should be focused on long-term things >> those long-term things were some questions that analysts were asking. cash burn? yes, slower than expected in the first quarter. analysts wanted more clarity on that they ended the quarter with 2 opini. $.7 billion in cash. as elon musk decided he was done with analyst questions, he said i'm tired of journalists and media reports about anything involving autopilot when there are these crashes. he thinks they're overplayed, and that the media should not be reporting as extensively as they have, for instance, on this crash in california that is under investigation by the ntsb. here is elon taking a shot at the media. >> but if it's an autonomous situation, it's headline news. the media fails to mention that

actually they shouldn't be writing this story, they should be writing a story about how autonomous cars are safe but that's not the story people want to click on so, they're writing inflammatory headlines that are misleading to the readers. that's really outrageous >> so as this call went on, about 35 minutes in, you see that drop after hours? that's what happened when elon musk said i'm done with these questions. then they brought in a tesla investor, a youtube financial blogger, he's not a journalist and he asked about 25 minutes of softball questions here's musk cutting off tony when he had the tamerity to ask about the model 3 configuration. >> we'll go to youtube sorry. these questions are so dry >> he also called the questions boring, bonehead so the bottom line is this, this call did not go well if you were a bull on tesla, if

you think that elon musk is god and he will take you to the promise land, whether with l electric cars or this investment, you loved it you thought he is throwing it back in the face of analysts. if you are a bear or want more details about tesla's financials, you came away from this call scratching your head saying here we go again. i'm left with more questions than answers when it comes to tesla. >> if this were three years ago, phil, this might be perceived differently. in this day and age when free cash flow was worse than analysts had been expected, they have not hit targets on the newest car and he does not want to answer questions about the configuration of the new car, so analysts can figure out the profitabilities of these new cars, this is not okay if you stripped away tesla and you didn't know who the ceo was, most people would come awayed from the conference call saying this company is not run properly

this company just cost us $2 billion in market cap because of what the ceo did. >> the question is whether or not this will have lingering effect adam j adam jonas' note said elon musk may not like these questions, but these are questions that need to be asked and these institutions are providing a lot of the tap cam that tesla may need or will need in the future. while you may not like these questions, it's questions that might have to be answered. >> part of elon musk's appeals, it's legendary as a futurist and everything else, is that he is mercurial. i can think about this either way, phil. there's a lot of normal ceos, they would never telegraph their feelings but i know in the back of their

mind they may be feeling the same thing, they just wouldn't say it out loud. >> i think you're probably right about that >> he's not like that. i think he thinks he has poetic license. you build a car like the s, and you actually mass produce that thing, it's expensive, government subsidized, but nas th is an unbelievable achievement if they get the model 3 anywhere close to the model s, it will revolutionize. >> but to determine that, asthma lisa sai -- as melissa said, you need to take these questions we're fine, we'll ramp up production when will you ramp up production what are the reservation

holders? how many are out there and how many are converting into orders? that goes into convincing the public that you are on the right track. >> i'm trying to figure do i ask boring, boneheaded questions i don't ask boring, boneheaded questions. a lot of times i ask questions that are crazy >> and crazy >> crazy, boneheaded questions so, phil, what do we have to do? do a bit of both, throw it up against the wall, hope something sticks no don't answer that. >> joe, you caught me flat footed on how to answer this i understand what you're saying. >> an analyst needs to get information for share hoelshare help them. >> rarely are these calls interesting. the ones that are interesting are the ones that pop out and we make a big deal of them. the majority of these calls,

you've been on him, melissa has been on them, the majority of the calls are getting deep in the weeds in a lot of stuff that frankly is boring. it's boring to listen to that's the point of investing. so you get the details that tell you whether or not the investment makes sense >> this is a company that everyone assumes will need go hat and hand back to the markets. they will need a reservoir of good will that the company is run right. >> maybe a visionary founding ceo eventually outlives his -- elon is thinking about hyperloops, boring things. >> maybe it's time for him to be chairman and think of the bigger picture things and not deal with the nitty gritty >> that will not happen. look what happened with the production system. he eventually took control of it when they were running into all of these production bottlenecks.

he is hands on with the new compensation package, he's there. >> quite a story i'm usually -- andrew is usually the fan boy with elon. he's not here today. i wonder what his take would be today. i sort of am on the side of elon >> they have a duty to answer the shareholders >> he could be both things >> phil, you deal with it. we're going to move on i got wedding registries to think about with one of our guests today >> yeah. >> and tequila >> lots to think about definitely not boring. busy day ahead for economic data weekly jobless claims out at 8:30 a.m. eastern along with the first read on q1 productivity and labor coasts

at 10:00 a.m., ism services index and factory orders as for earnings, kellogg's, xerox, blue apron before the bell after the close, activision blizzard, cvs and shake shack. let's get a check of the markets from steve masutto and joe zock steve, what did you make of the fed's language yesterday the markets had a mixed interpretation >> i think there was a lot of mix. a lot of people jumped on the symmetric statement saying the fed would be aggressive tightening on the upside of 2% as they were easing on the bottom side. that's the wrong approach to what the fed was saying. the fed was saying a band around 2% is comfortable for us either below, slightly above >> for inflation >> for the inflation target. they got back to the inflation target we're already into the second

longest expansion in history we got back to a target. this concept that they'll run out and tighten overly aggressively is just wrong-headed doesn't mean they won't raise rates. they are i think they're incorrect in doing that they'll continue to do that and flatten the yield curve which will be a problem over the long haul that's why the equity market is having such difficulty here. >> will they be wrong to continue the tightening two more times this year or wrong if they follow through in 2019 >> i think the problem is they already passed the peak inflation part of the year in the past few years now we're going to drift lower in addition to that, i don't see the acceleration in growth they're factors in into their numbers. i have the economy basically stuck at 2, 2.25%, 2.5%, as opposed to the trump 3% numbers. i think those factors combined just leave us with an

environment of, okay, it's a ho hum economy, we're nine years into this thing what are we aiming for let it run a bit and get a bit hot. >> does your world of the equity market change based on what fed said yesterday >> our view is broader we look at central bankers around the world we look at japan, where you get 0% >> so you're worried about the interest rate differentials? >> i'm comfortable we can't go too high because there's an anchor there which gives us a better view of what's happening in the equity market, which is overvalued nobody wants to come on your show and say that. i think we're comfortable saying that, at the moment earnings need to justify current prices >> even though -- it sounds like you think there's a cap effectively on where the ten-year yield would go. that's been the lid on the equity markets here you think there's a cap, but the equity markets are still

overvalued >> they are. there is the strong possibility that earnings can justify the strong prices. still you are a degree over normal you are worried? no just makes us look at different parts of the economy, different stocks we have to go icinated by your previous segment, having been an analyst and involved in the trenches will, you can't discount what the analyst brings to the table in our case, since we have done our own proprietary research, it gives us great comfort with the current economy, current valuations in stocks >> gives you current comfort to based on where we are now? do you view the last few movrnts months as the market just sitting still and waiting? >> you had two huge kickers.lec in a positive way, and a tax cut

that was interpreted in a positive way so stocks moved ahead of their own earnings we want that to catch up but there are many stocks in the u.s. economy that are undervalued below their intrinsic value, which is what a company would pay for. >> got to leave it there joe, steve, thank you. coming up, it's jobs week in america. an early read on tomorrow's number with exclusive data from the linkedin work force report that's next. "squawk box" will be right back. monday on "squawk box," we have your ticket to omaha for a billionaire summit three hours with berkshire hathaway's ceo warren buffett

he'll be joined in the last hour by charlie monger and microsoft co-founder bill gates. that's monday, starting at 6:00 a.m. on "squawk box. xfinity x1 customers can vote, simply by saying,

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tomorrow for a look at hiring trends, dan roth april over april, year over year, according to you that's a huge number. >> another 19.8% increase. >> in hiring >> hiring. >> crazy >> yeah. if you look and try to find a negative, a month where it dropped, february of 2017 is the only month in the last year that we've seen that happen over march of this year, march over last year was up double t digits >> both geographic, places t be and some jobs better than others, but also a skills gap we worry about. >> the skips gap is interesting. this is a look at what employers are hiring for and what employees have the top skills

gap is soft skills people for -- employers need people who can communicate, who can talk inside and outside companies. that's the number one thing they're looking for. number two is software engineering. you don't have to get a s.t.e.m. education, but you should. >> they need marketing people. i don't even know what that is you need marketing people. >> people that lureturn e-mails >> if you were in college and someone said you have to take electrical engineering, it's like really? or take marketing. okay i'll take the marketing story. once you have stolen everyone's private information at one of these new companies like facebook, you need to market is a certain way? >> that's an interesting perspective. >> isn't that what's happening

if you are running a small business, you have to cut through the clutter and try to be heard you rely on marketers to do that you have to know how to use facebook and social media. get the meg ossage out, read th data that takes certain marketing skills peefrnlg >> people are moving from high tax states to low tax states, you're saying it's not because of that but because it happens to coincide with where the good jobs are san francisco or austin. or washington. there's a skills gap in d.c., because nobody is any good at doing anything in washington, are they >> i'm not sure that's what's going on >> why is washington a growth area >> are tech companies there. a lot of businesses that need to be located there there are a ton of changes in

policy, you have to be in washington to be able to have an impact on it >> yeah. the government that's where you get the government contracts >> what dalio said, once state and local taxes are not deductible anymore with the changes in the tax law, there's a vicious circle that happens. >> when you read about alliance berme ste bernstein moving to nashville, not just individuali ins movingu employers actually moving to another state. >> if you look at the numbers, they're so phenomenal and huge, it means employers have to find alternate ways to get employees. they can either pay more, we're seeing that, they're starting to do that slightly or go into other markets, nashville or goldman sachs in utah. and you just have to go elsewhere. you can't be in your cities and say we'll keep trying to attract them

this is san francisco's big problem. >> there's a piece in the "journal" about the amazon play. cincinnati is in the running there. the thrust of the article is that a lot of the cities are areas that are trying to curry forgave wer amazavor with amazod their game across the board with the local economies to make it more attractive, but in detroit's case it shined a light on the mass transit system being ineffective. where will they end up, do you know >> washington. >> you think >> i think that's where the vetting is one of the washington metros >> i thought pittsburgh would be in the pittsburgh has the educated work force, housing prices low. >> steelers, penguins. >> not the pirates really. >> if you look at where the talent wants to go, people want to be where other good people are. that plays a role in it. that seems to be more important

than low taxes >> the reds and bengals -- exactly. enough said. thanks >> thank you >> you wore a tie? >> because of me >> exactly >> looks good. looks good everything you said sounded -- >> better. 25% better >> because of the tie? >> sounded more accurate like you knew more >> and i feel good >> making a deal with china president trump's trade team has arrived for meetings with chinese officials. we'll tell you what it could mean for the president's tariffs. as we head to break, a look at yesterday's s&p 500 winners and losers

