you have the three day memorial day weekend coming up. >> did we leave anything out today? >> no. >> china, north korea, harvey weinstein, stock market, alexa. >> umm, a good series coming up in hockey and nba. and the u.s. open is coming up >> all right. >> and the indy 500. >> we'll see you back here on tuesday morning. right now "squawk on the street." ♪ good friday morning! welcome to squauk on t-- "squawk on the street. futures have gone red this morning after a couple of days of stocks trimming their losses. retail earnings in focus europe is mixed. more political instability in italy and spain. ten year below 2.95. oil below 69

road map begins with alexa privacy problem. an echo speaker shares a family's private conversation and sends it to a random person on their contact list. the fall of a hollywood titan harvey weinstein surrenders to the police the first criminal charges he's facing since being accused of harassment and assault futures pointing to a relatively flat open be careful what you say around amazon's echo smart speaker. apparently alexa is listening in one of the speakers recorded a private conversation and sent it to a person in the owner's contact list amazon calls this a rare and unlikely event but is looking at options to make it even more unlikely question is whether or not in the meantime this feeds the debate about what is private what's not what companies have. what they don't. >> i read this and i said i don't think this is an aberration this could easily happen

i mean, i have a friend named alexa. it could be sending stuff to her. you don't want to share everything there's things you say you don't want sent. somehow like i mentioned my friend alexa and then i mention david, you know, within the same paragraph. >> right. >> you'll find out things about her that i'm not thrilled about. >> it goes to the larger issues of privacy, which we've been talking about a great deal, of course, given what is going on in europe and the questions about what these devices that are proliferating in american households at a rapid rate are recording or not. >> we don't know it. i'm going to call my friend lexi she's answers to alexa and lexi. you have to say about i saying the word alexa around this device and that's what i think is going to be the big take away. >> it does sort of feed, though, this long narrative of can software trade stocks effectively?

safely can they drive a car safely? can they maintain the sound in your home. >> not yet i think what we're learning is that there's a downside to these. i mean, the other day on this set, i had my -- i didn't know i had my phone on. and i said "you can't be serious" and it said "can you say that again." they were like, jim, you can't have your phone on i think that this is a real issue. and i think that what happens is people are eventually going to say this is not what i want in my house. >> really? >> even though i love it. >> you believe that? >> there's a lot of privacy freaks. >> there are but there are a lot of people who prefer the convenience of having a device they can talk to by the way, we're at the early stages now in terms of what the ai is going to be able to accomplish when we get to 5g and the different applications

you haven't even thought of yet. >> once we get to a generation where it's the base. it's the bar where you begin voice assistant. course. >> it's going to happen. it's going to happen but one of the things i'm not -- i think that i like the device you know, alexa play cold play. >> doesn't anybody know what i'm on tv now? doesn't anybody know >> alexa doesn't it could be your call about one of your friends. >> no. it's a banker. it's very disappointing. >> i've been on 25 years. >> my wife doesn't know i have a show say anything i want. >> sorry. >> there's a ton of faang news today. there's the netflix market cap raise which we've been talking about. gdpr taking effect. >> it is before we end on alexa, the larger question we've been dealing with a little bit on amazon is the ubiquity of amazon itself these are not going to stop being used in homes, i don't

think. and/or grow as a huge growth industry for amazon to be ajukt, if not a essential part of the business i talked to the -- anti-trust. >> against time warner how much you want to bet >> you are crazy. >> no. >> the government will win in that case. >> why are you going out there saying this? it's going to be a headline and suddenly people will said cramer said they're going to win. >> i thought he made a compelling case. >> okay. >> when i had him on a panel and we were talking largely about anti-trust and the large and powerful technology companies, he did bring up alexa in that overall discussion take a listen. >> once you ask, you know, alexa where is the closest pizza restaurant, you know, alexa is

only going to hand you over one. it won't hand you over ten pages of a hundred search results. how important is it going to be? it's going to be a more powerful product and the analysis is going to be important. is amazon only going to direct it to their own product and that type of search should it be a violation of the anti-trust laws? or is that just innovation >> does he favor the latter? >> yes. >> innovation. >> yes, he gave a speech in rome earlier this week that people are starting to pay closers attention to the doj. >> do you have a copy of that? i do i will forward it to you immediately. >> okay. i think he's a very -- >> but you heard it there. the question is when it is innovation or depressing innovation >> this is something that is so new. it's not something you can

opine. honestly we have alexa in different rooms. and i did not know about this and now i read this story and i said holy cow. >> what about companying building applications for this toyota all these companies are building skills. >> video games for handicap people on alexa. >> in europe they probably hate it right. >> i don't know. i can't believe you're out there calling the results of the time warner trial. >> yeah. >> what does it mean for comcast? >> yeah. then i'm done now. i don't have to worry about it. >> oh, my god. >> did you let the parent company know >> no. i've taken over the viacom situation. "the quiet place" is what i'm seeing this weekend. >> yes. >> have you seen it? >> no.

