good morning welcome to "squawk alley." i'm carl quintanilla with jon fortt. morgan brennan is on excitement today. david faber interviewed lowell mcadam he sticks around with us for some highlights. what sticks out to you >> the implications of 5g as it gets closer. when we say closer it doesn't mean in any way it will be ubiquitous any time in the near future sacramento as the rollout city, los angeles, one of the biggest cities in the country. they will roll out to four cities by the fourth quarter of this year. two others have not yet been named. i think mr. mcadam, trying to sort of at least introduce the idea of just how big this will be it's not just about your handset or a faster speed but the broader implications of it, and

applications for 5g, given this lack of latency. there's no time between when the signal is received one place and another. and he explains a little bit about what the implications of that will be in terms of at least his perspective going back a long while talk a listen. >> i've been in this business since the first phone call back in '84 i have never seen the technology that will be more disruptive and have more benefit for consumes s than 5g. it's completely obvious to me. it's not that speed to your handset will get you all excited. it's the ability to do autoinfoaut autonomous vehicles. you can't do autonomous vehicles without 5g to have better health care and outcomes because of 5g gaming console you saw yesterday because of the latency of the

network and for your viewers that means how responsive the network is you don't have to have big gaming consoles. you don't have to have tethered devices. >> think about it. a car that is connected to 5g, the computing power in car that will conceivably reduce the cost of the car by a lot for the automaker as well if you've got everything fully networked all you need on the car is a couple of qualcomm chips you think about surgery, it will truly be able to be done remotely it sounds crazy but the surgeon can actually feel and do it because it's in real time. there's no latency between the movement here and what's going on with some robotic arm in the patient. how quickly it will be, what the costs will be and there are many people who doubt it will fully actually work. >> what many of us forget is that with these huge transitions

2, 3g to 4g, there are losers. some companies choose the wrong path and end up getting left behind sprint, nextel, nokia and erickson had problems transitioning to 4g. the transition tripped up a number of players not just geographically but a number of companies. i don't know that we have a sense yet who is best positioned but someone will lose. >> watching the gaming console demonstration yesterday where basically you can attach the console to your phone and 5g and the phone mirrors up to your tv, you don't need an x box anymore. you don't need the computing power in the home any longer because the latency is gone and so it doesn't have to be there you can connect to the network at such an incredible speed. there's one example, for instance, where at least you can think about what it will mean for your nextinterview, you ma want to ask him, what will happen to x-box when 5g becomes

more ubiquitous in the home? >> what do you make of all this? does it explain why the white house is calling -- calls 5g a national strategic comparative >> for me 5g cannot come too soon i mean it -- the technology economy depends on new platforms and it depends on major product cycles of hardware infrastructure to create opportunity for vendors and new products the thing about 5g that in my mind is the great hope is that it will deliver massive bandwidth in a ubiquitous fashion. instead of having to create system systems to do a specific thing we'll be able to assume a pervasive amount of bandwidth, creating opportunities we haven't imagined yet i suspect the top two or three are things we aren't even thinking about today who knows what the timeframe is.

in my mind, it has to be inevitable otherwise, the technology revolution stops i look at this and go when the time comes, i think this is going to be as profound as he suggests and, you know, from my perspective, what i hope is that we show good judgment in the way we assign products so that they are more humane than the ones we design in the 4g generation. technology has cause aid lot of harm in the 4g generation. and opportunity to do the same thing in 5g will be there. i'm hoping we'll use some of that power to help humans instead of harm them. >> the president might argue with you but we'll see. >> let's see. >> if we've learned our lessons. >> there's been general consensus that something like this 5g or name it something else was going to come and i think a lot of those players, we mentioned microsoft before, have been very much aware of that that's why you see everyone trying to build a community,

