yesterday. didn't close at the worst levels yesterday. it cut the losses to less than 200. nasdaq down 4. s&p down who is here tomorrow you? >> i'm here. >> three in a row for you. >> short straw [ laughter ] >> make sure you join us she loves it she loves being here "squawk on the street" is next ♪ good wednesday morning earthquake -- welcome to "squaw on the street. futures are red for the second day in a row after the worst day for the dow in about three weeks. nafta and north korea are in the

headlines. macy's may hardin the bulls. europe is mixed. ten year around 3.06 shares are up in the premarket and macy's raises guidance plus, the rallies pause, at least for now. u.s. stock index futures are pointing to a slightly lower open this, of course, on the back of the rising interest rates. and the geopolitical risk to stocks north korea threatening to blow off a planned summit with the president saying it will not give up its nuclear weapons. macy's up sharply in the premarket. quarterly results beat expectations 2.5% of that resulted from an accounting shift the retailer cited double digit growth in the digital businesses, raises their full year guidance. has not had a raise since 2011. >> this is dramatic impact because just a few days ago

morgan stanley put out a piece saying i'm going summarize it that the quarter and the year are going to be bad. so therefore you should sell the stock. and they have a kaurks rating. they took their target from 27 down to 25 now that said, we have to understand that there is a 4.2%. it's really 1. 7%. you have to back out friends and family, which is a big mover but more important, inventories lean improve gross margin. a good quarter 3.75 to 3.95 this is kind of what is going on with the stock market. you thought macy's was expensive then you look at the number with the consumer doing quite well. and the stocks not expensive so that's one of the things that continues to happen and can balance the bears. considerable short position build up in the last six days at macy's. >> now the downgrade was partly about real estate sales and how

they thought roi would decline after q1 they'll rely less on that engine >>well, it wasn't really a factor, i mean, they did back out, you know, what was not operating. but the fact is, this is a story what greenberger missed, and i don't think people understand it, but jeff is like when mickey drexler went to gap. he has an eye. he's a merchant. those who have followed his work recognize and it's not the research the research is written as if he's selling black and decker tools. he's not selling hand tools. all right. he's not selling distrust. he's selling fashion and that's what the store chain is like. he's selling fashion he's upgraded the store. no plastic hangers, no "sale" no

red sign the stores have a better look and feel and people go to the store to recognize what he's done it's not in the numbers or the spread sheet it's about good looking merchandise. >> yeah. >> good looking merchandise. >> a good discussion macy's power as a curator of merchandiser. >> thank you. >> this is what you said about macy's on may 10th. >> i think jeff is reinvented macy's i think it's an exciting place to shop. i think that the blooming dale's fifth floor, the show floor, cost me a fortune. i think in general he's being underrated here. saying he won't do real estate i disagree with that i think he's made the stores exciting he's energized the company and this doesn't take -- doesn't get any of the mojo doesn't have the mojo

remember mojo is steve easterbrooke. >> so you compared him to drexler and easterbrooke that's high praise >> i have to praise him because he's way, way too -- let's just say -- $6.4 billion to debt down to 5.8 billion he did tell me i think, you know, more important than friends and family my wife's trip to blooming dales was in the current kwourt which may be inflated by the fifth floor. what i like, and i can't stress it enough. we used to have promotions we used to have the companies that have to get rid of merchandise. it was not great weather quarter where they are lean. there's not going to be any sales in the current quarter that's confident he's able to guide up this is a new macy's everybody

it's back. more tourists. a huge part of macy's is the square but go to a store. go to the queen's store. these do not look like they did. they looked awful. now they look fashionable. >> you've not been to the queens store. i know you haven't. >> i remember that mall. i remember the old macy's. >> a friend of my daughter's works there. she showed me. >> why should i not view this in the longer arc of the decline overall of the decline of physical retail and that's still coming it's still happening, and yes, they're moving against the tide but eventually be washed out. >> let me give you my side there's still a desire for some people to shop i have lots of stores in the mall that are doing better and lots of -- this is a bit of last man standing.

jc penney pulling back dramatically your friends at sears. that's not true. you have no friends at sears when i have gone to bon-ton i felt like i got a pay cut. >> me too. whenever i go to bon-ton it's horrible. >> you wouldn't know bonbon from bon-ton. >> i would not that's true. >> how about b altman. >> yeah. i remember that. the brooklyn one is extraordinary. >> lord and taylor is still in business. >> around new brand name of walmart. what matters there aren't as many stores and there is, you know, things like fry grans. fragrance is a huge category david, amazon fragrance not that great. as a way to gaze, you know you get it utla does business they used to spray you. >> yeah. on the floor at saks.

>> people love to try shoes on even if you're weight fluctuates, which is a kind way of saying you put on a lot of weight your shoe size doesn't change. let's watch macy's it's big north korea is the other big story. threatening to cancel the planned summit between kim jong-un and the president next month. we're in beijing watching the latest hi >> reporter: hey, carl north korea has sharp words for washington warning it's reconsidering taking part in the summit with president trump. the official state-run news agency kcna quoted a senior diplomat as saying for the u.s. is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such e dialogue

the trump administration made it clear a top priority would be to get north korea to dismantle the nuclear program. that diplomat also called out national security advisor john bolton for suggesting that the u.s. arrange a deal for north korea that would be similar to the one that was organized for libya to denuclearize its own program. now he said that the world knows too well that our country is neither libya nor iraq, which have met a miserable fate. that official also said that north korea would never give up its nuclear weapons in exchange for economic trade with the united states. and this was a reference that was made towards some of the comments over the weekend that we heard from the secretary of state like pompeo who suggested that north korea might see sanctions lifted if it did agree to give up its nuclear arsenal speaking to a couple of analysts

about this tougher rhetoric, and people were telling me this was really straight out of north korea's play book. they said it's a negotiating tactic and we could be seeing north korea looking for more concessions before the summit. still this tough rhetoric came just as north korea had decided to pull out of high level talks with the south koreans and, also, to denounce the u.s. south korea military drills that are currently ongoing in the region and the south koreans, though, said they did have their foreign minister on the phone with mike pompeo and that foreign minister was reassured that the summit is still going on the preparations are underway. the south korean president is going to be heading to washington next week guys >> thank you for that. sara sanders did comment on this saying that the president is ready to meet, if it takes place. if not, she said that's okay, too. and the president tweeting a few

seconds ago about china saying we've not seen china's demands yet. this is on trade which should be few in the previous u.s. administrations have done so poorly in negotiating. china has seen our demands there's been no folding as the media would love people to believe. the meetings haven't started yet. the u.s. has little to give because it's given so much over the years. china has much to give. >> he walks back zte. >> yeah. it started with the "washington post" thing. cnn and the "washington post" saying false stories nothing happened with zte except as it pertains to the larger trade deal i'm not quite sure what that means. i'm not quite sure what that means. of course, remember zte, his request to the commerce democ t department to intervene to save zte had an impact on the name we know well nxp.

i'm not sure how you view that except it seems to be part of the overall trade deal wilbur ross said it's different from the trade deal. >> ross said it's separate from trade. >> the bro mance has been keen on the idea that the 70,000 jobs at stake with zte will be saved by presidential order. those who are along amazon, be careful. he said that the "washington post" have typically written false stories about a trade negotiations it's about time that the president tweeted again about the post office. >> he's defending himself against the charges that the zte request was, in a sense, a folding to some of china's demands. >> you're so right. >> yeah. >> thank you industrial production on the other side don't go away. prepare for your demise, mr. billingsley!

