set. >> i'm sure we would have lots of investors. >> it's a good idea to harm a primate with darts that's all right. >> velcro darts. know those kind? join us tomorrow maybe we'll have a chimp on the set. "squawk on the street" begins right now. good tuesday morning welcome to "squawk on the street." premarket is up a day after the dow reclaims 25,000 for the first time in a couple of months trade war tensions continue to ease a lot of retail earnings and new ceos announced here at the nyse and low's. we have a two-year debt auction this afternoon

easing trade fears giving a boost to stocks. shares of gm and tesla up in the premarket after china said it will cut car tariffs and nearing a deal to lift a u.s. sales ban on chinese telecom giant zte. plus a retail shake up this morning. marvin ellisson is resigning from jc penney taking the helm at lowe's. >> and the ceo of spacex how the company is turning elon's vision into reality with a little help from nasa. lowe's announcing ellisson as the new ceo. >> i remember when marvin took the job at jc penney it was kind of odd if only

because he was considered to be a terrific, terrific hard goods guy at home depot and home depot is a couple of smartering of garden apparel there wasn't that much and i think jc penney, it says that jc cannot be turned around. >> cannot? >> i don't think it can be turned around. >> you're not alone in that. >> ron johnson the other day. >> and mr. simon from walmart, i believe, as well who ran north america had similar things to say about the inability to turn around jc penney. >> it's brutal because it's one of the situations if there was any chance, i think you would stay because it would be, obviously, such a kick in the face of jc penney to move over and really fabulous for lowe's who can they steal they have great technology people they have number two and number

three. no, they got someone who was -- >> you think it's fabulous for them. >> he was great at home depot. >> he was? >> he was. >> and lowe's was under pressure from activists te shaw has an activist strategy they immediately hit pay dirt. they got a couple of board members there. the question for lowe's can you improve the margin it's reflected in the performance of the stock price for the last ten years. >> i think what people don't recognize is home depot spent a fortune on technology. it's truly a marvel. you know, they have a technology boot camp they'll put people through. they've got tremendous computer training that makes it so that they're -- for instance, their hand held app is amazing for contractors. it tells what aisle the goods are. in and out everything was the contractors they took a huge number of

contractors away from lowe's the lines are traditionally longer at lowe's but ellison knows the way it works there jc penney, obviously, it's hard. >> you don't hold jcp against el ellis elli ellison saying they failed. >> they will have the lead independent director be chairman at jc penney the office of the ceo will comprised of the few executives. the cfo, the chief information officer, one of their supply chain executives together they'll be responsible for day-to-day operations until they find a successor.

i think it will be hard to find someone. what i find amazing is everything else this morning is super red hot in retail. remember, we keep thinking is the consumer cooling gasoline is up people aren't spending i've been saying the consumer is the healthiest i can recall and the tax cuts doesn't matter. tjx was initially down big people misread the story now it's up. kohls was a remarkable quarter people didn't think it was going to benear that substantial short position obviously, lowe's is being well received should it be up this much? i question that. home depot got hit when it reported sales so i wonder if home depot reported sales whether it wouldn't be a little bit better received but there is a sense that the consumer is alive and well, except for what it comes to home buying people didn't like -- i can make

a case that eps wasn't so good but there's a lot to like. and they keep buying back a lot of stock but it's the home building side that people are really worried about because of interest rates. and there is, i know a little mortgage business not so great. >> yeah. >> a lot of other business good. >> yeah. it's great lock setting in people afraid to move because they refied at such an attractive number. >> the interest rates are up big. every time you say that, people say wait a second. did you refinance in '07 did you refinance in '05 '04. you could get 2.58 a little bit. i think housing is stronger than people realize people are buying apparel. i read the runway the disrupter on tonight people are buying apparel like mad. don't forget, a lot of these retailers got a second wind because they tend to have between 10 and 20% they buy in

china. and every one of the retailers has multiple sources but the chinese worry is being taken off the table. >> we're have an upgrade of macy's today. >> better late than never. >> they go to 43. >> that's not exactly -- >> which is 24% upside initiatives in place to drive more positive. >> look, i've been a huge fan of jeff gannett and what he's doing. everything missed with jeff gannett the stores look better there was execution issues at macy's and it's a more fun place to shop when you tell jeff, like here is what i would do, then you go to the store and it's done. i mean, he's a person who loves feedback he loves merchandising reminds me somewhat of drexler cares tremendously about merchandising. that's what everyone forgot. and people were talking about capital allocation remember at the end they were

talking about the ratteal estate more than the store. he thought the store was worth more than the real estate. >> before we come back to -- >> sure. >> it's worth mentioning on jc penney the market value is $700 million or less. there are 100,000 employees. >> that's been a big weakness for the country. you don't want jc penney to have real problems. jc penney is a giant chain when you comes to people who work there you don't the presidewant it to sears. >> other troubled retailers duking it out at the bottom. >> i love when you listen to the home depot cfo she's talking about how sears is just been such a spurj in their comps courses. i wonder whether jc penney will be i don't think there's that much.

but jeff would never tell you the reason why they're doing well is because jc penney is doing badly. macy's has so many different things going for it. it's a too limited way to look at the company. >> all right on to broader markets. stocks are poised to build on monday's rally more signs of easing trade tensions with china. chinese officials announced a cut in the import tariffs for certain vehicles from 25 down to 15 tariffs on car parts would be reduced. the move is part of an effort to open china's markets and according to reuters, u.s. and china are getting closer to a deal that remove a ban on u.s. companies doing business with telecom giant zte, which remains a controversial move but it's good news that the auto tariffs is good for carmakers. gm up almost 2% remarket. >> yeah. the way to make cars is doing a joint venture. you just don't want joint venture there. that's where the best one to

recall is american express they applied to be a car company in 2004. finally threw up their hands and said we're going to have a joint venture with a mobile telephone company. the chinese government wants to know, i think, everything about american express so it's a little disconcerting and i'm not going to possibly, possibly say things are better yet. >> things are better on what what do you mean >> what larry kudlow came on-air and said that maybe the joint venture situation is off the table. >> this is the first, i mean, yesterday you were talking about the lack of tangible, i think, to put the word tangible advances in terms of where the talks were this is the first thing that is dropping the tariffs that is tangible in a way, right >> yeah. >> the rest is promise to buy more stuff. >> yeah. you have 25% goods and 13.8.

