"squawk box. good morning, everybody. welcome to squawk box here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. you are looking at markets up across the board this morning. dow up by triple digits. gain of 103 points after the dow was up by 2.3% last week, a gain of almost 570 points over the course of the week nasdaq up by 24 this morning it looks like the s&p is up by 8. nasdaq up sharply, too up by 2.7% this week we're going to watch this. these are all gains that started even the week before that. the thursday low had been set and then green arrows this morning. take a look at what happened in asia you're looking at the nikkei closing up by half a percentage point. hang seng up by 1.3% and shanghai percent up by 1/3

of a percentage point. early morning trading there. you'll see that they are down across the board very modest in the declines at this point then take a look at the treasury market ten year last year ended the week below 3%. this morning it is starting just below 3% at 2.986% two year trading at 2.93%. we'll talk about china, the president and zte in a moment. a big win for activist investor carl icahn xerox backing out of the deal to merge with furjifilm under that deal they will replace ceo jeff jacobson who was trying to hang on to his job there and overhaul the board they struck a deal to oust

jacobson and several board members. that expired before a court could sign off on it icahn had opposed the merger saying it undervalued it icahn and diesen have said it can be sold to a competitor. fujifilm says they have no right to terminate the merger. we'll see where that soap opera shakeups. talking about shakeups, soap operas, we're talking about tesla. matthew schwall has left the car maker to join alphabet's self-driving unit at waymo the ntsb has four active probes into crashes of tesla vehicles separately on friday they said doug field

is taking a leave of absence to recharge meanwhile, three weeks ago effectively elan musk had taken over the duties of production of tesla. mr. field didn't have so much of a job but he is not leaving the company, he will be back and they wanted to make that clear. in the meantime, ron baron will be here to talk about all of the departures at tesla and whether he is still bullish about tesla. he has been a bull for quite some time. he's our guest at 7:00 a.m. walmart may take india's first flip cart public walmart says an ipo should be done at a valuation no lower than the value at the time of walmart's investment >> thinking about that again, self-driving cars. thinking about how difficult that is to do it -- how many

crashes did they say they were looking into >> four tesla crashes. i think one of them is a battery. >> think about trying to do that really >> i went on a test drive on friday. >> i didn't know this. >> new information to you in the new tesla. >> did you try the automated -- i tried auto pilot on the west side highway it worked. >> of course highway. try it somewhere else. >> here's the thing. if a white -- if the lane markings are not good, it is not good. >> there's no way that works around here. >> as you know -- >> there's no lane markings -- >> there's a point on the highway where the lines are really great and there's a point where it's terrible. >> i drive it every morning. the lines are terrible. >> where the lines are terrible you need to keep your hands on the wheel. >> when you say self-driving, what were you doing? >> effectively you go into the

equivalent of a cruise control where you have to keep your hands on the wheel sort of >> what's the point? >> you take your foot off the gas? it knows you'll keep it at 50 miles an hour. if the car is going this way, it goes this way. >> see, you say self-driving and i think you can sit in the back and read a newspaper. >> that's not what we're talking about. >> at least in the tesla the ultimate to a level 4 or 5 self-driving is you sit in the back and you say, take me home. >> the thing i'm thinking of seems like -- >> so far away. >> right >> the problem with almost getting there is people don't do what they're supposed to do. >> to get a fully self-driving car, it just occurred to me without ever hitting anything, it's a really hard thing to do that's why i don't know, these guys are leaving, one is going to waymo

i don't know 50 you're going to get into a crash going 50 you can't go 50 on the west side highway. >> you can >> well, you're going to be watching people -- >> i was going to say, i was going faster than that coming in this morning >> but you can set it. i did it with four car lengths ahead of me. >> so he has the guy everybody is honking behind. >> 2 car lengths, 4 car lengths. >> i would feel more comfortable with four car lengths. >> you're going to have everybody thinking you're grampa driving. >> no, we were hustling. >> this is the model, what is it the 3? >> no, this is the s squl the model 3? >> yes >> okay. >> cool little car. >> good looking. >> musk said he's hesitant to raise more money now would they have more

trouble? >> they might have. >> is that why he doesn't want to broach the subject? >> he doesn't want to broach the subject because he's made promises to the equity holders. >> we'll talk to him >> yeah. what happened to my stocks to watch? i was going to say cura sal. >> let's talk zte. this was the news over the weekend. a lot of debate over it. president trump making a concession to china over a telecom company and kayla has all the gory details kayla, how are you >> reporter: good morning, andrew you can call it a concession, an olive branch it was something they wanted it happened as trade talks happened behind the scenes the president suggesting in a tweet that he is working with china's president xi to restore business for the telecom giant zte which they banned u.s. companies from supplying citing

illicit statements trump tweeted that too many chinese jobs had been lost and of relaxing the punishment saying commerce would, quote, get it done. officials from the u.s. and china are holding trade talks in washington ahead of a visit by china's vice premiere that is expected to take place this week the vice premiere is said to have presented a deal without restoring business for zte which was effectively paralyzed. the white house said the administration is there and president trump expects secretary ross on the facts. beyond those talks with china that are happening this week, today we will see the opening of the u.s. embassy in jerusalem. you have a nafta dead lean line

thursday certainly the zte news, andrew, is a little bit of a head scratcher considering it is such a departure from what commerce did a month ago. >> i have so many questions, kayla. first of all, they say the commerce department was going to act independently of the white house and yet the commerce department is run by wilbur ross who is ostensibly one of the president's good friends. >>ing wilbur ross, when we spoke with him about this very issue was pretty adamant that zte deserved this punishment for the things that were so far out of line he talked with us nkts that's the point. the point is how -- the idea that he's actsing independently, he's been instructed by the president who he serves as the president to act independently >> reporter: right we are expecting to hear from secretary ross today likely on this matter. we'll see what he says you're right, andrew this is a clear instruction from

the president, get this done it is stemming from the trade talks that are happening behind the scenes as the companies are trying to work out some sort of compromise to avoid a trade war and you'll remember that on may 22nd the treasury department could be slapping on new investment restrictions on china. you have may 22nd also the deadline for the u.s. trade representative to be able to after that date put these $50 billion export tariffs in place so that is a real deadline just a month ago when commerce put this penalty in place which by the way stems from a 2017 penalty of $1 billion that commerce said you're not abiding by the terms of that penalty so we are going to penalize you even further at that time when i spoke to administration officials about the issue they said it was part of a multi--pronged approach to china that included not only that action but also the multiple tariff rollouts and

also a potential bill that would significantly increase the -- if you remove one of those prongs, what does it do to the strategy. it's also unclear what the u.s. has asked for on the other side. >> hold it anybody think this company is a national security threat from the cyber security side of all of this? >> yes the pentagon did ban zte phones from being used on military bases. it's something that multiple agencies have weighed in on at this point what relaxing the penalty, what restoring business for zte would actually mean is unclear we don't have many details beyond what the president's tweet actually said so we'll see what they're willing to do >> what could you get -- >> it's kind of interesting because, kayla, i mean, many times it's like a good cop/bad

cop thing. he's friends with xi it's just kind of interesting that he wants jobs here. everybody wants jobs we like jobs jobs for people. and he's actually -- president xi says a lot of people -- my people are over here losing squoobs and the president is like what's happening. it's interesting. >> reporter: it's definitely an argument he can relate to. it's unclear what's on the table. >> benevolent. we're buddies. >> what do bwe get in return for it >> you can't scream about american companies, amazon, denigrate all of our companies and say we're trying to make america great and say -- and then say we're going to help this company, which, by the way, is a national security threat. >> the only thing that i thought

this could mean american jobs, too. >> if you stop using them, that means there are going to be american jobs that are going to be lost, too trump has den know grates all-american companies we had one of those guys he's gone. you didn't build that and insurance companies, oil companies, drug companies. that's not fair. >> trump has taken his shots at the drug companies, too. >> he has. >> yeah, but you saw-he's not the president who is -- he's been a private sector -- >> your symbol of -- >> i understand though with xi the president probably appealed directly to trump. >> it's what we don't know. >> that's my question is what's behind the scenes happening as a result >> normally you would like that.

as a globalist you worry about jobs. >> this makes it less likely we'll get a trade war. >> kayla, i think it's nice, kayla. anyway i think it's nice. thank you. let's get to the markets now. ed keon, chief invest. strategi strategist, phil orlando at federated investors. phil's a little more bullish than i think ed. ed, you at the beginning of the year when we went up too much in january, said, wow, we underestimated 2018. then a month or two, too hot, too cold your thesis is 20% earnings gain but what's the multiple contraction it gives us mid to high single digits >> that's right. a lot of people concerned about market's evaluation coming into the year 20% plus will help you get a

desend retud decent return and pull back valuations we're long in an economic sic--e cycle. >> you figure recession sometime in 2020? >> purely mathematical point of view so, again, late in the cycle the fed is tightening. what's the odds? probably a bit more than 50/50. >> i think you're keeping it simpler, phil? there's a lot of positive things inflation is something we're trying to get to 2%. maybe that's what we want. rate increases >> that was the topic of the piece i wrote on friday which will hit our website we're right with that in terms

of 20% earnings up to $155 on the s&p. where i think we diverge is we still think there's multiple expansion because the inflation is pretty good that's why the markets rallied in the last week or so last week we got updates on ppi and cpi which were pretty benign now the market is saying maybe the fed has two hikes this year, three hikes next year and that's a couple of hikes less than the consensus built in we still think we're going to end the year very strong fourth quarter. s&p up in the 3100 neighborhood. we're still pretty excited. >> december 31st, the s&p? >> i guess we were in the 26, 2700 neighborhood.