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let's get to rick santelli for industrial production. rick >> reporter: interesting data point. this is our april read industrial production was up .70 that's a solid number. subsequently it follows another.70 because it was revised upward from originally

released utilization, which we like to pay close attention to is at 78. 78 and the reason this is important is because the last look we had was 78.01. it was the best since march of '15. now it's revised down to 77.6. the current now 78 becomes the best read in march since 2015. and i want to point out one thing. when it comes to the utilization rate, it gives us a good glimpse what is going on under the hood. i think it's something to pay close attention to carl, jim, david, back to you. >> that's key when the journal does a page one story, jim, about cap x running according to some expectations the highest rate since 2011. >> these are great numbers i'm glad to see them we have lower inflation. i see some inflation not a lot of wage inflation yet.

i think that's to come people buy equipment i think it can boost gdp i don't want to go against steve liesman but i hear buy equipment and expansion. i had a company wellbuild, if you're in the restaurant business, they make a lot of equipment in order to have a restaurant and they're doing fabulous expansion. expansion via equipment that's the best way to judge. by the way, they have a truck that makes the pizza in it while it delivers to you in order to be the hottest it's zoom and they can make food in it. when they have antonymous drivers, obviously, there won't be anyone in the truck making the pizza or driving it. but that's the new way to go. >> you know i got to come back to china trade given the president's tweet of a few minutes ago, jim i don't know if it's going to have an impact on the overall market you talk about the industrial economy, this does seem to, once again, i would argue, ratchet up

a little bit of attention between the two. right. >> yes, it does. >> this morning saying nothing happened with zte except it pertains to the larger trail dead and we've been losing hundreds of billions with china every year you see what he said we haven't seen their demands yet. and our meetings haven't even started yet. by the way, we're not going to fold we have little to give because we've given so much over the years so chinese has so much to give. >> here is ross yesterday. >> we sent them an extremely detailsed list of their needs and they responded with a similarly detailed but different list of proposals. >> look. >> couple this with nafta which doesn't appear to be getting near the time line needed to get a vote out of the house under fast track. >> that's bad. >> trade is not really we're not getting it any time soon. >> that was a shocking story being overlooked hopes fade on nafta deal by year

end. it was supposed to be done we heard that all that is left is autos there's a consortium of hedge funds. my biggest problem is the otis division the delta is dependent on china. >> all those high-rises. >> yep potentially end up being a pure play on china if and when they break the company up which seems likely in the next couple of years. >> i don't necessarily want that division not that the chinese will stopmestop inspecting elevators. >> no. >> to punish -- >> no. >> that would be a bad call. >> is there a chinese company of elevator -- >> i'm sure there is. >> they copy all -- [overlapping speakers] i think that the 500 billion in trade that we do with them, obviously the president is saying i got to go back on this thing.

zte that's the battle ground our government has the ability to close zte we didn't know that. >> we kind of did. >> i think it was more or less closed. >> yeah. >> and then there's a hope based on the tweet from sunday i think it was sunday. that reengage and open things up secretary ross so you do wonder where things stand between trump and ross, as well and trade is lumped in there. >> maybe we should -- do you think that people in the government are reading tweets and saying that's our new policy really >> yeah. you do. >> that's it. >> doesn't it seem to be the case >> yes. >> we'll follow it cramer's mad dash and count down to the opening bell. futures a little bit soggy here coming off the worst day in about three weeks. back in a minute people don't invest in stocks and bonds.

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welcome back to "squawk on the street." time for a mad dash to get you ready for the opening bell about six and a half minutes we have some favorites we like to hit and one is micron it's one of your favorites. >> one solid note saying you got to buy it. but then rbc capital, okay, new write up

david, what matters here is this stock, this decline coincided with the semiconductor decline because it's the cheapest. if this can take out that, you'll see a plethora of semiconductor stocks off to the races and the smh. this is the one everyone is key on why? people thought the flash was crashing in price. their stability in pricing and that's even mad they're saying could be good. so look out. because this is a bellwether we had retail with macy's. we have micron with two analysts this is how a rally can start if we stop focussing on the ten year. >> interesting okay >> so it's a real tell potentially. >> micron is huge. they can move a lot of stocks.

i mean, by the way digital is flash. but i say watch this group two guys get by micron it reported an amazing quarter here and look what happened now people are reassessing and the target share is 80 and $100 the pte, as they call them, are dramatically higher. it's wednesday you didn't say it. >> yes it's hump day. >> we have an opening bell coming up. also, more on the developments on the cbs drama and i'm not talking about one that is going to be on channel 2. i'm talking about court today. 2:00 p.m. delaware cbs versus nai we'll give you the latest on that aerhereft t bak ♪

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>> the dollar is directly related to real weakness in europe there was a great move in the euro and it's being walked back. i know a lot of people are trying to relate the dollar to bonds. there's a lot of relations people want to manage that are not playing out. strong dollar maybe oil should go down. that's not playing out oil, by the way, we're exporting a huge amount per day. thing quarter was a quarter where the comparisons were very easy for the dollar. and yet the other companies all they did is give you -- they didn't move the stocks there was just a lot of noise not impacting stocks and there's earnings which directly impact. >> that's what rather. you tweeted this morning nafta news in the housing market how hard is it to buy a positive story? >> i just can't believe it the housing numbers they need more inventory housing will go up but the inventory is not as important as

the affordability index which is positive [ opening bell ] tesla converts and ton of information. >> yeah. the tesla convert i was talking with someone who is short tesla and, you know, obviously, they have no shelf registration on, by the way that's something i was tweeting perhaps if you had the, you know, the model 3 if they had -- take some time off the assembly line more than they did this was opposed to the

regularly scheduled assembly line maybe it would allow musk to get around his no, no, no. i saw that tesla bonds were bought if you're a broker, you could say, listen, i've got some very hot merchandise. the smartest guy in the world bought and i'm going to have some bonds coming. tesla could be at stake soon they could come to market and do something. say that the company is what we thought. we have to come to the market and he loves his paper. >> he did own the stock last year and sold last year. these are due march 19th. >> sorrow is not making the investment decisions. >> right. >> it's all his money, as well these are dated.