those are real numbers that's not framework. >> right >> let's not forget that sells more cars than china. >> and japanese and european automakers import more cars than u.s. companies because a lot of our companies have plants there. >> right and, you know, the car numbers in america are not so great. cars come from mexico. >> yeah. don't forget the china is by far the largest market and they have their own marketers there. people say tesla will benefit but they have neo which is going to be a huge player. they want to start to ship some of it over here. >> right. >> every time we talk about zte, of course, you end up having to speak a bit about that qualcomm deal that has been held up by the anti-trust authorities

they've been put together. we'll keep calling it mofcom even though it's not really. there continues to be a lot of optimism from people close to this potential transaction that it will be approved by the anti-trust authorities in china and something along the line of settlement with zte seems to help the sentiment around it but, again, speaking of a number of people who have been involved in the process there seems to be optimism and you can see it reflected nxp stock price trading about $10 below the 127.50 deal. timing wise hard to know. >> right. >> a few weeks absolutely longer sure they only have until kind of middle of july, right. that's the o90-day calendar. there seems to be rising optimism as we said along, it would not be a deal to block and be beneficial to the chinese

overall. it would have put a chill on all worldwide technology deals. >> right. >> and they wouldn't end up getting their pound of flesh, so to speak. >> right you can argue broadcom might be in the deal. another barometer is asia. the company that provided parts to zte that's going from 25 to 35 it looks like it's percolating. >> right. >> i'm bullish on the idea the semis are ready. ready to move up. >> even more than they ave. >> kudlow yesterday said zte broke the law. >> we can understand there's a shake up at the top. i'm sure there's no deal without a shake up we had dan d'amico tweeting this morning, obviously, the former

ceo of new corps. saying once again what are we doing? what happened to the policy? we're not going to give it away. and there are, like, the new york times talked about the end fighting. >> right. >> ceaseless end fighting. >> peter navarro worried about 2025 peter taking a longer term view. i thought the president might take a longer term view. obviously the president wanted the stock market to go higher, he ain't got the right formula and that's important kohls, by the way, friends and family shift real come didn't miss i want to hear more on the conference call. >> we're looking at it we'll watch kohls. when we come back, mark zuckerberg goes to the hot seat in brussels as he talks to the european parliament. and history being made at the big board. we'll talk to stacy cunningham the first woman to lead the

exchange and its 200 plus year history. another look at the premarket as we build on yesterday's rally. more squawk on the street from the post 9:00 at the nyse in a minute mom you called?

oh hi sweetie, i just want to show you something. xfinity mobile: find my phone. [ phone rings ] look at you. this tech stuff is easy. [ whirring sound ] you want a cookie? it's a drone! i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. facebook ceo mark zuckerberg is due to testify before the european parliament in brussels hours from now data privacy will be the big focus. he's expected to tell lawmakers the social networking giant didn't do enough to prevent the

tools from causing harm. according to prepared marks, he's expected to say whether it's fake news, foreign interference in elections, or developers misusing people's information we didn't take a broad enough view of our responsibilities that was mistake and i'm sorry we'll see how different this is in tone because the europeans have different views of privacy than the americans. >> yeah. definitely i like the fact he immediately comes out and does the "i'm sorry" rather than be argumentative. i think that matters that was the posture that got congress off his back. but you're right i mean, europe is -- i keep thinking about the google 60 minutes piece, which was something that everybody knew in this country if you followed anything involving google and the competitors. >> yes. >> but these -- look, these regulators are really much more about power concentration. and facebook has power concentration. did you see how much facebook is

used in china even though it's banned in china? >> yeah. >> in our country there's not yet been anything any peep made from the regulators being the department of justice about market power, stifling of innovation you could go down an anti-trust road that gets you there it's not just about the consumer. >> right. >> but my instinct it's no going to be the case with our anti-trust division, which i think salutes a lot of what is going on in silicon valley i don't think the concentration. it's interesting it was concentration on anti-trust and obama either. >> i mean, the power, you could argue, has only drown dramatically, even over the last few years. >> yeah. >> as it moves into so many different areas. to the point that amazon continues they could argue can bring prices down for the consumer and so that becomes a weapon that or not a weapon but a

helpful argument they can make. >> yeah. they can charge more. >> yeah. people all the time on squawk alley carl would make the argument. >> it's a huge fight among giants at the top. the 60 minutes piece is start ups being quashed. >> you'll never know what you're missing because you'll never see it. >> no, you wouldn't. i think adobe made an acquisition which allows the euro website to be more stronger that's needed. adobe being a nice countervailing influence on amazon to some degree, they have their own commerce cloud that is strong you could easily -- amazon were to be hit, they could say look what ado bee is building adobe is an amazing company. there are ways to make a case that amazon is not as concentrated as facebook but, again, what are we supposed to do? are we supposed to break up facebook break it into instagram and

facebook and have them compete what did we do do we decide the support a rival company that gives square some of facebook's share? i mean, give snap. like, you know, when i was at the government said, you know, we have to favor snap. what is that what would you do? tell me what you would do in order to make it so facebook is not so powerful. >> i'll get back to you on i'm sure there are any number of anti-trust scholars. >> you're making calls on facebook >> you think i have any original thoughts >> i didn't say that >> i try to at least -- >> let's give money to snap. let's have it loike the farmers. subsidi subsidi subsidize snap. >> we did it on at&t and ibm we did it on standard oil. come on! come on! >> save some time here for the mad dash, which we'll get after a short break. don't go away.

the digital divide is splitting this country. we have parents who are trying to get their kids off of too much social media and computers, and then we have parents who would only hope their children have access. middle school is a really key transition point, right. the stakes start changing. students begin to really start thinking about their futures. what i like about verizon's approach is that it's not limited to just giving kids new tools, it's really about empowering educators to teach in different ways, and exposing kids to more active forms of learning. giving technology is not a total solution. teaching technology, now that is.