lock-in to something other than hardware that it's been something other than the phone someday has been pretty pervasive already i agree with roger that there are things we haven't thought about yet that will be unlocked by 5g and the opportunity to be more widespread. we sit here in new york and have great access that's not universally true. i'm hopeful that with 5g we are, hopefully, it's not so cost prohibitive that we weren't able to roll it out in a comprehensive way. >> roger, networks don't sell themselves even in retrospect it seems like this was inevitable, it would make financial sense, 3g had to be sold by the iphone. touch screen phones that could do video, cameras in the phones, the need to do this messaging and send our selfies, that's what drove demand for that network. it's not a foregone conclusion that people are going to automatically understand why they need a 5g network are you seeing start-ups pass

through your ffices? >> not yet. >> not yet that are justifying this >> not yet jon, the point you're raising is really important the chicken and egg problem here will always exist. at the end of the day, the people who build networks have to build them first or nothing happens. and i'm pleased to see that verizon and others are making that commitment. but the point you're raising is profoundly significant because at the end of the day, the entrepreneurial economy of silicon valley has been distorted by the success of the internet platforms and so i wonder if our muscle tone is at its best for coming after the 5g opportunity. and my hope is yes, because i do -- i actually believe that over a 10 or 15-year period this will be humungoongous the only question is what parts of the economy drive the market. >> it could also be the internet

of things that could be a will the more application of the enterprise or for business -- >> self-driving cars is a great example. >> and there alone, mcadam will tell you -- >> that might be enough to do it all by itself. realistically, the model that silicon valley has brought to self-driving cars is wrong, putting all the sensors in the car. 5g would then allow you to take in all the other sensors in the environment and make the cars a lot safer. that case to me strikes me as a really good driver but who knows? it's early days, as you say. they're just rolling out the first few cities when we get to 100 cities, 200 cities we'll really be able to run a test. >> forgive the question. are we five years, ten years, 15, 20 >> i think that's a great question that verizon should be able to answer better than we can, but i think -- it's obviously coming we're going to start to see the first wave of start-ups flow

through in a few years i still think it's a few years they're certainly not coming to the top of the funnel now. >> industrial economy, they've got a built-in kind of state controlled market they're creating for 5g. if the u.s. is going to continue to lead, a killer app -- >> centralized control will not necessarily produce the best long-term options here i do think that the pervasiveness of this suggests lots and lots of different opportunities and the centralized model pushed two or three and get them to the forefront. i think in the long run this is very, very wide, not necessarily the way 4g was where the iphone and -- >> you would rather see a little darwinism at work here >> i always would prefer to see that american way is entrepreneurship and lots and lots of start-ups knock wood that's where we wind up but early days, we'll find out.

>> that's right. in order to push out the infrastructure more quickly, ye yeah, the centralized good go to market obviously has its benefits to get to market faster to what actually drives the value, to your point earlier, having a lot of at-bats is the way we do thinks. >> 4g and smart phones aren't going away it's a mature market we desperately need the next big thing. knock wood it will come soon enough so investors aren't left at the altar. >> security and privacy, certainly, will also be a key issue. >> and manipulation of the mind is another thing we also have to -- >> eventually we'll all be ruled by robot armys so -- >> running on 5g. >> there you go. >> david, thanks, as always. >> thank you. >> good stuff. the supreme court, meanwhile, paeving the way for legalized sports betting and big tech might cash in here is what mark cuban told us

on this program yesterday. >> it could go -- you know, facebook, amazon -- look, amazon, the one place that reaches everybody in the country. and so you could take it to its natural conclusion that they can do it, but it really comes down to what the states do. >> all right this is going to be interesting. his point about the states, about whether or not physical presence will be required, whether or not this will truly be online, we don't know that yet either. >> definitely not. and it's a good thing. in my mind i look at this and i go, i wish the country could debate issues that were actually going to move the needle on our economy. if the growth in our economy comes from sports betting, i don't think the outlook is as bright as it comes from 5g or something that looks like that. >> at the same time, ellie, there are lots of different types of possibilities, not just traditional live sports but also e sports. >> certainly. >> i imagine there are different gameification features inside

