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 last night. europe's down coming off the

lows and the yields at 2.95 as productivities miss, and the tesla tantrum despite the earnings beat. shares of the automaker dropping after musk's unique conference call calling analysts' questions boring and bone headed the service posting worse than expected results in the first quarter as a public company. >> waning hopes in u.s./china trade talks and the second straight week down they haven't done that since the middle of march. tesla, down with the model 3 production targets and the stock started to slump during yesterday's contentious call as elon musk cut off analysts including bernstein's tony saganacki who asked him about gross margins. >> so where, specifically, will you be in terms of -- >> do you have a requirement

>> next. >> boring, bonehead questions are not cool next >> musk eventually decided to take several questions from a retail investor who hosts a youtube channel. baer today said ignore the noise. how much of this was noise >> let's go over this. this was the best call i've heard in a long time and i'll tell you why okay first, everyone wants to cut off tony saganacki he is too negative most of the ceos say that guy, that guy, that guy, all he does is talk negative he went negative and elon musk had had that i like that. we have no interest in satisfying day traders i couldn't care less please sell our stock. don't buy it how good is that that is the truth, and finally, he says about the individual investor and he says to galileo

and not cappernicus. they should buy our stock. i'm not here to convince you to buy our stock. do not buy it if volatility is scary. amen isn't that what we want? if i were elon musk i would have done the exact same thing. i would have done the exact same thing. >> i can't figure out whether you're being sarcastic or not. that was a first for me. >> i'm not being sarcastic these are all of the things that should be said if you're a hedge fund, get the hell out of my stock. if you don't like volatility, get the hell out of my stock you know what that's called? truth from musk. truth! >> what if you're a long-term holder who just wants information about the three? >> yeah, you know, i don't think that's as important as what's under the hood i think the car guys, you know, i still -- no. no, i am not kidding tony saganecki, i've had enough

of him with youtube. hey, man, he loved the car what's the matter with that? >> rbc analyst asked about the model 3 reservation and that's the key area here because people are trying to understand exactly how many have been -- deposits have converted to actual commission cars and he wouldn't answer that. >> i thought it was so much better than what he could have done which would have said if i were musk, if i were a simulation of mufbsk, he told mi was a simulation we'd have more reservations than ever so he didn't do that. he just cut the guys off none of this -- i'm kidding. you know what's going on this weekend? you know what's going on this weekend, right >> no, what? >> kentucky derby. besides cinco de mayo, it's about this weekend this is musk's plea for help he has to have a tesla weekend and he has to close the factory

because he has to retool and just have the flock out there, okay because he doesn't want the flock on the call. >> did you get even less sleep than normal? >> went over the call, and i was -- and i had not had a single bit of mezcal >> let me go through the numbers. >> you are small minded. they drew down 1.2 billion because they did elongate their parables, apparently they did not need to raise capital and they cut capex to 3 billion so they're saying they can not build the factories for production model y they're losing 23,354 a car right now, and the idea that they are actually going to avoid raising new capital as he said they would before year end seems to be a dream to some. jim, there are others who look at his behavior on the call and the first thing that comes to

mind -- >> jeff skilling. >> jeff skilling from enron. i think there are very -- few people. >> he cursed musk didn't curse. >> by the way, to your point, maybe agree with skilling's characterization of him. i have my dealings with him. >> but that's not central here and neither is necessarily the comparison to enron as an obviously a huge fraud and -- >> irresponsible. >> people who were putting up charts today -- of enron shares and marking where skilling said that is irresponsible. >> yes, it is. all i'm saying and i'm not being facetious to really make this clear to you >> okay. >> this is the true elon musk. he doesn't want chokers in the stock and hedge funds in the stock and the biggest charade is to go through answering questions. i really adopts warren

buffett -- i hate to say it in the same sentence which is the warren buffett attitude saying i'm done he declared war. no just don't do any calls. there are lots of companies that don't do calls you go get the car guys and have them -- >> so then what? just, okay, well, we follow your -- either put up the numbers you need to put up and we'll figure it out along the way? >> he doesn't need to raise capital, maybe you're right. maybe he doesn't need to >> if he has to go in front of the sec to raise capital that will be the issue. the sec will do its usual job of scrutinizing, and they'll want to know whether he's being as transparent as he can, but i am just saying this was the call that ended things. he's not going to do another call because he's had it get out of my stock. when he says get out of my stock what he is saying is i'm done with you i'm done with the analysts i'm done with the investors. i want the people who like the car. i own it >> i agree that's what i'm saying.

>> you don't get to choose your shareholder bases and you have to as a public company. >> make it private >> yeah. although at this point, he borrowed $650 million against the stock and at 225, he's got to post more stock he's got plenty of it. >> i'm done with this and i am point-blank saying he has declared that he doesn't want to talk to the analysts >> want to try and understand what your advice is if you have anything to give with regard to tesla. are you saying therefore, based on this conclusion that he doesn't want to talk anymore that people should sell the stock? >> i think if you can't handle what's going on with the stock you should sell it he is catering to hedge funds by doing these calls and he has to have just a gigantic conference where they get all of the flock and they come. and if you want to own the stock, the flock or the cult

>> i covered jim jones i covered jim jones. those people did not lift so i do not represent that. >> you called it a cult stock in the past. >> i thought you were alluding to the kool-aid. >> no. >> i'm not kidding this was the end and this was the end of his call and he realized it mid-call why am i answering why am i answering tony? >> this is the call of a man who's had it. >> once said that he had a, it was over many years who -- who is saying it >> the morgan stanley analyst. >> that is totally untrue. these calls have been -- >> two things, sacconaghi will be on today. >> i like toni

>> the path to 5003 is weak. >> think he's had it i don't blame him, okay? once he says get out of my stock then i think that's kind of the cigarette warning that you need. he's telling me if they -- >> will they have to raise capital. they will need a new kwe who can repudiate what he said because that's what will have to happen and by the way, he can step down in a flash >> yeah. again, bernstein, sacconaghi, and they pushed it from 25% from six to nine months so how do you not have to raise capital if you're not going to be making -- you're not going to be positive on the cars? >> he offers a definitive apology to those who thought that he misled them and that's

what he'll do and the best way to raise capital would be to give up the ceo job, okay? move on to another higher job and bring in a ceo that did not bag people and get the deal done he can do that we do not think he can do that he thinks he thinks bigger than the rest of us i'm not being facetious. he's a small mind to him. >> it's not in your charitable trust. >> no. >> nor would you ever add it to the trust? >> no, because i demand some knowledge of a company, and by the way, how did toni did on apple? remember when he said the best days were behind he wasn't the only one on this call, and he's not the only one that's expressing -- >> i love toni i love him you know how trump loves xi? good friends. >> right >> love toni >> again, what do you think about a guy who says listen, get out of my stock. >> and the viewer says it's not

his stock. it doesn't belong to him. >> that's right. if he wants it to be his he can take it private as we just said, but he can't and there's no chance. >> why are we holding him to some bizarre standard that all ceos have to have calls? >> i don't know. >> he's a unique person. let's not forget that. he's a visionary he has all of these personality traits that enable him to start a tesla. >> right. >> to take this kind of -- >> to get people to believe. >> he can't do it. they all go together >> he wants to go into space and people are, like, let's go to mars he should do this just short of the planet pluto >> can you figure it out >> i still can't >> saturn and pluto? >> are you taking performance art to a new level now >> andy kaufman.