>> you're distant. in your reporting you haven't included it. >> i haven't included it. >> i think it cost like $1.50 to make. >> i think it took paramount into the black. >> it did. most is the current quarter. yeah. >> it's going to be huge. >> this is underrated. alexa, david has underrated -- >> you give me a review when i see you on tuesday. >> here is your reason. >> philip roth. >> you guys like a lot of americans were affected by his passing. >> every inch and the times coverage was fabulous. >> he was my favorite author. >> never talked to him. >> and now i can't. >>well, that's -- >> yeah. >> he's dead. >> not even alexa can talk to philip. >> speaking of the tech stuff. here we are coming up on memorial day weekend tech is leading for the year 10.5%. only discretionary and energy are the only other sectors

outperforming. >> and energy is rolling over so quickly it will give up everything oil is down almost $2. a lot is the cloud case. it's not necessarily faang it's the cloud case. workday and adobe. splung is going to be up and the government is going to win the time warner case [ laughter ] i question the brief is so hilarious. the flair that man has for writing >>well, you're preparing for your interview with him next week at your conference. >> i'm not sucking up. >> yes, you are. yes, you are. >> you mentioned oil, jim. we have the headlines about opec and the russians thinking about bringing some of those production cuts. >> we know from slumber shea in their last conference call that paul said unless the saudis and the russians start pumping more,

oil is going to keep going higher because of venezuela and iran so this could be a substantial roller it's up at 69. it could go back to 62 if saudi arabia has to pump an additional million bars we would be in balance. if russia pumps a million barrels we would be over you would see oil come down rapidly. and there's a $7 differential. watch the oil stocks the world economy is so strong, it will soon absorb 1.5 million new barrels. keep in mind it's important, it's deflationary. that's why the ten-year is going to 2.75. >> we're down to 2.94 today. >> it's headline does anyone talk about it?

no the big problems are oil and freight and lumber where the wto is going to rule against the united states. >> yes. >> watch it. freight will be solved by q3 it was supposed to be train congestion. >> we'll watch that. in the meantime harvey weinstein turned himself into police in new york city this morning as he faces sexual assault charges. we'll get to contessa outside the courthouse in manhattan. good morning >> reporter: and speaking of being far away from what you're used to, at this point, carl, you saw harvey doing ae perp wak into court today he's going in to face felony charges on rape, criminal sexual misconduct, allegations by two women. one has been public in her charges against him. and the nypd opened up this investigation and today thanked the alleged victims for coming forward and for cooperating with

the police and with the district attorney's office. now inside, he's having an arraignment now, and nbc news has learned from two different sources that the deal that was agreed to was for harvey weinstein to turn over his passport, to pay $1 million in cash on bail, and to wear a monitoring device. so presumably being allowed to leave court today even though he's facing felony charges but specific limitations on where he would be allowed to go and travel i should mention, the grand jury in this case is still convened and looking into other allegations as well as into the financial payments that allegedly were made on behalf of harvey weinstein to these women that accused him in the past and allegations are ongoing in other areas like london and los angeles, at this point, where harvey weinstein has spent a lot of time. his lawyer said that harvey weinstein continues to deny any

nonconsensual accusations against us. >> contessa, we'll see if we get more information this afternoon or morning when we come back the geopolitical rhetoric is more confusing. the impact on markets this morning. take a look at the premarket futures faded a bit. all three major indexes trying to get on track for a positive week it would be the second of three for the dow and the s&p. back in a moment at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & if your customer also forgets socks! & you could send him a coupon for that item.

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getting some of recall information out of fiat chrysler today. we'll turn to philip >> reporter: this is massive recall from fiat chrysler. here is what the company announced 4.8 million vehicles in the united states are being recalled these are 15 models from the model year 2014 all the way up through 2019 we're talking about some of the most popular jeep, ram, dodge, chrysler model that the company builds cruise control defect is the issue here as we take a look at shares of fiat chrysler, here is what the company is also doing. this is highly unusual it is warning owners of these vehicles do not use cruise control. stop using it immediately. there's an issue where once the cruise control is engaged under certain circumstances, the driver may be unable to disengage it almost to the point where they

have to put it in neutral and then hit the brakes and once they have it completely stopped, once it's in park, that would finally disengage the cruise control. the company said it knows of no incidents, accidents, or injuries involving people who may have seen this or experienced this defect, but, guys, any time you have owners of nearly 5 million vehicles being told to stop using a critical feature like use control, that's big news and certainly coming on a weekend when a lot of people will be hitting the road and a lot of people will be going to fiat chrysler dealerships potentially looking at a new model. this is one of the headlines that will generate questions for potential buyers. >> thank you very much, phil that's a lot of cars and it feeds right to the discussion we were having, jim, about software in a car. >> yeah. is phil still with us? phil, this is one of the most lucky charmed companies.

i mean, it's been a remarkable renaissance. is this the first thing that happened really, the first blemish on this incredible story >>well, yes and no, jim. one point i would bring up is if you look at fiat chrysler's record in terms of reliability, in terms of whether it's consumer reports or other groups that look at how thesevehicles are build and how they perform they historically are among the worst performers so some people will look at the recall and they'll say i'm not surprised. these guys have a pretty bad track record over the last ten years. having said that, jim, we talked about thisbefore the jeep design, the look, maybe the best out there and that brings people into the showroom ram is doing very well so you can't fault them in terms of understanding what people are looking for in a vehicle in terms of styling and appearance and, yes, to a certain extent, performance. that's why the company has done so well. but this recall emblematic of

what we've seen of this company over the last ten years. they've had real problems when it comes to reliability. >> you know you're right i was thinking about jeep and how my friends who buy american cars they say, listen, i buy american cars i buy jeep and it's just on the hearts and minds of people. i haven't thought about a lot of issues they have in terms of quality. but, wow, it's a loved vehicle. >> by the way, since we're talking about cars and, obviously, thinking about yesterday's potential tariffs based on national security are jeeps all made in this country? >> well, worldwide they have now started some production over in china for the china market but primarily jeep is a north american brand and made here in the united states. david, you bring up a point, i think you talked about this yesterday, you know, this question of whether or not to slap a tariff on vehicles imported from other countries.