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all right. about a little less than six minutes before we get started with trading ge was a big feature yesterday on the course of the transportation deal with wabtec. >> right now, david, we're talking about retailer let me segue to shoes. stephen tusa says that maybe we're done with the material shoes to drop. a lot of people feel that all

the shoes will drop in general election electric. he questions the leverage ratio. he mentions the two words you never want to hear "dividend" and "cut" within the same sentence maybe there's something coming in terms of capital. the secret word there is "raise." but i've got to tell you, citi comes out more constructively and said the wabtec deal strikes a good balance but now you're going to have the dispositions probably be lower 5 billion versus 10 billion. >> the last part >> dispositions in 2018. there was a hope that flannery, the ceo, would have $10 billion with the dispositions. now it's more toward $5 billion. but tusa digging in his heels didn't buy this, david sticking by his $11 target tusa tieless tusa cannot be --

he's tough all right. he's not going to be bullied. >> you haven't said anything nasty about it. >> no. he's jpmorgan. he's the best. he's not looking for any investment. >> no. his whole reputation has benefitted you say his name every day on television w n bk off? >> he can't. we got to go opening bell coming up ♪ south l.a. is very medically underserved. when the old hospital closed people in the community lived with untreated health problems for years.

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so they can focus on new things like exotic snacks. talk with your advisor about shield annuities from brighthouse financial- established by metlife. the opening bell is brought to you by brighthouse financial established by met life. you're watching cnbc squawk on the street live from the financial capital of the world the opening bell in just about 60 seconds here as we follow up on the dow rally yesterday haven't been up since 26k since february 1 directionally we're headed that way. >> a lot of industrials were really much more oriented toward china than people realized you started adding -- there's always boeing and caterpillar. but it's far deeper than that.

many, many of these industrials rely on -- [ opening bell ] that's the absolute number [ opening bell ] >> president stacy cunningham doing the honors this morning. we'll talk to her in about an hour along with adobe's $8 million buy back. >> right micron on "mad money" tonight. i've been waiting for micron to put to rest the idea it should permanently have a low price earnings because permanently we worry about the deramp cycle and it is not a cycle. it's secular

that's been the issue. is -- are the d-ramps going to be straight up because of the data business they have? data center? or was it just going to roll over again and i think micron with that buy back said, guys, it's for real it's lasting come short us. see how you do right in their faces remember this was the cheapest stock. >> yeah. this is the cheapest stock in s&p. >> you've talked about it yesterday. you did it last week. >> i've been boring with people with micron for weeks. >> right the narrative. >> yes thank you the narrative changed. and i just, what i love is when a company just says, you know, we keep increasing price not necessarily because the shortage but also because the demand for our newer chips is far greater because they run much better and are much more complicated. the old days you could put a factory up in six to nine months. >> really?

>> yeah. they were easy things to make. not anymore. there's a big mote around just regular technology this is the invidia issue. invidia makes the ship invidia has been getting hit these are different companies. by the way, when you see these complicated video games, you should thinking about invidia. i don't know if you saw the prize, david, your kids are probably paying for epic $100 million prize. >> they did. >> your boy is good, though. invidia is slightly negative micron is up 10%. >> it's viewed as zerosome i think that's preposterous. micron makes d-ramps and invidia makes gpus graphical. so the idea that one is going to take businesses from the other, i think that's just factious

they can both go up. >> it was reflected at kohls until the call and then friends and family line. but auto zone, advanced auto, lowe's, tjx, foot locker all of them. >> yeah. i want to hear the kohls conference call. kohls did tell you there would be a friends and family. this is not. the stock was at 69. this is one that the conference call matters tremendously on strauss' stock was down $7 and then the conference call and it goes back $7 and adds three more so those who want to trade these things without listening to the conference call, i think that you're just -- once you want dot the casino and bet double zero if you win call yourself a

genius. >> got anything for us in media world? >> i'm going to have some things i'm going to do a faber report. >> i had a faber report. >> on media. >> i was going to do a faber report on tractor supply. >> go ahead. let me see it. what do you got? >> good number tractor supply is hyperraises and a meeting they told you everything and now then it's finally happening. everyone is scrambling to like it there's my faber report for today. >> i remember when tractor supply was the key to this market. >> tractor supply has often been the key to the market during farming season how right you are. >> since you asked since you seemed so anxious. i'll do the faber report now it's on media wars, jim. media wars. >> i don't know about video games. >> end game media wars and you might think i'm talking about cbs and, of course, what was that open warfare last week

between leslie moonves and shari r redstone i am a little bit. i want to talk about a bigger war that is probably less than a month away probably a few weeks away from beginning. certainly a battle i'm talking now about comcast and disney going to battle over fox. june 12th, of course, is when we'll hear from judge leon and the time warner case you'll never know. so many people expected he's going to rule against the government it almost makes you wonder is he going to rule against the government. >> me too. >> if he doesn't, then ignore it we don't know what he's going to do you're going to start to see the tanks rolled out on both sides, shots being fired, and then it's going to be quite a battle as comcast comes with what we expect will be a higher largely cash if not all cash offer for the fox assets with the deal

protections in place that was lacking last time, remember, when it tried to compete against disney to buy the fox assets will it be enough? who knows. what is the object well, the object is to make sure that fox shareholders do not approve the disney deal. and in the next week or two, according to sources, we're going to get a date for the fox shareholder vote it is likely to come, let's call it, in the middle of july. that does give you a sense in terms of this battle it's going to play out over what might be relatively short period of time. let's call it a month of heated, perhaps back and forth as comcast comes with its higher offer. tries, really, to communicate with fox shareholders about the price. about the deal protections about why they feel even if time warner gets approved why they feel strongly that they're deal will get approved disney will fight back on a lot of fronts. it probably is willing to go

higher for fox it's willing to go higher for sky which is another battle that they're involved in. it's equally going to push hard on the anti-trust arguments. saying that nbc's earnings is like by the department of justice. they didn't like the behavioral remedies they entered into on the nbc deal they didn't feel like they lived up to them, to some extent nothing guarantees the deal will happen at all. now, of course, you may have the deal protections in place that were lacking the last time most likely going to some of that argument may not have as much traction given there won't be as much at stake. this will heat up. get ready. unless, of course, judge leon does something unexpected. yes? >> okay. i'm raising my hand. i'm glad you called on me. but all cash bid by comcast -- >> yes. >> parent company's network travel trust holding, if they lost, what do you think the odds are that perhaps they use some of that fire power to buy back their own stock which has come