>> that's it, he's done and you can own the stock or not that's not as bad as what he said about me that he said i was simply a -- >> go back to that >> no, it's not personal it's business! next time you listen to the call, do it from san miguel with a mezcal. >> i would love that, by the way. >> nothing better than drinking with you >> when we come back, a lot more to get to including spotify, craft times and the fed's decision yesterday and we'll talk to former commerce secretary gary locke as the trump administration officials engage in trade talks with china and we're looking at four days down in a row. more "squawk on the street" in a minute. we have no interest in satisfying the desires of day traders. i couldn't care less please sell our stock or don't buy it your company is constantly evolving.

and the decisions you make have far reaching implications. the right relationship with a corporate bank who understands your industry and your world can help you make well informed choices and stay ahead of opportunities. pnc brings you the resources of one of the nation's largest banks, and a local approach with a focus on customized insights. so you and your company are ready for today.

mr. elliot, what's your wiwifi?ssword? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too.

so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. ♪ ♪ ♪ ♪ dow looking at potentially two weeks down and haven't done that in a month or so as the futures are negative and the dow flirting with levels of 10% off its all-time high. spotify is out with the first quarterly reports and going public the music streaming service had worse than expected numbers below forecast, as well. ubs, i think, this morning said the first note is not the symphony how much leeway do you give

them >> no. i think they deserve more. i'll tell you why. i was going over what they said on march 26th when they gave first quarter employer guidance. it would be 168 to 170 they came in at $170million. they came in at 75 that's in line total revs, 1.1 billion and came in at 1.4. gross margins came in at 24.9. operational loss guided from 50 to 80 million and they came in with a 41 million loss and they have 90 million free subs and 60% of a free sub takes pay. this is a buy! >> it is >> it's a buy. >> and gross margins setting 24.9, up from 24.5 from the fourth quarter and obviously 11.7%. they're going in the right direction. >> this is a company that is the opposite of the planet, the guy who does the planet for 45 pluto, this was transparent, this was a reasonable statement that they gave you on march 26th it's almost as people forgot

of course, they were looking at the quarter when they spoke on march 26th they did better than what they told you and the people are selling the stock with 90 million free subs. think about it apple does not have that model they have 90 million free subs and 60% converted and think about where they'll be three to six months from now. i think this was a very, very good call, and that the analysts are negative. >> so you're in the school that we just celebrated apple services revenue and part of that music and amazon has talked about the numbers exceeding certain level, but you think a rising tide still lifts. >> i think free is the gauge here, not unlike what we saw when twitter broke out the opposite of when snap collapsed and this is where you put. i think this company is such a good company i think the cfo is really smart. i think that they just chose not to play the game now musk chose not to play the game by blowing everything up. this guy chose not to play the game by saying, listen, here are

the numbers. >> the stock has moved up substantially into this print. you know, in the high 160s >> i just think it's a buy >> after sort of moving around a lot on the days following listings >> look, you can say what you want about this company, but the euro loss, the 50 to 80 down to 41 is terrific 2018 guidance is the same. i think people who didn't study the march 26th call really missed out, but the key thing here is you have to understand that this is going to be gauged by how many free because that is the true indicator of what's going to happen in the future. 90 million free, and i don't know about you guys, but i didn't like free ice and everybody i know switched to pay, but the numbers bear out that a free person, 60% of those people get paid. so buy the stock here and i think the stock is reflecting.

uninformed sellers who don't understand how much is laid out before -- before this conference call it's a good call >> yeah. >> people need to go back and look at what percentage of their overall revenue comes from paid subs. >> yeah. >> i just think, throw it away this is an excellent company with artificial intelligence not unlike netflix and sometimes netflix was misunderstood, and i think spotify was being very misunderstood and it's a buy >> a lot more to get to and it's a busy day and we'll count down to the opening bell and take another look at the pre-market and "squawk on the street" continues in just a moment whoooo.

when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews. the lowest prices.

when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

♪ ♪ ♪ ♪ let's get to our mad dash this thursday as we count you down to the opening bell we'll get you started in trading. >> kraft heinz has not done the large acquisition that many thought it would. >> down 40 points. >> yes >> that often brings down what i call value ticks value buyers david, they had organic growth, 1.5% some people say the innovation wasn't enough. that heinz premium mayo is not how you turn it around they're still looking for m and a, but here's what i think is important. kellogg reported a slightly better than expected number also kraft heinz, slightly better than expected. are we seeing the bottom in line in the consumer products group which has just been crushed.

>> crushed. >> pricing, jim, was up 1% which was better than the analysts had thought it would be which many thought it was down a half a percent. >> and the store may be recovering i've done a lot and conagra had a goodquarter. coca-cola had a good quarter no one expects anything from the stocks anymore and they're getting a little bit better than they thought david, i think that if the ten-year stays where it is. >> yeah. >> we're going to say, you know what i'll take the yield and wait for them to do a deal. i think kraft hooieinz is a buy. >> you do? >> we sold it when they tried to buy unilever and that was a bridge too far this, david, this is operation market garden, okay? this is just the same slog with montgomery. >> okay. all right. >> there you go. >> 55.50 we have five minutes or so before we get to the opening bell a lot of other stocks we'll be

covering this morning and we'll be talking to cor d anwe'll see how the express deal is moving along. stay with us opening bell coming up into retirement...

and a little nervous. but not so much about what market volatility may do to their retirement savings. 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. so they can focus on new things like exotic snacks. talk with your advisor about shield annuities from brighthouse financial- established by metlife.