fiat, chrysler, and general motors had huge numbers in terms of trucks and suvs built down in mexico, brought into the united states in the first quarter. so they would be potentially impacted depending on how this shakes out. if we see anything happening and we have talked about, as well, whether or not this is a negotiati negotiating ploy. >> right your point is is a good one. particularly if the nafta talks fall apart and mexico is subject to the same tariffs, i mean, jim, what will happen then you're in favor of some of this. a lot of push back from his own party on the national security use to justify steel and aluminium and auto. >> corker, toomey, the u.s. chamber of commerce yesterday. >> not far from me is a huge 24 hour transmission plant for gm that's american made but it's made in mexico i don't even know -- where does that come up this is more confusing

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we've been watching an incredible montage around here. >> yeah. >> thank you, tom, for everything you've done to help us. >> yeah. very helpful a mad dash on a friday what do we got >> it's still not dead this morning foot locker much better than expected. dramatically $1.45 is better than $1.25 most importantly their inventory and the premium product continues to improve david, the read through here is not just good for foot locker which is going higher and nike which remains one of the strongest stocks in the dow. they make the exciting product. >> even though adidas has been

beaten. >> they do well. under armour is doing well remember, i had kevin of under armour everybody laughed. it was almost like carrie where we saw a bucket of blood drop on her. but it's back. >> there's tom farley and his successor. last day on the job. stacy cunningham is taking over on tuesday >> he's been a great salesman. a great marketer of the nyc. spent a lot of time in china given how many ipos have come from that country. >> and a georgetown alumni. >> opening bell next

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closely. we're looking at tape here from the president as he answers questions about north korea. on his way to the naval academy to give his commencement address. let's take a listen. still awaiting it. >> we'll see what happens. it could even be the 12th. we're talking to them now. they very much want to do it we would like to do it we'll see what happens [ inaudible question ] >> i don't know anything about it john, everybody plays games. you know that. you know that better than anybody. >> reporter: what does north korea need to do -- >> i'm not familiar with the case it's too bad it's too bad [ inaudible question ] doing great.

right there. right there. >> if you missed it, president says we'll see what happens. it could even be the 12th for the summit [ opening bell ] and oil is lower that's ludicrous ludicrous. >> he said everybody plays games. here is the opening bell and the s&p at the bottom of the screen. and tom farley recognizing many on his last day as president stacy cunningham will take the reigns next week, as jim and david said earlier congratulations to him we'll miss him at the nasdaq

foot locker is an eye opener. >> foot locker is a company if you take a look at the chart, it had a bad couple of quarters a lot may have been related to nike and that's now in the past and the company was always well run. the one that shocks me, i thought gap was further along in getting rid of the bad gap inventory and the flagship, i thought, was coming back and right now no and i don't encourage people to buy that there are some retailers like a ross store that reported a so-so number a lot was weather related. if that's down, then you want to buy that it's a much better store. >> yeah. gap did say they had operational missteps heavy inventory. comp is up one down four at the name sake. >> old navy has been strong.

remains strong when i interviewed art peck, not that long ago, i felt they had it together and that turned out to be not the case you know, i don't think target is doing as people think it is before owe throw away target, the market has very little memory for what went wrong. >> mentioning herba life this morning. only 11.4 million shares could possibly be purchased from iep from the company but the reason that iep said they did tenders they've owned

it for about six years in fact it represents as much as 24% of their total net asset value. because of a move up in the stock price over time. it represented a larger percentage of the total and they felt for a number of reasons it was prudent to reduce that exposure in part because it did represent almost a quarter of the overall assets herbalife has been a strong performer. they say even if they get hit on all 11.4 million shares, they'll have 34.3 million shares. >> oh. >> i've got to tell you it's a nice way sometimes it's not a bad call. he made a lot of energy investments not particularly well timed some i think are doing far better now than they were a year or two ago.

>> and ikhan's performance versus the s&p over time it's not as strong as you might expect. >> no. you know, you mentioned the other day about exxon and how weak exxon has been. >> yeah. >> exxon did not participate, really, that much in the rally it's given it up pretty badly. i want to warn people that i think that june 22nd is the opec meeting. it's entirely possible that oil could be weak right through to the opec meeting because no one expected russia everybody expected the saudis might do something if you remember, when they decided to contain when the saudis made the deal with russia, that was the beginning of the big oil the last few points were very

quickly. they have bottle necks but i think you have to be careful it's looking like a spike up if you want to buy them in as they come in -- >> why hasn't exxon participated in the rally itself? >> so exxon recently said. >> buy backs over buy backs. >> yeah. they held back exxon has gone out what they would tell you but what matters is the countries have not drilled the countries have held back now remember venezuela is pumping half of what it did three years ago. a lot of countries you thought china and mexico they're not drilling and they need to start zriling and schlumberger said there's going to be a big gap. be aware if the saudis and russians take it down a little bit. they won't take it down to 68. they could take our oil down you remember there's a big differential between, i mean,