down dramatically. >> yes i think the stock has come down because of the belief they're not using as much committed to the buy back as they might otherwise have given the huge benefits the company is bound to receive from tax reform the big domestic taxpayer. you're right, jim, the stock suffered part of the communication comcast will have to do is not just with fox holders as it tries to get them to vote down the deal or make sure that the vote is pushed off somehow when it's set as much with their own shareholders base to try to keep the stock somewhat relevant. that's not the currency used in the deal nothing says, of course, as we come back that even if the deal were to be voted by fox shareholders, that the murdochs are obligated to engage. they like disney they believe it's a better currency they believe the prospects for the combined company are better with disney and fox as opposed to disney and comcast, even though, of course, you won't get currency anyway so you won't have an ownership stake. they believe it. they're a 40% voter in something

like that when you can't take a proxy fight to them. but it's going to be an interesting battle i did want to quickly get to cbs. things got quiet. >> sure. >> there's not much to offer here things will take place in court as this moves ahead. of course, this war has been quiet the last couple of days. what can we expect well, maybe nothing. theed the advisors certainly on both sides of the special committees are trying to lower the temperature and see if there is some path to getting these two companies to agree it seems highly unlikely but hope springs eternal so much if it goes back to a meeting almost three weeks ago in which moonves, dick parsons, bruce gordon, and shari red stone got together and bad blood got much worse because of the believes on things that had been promised that weren't. and then, really, gone south ever since even though as we said, i've gotten it from both sides. they largely agreed on the economics of a deal. they were getting close to

making progress. probably in court the next few months probably not much more than that you never know shari redstone, at any moment could make her choice to try to replace the board. because time, conceivably is of the essence if she believes the two companies need to be put together given how fast things change in the media world. >> it's amazing that cbs business is so strong. ncbuni killing it. if you look at them on a fundamental basis you say that cbs should be at 60. comcast 40. >> right. >> it means nothing right now. >> right you have netflix within about $2 of an all-time high this morning. you have the new production deal with the obamas. they announced yesterday you have amazon hiring another nbcer to help run their tv studio vernon sanders used to be responsible for shows like "blacklist" here on our parent network. >> right amazon is doing a lot of things right. you continue to read about amazon advertising doing

incredibly well. amazon web services. we're looking at twitter -- a tweet about misplace the about facebook if you decide that amazon had too much market power, you have to somehow come to terms and move advertising or web services away i don't think you can do that. i don't know how to break up these companies. i can't -- i keep -- i'm struggling with how to break up these. i don't know how to do it. >> amazon web services. >> that would be why don't we wreck it. >> i don't know. >> echo. >> right. >> alexa is separate. >> we break up. >> what would happen to amazon's u.s. retail business if it didn't have aws? >> all that would go, you know, any third party goes to amazon to the amazon web services or goes to ado bee. it would be a great way to ruin a great business it's that the goal

let's say you're ruiner in chief. >> if they even were to come you know how many years we could be in court dealing with this? you know how long it took for judge green to get around to the modified final judgment on at&t. >> it was forever. you would have to go and say that amazon is a predator on all mail you have to say that amazon has to pay a fair share. >> how about alphabet. what would you break that up into >> that's so easy. that i can break up easily android. >> android. >> yeah. let's break off alphabet. >> google. >> waymo reverse trust like ge likes to do now >> the whole story -- >> waymo to tesla. >> that's a great idea.

>> thank you. >> he will buy waymo on the disasolution. >>s at lot of times the stocks go up on the break ups you know that. >> these would be punitive break ups. >> standard oil's break up didn't necessarily hurt the rock fellers. >> good point. they did okay. initially not so a adobe is the winner in the break up after this magenta buy. >> i'll tell you, jim, calls went from the leader premarket to the worst s&p at the moment we talked about the home builders at the top and our dhi. >> yeah. toll was a miss. if you read the press release everything is great. they won't say we're not doing well

but the home builders have been a one-way down that's been a very, very big weakness and the auto zone. and there's nothing that the autos can go up on china, i guess. that's not where they should. >> right lumber, labor, and rates. >> yeah. it's tough the packaged good stocks which have been dreadful and the autos. these are and the housing stocks have been terrible just terrible. >> yeah. >> moodies put campbells on negative review. >> that was the worst conference call of the year, perhaps. let's get to rick santelli today. hey, rick. >> good morning, carl. if you look at the curve this morning, we're up one basis points everything else pretty much highly unchanged we seemed to have drifted off the highest yields a bit, if you look at a chart from about the third week in april, what should

jump out and what is significant to most technicians is the fact that once we establish that 303 and blew there it, of course, the last day of 2013, we haven't traded below it. and that is significant, especially as we draft down to the 305 to 306 level when it comes to 30-year bonds, a little different scenario. today unchanged, of course open the chart up to february 1st. when they made the 3.22 high yield close of the year. we've since taken out. we've drafted and are trading below it it takes away the intensity at the long end of the market it did have eintensity for two r three weeks. on the italian side, yeah, we're giving back some rates down four or five basis points if you look at the chart from may 1st, 70 basis points from low to high. 70 basis points we've given back four and five.

continue to monitor italy and the european banks in general. as for the dollar index, it's down about .005. and traders are starting to sell some of the volatility fx markets and it has been running high in hedges are expensive carl, jim, david, back to you. >> thank you very much rick santelli dow basically flat all though we got movers on either end. we get to bob. >> and those movers includes the semiconductors take a look at the sectors micron is helping the semis. up about 5%. some of the retamers doing a little bit better. consumer discretionary flat. you heard jim talking about toll brothers energy is lagging but it was at a three-year high yesterday. not a surprise on that i want to talk about the impact of the tax cuts. we try to figure out how much is it helping on the earnings and buy backs. tax cuts are helping look at tjx. the numbers were good for tjx.

look at the guidance here. figure 480 at the midpoint last year it was 404 so they specifically said the boost from lower taxes would be 72 to 73 cents look at that almost all the gains you're seeing this year are due to taxes. this is what we're talking about. it has an impact if you take a look tjx was trading on the upside a little bit. we have some of the other ones up there macy's got an upgrade. it's not helping them. lowe's of course, you know, the big story with marvin ellison moving over there. the second one i want to talk about is the buy backs we mentioned micron several times. i want to point out a couple of things the $10 billion buy back is 60% of the total shares. we don't know if they'll buy it back we don't know if they'll have a share count reduction, which is what we care about or whether they'll add options on the other end if they did, it would be a big reduction. the goal to return 50% that's important micron has been adding to their

share count for many, many years. if you take a look at this here and now they're going to try to start reducing it. i think that's fairly significant overall. i'm out of shares outstanding in the s&p have been getting down they've been going down. this year is going to be a record year for buy backs. share counts are going down now after many years of going up that's a very good sign. we want to say congratulations stacy cunningham is going to be the new president. we'll be talking to her at 10:30 eastern time but there's going to be a lot of challenges for her a couple of things we want to talk about with her. first, of course, is expanding the ipo business that's a big area for them but ipo is amid stuff. a lot of companies are staying private. how do you get them to go public dark pools how do you get more trading? they've been charging a lot of money for market data fees the street has been pushing back to a big source of revenues. how do you deal with that? and competition for listings

with the nasdaq. stacy cunningham will be us at 10:30 eastern time right now the dow up about 12 points carl, back to you. >> thank you very much when we return, cnbc's annual disrupter 50 list has been announced actually, trending in the u.s. on twitter elon's spacex at the top of the list be sure to stay tuned for an interview with spacex president later on this morning. dow up 10 points to start this tuesday. don't go anywhere.