apps that could be enabled by this ruling. how deeply are investors going to be looking at this to see all the ways it could be used? >> very deeply this will come sooner in my inbox than anything 5g related starting today frankly, in the past we've seen a lot of it, too people were betting on this happening and -- i know, and here we are. so i think it's going to be absolutely huge. we're going to see a ton the question is what the timeline is. i think there's a lot to learn from the uk and what worked, what didn't. but you're obviously going to see the daily fantasy folks pvt pretty quickly you'll see new jersey lead the way. they already have casinos and have been preparing. in reality it's going to take two, three years for a lot of these states to pass their own laws this is not just a flip a switch tomorrow and up we're going. but certainly you'll see some of the ones who are more prepared for this probably be ready to go

before the nfl season. >> and it's going to take off. i mean, obviously, it's going to take off the more you limit it, the better the benefit to the people who get the early start. right? >> yeah. and i think the ott platforms have something to gain here, too. we've seen a lot of over the top, more niche sports providers. suddenly there's going to be some utility there and you're going to have a broader audience there's a reason that people are -- i don't think the full reason that people are into horse racing is just for the horses so, i think you're suddenly going to expand dramatically what people are going to be able to bet on. >> interesting espn's chief making comments to reporters even as we speak, about -- not specifically about gambling but about eyeballs. we'll see how they change once these laws are written futurists. thank you. appreciate it. >> breaking news out of d.c. on iran sanctions kayla tausche has the latest

kayla? >> reporter: the treasury department is announcing new sanctions. this time on two officials at the country's central bank, including the governor of the central bank these officials are being designated as terrorists in a statement the treasury secretary, steven mnuchin accuses them of funneling millions of dollars to hezbollah, going to great lengths saying officials are being sanctioned not the bank itself but beginning august 7th of this year, certain transactions involving the central bank of iran will be outlawed as well, including those involving u.s. dollar denominated bank notes that is certainly an update that companies doing business with and around iran will be watching, but certainly a big development as treasury works to put some meat on the bone around what exactly this withdrawal will look like and what it means for future sanctions going forward. back to you. >> all right kayla, thank you and still to come, fear and

loathing or viva las vegas we'll take you to sin city to find out how legalized sports betting might impact that town wusmayor of vegaswill join toeigh n more "squawk alley" coming up. stay with us when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. fidelity. at&t gives you more for your thing.

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contessa >> yeah. i'm in cesar's sports book here. companies like cesar's stand to benefit from paving the way from legal sports gambling. think about it you have a well-established sports book in its operation that cesar's can duplicate and put into its properties in atlantic city or mississippi where sports gambling could possibly be up and running the end of june. mgm was champing at the bit, ready to take its vegas sports book experience to its online and mobile offerings in new jersey the total financial impact for the gaming industry is somewhat modest it's expected to be around $5 billion annually but mgm's ceo says what's really exciting about it is what it could bring in terms of foot traffic and cross promotion opportunities and new enthusiasm for gambling opportunities all of that could be invaluable.

i talked to people here in vegas about how legal gambling in the sports arena could impact them. >> would you be more likely to be a bigger fan if you had 20 bucks riding on the game >> definitely. i'm winning that $20. >> i think it's good actually. if they don't have to travel all this way, spend hard-earned money to travel on sports. and they could do it at home. >> i think it's a good thing it's something that everyone enjoys so why not? >> he's british, in case you didn't catch that. and in britain, sports gambling is legal so he just doesn't get what the problem s i did talk to some locals who expressed concern about the increased competition, whether gambling in other places might cannibalize the need to come here. people don't come here for the sports book.