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning u.s. equity futures at this hour a bit mixed around the flat line wow. that sums it up there. all green. but the dow up 0.02 points really exciting.

the s&p up 0.13. nasdaq up 1 point. adidas pointed better than expected first quarter profits, sales grew in china even as the reebok brand continued to struggle on the call, the adidas ceo said he does not see a major impacts on u.s. tariffs. shares of spotify are taking a hit in the company's first set of results since its market debut last month the streaming service posted a net loss revenue was in line with forecasts. spotify added 4 million new paid subscribers, bringing the total to 75 million. it expects that to rise to 79 to 83 million this quarter which is short of estimates square reporting a wider first quarter loss they ramped up spending on product development and marketing. square said they would continue

to invest big sums into the payment business the u.s. trade team led by steve mnuchin arriving in china. they will meet with their chinese counterparts for high-level negotiations. for a look at what is at stake, let's bring in michael hirrsen, the eurasia group's analysis can they effectively negotiation great when you have wilbur ross, larry kudlow, mnuchin. >> it raises some questions. you have not only different players there who will want to assert their views, but also different camps. there's a more conciliatory pragmatic camp in terms of what the approach to china should be. i would put mnuchin and kudlow in that camp, and then you have robert lighthizer, wilbur ross, and pete nor vavorro who has be

strong on china. what would be a win here they're only there for two days. it's unlikely they will convince china to up end their economic policy >> i think a win for the u.s. side would be a sign that china's willing to engage on the two main issues that are at stake here the first is the trade deficit that matters to president trump. the other is the substance of concerns behind the second shn 3 -- section 301 investigation. that surrounds china's industrial policies and the way innovation moved to the center of these disputes. >> a lot of that involves protections on intellectual proper property do the chinese acknowledge that's on the table? there's some evolution that has to happen in those policies? is it just a matter of wait it out and resistance

what china focused on is protection of intellectual property what they have not engaged on is the notion that these ambitious industrial policies that china has been rolling out, like the made in china 2025 initiative, they have not been willing to engage on the substance of u.s. concerns it's not really just the u.s. that's alarmed by this it's germany the rest of theeu. japan. so i think we're at an inflection point where china is starting to realize the depth of concerns right now the rhetoric has been that they're digging in. that's a central question. are they willing to talk about this set of concerns if they're not, this dispute will be hard to reach a settlement >> there are reports that the trump administration is-ing an -- is considering an executive

order about telecom sales to the u.s. it seems like interesting timing they would have this report floated out they already banned american companies from selling to zte. does it make it harder to come away with a win? >> it does we have this one dispute, section 301. taking behind the scenes or right off camera is a set of actions that have been the u.s. trying to clamp down on the role that chinese firms will play in u.s. tech infrastructure that will make a settlement harder what we've seen is president xi making public appearance on chinese state media talking about the importance that china move to self-reliance in areas like semiconductors. they're worried about the u.s. cutting off firms like zte or huahi. so we're seeing china seeing

these actions, decides it needs to dig in that much further, develop self reliance and that will squeeze u.s. tech firms this is a very difficult part of the dynamic we're in now >> is there a specific area where you're watching and you think they could actually put a win on the board here? >> on the u.s. side? >> yeah. >> i think it's really just are they going to be able to address the substance of the concerns. these are pressures that have been building for years. you have a president, a trade team and a business community that's cynical about how the relationship is working out for the united states. we're not looking for narrow wins the trump team wants to reset the relationship with china. >> what about the set of retaliatory measures from china? are the chinese eager to make these gestures or just floating

them out there, like stop buying soybeans and stuff like that >> china is not itching for a trade war, but they have strong incentives to show the trump administration they will not back down easily one is the notion that if they give in too quickly, there's a concern in beijing that this will not be the last measure that the trump team rolls out. we may see another section 301 investigation with japan in the 1980s, the u.s. and robert lighthizer rolled out a series of these if you're beijing you're thinking we need to make this costly enough for the u.s. so they're not tempted to keep playing this card. in terms of retaliation there's formal retaliation which beijing already announced. then there's a whole host of informal measures that the chinese leadership is -- can use at a calibrated way. that's arbitrary, regulatory actions against u.s. firms operating in china

so there's host of measures. if this escalates, we'll see the informal measures. >> the first set of measures will take place june 1st if there's no short-term win, what's the outlook on tariffs? >> i think the likely scenario is we'll see a first round of tariffs imposed by both sides. both sides have shown they're hanging tough, then you have the two leaders with the strong incentive not to let this escalate further another round of 100 billion that president trump threatened. our view is that once we see that first round come into effect, it's likely that progress towards a settlement will move more quickly >> thank you for your time >> thank you coming up on today's executive edge, tech ceos have been reluctant to give up

control of the companies they founded, but the founder of one gaming company may just do that. that's next on cnbc. monday on "squawk box" we have your ticket to omaha for a billionaire summit three hours with berkshire hathaway's ceo, warren buffett and he'll be joined in the last hour by berkshire vice chairman, charlie monger, and microsoft fode bcounr,ill gates. that's monday starting at 6:00 a.m. on "squawk box.

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time for the executive edge. gaming company zynga is scrapping its dual class structure and mark pincus will no longer weald 70% of the voting power pincus said he will convert his shares in the company into common stock he is also stepping back from day-to-day operations, moving from executive chairman to non-executive chairman pincus with zynga in a strong position it's a good time to evolve his role.

zynga reported first quarter revenue of 200 -- [ laughter ] >> what are you laughing at? >> did you read that >> 208 oh yeah that would be a lot of revenue 2$20 $208 billion >> amazon gets that in a year. >> think of what apple just reported >> helps to think about what you're reading revenue of 2$208 trillion. it's quadrillion, isn't it an increase in mobile users to 14 google total people, which is -- you know what google is? 100 zeros. it's spelled differently shares of kraft heinz popping after reporting mixed results.

profits grew 8% last quarter kraft pointing to higher prices and lower taxes for that profit beat a programming note, becky quick will speak to bernard bernardo hees tomorrow live from the berkshire hathaway annual meeting. that interview will be at 8:00 a.m. on monday becky has a day, a lot of money in one room gates, buffett just sitting there. >> monger ain't too shabby either >> no. sprint posting a net annual profit for the first time in 11 years. the wireless company adding 39,000 new paid customers in the quarter and announcing that the ceo will step down an be replaced by the cfo. and fitbit sales fell for a sixth straight quarter and missed forecasts the company sees weak tracker sales hitting second quarter revenue. shares are down by 3.5% in

extended troin. and goldman sachs is launching a bitcoin trading desk the "new york times" is reporting it's happening within the coming weeks the move comes weeks after goldman hired a crypto trader to head up its digital assets team. bars and restaurants are gearing up for the big day this saturday, cinco de mayo. that means stocking up on tequila. jenna fangan is here and heatere's a quick check of what's happening in the roaneupe markets. 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

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it's thursday? okay it's almost cinco de mayo, which means bars, restaurants and liquor stores across america are gearing up for a tequila-heavy saturday tequila transformed from a festive seasonal drink to a versatile bar staple joining us is jenna fangan, president of tequila avion and we eventually saw some

depressing beer numbers. >> yeah. >> but this is growing three times the industry growth rate >> yeah. over three times it's this millennial generation. they are generation. they're shifting away from beer unfortunately, fortunately for all of us, and drinking more, more cocktails. >> and they want the stature here in terms of a new entry, it's not new, but how many years? >> it's pretty new, usually it takes 20-plus years for a spirit to get a place hold and it was our founder ken austin, he started it about i would say he worked on it maybe ten years ago, 11 years ago in mexico. exactly. then we launched about eight

years ago. so it is relatively new. it's incredible that it's gotten to the size that it has in such a short amount of time usually at this price point it does take a couple decades >> i tell you, it matters. i know the grey goose success story and the kettle one success story. but i thought with vodka, i don't want it to taste like anything, how can it be a great vodka? it's different for tequila, it needs to have a taste and be smooth and you need to wake up the next day right? >> it's true too many people are adding things additive, carmel color sweeteners, our belief is that we want it to be natural, i gave single organism from this small little town. we care what those ingredients are. >> how much a blue i gave plant agave plant going for?