>> congratulations to the carolina panthers. >> yeah. $2.2 billion. >> yeah. it was a price that some thought was a bit lower than should be for an nfl franchise zbles specially with the gambling laws changing big story how the nfl is hoping maybe the states have to rely on their official data and start monetizing those numbers. >> look, all i hear endlessly is you'll get a building that is near a stadium and people will be able to use it for a casino to gamble. >> why does proximity matter >> because las vegas is looking for that when it comes to the las vegas raiders. they believe there will be substantial business for people in the stadium and walk outside and place a big bet. >> i see it makes it more -- you're in attendance. >> yeah.

>> it's got to be more than -- >> really? >> that's what they say. i'm not in that business. >> the leagues themselves want in on the action an integrity fee of .25% of every dollar waged. >> what can i say. e sports people are talking about that you go to a sports bar and there's an e sports team i think things are happening rather rapidly gambling is supposed to be a $5 million business in the nfl. you take it out -- you expose it i don't know it's not the kinds of gambling -- >> a lot will be seen by states to capture revenue some might stay in the black market it won't be subject to tax. >> right there's not a one for one conversion. >> it's not like pot where there's a market out of nothing. >> pot was a great market for states that did it

this not necessarily as great. it's a big story. >> ncaa may not have any events in states where it's legal because they planted a flag in the ground that is anti-gambling the ncaa. >> adam silver is the first one to bring it up. >> maybe they can take an integrity fee and pay the players. >> this is the sec acting on the sec. walmart is leading and jim, maybe on macy's. intel is up there. >> intel on micron these are the reads through i've been looking for remember walmart has been knocked down severely because of flip cart. i thought taken down too much because of flip cart because a lot of companies, i think, want to be in india now, look, let's understand. there was no doubt about it that they paid a lot. that was a high price. it shovpt have set wall down so

much i think walmart oversold. >> amazon did institute about 10% price cuts on hundreds of new items. >> i've been waiting for that. >> at whole foods. >> yes whole foods other than the visa cash in the discount, i've not felt as a prime member when i go to my whole foods i was getting any sort of deal by the way, whole foods prices are not that bad anyway. we used to get a basket analysis whole paycheck i hated those jokes. but i think whole foods prices this is going to drive traffic i think they want to know what people like. everything is a lab. everything is a lab for amazon i have paypal and i know paypal feels strongly if amazon moves the business -- a lot of retail -- it's unlikely there will be -- amazon given the fact that amazon so often ends up

let's say spewing the idea of what people want and we know this from alexa now. if you say, alexa, i want 30 whatever it's liable to be an amazon product. >> right. >> right when independent merchants use the platform, they see some success for a period of time and if they get too successful, amazon simply replaces them by getting its own sourcing on the product they're making. >> right i remember there was a toy company that made it and shared the data with amazon did you see that >> yeah. >> he was so early in the documentary about this. >> too early. >> yeah. that was too early we ran that right now it would be jaw dropping and the president would tweet. >> timing is everything. >> yes truly is. >> can you imagine the president going to town on that stock. one more note on amazon. they're going to amazon go to

chicago and san francisco. these check out-free stores where you and the scales know. the sensors know when you pick up an item and walk out the door. >> all right what do we do with the 2 million people who are checkers in this country? they are going to teach them how to code? put them in computer science school >> there's a division of opinion on that. some believe it's going to dislocate vast amounts of u.s. work force others say they'll be reproposed there will be new jobs different jobs they'll be able to take. >> reproposed? >> you won't be a cashier but maybe there to give advice or help promulgate more sales by being an in-house advisor. >> what advice can they give you? green's giant tastes better than bird's eye we have to own the fact these people's jobs get taken away. >> maybe you didn't notice there was a sale on greens don't get those.

those are from jim cramer's garden. >> they steer you toward the organic food why do people say this stuff >> journal did a nice piece yesterday on automation and how repetitive motions you give robots to do it but final assembly in a car factory difficult to get a robot to do it. >> thank heavens there's something the robots can't do. they run faster than us. they play golf golf is a hard game to play. >> yes. >> they can't brush their teeth. >> robots have bad breath? >> not yet. >> we're going to give them halitosis. >> not yet. >> robot bad breath -- >> i saw a robot learn on its own that a coffee cup is hot that's it. >> i want to talk about cbs and mai and viacom. >> what about the segue?

>> there wasn't one. i went with it there we go. the old faber report animation let's tell you what is going on this morning 2:00 today in the court of delaware presiding judge mcshard, the court of chancellor is going to be ruling or listening to arguments, i should say, on whether or not a temporary retraining order should be issued against mai to prevent it from replacing the board of directors at cbs or a certain board members potentially therefore also the company's ceo moonves. this is two days ago we got the bombshell lawsuit from cbs and its special committee of directors essentially saying we're going to have a special meeting on thursday. we want a tro to prevent you from replacing us in the interim. and we feel that you have acted not in the best interest of shareholders and we're going to protect the interests. there's more to it but i'm going to leave it to that.

we're planning on issuing a dividend that will have the affect of significantly diluting your stake we get a response from nai this morning to the lawsuit that's being submitted to the court. they say plaintiff suggested that nai intends to force such a merger by removing and replacing the cbs indirectors. there's no truth to that nai has never had, they say, any intention of replacing the cbs board or taking any action to force a merger. should add, by the way, if they get that tro and may not hear from the chancellor until tomorrow morning if they get it, cbs has still said it would wait until his ruling overall before actually

issuing that diluted dividend. but perhaps there will be, also, something in his ruling that gives some sense how he feels about the overall complaint itself so many other things going on here i've reported endlessly, of course, on the heart of this which is the chas m that celebrates shari redstone and leslie moonves in terms behalf they want. and why mr. moonves and the special committee of cbs board is adamantly opposed to the potential merger on the terms of the management of the combined between and the board of directors of combined company. as i reported, they were close what matters is this what is bad blood now. starting to get some sense as to recent meetings between shari

redstone, moonves, dick parsons. it didn't go well at all there was no progress i said that a couple of weeks back. two weeks ago, actually, to the day. it went even more poorly than i knew at the time in their complaint this morning, or i should say their filing, excuse me, nai notes behind the drama since lesliemoonves. nai reserves the right to challenge any such claims. they go on to say, hey, you think, you know, you think you can leave potentially if this doesn't got way you want collect your golden parachute. not so fast.

and theysay -- oh, man. so much going on, guys one of the great fights now we're seeing unfold. it's not clear how it ends i would note this claim nai has no intention of replacing directors is a big one chad gifford is a director in question they say intimidated people and they say it's the only person they wanted to replace at the upcoming meeting on friday at the annual meeting. >> meanwhile, it's their press breakfast where they roll out the schedule for the fall. and moonves, apparently, did not appear for the first time in a long time. >> wow. >> yeah. >> big surprise, i guess.