they come here for other reasons and then they come to the sports book to place a bet on their favorite sports. they don't think it will be an issue. in fact, it just opens opportunities everywhere else. guys >> okay. yeah well, we'll see if they'll take that bet thanks, contessa. sites like fan duel and draft kings looking to cash in aiming to launch sports betting by the nfl season. first now, fanduel ceo matt king matt, welcome. >> thank you. >> what's going to take so long? or is that just you've got to start somewhere? some season has to be starting surely you saw this coming >> yep are you asking in terms of how long it's going to take to launch a product >> yes, to get it up and running. nfl season starts, what, september 6th? >> it does a lot of it has been the regulatory side. our view is that it's been a

good idea to have smart regulation around this the supreme court was the first step in this the next step is the state-by-state legislation and regulation we're working ining with the regulators on what that regulation will look like. sufficed to say we have the product design, have our tech team working on it and we'll be ready to go. >> dof any take on how much this will expand the market for potential betters? there's got to be some, you know, legality effect where people feel like it must be wrong because it's not legal but now that it's legal hey i'm going to do it. >> when you look at fantasy sports, when we brought a mobile version, it exploded it, probably doubled the number of people that were playing fantasy sports and it also, importantly, increased the number of sports they play around you have 200 million sports fans in the united states today, a significant chunk of those probably don't sports bet because it is illegal. most people like to follow the law. and we see a massive opportunity

in terms of expanding the number of people. and i think as the comment was made earlier, it also -- the fact that it's going to be online in a lot of states makes it easier for people to do so they're not having to actually go to either their bookee or to a casino in order to do it i think you'll see many orders of magnitude increasing. >> is football more profitable because of the interest in the game or is baseball more profitable because you have more games to bet on? >> basketball is actually our biggest sport. >> basketball. same dynamic. >> same dynamic. you have fewer people that play on our site, fewer people who play basketball but they play a much longer season but the biggest number of people play. >> it's too late in the season to benefit baseball or basketball. >> correct. >> could it help nfl >> it could absolutely help nfl. we have a lot of interesting plans. we've been very focused on our product the last six months. we've pushed an incredible

amount of innovation in our products that's really expanded the audience we're talking to. a lot of that work we did with a lens toward sports betting being legal. it was new game mechanics, new ways to bring players into the environment and into our ecosystem. what you're seeing is a lot of the groundwork we laid so far you'll see come to fruition in football. >> how worried should you be about another yahoo! getting into the market, another player with big network effects saying we want to play here too >> our view has always been the best network is going to win we think we're incredibly well positioned to be a leader in what's going to be a massive market that said, it doesn't underscore -- it doesn't underestimate the fact that there will be a ton of competition and we'll need to execute really well in order to be a leader. >> give me one sport that's the

dark horse, ha ha, that gets a lot more popular because this gets enabled will this finally be what makes soccer come to life in the u.s.? >> my prediction is going to be tennis. >> tennis? >> you think about the innovation that will come into the u.s., we think, will be around in play and cash out functionality over time. traditional sports book experience, betting on before it happens, before it starts. if you look at europe, more than half the volume comes from in play and cash out, to place bets on any single play the beauty of tennis is that you could literally bet on every single hit in the match, every single point and so it creates a lot of opportunity for people to engage in the sport. >> and now wimbledon has that? >> exactly it exists in europe today. my bet would be tennis. >> fun to see. >> absolutely. >> matt king, ceo of fanduel thanks. >> thank you. in just a few minutes, the

mayor of los angeles, carolyn goodman, will be with us on how this landmark legalization could impact her city. as we go to break, take a look at shares the dow is off the lows down 172, lower for the first time in nine sessions. tesla once again being challenged we'll talk about that when we come back. the analyst who went head-to-head with elon musk is back do you remember this >> those questions are not cool. next. >> and the latest call on apple in a moment. lower calories. ♪ higher expectations. the light beer you've been waiting for has arrived. corona premier.