you're watching cnbc "squawk on the street" live from the financial capital of the world the opening bell in two minutes as we watch for any developments regarding the trade delegation now in china reaction to the fed got plenty of earnings and the tesla call which we've been over. you got a downgrade of caterpillar over at b of a along with cummins. >> i have mixed emotions about that downgrade, the deere upgrade saying secular growth and the world needs food and the reason i've missed it is because what the analyst is dos is trends following you talk about a number of factors, and caterpillar did shoot itself with the high watermark and comments with actual executions that were

dreadful so i don't think there was a lot of value add i think that if the trade delegation comes back with any good news you'll wish that you hadn't sold cat. i don't want to own cummins. that was a terrible miss even though he said class a trucks are peaking and how is that possible let's just say that was basically a call that anybody could have made. it's choppy, so let's take it. >> what do you think the chances are when you get something out of china soon? >> there was a great guest this morning, when don was interviewing -- listen, i wish that they'd come over here the fact that we went there could be a sign that there is something good, but the notion of that team, that team that went is not a one voice. >> although yesterday you said navarro, he's a voice, no? >> navarro is going to drive very, very hard, but why do the chinese have to keep making

steel? it's a terrible thing to make. they stop making a lot of aluminum because melting is so dangerous. i think they could say, you know what we will go away from steel we will go away from steel >> the s&p in the bottom of the screen on the big board celebrating the ipo and inspired medical systems, sleep apnea over at the nasdaq a west coast regional bank one thing that's gotten some attention yesterday and today regarding trade is the epe action from the military banning the sale on military stories and people wondering if there will be reciprocal action. >> and it was brought to the fore we also had earnings and they were not particularly good revenue, slightness on revenue, lower growth margins, higher

operating expenses take a look at shares of nxpi, down 80% this is a 127.50 deal. while successful, getting the chinese regulator to sign off on this deal in the next -- it's days now >> 127.50 is what you're going to get >> you can see many people are thinking --? memo to individual investors who own the stock when you get a bid. ka-ching, ka-ching you might be over your head. >> i might point out the first piece was one of the great reports of the quarter and the headline was probably not the best time to miss a quarter. and again, what caused a miss? >> well, secure connected device weakness which is deerfield communication which is apple, just like cirrus logic these component companies -- even though we know that apple itself did well. >> pure interface and

infrastructure revenue is what they saw some of the weakness. >> very bad. >> you know, we'll have to wait and see. we talked to steve malakov and he's still confident that they'll get it done if and when they decline there is an outcome, a positive one, you will see the shares go up and that's a way to play it >> i've got a strategy you buy the 100 calls and that's a bet that larry kudlow beats peter navarro. it's like rock, paper scissors over there if kudlow beats navarro those hundred calls will scream. >> i think it's safe to say when elliott's contention when it was fighting that the stock was worth 135 unaffected looking at such a strong prognostication at this point >> if you're selling auto, it's absolutely true and with ford cutting back and that's an auto play and it's an apple play and

both of those are not that strong right now for the component companies and not for apple, though. >> your point on kraft heinz of the telestrator was good because kelloggs was better than expected in most parts of the world. >> i liked the kellogg quarter one of the things i love about these consumer products. david, you'll love this. >> yes >> sales declined and that is enough because that means your dividend's great that mean, listen, we'll get it together that's part of my return to the store. we've oversold all of these companies in what we call the center of the store. we've made it so we really think that people are not buying these things no the stocks now reflect the slowdown and just when they reflect the slowdown, the slowdown is decelerating, and that's enough when you have a stock that's gone down as much.

>> so you think, clorox, p & g, hershey. >> yes >> not an everyday 52-week low >> remember, they're a dividend aristocrat clorox, people thought there was a guide down and that's wrong. i think that the freight situation's going to be improving. proctor, don't forget we have nelson in there making some changes. so i like all those stocks if the ten-year holds and i think it will. >> what happens to cardinal health >> okay. so they -- >> which is down 16% pah for the drug distribution company and just getting crushed >> in 2015, kortis, johnson & johnson sold them kind of a heart formulation and that -- how do you say it's maybe not panning out? and cardinal has missed a series of quarters, but scripps missed a bunch of quarters and they had something good there. >> and they had the amerisource

bergen and it's not the trio there. >> no, he wasn't he was outside of it. >> there's our -- >> they are? >> do you know who they also remind me up mandy in "the princess bride". >> montoya >> one of. >> of course >> square down about a percent some of the costs were focussed there marketing product costs. >> they are tending to accelerate and i'm taking the other side of the trade. fryar, masterful ceo and this is crazy. they had decided that we want to spend a win and ecosystem buildout and they had 36 million in ebitda, and the buyers are at 35% and they're in the point of sale system and then they want all of the rest of your business square is a company on the move.

just because you're spending doesn't mean you're an idiot >> generally, the stock market doesn't look too good today. >> i have a key intense for the obvious. >> that's me yeah not seeing a lot of green here. >> not a good day. >> no, it's not. >> it's a stormy day >> all right >> stormy weather, and that's not good we're back to the 200-day watch on the s&p which is about five points below where we are. >> look, the semis are all weak and the people figured out if people do well the semis don't do well. we had an insurance blowup in aig and the insurance group was a place that you could have hidden for a while >> our parent company stock doesn't ever go up anymore i took it off my screen. comcast up 22.5% this year sky bid. killing us >> skynet.

>> look, i think the bank stocks have been and they're stabilizing and now they're going down and we do have an employment number tomorrow and we do have some out of the chinese conversations and today is a bad day fridays have always been bad i think the people who are saying i want to get ahead of a bad friday and sell thursday >> interesting >> yeah. goldman 232 here >> that's unbelievable my charitable trust is buried alive with goldman >> down eight -- somewhere around there >> over 9%, down over 9% goldman down over 9% and jpm, the only one that's positive on the year >> so funny because you had the regulatory regime and you would have think that would have been housed in times and we have the bank stocks just for the record and ever since the narrative

>> is it trade, number one, rates below that what's trade >> you said trade, tariffs and trump. >> that's the three ts worried about trump because the. >> stormy weather. >> stormy weather. >> worried about tariffs because they got it. somehow get some sort of break on these tariffs and world trade is sending a deal. remember, all of the pmis in europe have been weak and the global synchronized turn is over because of -- everybody's kind of frozen. it is all about the eurozone slowdown theresa may is in a bit of a mess regarding brexit. >> sell in may there sell in may? >> yeah. it will really go away i think that's one of the reasons why i like the kelloggs which is just bizarre to even hear you say that. >> they have good yield and they're probably bottoming people turns out are still

eating >> it's suddenly having this huge resurgence. >> the center of the storm no longer has, like, barbed wire in it people going in it >> i don't actually go i order my cereal over amazon now. >> do you think it's like steve mcqueen in great escape? in the end he gets caught. no, he's going through the center -- >> he went over it with a motorcycle >> i love that scene >> yeah. >> conagra using better packaging. the millennials love frozen food and one of the reasons why pinnacle doesn't come down >> did you know they like frozen food >> it's considered to be more nutritious there is a real benefit for nomad, the brand that has bird's eye international? >> that's the beacon, but the fact is that people are no longer just stopping eating cereal, and i have to tell you this kraft heinz if they do a little innovating you can buy the stock down 40 points with the yield. procter & gamble, i will buy procter at a 4% yield every day

of the week, even though procter's quarter was not so weak. >> and campbell's soup and hershey. >> no. campbell's soup is poorly run. >> it was crushing. >> that was a no go. >> tesla down 6% do you think it can close? >> does it matter if it closes above the opening low? >> jim stewart -- if he'd said something brilliant i'd never forget it. >> people who like tesla, the car, own tesla stock, and they regard this as an opportunity. by the way, elon musk should do his conference call from now on at the tesla showroom in brooklyn which is extraordinary. i used to go there just for something to do. . >> jim mentioned earlier, musk last night on the call talking about share volatility take a listen to that.