>> it may be in delaware. >> that's bank of boston guy, right? >> yeah. nai contends bullying and intimidation and cbs knew this the cbs board took it they wanted everybody replaced. that's not the case at all it's a separate action, they say. mr. gifford, by the way, does not have an opportunity to defend himself here. but he's in the filing as the name. >> okay. david, the leaked golden parachute, is that from -- we don't know that moonves has asked for that. >> no. we don't know that moonves will not be in delaware. i don't know where he is. >> i mention that because he's favored higher stock. >> he wins the stock goes up. >> yes and i think the leverage they

felt they had all along if he leaves the company, the stock will go down dramatically. they have different opinionson that in terms of how much. we can go on and on. for now we'll leave it and revisit it tomorrow morning and see what the judge decides. >> excellent. >> meanwhile dow is up 12. wel we'll get to bob >> reporter: good morning. it's not an exuberant rally. it's a rally at all, that's impressive we bounced back. take a look at the sectors banks are flat energy, well, we're sitting near multiyear highs on oil it's taking a bit of a break a little bit of an inflection point for the markets. it's a good question to ask. is the shock of 3% rates and higher inflation starting to wear off the response is modest compared to yesterday

the economy is strong here looking at 3.6% gdp for the second quarter 2.3% in the first quarter. so definitely an improvement what you don't want to see is us rolling over we kept showing you the triangle many times where the prices were moving to the downside and you can put that up. you don't want to break that we have to go down a ways. another 30 points or so to get back to the lower highs. i don't think we're there yet. the response is encouraging. what hasn't changed is the dollar it keeps going up. that's a problem for emerging markets. we talked about it for the last month as the dollar is strengthening. you saw what it did to the smaller countries. there's the big one, the emerging etf a little more modest decline it has significant south africa and china in it. it wouldn't go down nearly as much as for the retailers, macy's is

helping the big names today. you can't help but love the numbers for macy's they raised their guidance considerably today debated whether the earnings are starting to bottom remember the 2017 bottom $3.11 on the earnings. now $3.77 in 2018 and the new estimates, this is the new midpoint, $3.85. it was $3.61 yesterday it's a significant move to the upside for them. i think it's worth discussions but don't kid yourself, we saw yesterday online retail sales is growing. department stores are down 1 to 2% if you want to see what the market thinks, look at this. this is retail the orange is the online retail etf. the bottom is the general retailers. the xrt. and both of them have amazon in it so one of them the retail one, the average one is up 10%. the amplified one, the orange one, is up 35% the difference is the online retail one, the orange has etsy and groupon.

and the others have american eagle and ross stores. the market is making a big distinction between a company like macy's. we have a big ipo pricing on the nasdaq side. they raised the guidance for that, too, from 12 to 14 still holding up in positive territory, carl. up 33 on the dow. >> bob, thank you. we'll get to rick santelli on this busy wednesday. hey, rick. >> reporter: hey, carl you know, start off with the two year in front of the curve it's hovering at $2.58 and change toying with a fresh new high yield clothes. back to july of '08, as you see on the chart we're taking back a bit of that steepening yesterday the long end is taking a bit of a buzz not a lot. only down 1. but we're up a bit in two. look at one week of 30 i'm concentrating on the long end for a particular reason. you see the high in that one week chart

3.22 year to date chart see what the high close of the year is from the third week in february, you guessed it, 3.22 open the chart all the way up to the summer of 2015, because should we take that out, that's immediately where rates would come to on 30-year bonds down here it's called a two for plus if you move through a key level on ten, which we did at 3.03 once you get the key level on 30, you may see more selling on the entire long end rate if we start to dip on the 30, they don't get over that threshold, that will also have a bit of an impact italy, they think they're debt should be forgiven the new reborn coalition they have with league and five star look what it's done to ten year rates in italy which have been going up it wasn't that many weeks in the $1.70 and now we're approaching $210 they're buying bunds which push

bund yields down from 64 to 60 it's affecting one of the reasons our long end one week of the dollar index it's really turned itself around you can see that and this december 2017 euro versus dollar chart we lost $1.18. back to you. >> thank you when we come back, matthew boss will give his take on the macy's number and the guidance they're giving which is helping to fuel the retail rally the dow adding to early gains. don't go anywhere. ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise

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♪ good wednesday morning welcome back to "squawk on the street." market trying to build a rally here on some retail news and upgrade of key chip companies. we'll get to that in a few moments. the road map begins with north korea protesting ongoing military exercises involving the u.s. and threatening to walk away from the president's historic summit on june 12th. >> macy's reporting a big beat sending shares soaring this morning. we'll dig through the numbers and look at the state of the

industry plus, the first tv interview the ceo of occidental will join us talk about the future of u.s. oil production a live shot here teachers in north carolina are staging a walk out for higher pay. and increase in education funding. this is now the sixth state to do this in recent months as many as 15,000 are expected to march on the state capitol today. we'll monitor the walk out and talk about you there live, if we get any developments of course, arizona, kansas, some other states, obviously, have been through this already. >> yeah. protesting the budget. budgetary state and the allotments to public school funding. in the meantime, stocks are higher this morning. one day after the dow snapped the eight-day win streak with the ten year yield we'll bring in bill smeed and vice president at aerial investments. do you have to make moves to posture for higher rates and a

stronger dollar within your stock portfolio? >> yeah. i'm glad you brought up rates. we've had 35 years of declining interest rates and a lot of people in the investment business have not seen an environment of rising interest rates. it has impacts people don't understand it's not always great for banks. we're taking into account what kind of businesses will do well. we think it's going to happen for the next three or four years. and what kind of businesses aren't doing well. >> what does well, if not banks. you're right it's conventional wisdom and theoretically makes sense because it's a higher profit interest margin. >> what people don't understand they have funding costs and they also have a lot of fixed rate assets they have made a lot of fixed rate loans over the years. those loans are worth less when interest rates go up the savings and loan industry went bankrupt when interest rates went up a lot in the late