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welcome back to "squawk alley. the dow down for the first time in nine days joining us for operations, art cashin here with us at post nine great to have you. >> thank you. >> so, markets down but it is

the first time in nine days. any particular reasons that are cause for concern here >> well, you know, the market is being weighed on by the jump in the yields in the ten-year we talk about the ten-year the yield on the two-year is the highest it's been since 2008 that's a ten-year time horizon that's putting pressure on it. eight is enough. we had eight up in a row and that seems to be what you could hope for the home depot is a little bit of a factor in here. people beginning to question retail on several levels so that's of some concern. for now we'll call it a con solidation until it begins to worsen if they break 2700 in the s&p i'll get a little more anxious after that. >> you've been skeptical of higher rates over time. >> absolutely.

>> are you convinced that 3.05, 3.10, 3.15 is a firm ceiling >> i'm not as convinced. i'm beginning to sense that the market is looking at a powell-led fed as being a bit more hawkish than originally thought. i still don't think rate also get wildly out of hand but i do see that they're moving a little bit higher than i had assumed. so you have to step back and reassess i don't think we'll see sudden movement. >> bill gross with tweets right now, economies can't support yields more than 3.25 for 30s and tens nor 3s for fives. >> that's pretty good company to be in. i tend to agree with that logic. i've been a bit of a dove, if you will, on where things are

going. >> has anxiety around trade turned to background noise at this point you noted in your note that the president tweets around zte, chip makers and hope around soy bean makers as well, that maybe this will clear up in a good sort of way before too long? >> yeah. i think you had a couple of different geopolitical problems. remember two months ago we were talking about a bloody nose for north korea and things like that now you've had a prisoner exchange -- prisoner release the president going to a summit. the chinese going out of their way to make things work. so, the various geopolitical things are now distilled to the middle east. and there it is not solely the u.s. nose-to-nose with iran. you've got israel. you've got saudi arabia in there. i think that geopolitical

background has calmed down a little bit. >> people like your eight is enough reference. >> not terribly creative but oka okay. >> art cashin, great to have you. markets closing in europe. bond yields here do support the dollar growth did slow in q1, sentiment remains at 5 1/2-year lows pretty good day for the banks, commerce bank rising on quarterly results and danish jewelry pandora missed on earnings, while germany's merck saw a decline, citing currency headwinds and then vodafone. red hot hub for autonomous driving even after that deadly accident earlier thisyear.

phil le beau is there. phil, what have you got? >> it's not just self-driving cars it's a number of autonomous type vehicles. including ollie. what is ollie and what does it say about the future of self-driving vehicles in this area that story when "squawk alley" returns. more? they've been saving folks money for over 75 years. a company you can trust. geico even helped us with homeowners insurance. more sounds great. gotta love more... right, honey? yeah! geico. expect great savings and a whole lot more. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com

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welcome back to "squawk alley. i'm michelle caruso-cabrera. uber announcing it will give its u.s. passengers and drivers more leeway to pursue claims of sexual misconduct. allowing them to file sexual assault in courts and mediation rather than being locked into an arbitration hearing. jay-z arriving in court in lower manhattan new york city after being ordered to testify as the s.e.c. investigates iconics brand group. that's our cnbc update for this hour let's get back to "squawk

alley. >> thanks, michelle. tesla, the latest stumbling block for the company whose shares are down 9% year to date. toni sacconaghi had that tense exchange with elon musk earlier in the month writing musk reserves the right to do difficult things, investors reserve the right to understand the costs i guess that's what you were after. >> yes look, the whole debate around tesla, in our opinion, is whether they have a viable financial model going forward. certainly they've been incredibly revolutionary and innovative, but the company has gone to the public markets for -- and burned through about $10 billion worth of cash and so increasingly the question really