>> people are concerned about it they should definitely not buy our stock. i am not here to convince you to buy our stock. do not buy it if volatility is scary. there you go >> he said it. >> hard to argue that's all i want. i want a guy who says i'm not going to give you any information. you make up your mind yourself it's very unorthodox he's an unorthodox guy, but he told the truth and he's not about hedge funds. he's not about people who can't handle volatility. i think people are going to buy the stock because they are you know what? it's heavily shorted and i really like the car, and the model 3. we don't know how many people are lined up should they buy it no i agree with elon musk for the first time i find myself on a page with elon musk don't buy his stock. >> dow sitting almost exactly at its 200-day. let's get to bob pisani. hi, bob. >> very close, carl.

we had another one of those air pockets and we had them a lot in the pre-open let me show you the s&p futures in the pre-open just before 8:00 we dropped eight point, straight news and any news out there? not particular news, but just the sentiment has moved against the bulls for a long time. for a couple of weeks. there are two big issues for stocks that i see out there. number one is the bear rhetoric has overcome the bull rhetoric and i'll explain what that means in a minute and the geopolitical stew, i call it, sort of coming back number one, it's regarding trade with the u.s. team there and they've been down playing ideas that there will be progress while they're there and iran is floating out there they're coming back and hard to figure out, but people are about them remember how things were in january? in january we were talking about record earnings. today we're suddenly talking about peak earnings. that's a change in the rhetoric from bull to bear. that's important

remember global synchronous expansn? it's gone now. now we hear glal slowdown. the beararwinning that one, too. remember the idea that inflation was going to be benign today inflation is picking up. how did this happen? well, some people got the rhetorical upper hand. the big issue and the core issue is whether the growth is or not, growth is not slowing down so you have all sorts of arguments and sam stovall yesterday had a very good point and the reports of the global economic growth are exaggerated. we see worldwide gdp up by 4% and up by 3.8 and there is no global contraction going on and more typical is what you hear from bank of america today bank of america downgraded caterpillar, but they commented on the economy, as well and april declined in the ism to 57.3 was not a major surprise and we see normalization from peak levels and the direction

here is probably lower and that's the general idea on global growth. it's still up, but the direction is lower and the bears are winning that argument, too and that's a powerful stew >> peak earnings and slower growth and inflation may be a tad stronger than people anticipated. meantime, take a look at the sectors that are up today and they opened up on consumer staples and there is something that you do not see very much and materials up tech just fractionally lower as you can see there. chips were a bit weak. broadcom on the weak side. he had a very good call and an portant e on wheer the consumer staples were bottoming and with kellogg and kraft heinz and they were down for two weeks now and the numbers were just stunning here in the last several months how the stocks have moved down. let me show you from the 52-week highs. kraft heinz, kellogg, general mills, procter & gamble and the

list goes on and on and almost everything is down at least 20% from the 52-week highs kimberly-clark, clorox, hershey, pepsico, palmolive 2614 is the 200-day moving average. we bounced off of that in january and again successfully back in april several times, and yes, it does matter in this environment. a lot of people are watching that number. right now, 2617. carl, back to you. >> see you in a bit. bob pisani let's get to the bond pits and check in with rick santelli at the cme. good morning, rick. >> good morning, carl. there are lots of dynamics going on even though the range is not very big and you can see the way they're slightly slipping out of the recent range and that makes sense and the short end is mostly interested and the fed and all of that is the fed and it's a different look and yes, it's moved a bit lower, but it is holding the bottom of its range at 295

we'll get to why that's important in a second and look at the today's chart up ten. you'll see the one spike while 295 was a high-yield close for the year until 303 recently and we are hovering there and we come down and we have an employment report tomorrow and it's arguable and the long end is interested in everything the fed does and right now it's mostly interested in the topic bob was talking about. what's going on with growth domestically and globally. nobody can underestimate the notion that there are a few hiccups. today you look at exports and another record in exports, and it still looks leak it could take off to the upside and you get a little different impression if you look at boons, it's much more developed for the trade as the ten-year in the uk hovering at 1.82 and this is the relative

value trade even though we're stretching the limits of the comparisons still close to 240 basis points and separate boons from tens and that goes back to 1989 just as the two-year, and the shot goes back pretty close to 30 years, as well and now let's look to the dollar index look at the one-week chart of it holding pretty nicely and yes, maybe the momentum slowed a bit and the yield slowed much. first of all, we are trading around 9252. 9253 is the high close for 2018 of the dollar index. we haven't closed above it, and we traded intraday above it wrrt and today. it is a very important area to pay close attention to carl, back to you. >> rick, thank you very much rick santelli. when we come back, cigna's dana cordati of express scripts is coming up. and the dow bounced very quickly off the day. we're back in mitea nu

it took guts to start my business. but as it grew bigger and bigger, it took a whole lot more. that's why i switched to the spark cash card from capital one. with it, i earn unlimited 2% cash back on everything i buy. everything. and that 2% cash back adds up to thousands of dollars each year... so i can keep growing my business in big leaps! what's in your wallet?

show of hands. let's get started. who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors.