they play off brent. i think oil can come down. >> you have gas prices in this country now $2.96. highest for memorial day in about four years. >> true. >> ten states with the average around three or above. you think that -- >> well you know, phil has been adamant that the five is the new four remember when he said that and that's because cars have used much less gasoline. guys, the -- i really do -- i question coverage here of the world. when we were at $2.90 going to $3.10. people thought it was going to be a seller. we had gone from $3.10 to $2.90 and people don't talk about it it's a whole kmcommodity retrea. oil is coming down freight costs are coming down. all the things that made it so

we saw the proctors of the world. we might have to start reverse and buying them. i was look at kimberly with the change in the chinese baby policy misquarter i'm thinking about the activist situation. >> even with what happened in emerging markets yeah. >> i think those that sold the stocks start picking up one. by one you can make peace with i happen to like pepsico when that stock hit down 18. that was ridiculous. 18% for pen -- pepsico should we go to weinstein? >> we didn't hit the netflix disney. >> those wondering the charges that's been a source of mystery today. the judge is now rolling it out. let's take a listen. >> which enables him to be tracked 24 hours a day, seven

days a week. when the court and the people able to request his whereabouts at any given moment. it will enable us to track him anywhere in the united states under the terms of this agreement, he'll be allowed only to travel in new york state and connecticut. if he wishes to go to another state, he must request permission from the court and the people in advance. he's also surrendering his passport and not applying for a replacement or a new one our case is presented to the grand jury, your honor the defendant has been served a grand jury notice and agreed, all though it's not a -- situation that he will testify or not by next wednesday, may 30th further more, your honor, we're requesting one temporary order of protection and asking,

however, that the name of the victim in that order of protection will be known to the court, the people, and the defendant, but otherwise be under seal. [ inaudible >> the order of protection stay away from the person. you can't get near the person. you can't have any contact with the person.

>> i briefly want to indicate that mr. weinstein and his counsel have through the investigation in many months we've had meetings with district attorney's office and this morning mr. weinstein voluntarily surrendered to the first precinct after negotiating in advance -- avoid any controversy this morning subject to your honor's approval, the defendant has surrendered his passport [ inaudible a chase account. the defendant has agreed to the gps monitoring for the state of

new york and the state of connecticut. we have also agreed to sign a waiver of extradition in the event that the defendant is in connecticut and is required to appear in new york and does not do so voluntarily. he will not require the district attorney's office to extradite him but will appear voluntarily. we have waived the extradition. >> just for connecticut? >> it indicates that the defendant agrees to a extradition in any state or country should he be required to be in new york. >> that's correct. >> it's signed by the defendant and his counsel. i will sign it. >> anything else, counsellor >> your honor, the defendant

understands that he were to require -- besides new york state or connecticut he would have to do under the consent of the district attorney's office or with the court's approval there's nothing else, your honor. >> we understand as we begin the process. has done in the persons here at the same time and -- >> and i ask the defendant -- in the interim. >> i believe that's going to be the case i served a notice.

i assume the issue is resolved if it's not, i will alert her and advise her, as well. >> thank you. >> thank you very much. >> thank you. >> adjourned until july 30th bail is $10,000 bond -- [ inaudible turn over his passport he may not apply for a new one there's an order of protection and the defendant is allowed to travel to connecticut an

these two separate women against harvey weinstein we're expecting that momentarily. we're expecting to hear from his attorney when he went in, he turned around and said i'll talk to you after wards. we've been alerted we'll be on the look out for that, as well. what comes next here number one, the investigation still continues. the grand jury is still convened on allegations from other women and on the issue of financial payments that harvey weinstein allegedly made to women who had accused him over the years so that continues. there are also inquiries and other jurisdictions in los angeles, for instance, and london, as well. so we'll be looking to see whether they move forward on that in the meantime, we know that three different sources familiar with the investigation say there were these two different women, one of them was lucia evans who are at the foundation of this complaint and the nypd along with the manhattan district attorney's office had investigated this and said they were pivotal because of their cooperation in bringing charges.

but it was a long time coming. and, remember, these dozens and dozens of allegations while he was the head of his own company that nothing had ever been done about it that the distinct attorney's office -- the women had allegedly brought their complaints against him in the past they never filed charges in this case, very different handcuffs today, fingerprinted, photographed he'll have a mug shot. forced to fork over $1 million cash or $10 million bond and surrender his passport clearly, carl, it's a big change for harvey weinstein and a turning point in the #metoo movement. >> contessa brewer you saw weinstein's lawyer who said his client maintains he never engaged in nonconsensual sex. dow is down 74 and your deflationary theory is in play with oil down $2. >> look, oil can be, you know,

watching the oil stocks they're down so much that i can't tell people to -- i'm kind of shocked at how much they're down but i think people are going to be looking at things like kraft heinz and go back and say maybe the quarter wasn't so bad. look at proctor and say what do you think? do you think that they'll do something? i'm putting thesis out. >> i'm sorry i want to make sure i understand it because of >> okay, so the relationship between oil and plastic. plastic is priced off of oil not off of gas even though we would say it should be. so as plastic comes down, the margins are going to expand for these companies. which is, therefore, the principle concern. the second is freight. csx and union pacific had problems delivering chemicals to people because of congestion what you're going to see is expansion for the soft goods one of the reasons why they went down i'm telling you that every one