>> it's usually seven to ten years. >> i know so much about tequila, seven-to-ten years >> you are talking an incredible cash outlay to have those plants for the future but all of a sudden the price, when we started it was less than a peso so per kill lo. today it's 24 peso sos think about. that it's incredibly impressive. >> can you use something else? mesco? >> no, it's like champagne, it's a denomination, can you only grow in a certain region >> mike, between the avocado shortages for guacomole and the blue agave shortage, we have a serious problem. >> especially for cinco de mayo. >> for millennial's, you mentioned the millennial's in this cocktail culture. i wonder about new brands that younger people latch on to, they're not into the big international brands him then do they move on from there?

i wonder if somebody like you trying to kind of build a franchise over the long term >> it's a great question i think it's what the substance is about with the millennial's if you are a big corporate brand, they try it they move on if you have substance. if you are from providence where they care where you are from the sorry, avion is this tiny little town it's all about that region and that town, they seem to stay with it. because they love sharing that story. >> did they really share the story? did they when they enter a bar, now i seen entire bars dedicated to tequila and tequila tasting >> brand-new. >> that's a new trends >> do they go and say tell me the story about that brand and i like that brand, because it comes from a small mexican town, et cetera, et cetera >> i want a shot of that >> i think they'll say, it's funny, it's interesting, it used to be tequila shots, people want to sip it, taste it, a soda

water. usually it's them and a bartender or their friend having a conversation about where it's from or about. >> what a warm was it? i do drink some patron will i notice a difference >> you should do a blind test side-by-side for us our big claim to fame is the competition, san francisco world spirits competition. it's really the be all in spirits. it's blind taste tests is the best connoisseurs are doing it you can't pay them off >> you can get blind drunk at the blind tasteoff okay >> 1,400 spirits it's a tough job for them. it's a couple weeks long. >> you won this? >> we won world best spirits and beat the vodkas, the rums the beg shift.for us that was a paradigm >> i'm a google, that's premier bourbon, y used your, which

one. >> it's funny the avion revev 44 and extra, a small petite barrel, they are calling at this time pappy van winkments of tequilas it goes on the shelves and the high end tequila is a trend that's brand-new that we're seeing >> i'm warming up the millennial's this was smart >> you share a similar love for tequila. >> and we're looking forward to saturday thanks for coming in >> likewise. thank you for having me. >> very interested in this stuff. you got to take that with you? >> i think you guys are going to have to fight for it >> just asking i was going to wait until we went to break before i did that. >> too late now. coming up, more elon musk bizarre tests in the conference call take a look at the first record quarterly loss we will show you the reaction.

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. tough talk from elon musk. >> these questions are so dry, they're killing me >> tesla's chief holding a bizarre conference call and the street is reacting this morning. details straight ahead >> trade talk with china, the delegation arriving in beijing, their agenda and how they hope to level the playing field coming up. the closest shave, the cutting edge approach to the $20 billion razor industry and how he has competition on edge as the

second hour of "squawk box" begins right now [ music playing snoens snoe >> announcer: live from the beating heart of business, live from new york, this is "squawk box. >> good morning, welcome back to "squawk box. here on cnbc live from the nasdaq market site in time's square ooimt i'm joe concekernen they were green, but they're red, right around the flat line. the nasdaq oh now green up a quarter oafter point and the dow jones industrials down about 13. in the news today, food maker kraft heinz is rallying after they beat estimates by 7 cents kraft heinz did see higher commodity through the quarter.

it would have raised price to cover those, stocks up 4% him general motors is working with auto desk on manufacturing new 3d printed auto parts. it's a part of gm's move for parts used in electric vehicles and extend the number of miles the vehicles can be driven before you need to recharge them it's the busiest day of the week for initial jobless claims our first quarter productivity and the march trade deficit and later this morning, palm beach factory orders and the latest ism non-manufacturing index, it might behe busiest day but then we got the big employment number tomorrow, quality, not quantity. that's a big number. >> we are watching tesla, the auto maker reporting the biggest quarterly loss ever, they were expecting $784 million last quarter or 335 a share on a just

basis revenues rose the company's cash piles dwindled at 2.75 tesla is sticking by production targets. when the g & a says e session began, elon musk cut them off. capital markets asked about the model 3 deliveries this is how musk responded >> we're going to play youtube sorry. these questions are so dry >> a lost venture, tesla enthusiast tweeting out monday in a crowd source question musk allowed not only one question but 20 minutes of back and forth on the calm. during that period, musk attacked the media of incidents involving tesla's auto pilot mode musk took a few analyst questions and took a shot at investors. >> people should definitely buy

our stock. do not buy it if volatility is scary. there you go >> the company quarterly results, it was down after it fell more during that conference call the stock is now down 5%. those comments of him cutting off two analysts, cost the company about $2 billion in market capitalization. >> the stock was at that stalemate at $300 a share, which has been this level it keeps bouncing off of and crosses beloi low, it was instant. >> it was. >> right after those comments. right. >> absolutely. it chose, i mean, it was an unwillingness to talk about capital requirements it was an unwillingness to talk about configurations for the model 3, which is how analysts will define how profitable average selling prices are so he does not want to talk about these basic fundamental questions that all of wall street has i don't know >> and with him, you know, you

would think, oh, he doesn't want to talk about it it's not even necessarily true with him he just did, i'd rather talk about something else doesn't necessarily portend. >> that there is bad news per se who knows. >> the markets took it that way, it looks leak, righike, right >> he previously said, they need more capital he said i specifically don't want to raise more capital this year in answer to a previous question so then he kind of shuts off all further q & a leading to you say exactly how calibrated was that comment? you have to raise questions on a lot of these things. >> right >> he will continue to get the bren of the doubt until he doesn't. >> but he's not in a way you got wall street analysts were bullish on the stock. they may have bye ratings. everybody believes tesla will raise capital. even though she not. his good will is already wearing

off. it's a matter if it will hold the stock closer to 300 as opposed to 1240. >> it's different than going to others >> oh, absolutely. there is a big difference. >> all right let's talk about the broader mark i don't know i shouldn't hang it on him someone i can't remember one of the guys, i don't know, yeah, somebody, anyway broader, yeah, the markets and the economies, andre garcia, my chief executive officer and josh stineman at stifel nicolaus dws. jess, i have seen people with using the s-word stagflation, you say growth is good >> i wouldn't characterize that as stagflation 2% is where the fed wants it to be we finally got back to there growth is proceeding at a good pace i don't think the moniker's type

stagflation is the right label at all >> and no surprises in what the fed does >> no yesterday was as expected. i think they will continue i think they got to be happy about the way things are developing growth is proceeding well. the economy is back to full employment back to starthd inflation. you don't want to use mission accomplished from the fed's perspective, it looks good the process they are in, gradually taking away looks to be the right course they will stick with it. >> i needled you in the past about your preferences over domestic issues. lately, we've read some disappointing things about european growth and the markets over there and the strength of the dollar has some people talking about our economy outperforming europe again or at least rates going up, one or the other. have you changed your economic outlook on that? >> i don't think one quarter makes a trends

so for a number of years, the u.s. was the fastest in relative terms, it was growing faster than it usually does compared to europe and the emerging markets the debtor points in europe are ak this quarter and china has stabilized but is not accelerating so it makes sense the dollar is appreciating to me right now the u.s. dollar was appreciating for seven, eight years, relative to other currencies. i think this is a blip in the map. i do want to add one -- >> you want to get to your thesis today cash is coming back as an option >> that's where i was going to go, a story that's going to continue to evolve is when we talk to consumers, they are blown away that money markets or savings accounts are yielding 1.6, 1.7%. for people in their 20s, they have never seen a savings account that gave them more

than .05 >> they don't have savings accounts that's a different story i think this is important because by if the ind of the year, we might see them yielding over 2% the question is are you going to invest in the markets let's say you're in your 60s, you are trying to decide how to allocate the dangerous part of your allocation, cash starts to look like an actual asset class. i think that is something that's overlooked right now >> it sounds like a really bearish call to me okay it is 2%, but you got to think that the stockmarket is going to - >> then you think the stockmarket is going down or will be flat in. >> no, no, no, what i was saying it becomes a viable option i'm not saying everyone will take their money >> you get your money back, plus a return him for a while there you were paying for someone to hold your money. >> inflation is 1.5, you were getting 0, you are actually getting 1.8, 1.9 in your savings

account, it changes the dynamics in how people look at investing. >> that would be bearish for the equity market. >> would it be bullish people are saying there is a little skepticism out there it would be nice to diversify. >> next year you might get 3%. >> exactly >> i was trying to be conservative you find your savings account giving you more than inflation >> doesn't that set up interesting dynamics if you choose to go into equities, you will not go into consumer statements, obviously, you will go into the growth year areas. the idiosyncratic areas, like technology it changes the dynamics in terms of portfolio allocation. >> the dividend yield is giving you 1.8 for the overall market the cash account is giving you 8% it chaings the markets >> they are not enticing anybody right now. >> not with this principle decline, yeah.

>> what about corporate? i still don't leak 2%. what are some good corporates yielding now >> if i was going to diverse away from equities >> corporates are 4 and a quarter. >> everything is going to start moving up. >> tax frees now the state income tax is. >> you got to remember the conversations we used to have, which was what are the other options? equity is the only game if town. why would you invest in treasuries now things are looking a little more dynamic it's not a bearish call on equity it means that -- >> it kind of is >> it depends on earnings. the rate of earnings continues to perform people will continue to make the decision that equities look appealing. that's a separate discussion i think the psychology of how you look at cash versus investing. for eight years. >> we used to live in this world. the pre financial crisis, you used to get paid to hold cash. >> pretty well i can remember 5 and 6%. >> without even talking about

the 90s. in 2006, you were getting a cash account at 6%. >> we were talking maybe going to 3 or something. >> i know, which makes me think there was some room left i'd rather have a dividend stock that pays 2.5. only the most bearish market prognosticators say mid to high single digits. that's their default call of the stock market >> over time, that's awe get >> if you are 25 years old, it's not a question if you are 65 and you are trying to basically time your retirement, cash starts to look appealing. zero volatility versus taking your chance in the equity markets. >> thanks, gentleman. coming up, the u.s. delegation arriving in china to talk trade with chinese officials. treasury secretary steve mnuchin, commerce secretary wilbur ross. robert lighthizer, larry

navarro, all over there, then later elon musk contentious earnings call with analysts after the company did beat expectations, what the street is saying is coming up again. stay tuned you are tcwahing "squawk box" on cnbc prepare for your demise, mr. billingsley! do your worst, doctor. i will. but first, a little presentation. hijacking earth's geothermal energy supply. phase 1. choosing the right drill bit. as long as evil villains reveal their plans, you can count on geico saving folks money. fifteen minutes could save you fifteen percent or more on car insurance. welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you!