1, 2, 3, go. e*trade. the original place to invest online.

within of china's largest smart phone makers is planning to go public seeking to raise at least $10 billion in what would be the world's biggest ipo this year. potentially the third largest tech ipo ever after facebook got some things moving in the wings at least >> i wish there was less supply around the world we have had an amazing number of buybacks a lot of m & a but we're just being overwhelmed with shares everywhere i think there's not enough money coming into any equity market to make a stand on more than one group at a time. being made on the food stocks. but youen can't make a stand on

the food stocks and also make a stand on the bank stocks there's not enough cash. but i do think the banks will come down enough i thought it was an interesting analysis you got fined % of the company back that's a real buyback. he's in a bind you sell it. he's bye-bye treen true to his d >> big source of demand overall. corporate buybacks a beautiful bank got a branch i always say why can't they all look like that >> just out there. wllet trading with jim in a minute stock is down 130. trade after the market closes. it's true. so all... evening long. ooh, so close.

yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light. ♪ you're not gonna say it are you? they're not investing in commodities or fixed income. what people areally 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.

mr. elliot, what's your wiwifi?ssword? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. one of the best stocks in europe issest ta lauder. while this is a remarkable ceo, yesterday the stock was down very big growth was moderating and they took it down about i agree.

you get a rare opportunity it did have some sort of testing issue on some of their products. they apologized. it was very abject it's a really great company. i think the bottom is probably being put in and i do tell you this is really insync with the best total instagram worldwide. amazing numbers out of china it's the true international executive. everybody is the envy of the industry >> the premium high end is what's working >> clip anemic had no problems you can't go out because people take the picture i. keep my makeup on all day now. >> i didn't know that. >> there's something for you >> that's interesting. i thought i knew everything. >> you seem to genuinely be surprised with a lot of what i said today >> you are always surprising today has been particularly interesting.

>> maybe elon musk will pick you to be the journalist who asks them the questions >> i would love that tonight on mad >> one of my favorite companies norwegian cruise because we're going to do it from his new ship and then brute point, the hottest tech company i follow, because it's cyber security. and the best it's when you look at your e-mail and it looks like it's from amazon. he stops the fhishing. he's the net >> thanks far good hour. >> hang in there okay. >> my new trade. >> dow shaving its early losses. "squawk on the street" is back in a minute.

welcome back to squa"squawkn the street." we're live in the cme floor with breaking news. more breaking news let's start from chronological perspective. march factory orders up 1.6, better than expected with a 1 pnlt 6 in the rear view mirror because it's ramped up

take out transportation. up .3. we can see where the strength is, but that's not bad it follows up 0.2. let's go for march final read on durable goods. durable goods orders up 2.6. that replaces 2.6. so that isn't a bad number if we look at ex-transportation it drops to 0.1. and that replaces minus the preliminary read and it's just not a good number. it comps back to the lowest number this year month over month. goes to last year, the final month of 2017 was down .5. these numbers need to be better. on the shipment side, down 0.8 following down .7 so not good there either the most realtime ism nonmanufacturing april read, the number is 56.8, slipping from

the 58 level we're expecting set kwempbs shlly that followed 58.8 it's the weakest number of the year it takes you back to, let's see, 56.5 you're going to august of last year so that comps to the last month of last year as well as several of those numbers did when the service sector number was created, we only had three reads 60 or higher back to you. >> watching those numbers. thank you very much. good thursday morning. welcome back to "squawk on the street." dow traded below the 200 for the first time since april 2nd we saw a small bounce. it begins with boring bone head questions are not cool

that's what elon musk told analysts the stock down after his unusual performance on the earnings call >> cut ties with kanye a petition calling for adidas to stop doing business with west after his controversial comment. what the ceo of adidas has to say about all of it. >> plus shares of spotify are down after its first quarterly earnings report since it listed its stock. we're going to have a look at what is scaring investors, straight ahead first up, analysts expressing frustration after the earnings call with elon musk, who refused to answer some questions. take a listen. >> so where specifically where you be in terms of capital requirement? >> next. boring, bone head questions are not cool we have no interest in satisfying the desires of day traders. we could care less please sell our stock and don't buy it people are concerned about volatility, they should definitely not buy our stock i'm not here to convince you to buy our stock.

do not buy it if volatility is scary. there you go >> joining us this morning is the managering director. good morning, guys what a story the commentary out of a lot of the side, jpm says it's bizarre. the call shook confidence. did it >> maybe temporarily i'm sympathetic. elon is probably staying up all night trying to fix production and he's probably sleep deprived it is a shame the way that it turned out i think the stock would be up today instead of down because the results are actually pretty good >> which part? was it the stint of the loss, the path to certain target on the free >> they prove to 2,000 vehicles per week that's a beg step up

cash balance was better than we were forecasting and they emphasized there's no need to raise capital. >> moodies says they are going to need to raise capital some $2 billion worth in the form of equity, convertibles or debt to cover cash burn. >> yeah, well i think the key is they are and i think if they can get model three production to 5,000 units a week that's such an important number. because that's the number they basically flip the whole company to profitability if that's the case, the second half of the year will not burn cash anymore and they will not have to go back to the markets for more cash i think it really comes down to that we have one more quarter to go a big cash burn.

and if they can get the model three ramped, which they are on track. six months late getting there, the company shouldn't need anymore cash >> significant and important questions. >> that's your right comparable. and it's a shame i think the stock would be up today if it wasn't for what happened but this will pass my feeling is the next couple days we'll look back and this will be all but forgotten. >> do you agree with that? do you think investors are putting too much weight on the call >> i thought the call was awkward to say the least i think it was a little mean,

but whatever we'll get past it. people are going to focus on how many model threes they can make. >> some people mentioned skilling i don't know if you go back that far. he dismissed people on a call as well who were questioning the underlying numbers you mentioned some of the positives. it's not as though things went completely well on the call. or i should say over the quarter as well. they did have a larger than expected cash flowand a record net loss i should not be viewing those as negatives. >> i think that you should be looking at tesla as a startup. trying to disrupt an industry that's been around for 120 years. that's the way i think about it. they are investing incredibly in some pretty incredible products. most people who drive a model 3,

it's probably the best car they have ever driven the company needs time to scale. it wasn't a perfect quarter, but i thought the positives outweighed the negatives >> moft established players started their own lines. the key question upset him or turned to the guy and went on for 20 minutes was about conversion rates do you worry about the rising competition where they are not going to follow through with the money they put down. the backlog is still north of 450,000. and people are waiting if you buy a model 3 today, there's a

limited feature set. if you wait six months or nine months, you can get a model 3 that has a dual motor. if you want an interior, you can get that that's probably the biggest reason people are waiting on converting i didn't think it was a great question i'm not totally surprised he was annoyed by it. >> your rating is, we had a target i believe within three months we're not talking about cash flows and not talking about insolvency risk. we're talking about market opportunity, which for them is tremendous >> within three months >> how about you >> i have a bye rating with a price target i think you may have two of the only positive analysts at the saim time.