is, is there a viable economic model? can the model three make money can this company be self sustaining from a cash perspective? >> toni, to what degree, though, do investors still just need to bet on elon musk himself if they believe in this company? i mean, the bench at tesla is thinner, it seems, by the week, but elon musk continues to find a way to create products that are inspiring, leading the industry, have a cult following among tesla buyers how much of this is more about elon musk even more than if he delivers a car on time >> i think you captured a lot of the sentiment of the bull camp on the stock, which is that elon's track record is tremendous he's pretty well done everything he said he would do, both at tesla and his other businesses they often have taken longer and

consumed more cash but he's ultimately gotten there. and i think bulls would bet on that, plus the incredible customer following that they have on the opposite side, and you have an entrenched bear camp because you have between 20% and 25% of the shares being shorted at any given time, our investors who are saying, look, vision can only drive a company for so long this is a very difficult business, the automotive business and it's really unclear that they're being realistic about their economics. and if they're not, there could be a cash crunch and the stock could go considerably lower. so that is the tension that exists between the bull and bear investors on this name and it's a highly polarized one. >> let's switch gears quickly to your apple note today. you do reiterate the market perform. you say services likely to decelerate in q3 and q4.

directionally, can we read that as a more confident view of apple services business? >> yes i mean, we -- i think the data points over the last six months have been very positive for apple. and i would have said two years ago that i thought the bogey of getting to $49 billion by 2020 was an ambitious one and they would have to acquire their way in it now looks like they can do that organically that's really a testament to a lot of good work that they've done there apple music has been a pretty big success. we think that will be a $3 billion business this year they have -- they get a lot of revenue from google. we think it could be between $4 to $5 billion this year for traffic acquisition costs and those have grown much more than we thought we believe the icloud business, which is a subscription business, is now between $3 and

$4 billion a year. so, some very positive things happening at apple on the services front. >> yet your price target suggests you don't believe they'll get to that trillion dollar market cap. why? >> well, look, they certainly could. it will, in part, be shaped by how overall markets do we think the risk/reward on the stock is reasonably favorable. if we look at the company's multiple right now, trace that about 15 times and that's about .9 times or 90% of what the s&p trades at. over the last five years, apple has traded at 80% of the s&p's multiple and its peak multiple has been about 93% of the s&p's multiple. so it's approaching peak relative multiples now you could argue, well, if the service business is better, should apple get a better multiple on the other hand you could argue, well, this is a -- most

of the profits come from iphones and iphones is much more mature today than it was three or four years ago. when we look at the stock and its relative multiple, it's at the very high end of its range it could certainly push higher, particularly if there's favorable news flow in the medium to near term but this is a stock that has been more range bound than people realize over the last three years, in particular, and we're at the high end of the range right now. >> toni, interesting stuff good note today. we always love checking in with you. we'll talk to you next time. >> thanks so much for having me, carl. >> toni sacconaghi at bernstein. phil lebeau has more from arizona with autonomous vehicles. >> i'm in front of ollie one of the examples of work being done with autonomous

vehicles you see a lot of these waymo self-driving minivans, chrysler pacifica minivans, 600 in the waymo fleet between arizona and california a lot of them are here in the phoenix area they're developing an autonomous ride-share program they'll be announcing later this year some that have work not only being done here but other companies in the phoenix area, check out nsp. we had a chance to go to their facility hee they're developing chips and processors these are the brains of autonomous cars. that's what they're working on in this area we talked to the ceo, he said you look at the ecosystem and you have a lot of things coming together that says good news when it comes to developing these self-driving car. >> what it really is, it's an embedded systems hardware and software ecosystem that's developing building autonomous vehicles is not typically like what you see in silicon valley.