we think this will be a pretty good year. >> it doesn't make ten year, 2% prohibitively attractive as an alternative. >> we think the 3% will continue to grind higher so the -- there's no disintermediation yet. the important thing is the trajectory , do -- >> do both of you feel confident having the trump administration handle everything trade related? do you think he is a free trader deep down and it ends up as a positive for the u.s.? >> i think an interesting consensus has developed that among people who are dedicated free traders still think we have

been too soft on china over the past decade plus >> right >> so i think the market welcomes a little bit tougher stance because markets are nervous nellies, we're a little bit concerned that the tougher stance might result in short term choppiness. >> what do you think >> i'm delighted kudlow is in there advising trump because he's the king dollar free trade guy. i think a lot of the large noise is a kabuki dance. it's trying to get them nervous on the other side of the table there was an article in the paper that china said, all right, we've got a $375 billion merchandise trade surplus. we're willing to walk that back a little bit the question is everyone sort of recognizes that the numbers need to improve and look at the trade numbers we saw in march, $49 billion deficit.

there's only one data point. directionally starting to move in the right direction >> kudlow -- >> he's having an impact >> i don't know. >> sounded like mnuchin -- >> kudlow/mnuchin. navorro. >> it sounded like mnuchin was running the day in china he side lined everybody and all the meetings were with mnuchin. >> there's some tension there. it's interesting who prevails, i guess. jonathan swann will be writing about that probably. anyway, thank you. >> thanks for having me. >> thanks, ed. >> thanks, joe. facebook just out with an update to its investigation with apps and the data they collect it says the process is in full swing. and about 200 have been suspended. facebook is looking into every app that has access to large

amounts of personal information before it changed its platform back in 2014 once all of those apps are identified facebook is planning to conduct interviews and make requests for information and instances where there are concerns. when we come back, take a look at this painting. it's up for auction tonight and the pre-sale estimates set a new world record we've got the details right after the break. later, billionaire investor ron baron will be our guest host that's coming at the top of the 7:00 hour. he'll be joining us to talk about the markets and some of his biggest investments including tesla. "squawk box" will be right back. people don't invest in stocks and bonds.

they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more.

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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. a painting by modigliani expected to be one of the most expensive ever estimated to sell for $150 million. that's the highest pre-sale estimate ever. that, however, wouldn't be close

to the most expensive painting ever which i guess i missed this back in november the honor goes -- >> i remember this. >> the honor goes to leonardo da vinci, it sold for half a billion. $450 million. >> remember i thought it went to mbs. >> all sorts of trusts and other -- >> that's -- who's salvador mundi? >> mundi >> who's that a painting of? >> a painting of jesus. >> that's what it looks like. >> why do they call it a -- i think it looks familiar. >> it's that one that everybody -- >> associates it with. >> we had one. >> everybody did my grandparents did. >> his eyes -- >> they watched you all the time. >> where you went. >> h'm >> couldn't do anything in that

house. shut the door. >> good to know. also, marvell's avengers infinity war once again topping the box office it took in $61.8 million at the box office domestically over the weekend. good enough for first place for the third straight weekend the big news came from china where the film debuted with a $200 million take. infinity war is the fifth highest dwrosing film of all time. and the launch of amazon's alexa has been great with home convenience but with unintended consequences alexa has tanked for a baby name it had a further drop 19.5%. >> they should have. >> i know some alexas, too >> no one is being named -- lots of people prior to that were named that. >> right. >> hi, i'm alexa you laugh.

>> i feel bad -- >> and then in their home you can't get an alexa. >> right you can change the name on it? >> can't you change the code word that it responds to >> i don't know about that what about all the kids that were named google. >> or siri there aren't any kids named google or siri. >> a weather woman did katrina >> yeah, that's not good. >> no. a lot of names get ruined. when we come back, when was the last time you saw an actual paycheck direct deposit is now common practice we're going to take a look at the next evolution in worker pay. that's right after this quick break. first though, take a look at friday's s&p 500 winners and losers

the sun comes up, the sun goes down. you run those miles, squeeze the toothpaste from the bottom and floss to set a good example. you fine tune the proposal, change the water jug so no one else has to, get home for dinner and feed the cat. you did a million things for your family today but speaking to pnc to help handle all your investments was a very important million and one. pnc. make today the day.

welcome back you're watching "squawk box" live from the nasdaq market site in times square. >> good morning. welcome back to "squawk box" and the u.s. equities futures. dow looking to open up 89 points

higher s&p 500 up 7 and nasdaq up about 20 points. joe, stocks to watch. >> oh, good. connick could ocophillips is one it rungs a refinery on the caribbean island the company seeking to recover $2 billion in a decade-old dispute over the nationalization of oil projects in venezuela by that country's socialist government and brinker international, the parent company of chili's says customers credit card data was compromised between march and april of this year the company is working to determine how many customers were affected. and nintendo says its super popular nes classic will return to store shelves on june 29th. a retrogame console sold out when it debuted in 2016.

nintendo expects this to be available throughout the year. cnbc's at work series focuses on changes technology is making between employers and the work force don weinstein is the chief strategy officer of payroll processor adp. don, thanks for being here. >> thanks for having me. >> adp started back in 1949 and started with the whole idea of outsourcing payroll because that was a function that a lot of employers didn't want to do. you picked it up you have 40 million people you pay? >> 40 million worldwide. that's right >> that's a huge number of people i am somebody paid by adp. we have direct deposit here. that makes up how many people? >> roughly 85 to 88% of the people are getting paid direct does posit wasn't always that way

punch cards. as technology has evolved, direct deposit is a great future when i started there was a favorite part of the week was there was a lady that pushed a cart around. it was my favorite part of the work week. we've automateds that process, which is great but it's taken a little bit of that tangible employer/employee relationship and depersonalized it. >> the nice thing is you don't have to go to the bank, you don't have to cash anything, you don't have to deal with it what's the new way >> it's been a couple of steps we pushed everything to mobile so as an example now, for instance, a lot of direct deposit people, oh, is today pay day? if you're fortunate enough not living paycheck to paycheck, we're able to put some notices out there. exciting, not bad. >> yeah. we're launching this new pay card which is a debit

instrument we made an acquisition of a debit pay card it makes wage payments it gives us a platform that we could innovate around digital payroll, payments. >> give us the practice. how would it work? >> you would sign up for the debit card as your private method of payment. instead of your wages going into a direct deposit and paper check, it's geared on the unbank, underbank. >> what happens if i lose this card >> that's the beauty of it it's secure. we can actually replace that when you lose a check, that's much less secure. >> how many do you have that are not able to bank properly? >> we would estimate 15% we still do 3 plus million paper checks that's because they don't have bank accounts. >> correct >> the debit instrument is the

fastest -- >> you're not trying to replace the bank, you're trying to take care of those -- >> trying to replace the paper check. >> primarily it's the paper check. i think we're finding particularly with millennials and genz, some will do this as a supplement to the bank account you might have the direct deposit and say i'm going to set up a separate spending card. >> if i have a small business, my small business has 50 people -- >> the payroll for this? what's payroll cost for a smul base we're talking about benefits administration, time and labor to expand our total adjustable market that would cost less than your utility bill and then the debit instrument is free to the employer, free to the employee it's a different way to get

paid i think one of the other big drivers on it has been the gig economy. we find in particular just getting paid on time is a big problem for gig economy workers. >> right. >> typically you get paid every two weeks. that's the predominant, typically they're not getting paid off of payroll, it's accounts payable terms could be net 30, net 60. >> from ge they went from 30 days to 60 days for all contractors they were paying. >> right. >> do you speed that process up? >> exactly. >> do you facilitate it? there were some companies doing it for the float that was a policy at general electric. >> yeah, didn't help. >> no, of course a lot of companies use accounts payable -- >> financial crisis. >> they did a lot of things. >> different story there

certainly accounts payable is something that companies look at for cash flow purposes that's kind of the point whereas payroll you're much more disciplined about t. a recent study by the freelancers union 71% of freelancers reported difficulty getting paid on time. one of the things that we offer to the freelancers, what we call fast funds model way for them to get paid faster. >> you're fronting the money before they get paid >> basically with a financial partner. >> what does the freelancer have to do in return? how much do they pay you >> it was a an average that will trend down over time because he have' phonen it. >> how many workers now? i know the irs is seeing w-2 workers have dropped. >> that's right. >> freelance workers have picked up as contractors.

what percentage are freelancers of the work force of people that you're measuring >> of the people that you're paying >> yes >> we have 350,000 transfers a couple we were talking about earlier, one of the challenges is if you didn't have a contract or formal record, you're getting a work assignment via e-mail, hey, can you come in and do this for us, we'll pay you x dollars, even if that's legit, which let's say it is, try taking that to your accounts payable department has anybody talked to you about paying in the form of cryptocurrency >> so it's a question that comes up from time to time from our perspective we look at both the employer and employee side and there's almost no interest expressed by employees

in getting paid in crypto. >> you think >> although it is a popular question. >> i would imagine in the context of some of these crypto companies that they might want to pay or somehow bonus out to people cryptocurrency. >> ham burger companies want to pay you in ham burgers, too. >> modern day barter system, but i would say of our 600,000 clients -- >> i assume it's a small group. >> the blockchain group however is something that's much more interesting to us as a technology that we think could revolutionize payroll, especially for international workers, assignment, cross border money movement. that's been growing quickly. one of the fastest growing areas are internationally paid companies. >> don, thank you very much for your time today. >> thank you for having me coming up, billionaire investor ron baron is going to join us at the top of the hour he's a big tesla bull for a long time stay tuned

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time now for the -- is it really just crepes up on you. for the executive edge u.s. consumers buy a lot of goods stamped made in china. trade disputes with the world's second biggest economy will have ripple effects courtney ragan joins us. >> reporter: the national retail federation is one of the groups lobbying they're out with a new campaign today. it has a familiar old movie twist. >> class, what are tariffs anyone anyone know? >> i'm not sure, but my best friend's sister's boyfriend's brother's girlfriend heard from an economist who said it will raise prices on everything from clothes to cars. i guess it's serious. >> tariffs raise taxes on hard

working americans. it's not complicated, tariffs are b-a-d economics it will lead to four job losses for every job gain. a net loss of $134,000 $150 billion in tariffs will cost 455,000 net job lost. supply chains have diversified from china it is the top country for both shoe and clothing imports among other product categories rick helfenbein points out we pay tariffs on clothing and shoes and we have since the 1930s. anything additional will cause people to cut prices and layoff workers. there's a lot at stake for the retail industry.