probably the most critical quarter in history coming up >> are you concerned by what has been a series of executive departures at higher levels of the company? let's call it over the last three to five months if you look at all the people leaving, google on a regular basis. people are moving on to better things on a daily basis. it's unfortunate but it's the nature of silicon valley to tell you the truth. >> bonds are getting hit this is important because they have ambitious plans to fund all of this production and those bonds are key. we'll watch that >> next 90 days are going to be fascinating. >> for more on the analysts reaction to what was a wild conference call, you can go to

cnbc wall street's slump continues here the dow is down more than 150 points it's down for a fifth straight day. the s&p for a third time in four days mike is with us. so what is the argument deinjury that is overtiming some of the arguments that center around earnings >> i actually think the main argument of the moment is that the market is refusing to respond well to good news. and the idea that maybe the tape is just very heavy right now it seems apprehensive and confused we have been riding this sort of lower ban of this trading for three months or so markets coiled up between a larger up trend. the market has defended this up trend. it seems like a bare market. but then since january you have had these kind of failed rallies and a down trend from those highs in january 26th. so i think the market is get tig

pinched in here and i do think that investors are not sure what to wish for at this point or to fear do you want to see a reacceleration of growth and all that might bring in the way of inflation pressures and higher yields or do you want to see the goldly lox moment continue but without the safety net of a fed that's going to be there if things slow down i don't think we have a verdict right here but two of the big questions i think are does the market now that's it's been trading at the lower end, does it give you that many chances to buy the dip at an optimum level you have been sitting here and able to buy at 2600 for a couple months now >> i'm also watching gold, which is higher. any talk about trade and whether

there's increasing risk around protectionism? >> it was this nuance factor in the psychology of the market it's being mentioned on a lot of conference calls with a the lot of the industrial companies. it seems like the stakes are high for this delegation even if nobody is expecting real resolution out of it at this point. then as you know, the dollar has been appreciating the last week or so. we're just not sure if the market has it set up right now is going to be really tolerant >> so many companies are saying they have been beating and the dollar was a tail wind now that it's reversing it could be a challenge should have them back onset some time. when we come back, it is a need for zig na

raising its outlook. they are going to join us in a moment plus conflict with kanye a new petition calling for adidas to cut ties with kanye. we'll get reaction from the ceo. dow approaching session lows once again and that 200 day moving average "squawk on the street" is back in a minute. say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee?

guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

mr. elliot, what's your wiwifi?ssword? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. earnings estimates while membership rose to 16.2 million. this is zig na's cash and stock

deal david, nice to have you. what have you heard in the weeks and what argumented have you made to fear a process >> it's more accepted than even a couple months ago that the industry as a whole is going through reformatting itself. that's becoming more accepted.

given the at&t deal and the transaction. it's very clear our companies are truly complimentary and don't have overlap there's news and headlines around the model in need of change we believe that's correct and see ourselves as a force of constructive change. with ours to build more value. >> how do you lower cost if cigna were to monitor versus two separate companies doing each of them what is different? >> it's for five years running and we started this year with the lowest medical cost trend. we have set a goal now to suggest that by 2021 we want our medical trend to resemble cpi.

et we think that's a much more sustainable result from a standpoint and it's not only possible, it's necessary specific examples, better and more wholesome coordination of costs that are approaching between 20 and 25% of the overall cost equation. with the medical benefits and with the physician relationships. and then driving value care relationships or outcome with the pharmaceutical manufacturers. those are just a couple examples >> sorry, it's going to get loud >> specialty pharma seems to be driving a lot of that when it comes to the rising drug costs, how do you slow those costs specifically >> it sounds like you have a party there. a little hard to hear, but the specialty costs, think about an environment today that pharmaceuticals are a higher percentage of the equation

then what would be deemed to be base pharmaceuticals thinking about an environment where half of the pharmaceuticals are not currently being administered or managed through the pharmacy benefit. the number one opportunity is to better align with the practicing physician around the delivery of those pharmaceuticals and to expand access and choice express has the ability through 500 home infusion specialists to deliver specialty pharmaceuticals at home in a highly coordinated way in aligning them. secondly, having the clinical excellence breath and affordability relationship that we can work back with the manufacturers to reimburse those high cost specialty drugs based on outcomes. two important examples

>> i was talking to bertha who covers your stock. she said you seemed to highlight the fact pz how much capital to do m & a beyond express grips. can you talk about what you mean by that and why you feel like you have to do more deals. >> it's a really important one >> it's tremendous both businesses run very capital efficient businesses the health care industry typically you consume most of the capital you produce as you grow the business. it throws off a lot of free cash flow so we will be able to be leverage the franchise back to our strategic leverage thresholds with an 18 to 24 months all while investing in growth, innovation and during that time frame having capacity for additional shares.

so the headline is really the financial flexibility and the strategic flexibility that et with think is exceptionally important because it's indisputable the marketplace is going to continue to change. whether those dollars go back to shareholders through dividends, share repurchase or we seek to identify additional m & a, those are all value traders and having that strategic flexibility is less understood and appreciate ed today, but more importantly critical for the future. . >> you have been asked in recent days whether or not the arguments in the at&t case offer any color on antitrust policy implications you haven't given very much. are you prepared to do so now? and if so, why not >> we don't speculate on other people's cases we anticipated our transaction would be reviewed. we anticipated a second request given the size and scope of the transaction.

it's essentially consistent with what we expected we're actively engaged with the doj. it's a very different transaction. we are not dealing with distribution and content we are dealing with two complimentary companies. one that is a health service company and a pharmacy service company that has very little overlap for any traditional measures and we believe that becomes understood with facts, this will not only be approved, but will be approved this year >> and finally, returning to some of at least concerns amongst investors, with regard to spending $67 billion when you include debt to buy, politically a lot of the narrative seems to be focused on the middle man as a key to why drug prices keep going higher what gives you the confidence about the durability to continue to earn what they are earning. >> so we think your ability to earn in any business whether it's ours, the pbms or anybody else's business is predicated on

a simple tenant. are you creating value for your customers and clients wp if you do, you get to earn a fair return and return back to shareholders cigna has a long track record of embracing transparency to drive alignment and value. and we see the future as ab opportunity rich environment to take what the market knows is the pharmacy capabilities, medical capabilities and health improvement capabilities to drive more transparency and alignment to lower costs so we're not trying to preserve the status quo we're trying to accelerate change >> appreciate your time. thank you. >> great to be with you. thank you. as we head to break, take a look at shares of spotify

plunging after releasing the first earnings report. 4 million new paid subscribers bring the total to 75 million. thafrs short of estimates. "squawk on the street" will be right back with the dow down 265 now. losses picking up steam. there was an idea. to bring together a group of remarkable people. to help save the universe... from paying too much on their car insurance. hey, there's cake in the breakroom... what are you doing? um...nothing? marvel studios' avengers: infinity war, in theaters april 27th. now...where were we?