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the u.s. delegation arriving in china this morning gearing up for trade talks. secretary steven mnuchin leading the way to avoid a global trade war. the u.s. trade representative and vice president wendy cutler, thanks so much for joining us. good morning >> good morning. >> everybody says we should temper our expectations going to the two-day meeting. what can we expect here? >> look. this is the first meeting since the administration announced the imposition of sanctions. high level delegation. a lot of issues to discuss i think this is just the beginning of a process and we should expect any substantial outcomes >> in terms of the chinese side of things, from their

perspective, they've extended an olive branch in this thing when president xi spoke about opening up his markets and knocking down auto tariffs, et cetera. do you think they'll be receptive to giving up more ground the daily newspapers are putting out, shay saying china will not back down to u.s. bullying and the global community will be on china's side, because they are representative of multi-lateralism and global trade. >> right i think in the leadup to these types of meetings, sides tend to get hard line and hard line statements are made. i believe in the meeting, option will be suggested where possible compromises can be reached. >> who has more. we got dualing more to lose statements >> right >> if you have a trade deficit the size that we have, by definition don't they have more to lose? >> well, yes and no both sides have a lot to lose

the u.s. has a lot to lose as well >> that will become evident once the public comments. >> we want to know who blinks. we are assuming there will be at least as an optimist, we're assuming there will be something productive that would come to some type of arrangement if you do have the upper hand slightly, that can make a difference, who has the upper hand >> i think china does. >> why >> because i think china has the wherewithal all to live through a trade war longer than the u.s. can. >> why >> tariff increases for the u.s. for the consumer, for the u.s. workers, for the u.s. companies that rely on these inputs and chinese -- >> so your living is much higher than the average person living in china right now so we're that fat and lazy and happy? >> no, but china can mobilize its people to live through distinction. we're going to find other -- >> it's already tough on the farm over there. >> states with less than 2% of the population have two senators

that are taking the bait >> and a lot of trump supporters are the ones that are going to be effective i guess >> china has been ready. take one for the team. >> china imposed sanctions on exports to china that hurts the u.s. farmer >> could he have lived into the future about addressing the intellectual property. are you supposed to sit here and let them organize technology >> i think we have to address this issue the question is, what's the approach >> we tried by being nice for the last 15 years ago got nowhere. >> there are other things you can do against china which don't involve increasing tariffs, such as restricting china's investment in the u.s. and chinese telecommunications

equipment sales to the u.s such as ensuring that chinese researchers don't have access to our labs let's get to the problem that doesn't violate the international trading rules and alienate our trading partners. we need them, their support and we need unity with them so we can all raise the same message to china. >> so we're seeing glimmers of that already, in terms of the executive action regarding telecom equipment sales. we're seeing part of that in terms of restriction of laboratories in u.s. companies when it comes to chinese researchers having access to that have we laid that good ground work so that these talks, we can give up grounds without having given up ground? >> i think that's demonstrating we view this issue with the utmostseriousness and we're going to take actions. we will mirror chinese practices right restricting sales and

investments in the u.s. like china does to our firms. to me that makes more sense than increasing tariffs and creating burdens for u.s. companies. >> on the investor's side, you hear a lot of people extolling chinese technology companies, their industries for how they have aksel rated ahead in a lot of areas and i wonder if the united states' hand is weakened just because the tech industry in china has basically you know come into its own. >> well, it's coming into its own. but it's not there it relies heavily on u.s. technology, on u.s. talents, on u.s. investment. so now is the time to address this issue i applaud the administration for taking the issue on. what i hope, though is that the approach they fol slow one that's going to be effective and doesn't ends up destroying the international trading system and ailient nateing our partners >> i think you mentioned about them living with tariffs is an interesting one. when this was first bubling,

there are reports on wivo, for instance, there are all sorts of chat rooms and commonly searched phrase was like war with china, excuse me a trade war with the u.s. and there are lots of people on there saying we are willing to not let the u.s. bully us we and china must stand up for ourselves, very sort of nationalistic sentiment. i mean, i don't think on twitter there are many people here in the united states. yeah not to the same degree whatsoever, we're willing to pay more for our goods, so china won't steal our intellectual property the point that china will take it do you think that's being lost on the administration? >> i think it's being lost him i do think the administration recognizing that this is a pretty complicated area they've gotten into. remember, we will get the public comments on the tariff lists that we published in about one week a lot of u.s. companies are trying to figure out how these taff increases affect their

businesses and that's beforthinking about the products that china will retaliate against. so there's going to be a lot of hurt here and the question is, can the u.s. consumer worker and company, can they live through this and are they willing to live through this or are they going to complain and say enough is enough. let's finds a negotiated solution >> big question wendy, thank you. wepdzy cutler. >> thank you coming up, harry's is looking to shave market share from its competitions harry's co-founder jeffrey raider joins us on how he is trying to take business from proctor and gamble and gillette. "squawk box" will be right back. monday on "squawk box," we got your ticket to omaha for a billionaire's sum. three hours with berkshire hathaway ceo warren buffet he will be joined in the last hour by vice chairman charlie munger and microsoft co-founder

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>> coming up, tesla focuses after a bizarre conference call with analysts. we'll break down that calm, what

was said, what it means for the call on the morning session. e s. a look at u.s. equity furethdow at 53 at the open. we'll be right back.

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good morning, welcome back to "squawk box" here on cnbc live from the nasdaq market site in time's square shares of tesla pharmaceutical have earned 94 cents a share for the latest quarter beating consensus still, revenue well above forecast the drug maker raised the full forecast a private equity firm kkr reported better than expected ploft raised the stock buy back by $500 million and would announce it would convert the corporate structure to a corporation. that shifts a direct result which lowered corporate tax rate you talk about this being a huge

catalyst >> hedge fund first, they own these partnership structures it was a clear discount on the stock. different tax form, individual investors had to dividend out most of their earnings, like a reit in a way. it was one of the cases, they'll convert to corporations. they get put into the indexes. it will be a more efficient organization >> investors will be keeping an eye on the latest productivity figures due out in an hour they expect it to have risen at a 1% annual rate after a flat performance in last year's fourth quarter we are also watching sprint, which is posting a net annual profit for 11 years. they added 39,000 new paid customers in the quarter sprint announcing they will replace the cfo. fitbit sales fell for a sixth straight quarter also missed forecasts.

the company sees weaker tracker sales for the second quarter revenue. the sales are down now four or 5% that's depressing. 5% is 26 cents >> that says it all. >> i think half the market cap of the company, it's the cash on the balance sheet. >> you can't get anywhere else >> that was the skeptical case from day one you know >> all right let's get back to tesla and elon musk's bizarre conference call last night phil lebeau joins us now with more and talk about it it's since last time you are thinking about it. i can see it on your face. >> i am reading the analyst's note the one i'm most intrigued by we will talk about how he is cut

off. the tesla earnings call raises more boring in quotation marks and not cool in quotation mark questions than it answers. that's in reference to what elon musk said to him some of the questions basically surround model 3 the wall street community wanted answered yesterday, it did not get answers to the in terms of where tesla is moving with the model 3. that's the granularity they were working for. how quickly discuss tesla think they will hit that 25% will they hit there as projected, the configuration has a lot to do with the profitability. he had the temrity to ask about capital spending here's the exchange between him and elon musk. >> so where specifically will you be in terms of rierms

requirements >> next. >> questions not cool. >> rbc exam was asking about model 3 configurations this is what elon musk said to him. >> we're going to go to youtube. it's all right these questions are so dry >> and then they proceeded to go to a tesla investor who asked a bunch of gem questions, nothing probeing, nothing that would make you say, wait i never thought of asking that in terms of tesla shares, they slid almost immediately after elon musk dismissed the analyst. then there was the thoughts about the fact that this is a volatile stock and how day traders look at tesla shares, muck has no use for them >> people should definitely buy our stock. i am not here to convns to you buy our stock. do not buy it if volatility is

scary. there you go >> and that was basically what you had in a conference call that for the first 30 minutes, they were moving towards some questions. granularity regarding model 3, which is what is moving this stock, guys, in terms of investors want to know about how are you doing on the ramp up in production how are you doing with gross margins, et cetera elon musk said, no more. we're going off, we're going to have our investor, somebody who is a huge fan of tesla admittedly ask a series of questions for about 25 minutes so bizarre to say the least. >> yeah. still, why don't you stick around we want to learn more about tesla as well as elon musk's strategy joining us is ted higgins. tim, great to have you with us i don't know what has changed. isn't this elon musk just being elon musk, unless we think elon musk isn't taking those questions because he's trying to

hide something >> a little more feisty. you never hear a ceo on a call like this going after analysts it raises a lot of eyebrows. if you looked at the result, there were some positives the revenues were better than expected the loss was better than expected. we get off the call and the words are contentious, bizarre, surreal to describe his performance. that's not really what a company is going for >> i get it. elon musk is a degree of eccentricity that investors sort of expect. so i guess the question is, you know, at this point, is that wearing off? >> well, what he did here was pivot the conversation to things that he does leak to talk about. he talked about the upcoming model wise contact sport utility vehicle, self driving cars these are things in the past the future has helped the stock. this idewhe is taking personal transportation itself enthused investors

he's trying to pivot to. that to your point, investors are in the now they want to know what the model 3 is doing, can he ramp up production like he has promised so many times and has not been able to do just yet. >> tim, obviously, i think analysts are also going to ask whether his reluctance to get into the weeds with a lot of the financial questions and the production questions, represents a lack of attention on his part to these issues or does he want to get away from the entire conversation of the balance sheet. how much cash will you need? how much will you burn in the second half? either way, it's one thing to say she a long time visionary who is focused on the next 50 years. it's another thing if the company has to come out and raise mine i money in six months >> exactly before the call you can see his activity on social media suggesting he didn't want to focus on cash burn and where they are in the now. it's about the future. it's always about the future