>> we've gotten very used to clothing prices not going up. >> right. >> a huge component that's never been there. >> exactly. >> clothing prices have stayed low, low, low. >> and if anything have been deflationa deflationary that could be a problem. >> courtney, thank you >> thanks. coming up when we return, apple ceo tim cook speaking at duke's commencement ceremony and taking a shot at his company's rivals over privacy issues and more we'll talk tech with ricoh's ed xte ne a look at what's going on in european markets right now 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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welcome back to "squawk box. apple's ceo tim cook spoke to the class at duke university encouraged them to be, quote, fearless and reject the status quo. he threw a few jabs at fellow tech companies facebook and google >> we reject the excuse that getting the most out of technology means trading away your right to privacy. so we choose a different path.

collecting as little of your data as possible, being thought full and respectful when it's in our care because we know it belongs to you. things tech, ed lee. by the way, he also made comments about the me too movement he made comments about gun activists. he did step out there on a lot of topics. >> right >> and the question is, does he have a license to do that in a way you think most ceos don't? >> he probably does largely because first of all, it's the most valuable company in the world. it's become an essential company too. they're selling things that are a big part of our everyday life. whether you're using your phone to hail an uber or be in contact with people. it's hugely essential. >> what do you think about his -- i have one privacy question which relates, though, to the functionality long-term of all these products

he has staked a claim in the ground that apple is going to really protect your privacy in a way that these other companies are not. yet one of the things that makes all this technology work one way or the other is having the data about me so you can serve me things that i need to know >> apple even knows when you're charging your phone. right? they collect that data they know what's happening they're not making use of it more than simply, well, maybe we can make the phone in a way that charges better or that, you know, reacts better when you are charging it. here's what i think is interesting. it's still at the core a hardware company it's selling you devices their services business is the vast arising part of the business that includes the data it's not an ad-driven company. but over time as services becomes a more essential part of its business line, i think, you know, i think it's good he's out there saying that. when that data becomes more essential to how that services business works, i think there's

going to be a can of worms. >> do they break it down >> they do not apple music. they've got 41 million paying customers. you have icloud. you know, you pay into that maybe a dollar or two a month to store your photos and things but the bulk of it is largely all of the games and apps on your services -- in-app purchases. you've got a game, you want to get the next level you play a dollar or two that makes up the bulk of that. >> data and privacy. what did you think -- we didn't talk about it on the show. google and its duplex technology google created this amazing technology that will lit kally call up on the phone -- did you see this >> i think we talked about it. >> did we talk about it in length >> maybe not in length but you mentioned it >> the idea it will call the restaurant -- >> no, we didn't talk about that >> it will make a reservation for you. or to get you a hair cut >> it's a piece of software that does it. it designed the software to

sound like a human so there's pauses and umms and ahhs >> it says i'm calling to make an appointment for my client >> as soon as i detect it's a machine, i click on it >> you wouldn't know it's a machine. >> i bet i would. >> it was amazingly good but also creepy. they got some backlash like are you going to let people know they're talking to a computer? yeah, we should probably do that so i think tim cook taking a hard line stance on that is going to be significant. you know, it is easier to take a shot now data is going to fuel how a lot of these interoperate. how you access your google stuff through your apple phone it's going to become more fraught i think. you know, in terms of all kinds

of things tech, regulation a lot of it's not there yet. i mean there are no rules of the road for a lot of these things. >> media mergers i'm thinking also of the impact on netflix since all of these deals -- >> it's all about netflix. >> what's going to happen? where are we on cbs/viacom >> cbs/viacom from what my sources tell me, i think redstone is trying to make the right concessions. the concessions just come down to who is the second in command. >> this is whether -- >> viacom will be second in command to les moonves >> and les doesn't want him in that role. >> it's that he doesn't like the idea of a proxy sitting right next to him reporting on what he's doing to sherri right? i'm not saying that's what bob's role is, but that is the concern people have. he also, you know, les works well with joe ianella.

he says in order to take cbs and viacom to get the higher fraction value we need to get, we need to keep the team in place. it's not putting puzzle pieces in place >> how long has that developed that schism? i thought of les as being close to sherri. in the past, she has been his champion over time i can understand him not wanting to feel like anyone is looking over his shoulder. >> it is a surprising development. here's the thing les is at the point of his career where he's like, i don't need this. i want to go out the way i want to go out. i think that's a key part of it. but going back to the media merger stuff, all the decisions come down june 12th. that will set off a lot of other dominos. figuring out disney reupping its decision for fox if it needs to. >> what do you have planned at recode candle light vigil or something? >> our monthly net neutrality

vigil? >> you going to wear all black got a box of kleenex ready is the whole place going to close down >> we're going to be fine. >> are you sure? people charging to build things. what a concept i thought the interpret was just out there. those servers cost money, don't they >> they do a lot of it's free and you get advertising and data >> you'll be all right >> ed, thank you when we come back, our guest host for the next hour, the chairman and ceo of baron capital. ron baron. look he's up and ready to go. ron's going to join us to talk markets, the economy, and his investment in tesla. "squawk box" will be right back. ♪ i just want you close, ♪ where you can stay forever. ♪ you and me together ♪ through the days and nights. ♪ i don't worry

♪ 'cause everything's ♪ gonna be all right. ♪ no one, no one, no one ♪ can get in the way ♪ of what i feel for you. the first survivor of ais out there.sease and the alzheimer's association is going to make it happen. but we won't get there without you. visit alz.org to join the fight.

the dow rally looks ready to roll on this morning in this hour, ron baron of baron capital shares his long-term investment outlook and where he's putting money to work now he's our special guest for the hour we're on washington watch. could concessions to china's zte improve trade relations? plus we talk baseball, business, and viral cat videos >> all right we're going to go get the papers >> keith hernandez joins us to discuss his new book and much more as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is "squawk box.

good morning welcome to "squawk box" right here on cnbc we're live in times square i'm andrew ross sorkin with becky quick and joe kernen take a look at u.s. equity futures at this hour dow looks like it would open up 90 points higher and the s&p 500 looking to open about eight points higher. a numb of headlines to catch you up on. walmart planning to take flipkart public as soon as four years from now that's going to regulatory filing they bought flipkart last week in its largest ever acquisition. fed's mester is a member for 2018 so a lot of investors watching what she has to say and xerox has scrapped its deal with fuji film in a settlement with activist carl

icahn. we've been tracking this one for some time. icahn and deason had said it significantly undervalued the company. fuji film said it would look into possible legal action seeking damages. some stocks to watch conoco phillips has seized assets belonging to venezuela's state-run oil company from a refinery that it runs on the caribbean island of skiir sow and chile's parent company said there was a credit card breach working to determine how many customers were affected. and nintendo says its super

classics nes classic will return to stores on june 29th it sold out immediately when it debuted late in 2016 nintendo expects this round to be available through the end of the year let's get to our guest host for this hour. ron baron who's the chairman and ceo of baron capital ron, it is a pleasure to have you here today thank you for joining us >> thank you for inviting me >> i want to dig down on your investments, but before we do, i feel we should ask you broadly about the market you have come on telling us the market is the place to be. that you have to be there if you plan to make your money work for you and earn more than inflation over time. right now we're looking at a market that's virtually stall ed out. we're where we started the year for the dow. we have seen a quiet rally over the last seven trading sessions. things have picked up. what's your sense about where things stand right now what's your sense of valuations? >> well, with interest rates higher and that's a negative for

valuations and oil prices are higher. that's a negative for the economy, i think so the growth is going to be faster in the short-term, you have conflicting, you know, developments which are making stocks relatively flat but the big poikture is stock prices and the economy are intricately tied together over the long-term. and we expect that you will continue on a short-term when president trump was chosen to be president, few people thought that was going to be the case when brexit came about, few people thought that was going to be the case. when we have the russian investigations going on and we have all this information about cohen and talk about impeachment and korea and iran i mean, you would think with all those developments, it would be surprising to you if stock prices just marched ever higher.

this year despite the fact you have these developments, stock prices are hanging in there. that's because the economy growth is accelerating i think everything's fine. markets 16 times earnings, that's the norm. and when i was on in now it's 24,000 and economy's doing well i believe every 10 or 12 years the stock market will double because the economy will double. and, you know, so the stocks are very importantly to invest in the market is how you protect inflation. >> are you continuing to buy stocking every month and is that what you would expect investors to do as well? they you're not advising people

to wait for a pullback or see something else that happens. you're saying right now is a good time to invest. >> it's always a good time so our country and every democracy that's ever existed has devalued its currency over time to make sure people have capital invested to create jobs in a strong vibrant middle class. always has so what i think is that if you think long-term, then $100,000 in the bank today is going to be worth $50,000 in 17 years in purchasing power another 17 years it's going to be worth $25,000 another 17 years, that's $12,000. you lose 3% of your money every year on the other side that the historically has doubled every 10 or 12 years i was writing on my current quarterly letter that the stock market has -- reflects what

takes place in the economy and longer term, it's tied together with economy. and basically the dow jones, the way i'm able to look through all this, we started grand capital in 1982. the dow jones was 800. in 1992 when we had $100 million under management, the dow jones was 3,700. then it was 8,000 in 2003. now it's 24,000. so if you think about 800 to 2,700 to 3,300 to 24,000, that's the professiogression that's great but the market doesn't march ever higher. it's volatile. therefore investing every month is the best idea >> let's talk specifically about

tesla. this has been a major investment for you. one you held for how many years? >> we've been investing in it since 2014 >> 2014. it has been a stock that's been very profitable for you. but lately the stock has run into problems too. we just had jim chanos on in the last week or two and he talked about why he is short this stock he laid out a case that included everything from competition and other car makers getting involved in this to concerns about profit margins not being measured the same as other car companies. and all the way down to what we've just seen recently with some of the questions that elon musk took on this latest investor call where he said those questions are boring on things like profit margins and wanted to move on. lay out your case why you like this stock >> everything we do is long-term. can i talk one more thing about process and then i'll get to this >> absolutely. >> in process, an individual

came to visit me about a month or two ago and he manages $15 billion for a family office. i asked him how that money is managed. he said it's in four sections. into private equity, credit, real estate, and stocks. i said how are you doing he said everything's doing well except our stocks. and the stocks, he said, we've had problems with that, have to hire new analysts. i said how do you figure out who's going to do well he said i chose people who were in their 30s because they're hungry, they work hard. you know, they're tireless in their 30s and several years ago, i was talking to max steinhart i said how do you figure out who is going to be the best investor he said give me someone with 30 years' experience. so steinhart wants someone with experience and this guy wants people who are 30 years old.