'70s its a case-by-case situation funding costs go up faster, sometimes, than they can relend the money at higher rates. it's very mixed message for banks. i'll come back to names that do well in a minute. >> okay. good let's hear from bill, first, though because there's a debate as rates move higher about where we are in the business cycle. are we approaching the end are we -- is it peaking? you know, we're heading into almost a decade since the financial expansion began. >> right so a couple of things. first off, on the higher interest rates, and the banks, let's talk about that for a minute. >> okay. >> the three majors that we own, jpmorgan, bank of america, and wells fargo have significantly de-emphasized their mortgage business right. they've allowed themselves to become a dramatically smaller part of the mortgage business the last couple of years, which will help defend against some of

what chuck mentioned on getting stuck with a bunch of low fix-rated mornings secondly, this has been the most academic economic recovery in the history of the united states coming off a deep recession. so another way of thinking it, sara, it didn't start until a year or year and a half ago. what will drive the economy, again, you know, one quarter, two quarters, you never know what is going to happen. over five to ten years, it's hard for the largest population group to move from an average age of say, you know, 28 or 29 to 39 and not have a pretty strong economy because your income goes way up. you have children. you spend a lot of money that you make not by choice but by necessity. it's very positive and then the second thing on tieing that back to the banks, the banks have been operating without these younger folks the 25 to 40s being very good customers and now they're starting to be good customers. so, again, i think you're right,

though, that's one of the big things holding this market back is people are just assuming length of recovery means we have to go in the tank. >> and you're saying no. the economic recovery is still on and the banks look like a good buy. thanks in part to demographics, correct? >> second or third inning of a nine-inning game and, by the way, what you talked about is the most important dynamic temporarily in the market besides, you know, extreme popularity of a narrow group of names the fear about the economy is the biggest fear at the moment that seems to be driving attitudes. >> so, charles, we can debate whether we're which inning we're in and whether it's the end of the economic expansion give us stock picks for the changing environment no matter what volatility is back interest rates are higher. the dollar is firmer it changes things around what do you do >> you buy names that are trading for less than their intrensic value. and the names we love here are

names like kkr they finally did what they hoped they would do and convert to a corporate structure and now they're going to be included in a lot of indexes, which they weren't included in before the business is spectacular. trading at less than ten times earnings and if you get inflation, and the value of everything goes up in nominal terms, then kkr actually gets its 20% carry even if the increase is only in nominal terms. so kkr is one of the financial institutions that does well when interest rates and inflation occur. what doesn't do well are y utilities, rates, and bond substitute stocks. they have underperformed and will keep underperforming the rising rate environment. >> interesting you mentioned kkr. i'm glad you brought it up do you think blackstone would do that, too. would you like to see them do that >> yeah. we own more kkr than blackstone because it's trading at a more

depressed price. we think blackstone is on the edge i hate to say on the one hand but it's a close call. i'm going to say they're going to watch how kkr reacts when they convert and if that does have the positive impact that we're thinking it's going to happen, i think they will follow suit. >> finally, bill i want to bring up emerging markets. some of these currencies and markets have been absolutely hammered in the past few months. as interest rates move up and the u.s. dollar strengthen you know, the old warren buffett when the time goes out, you see him swimming naked some of the countries have their own problems like argentina and turkey but their currencies have been absolutely bashed. l look at the double digit weakness down 22%. the lira down. the rial down 14%. what do you advice investors pouring into etf or emerging market exposure over the last few years on cheap money that has been out there >> sara, i would be disenginous.

we were in a large mutual funds and strategy so we -- unless it has something to do with a companies we own, we're not real knowledgeable about that area. i will say this, in a higher interest rate environment and a much stronger united states economy, people are going to be less attracted to things not having to do with those earnings and our criteria for common stock selection is free cash flow generation and strong balance sheet. and the thing chuck would mention in rising interest rate environment the burden becomes a lot more than two in the bush. and in this declining interest rate, people have been playing on earnings. somebody might make five or ten years from now we like discovery communications, which john malone said on your show in november how undervalued he thought it was they cater, for example, discovery's target audience is

women 30 to 50 years old and last time i checked, in the next ten years, we'll have a ton of them. >> all right nice pivot from emerging markets to david's interview we'll talk more about that theme, though. thank you very much. i wanted to show some of the currency carnage we've been seeing for some of those countries. meanwhile, north korea threatening to call off next month's talks between the president and kim jong-un. eunice joins us from beijing >> reporter: hey, carl after weeks of warming ties, north korea has dramatically changed its tone toward washington today the official state kcna news agency quoted a senior diplomat as saying if the u.s. is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue the diplomat specifically criticized national security advisor john bolton for suggesting that the u.s.

organize a deal for north korea that would be similar to the one used for libya to get libya to abandon its nuclear program. he said the world knows too well that our country is neither libya nor iraq, which have met a miserable fate the official also said that north korea would never give up its nuclear weapons program in exchange for economic trade with the united states. that was really seen as a reference to comments made over the weekend by secretary of state mike pompeo who had suggested that north korea could see sanctions relief if it decided to give up its nuclear arsenal. analysts say that this is -- this about face is straight out of the north korea play book and is likely a negotiating tactic to get some concessions ahead of the summit the tougher rhetoric also came after north korea pulled out of talks ministerial level talks with south korea and denounced the ongoing u.s./south korea

military drills. and south korea said its foreign minister had a conversation with mike pompeo and got reassurance that the white house is going to continue with its plans for the summit in fact, about an hour ago, sara sanders said we're hopeful that the meeting will take place, but if it doesn't, we'll continue the maximum pressure campaign. guys >> eunice, thank you very much for that big story today, obviously, in asia back home it's official hedge fund manager david temper is buying the carolina panthers. he said i'm thrilled to have been selected to be the next owner of the panthers. i learned a great deal about the community and the team over the past several months and look forward to becoming part of the carolinas. deal is subject to nfl approval. transaction expected to close in july the price tag reportedly around $2.2 billion

all though i think it's -- see a source out of nfl network saying it's closer to $2.75. >> interesting. >> didn't he own a part of the steelers at one point? i thought he may have. >> you might be right about that. >> i would assume, obviously, it's no longer the case. he can't own any part of a second team. >> that makes it a record high either way. >> yeah. tillman paid the record for an nba team. >> right and balmer clippers $2.2. >> yeah. around the same level for nba franchises yeah >> i think i rather have an nba team than nfl team. >> really? >> yeah. i think it has more international appeal. >> that's the sportiest thing i've heard you say. >> and sneakers. >> that's all she's thinking about. shares of macy's are way up. retailer reports earnings on sales that beat the street is traditional retail back we'll dig through the numbers and speak with the ceo of oxy. a look at the future of u.s. oil

production down back to the flat line here. authr pnts. don't go away. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

macy's shares are up after posting the big earnings handling beating expectations of a 1.4 increase does it mark the beginning of a new macy's joining us this morning is a worldwi worldwi worldwide enterprise joins us here we've had a discussion

how impressed with what they've done can it last? >> i was the most optimistic person on the street along with matt boss on the name. i was way not optimistic enough. they really knocked the cover off the ball to turn in those sale numbers given what their track has been. yes, they had a great fourth quarter and now a great first quarter. i also think they're going to have a great second, third, and fourth quarter of this year. they're just doing much better job than they've been doing. and i attribute a lot of that to their new advertising methods that are more narrow cast than broadcast. and much better inventory control. >> some of the downgrades we've seen, even in the past few days, argue in part that once the comes start lapping later in the year, it gets tougher. you don't think it will be that tough? >> i believe may will be the best month of the year we happen to be sitting in it. when they release sales, they've seen that and they're going to be happy the compares get tougher i don't think it'll be quite as