>> on social media, he retweeted a comment lala la as well as an instagram photo that said woke on it. phil, do you have some thoughts here for tim >> reporter: i think thim tim would agree with me on this, if you look at the analysts notes, they call this bizarre, strange, a weird phone call the strangest many have seen in 20 or 25 years on wall street i have yet to see anybody who said you know what, i'm a little worried here, i'm cutting in my estimates. so at the end of the day, i have to wonder, i'm curious what you think, tim, are investors going to care about this i think if you are a bull, are you still a bull on tess larks on elon musk, if you think the guy is a carnival barker, you still think he's a carnival barker >> that's the magic of elon musk, if you are in his catch, you see him as a visionary, if you are against him, here is another example why you don't like him

here's another example my e-mail box this morning from readers were hey, you are so biased the question i said to them was which way? if people aren't happy on both sides of the equation within it comes to tesla >> it's a real battleground stock, still you brought up the point earlier, that is these investors are going to be the ones that tesla is going to be knocking the doors of in terms of raising capital in the future elon musk says we don't need to move capital it's not required. everybody on wall street thinks they do need to raise capital. at that point i get eight lot of the institutional investors, their cost space low they have been with tesla years and years, it doesn't matter if it goes back to 244 the last 52-week low, right but they may not want to put more money into the next offering >> right i think elon musk's feeling now, i don't think this is why he acted the way yesterday. that's a part of his personality. anybody that's covered the company has seen this before in

some fashion i think elon musk right now is feeling, look, i'm confident where the model 3 is, where we're heading. i'm not getting into the granularity on these things that analysts want to talk about. you have to trust america's all is well in the world now i understand the flipside of this is people saying, look at something leak auto pilot. you know, he comes out and says that the media are crazy to be writing these stories. they shouldn't be writing these stories at all that's absurd. everybody knows that's absurd, n ntsb investigation is nothing to blow off these are pertinent information about technology we know where musk is coming from on his appreciate to not only the media, but these questions about the granularity of tesla's business. >> it seems like the problem here as manifested by the stock this morning is elon musk is essentially dismissing what matters to many constituents when it comes to tesla, whether it be these accidents or the

ability to, you know, operate its business and not flow through more cash. these are key questions. he doesn't want to answer them that's an issue. tim, phil, thank you >> thank you all right, coming up on razor's edge -- phil murray -- bill murray movies. competition heating up santoli i look to you for this kind of stuff. >> it wasn't bill murray >> don't sit there when aforay into drama -- when i foray into drama he got good at he said personally to me if he can do comedy -- comedy is much harder i don't know, to me he's pretty funny. anyway, competing for the best shave, the founder joins us to discuss the business model and taking market share from procter & gamble unilever, the futures at this hour continue now to trade in

the red, now a little bit worse or better. down 41 on the dow jones, down five on the s&p, 10 on the nasdaq grandpa come. at cognizant, we're uniting doctors, insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh... am i covered for that? yep. look. grandpa catch! grandpa duck! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies see it- and see it through-with digital.

>> joining us now is the co-founder of harry's, a direct consumer of men's shaveing company, jeff, is that stale good description of harry's? direct consumer at this point? >> i mean, we see harry's as a brands that should serve customers where and how they want to be served. we started online at harry's.com. overtime we've expanded our distribution to retail we found our commerce want to be there. we feel we as a consumer first brand have to be where they want to be. >> i'm obviously referring to the target placement in wal-mart now, that's good and bad who wouldn't want to be in wal-mart, though, to get to customers? can you lose any of the cache?

>> we think it's great for our brand and our customers for us to be at wal-mart. wal-mart is within ten miles of 90% of the u.s. population and we always want to be a brand that's available for everybody we care a tremendous amount about delivering our customers amazing value and wal-mart cares about the same things. we're super excited. >> what about, it's not going to just be razors now can you give us an idea of what else you'd like to get involved with is there anything i wouldn't leak to have the harry's name on in terms of men's grooming >> yeah, we are focused on trying to deliver guys better experience every day as they get up and get ready we think there is an amazing opportunity to do that we've gotten to know guys well and are now trying to make products that differencely deliver for them, deliver them exception am experiences, with

really great ingredients and do so at great value. so we plan to continue to expand into other categories in men's personal care and try to kind of give guys a great experience, not only in shafk butching they are doing to get ready >> can you tell us about it? or do you have to kill she in is it top secret? what kind of things can we look for from harry's >> today we make razors and shave gel and things around shaveing we make men's skin care products face lotion. we just launched a post-shave mist, which is an amazing product that you spray on after you shave that hydrates your face and sort of prepares you for the day and we'll continue to understand what guys really want in their morning routines and try to deliver them products that have amazing ingredients that deliver sensorial experiences and that we hope will make their morning, a little better.

>> santoli sort of twitch. does that sound good now >> yeah the mist. >> it sounds like it will be refreshing. >> it does would you mist >> in the room you walk through or you have to - >> ask jeff. i don't know >> let's have, you you all have to try it. >> it's delightful >> we started experimenting with it at our barber shop in new york guys loved it. we said we think we have to bring it to everybody. >> i never heard of it but when you said i, i thought, i don't have a mist after i shave. i have nothing really. i can use that >> harry's.com will take care of you. >> my other client, somewhere, he's wishing he may already mist. he may already mist. does anybody else have a mist, jeff, or no? >> i don't think so it's an

innovative product >> i think so. who is your niche pretty tore? one of these big guys? >> we have always built harry's in a way we can remain independent for a long, long time to be able to control our own supply and innovate on behalf of guys, we are building a brand we hope will be around for a long time it's growing really well we continue to see amazing opportunities to do better we're reaching lots of people. we continue to focus on ourselves and build the best business we can. >> wearables are a big deal. i'm seeing we park our glasses with little spray attachments that can miss you. is that possible >> i think you should join our

r&d department >> can you >> all ight. jeff, thank you. >> thank you >> little wipers on your glasses. >> all right coming up -- >> i don't know, you are playing along. cinco de mayo is coming. >> coming up, is the near luxury real estate market preparing for the election sflits your fate topic manhattan real estate has the biggest fall april is showing signs of a possible redown. we will talk to new york's most famous broker who sold nearly $1 billion in real estate last year coming up after the break. >> monday on "squawk box," three hours with berkshire hathaway ceo warren buffet. he will be joined in the last hour by charlie munger and

microsoft co-founder bill gates. monday starting at 6:00 a.m. only on "squawk box. welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com

save up to 15% oh hi sweetie, i just want early to show you something. xfinity mobile: find my phone. [ phone rings ] look at you. this tech stuff is easy. [ whirring sound ] you want a cookie? it's a drone! i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. all right time now for a check on the new york city luxury real estate market. i got a dandy sitting next to me you would love owl that sort of stuff the mist the glasses you would like that. you are mr. metro. aren't you you live right nearby here, don't you? >> yeah. >> you we'll be right back of

it i smell the mist. >> yeah a little mist. we're going from mist to real staechlt ryan sirer er is hospi the star -- ryan serhant is star of listings in, no he is the author of an upcoming book "sell it like serhant." thank you for joining us >> thank you. >> when you started this show over six years ago the top brokers were saying this is not serious, real estate this will never change now you and frederick your co-star are two of the top if not the top brokers in, no how is the world of broke -- being a broker changed with social media and media >> it's a good question. i distinctly remember when the show first started for us if 2010 we started filming everyone toll us not to do it. literally everybody. except maybe one person and then the opposite has changed

now, everyone tries to get on the show with us the exposure is so massive then it kind of has a much better value because it plays into social media as well, which we never anticipated it wasn't out when "million dollar listing" started. >> does every broker need to be their own brand or a broker for a broke raj brand -- brokerage brand? >> one thing they ask me, how do i build my brand and reputation if i don't have a show or two tv shows on bravo listen, you don't need to have that look at youtube, i started a blog it's three months old, it's awesome. it has an amazing exposure to a whole lot of people. younger people don't have cable. they're watching everything just on their phone you can create your own person na and brand through your phone. that's all you need. >> it's amaze, big properties are selling through insta- gram

i want to ask you about an $18 million property in west chelsea. >> yes. >> you put out an e-mail alert saying we are selling it this week for $9 million. half hoff. what happened? what's that say about the market it says that the market is saturated with inventory you know a lot of people ask me if the market is bad or correcting or really, really hot. i don't really believe in any any of that sent imt i think it has lots of inventory or little inventory. if you look at the numbers from 2002 or so roughly the same amount of homes sell in new york every year the demand doesn't really change the only thing that changes is the amount of inventory for seam it goes up or down we had a property in chelsea, we sold, when to the contract for three years ago for just about $18 million the contract fell out because the building took too long to be finished. we went back to contract on that for just about 9 about half off. >> a 50% correction?