so it's about process. and about the reasoning why you can't predict whether someone's going to do well or not. you can't just say, okay, go buy stocks you haven't seen it. you don't have the perspective what we do is try to find businesses that are a process. so they're growing real fast they have something about them that makes it very difficult for other people to compete. they have excellent management teams and judgment and then we invest in them for the long-term. so most people buy and sell on the basis of current news. and our holding periods are long baron growth fund, for example, the holding period on that is somewhere between 13 and 14 years. publicly owned stocks, 13 and 14 years. and our firm overall is probably seven or eight years the average mutual fund is one year so what? so who cares about being long-term? everything is about long-term. but if you think about long-term why that works, is that it takes

awhile for businesses to develop. it takes awhile for when you're doing something disruptive or have a big opportunity to take advantage of it. so oftentimes from the very start of my career when i was investing in hotels, they were building hotels while we were investing in them. they weren't making a return when investing in the hotel. they were making it until it opened then you do it if you wait until it opens, it's too late then you pay a high price. how have we done we had $100 million under management we now have $28.2 billion. we've made our clients profits at 98.9% of our funds have beaten the market. and 96.5% are top 12%. i think it's a better record than any other mutual fund company and probably most hedge funds. the way we've done it? long-term. find businesses others can't compete against and find great management teams and investment

teams and buy them after other people are buying them a lot of people are negative about tesla. and i understand it happens to be our -- i think it's our eighth largest holding. and we own in the aggregate 106 million shares between 2014 and 2016 our average price is $217 a share. so we haven't made much on it in my judgment. when you think about the investments we have over the long-term, we have ten times, 20 times charles schaub 50 or 60 times alexander's since 19 89 seven or eight times we've gotten $200 in dividends,

i think. >> so in other words, tesla has yet to pay off >> i think we're going to make 20 times our money >> because >> because the opportunity is so enormous and people are saying, gee, they're spending a lot of cash of course they are they're building factories when you build factories, you're not making that much -- >> well, he has said he doesn't think he'll need to come back to the market for more money. >> i don't think so. >> you don't think so. >> except he wants to grow as fast as he hopes if he grows 50% a year and keeps going that way and you're capital intensive. the capital he's going to need to produce vehicles is much less than other companies are going to be spending and they'll be using less capital >> you don't think he'll need more if he does come back and ask for more capital you would be understanding as an investor or upset? >> whatever he thinks is the right thing to do. he's a bigger shareholder than i am whatever he thinks is the right thing to do, he's not going to be necessarily come to market.

there's a lot of people scrambling would like to invest in his business. tencent which is the largest publicly owned company in china spent $1.8 billion to buy 5% of tesla two or three years ago they were buying the same time we were buying you know, their idea, i suppose, is they wanted to be involved with tesla when tesla is active in china i'm not sure that that's -- not say i'm not sure but i think there's some likelihood if they want to have a partner. maybe. but maybe there's something they could do relative to data in china. but the way i think about it, when tesla is building these factories now, if you go visit these factories, they're mind blowing. i can't conceive of how someone could think about these factories, developing them, financing them, building them. and then taking the risk to go ahead and invest the capital required to become a large

automobile company if you think about other automobile factories, the person in charge at fremont of the tesla, he was a top executive for toyota and he's been at tesla for 15 years now. he was telling me that there are, you know, when you look at the german automobile companies, you look at the japanese automobile companies, these companies when they build a new factory it's 98% similar to the factory they already had it's a little bit better so someone comes to them and says, you know, mr. -- i don't recall his name it's hard for me to pronounce in charge at toyota -- i think there's a better way to make toyota cars this is the way. and it entails ripping up everything we've done already. and now we're going to have this new factory that's all automated. we're going to have better quality. when you go into their factories and screwdrivers, how do you

know how much torque is supposed to be used for the screws? this is all in the screwdriver itself it's all automatic that you can tell when something isn't exactly right. right now -- >> ron, unfortunately our structure doesn't allow us to have the thoughtful in-depth conversation we're having right now. i want to continue this conversation because it's really good we need to hear why you have such a strong bullish defense of tesla. >>and let's talk about how the finance it >> all right we'll talk about the financing and executive departures >> generic has a power washer now. have you seen that >> i haven't been a shareholder in generic for awhile now. we bought it when it came out, made three or four times our money and sold >> we'll talk about this too but i was surprised. i thought it was all generators which was amazing.

>> we're not on camera right now, are we? >> yeah. >> that was live >> wow i'm going to start doing that all the time we'll get really good stuff out of you talk elon musk the conference call no >> we're still live. coming up, could the move improve u.s./china relations we'll discuss that after the break. futures at this hour, would be eight days in a row if it holds up on the dow. we'll be right back. there's nothing small about your business. with dell small business technology advisors you get the one-on-one partnership you need to grow your business. the dell vostro 15 laptop. contact a dell advisor today.

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one more way comcast is working to fit into your life, not the other way around. welcome back to "squawk box" this morning president trump offering a concession to zte. kayla tausche is joining us right now with that story which has caused a lot of controversy over the weekend kayla? >> good morning, andrew. president trump says he's working to get the chinese telecom giant back in -- as the two countries work toward a potential trade compromise this week in a tweet trump saying, be cool it will all work out but the white house says commerce will evaluate the zte issue based on facts in april commerce banned u.s. suppliers from doing business with zte which it found to violate sanctions in iran and north korea. so we'll see where commerce comes out on this. meanwhile, the secretary of state mike pompeo said yesterday

on "face the nation" that total denuclearization by north korea would result in sanctions relief and also access to american business >> we can create conditions for the north korean people that will rival that of the south and that is our expectation. it won't be u.s. taxpayers it will be american know-how, knowledge, entrepreneurs, and risk takers working alongside the north korean people to create a robust economy. >> pompeo specifically mentioned midwest electricity and energy companies. it is one month before that summit takes place in singapore. we'll see how that situation evolves in the meantime. >> thank you very much, kayla t tausche. when we come back, a baseball analyst and former player and now a social media star keith hernandez and his cat hodgy going viral.

he'll join us to talk about his new book "squawk box" will be right back. ♪ you and me together ♪ through the days and nights. ♪ i don't worry ♪ 'cause everything's ♪ gonna be all right. ♪ no one, no one, no one ♪ can get in the way ♪ of what i feel for you.

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iranian oil squeeze. we'll be joined on where prices may be headed. take a look, by the way, at oil prices wti crude at $70.78. take a look at u.s. equity futures. we are in the green. dow looking to open out ab81 points higher. back in a moment more range of m. i'm fine. okay, well let's see you get up from the couch. i'm sorry, what? 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. your company is and the decisions you make have far reaching implications. the right relationship with a corporate bank who understands your industry and your world

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welcome back to "squawk box. we want to get back to ron baron. we got rudely interrupted by a commercial break during our tesla conversation you were making the bull case. one of the questions i have is we have seen a series of disappointments in terms of the production schedule. meaning a promise or expectation about where production is going to be and then the number doesn't get hit. i'm just sort of curious as an investor who has tried to be bullish about this, when you get those numbers, are those bad days for you >> no. i think that you have to expect that if you're doing something

entirely different than anyone has ever done before, how can you expect, okay, this date it's going to work? that's not possible. it just takes awhile they're doing something dramatically different they say they're at 98% the same as the factory they had before this is going to be doing things with much less labor, much less capital, better quality. way different. when you're doing something dramatically different, the guy who's managing this facility was saying if he took this idea to the head of toyota, he'd say are you crazy? why would you try something different? >> a lot of the success thus far has been about a trust that he's created between investor class and him. to hit the number. he's had a special license to frankly lose money and invest in a way that most other companies have not and i think the question on the

table has long been how long that trust remains >> he's growing 50% a year are you kidding me they're doing more model 3s. this year coming up they do 17 the following year they do $25 billion. have you seen something from ground zero to that in such a short period of time so basically, you know, right now the production line is about 350 cars a day there were 200 cars a day about a couple of months ago there'll be 500 cars a day in next week, the week afterwards just in a spurt. they're now doing cars -- lines are set for a car every two minutes. and right now there are probably four minutes a station and so a car every four minutes. and there's -- in this production line, normal lines for other car companies, 130 to

200 stations this guy has 46. the next car, the next model, model y, is going to be 36 so he's producing with fewer stations, fewer stops, three different levels it's mind blowing. >> ron, one of the things you've said when you're looking at companies that you're going to invest in early and then stay invested in over a long period of time is you look for management teams that you like and that you think can go the distance one of the issues jim chanos brought up and the reason he's shorting it is because of the huge number of executive departures at the company. we were reporting about a couple more today does that concern you in. >> well, of course you'd like to have a team be built but this company is running at the speed of light, you can't have people work 24 hours a day 7 days a week. and doug field who is one of the senior people there, engineering, he is on a

sabbatical i think it's six weeks maybe eight weeks? but he was in charge of the model 3. but it wasn't the model 3 manufacturing. it's the design of the factory and when he made the announcement with elon that he was going to be taking this short break, arm in arm with elon to the tesla team, i'm taking this time off it's personal reasons but i will be back and he will be in charge when he does come back of the model y. >> but doug field aside, we have seen a huge number, dozens of key executive who is have left i guess that's my question and then secondarily, elon musk is obviously the key man. >> there's 31,000 people there you know, there's people going up, going down and, yeah, you'd like to have -- my opinion about talent is that when you have a business like mine and you're trying to build

this team going forward, it's, you know, the more -- the longer people work together the better they become. when you're growing this fast and you're disrupting this rapidly, breaking eggs, i guess they call it >> jim chanos and some of the bears have a thesis that suggests that elon musk will eventually step down or move over in his roles to a sort of chairman and chief product officer where he spends most of his time involved in spacex. do you believe that? >> we're an investor in spacex, too, and that's a private company. how do you know what someone's going to do over a long time >> do you think that's going to happen eventually he will not be the guy sleeping on the factory floor making the production line works. eventually --