sharp ly taking a look at th most exposure to the stock >> so a number of etfs have a lot of exposure to the stock kind of site krooited things they are a relatively larger funds that have the exposure that are actively managed in nature with overweight based on the actual stock picker. some of these are managed by a company called arc investments one of these is a $690 million fund the arc innovation ticker tesla is the single holding. it makes up 8% of the port fo o

folio. it invests in the manager big fans of tesla and ceo elon musk. she took to twitter in the hours since tesla's earnings report for the bullishness on the shares tweeting arc invest understands how profoundly they are changing the world and making it a better place of course, not all analysts share the feelings rebecca lynn said elon musk has to take adult analyst questions instead of those from fan boys and retail analysts. morgan stanley called musk's earnings call the most unusual call he's experienced in two decades covering companies so some exposure, but a lot of things happening with regard to tesla and the effect on the markets. >> everybody can talk about it thank you. when we come back, auto executive bob luts will weigh in on the controversial earnings call plus an interview with the ceo of adidas is next.

>> can you just fact check for us whether it's true that kanye west makes more money than chl rdan

good morning, everyone here's what's happening on a very busy news day president trump et tweeting that he paid a monthly retainer to his former lawyer michael cohen suggesting that a payment to porn star stormy daniels to keep her quiet was not a campaign contribution but this appears to contradict his earlier statements he didn't know of such a payment and last night his lawyer said on fox news that trump repaid the

$130,000 to michael cohen. iran's foreign minister taking to youtube to criticize trump's threat to withdraw from the nuclear deal saying iran will not renegotiate the video was also posted on twitter. a powerful dust and rainstorm in india overnight left 91 people dead and more than 160 injured that storm swept through northern and western india toppling trees and causing a number of homes to collapse. and bill cosby's wife is corral kalling for a criminal investigation into the prosecutor behind cosby's sexual assault conviction saying the case was mob justice, not real justice. camille cosby's commenting on the case for the first time in a statement issued through a spokesman. >> you are up to date. that's the news this hour. i'll send it back downtown to you. i'll see you next hour welcome back, everyone, to

"squawk on the street. it's always from the new york stock exchange and things are looking pretty ugly all groups are in the red. dow losses have picked up steam down 300 points or 1.2%. almost all dow stocks are lower except for p&g >> elon musk's combative earnings call predicted it might be his last call ever. >> this is true elon musk. he doesn't want jokers in his stock. and the biggest mistake he makes is he goes through the she raid of answering questions i really hope that he adopts a warren buffett attitude that i'm done that's what he said. he declared war. just don't do any calls. there's lots of companies that don't do calls >> to delve deeper, we're joined by bob luts, who joins us on the news line.

it's good to have you back good morning >> good morning. >> congratulations on that we're all jealous. you have been critical of musk in the past. and now this morning they argue this call reflects the challenges they have on scale and challenges and capital finally catching up to the company. do you believe that? >> i've been totally consistent on this for the last two years anybody that knows anything about the automobile business and how it's run was ever taken a look at the numbers. the investments, the fixed cost, the material cost, et cetera, the labor costs, know this cannot possibly work eartlon isa

visionary. he sells the dream he doesn't want to talk about the present or the numbers which are a disaster he calls him stupid bone head questions when maybe he should pay more attention to that and instead he says let's talk about the future so when he talks about the future, he's talking about tunnels and mars and batteries and hyper loops and i don't know maybe this time he wants to talk about going to nep tune. he wants to talk about anything but the disastrous business. and i agree with cramer. >> how do you distinguish between elon musk, who you say is a visionary we had a bullish analyst on the set half an hour ago that said this is like a steve jobs moment he's been sleeping at the factory. investors want that.

they want someone who is accent risk and a genius and can put out game changing cars on the other hand, if the ceo loses parks over talking about financial numbers, it becomes harder to see clearly what the company is going to do in the near term. how do you make sense of both of those things >> you basically need two things to run a successful company especially in the new field, you've got to have a genius personality. that's part of being an entrepreneur believing in the dream and selling the dream. but then comes the hard part, which is execution it's the execution is flawed because your business model is upside down, it doesn't matter how beautiful your dream is or how the planet stands to benefit from your activities, none of this matters if you're running out of other people's money and

your costs are higher than your revenues that has typically been the case with elon. his costs are way higher tha his revenue. that's how he's been going bab to the capital market and getting more money that may work one more time. but then he's going to run out of money and he's cooked >> i want to make it clear it's david faber. jim has never said he thinks he's going to go bankrupt. obviously, you do think that >> oh yeah, they are going to run out of money >> the model 3, i'm curious. because this is where musk seems to take some and move things along in terms of converting the down payments to actual sales. what are you hearing from your auto buddies in terms of the competition that they are now facing from other electronic vehicles being made. and do you think it's possible that demand will not be as great as some had anticipate d for th

model 3. >> that's where the model 3 will not be as great as anticipated because all those deposits were made on the promise of a $30,000 automobile, but the average as delivered price now is all in the high 50s and low 60s so the market you do not have a $400,000 market in the united states for cars that it's just that simple. and then he has competition. everybody is coming and general motors already has the chevy bolt, but there will be other vehicles, crossovers, sedans, et cetera, mercedes, porsche, so i say there's no magic to tesla's technology the only reason they had more

range than anybody else is they put a bigger battery in. batteries cost about $250 per kilowatt hour. if you put 100-hour battery in, you can figure out that your battery alone costs as much as other people's cars. electric cars are almost an impossible to make money on at this stage of battery technology if he produces 500,000 model 3s and loses money on every one, the losses will just go up >> one last thing on this, where could you be wrong where could he extend this cycle beyond this last quarterback, as you say. >> unless something radically changes like the battery supplier suddenly says, guess what, we're going to sell lithium ion at $50 per kilowatt

hour or he hires some production expert that gets his plant efficiency to somewhere near the industry norm, right now his labor hours per car are about five or six times what a japanese german or american car producer uses. so something truly miraculous would have to come up. the problem is the analysts don't know this. the analysts i hate to say this but most analysts are naive. and they say like the ceo and tells compelling stories about the future, most analysts fall for it >> we got to run we appreciate your insight as always enjoy the caribbean. >> have fun at the beach >> thank you, will do.

>> for more on the analysts reaction to the conference call, go to cnbc.com quick programming note next monday on "squuk box", three hours with warren buffett. he will be joined by charlie munger and bill gates the trio monday at 6:00 a.m. eastern time do not miss it we're watch iing this market w dn llf ckp. doisow334. we'll be right back. nter weathe. extreme risk of burst pipes and water damage... soon, insurance companies won't pay for damages. that is, not if they can help prevent damages from happening in the first place. at cognizant, we're turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. get ready, because we're helping leading companies see it- and see it through-with digital.

the dow hovering in correction territory, but one wall street bull says new highs are on the way find out what could drive the rally on trading nation. right after this i'm not a bigwig.