of those companies is a candidate. i like pepsico because it wasn't that bad but you can bet that these stocks are going to go higher and it's no longer going to be estee lauder con agra, for instance, they could come back. they had a good quarter. oil, polly styrofoam, consumer products. >> i saw -- with the surcharge i saw an earlier this week from ups. do they go away, too >> yes. >> that would be a kiquick turn >> yes, they do. by the way, the airlines have been down. we know that gary kelly there was an terrible accident that happened on southwestern that stock has come down so much so look at the airlines. i'm telling you this is fundamental this is happening. no one is talking about how good this is for the american consumer they're acting as if it doesn't

matter the home builders needed 2.75. you go over the toll call. they didn't like what they had to say why? because of mortgage rates. mortgage rates could come down this inflation, i got to hand it to the fed to jay powell. and we're seeing -- and when lumber -- when we lose the lumber case at the wto, everybody will know what i said. so, i mean, alexa right now alexa, tell my friends that inflation has peaked. >> she already sent that to your friends. >> shoot. >>well, no. >> i know. >> david, this is a prop. >> okay. >> i didn't mean it, tim cook. sorry. >> your point the airlines are up 2%. >> i'm going to give an early call that splunk should be up at the end of the day and gxc was a great quarter. the market is very wrong here and the deflationary thesis.

i said it first. i also said that the government is going to win them big case against -- >> starting to get e-mails about that people want to know if you're serious or not >> i'm also going to bet on the indianapolis colts because frank is a great coach i'm not allowed to bet, but -- >> colts >> this is why no one is talking about this, going to 2.75. it's almost as if all we do is talk negative. i'm telling you, i'm giving out a very positive thesis about inflation and a week from now you'll hear not unlike when data reports on comcast and the next people say exactly what he said and comcast stock reacts as if david is a proverbial maple tree falling in the woods >> our yield on the ten-year is it going to fall below that of the italian ten-year >> we'll find out. and when i get over there in june, i have to tell you something. if the government is as heavy-handed as they are right

now, i may not plant that next 100 olive trees. >> that would be good for them >> report is really gotten your temperature on spain, italy, argentin argentina, turkey, venezuela >> i want to buy spain argentina is a very mixed bag. >> mixed bag it went all straight to -- >> negative bag. it's a negative bag. >> out of nowhere. it was all going fine and then they didn't believe. that word credit does come from the latin word root for believe. to believe suddenly everybody lost belief >> we lost belief. >> shouldn't lose faith. there's some spanish banks very solid. some were mad at me when i said there's only one solid italian bank there are others that are solvent, including the great palio bank, which is in siene. you know what that is? you got to go like amazon frost.

i saw him wednesday, at a bar watching arsenal at 10:00 a.m. >> we're talking about wilford frost so people can keep track of where your mind is going. >> i saw 007, daniel craig, is going to start production of his fifth 007 movie. >> who is taller, daniel craig or willford frost? and don't you think he's going to have to -- he is like 6'5" and daniel craig is like 5'5". don't you think at one point, while he's doing this, he will play bond, right >> yes i believe that is true >> he's going to do a remake of "from russia with love" now that russia is bad again. daniel craig is actually 5'10", i want to clarify that. >> oil is down two bucks dow down 73. we're keeping our eye for more information on the weinstein

arraignment we saw this morning. the s&bap ck to 2720 back after a break had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade. 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

time for cramer and stop trading. >> paypal. dan schullman is talking about tying up with google

even mentioning amazon but this was just a lovefest i think the paypal is headed to all-time highs and i think people should buy it it was up 1 going into the session. paypal is going to take over the world. he's talking about giving -- on banking, 2 billion people don't have a bank account but they have a cell phone. you just need a cell phone to bank with paypal and venmo. i'm going to venmo you some money. >> i actually have venmo >> kayla tausche tried to get me to venmo her >> i'm surprised you don't do it from your apple watch. that's next. jim, what's on "mad" tonight >> we're talking about the fact the justice department is going to win the case against -- >> no, you're not. will you stop doing that >> it's memorial day weekend let me do some teaching. all right? prepared >> i'm ready >> you ready >> i'm ready

and you clearly are ready. you never talked to philip roth that you lived next to him >> i didn't live next to him i lived around him >> was he down the hall? >> have a good, long weekend we'll see you tonight. "mad money" 6:00 p.m. eastern time dow is down off the initial lows don't go away. we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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good friday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber. massive recall out of fiat chrysler harvey weinstein in court. dow is down 62 points. everything pivoting off this $2 decline in oil as airline and consumer products lead the tape. economic data crossing rick santelli? >> 98.8 mid-month read we toss that and replace it with 98.0. we've backed a little bit on what we replaced

that follows 98.8 because that was the final read for april as well as the midread for may. that is the weakest number since the first read of the year at 95.7 but historically, it's still at a lofty pace the internals on the inflation side, one year, 2.8. steady with our last look. and five to ten-year inflation steady at 2.5. sara, back to you. >> lofty but a little lower on confidence rick, thank you. we will take you back to the courtroom because we are seeing harvey weinstein now exiting let's listen in. >> anything you want to say to the accusers, harvey harvey how are you feeling? >> make a statement out front briefly. >> contessa brewer has been there live