>> would your investments change if he was not the ceo of the company? >> he said he'll be there longer than anyone in the company >> is he doing that right now? sleeping on the factory floor? >> the employees bought him a couch. >> so he'd be a lult more comfortable. >> little more comfortable he said he was sleeping on the floor because the couch wasn't comfortable. i don't see any time soon that he's not going to be in this role and by that time that's the case, look -- >> do you have any concerns about him being stretched thin a question about his role with spais ce spacex he's very active on social media. >> i think that when you have an exceptional person like elon musk, his mind doesn't work the way other people's minds work. when you talk to people in silicon valley, there are two people who are different than all the others there's bezos and there's him. you know, would you say bezos is stretched too thin

musk has 31,000, 32,000 people around him and there's people coming and people going there's more people coming here from apple than going from here to apple and he may think about it in terms of if you want to go take it easy and have, you know, a more pleasant life, go to work at apple if you want to change the world and have a big impact on our planet, you'll work at tesla it's a demanding, demanding job. >> one more tesla question then we'll move on. which is thus. >> i want to talk about financing. >> in the amount of time tesla has been involved in and really moved this industry forward, a number of other competitors have arrived with evs, have arrived with all sorts of new kinds of automation systems you know, in two or three years from now, do you look around and say there's going to be a lot of competition in a way that maybe we didn't anticipate before.

>> do you know what the initials bmw stand for? >> i do not. >> bavarian motor works. do you know what my building is named after? general motors and the company that acquired was cadillac motors and chrysler, buick motors and now it's general motors. when you think about the companies foreign motor. what do these guys do? they make motors when you're talking about someone coming along who's an existing oem and going to compete against tesla. tesla makes batteries. and the batteries when i started six, seven years ago, they were more expensive the battery of the engine cost gos up but those guys make motors

i brought a quote here which i thought was interesting by the german car minister. the guy who is overseeing, regulating the car companies he said german companies must heavily invest in electric car technology and batteries to keep up with global competitors quote, he did not understand why the firms hesitated for so long. why do you think they hesitated for so long? because they're interrupting the whole business all of those billions in engines are worthless. they won't be making engines anymore. if you're those executives running those businesses, do you think you're going to go say, okay, i'm not going to make any more motors anymore. half of my investment and employees are making high-technology engines. we're not going to make them anymore. are you kidding me that's how come they don't do it that's how come they try to stretch it out as long as they can. that's good for tesla because

that means the competitors are going to take longer they're going to lay back and not be competitive to build new battery plants also one more thing. how are they going to sell them? the guys who sell the cars, there was this societal reason for having car dealers a hundred years ago. and the reason for it was when they started coming up with cars, people were run over you know, they needed in local communities, they needed to have dealers to make sure they instructed the people who were buying the cars how to use them so they wouldn't kill themselves and to repair them now what's happened is that you're going to a new model. in order to do that -- henry ford didn't have the money to distribute them around the country so he got these franchises and gave perpetual franchises they can't be disrupted. their cars must be sold through those dealerships. think about that so those guys who were the dealers who sell the cars, they make their money not in selling the cars but in servicing them

if all of a sudden they came up with these great cars that don't have anything go wrong with them, you think the dealers are going to want to sell them how are they going to get sold when they say there's not enough demand for them, of course there's not. but when the dealers don't sell them or you come in to buy a chevy volt or whatever it is, the dealer tries to switch them to a gasoline car. >> you said you had a point on financing you wanted to make too. >> so tesla, they will shortly be 2500 cars a week. they're now -- for these new cars the x is next. the new ones are going to be 5,000 a week within probably another six weeks or so. and they're almost there they're 2500, 2700 a week right now. they're almost at that level and when they are at 5,000 a week, what that means financially is that company --

let's say $50,000 a car -- is doing $250 million a month of sales -- a week of sales a billion dollars a month. the suppliers are so excited about being involved with tesla, that they say i want to be one of your suppliers. what i want to do is that because i want to be so on your menu, i will give you unbelievable terms you don't have to pay for me 60 to 90 days from the time tesla gets an order, it takes a week to get all the parts they need. it's shortly going to be just in time right now it's a week. takes two week to make it. a week to send it somewhere. then they give someone another week before they have to pay for it so every time they're doing this, every time they get a billion dollars of sales a month, they get a billion dollars to float number two, they should be making under the tense conditions they're at right now once they get to 5,000 cars a

week, they'll be making $8,000 a car. in profit. when they get it running properly, it's $10,000 a car it's $2.5 billion a year of cash flow coming from making the cars $10,000 -- a billion a month then you got another billion dollars. on top of that, zero emission credits another $6,000 a car so basically this company is enormously profitable. they're spending $3.5 billion a year, $4 billion a year. so the cash flow is being taken by the production of these cars. and car production is going to double by next summer. >> okay. we're going to continue our conversation with ron baron in just a moment. in the meantime, let's talk opec and oil prices jackie de anless is here and she has more on this part of the story. >> certainly ricing prices are part of the story you were

talking about. opec is out with the most recent monthly report this is after president trump pulled out of the iran deal last week 3.8 million barrels a day. that's up a little month on month. it's up a little less than half a billion barrels from the end of 2016. overall opec pumped 31 million barrels a day. down from 10.4 million barrels at the end of 2016 shows you who's doing the heavy lifting here what happens to the iranian projection now there's a swing of have a million a day if they come through and see how quickly they come offline still market conditions have been tightening. demand seems more robust if the market loses the iranian oil in addition to the almost 2 million barrels a day that the rest of opec and russia have

cut, you've got a reason to see these prices cross $70 they did last week now the talk is for $80 a barrel and you can see that the brent prices are not far off that right now. so the dynamics are changing. >> they're talking about $80 a barrel for brent or wti? >> wti >> you can see the brent price quickly. >> thank you when we return, baseball legend keith hernandez on his new book, viral videos of his cat as well, and the business of baseball we'll reminisce about "seinfeld," 1979 actually, that is -- is 1979 -- yw, 's a song, too, isn't it anayhe joins us after the break.

♪ our next guest's career took him from baseball to acting to on-air analyst and now author let's bring in keith hernandez, former first baseman for the st. louis cardinals and the new york mets he's now a sports analyst and

author of a memoir "i'm keith hernandez. thanks for joining us. you are a great baseball player. 11-time golden glove never been done before you won mvp in 1979. but it was co-mvp. i'm okay with that after looking how that happened. you should have won because you batted 0.344 across the board you had better stats but willie stargil, only played 120 games and then the pirates we are family they won are you okay being co-mvp? >> it doesn't diminish the award at all i state it in the book i mean, it'll go down in history as it'll never happen again. >> it's a fluke that it happened that time. >> the odds of it happening are slim to none. >> you had ten first place votes. >> i finished in the top ten -- there's ten places i finished in all of them. i finished all in the top five willie didn't make it in two of

them the two writers from houston didn't vote for him. >> but then he was mvp in the nlcs and he was mvp in the world series >> but the voting ends end of the year post season has nothing -- supposedly has nothing to do with it. >> exactly so you're al qaeokay with that how about being the same almost for one episode of "seinfeld"? i think that's okay too. >> that was pure luck on my part >> but it's good >> it's great. i never -- i was two years into my second year of retirement i was just laying around new york trying to figure out what i want to do with the second half of my life i got a call from my baseball agent who was scott boris at the time >> the same guy -- >> i hadn't talked to him in two years because i wasn't playing ball anymore he said they got this show in l.a. i don't watch primetime.

and i go, what's the show. he said "seinfeld" show. you'll have minimal lines, pay you $15,000, fly out to l.a. for a week i said i'll take it. >> you were good >> they threw my script out to me, overnighted it and i went, holy cow and i never acted. >> you were good though. and i've tried it's not easy. >> it is -- petrified in front of a live audience, too, on friday night so good friend of mine marsha mason, i called her. i said marsha, you've got to help me here so she said read line one, read two, then one, two, three. do it before you go to bed because it will soak in overnight. and do it first thing in the morning. so all the scenes that i did, i knew everyone's lines. so i knew -- >> you memorized everybody's >> and really when i looked at them, i didn't even see them i realized by wednesday that i'd

be leaving saturday and they're onto the next show this was pretty serious stuff and i better get my act together and get it right >> just by happenstance, today is the 20th anniversary of the last "seinfeld." >> i was talking about that, too, how they were all really bad people when it came down but it was funny because all of us don't act perfectly all the time even at the end when you didn't spit on -- >> right >> honestly i could take you until 9:00 talking about all that so i think it's good, too. and you asked jerry to help you move and you barely knew him you'd only been out one. >> nearly took out elaine. >> it's great watching you now too. let's talk about the book. i'm not a big cat fan. is that all right? >> i grew up with pets i love dogs and cats >> i was allergic.

but they are different you know what i mean what started this? how did this come about? now you're famous for this which is bizarre >> hodgy is a bengal cat he's 15. >> wow >> that's the video that went viral. i got home at 4:30 in the morning. that was the flight back from san diego. so i slept to around 11:30 and then went out and got the paper. someone taught me how to do it -- i could video on twitter that was my first video. >> this is bizarre cats look like their owners, too, eventually. that's weird i guess it's the mustache. >> i guess it's better to look like a cat than a dog. >> i have a memoir question. you talked about the first half of your life and then your second half. which was more fun in the end? you've done some pretty cool things since baseball. >> still doing >> first half. there's no replacing playing baseball there's no replacing i could go out and find the next

what steve jobs did and it will never be the same as getting out in the field and playing every day. >> that season, 0.344, that's strong >> that was a good year. i hit 0.230 in april that year >> and 210 hits too. >> you're good >> i'm good. >> 104 rbis? >> yeah. that's -- i'm okay with -- you know, willie, we are family. i'm okay with it you're on mvp. >> willie was basically got kind of screwed in '73. he hit 48 home runs and pete rose led the league in hitting and willie should have won that year and pete rose won. >> i had high hopes this -- i'm not a big yankees fan. i'm not a mets fan either because i'm from cincinnati. so i don't like either of them i was hopeful for the mets what the hell happened >> the mets? >> yeah. what happened?