so this has been a good mix of two. >> when we talked to jay rogers, he thinks that ollie, the first one will be delivered probably later this year, this is just the beginning of local manufacturing here for these autonomous electric shuttles we talk a lot about self-driving cars but it really is a wide range of types of vehicles and work that's being done here in the phoenix area. >> our phil lebeau in chandler thank you so much for that we'll see you soon. >> we do have some sad new this is morning robert frank is back at hq to bring that to us good morning, robert. >> good morning. tom wolf, famous for books like "the right stuff" and "bonfire of the vanities" suffered at 88 after suffering from pneumonia his death was just confirmed by his agent. he became famous in the 1960s for what he called new journalism, blending novelistic techniques with journalism and his immaculate vanilla

three-piece suit radical chic, meet decade. his 1979 book "the right stuff" was made into that famous moveny 1983 perhaps our audience best knows him for "bonfire of the vanities," that shaped the way all of us view wall street and the excesses of the 1980s and, of course, gave rise to that famous phrase we use often, master of the universe and he was a master of journalism and novels and he and his books will be missed "squawk alley" will be bk tethisac ♪ when i first came to ocean bay, what i saw was despair. i knew something had to be done. hurricane sandy really woke people up, to showing that we need to invest in this community. i knew having the right partner we could turn this place around.

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can stocks hit new highs if rates keep rising? could be the biggest question for investors in the midst of today's big sell-off plus the one specialty retailer he is betting on now we'll see if our traders agree and the best trade in the market and shows no signs of slowing down we'll discuss and debate that on "the half time report" at noon carl >> see you soon. legalized sports betting across the country how will it impact the especially center, which, of course, is las vegas mayor goodman good to have you back good morning. >> thank you it's nice to be with you again. >> big debate since we got the

news, is it good for vegas or bad? what's the answer? >> it's always good for vegas, let me tell you. it started off with our win last night with the las vegas, vegas golden knights taking on winnipeg and getting that second win. the sports folks, we have the best of the best here and have so much more to offer. we have 155,000 hotel rooms and almost every one of the hotels has a sports book. the west gate, south point, the golden nugget downtown anybody who wants to come and the bets that they can place, every single game no matter what the sport is, there's always something new. and it takes a long time we've been doing this for a long, long time. >> mayor, hays your strategy of taking advantage around sports betting to make this good for vegas? is it going to be to draw more people to vegas because you're going to argue the experience is better there, or is it to lift the profile of the experts in

vegas to sort of export that but still bring some economic benefit to vegas itself? >> well, when you look around in the country, in the 32 states or 39 states that will be able to go ahead it's a very differe to have one locale here we have so many and there's such a fever and interest and excitement anybody who loves any sport, you can go ahead and go from hotel to hotel you can be part of the entire feeling that's in las vegas all the time it's nothing but excitement. it's rest, it's an adult community. we're so excited and i think it's going to be a long time before there's the same excitement of going to a sports book. i mean, everybody loves to gamble, whether it's been illegal or legal, over these years across the country, they have been doing it now, they can do it legally. but here, it's a party every place, it's a party to bet and have the whole enjoyment of

what las vegas offers. >> any idea what percentage of overall gambling revenue comes from the sports book as opposed to slots or cards? >> well, it varies so much, but we've been on a total increase in the area because, as you know, table gaming, while it's still very popular, and that's what we relied on for so many years, really, they're seeing because of how we have physically created this sports environment here, in the hotel rooms, there's a whole different feeling there. so it continues to make its mark you know, we live off the tourist room tax, and so the hour we can get people to come here, and that's what we thrive on, but anybody who comes in from around the world here, they always end up in a sports book they're intrigued by it, intrigued by the ambience that's there, and the ability to see a new bet, whether it's, you know, two cockroaches crawling across

the floor, which one is going to get there first. an amazing way >> sports events are a big part of what draws people to vegas, though whether it's boxing or, hey, the super bowl is going on, so let's go to vegas to watch it. are you concerned at all about the edge being taken off of the need to go to vegas because there's a big sports event going on >> absolutely not. i mean, i think that's where we really shine here comes the preakness we just had the kentucky derby meanwhile, we have the baseball, we have nba, we've got the ice hockey we have soccer i mean, we just have it all. but beyond that, we have such a great environment, such great weather, such ease to get here because of our international airport at mccarron. direct flights coming in from abroad, canada, of course, being our number one participant coming here. but we bring in people all over the world, and we have the finest in entertainment and