not a surprise that we didn't hear any comments from harvey weinstein after he just finished his arraignment, listening to the charges. >> yeah, and not a plea at this point. it looks like that we -- it looks like we just saw him nod his head in the affirmative when asked if he understood what was happening. what we know that happened in court today was that he has waived extradition should that be required to another jurisdiction, that he has agreed to wear a monitoring device and will pay for that. he surrendered his passport. it was clear the defense attorney knows he will comply with efforts to monitor him and alerting authorities should he need to leave the state for any reason a million dollars cash bail or $10 million bond was the requirement. what comes next, the grand jury is still investigating we are awaiting for the attorney to come out and talk to us about what happened in court, what happens next it looks like they gave him a

deadline to testify. this is the attorney coming out right now. so he's going to come up, as you can see right here and he's going to -- i'm going to, but i'm live on the air right now. so they're coming in and we're going to listen to him talk about what has happened in court. we did not hear from weinstein when he was going in, but he was in handcuffs >> come right up to the microphone >> all right we'll let contessa brewer listen to that and bring us any headlines as we have it. we also want to show you another live shot of what's happening this hour. president trump is getting ready to participate in the u.s. naval academy commencement ceremony. we'll be monitoring that for you. annapolis, maryland. there is the president >> as if that weren't enough shares of fiat chrysler are down

as the automaker issues a recall for 4.8 million vehicles phil lebeau all over that. >> as recalls go, this is a doozy because it not only involves almost 5 million vehicles but it also comes with an explicit warning for the owners of those vehicles, stop using cruise control immediately. covers 4.8 million vehicles. 15 models. we'll not run down all of them it's the most popular jeep, ram, dodge, chrysler models the problem? cruise control it may not be able to be disengaged by drivers and that's why fiat chrysler is issuing a warning saying stop using cruise control until the vehicle can go into a dealership and they can do a software fix on that vehicle so that this potential defect never happens when somebody is out on the road. fiat chrysler knows of no incidents, no accidents, no injuries but the potential for cruise control to be in a

situation where the driver may not be able to disengage it unless they put it into neutral and then apply the brake and then ultimately hit park before cruise control is disengaged that's enough for fiat chrysler to say stop using cruise control and 4.8 million vehicles covered by this recall guys, back to you. >> phil, that's 4.8 million sounds like a lot. we're sort of numb to the auto recalls, especially if there are no incidents here but how does that stack up historically as far as the -- >> that's one of the biggest ones you know, if we get a recall for 750,000 or 800,000 vehicles, it sounds like a lot but because you have the commonality of parts, that's more common these days so 4.8 million is a huge number in terms of the number of vehicles covered but it's the warning about cruise control that really makes this unusual you rarely hear automakers say

either park the car or stop using a particular feature in this case, right ahead of a big travel weekend like this, it's going to get a lot of attention. >> absolutely. phil lebrebeau, thank you shares are chrysler moving lower. president trump speaking out over future plans with north korea after calling off the planned summit yesterday eamon javers joins us from washington >> president trump has arrived at the stadium at annapolis. on his way out of the white house this morning before boarding marine one he stopped to talk to reporters yesterday senior administration officials briefing reporters here said the north koreans had gone radio silent. they weren't even returning phone calls and that was one of the reasons the president called off the summit with the north koreans scheduled for june 12th. this morning the president saying something very different. here's what he said when leaving the white house to get on board

marine one just a little while ago. >> we'll see what happens. it could even be the 12th. we're talking to them now. they very much want to do it we'd like to do it we'll see what happens >> the president there saying we're talking to the north koreans. that apparently is a change from what was the case up until just yesterday. so according to the president, something must have changed overnight here in terms of communication between the u.s. side and north korean side the president there expressing optimism this summit could take place as soon as june 12th, even though aides yesterday were skeptical about that one senior administration official said june 12 st like ten minutes from now saying it was simply too soon to have the summit and one other thought for you is that officials i'm talking to suggest that all of this plays into the china trade negotiations remember, wilbur ross is going there at the end of next week. will the president now take a tougher line on china now that

it looks like that north korean summit could be off the table? or if he feels the summit is still possible, will he still continue to negotiate more easily with the chinese side and send steve mnuchin and the more moderate faction to be the face of that negotiation as opposed to the peter navarro and more hostile to china faction >> it is very complicated. thank you for the update from the white house. joining us with a look at how geopolitical tensions like this are impacting the market. and alex striden, global market strategist at jpmorgan how should investors look at the back and forth between the u.s. and north korea given the china trade falls somewhere in the middle >> for us, you should be probably looking for a lot of the geopolitical noise and focusing on the fundamentals which are solid. a price to earnings ratio back down to its 25-year average. earnings growth close to 30% for

this year. for me when you look at the fundamentals and take away the geopolitical noise, the direction of travel is likely to be higher. >> do you agree, michael >> i do. i think it's overestimated i think you should look at what is the fundamental case. what are interest rates doing? what are earnings doing and make your investment case out of that and not concentrate on the headlines too much >> you go so far as to say buy emerging markets >> we're constructive on emerging markets we're in a global synchronized recovery they are cheap they have begun picking up on the outper formance they haven't had since the financial crisis we like some of the currencies as well. so it's, for us, it's -- >> 2.93 as we unwind a month of rate fears how much -- is this a step toward another leg higher down the road or do you think this

inflationary story is starting to peter out >> we think there's two factors that will push yields higher you're seeing some inflationary pressure build noting oil prices are moving higher unemployment will get down to 3.5% get down to the lowest level since 1969 that's because of the lack of tightness in the global economy. now what you're starting to see is the recovery kicking in, in europe, emerging markets and elsewhere. once you remove that global slack which has been holding down wages, that's when you get inflationary pressure. couple that with a lack of demand for u.s. fixed income from overseas visitors, and we think the yields can move up to 325, 3.5 by the end of this year >> you have a global view and all you people around the world. italy, for example should i be concerned? turkey or even argentina i can go on and you mention