>> it's early. >> all right we got to go you like the yankees >> i like their lineup, yeah >> okay. all right. anyway, i watch you now. it's great thank you for being here >> thanks. >> the book is "i'm keith hernandez. >> we'll be right back wrapping up our hour with ron baron stick around a bulb of light?!? aha ha ha! a flying machine? impossible! a personal' computer?! ha! smart neighborhoods running on a microgrid. a stadium powered with solar. a hospital that doesn't lose power. amazing. i like it. never gonna happen.

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bit. what is the next most important thing? you only get to come on once in awhile next biggest thing you want to talk about >> two things. i want to end with tesla on safety and basically there's 5.4 million accidents. that's a lot every day and basically every time there's a tesla accident, there's pr about that why is that newsworthy isn't that amazing and the tesla cars have been ranked the two safest cars ever made in the united states, in the world. the two safest cars are tesla cars yet every time there's an accident and there's very few of them, they focus on that instead of on the fact that there's 15,000 accidents a day in the united states and a hundred fatalities a day that's point number one. that shows you the bias that people have. and important about that because

their business is being disrupted. number two, people got to focus on long-term and focus on the idea of compounding. >> okay. we are going to have you back. >> you're talking investors at large. >> ron's going to come back on soon >> next time for two hours please >> but we want to thank ron for a great hour when we come back, president trump looking to help chinese smartphone merak zte what's it going to do to china relations? we'll talk about that when we return but right now, our bond is fraying. how do we get back to "us"? the y fills the gaps. and bridges our divides. donate to your local y today. because where there's a y, there's an us. is it to carry cargo... greatness of an suv? or to carry on a legacy?

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are trade tensions easing? president trump vows to help chinese telecom company zte ahead of key talks between the u.s. and china and stocks pointing to a higher open on wall street. new this morning, facebook suspends 200 apps for data misuse in response to the privacy scandal. we have the details straight ahead. plus diy cryptocurrency. >> start with a reason for the token to exist developing the concept, the idea around what you're going to do >> we'll show you what it takes to create your own digital coin as the final hour of "squawk box" begins right now. ♪

. live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc i'm joe kernen with becky quick and andrew ross sorkin and the futures at least right now continue to be positive. in the green up about 75 poi3 ds that would be eight days in a row. i think we've got seven since that thursday a week ago when we were down 400 points remember it turned around and closed up five that was the beginning of the most recent sort of rebound. looked like we were going to test the lows. that was the day we went into the average too. and it bounced back up there's the 10-year note $2.2 2.98%. right now gasoline prices at the pump are definitely up

>> almost 3 bucks for regular in new jersey >> and people are siphoning gasoline, again, supposedly. >> $3.77 in hawaii i heard that this morning. here's what's happening at this hour. xerox has scrapped its deal with japan's fuji film with icahn and dee son. they had maintained with the joint venture significantly undervalued the company. fuji responded saying it would consider its options including possible legal action seeking damages. this morning jpmorgan downgrading xerox to neutral that firm says it is unlikely the new board will find an alternative acquirer for xerox then check out shares of qualcomm and nxp semiconductors. china has resumed its qualcomm takeover of nxp. this comes after the review and

reaction to trade tensions with the united states. all right. cleveland fed president loretta mester says they could raise rates more than they once thought. she made the comments earlier this morning mester also cautions that the u.s. should keep its debt pile in mind before things get out of hand mester is a member of the fomc this year. let's get to julia hernandez and here on set with us drew mattis. let me start, drew, with you to get the economic backdrop. we had some numbers at the end of the week. where are we right now in your view anything change? is it hotter than you were airporting right now

the labor market, the economy? >> the labor market has been hot for awhile we haven't seen the wage growth. the thing i think people are paying way too much attention to are the energy prices. are energy prices going up bad for the consumer yes. but the consumer has benefitted from a tax cut if you look at the number of minutes of work required to buy a gallon of gasoline, it's not all that different so on the capex side you should see a difference in relation to the rise in energy prices. >> victoria, earlier we had phil orlando on who was not worried about inflation. just didn't think it was a spike. just thought it was sort of business as usual. this is where we should be on inflation at this point of a recovery is it more concerning to you >> we have quite a bit of a focus on inflation we think we are going to see that continued rise.

we don't feel it's going to be runaway inflation, but you have to look. we had strong cpi numbers. a lot of that comes from the fact that 12 months ago we had low prices we anticipate a bit of a pickup there. their underlying inflation gauge. it's about a year and a half lead on headline inflation numbers. they should be trending higher here at the beginning of the summer season, so demand should go up for gasoline and consumers are going to notice that the higher price at the pump, the higher prices for groceries they have. we do think inflation is more of a concern than maybe what some people are giving it at this point in time. and that's going to help push the race higher. >> most of what you've done has been fixed income in the past. are you riding at all of the equity investments as well i mean, it -- i think it helps to have a firm grasp of fixed income what does all this portend for

stock prices and then also, with the backdrop that wages don't seem to be tied to the overall unemployment rate of 3.9%. we're not seeing the same correlation we normally see. >> we're really not. that curve has uncoupled with what we used to see. a lot of that is due to productivity reasons we've had such low productivity for a long period of time. started to see that come back over the last four quarters. that's going to keep labor costs low. we have a demographic change in our labor pool that'shelping kind of add to the confusion as to why we're not seeing wages go higher you have less experienced people coming into the workforce. you have baby boomers retiring the biggest thing is the mismatch we're seeing there. both in skills and in geography. we had the small business survey come out last week where taxes and sales are no longer their number one concern it's a skills mismatch and we have companies like

tyson, like genuine parts come out and say they can't find the people they need they can't find the people for the truck iing industry i think we will start to address that issue and as we -- i don't think we've seen all of the ramifications of the tax reform come through yet. we'll start to see -- continue to see some momentum in the equity markets. >> what do you think, drew >> well, i agree with victoria i think the point is productivity is going to determine everything but if you look at productivity gains, growth, what growth typically does to earnings, we're not equity people either we're a fixed income investor. but we run equity models to check ourselves. those are pointed towards reasonable growth and indices this year. so we do have to weigh what we're doing, you know, on risk adjusted terms but the equity market seems it should be holding up well given

the outlook. >> okay. we've got to go. thanks drew mattis, victoria, thank you. appreciate it. >> thank you meantime, want to get right over to deeds idra bosa with information on lyft. >> lyft is disclosing internal market numbers telling cnbc exclusively it has 35% of the national ride sharing market that's up 20% from 18 months ago. that would be growth of 75%. a lot of that is on the back of the disastrous 2017. but lyft says the momentum is not letting up uber does not disclose market share data but a source familiar with how the company tracks the metric tells us that lyft has more like 28% to 30% wuch hich is closer second measure but has its own limitations. including some of uber's international rides in u.s. calculations the ride sharing battle is heating up this year

both companies trying to rein in spending looking towards ipos. lyft tells us it has reduced spending by 20% year over year in the first quarter uber has not released q1 financials but a source close to them say they look good at the same time, guys, uber's having trouble finding a cfo that's a key position that has been empty since 2015. a report saying that the top candidate would likely drop out. >> thank you for that report when we come back, a lot more to tell you about you may jesse williams from his acting work. but you know he's also the creator of two mobile apps he's going to join us on the set next to talk business. u' wchg ed yoreatin"squawk box" on cnbc er weather emergency... 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,

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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. . all right. welcome back, everybody. president trump offering a concession to chinese telecom company zte. zte was forced to suspend operations after the united states banned american companies from selling to the telecommunications company for seven years. in a tweet yesterday president trump says that he is working

with chinese president xi jingping to give zte, quote, a way to get back into business fast the president also tweeting, china and the united states are working well together on trade, but past negotiations have been so one-sided in favor of china for so many years, that it is hard for them to make a deal that benefits both countries but be cool. it will all work out this all comes ahead of trade talks between the united states and china in washington this week in other global news, treasury secretary steven mnuchin in jerusalem today as the u.s. officially opens its embassy there. it's a controversial move that has caused some tension in israel richard engel is live in jerusalem and joins us now richard? >> the ceremony is about to begin. the vips are already assembled, the media is in place. the ceremony should be taking place in about 45 minutes from now. and at that stage, the -- what was the u.s. consulate here in jerusalem will become the

official american embassy. this is sometimes dismissed as a symbolic move. i can tell you for both israelis and palestinian moves, it is far from symbolic. for israelis this is a historic recognition of their claim that israel -- that jerusalem, all of jerusalem east and west is their eternal undivided capital and the capital of the jewish people now the u.s. in stone, in concrete with this ceremony is recognizing that for the palestinians, it is a devastating move there are about 40,000 palestinians right now protesting in the gaza strip there are thousands more protesting in the west bank. but just in gaza, there in multiple locations of the gaza strip, palestinians have been approaching the israeli border when they get too close or throw stones or mall kolotov cocktailh

israelis are firing on them. according to officials in gaza, already at least 25 palestinian demonstrators have been killed that's just 25 and this sceremoy hasn't even begun yet. >> all right, richard engel. thank you for that report in jerusalem. coming up in the next half hour, why economists are dramatically rethinking the impact of oil prices on the economy. we'll bring you that story first, though, actor and activist turned entrepreneur jesse williams is here he's going to join us on set right after the break. ♪ ♪ (baby crying) ♪ ♪ don't juggle your home life and work life without it. ♪ ♪