food it's not like going to one hotel that has five restaurants in some community where they are trying to monitor what they're doing in the sports betting industry for us, we have been doing it a very long time we know what to monitor, we know how to make the experience quintessential for anybody who wants to come and have a grand time and just talk about me, i, my, let's have a good time and i love to bet and i want a spec l specialty bet. >> that's a good pitch, mayor. we're going to find out, obviously, we're entering a different kind of era, but our thoughts are with vegas, as always thanks for the time today. >> thanks for having us. >> as we go to break, take a look at stocks despite the losses today, still the best month of may for stocks since 2009 for the dow and s&p more "squawk alley" continues in st menju aomt. ♪ you and me together

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let's get to the cme group, rick santelli and get the santelli exchange. >> hi, carl. like to welcome richard from marion capital group thanks for taking the time this morning, richard >> good morning, rick. how are you? >> very good well, we had retail sales. you know, headline up .3

it's good. still say we don't have enough 1% handles, but the control number today, up .4. last month's revised up .5 the last biggy was in november of '17, up 1.3, but that isn't bad. we plug that into gdp, give me your thoughts on retail sales and gdp and the tame inflation numbers in the rear-view mirror under the context of what interest rates are doing today >> sure. so overall, it's a very good number, rick they revised up the last two months you're at 4.6% year over year, overall retail sales you mentioned the control number that's good because the prior quarter was held back by some of the pce and some of the auto sales. we saw a pickup in auto sales here, but we need more, for sure i agree with you, we need more 1% handles on the retail sales >> when it comes to interest rates, i'm part technician, part fundamental analyst. to take out the 303 area, the

high yield close of the year, new year's eve 2013, then back to 2011 before we have seen these levels i hear people say, oh, it's great because it's going up for the right reasons. do you thing it's going up for the right reasons, richard >> in part it may be going up for one very big wrong reason we showed in our report yesterday that tax receipts have started down may down 18%, it's very early, a couple weeks worth of data, but tax season is over, and now tax receipts are falling at the federal level, and that means big deficits are coming, which means the treasury has to issue some bonds i heard what bill gross said about, hey, the economy maybe can't handle 3.25 ten-year yield. what if we get there that's the big issue i think that's why the market is down today, to be frank. >> no doubt in my opinion, and sounds like your opinion, too, that's a big part of why the

equity markets are down. if you look at how markets are traded over the last couple years, consolidation in the equity markets, it seems to be trying to break out of that. we had two or three major consolidations i think the data has been consolidating and we're starting to break out all of those combined give us some good reasons for rates to do this. your final thoughts. >> i agree that's why i said it's in part a slow gradual rise in ten-year yields over time is not a problem. but we're already hearing from some mortgage brokers and you're seeing it in the mortgage apps data that mortgages are starting to slow. there's some reasons for that, but i wouldn't want rates to take off too much more from here quickly because i think it will slow growth, for sure. >> no, i got you, richard. the pace is important. but if just a couple of points of interest rates kills housing, then i think people better hurry up and buy a house richard, thank you carl, back to you.

>> all right, as you're talking, session lows, or close to it dow down 230 thanks to some individual names, home depot not helping the index overall, but we watched apple today. >> yeah. >> apple not helping either. one name that's up, interesting, yelp, up about 2.5%. >> let's get to the judge and the half welcome to "the halftime report." i'm scott wapner our top trade this hour. rate weight. stocks falling as the ten-year yield hits its highest level in more than seven years today. what happens to the resurgent rally now if yields keep climbing with us for the hour, joe, stephanie, josh, the brothers najarian are here. let's begin with the markets the dow after rising for eight straight days is under big pressure this hour after interest rates continue their rise the move coming with stocks putting in their best may since 2009 all right,