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sure. mom,what's up son?alk? i can't be your it guy anymore.

what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. [ chuckles ] download the xfinity my account app and set a password you can easily remember. one more way comcast is working to fit into your life, not the other way around. let's get to cramer. >> there are groups that have been terrible. housing stocks, bio tech stocks. the defense stocks which have just been on fire for a very long time are peaking right here right now and you can't buy them. there is a d rating coming meaning they have been too unpopular. i think the president is the arms dealer in chief, has often said that you want to kind of do

business with america and perhaps you ought to arm yourself, tired of being the world's policeman. it's without a doubt an impact call and the stocks have been fabulous. >> what a story. while we are at it let's do union pacific which is down. jennifer hyman the whole staff at mad money uses this rent the run way. she has done a great job. i am very excited about micron. it has broken the spell. it's not cyclical. it's secular. it's separating church and state. >> thank you for calling on me.

>> you're welcome. >> there were a lot of hands up. >> we'll see you tonight. when we come back stacy cunningham first woman named head of nysc. dow is up seven.

welcome back to "squawk on the street." a little bit more muted than yesterday but adding to gains after we got 25 k back. a lot of news on trade, watching retail, as well. road map does begin with elon musk and space x sending another set of satellites into space. we will talk to space x's president. it is the number one on the just released cnbc disrupter list. j.c. penney ceo leaving the company for lowe's. we'll dive into what it means. the new york stock exchange makes history.

the ncse is naming a female president. dow is up 14 points. treasury yields creeping higher. mortgage rates hitting a seven-year high. is this signaling a new era for the markets? joining us is former wells fargo chairman and ceo. with oil hitting key higher levels, is that a big threat to the overall stock market >> i think it could be. i think it won't be in the sense that the reason these increases are occurring is because there is confidence in continuing economic growth. as you know profits were double what everyone expected by analysts in the first quarter. and if we achieve the three percent growth that is likely to be the case in the second quarter for the rest of the year i think you will see rates increase from where they are today by 40 to 50 basis points

by year end. >> what about mortgage rates specifically with your history with wels fargo? you have had a good eye into how they react to the rate shock. is the housing market at risk? >> if you really believe mortgage rates are going to increase which i think they will what happens is people buy now. the aggregate people if i'm right about rates increasing if you buy a house do it now. the rates that exist today are still low by historical standards. i think let's just say that the ten year goes to 350 this year. there is at least three if not four increases in the fed funds rate. that will put the 30-year mortgage rate at about five percent. that again is low by historical standards. one bright picture -- the reason i think bigger problem than rate

increases for mortgages has been the increase in prices of homes about double what they have been in the past because the fed kept interest rates low for so long. we should start to see price increases decline. that will be helpful to offset some of the mortgage increase. another important factor is i think the neutral rate for the fed funds rate most people think is about 3.5%. that is probably 1% to 1.5 pblth lower than history. variable rate mortgages will come into play if and when the 30-year gets above 50%. those rates are likely to be lower than history because of the neutral rate of the fed funds being lower. >> you know, we have the perfect other guest talking about home prices and mortgage rates. we welcome the man behind the s&p. you buy this idea that dick just

laid out that home prices have to cool off a little bit as mortgage rates go higher >> well, there is some logic to that. i think it is apparently right. i don't think home prices historically have been very well explained by mortgage rates. you think they would be. it's not that strong. also, there isn't much news really right now. people have expected higher mortgage rates going almost back to the financial crisis. they are always expecting higher rates. it's nothing particularly dramatic happening right now. >> what do you think about the overall market here? you are also known for prognostications on stocks. you have your models. how do they look >> home prices have according to

the s&p case indexes have surpassed their previous record before the financial crisis in nominal terms but not in real terms. they are still substantially behind. they show a lot of momentum. the real estate market is different from the stock market. totally different. it shows such strong momentum it's only faint momentum in the stock. housing market keeps going up year after year. it has been going up steadily since 2012. we have six years of this. the question is when will it come to an end it will eventually but it might be years. i don't see that the news right now is so striking that i would call this a turning point. i would extrapolate and think they are continuing to go up for a while. >> speaking of rates, a lot of attention on corporate debt especially high yield. jp morgan today said on 100 day return it is one of the worst we have seen in about 18 years or

so. is that something worth watching or others argue if you look at it as a spread it really just reflects the rising rate environment overall. >> what happens when you have unusually low interest rates manipulated by the fed is asset prices go up. when that normalizes you find asset prices that go down which means rising rates. and the spreads have been reasonably similar. i think it is the adjustment going on as the fed winds down their low rate environment and kind of can be expected. some people may think that there is not more risk in the assets because of rates and slower economy. i don't buy that. i think it is just adjustments going on. >> are you surprised to see that financials are flat for the year at a time where yields have broken out here? >> i am. and they seem to me to be

unusually low relative to the profitability and the reduced regulations which are going to be beneficial to banks and usually banks profits are higher when interest rates are higher. it's kind of bewildering to me. but it is what it is. which means that if you think they are low they are a good buying opportunity. i have been buying financials. >> robert, you have made some news with the recent blog about crypto. you said no one outside the computer science departments can explain how crypto currencies work. you say none of this is new and as with past monetary innovations a compelling story may not be enough. what are you trying to say here about it >> i'm trying to give a little perspective from narrative economics about what goes on. what goes on in financial markets is often not as you

would think. it's because people are reacting to people and other stories. crypto currency story is a very powerful story. almost nobody who deals with it understands crypto currencies. the equilibrium in the market is very subtle. it's not obvious. but they like the story and i think that that -- we have close to 2,000 crypto currencies now. it is just like outer space. it is wonderful in people's imagination but they don't know what it is. that's part of the mystery and part of what makes it a great story. >> are you going so far as to call it rat poison or just fools gold nonproductive asset >> i don't usually talk like

that. i think that some of the people involved with crypto currencies are very smart. there is a computer science innovation here that is substantial. i'm just saying it is hype. that is usually what happened in a speculative bubble. it's just that the public carries it way beyond reality. >> you buying bit coin >> no. i wouldn't touch it. if you want to invest, invest in block chain technology which is the engine of crypto currencies. that is going to be a great technology that is going to have a great future. but i think crypto currencies makes no sense. it's tulip bulbs in my opinion. i wouldn't invest in it at all.