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welcome back to "squawk box" this morning amazon has narrowed down its list of potential locations for hq2. now the short listed cities are recycling the pitches they sent to the tech giant to pitch to other corporations places like philadelphia, toronto, newark have received an uptick of requests from companies. as we talk technology this morning, the 22nd annual webby awards are tonight the ceremony honors internet culture and content creators

we're joined by jesse williams of course an actor known for his role as dr. avery on "grey's anatomy" and a tech entrepreneur founding two mobile apps found exclusively on gaming. also david michelle, ceo of webby media group is here too. thank you both for being here. you will be celebrated tonight at the webby awards. how did you get into being a app entrepreneur >> well, i mean, thanks for having me. i'm excited about today. i started in the art world with a project called question bridge then we figured we're looking at the landscape of social media, me and my cohorts. and realized there was an absence, there was a big hole that i think needed to be filled which involved gaming and culture and the internet is, you know, a whole new landscape. we decided to make some products that made the decision not to exclude black culture as part of

americana. so we created something that we think was really fun and didn't have to kind of put u us on the specialty aisle. >> tell us about the two apps. >> well, bleberty is where you you figure famous phrases and words pop up you need your friends to quickly cue you on a timer so we have a range of 50 categories it shot up to number one app in the app store in two categories very quickly and people have embraced it. >> what's it cost? >> 99 cents. >> 99 cents. how did you pick the price >> we wanted it to be accessible we wanted to get you in. you know, we dabbled with it we played around with $1.99. we started with 1. $9. >> it wasn't working as well >> it was, but we wanted to get folks in the door and then buy packs from there you can buy different packs if

you want to focus on certain types of music or other elements of pop culture >> how did you find the developer to -- did you know some programmers >> i know several. we kind of have assembled a team over some time some folks we've kind of added to the fold. yeah >> how did you decide he was the guy for tonight? >> good question i mean, first of all, the app is awesome. it's really good people really like it. that's a big thing but the other thing is jesse and a lot of other people who will be at the webby awards tonight are using their place and platform and where they are in society to make a difference and do important things like this. this is commercially successful, but it's also a really important thing. that's one thing we like to recognize at the webbies people who are taking the responsibility themselves and stepping up and doing something. >> by the way, just as a point of clarification the webbies have changed over the years. you used to be about the web now it's for internet and apps and everything else now. >> it's like the grammys

honoring things not on gr grammaphones anymore >> how many of these do you want to build >> there's no limit. we have new ideas. we've got a whole slate of new products coming out. we're going to build out a real center of real estate around cultural experiences that also i should say have a subversive element to them if we're normalizing otherness and things otherwise cast aside, that helps >> do you believe the internet is dividing people or bringing them together? >> i think it does both. there is an element of flattening where it can create a little bit of a group think. how do we feel about this, do we love this, do we want to drag this but it also gives us, you know, an unprecedented level of access and content.

>> do you run ads? >> we don't. >> i was going to ask you about whether you think things like instagram or facebook or snap, which works betst these days? >> for promotion >> yeah. >> the roots weave in but instagram is fast and cool right now. it feels like it changes every year and a half, every 18 months so we do both. it's not twitter as much as it used to be, i don't think. but what do i know i'm a dinosaur compared to what's happening with these kids. >> while you're acting and learning the lines, are you also doing business >> yes i'm always -- yeah -- building and doing admin and reforming and reshaping categories and clues and playing on set we do kind of legendary game nights around the country. in l.a. with influencers and folks. we're going up to silicon valley to do it later this week >> cool. congratulations. >> thank you

i appreciate it. >> congratulations on the award. >> thank you. >> have fun tonight. >> thank you when we come back, baron's cover story this week is all about buybacks the magazine's top for purchases. we will talk to the senior editor right after this break. first, though, take a look at u.s. equity futures this morning. we've been in the green all morning long right now dow futures up still up by about 77 points after seven sessions in a row of gains. s&p futures up by 6, nasdaq by 16 "squawk box" will be right back.

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♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin those are the only people i'm going to talk about now but there are other people on the set with us right now that i hate to leave out. steve leisman. >> it's nice of you to include

me >> i just said i'm here with -- >> you're here with. >> a lot of people if you look behind the scenes right now. >> yeah. see? among the stories front and center, facebook has suspended about 200 apps so far in an ongoing investigation. it's examining apps that had access to large amounts of user data it will continue to take action in cases where it finds evidence of data abuse. ford is planning to resume production of the f-150 pickup truck. they were forced to halt production last week due to a fire at a factory of one of its key suppliers. and infinity war stayed on top of the box office another week the movie took in $68.1 million. also had a $200 million launch

in china and earned more than $300 million worldwide over the weekend. all right. leisman's here economists are rethinking the thought of higher oil prices on the economy. it's always been kind of a blessing and a curse, steve. joins us now with that story >> but more blessing now this is one of the more remarkable stories i've hada chance to report you keep doing the same story over and over and over and all of a sudden the stories change this is a dramatic shift economists changing how much they think the u.s. economy will be hurt by rising oil prices some have even downgraded the effects to almost zero when it comes to gross domestic product. first of all, surging u.s. oil production, we're number two on the way to being the number one producer lower imports and also offset by higher exports finally capex offsets the pain of consumers at the pump mike feroli, talked to him last week, said quote, we think the

effect will round to a wash. our prior modeling would likely have produced a slightly more adverse impact perhaps annualizing to a quarter point off growth for two consecutive quarters can be offset by the increase in capital spendsing. john ryding not going quite so far says you're not looking at the kind of magnitude we used to think about oil prices hurting the u.s. i think it's less than a third of the impact that it used to be riding says the biggest issue is one of distribution. this will amount to a transfer of wealth from consumers to shareholders of oil companies. from oil consuming regions to the oil producing regions. but this time a lot more of the money will stay in the united states economists we contacted say their new ideas may not hold if oil surges above $100 a barrel again. and one important negative, gas prices have an outsized impact on the american psyche for whatever reason. sustained gas prices above $3 a

gallon could undermine strong confidence this story was born from my errant mistake in '14 and '15 thinking the u.s. economy would get a pop from lower oil prices. it didn't happen in fact, jpmorgan wrote a mea culpa why it didn't happen a lot of economists predicted it didn't happen on the upside so they're not predicting the negative on the downside >> that makes sense. >> 70 seems -- 30 seems low. 130 seems high 60, 70, seems it worth about -- >> i think these estimates by economists hold for 80, 85 they worry above 100 for the pain for the consumer. i will get half a dozen angry e-mails from people saying how can you dare say this is not negative but there's this huge capex offset there are places in houston have that booming right now and there are more and more of these towns across the united

states because energy is now in many -- >> found so many more places because of fracking. >> there's a way you can -- like, gold is supposed to be worth -- an ounce of gold is worth a suit -- not an andrew suit, but what most people think is a nice suit what is there supposed -- >> there is no supposed to be. we i talked to lee raymond, he said i've been in this business for 30 years the average price of oil was, like, i forget what it was $40. and in no year was it between $30 and $50. so there are huge swings and there's no sort of ought to be, supposed to be kind of thing on oil. but, joe just one quick note. you called me out not having the gdp number last week it didn't exist because we didn't have data i got off set, we had that

number 3.7 is the starting number for the second quarter add it up, divide it by two, you come up with a 3% average for the two quarters that's a big number. >> what do one of those -- andrew, what do one of your bill ford suits cost? no that's the auto guy. >> i don't have a tom ford suit. >> is it jack ford he was like -- which ford makes the suits? >> ralph >> ralph lauren. >> and on the other side people's suits made out of oil it's the polyester >> by the way, you've got three of them for 400 bucks. >> speaking of suits, i like that tie and shirt combination >> sometimes i put things randomly together in a weird way. >> your wife doesn't let you turn the light on, does she? >> she's not up. nothing to do with this. >> but you got to dress in the

dark. >> obviously >> thank you stock buybacks are on the rise fueled in part by the new tax law. most recently apple announcing an eye-popping share purchasing program of a hundred billion dollars. but which companies should be buying back shares that aren't that is the topic on barron's cover story this week. joining us right now is jack howe he is senior editor at barron's. thanks for coming in >> thanks for having me. >> let's talk about this amazing buyback story. you're talking about more than $650 billion overall of companies saying they're going to be buying back stock. that blows away the previous records. >> you can think of that as a buyback yield. sometimes we look at the dividend yield of the market a couple percent right now we'll compare that to bonds. call it 3% but really the makeup of how companies spend their money has changed dramatically over time right now it's a ton on buybacks the yield of the market is

really more like 5% when you lump in the buybacks and the dividends. >> if you're a shareholder owning that, you own a bigger part of the company. >> it ought to make the shares of the company you own more valuable it doesn't always work out like that there are plenty of examples of companies that spend money on shares and the shares go lower you can ask ge about that or ibm. the way i would tell you is this buybacks will make a good stock better but they won't make a bad stock good >> right let's talk about companies that you think should be buying back more shares that aren't. who's at the top of the list >> i think you have to look at alphabet there's a ton of cash right now. you want to look at a stock you would buy on your own is the test we think alphabet looks attractive here. there's a duopoly formed in online advertisement money is flowing to them and facebook rapidly and have more cash than i think they can reasonably use right now. as we see rates come up a little bit, that becomes more valuable to investors they'd like to e soo it put to work i think berkshire is another

candidate, you know, warren buffett has a test when the stock is cheap enough -- >> 120% of book value. >> it's probably time for him to nudge that up a little >> why is that just because of valuation? we spoke with him and i think it was in february he told us they'd consider moving that higher if they couldn't find other deals in the stock market. still had over a hundred billion in cash. >> sounds like he might push closer to 130% at some point or just below at least he's put more money to work in apple which we think is an attractive company. he's at least putting money into something. >> you don't think there's any value in apple taking that hundred billion dollars and going off and think about all the companies they could buy with that money. there's nothing out there that's better than that >> they have so much cash, they generate so much cash. >> $65 billion a year in free cash flow. tons in research and development. plenty of opportunities to buy other companies.