strong, relatively speaking in the back half. i don't believe it about macy's. i think they're doing something themselves to make it better for retailing in general i'm relatively optimistic on 2018. 2017 was very good the year over year comps as we get to the back end, it's tough. but still the consumer has never been better. i mean, unemployment 3.9%. you know, we just saw the atlanta fed come out and say 3.3% wage. 2.2% hours that's like 5.5% income so when you get that kind of stuff, naturally sales should be better and all the money company to go to experience. it can't all go to phones or higher netflix use and so we're seeing some of that bleed into the real retail world. we still saw, what, online up 9.6%. >> right don't be mislead, though, i guess is part of your theme

here the overall theme continues? you've been talking about for years now, which is online will dominate but right now given the strength of the consumer everybody is benefitting >> yes i think everybody is benefitting but i also think that the players that are winning are learning to play the game in this new age i think nordstrom is winning cole's is winning. sears isn't winning. they invested a fortune into online they've been doing it for years. and i say all the tasame you ha to rebuild online every year you have to put the money in it and stay with it and keep reaching the customer. those i named are doing that they've restructured their store base, right. they've looked at it and said we have to put things in the store that haven't been in the store before and then we also have to reduce our footprint. they've made all those moves they had to do those are the winners. there's plenty of losers we're seeing record bankruptcy

s this year. we'll see record store closings again this year. we'll have the mall falling retail traffic, even though it wasn't as bad in the first quarter. it was down 1.5% in the malls in the first quarter. it won't be down 1.5 for the year it'll be down mid singles or something close to that in the mall we're seeing less good malls get recharacterized. so the change is here. >> the bankruptcies, the debt maturity question, is that a specialty retailer thing or is it about apparel or departments? wheth where is it felt the most? >> apparel retailing and bon-ton already declared right i don't think we're going to see growth much at dillards. it will be a smaller company they're not a big online player. inside the mall. what do you like inside the mall

make foot looker or lululemon. anybody else inside the mall not so much. >> restaurants maybe i'm looking at -- >> nlooking at all-time high list two retailers, nike and tjx. >> i'm a big man of nike bigelow price department store and i'm less thrills with them so i like the ones that are more nimble in burlington and ross if i'm going to pick -- >> you think macy's changes are sustainable? >> yes i think the changes at kohl's are sustainable. i think nordstrom is going to be fine and most of the rest rev tailing that looks like them is not going to be fine and i think we're going to see a lot of attrition in apparel in the malls. those players are not going to be strong. but, yeah, right now there's

some win esners out there you mt not have thought of. i think nike is a winner and walmart is a winner. they're going to look good tomorrow >> earnings. >> we'll get it in the morning nice to have a story like this to talk about. thanks johnson & johnson relaunching their iconic baby brand making a move to be more natural and organic in a bid for young parents. meg terrell spoke to the ceo and joins us live from the company's analyst day in new jersey. meg? >> hey, sara this analyst day is focused on the medical devices and its consumer products. together they comprise just over half of j&j's business the consumer products unit is the smallest but still a huge business at more than $13 billion annually of course, comprises some of the -- it's composed of some of the most famous brands of j&j including tylenol, listerine and johnson's baby they did announce they are relaunching this brand, take out certain ingredients. now also taking ought sulphates

and dyes after a 20% sales decline since 2011 the head of consumer here telling us they'd fallen out of touch with millennial parents and they're trying to turn that around they are cutting the whole ingredient list by half and trying to use more natural products like substituting coconut oil for mineral oil, for example. they say in addition, they're going to be simplifying their supply chain so it could become more profitable. we did sit down with the ceo alex gorsky and talk about how competitors are looking at divesting their units such as pfizer we asked him about the future of that business and whether they'd look at pfizer's unit. >> we think the best position is we want to be the broadest, best health care company in the world. and regardless of whether it's a pharma approach, a medical device approach, we want to help patients and consumers find a solution for their particular need so we think being a broad base helps us better understand what patients and consumers need. and we think it's what's

contributing to a really strong business performance over 25, 20, 15, 10 or 5 years and we're always on the hunt for new opportunities. >> so always on the hunt for new opportunities, whether that will mean a big buy like pfizer's unit, we don't know. this new line of johnson's baby will hit shelves in july >> those big brands being behind the curve. the honest company, burt's bees were talking about paraben free years ago. that's probably where the market share is going j&j certainly has the powerful brand, and i think it's the only baby shampoo that actually smells like babies, but how are they so late to this >> you can actually see it in the data we got data from a euro monitor international showing that honest company has been taking up market share as bigger brands like johnson's baby has been losing market share, although they are still the market leader

they took ought thaleates and parabens years ago but they're swapping in natural ingredients. they're trying to compete with the smaller brands it's a big push for j&j. >> i'm glad they took it out years ago because i've been using it meg, thanks. meanwhile, amazon prime members getting a new perk today. discounts at whole foods 10% price cuts on hundreds of sale items and rotating weekly specials they are available in florida and will be expanded nationwide this summer as we continue to look for clues as to how disruptive that $15 billion deal is going to be >> 1% market share of the grocery sector $800 billion market, but, boy, are they making aggressive moves on pricing north carolina, the latest state with teachers walking out over compensation, shutting down schools in that state. we'll take you there live. "squawk on the street" will be right back with the dow up about 27 points here

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♪ 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. time for our etf spotlight mike santoli looking at etfs

that could mirror the smart money plays. mike >> yes, so hedge funds have long been considered smart money for those who still consider hedge funds the smart money worth following. a few etfs that try to look at the stocks most commonly held by hedge funds. and hold those stocks. obviously, right now we're hearing about etf holdings that's always lagged by 30 or 45 days but nonetheless, some of these funds are smaller but try to track it. goldman sacks has kept a hedge fund vip list which are the 50 stocks that most commonly appear in the top ten list of the larger hedge funds it's only launched in november of 2016. it's a small fund. all these funds are pretty small. it's done well it's ut performed the market by 2 or three percentage points not dramatic but definitely a better go daddy is peers in a couple of these. very tech oriented otherwise,

even besides that. another one is the global x guru fund guru is also the ticker there. more diversified been around longer doing okay a lot of energy in some of the top holdings here as well as herbalife which is an interesting battleground stock alpha, alfa is an alpha clone alternative etf. very biotech heavy they look at hedge funds that had a blockbuster record over time which is hitting the lottery with some big biotech. this one is a lot of small bioteches in small increments, held like 1% or 2% each. >> are they all operating on 45-day delay >> exactly you're only as good as the information that feeds in. 45 days later. you don't know what they're doing in realtime. those are all the caveats you have to have in mind >> are they outperforming actual hedge funds? >> they've outperformed over the last couple of years by a little bit.

it's not anything dramatic and they had a great run in 2014 back when actvisit actvisit actn their heyday >> mike santoli, our etf spot light. north carolina teachers take to the street this morning in a latest of string of teacher protests demanding better pay and scott cohn is live >> reporter: about 15,000 teachers or so not held back by scattered showers today making the march to the state general assembly building where the legislature is opening its 2018 session today. they'll be there for the better part of the day packing the galleries, rallying this afternoon. and according to the national education association, and this is what they say this is boiling down to. north carolina ranks 39th in the nation for teacher pay and 41st for per pupil funding.