>> you can join that club along with others. thank you. we will leave it there. we covered a lot. >> thank you. meanwhile, the white house reportedly nearing a deal to lift the u.s. sales ban on zte as u.s./china trade talks remain in the spot light. >> review of that april ban on u.s. sales to zte could result in a deal soon a week after being requested by china's president. the sales ban would be lifted in return for large fines and management changes according to the wall street journal. those are tenants of a deal that larry kudlow outlined yesterday on cnbc. >> they are not going to get off scott free. if there are changes in the remedy they will include very significant fines, very severe compliance measures, a new board of directors, a new management

team. i have said that before. >> the white house has said repeatedly the zte issue is separate from trade but president trump has linked the two and a reprieve would come amid a temporary economic cease fire. the dynamic has led to significant pushback from congress with chuck schumer saying the signs will do nothing to protect economic security and are simply a diversion from the fact we have lost. similar sentiment from republican senator marco rubio tweeting china is winning the trade talks and avoided tariffs and got a zte deal without giving up anything in return by using north korea talks and agriculture issues as leverage. this is not winning. the commerce secretary will be going to china late next week to work on the u.s. export side of the deal which will include agricultural exports. it is not without critics on

both sides of the aisle. >> interesting to watch that story evolve. thank you very much. when we come back spacex set to launch seven new satellites in orbit. we will get a rare look inside elon musk's rocket factory. plus is it time for consumer staples to finally make a comeback and history being made. we will talk with the first female president of the exchange's 226-year hiorsty. big show ahead. don't go away. you traded options.funny, i thot i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

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let's get to our etf spot light. consumer staples, looks like packaged food stocks. michael santoli here at post nine with a look at whether they can make a comeback. >> as you know i wouldn't make the case that they are hated. as an investor what to like about the group is they have been discarded. if you look at the branded packaged food companies as well as consumer personal products they are basically being recommended by 25% to 30% of all analysts so clearly the sell side turned their back. hedge funds are more short the group than long. if you look at the etf the main one for consumer staples is xlp. a pretty big loss for a fund

that is about $7 billion. once you get to the point of saying nobody likes them i think everyone says for good reason. the businesses are lousy. if you look at pbj as another etf which focuses directly on food companies both retail and packaged foods it shows you that there is basically no good reason in a growing economy that people have to look at these. i will also make the final point, though, that they were so beloved two years ago for the wrong reasons and got overvalued beyond the fundamentals because they were considered safe low volatility high dividend stocks. and the expectation of even more. i think the fact that there hasn't been in two years leaves people saying what is wrong here >> there was mna. they have gotten it. >> and the sellers see them coming.

it gets the companies more debt. if you look at the food stocks that would be kraft heinz. they have not been this cheap for more than 15. those earnings estimates can go down. it is tough to see that they are washed out. >> you couldn't see the fundamental end and couldn't see why the trends were going to turn. the stocks turn. did the trends turn as much as the stocks i think we have to get to the washed out moment like ge has seen. did things really get better to go up. >> barely 20%.

>> ge up again today. >> changing the focus there. let's move on now. major retail shakeup. j.c. penney ceo jumping ship. he is heading over to lowe's. let's get more to courtney reagan now. >> with j.c. penney ceo resigning marvin elson served for a year as ceo designee and then as ceo for the last almost three years. he was with home depot for 12 years and prior to that at target for 15 years. he started his retail career in college as an hourly employee. the retailers board will be meeting this week with the ceo search, the main discussion point. the department store has started a search committee looking internally and externally for

possible successors. he spent a year as ceo designee under then ceo. j.c. penney did that purposefully after the departure and reinstatement which was quite shocking to company employees. currently four executives take over as part of the office of ceo when elson departs. cfo jeff davis current board member will be new board chairman. coming into j.c. penney elson's biggest critics pointed to weakness as he pointed to career in operations specifically in integrating stores and websites somewhat similar rules at target. that weakness is likely key strength for lowe's. the home improvement retailer has a history falling behind home depot with better store

operations. perhaps that is exactly what mr. elson can bring expertise in. >> big story. thanks so much. >> mark, it is good to talk to you on the phone. trying to make sense as to what this says about j.c. penney's future overall. >> this is a decade plus on the house. the ceo in the mid 2000s was a mistake. he led to the hiring of ron johnson which was a catastrophe. attempted to pull the company out of a death spiral. unfortunately, he created a

likely unsustainable level of restricted debt. and then, of course, elison was recruited and as well regarded as he has been as a manager he was another mistake because he had noerchandising chops. jcp penny has no merchandising to reset themselves. the captain has abandoned ship. performance is certainly disappointing at best. it is anybody's guess what the company's next moves are going to be in light of what just occurred. >> this ceo office that they put together on an interim basis is interesting. let's assume they get a superstar who is willing to come in. is there opportunity to build something new? >> well, the biggest crisis that j.c. penney faces.

the debt overhang this is the by product of the catastrophic rein. so they need to find a vatagy which will immediately address the top line at reasonable gross margin. the notion of the superstar not withstanding they need somebody with some demonstrated skill in quickly bringing that to bear. obviously, they had no inkling of this so this office of the ceo is completely interim in its nature. the holiday season next year is at risk because commitments are made typically right about now which set up the pattern of the season for year end. so they are really in a terrible bind, difficult to know what the next steps are going to be.