>> yes that itself not to say it was never worth that number. it's that old phrase, something is only worth what someone is willing to pay for it. then there was not that much inventory for a beautiful duplex penthouse, private parking in chelsea, what do you find that that's $18 million at the time it felt like a really good deal today things are different it's definitely a buyer's market if you want to classify it as something. >> you are seeing that throughout the city at all price points or mainly at the top? >> across all price points, definitely in manhattan. he had a property in greene mercy 3.5 years we told it facing a brick wall. now we have basically the same apartment, beautifully renovated on the 8th floor, open views we're trying to sell in the high 3s >> half off fast >> it's a different market brock lynn is experiencing a massive, massive growth. it's up 6.7% year over year,

park slope is one of the most expensive neighborhoods in all of new york. considering fifth avenue, everything >> do you feel bad if you sold it for 18 million, do you feel bad? >> would i feel bad? >> now it's only worth 9 >> no, i feel good every day, i'm a broker rehe% wouldn't be going back to t person to make them feel bet fer. >> no, listen. you have to buy today, right >> i hear you. >> >> it's only because it's on the >> it's only because it's on the market the cloud that's built for all your apps. ai ready. secure to the core. the ibm cloud is the cloud for smarter business.

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the conference call that shaved $2 billion off tesla's market cap. >> do you have a requirement >> next. >> questions are not cool. >> elon musk ducks questions from nalysts the stock falling sharply. tesla bold goes head-to-head with an analyst who remains skeptical. that's coming up >> shaking news a trio of economic reports about to cross the tape we'll bring you the numbers ahead of the big jobs reheat as the final hour of "squawk box" begins right now [ music playing >> announcer: live from the most

powerful city in the world, new york this is "squawk box. [ music playing >> good morning, welcome back to "squawk box" here on cnbc live from the nasdaq market site if time's square, i'm joe kernen, andrew and becky are on assignment today we're getting more specific about where they are they're not just out and that's true next week this weekend >> they're both working hard >> andrew will be back tomorrow, becky is in omaha preparing for the big berkshire hathaway >> contest >> capitalist, woodstock, whatever you want to call it except i don't think they're outside in the rain. >> they're eating c's chocolate somewhere. >> our guests this hour, research partners, where were you in the last hour did you see what happened?

did you see the dow? >> nothing significant it's not the ten year. ten year is not it you didn't go above 3. suddenly we went from unchanged really on the dow to down to about 150 and the nasdaq down 37 the s&p down 14. tesla is down even more than it was. >> % >> here's the treasury yields that i was referring tom you can check that, that will cause her consternation last week and the week before, it got 3% you can see it's not yields. >> and the dollar rally halted >> caterpillar is down i don't know who knows it's 100 points on a percentage basis not that much. since the end of january >> your hair is longer >> at my age i try to blow it

out now. make it look a little bit thicker. >> it's a gooth good point you know i'm going to notice otherwise it might be called boring and dry and they're not. in this case blow dried. >> we'll talk more to jason in a few minutes. a busy morning, meantime for earnings cigna beat profit 4.11 per share well above the consensus estimate of 3.39 more customers enrolled in cigna health plans the company is raising the four-year plan check out shares of blue apron, they saw lower than expected loss and added customers during this quarter the stock is popping up 5.25%. it's a small cap stock in market cap here regeneron reporting a share versus consensus revenue beating stills

results helped by a 15% increase in u.s. sales of the company's injectable eye drug ilea, up almost 2%. shares of kraft heinz, it grew 8% last quarter, despite sales, pointed to higher prices and lower taxes. programing photohere, becky quick will be speaking to craft heinz ceo bernardo hees. let's look at the aforementioned tesla move today. the shares actually the price has worsened now down 21. 21 points, down 7% after elon musk's un unusual performance on the tesla conference call. when the qch a afternoon a session began, they cut him off mid-question he attacked the media for misleading coverage of incidents involving tesla's auto pilot mode he took a few final analyst

questions and took a shot at investors as well. here's what he said. >> i am not here to convention you to buy our stock do not buy it if volatility is scary. there you go >> the auto maker reported its bigger reporterly loss ever. wall street was expecting losing $780 million 3.37 a share the company did dwindle to 2.7 billion. >> let's get back to the broader markets here >> what will you be watching this is interesting. >> mostly watching to see if the market can hold the trading range. we have been talking about it. it's been kind of teasing this

200 day average it's coming up on a longer-term basis i don't think it gives you a clue as to how it's handicaping. the market seems confused. not sure what we are wishing for a react sell racing of growth or what it might do to yields or a kind of a goldilocks situation to sit around for a while? the confusion is also because the way the market has absorbed these great earnings reports, not really responded to them in higher prices. i think a lot are the opposing currents have the marks caught right now. we had this little sell-off in the futures. it kind of brings us back down to the bottom ends for months now. >> you don't know if you want a hot number >> exactly >> or a weak number or what. either way the good news is either good news or bad news. >> we saw in response to the fed statement.

that was neutral statement is there any better rule than the reaction as the wrong one? you had a minor rally and it gave way because you could basically argue either side of it. >> closing at the lows of the session. let's get more on the markets here the global wealth chairman. bank of america. our guest host, research partners who have longer hair. normally does. keith, i'll start with you your hair looks fine. >> thank you >> how are the markets doing were you surprised to the reaction what do you anticipate for the jobs report? >> i think one of the thing that surprises us, the expectations 16% year over year, we are looking at 20 to 25 the real shocker was revenue up 8 to 10%. margins around 11. so we're just blowing it out in the earnings side. unfortunately the pe multiple continues to shrink, not reglflc

that there is a lot of pusheds and pulls, not the least the yield on the two-year treasury is above the yield on the s&p 500 so it's getting people thinking about there is an alternative now. it's that in addition to the other trade war concerns, et cetera, or getting people on the side lines a little bit. >> it's interesting, jason, i mean, because for so many years, you know, you have pointed out this whole kind of advantage that equities had over almost everything else. but i just wonder how to interpret this idea that people are themed by 2% in cash we talked about this in the last hour does that tell you there is this reserve of skepticism out there, people are quick to kinds of get to safety or does it tell you, well, look, there is a real asset allocation issue that will go on? >> by the way this goes on after the third straight month of neutral outflows we are seeing it

maybe it's coin cash i don't know >> i can kel e tell you this, since march 9th 2009 when the bull markets started, there have been net outflows if you count neutral fund and etfs, inflows and etfs have been competed. to me that is not a sign of a bull mark top or excessive euphoria i think there is more skepticism now. it remains a lot of scenttism about automatic questions i get on the road are about the yield curve about the potential, the inethicacy of the levels, earnings will be up 20 to 25%. no one is looking at the upside. i do think bonds and cash are starting to compete with stocks now. i think that's true. in tesla there is in my penalties a little of a story to link these things together, which is to say, are you not

going to get a free pass anymore in terms of access to capital. you can be blase, everything gets a trophy access to capital market you will get punished if you don't do the right thing so i think tech, some companies in tech are finding that out the cost of capital is moving higher personally, i'm very bullish on the xhichl i think the economy will be better than the marks him i'm very bullish on the economy. >> in terms of where the equities and their values. you don't think where we are in terms of a 16 times four that's not right or is that satellite is the market telling us that may be the right way to look at stocks that's where we should be, where we were a few months ago is where we never should have been. >> i think we are shy of 20 times multiple tant. especially on top of a 22% total

return the prior year we think what will happen, the economy will react sell rate we think earnings will continue to come through in a big way, as time goes on, meaning as we go through this year. what will happen is money, long-term investors will continue to come back into the markets. we think multiples will begin to expand >> that itself the only question to answer right now is how much expansion can you, will you get? it will answer the questions where the markets will go. we have a range of 2803 thousand we think there is a good shot we could see the lower end of that range as the year progresses >> you will be with the number one barrier to 3,000 >> i think it's, it's higher rates, if the fed gets more aggressive than they're suggesting and inflation stats to rise above the expectations are currently. >> i wonder if we're getting to

that point the big question is how long the cycle has to run to these financial accidents start to become a little more common >> listen, i, personally, as far as the business cycle goes, i don't really think we're that late and the reason why i believe that is that normally late in the cycle the fed funds rate is not negative in real terms and you don't have, i know the unemployment rate is low, but you have a lot of other things it's been a very strange cycle because of the way the fed has acted. so the other thing i'd say, mike, that it sounds crazy, but at this stage of the cycle a financial crisis could be the pause that refreshes as far as the ends of the bull market. normally you get as interest rates rise a financial accident that will freak everyone out the fed then takes a pause and risk assets take off and then that's the kind of the blowoff stage.

so i'm not rooting for a financial accident but in some ways, that would be more typical of a normal cycle you just don't have low volatility forever for nine years. it's not consistent with free enterprise. >> jason will stick around, more market insights ahead. >> at the top of the hour, we mentioned caterpillar. >> that is the stock putting pressure on the stock now down triple digits. it is down 1.4% after a downgrade at bank of america, to neutral from buy the analysts say the stock is not responding to positive earnings news. they also says -- b of a is getting more selective check out laggards if we follow the overall average. boeing is not helping. although, it's not even a 1% loss at this point up next a wedding registry that is ringing in major dollars.

the ceo of e-commerce zola joins us on set. first, though, where people are bugging out about tics and mosquitos more than usual. megan, what do you have coming up now >> hey, joe, summer is coming. >> that means, are mosquitos and bugs like tics and the diseases 'lte carry are on the rise wel ll you the numbers and what businesses are doing for the problem. nobody's putting their money into equities. they're not investing in commodities or fixed income. what people are really putting their money into is what they hope to get out of life. but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more.