you're positive on emerging markets. i know italy is not that are those cause for concerns overall? >> look, italy is italy and it's been like this for the last 45 years. i would not be surprised to see this new government also end up in debates and perhaps at some point in time we'll see re-elections -- >> it's the fourth largest bond market >> third largest eurozone economy. >> and this is a large economy in the middle of europe and part of the euro and we're observing it we've seen yields go up. the italians are beginning to pay for this level of uncertainty, but for me, it's much too early to say this is going to be a big sort of blow up we are observing emerging markets, of course, very carefully. i would just for the moment say you need to be selective and steer clear of something like turkey overall but from my perspective, i do believe that

we're in a solid global recovery and you need to be takie ining equities, riding this growth that we're still in and it's not going to last forever. we still have some good years. >> why the uk positive given a lot of weakness reported as a result of brexit >> we just recently -- it's an energy oriented market a more defensive market. it's been sold down because of brexit and we're sort of picking our alpha sources toward energy, toward being defensive at this stage in the cycle, and uk is also quite cheap >> you are both shooting down all the bearish arguments we've been talking about the emerging market story. the stronger dollar story. what about gas prices and higher oil prices going into memorial day weekend where gas is almost $3 a gallon. >> high since 2014 that starts to hurt the pocket

of the consumer. it's definitely a tough situation for the u.s. consumer. the thing to remember is that the impact of higher gasoline price does not fall evenly on everybody's shoulders. the lowest quintile of earners give up about 10% of their takehome income to gasoline prices they are the ones that hurt the most when you start to see these gas prices move higher unfortunately that means the ramifications for the wider economy is the higher oil prices typically hit those who have the most to lose in that situation now that slows down the economy a little bit but what you're also starting to see is some of that is being offset by more business investment in oil related activities so rigs, refineries, all of that investment here today has helped pick up. that's helped lift some of the u.s. economy but overall, the u.s. is a light loser from higher oil prices but not a big way. >> you need to look at cap x

an oil price of 80 is net positive for the u.s. economy. and how far that could go, time will tell. oil price at 100 is probably going to become a problem but at 80 it's a net positive now >> we're hearing more and more of that argument guys have a good long weekend. michael and alex when we come back, pulitzer prize-winning columnist jim stewart will weigh in on the president's new auto tariff threats. shares of auto desk are down the ceo will join us later on today. and alexa, are you listening. this amazon echo secretly recorded one family's conversation and sent it to somebody else. dow erasing some early losses here down 31 "squawk on the street" back in a minute

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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. auto stocks moving lower today on the news of one of the largest auto recalls ever issued in the united states fiat chrysler recalling nearly 5 million vehicles joining us, jim stewart joins us his column this week focuses on ford and how the mustang made the cut even as they essentially desert the sedan as a concept. >> i'm surprised this didn't get more attention but ford, which you think of as the iconic passenger car, is basically saying we're leaving passenger cars they describe it to me as the commodity silhouette it's going to be all trucks, all suvs, all crossovers all the time with one exception

the mustang. i saw that news, oh, thank god they're saving the mustang but why? that's what got me interested. >> the whole concept was we're going to just move around in these commoditized blocks but americans, i guess they assume, are going to still want to love to drive >> yeah, there's certainly a segment that loves to drive that doesn't really look forward to this like autonomous future where we're just sitting behind a robot. but there was a fascinating detail in the ford earnings a couple weeks ago where their top performing vehicles which we know are the trucks and the suvs make 150% of the profit. which means that the nontop performing products which basically include the passenger sedans, are losing enough to eat up 50% of the products and so wall street, you know, loved to see that. they're finally focussing on the fact they churn these paersseng cars out we're losing historic names like

taurus, fusion, which i thought was a big hit when it came out but back to the mustang, i started doing some research on it i completely forgot it was lee iacocca who introduced the mustang. the very first film appearance was in "goldfinger." a white convertible with a red interior they're issuing a 50th anniversary edition. two u.s. postage stamped features the mustang it's the ultimate american -- >> is it iconic or high testosterone thing >> i think it's both 20% -- 27% of the buyers of mustangs are women and when it first came out it skewed to women. i took my driver's test in my mother's 1967 turquoise blue notch back mustang and i'm telling you, when i got to drive that to the high school, i was mr. popularity. >> it's like a pink corvette, right? >> exactly, but it definitely

skews male it's turned into the muscle car. what ford said is mustang all over the world means freedom the freedom to get away from your parents or freedom to take a drive down the coast of california the freedom to put the top down. the symbolism is so great they just couldn't give that up >> where do you see this tariff thing going? what was your reaction to some of the threats we heard this week >> you know, i basically believe in free trade and i realize there are exceptions to that this is going to hit consumers a lot of people have voted with their own wallets that they want cheaper cars they want quality cars they want, in many cases, foreign built cars and why tax them why take that opportunity away from them? meanwhile, hit something of our greatest allies like germany, japan. to favor what? a handful of auto workers in the middle of the country? i believe in fair competition, and i'm against car tariffs.