>> and lowe's is moving in the other direction. just wondering within retail it is not hard to pick losers and to criticize some strategies. where is the leadership? are there stars in the industry? >> i don't know. the industry shifted from the presence of quote/unquote merchant princes who were criticized for having no sensitivity to the bottom line to financially and operationally focussed executives who had no sense of merchandise, merchandising or the customer. so this company needs someone whose got quite a bit of varied skills and can move extremely quickly to adopt a path that is sustainable. the one that they are on is not sustainable. not a catastrophe in and of itself but certainly taking them nowhere. >> you are talking about j.c. penney.

>> yes. >> not lowe's. >> lowe's is number two in a two-horse race. lowe's has every opportunity to improve their position relative to home depot. at one point some years ago lowe's was viewed as a more powerful merchandising operation than home depot. home depot has overtaken them in that regard. elison's skills may serve them well. at the end of the day it's always been and it will always be about the merchandise and the relationship between the merchandise and the customer. lots of people talk about that. >> you mentioned who is the superstar. one i can think of is over at best buy. not that many years ago we were talking about that company. i have no idea if j.c. penney

can find somebody who redirects them to the extent that we can talk about them having a long term future. >> amazing is up 35%. >> look what happened to abercrombie and urban. those were written off to a large degree. then something like lb which was a superstar and loses its moejo. >> i wouldn't cite urban or abercrombie at this point. the example of best buy bears note. we point out that the guy who runs it came from the hospitality industry and did take two to three years to get his sea legs and position the company into what appears to be a sustainable round of success. j.c. penney doesn't have two or three years at this point. there is no opportunity for someone to come in with no background whatsoever in the businesses that j.c. penney occupies and learn their way to success.

i think the shot clock is basically run down to zero here. >> mark, we will watch it closely. this definitely adds another wrinkle to the story. always good to get your guidance and insight. thanks. mark cohen talking about j.c. penney today. up ending the rocket industry and working on elon musk's vision for a manned mission to mars. plus it is also number one on new disrupter 50 list. we will talk to the president of spacex. more squawk on the seetrt will be next with the dow negative now 25 points.

elon musk's space x taking the top spot on the disrupter list. goals include travel to mars tweeting an image of a new spacecraft which could be used for the first manned space mission giving a rare look inside the facility where we find morgan brennan.

>> reporter: that's right. elon musk's spacex is a six-time cnbc disrupter and this marks the second time it has topped our list. i sat down with coo and president in an exclusive and rare interview to discuss the financials of this closely held company. this is a company that can afford to be picky. >> there is a lot more people that want more stock. you have been recently raising more funding. >> we are raising funding kind of bit by bit. we don't want to do big rounds but want to do it as we need it.

so i think you probably continue to see some of that but again we are being very picky about who we invest in the company. they have to share the long term vision and getting people to mars is a big job and will take years. we want investors with patience as well as excitement. >> does that sound about right >> i think we are higher than that. >> in the past elon musk has said maybe spacex would go public. >> we actually don't talk much about going public. >> it's not until then at a minimum. we can't go public. >> space x is still on track to begin transporting humans to the

red planet in 2024. this is going to involved. even more detail we will be talking about the satellite business, how space x works with tesla and what it is like to work for elon musk. we have all of that in so much more coming up in the next hour on squawk alley. >> look forward to it. morgan, thank you. with the dow down about 41 points let's get to sue herera for an update. >> good morning everyone. here is what is happening at this hour. health ministry announcing six new confirmed cases of the ebola virus. there are now 28 confirmed cases, 21 probable cases and two suspected ones. a heat wave has killed 65 people

in pakistan's southern city over the past three days. >> more homes have been destroyed as lava flowing from hawaii's volcano continues across the island. large plumes of what is called laze which is a cloud of toxic gas have spread across the area. explosions continue at the summit prompting more warnings. and sweden is distributing an updated version of a cold war era emergency booklet to 4.8 million households. it has to do with what they should do in case of war. the brochure is a reflection of concerns over a worsening securities situation in the baltic sea region. that is where the russian military has increased operations. you are up to date.

that's the news update this hour. i will send it back to you. see you next hour. >> thank you. up next on the show two of the best known stock exchanges are about to be run by women. new york stock exchange names the first female president in the 226 years of existence. we will talk to stacy cunningham next. "squawk on the street" will be right back. your company is constantly evolving. and the decisions you make have far reaching implications.

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welcome back. one hour into trading dow is taking a turn lower down 38 points being dragged lower by boeing and home depot. just barely random assortment of groups leading the s&p right now. new york stock exchange has a new president. stacy cunningham will be the first female leader of the exchange. joining us now in an exclusive

is stacy cunningham along with bob pisani at post nine. welcome. congratulations. >> thank you for having me. >> it seems like a long time ago. >> floor clerk, eventually specialist. you know the floor well. >> it is home. i cut my teeth. >> now you going to run this. sglits rr a full circle story for me. >> what to you is important as you take this next chapter forward for the exchange. >> i think it is important that we continue to maintain the single mission that we have had for the past 226 years that is helping great companies raise capitals and helping investors with opportunities to plan for the future. it looks different. we have done that in different ways as you look at asset classes that evolved and different types of listings.

it's the same mission that under pins everything we do. we are all trying to figure out how to get more companies to go public. they are locked up in private equity. we would like to see more go public. i know ncse would. what are your thoughts >> we absolutely want to see companies continue to access public markets and have the same level of great skaeuccess they e had for though sew long. i think that means having a regulatory environment to ensures a large source of capital. we have a strong pipeline coming up in june. there are a lot of companies that are planning to access the markets. we want to make sure we haven't gone too far to a market structure that has created an environment that is too big.