at this point especially with the tax cuts that amount to found cash for them, there's less cash that they need to keep on the books right now i think that stock's attractive. we talk about the race to a trillion-dollar market value it looks like it is the front runner >> unless they keep buying back stock like that. >> i think it will win that race to a trillion soon apple is very attractive everybody talks about the disappointment with the past phone cycle. but numbers are still good >> would you just say that even if you're buying back stock, it's better than leaving it overseas you know people get so disappointed when they buy back stock. they want them to just capex or raise wages or whatever. don't make rich people richer. >> i think there is some political pressure on these

companies. we've seen apping in the same breath it talks about buybacks it talks aboutcap ex-. i think companies are under pressure >> you don't over-build things you don't need with capex necessarily. you don't want them to do that you don't want them to arbitrarily decide to build a factory you don't need >> and also the composition of the spending has shifted they're buying a lot more technology in the past you'd be looking for big construction >> i don't know. he was so bummed when they bought beats remember >> that was not a -- >> and any one you buy, it's so expensive. >> the question is would you want to own a telephone operator >> i don't know. everything is -- i don't know. should you -- >> disney? >> better make the right move though in buying yourself which you know all about and it's the most valuable

company on earth you know exactly what you're going to do because you run the company. >> the question was never is it better to be here than not >> the best laid plans of wanting one thing and in the unintended consequences do something else >> it's all money that works its way back into our economy. >> there was an argument about you whether you should leave it over there because if you bring it back this time, they're going to do it again but you're okay when they buy back stock with the repatriated earnings now you're okay? >> i am okay i wish we had come up with a -- i wish we'd come up with a tax system and strategy that would have figured out a way incent

capex. >> i don't want to come in between you too. >> yeah. that's my job. thanks, jack overall, though, you do anticipate it's going to be the biggest year ever for stock buybacks >> we think it'll be the biggest year the market to us still looks reasonably priced and earnings growth is good i think this money that's plowed into the stock buybacks will be for the most part money well spent. for the market as a whole. >> jack, thank you for coming in today. >> thank you. >> by the way, the barron's cover story is why the boom is bullish for investors. when we come back, seema mody has some good news. what's coming up on the bitcoin front? >> hey, joe. every day it seems there's a new cryptocurrency coming to market which got us thinking. how hard is it to create your own? quk x"etnsn oming up whe "sawbo rur into retirement...

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apple ceo tim cook spoke to the class of 2018 at duke university's commencement ceremony on sunday speaking at the graduation where he went to business school, cook encouraged graduates to in his words be fearless, reject the sta kus qtus quo. he also threw a jab at fellow tech companies facebook and google >> we reject the excuse that getting the most out of technology means trading away your right to privacy.

so we choose a different path. collecting as little of your data as possible, being thoughtful and respectful when it's in our care because we know it belongs to you. >> mr. cook graduated 30 years ago when he graduated from duke's business school check out the price of bitcoin right about now. let's show you what's going on this hour for those of you who are invested you can buy bitcoin for about $8,400 right now if you want to get in on the cryptocurrency action, what about creating your own? we've talked about this before but we didn't know how to do it. seema mody did just that >> that's right. at least for you cryptocurrencies are here to stay it got me thinking how hard would it be to create my own i decided to embark on a journey to see what ate takes. >> start with a reason for the token to exist

the idea around what you're going to do. >> i decided to name my hypothetical token diy coin. simplify and outline the steps someone should take if they want to have an initial coin offering if this were a real ico, i'd need to team of advisers i tapped kevin o'leary >> it's not backed by any asset. >> that's true >> i tell everybody that approaches me with utility tokens, what do i own? what am i taking real money and giving it to you for >> i began thinking about how to market the diy coin. many coin offerings use white papers and they can be dozens of pages long some are full of graphics. others are packed with mathematical equations which show how a token will exist on the blockchain to help with those technical details, i needed a savvy blockchain developer >> you need speed. you need safety, scaleability,

and simplicity. >> with a diy coin coming together, it was time to check in with a cryptocurrency lawyer to make sure what i'm planning is legal >> what is your business model for diy coin how is it that diy coins once issued would be used >> having run my hypothetical diy coin through all these steps, it should now be ready for its initial coin offering. of course this is the expedited version. there are a lot of steps in between. and keep in mind nearly half of last year's icos failed. it can be very risky >> it doesn't give me faith that any of us could go out and do something like this. it makes me think even more that this is like a chuck e cheese token. >> every step can take a lot of time it requires a lot of expertise especially if you don't have knowledge or expertise in software development or launching your own coin. blockchain itself is a technical software to work with. >> if any of us got the right people to help us out with it,

we could launch our own money? >> you could technically do it with the right people. marketers and advisory team that would back you perhaps kevin o'leary. >> he sounded skeptical. >> he was. they need to ask you tough questions just like with an ipo, right? >> i thought you should call it mody money >> we tried. we thought diy might be more marketable >> sounds less like monopoly money. >> right >> andrew. >> yes >> you must have looked into this >> i never looked into it for ourselves. but you know that we did we mocked up our own "squawk" coins. check this out you ready for this we have joenero. we have quickcoin. and we have andreweum. >> that's the best, i think. >> like ethereum >> question is which one will be worth most >> i'd put a sell on all three

of those currencies. >> interesting point that o'leary, more and more people are saying that. but then what asset do you own and what's behind it but paper money, what do you own? you don't own gold anymore >> it's faith in the government or whatever issued it. >> i know. but i don't know if that's -- if that's all you decided on that you don't really own an asset backed by the bitcoin, no money is really backed by anything anymore. >> but it's trust in the entity that issued it >> it's the trust me, game >> we're going to continue the conversation we're getting the st. louis fed president at the conference today. this is new york's blockchain week >> still it's the blockchain versus the bitcoin and the ot r others that we talk to says even if you don't believe in bitcoin or the other monetary, it's the underlying technology that matters.

>> that has the applications even the fedex ceo will be at this conference talking about it on the logistics industry. we're still waiting to see the use cases. >> great seema, thank you when we come back, we are counting down to the opening bell on wall street. we're going to find out what jim cramer is watching ahead of that meantime, here are the futures right now. dow futures still up by about 65 points sd up by 17. stick around we'll be right back. never owned a business. there's nothing small about it. are your hours small? what about your reputation, is that small? when you own your own thing, it's huge. your partnerships, even bigger. with dell small business technology advisors you'll get the one-on-one partnership you need to grow your business. because the only one who decides how big your business can be, is you. the dell vostro 15 laptop, with 7th gen intel® core™ processors.

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the financial sector gained about 5% in the past week. about 5% in the past week. the bull i'm dianne feinstein and i approve this message. i support the affordable care act, and voted against all trump's attempts to repeal it. but we need to do more. i believe in universal health care. in a public health option to compete with private insurance companies. and expanding medicare to everyone over 55.

and i believe medicare must be empowered to negotiate the price of drugs. california values senator dianne feinstein check out -- please, the shares of ups higher after an upgrade. bank of america to buy from neutral. a citing ups network transformation plan. it could focus on improving margins throughout the organization let's get down to the new york stock exchange we spoke about tesla for quite awhile, jim. i don't know if you were able to catch it. >> i caught it all of it battle ground. i think he's -- if they can meet the distribution levels, obviously, this is a home run.

we see these different departures i can't be as sanguine as he is. when you lose someone that is important with government resolution when you lose a top engineer, i mean, these matter it would matter tremendously if this were ford or gm i think it's a total battle ground i cannot feel both either complacent or scared, in part, because the short position is so big. >> yeah. i don't know what to make of it either at this point for awhile, i thought it was, you know, similar to some of the other -- what people get emotionally involved even if they try to even read your body language, if you -- if they think you're saying something negative about tesla it reminds me of the names of the past, which weren't tesla. they didn't have, you know, they had nothing going for them and they had the cult following. >> this is real. >> i don't think that.

but, you know, you can look at the behavior of crowds sometimes and, you know, at least get a bit, you know, at least keep an eye on things. >> i think it needs money. i think there's people who want to throw money at it still i think there's also people who believe there's some sugar daddy at the end if he fails there's someone that said i'll buy the whole thing. a softbank out there i don't see a softbank but the bears are afraid there is one. >> one of his points, i thought these great, you know, legacy car companies that, you know, that i love. whether it's a beamer or mercedes or even gm. they have the money and know how. i thought what happened when they go full force into the same business his point they build a new factory. it's 98% ipo they do a couple of things on the edges but don't approach it in a disruptive way. the same way tesla did that's the reason for saying the barrier to entry for one of

these old guys would be more difficult. do you buy that? >> yes, i do i think it's not as important to the other guys it's defensive not offensive i've been in the bmw electric and it's a great car but it is the same car a all they're trying to do is make the exact same car. >> yeah. and it needs a whole new approach, i guess. >> i agree. >> to look at things great cars i've been in them and i like them but that's still -- >> they'll turn heads. >> yeah. that's different than making 5,000 a week. >> total agreement. >> thank you, jim. we'll see you. >> thank you "squawk on the street" don't miss the cnbc interview with james bullard at 10:30 a.m. eastern time

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welcome back walmart announced they were buying 77% stake in the indian e commerce firm. the biggest ever acquisition

now walmart said an ipo should be done evaluation lower than at the time of walmart's investments. >> one last look at the markets that have started in triple digits when we began the show. now 65 points on the dow we had seven straight up sessions. >> 2.3 last week. >> nasdaq is closer than the other to the highs but they're all up for the year. so we bounced off that and retested those correction lows who knows what happens from here on out at least the day looks positive again for the start of the week. there's wti crude up 19 cents. sort of locked at the 70 level and the ten year a lot of these things at 3% level or just under at 2.98. i'll keep an eye on those as the economic indicators come

and i think like there's another earnings season coming. >> it's not that far off. >> another on friday keep coming. >> anyway. it gives us something to do. >> it does. >> something to look forward to. in the meantime, make sure you join us tomorrow "squawk on the street" begins right now. ♪ good monday morning welcome to squauk on t-- jau"squawk on e street." the dow up seven days. a lot headed our way including high-level trade talks, retail earnings, crypto and more. a stock rally heading into the second week. futures pointing