>> this is about priorities. we have a general assembly that wants to invest in corporate board rooms instead of public school classrooms. we're going to make sure that may 16th is really just the beginning. >> well, that's basically what the republicans who control the legislature are saying that this is about politics. they point out that they have given teachers raises for each of the last five years there's one baked into the budget for this year of about 9% but north carolina does underperform the nation for education. if you look at our 2017 rankings, they finishes 32nd for education, not dragged down just by funding but also low test scores of course, this is one of six states where teachers have staged walkouts. look at arizona. teachers won a 20% pay raise there. thatstate finished 49th for education. colorado, 12th place for education. hurts the state's sixth place overall ranking. kentucky teachers want a pay

raise and additional school funding but the state finishes 30th for education 35th overall teachers in 43rd place oklahoma did not win any new concessions with their walkout a few weeks ago. and west virginia, where teachers won their first pay raise in years, 39th for education. remember, states with the exception of vermont need to balance their budgets. so when they give out these concessions it comes with costs. that's what republicans here are arguing, and that's the big trade-off as this hits state legislatures across the country at budget time and by the way, we are working on our 2018 america's top states for business rankings coming to cnbc in july guys >> that was going to be my question, scott. how north carolina did in the past i kind of remember it having been fairly strong on your annual survey. >> it does well overall, but it does not do well for education it also hurt the quality of life a lot of social issues at stake here as well but that 32nd place for

education is crucial because, remember, the big battleground around the states now is workforce. and education feeds into that. and they know that here. we talk to the house speaker who we'll be hearing from later, a republican, who talked about the balance between competitiveness, between strong education and a strong workforce but keeping taxes low. that's the tradeoff. >> yep it's oftentimes is scott, thank you scott cohn over to sue herra for a cnbc update >> good morning, everyone. here's what's happening at this hour the senate intelligence committee voting 10-5 to recommend the full senate confirm gina haspel to head the cia. the senate is expected to vote on her nomination as early as this week. donald trump jr. told the senate judiciary committee that he couldn't remember whether he had discussed the russia investigation with his father. that's according to transcripts of his interview with the panel last year. the committee releasing more than 1800 pages of interviews

with those that met with the russian attorney at trump tower. hundreds of iranian protesters gathering at the former u.s. embassy in tehran to show their solidarity with the palestinians they burned the israeli and american flags inside the embassy's courtyard. then a giant palestinian flag was hung on the facade of the embassy building and here at home, the carolina panthers announcing the team has been sold to hedge fund magnate david teper for $2.2 billion. it's expected to be aprufd by nfl owners later this month but not officially closed until july and you are up to date that is the news update this hour now over to jackie deangelis for the inventory report good morning >> good morning, sue you can see crude oil is paring its losses after the department of energy reported a draw down in crude oil of 1.4 million barrels. draw down in gasoline as well of 3.8 million barrels. this was one of those interesting reports that flew in

the face of what we heard from the api last night saying there was an almost 5 million-barrel build. that's why it's always important to wait for the actual government data. u.s. production did go a little higher 10.723 million barrels a day in terms of pricing, trading $70.75 you can see we're trading over $71 now. another key note this morning, the iaea was out with its monthly report and it's taking its demand forecast slightly lower because higher prices could have a chilling effect on demand, guys >> okay. jackie, thank you. sticking with the oil beat, brian sullivan joins us from an energy and oil conference in houston. he's got a look at what's coming up next. >> yeah, david, thanks very much the market has been red hot. we're at a conference call, the hotter than hell conference. that's the real name first ever cnbc interview with the president and ceo of

occidental petroleum things sore good in texas that they may roll over we'll dive into the o ceof occidental right after this.

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welcome back to "squawk on the street." from post 9 at the new york stock exchange one hour into trading, a mini rally going on for stocks. the dow is up 47 points led by names like apple and nike and walmart. the 3m is a drag s&p 500 up 0.3%. tech strong today with the nasdaq up 0.5% consumer discretionary one of the better performing groups on that macy's beat >> watching oil, producers could be facing a rough road in the next few years as costs for oil transportation rises our brian sullivan joins us with a major player in that space. >> hey, carl thank you very much.

we're very excited the first cnbc interview with vicki, the president and ceo of occidental petroleum, one of the biggest players, if not the biggest in the industry so my riddle, i guess, going into the break is about something that's happening very recently which is over the last couple of days and weeks, we're seeing companies produce so much oil in the premium that they're having trouble getting it out. the pipelines are full prices actually drop in certain parts. so are you able to get all of your product to market right now? >> oh, definitely. we actually have an advantage in that we not only have the gathering systems within both of our operations, enhanced oil recovery and resources business but we also are connects to multiple pipelines we have 470,000 barrels a day of capacity out of the permium. that's more than twice our equity production. not only can we get it out of the permian but the oil export

we can get it on the water to international markets, both asia and europe we have an advantage in this environment. >> you'd get paid by some of your competitors in the oil space or gas space >> certainly >> so you have excess capacity when others are struggling >> that's right. >> steve chasten, your former ceo, gave some comments to the e effect of the growth rate can't continue at this pace. how much do you think occidental and the industry can get 10.5 million barrels a day in the united states right now. >> i think there's still a significant amount of oil in the ground what's going to be a governor on the production will be takeaways sporadically but the pipes will be built so the bigger governor on pace, activity and production will be the availability of competent crews. that's where the next bottleneck will be for all of us.