we want to welcome companies of smaller sizes early. >> these small companies complain about the burden of going public. they can't afford the lawyers and issues involved in doing that. is there a simpler way to figure out with less burdens to get companies to go public >> we spent a lot of time working with the administration on changes that we think will make sense whether disclosures or other things and how do we get right sized regulations so it is not too burdensome there are a lot of options. we want to make sure they see the value of the public markets and choose to access that liquidity. if they wait too long it means smaller investors aren't getting the benefit of the growth. >> exactly. we are very focussed on that and going to be one of my primary goals. >> want to ask you about the rise of electronic trading. we always sort of come back to the question what it means for the floor of the stock exchange. a lot of people here are happy

because you are a floor clerk. how has that changed the business >> like any industry technology has allowed us to scale what we can provide so the team down here continuing to trade and provide that same level of value they have given to issuers for centuries but they are doing it with technology. they are doing it with scale. it means they can do more in the future. what about new technologies like crypto currencies? we will see participating in trading platform >> the landscape has evolved over the past year. we were an early entry into the space so we would have a closeness to it and we can watch it. when we got directly involved it has been more on the data side and worked closely with providing market data around the crypto currencies. i think that space will continue to evolve. we need to figure out what the right regulatory framework is. >> what are you going to do with

coin bit is this something that will happen with the investment. a bug in your ear about what is going on in the crypto space. i know they are helping you understand what is going on. >> the space is rapidly evolving. we'll see where it goes. there is still a lot to happen there. >> 40% of the volume of all trading in the united states occurs on -- is that a concern of yours and what can you do to bring more of this trading into what we call the regular exchange space, nasdaq, nyse occupies. >> the public quote is so important for all retail investors going on and looking at what is the value of the stock. we want to encourage them to want to participate in the markets. having a lit public quote is important. markets are more fragmented. that is the way it has evolved. it is not surprising you see a lot of change with that. we think the markets operate

still better than markets in the world. wherever there is room for improvement we will focus on it and work towards getting the best market structure for issuance of investors. >> it seems like the sec is quite happy with the current system that is out there. they have said before it seems to be working okay. are you happy with the way the current market structure exists? is there too many exchanges and dark pools >> i think the level of fragmentation has gone too far. you can say you guys operate a number of exchanges. i think that that level of fragmentation has gone a little too far and we can swing the pendulum back. some proposals we are in favor of driving change. we have been lobbying since 2014 when ice talked about the equity markets and the complexity there. how can we help simplify the market so investors understand them. we are supporting change. we want to make sure the issuer voice is part of the change.

>> i think the big question you can hear monitors up everybody is listening on the floor. >> seven second delay. let's ask the question. what is your plan for the floor of the new york stock exchange >> i love this place. i started my career on the trading floor. i grew up down here. i certainly hope we are sitting here in five years and celebrating the many successes that we have had and continue to have. we have big plans. >> can i follow up is it necessary to have a floor? in '94 this was a different place. certainlyweren't a lot of tourists coming through. is it still necessary to have a physical space to trade? >> there are plenty of other markets that do that. it is not necessary to have a floor but more value for listed companies to provide them. we trade with less volatility because of brokers representing our trading floor. this community provides value to their customers both institutional investors as well as listed companies that chose

nyc as their home. they have the floor providing that value that you can't get anywhere else. >> 1967 first female gets a board seat at the new york stock exchange. now 2018 we get a female ceo. how has this business changed for women? it feels like there are very few of them. >> there are very few women in finance and very few women in technology and we are squarely at the cross sections of technology. that hasn't changed as rapidly as other industries have changed. it is not something that has been top of mind for me because i approached my career for how you want to grow that. when you look at our organization i see a very different profile. that is because we prioritize diversity of thought sitting around our management team throughout our organization. if you prioritize diversity of thought you find you have a diverse team. when i look at ice it is a woman

that leads. it's our general counsel is a woman. head of ice futures clearing is a woman. there are plenty of women throughout our organization. i think that is an example hopefully we set for others. >> and the head of the nasdaq. two women. >> maybe you can bring the women's bathroom a little closer. >> yes. >> journal does a nice history on the bathroom. >> i rotated around that phone booth a couple of times. >> you talk about private capital being competitor to listings business. how would you characterize nasdaq as competitor >> there is a long standing competition between nasdaq and n nyse. creating a network that kraik leverage when looking to promote their own businesses is really important. >> we used to call it tech heavy

nasdaq. you have taken large tech names. do you see that as something that continues >> absolutely. >> looking at last year we raise the majority of proceeds that is certainly a trend that i expect to continue. >> let me ask about market data fee fees we buy from you. it's well known that that is a big growing part of the business. wall street has been pushing back against that m. do you think it is a fair proposition as a company that used to be a mutual company that keeps raising the fees on wall street. >> i think what is not entirely understood is fragmentation that we talked about has been a primary driver of why the value of market data has evolved in the equities space. you need to understand what are

the prices and venues. market data hasz changed as regulatory landscape has changed. data at a higher level is an important business for ice as customers are consuming data and trying to manage their risks using data. the u.s. equity piece that you talked about is a very small piece of it. >> market data overall is about 40% of ice's overall revenue. >> not u.s. equity data. >> you realize how small the slice of the data business is. >> congratulations. everyone is very happy. you are the logical choice. >> appreciate it. >> and speaking of women in

business, destination maternity, owner of popular brands like pea in a pod and mother hood maternity has a woman problem. at tomorrow's share holder meeting two activist investors are hoping to change that. >> at the crux is the idea that destination maternity should preclude women from obtaining future board seats. two share holders who own about nine percent of the shares say no. they put forth the slate with three women and a man. the company is putting forth a slate with three men and a woman. the most influential is urging investors to vote against the female majority slate due to what they see is the fact that none of the nominees have served

on public company boards. one of the activists says prior board experience shouldn't outweigh operational experience. >> if the argument is that qualified could not then it is embarrassing situation in corporate america will never be remediated. >> at the end of the first quarter women made up 16.9% of directors among russell 3,000 companies. destination maternity did not return five attempts for comment but did put out a letter reaffirming their commitment to increasing gender diversity by identifying and appointing at least one additional highly qualified female director to the board as soon as possible. as you mentioned the company has only had in its 35-year history three women directors aside from

the interim ceo who is serving the two others left in february of 2011 and since then the stock has plummeted 88% amid management upheaval and then trouble facing the retail ent upheaval obviously, trouble facing the retail sector. the company currently only has a market cap of about $40 million. guys >> seems like a no brainer when you consider their customers it will be interesting to see how this one plays out thank you for bringing us the story. quick check on the major averages this hour dow lost its gnsai boeing, home depot the losers. s&p pretty much unchanged. alerts -- wouldn't you like one from the market

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>> welcome back to "squawk on the street." i'm dominic chu. after pulling back, after posting its best nearly two days best performance in nearly two months, rather, on monday, more than 1.5%. a number of defense names leading that sector to the down side raytheon, northrop grummman and lock heed martin back over to you guys. >> dom, thank you very much. as you know, tesla and consumer reports have a bit of a history in fighting over reviews. consumer reports is not recommending the vehicle and, carl, we'll speak to the reviewer who elon musk is responding to on twitter and obviously shooting back out on

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