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. for the sales team, it and the warehouse crew. give us the data we need. in one place, anywhere we need it. help us do our jobs better. with domo we can run this place together. well that's that's your job i guess. ♪ dow is closing in on a 1.5% loss down 339. since the high yesterday after the fed decision, we're down 600 points that's nearly a 2% move since

2:00 yesterday afternoon >> names like caterpillar, home depot, all sectors are lower led by financials. it's not interest rates because the 10-year yield is still below the 3% level so fears about trade, input costs, all sort of factoring in. adidas reporting another strong quarter with strength in north america, china and et commerce showing double-digit sales i spoke to the ceo this morning about all of it. i asked him how he's getting 21% growth in the u.s. market when und under armour's business was flat during the same quarter. >> there's no doubt in the last probably three and a half to four years we have taken significant by growing more than 25% every year what we are seeing, we're seeing partial growth out of the athleisure category, but also

out of training and running. the american sports. it's a balanced growth that we have right now and by no means are we only getting the growth from the athleisure there's more from sports with that kind of growth rate, we are taking market share from our competitors. >> what are you doing that your competitors are not? >> i think the last numb of years we have had cooler products to say more innovation. we have been very good at or online channels and we have had a number of very strong creators and also very good yufts in the u.s. that help promote our products i think we have just had the more competitive product and maybe the underdog have the more aggressive attitude of wanting to win in the u.s. >> some analysts were disappointed with the e-commerce numbers. just tough comparisons or are you finding it trickier than expected >> i think what we're learning

that when you're online, you need to have hard launches every other week or month. you don't need the brick and mortar that's some of the learnings we have of migrating towards becoming more hyper organization with an online business. last year in the first quarter we had a lot of new launches in the first two months of this year and that gave somewhat lower beat on the online 27% is still an acceptable number >> as you continue to focus on e-commerce, how many physical stores are you going to close? >> we are going to probably take a couple hundred out we took 90 out in the first quarter. the stores we have we want hi higher quality in our own stores and work with the dick's sporting goods of having a great representation of our product and push online. we still have a large part of brick and mortar and will continue to do so. we have to give the consumer the best brand experience when he or she is in the store.

>> you mentioned that you attribute a large part of the success to some of your creators is anyone more important to you in terms of your creators than kanye west >> i think kanye along with others play a great role so i think we have a set of creators, but clearly kanye has helped us have a great comeback in the u.s. not only because of him but also because of him. >> is that why you're sticking with him you're facing petitions to drop kanye west after he seemed to suggest that 400 years of slavery had been a choice. praised president trump and now you have people saying adidas should be dropping him >> so first, let me state the following. for many years we have been a member of the u.s. human rights declaration. which speaks clearly against slavery, racism, et cetera that position we have had and continue to have and promote very strongly. when it comes to one individual

person, i wouldn't comment online because it wouldn't be appropriate. but i have expressed my opinion on behalf of the company where we stand on matters like those mention ed >> do you worry about boycotts from consumers because of boycos from consumers because of some of west's positions? >> we look on all consumer feedback very serious and of course we look upon the feed back that we get to understand how to reacts and that is not only related to this particular issue, this is related every day to our consumers and how we behave in the marketplace. >> i know that you've been very hush-hush and i've tried to get you to tell me abouthe financial details and sales around the easy brand. can you fact check whether it is true that kanye west makes more than jordan and that it is on its way to becoming a $10 billion brand? either of those true >> i don't know how much money michael jordan makes and i think it would be inappropriate for me to disclose the details of our

contract with kanye west there is no doubt the yeezy brand has an impact, but in the bigger context of us being a 25 build compan billion company, it is a small part of our company. so you need to look at that. yes, it is a manageable size from a business standpoint regarding income, you know, that is something between kanye west and michael jordan to fight out, it is nothing of ours. >> so they are not dropping kanye west he is important to the brand's turnaround, but no more details. just a small part of the $25 billion business that adidas has. >> and we have a lot more for u. watching the s&p down 1.3% stay with us and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists?

did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online. they're not investing in commodities or fixed income. what people areally 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. mr. elliot, what's your wiwifi?ssword? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome.

welcome back rick santelli here i'd like to welcome my post fed meeting guest vincent reinhart thank you for joining me >> thanks for having me. i wish i was phoning in from the caribbean. >> no phoning in from the caribbean. listen, here's what i find fascinating. everybody has their own inflation index.

and no surprise that they will always pick and modify and go with the lowest one. i personally like year over year cpi. if you look at only december going back to world war ii, we've only had one year and that was 1949 where the year over year december cpi was negative at minus 2.1 so when i see everybody talking about this phrase in the statement symmetric inflation goal, i'm not sure i really know what it means when we never have had a deflation issue. and i also preface that with this is the 10th statement that phrase has been in though many of my training friends and sources just seem to have discovered it yesterday. can you go on that, sir? >> so part of it was i think a drafting error they told us already that they have a symmetric goal. they are basically saying that they are willing to overshoot. what is the design of policy they will keep on tightening

until they know when to stop, and when do they stop, when i inflation goes noticeably above their goal they revealed that to us in the march meeting. where the policy rate actually goes above its long term level and has to come back they will overshoot and the signal is that they are telling you they won't be worried about it >> now, when it comes to the notion of one percent of year of tightening, having a program sort of plan, that flies in the face of evaluating data. where do you think this fed really is under jay powell with respect to we need to grab more insurance of higher rates versus interpreting the data as we move along? >> this is janet yellen's fed. she set the precedent last year by acting at every press conference meeting but only at the press conference meeting and signaling well in advance that is what jay paul's iowell'

inherited. and in doing that, janet yellen locked in at most one full percentage point increase in the funds rate per year. think about how hardwired that is this he act at a nonpress conference meeting, everybody on the floor will go crazy thinking they are going to be tightening every meeting. if they ever try to pause, everybody would say, that's it, one and done, they have stopped. they are stuck with going quarter point every press conference meeting until they are pretty sure that they have to stop. they will know when they have to stop when they know inflation is above goal >> mr. reinhart, thank you for your thoughts on the fed meeting that ended yesterday "squawk on the street" will return after a short break whoooo.

when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews. the lowest prices.

good morning it is 8:00 a.m. at testa headquarters 11:00 a.m. on wall street. and squa"squawk alley" is live ♪