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save up to 15% sure.you book early mom,what's up son?alk? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us.

i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. [ chuckles ] download the xfinity my account app and set a password you can easily remember. one more way comcast is working to fit into your life, not the other way around. here's a story that might make you itch. disease caused by mosquitos, bug bites, tripling. >> they're not just annoying summer pets. tics and fleas carry serious diseases the cdc shows those are on the rise, cases tripled between 2004 and 2016 in the u.s. with the big uptick due to the zika virus. west nieshlle and denguegy, lary

due to lyme disease, researchers cited warmer weather, reforestation and lack of vaccines we can make sure to protect ourselves and over the last few years, sales of insect repellent products, bug spray and citronella have been on the rise there are more creative solutions, better methods of insect control google is working on this through it's biotech company to wide out the population-to-of the disease. debug. a similar approach is being worked on. they say these numbers, they're probably under reported. probably even worse. >> how far are we from a vaccine for lyme or you name it west file, whatever. >> that's a good question. a lot of these things are being

worked on by funding and academia companies get involved in the later stages we went through that with zika there are ones funned by the government we haven't gotten across the finish line yed yet, west nile, we haven't seen that across the finish line either in a more immediate sense, they need to do mosquito control and go out with folks who are spraying today to get a sense on how that is shaking their business >> do miscoy tos occupy any e ecological niche >> i like this story, they are a food source for birds and other animals. >> you don't get rid of bats because of mosquitos you want bats around, a little place. >> the bat cave. yeah no, not like michael keaton. yeah >> and they didn't think he would be, either you know what i mean.

>> he's my fate, michael keaton. >> better than talking about skeevie bedbugs. becky, that's her -- ooh everybody hates bedbugs. all right, we got to go. a big show big, big, really big show coming up on "squawk box" tomorrow, becky will be live at the berkshire hathaway annual meeting the lineup of ceos, including benjamin moore, brooks running and oracle of omaha, warren buffet will be joined by charlie munger and microsoft .munder bill gates, 6:00 p. eastern. we'll be right back in two minutes. because, when you really, really want to be there, but you can't.

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[ music playing ♪ it's a beautiful night ♪ we're looking for something dumb to do ♪ ♪ hey, baby, i think i wanna marry you ♪ >> disruption is not a good way to describe marriage but in the case of the $20 billion just registry, letting vejs industry in the streets bring about positive change and modern 15, zola is a wedding registry, breaking news it just

raised $1200 million in the latest series. we should point out, led by comcast, nbc universal and goldman sachs investment partners joining us now, the ceo and co-founder of zola i got a quick education on exactly how this works the wedding industry is $100 million. just the registry is $100 become the rejs registry is 12. >> the registry is 19 billion in the u.s. >> it said 12. >> the wedding industry in the u.s. is $100 billion >> that's staggering >> yeah. >> now, we are kind of talking about, well, people that are getting marred by definition are probably millennial's at this point. unless are you a late bleerm so 28 to 32 is your sweet spot for who would use an online registry >> exactly >> that is the average age of a couple getting married today in the u.s., so it is the millennial generation.

they are unlike any generation that's gotten married in the past in that they are getting married at old age, they live towing before they get married. they want different things from the registry >> than before i can remember, sort of, so i remember, you might do, oh, we're registered at like nordstrom's or something in this case, it's alling a gre gatd it's across the board. so it may not be something that makes no sense for any given couple you can find exactly what you want it encompasses everything, right? >> so zola is a retailer and e-commerce store in the same way that every other department store is a retailer and might have an e-commerce store >> no inventory. you dealt with all these other vendors? >> yeah. we worked directly with 600 brands, many of the brands, you might find, kitchen aid, quisinart, cool new brands

couples want, sonos. >> airbnb. >> they're experiential. so it could be an airbnb or a honeymoon that they raise money for through a registry, right? >> exactly some of our most popular gifts through the registry are delta or southwest gift card >> 40% margins how do you have those margins we are tailers? that would be the dream of bricks and mortar retailers. >> what we have been able to do is really capture normal retail margins, so you will find in the home industry, that is the normal retail margin, but our team has been work income e-commerce for many years trying to really evolve and improve on what are the paid rates. we saw in other e-commerce businesses >> so you may be a unicorn some day in new york, right a tech unicorn how long will you be zola independent and not something bigger do you think in >> i think the definition of a

unicorn is can a company be valued at a billion dollars? >> yes >> our goal is to be much bigger than that. when you look at the wedding industry, there has been no multibillion dollar disruptor emerge we have the best position company to take that place. >> we got to run great seeing you two out of three people get married are living towing, mike. i know, i know but that's just the way it is, right? >> get with the times, joe >> get with the times. i know coming up a trio of economic reports a live report from the cme next better not oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab.

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back to "squawk box," some live breaking news, yes, sir, our first quarter preliminary read may be one of the more important metrics in the economy. productivity up .7 it's a bit short of the .9 ones we were expecting. it's better than last month. it improved. originally released at zero. the last look. the last final read ends up at up .3. first quarter preliminary up .7.

unit labor costs 2.7 a little less than 3% sequentially following a lower 2.1 originally released 2.5. jobless claims, 209,000 last week, into the late 60s. we haven't moved too far off the mark, ramping up 2,000 to 211,000, still a very low number based on the last time we've seen it and continuing claims, move from 1.833 million to a little over 1.75 million trade balance for march a bit old. here's metric important to pay attention to we're expecting a rounds football 50 billion. it's a deficit with a minus sign, following 57.7 remember which had a subtle revision. all fed meetings, we tend to rise on rates going into them. slack off a little bit we're hovering one basis point the high for the year, prior to

the 303 established the high close, we're hovering at 294, still firm we have a big number tomorrow as everybody knows. joe, back to you >> rick, thanks. let's talk technicals now the founder and managing partner do you remember, was it two weeks ago, you were on how long ago in. >> i think it was a week ago >> so we saw a chart of the s&p. you got the big run up and almost a flag formation, it was your contention, it's for a while now when it does resolve itself, a certain amount of time, not necessarily for the decline, when it results itself, it starts the move that was intact, which would be hire. is that right? >> that's still the calls. usually the breakouts and breakdowns can be pretty explosive. we're getting to the point at which that triangle is sonar row, we feel it now with the five points that we're probably pretty close to that breakout.

i think we see it to the upside the triangle would be resolved hire above about 2720 on the s&p 500 and that would then give you a target easily 15% higher with long-term time >> so you got it the s&p? it looks, we're talk triangles what do you say at 2720 is where? >> that would be the breakout. >> so it's still in a -- if it doesn't go above it, it can go back down, what's the low end? >> when i look at breakouts, i want to see not just price, but time spent there a up can him weeks gets that you breakout then you can suggest that. presume, that's right. you tend to see immediate follow through on triangles that's their nature. >> what does explosive mean? 5% >> the target would be 15% >> that doesn't mean you obviously get this year you have been, but very quickly, you do tends to see fed follow through.

there is no number assigned except you want to be there for that breakout and not wait too long >> things could explode lower, also >> they could so, triangles are often a continuation reversal pattern. you see a breakdown, have you to be mindful of that, too. the breakdown would be below the february lows. the 200 moving day average is close by for the s&p 500 the cushion or psychological gauge of support that's rising, an indication of a long-term uptrend. i think it's right to let that intact earnings season, we had a lot of breakdowns on the charts they have been very limited. >> watching mel lisa all this will come up on "fast money" at 5:00 today >> it's copywrite analys kay. o >> i don't know what you are calling, though. >> when you say. >> i'll attribute it to katie stockton that spoke about this what i wanted to ask katie

take you all in. industrials look like a very similar chart, do you see that same sort of breakout? in there the industrials have been a source of breakdowns during earnings season, i'm sure you are noticing that, now we get to where they have countertrends buy signals. they're not high conviction until you see that uptick in momentum, which we don't have on a short-term basis industrials and consumer discretionary has been a source of breakdown, whereas technology is doing well in reaction to earnings financials look also, oversold uptrends there is potential in health care energy, which are more oversold opportunities, more countertrend the more longer-term perspective, still looking pretty attractive. >> i wonder when the markets bump up against the ceiling. they say it doesn't give you many chances to sell the high. does the market give you this many chances to buy at the low end of the range can we have confidence this

lower ends of the range will hold >> we have measured to gauge when something is sfauld oversold and on an intermediate term basis, we got close to that in february. it was the first time in some cases since the election mode. there is not often you get the oversold long-term uptrend in fact it's oversold or close to it is enough to suggest that we have some kind of countertrend moves on the way >> dollar and tenure, too, can you do that in 30 seconds? >> i can the dollar, it's a relief rally at this state. it's not a countertrend move, something that doesn't look like the start of a long-term reversal to me especially when you dig into the yen, look at the resistance levels there on ten-year treasury yields an uptrend, they're stepping higher the last move has been lower, just a pull back, support around 265. but you can easily arrive at 235 based on previous workouts for

the ten year >> you got to find it. >> i have my sources >> you like it here. you did get it out of the way early in the morning thank you. >> why not >> i discovered you. that's my story, i'm sticking to it >> it's fine >> what do you think santoli you have been around a long time >> i have been actually. >> that shows you, it lays there on behrends, should i look at this no, your print is different. now are you making a difference. now you are making a difference. now are you making a difference. >> all those years of making no difference >> and i begged you to come here. >> i have vouch for that >> it only took you. >> was it right or was it right? >> oh, you saw that? >> yeah. >> needle-nose ned >> that pearl with that belly button thing >> anyway, we've lost everyone at this point. >> thanks, kate.