>> is it a struggle to get labor right now? >> it's a struggle with very much higher activity that will become even more challenging for us, it's not a challenge because we're really at the activity level that we want to be we added two rigs in the second quarter of last year we'll continue that pace into next year. and so if you are a company that's not trying to ramp up significantly, you have an advantage. >> so you're part of that rig count we talk about that just keeps going up >> well, we only went up two didn't go up a lot now some companies are needing to increase by -- or so they say -- by 5, 7, 10 when you get to that kind of increase in activity, you'll really be playing for the inflation and crews that aren't quite as skilled >> your stock has soared, up 31%. one of the best performing big major oil companies out there. everybody knows about your permian assets do you feel like they give the valuation or the stock market respect to your other two

divisions? >> i don't think that quite everybody does and if i can just talk about that a minute. a really big transformation has ha happened with our company. in 2013, we realized that we really needed to exit some lower margin, lower return assets. the balkan, south texas, and we spun off california. we also exited four international assets in doing that, our production decreased by 40% from 760,000. so we lost 300,000 of production we also lost the associated cash flow with that but what we were trying to do is ensure that as we go forward, every dollar we invest is higher margin, higher return so to replace that cash flow, we started doing that actually during the downturn. when people thought we were just being active to grow production, that was not the case. we were trying to replace cash flow and to ensure that going forward our dividend will be more secure than it's been in

the past now today we have three quality assets internationally qatar, oman and abu dhabi. we have colombia and south america and the united states. so we're in better position than we've ever been to deliver on the metric we feel -- >> how profitable are you? >> we set a milestone to be cash flow break even at $50 with a 5% to 8% growth rate. with the growth in the permian, growing production by 80,000 barrels a day is going to get us to that in q3 this year with contributions from the chemicals business in terms of incremental tax reform so we're going to be cash flow break even at 50 which means we can grow our 5% to 8% growth rate and we're going to be cash flow neutral at 40 which means we'll be able to maintain our assets, offset our decline and pay our dividend

starting in q3 of this year and beyond, we'll be -- we'll have significant free cash flow in a $70 to $80 environment >> do you think we'll be in an $80 environment? >> no, and we don't have to worry about that because what this model does for susat $40 we're adding value to our shareholders by still continuing to pay the dividend. anything above $50 is incremental cash flow that gives us the ability to do other things with that cash. >> vicki hollub, i'm not sure a lot of companies can say that. we appreciate you sitting down with cnbc. don't be a strachbnger now we'll see you soon sara, back to you. >> brian sullivan, thank you very much for that interview from houston with the ceo of occidental we're trading above $71 on wti just shows how well -- how much better 40 neutral 50 break even on cash flow which means they can return cash to

shareholders, keep that dividend safe wasn't too long ago we were talking about these dividends at risk >> and the permian is the key and they've sort of, as she said, dwefivested a number of assets in other areas not having those kinds of return metrics. >> no wonder the stock has gone from 64 to 84 in just over a month. amazing. >> yeah. >> nice to hear from them. we went a long time without hearing from occi on tv. >> we'll hear these ceos more. energy has taken a leadership spot in this market. salesforce ceo speaking out this morning about regulating facebook here's what he said on "cbs this morning. >> in some ways say february has become the new cigarettes in our industry that is, it's a technology that is, yeah, it's addictive it may not be that great for you. and it may be something that you mute want might want to go back to maybe this is a time the government has to step in and

regulate >> i thought that was harsh. called facebook the cigarette of the industry >> he first said it in davos on our air with andrew? >> i think you're right. he's been fairly outspoken on some of these issues on so many issues. he does take kind of the lead in technology whether he's supported fully, i don't know. >> i wonder if other companies that don't stand tllose from a regulation of some of these privacy controls would agree with him or whether the facebooks of the world are looking at that like, thanks for throwing us under the bus. >> if you watch the latest advertisements and all the different things it's doing to combat, of course, criticism >> not so far as to say we need european style privacy laws in the u.s. which is what benioff is saying. it's wynn versus wynn. the embattled casino and resort arolr etg.icking off his shehdemein dow is up 32

tesla trying to snap a four-day losing streak approaching a key technical level. find out more about what to do, tradingnation.cnbc.com more "squawk on the street" after this welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com

. taking a look at stocks, the dow is up 42 points. this after yesterday when the dow broke its eight-day winning streak with a decline we're keeping an eye on rates here because the 10-year treasury yield is above that 3% level. that was part of what spooked investors yesterday. you do see some of the groups that are very sensitive still under pressure and that includes utilities and real estate. difference today is you have a big rally off the macy's number and also the macy's effect with nike leading the dow. >> yeah. 308 now on the 10-year yield you saw what happened with mortgage apps if you haven't

refied by now maybe your chance is gone but we've said that before churchill downs the iconic kentucky racetrack announcing an agreement with the golden nugget in atlantic city to enter the new jersey on-line gaming and sports betting markets just the latest twist of the machinery as we get this new law. even though we're waiting for states to delineate how they will do this, a lot of these players insist it's plug and play and they are ready to go. >> new jersey was locked and loaded they were the ones fighting this from the get-go. it will be interesting to see how other states do this, where they do it, is it going to be at at sporting venues and most interestingly, david, how the leagues get a piece of it which they want of it. >> they do we were talking earlier they want a so-called integrity fee, whether 2.5 or whatever the amount wagered is clear, they want their take as well. us a stensbly to pay players, but more in the form of just ownership. >> owners, more money. >> yes. >> mark cuban says doubles the

value of the teams. >> yes >> let's send it over now to jon fortt with a look at what's coming up on "squawk alley." good morning. >> good morning. if macy's had a bad quarter we would be talking about amazon effects but macy's had a blowout quarter. what's going on with tech and retail we will look into that even as amazon extends prime benefits. more of them to whole foods commerce that -- customers. that's coming up your company is constantly evolving. and the decisions you make have far reaching implications. the right relationship with a corporate bank who understands your industry and your world can help you make well informed choices and stay ahead of opportunities. pnc brings you the resources of one of the nation's largest banks, and a local approach with a focus on customized insights.

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welcome back to "squawk on the street." i'm dominic chu. the material sector is today's best performer in the s&p 500. we've got shares of liondale and freeport, newcorps and packaging corp lead the way higher after it announced a 25% boost to dividend payment. nearly every member stock of the particular sector higher on the day. back downtown to you guys. >> all right i'll take it, thank you, dom. >> wynn is allowing roerps into the company's annual shareholder meeting. contessa brewer is live in las vegas and has the latest on that meeting. contessa >> we're going into the shareholder meeting today with this battle over the board settled, at least for the moment, elaine wynn got what she wanted we know that legacy director

john hugbuck stepped aside as well as former nevada director bob miller this means the board is 50/50 men and women. matt maddox has been persistent in clearing what he called distractions expecting to hear from him in the annual shareholder meeting about some of the big investor issues of concern, macau revenue, las vegas development and a path forward in the new wynn looks like. the guidance we're getting is board director pat mullroy who heads up the internal investigative committee will talk about the committee's work. what she told me on monday they will stay in sync with the massachusetts gaming commissions' investigation as well but will release some portion of that report when it's made public or when they come to their conclusion we were also told that elaine wynn may be given slightly more time, given her status as the largest shareholder of this company and when she talks we're

going to be watching for indicators here about what battles she's prepared to take on next, guys. >> contessa, thank you huge story, obviously. tracking closely glad you're there. contessa brewer in vegas amazon as whole foods discount as they institute price cuts dow up 16. "squawk alley" starts in a up mutes at&t provides edge-to-edge intelligence,

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