apple the latest company to announce the stock buy back program. is the buy back overshadowing a buzz we are live. good morning, ylan. >> reporter: i am in baltimore where this company is making major investments in new equipment and new facilities now i know there has been debate over this corporate buy back i got s&p global markets that shows that capex spending is up 25% during the first quarter companies have reported so far and experts are telling me the effects could be even greater as small and medium prized businesses like this one the new tax law is delivering big benefits at arnold packaging in baltimore the company makes wooden storage containers in cardboard boxes and designs specialty robots now the company nick arnold says he is gearing up for a major expansion. >> our manufacturing minute has

nearly doubled in size in the last two years we have been able to go back and buy equipment that we needed to keep up with demand. >> reporter: lower tax rates have freed up cash to pay for it all the new tax code also lets businesses write off more of their expenses, like this fan and two others that arnold just bought in january. they cost $25,000 and will save 17% off the factories heating and cooling bills. that's money arnold is plowing back into the business and higher wages for workers >> a small manufacturer cash flow is critical for us. we have a little over 4% we're constantly making reinvestments in our people, not just equipment and auto makes, but the people in our work force is critical. >> reporter: now, analysts say it could take months for the couple lative impact to show up in the economic data, clearly, guys, you can see this effect playing out on the factory floor in baltimore >> thank you very much when we come back the earnings

call that everyone is still talking about. >> we're going to go to youtube. sorry. these questions are so dry >> that was elon muck, of course, abruptly ending analyst's questions on the earnings calm the car maker fowl falling in pre mark trade, nr ea pre stock market session lows a tesla bull and bear debate right after the break. and marvin... are going to need a bigger bed. ♪ ♪ ambitions live everywhere. synchrony helps make them happen with financing and partner offers at over 350,000 locations. ♪ ♪ synchrony. what are you working forward to? ♪ ♪ or a c-anything-o. but i've got an idea sir. get domo. it'll connect us to everything that's going on in the company. get it for jean who's always cold.

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>> so where specifically will you be in terms -- >> next. >>bonehead questions are not cool next >> that was elon musk on last night's earnings calm, the stocksing to a dive in the post-conference call cut off analysts questions as you heard there. joining us the automotive analyst at consumer edge research brian johnson covers u.s. autos and auto parts at barclays the stock is an underweight. we have a bull bear. jamie, have you changed your price target on the conference call you left it? >> we left it for now. we will be updating our models in time. real quick on the fundamental also for the quarter, i feel like nothing much has changed from yesterday clearly the conference call is the issue

we totally disagree with the way and we are reevaluating our stance as a result. >> when you come out of that model re-visit, we could see a change rate, i'm asking you this, people are wondering today what we heard from elon musk is elon musk being elon musk or did we get a glimpse of a ceo who can make grand prognostications of being cash flow pos five in q4 -- positive in q4 who can chart a path to those two goals by answering analyst's nitty-gritty questions >> i wouldn't go that far. i would say he is clearly frustrated and i think what he was showing was his frustration, what it came across is fuelling the naysayers, making him look unglued or unhinged. he has to remember in some way, shape or form he works for shareholders what we're doing is we're the voice of the questions we're getting to the institutional

investor community i thought it was disrespectful, unadvisable. i've never in my career i've heard any ceo act that way there are clearly more questions than answers on the corporate governance side today. it could have been a good quarter. on thought on paper it wasn't that bad, there were increment am positives, that goes to your question of q4 profitability i don't think that's necessarily derailed because of his actions, he should not and if he could take it back, he would >> looking at wall street's reaction, i haven't seen a downgrade on the stock, i've seen only a couple of price target trims in response to yesterday's results and/or earnings conference calm are you surprised that wall street in large part is still giving elon muck a pass. if you strip, i ask this question earlier, if you strip away this ceo did this on the

conference calm, refused to answer questions about capital expendstures refused to answer questions to help analysts understand a new product line, i'm sure a lot of analysts would say that's a huge red flag, we're going to wrn warn investors about this? >> we have an underrate rating and a 210 price argument on the calm, in terms of wall street, i think we're kind of like the factory, late night, a lot of people are reeling from the call in terms of what they heard. we point out that similar to jamie, we saw glimmers of fiscal reflection responsibility that gave us hope that maybe capex is being trimmed, maybe opex growth can be restrained. the downside is it calls into

question some of the time lines for things like model y. we learn that's 2020 instead of 2019 and the whole thing when we then got into the conference calls, really throw what is we call the cult-like upside case for tesla and the do you that it cannot only dominate cars but multiple other industries. >> and bryant, is your price target of $210 essentially strip away a lot of that really long-term maybe perhaps some day bigger future out there? is the 210 for what they now have in sight in being able produce? >> yeah the way we break it down, we'd say about 150, 160. if they just became a niche luxury car manufacturer 700,000 units a year, with a focus on profitability, which frankly if i were on the board, i'd be pushing for tom get beyond that we're giving am lottery ticket value more than the rest of the

lottery season that we do for potential expansionion that. >> an since all that potential expansion spent depends on going to the capital marks for fund raise, i think last night's call really called that into question >> ryan, there has been some talk of elon musk, programs stepping down as chairman, do you perceive that? do you think that would be helpful for the valuation of the stock at this point, given the behavior we saw on the conference call last night >> we raised that question on the conference call in 2016 an it was fol elowed up -- followed up from bloomberg. he brushed it off. i think the stuff you see there hasn't unlike space exbeen a full time coo-on-on the ground really running things, looking for crazy automation with the fluff robot. >> that being said, we wrote this in our opener, if this was run by a credible auto executive, it wouldn't be valued

at five times sales. we got that. the rest of the industry hovers around.2 to .5 times sales. >> we will leave it there. when we return, we'll do as we do from 6:00 a.m., continuing to countdown on the opening bell with we check in with jim cramer at the new york stock exchange next >> the futures right now are not about right where they we.er down 150 on the dow. we'll be right back. [ music playing into retirement. and market volatility isn't top of mind. that's because they have a shield annuity from brighthouse financial, which allows them to take advantage of growth opportunities in up markets, while maintaining a level of protection in down markets.

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the things we do every single day that puts ourselves in harm's way, and to have a partner that is so skilled at what they do is indispensable, and i couldn't ask for a better partner. let's get down to the new york stock exchange. jim cramer wrojoin us us now tough to talk about it too much, jim. is it elon being elon or did he not want to answer those questions? >> i think it's elon being elon. i think what he wants is to be in the middle of the cause and he switched to berkshire hathaway mode. i think he realized this is ridiculous i'm not dealing with these analysts and warren buffett doesn't deal with them and i'll go to galileo, and tesla meets galileo. he shouldn't do it the same

weekend that becky goes out there that would be bad. i would have done a conference last weekend or memorial day and just let all of the people come in and look at the cars and shut down the giga factor for other debts and this is ridiculous i think he's just got to get out of the call business because it's just too boring for him i mean, honestly either that or host it during cocktail hour. >> so will there be more money -- uh-oh. >> we don't like what jim was saying >> he got into the feed, elon. he's like the running man. he has running man situation remember when they broke in -- what was it? fleetwood? >> so do you think they'll need to raise more money or -- and if they do, you should do it when you can. that's the thing. >> that was kind of the theme, but you know what? you know what, joe that's a boring question let's go to youtube and go to

galileo. he wants to be interviewed by the car guys the car guys come in and they do the q and a? i mean, it's really time to get away from the analysts and tony, how many ceos would love to do exactly what elon musk did to tony saganetti they're all tired and boring asking tough questions and all he did was do what was the internal thinking of a lot of ceos, but this should be the end. i mean, you want to buy a candy company and give away some see's, and lost money in shoes i don't know it's time to go warren buffett because this doesn't work. >> if i'd been elon, i might have gone to see -- like stephen hawking is all a hologram. it's not a multiverse. it's a two-dimensional verse prior to the big bang? >> do you understand that? it had something to do with string theory, but that's where i would have gone. >> i think it's 50% chance that

the analysts are simulations on the call i would say, listen, don't drink and drive. he wasn't in a car, was he >> you know what, jim? i think a lot of ceos, if they had the poetic license to do that they would, too they get sick of questions like that, too, but elon musk -- he may not next time, though. >> a lot of people are saying it's an enron moment when he realizes, what have i done he blows it up and from now on it will be the car guys and maybe we have to have a reporter go out and make it a tesla weekend, you know? and get that galileo he was brilliant let's get cap eakaepernick us. >> he's entertaining these calls are going. i like the call. >> excellent >> i had it with at&t. how could you not have the call with tnt

>> maybe with the mets >> i'll do the call from san miguel next time. >> san miguel coming up. >> cinco de mayo >> he could do it with corona. >> today on "power lunch." n'mi a cnbc exclusive interview with rosalind brewer at 1:00 p.m. eastern time. demand a cfa charterholder. cfa institute.

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while the month of may tends to be tough for stocks there are some bright spots, the sectors that outperform, health care, tech and staples get back to our guest host jason trenner. you've been overall consistent in recent months and we needed to bring some complacency out. some might say this is getting ridiculous >> yeah. do you think it's possible the market goes to new highs and then adds 5% or 10% to that before the end of the year >> maybe not by the end of the year, but i certainly think as we go into 2019 this idea that -- i think the policy made it so that the policy outperformed the economy and all of it when into financial assets and now in my opinion the fiscal stimulus will work particularly as it relates to capex and more

of the liquidity will be drawn into the real economy which means it will be harder to get to multiple expansion. you're not going to get a 22% total return on the market it's also, though, to talk about the business itself. i think it's very good for active management versus passive. >> you always say that >> i know. it's true, but thank you. >> it might be circulated. >> melissa, thank you. >> my pleasure. >> call katie, if you want. >> make sure you join us tomorrow "squawk on the street" i ♪ ♪ saa. good thursday morning, welcome to "squawk on the street." i'm carl quintanilla and david faber and the u.s. china trade talks downgraded caterpillar with the bizarre conference call out of tesla las