>> seems political rust belt states >> trying to just pick out a group of winners, favor them at the expense of basically everybody who would want to buy a foreign car. >> that said, they do have tariffs in place on our exports in certain markets >> that's correct. and i think china. we've made progress there that they are talking about making -- opening it up a little bit two wrongs don't make a right. we should be trying to get rid of those tariffs not slap them on ourselves what do we do? going after the europeans and chinese. that doesn't make sense to me. >> we've been watching weinstein's arraignment this morning. the charges now look like a first and third-degree rape. he'll plead not guilty you've written a lot about him through a disney prism during the -- >> i met him many times in his heyday and, look, i think this is an historic moment. back then there was a whole different ethos really i never heard anything about rape, about assault, about

force, but harvey weinstein always had these beautiful women on his arm, and, you know, i think rumors of the casting catch were rampant and everybody assumed it was sort of consensual but the idea that the path to stardom in a hollywood movie might require certain favors, that was kind of just seemed to be accepted, and i'm thehappy to see that's changing sorry to see a guy like that, very creative guy with great movies, caught up in this. but his behavior has been rampantly unacceptable for so many years >> we'll see what the defense poses as to the degree that they -- he pleads not guilty leads us to the weekend media and the ongoing theory about comcast. this incredible piece in the journal about espn over the years and how they never -- they argued cord cutting was not going to be a factor >> well, that's just classic when you're sitting on top of something that successful, you

go in denial i think that's just human nature this puts the spotlight on this time warner decision that's looming. could come any day now assume it won't be memorial day week but you never know. that's going to be huge. if time warner and at&t win this case against the government, then it will open the gates because there's going to be a lot of convergence >> cramer this morning predicted the government wins. you go that far? >> no, eye. >> let's -- a little bit of an out here because he was kind of being -- >> he was impressed by the brief. >> he did his reading and somehow thinks that against all odds, jim, well, i have to say -- >> so many people think there's no way the government can win that you do start to wonder sometimes. maybe they can win >> to say the government will win is definitely a contrarian view and i wouldn't go that far, but, you know, conventional precedent which completely supports at&t time warner. we're in a new world here with

this administration, this particular judge you just don't know. if the government does win, that's also going to be an epic decision because you'll see a lot of rethinking. >> without a doubt and has broad ramifications not just for media but all vertical mergers >> it's going to put the whole anti trust spotoit on a different set of hills >> good weekend, jim >> same to you when we come back, a morning for retailers. look at foot locker up almost 15%. gap going the other way. both out with results. we'll look at the reports and what it means for the state of the industry plus, an alexa users' worst nightma nightmare. how it recorded the conversation of one family and sent it to another. dow is cutting its losses now quk 20. "sawon the street" will be right back

welcome back two big retailers reporting earnings this morning. shares of foot locker popping after reporting a beat on the top and bottom lines comp store sales did fall but a smaller decline than analysts were looking for and gap tumbling this morning. the retailer missing estimates

but revenue did beat forecasts gap stores trying to deal with excess inventory and bad weather. guys, just summing up the retail season, a lot of the big wins in this category have had to do with better inventory management and less so about just a boom in sales or some strategic turn in the business apparel was stronger in q1 nike and adidas all gain off of this report. >> the inverse of gap. inventory was the problem. but overall, retailers have been getting better at this, not worse. that's been the general rule >> that's been the general rule and the consumer economy is doing decent right now so you have big winners i think of the department sto s stores >> was there any key problem at

gap? we said old navy was -- old navy was good for gap as far as the three. banana republic and gap. >> down as much as 13% >> let's move on it may be some amazon alexa users' worst nightmare the company explaining how its alexa device recorded a family's entire private conversation and then sent it to a random contact. aditi roy has more on that story for us >> david, it's a real talker amazon saying it is an unlikely set of events that sparked that accidental recording the company says the portland, oregon, couple's alexa device mistook certain words in a background conversation as voice commands the company telling us echo woke up due to a word in background conversations sounding like alexa. then the subsequent conversation was heard as a send message request. at which point alexa said out loud to home at which point it was interpreted as a name in the

customer's contact list. the recipient of that private recording was a business associate of the husband, according to a local tv station in seattle the company learned what happened when he called them up and told them he had audio files of their private conversation at home at first they didn't believe him but then he heard them talking about hardwood floors and the couple was stunned the company says it's trying to prevent this from happening again but it comes at a time when amazon's share of the home speaker market might be slipping while competitors are gaining advantage by winning over customers. amazon dominates two-thirds of that market but the research group projects that lead will drop by 6% in two years while products including the google home will see a corresponding increase the case also brings up privacy concerns the group consumer watchdog is already calling on amazon to have a dedicated internal privacy watchdog at the company. guys, back to you. >> i was trying to figure out.

it's ironic today is ggpr day which is the privacy laws go into effect in europe starting today. and as we understand it, i was going back and forth with our bureau chief amazon alexa is not part of ggpr because they aren't taking your data and processing it and using it to sell advertising >> as far as we know it's not part of that, but obviously, a case like this brings up a lot of privacy concerns and issues which likely those questions are not going away any time soon >> absolutely. time for our etf spotlight dom chu looking at the plunge in oil prices >> prices for oil reversing course in a big way this morning. as you suspect, it's having a big effect on oil and broader energy related exchange traded funds. so a big driver of that move higher has been global supply cuts by opec and russia as well. then saudi arabia and russia now suggesting they could move in to boost production and ease some of those supply concerns that's taking some of that

bullish tailwind away for oil prices the u.s. oil fund ticker has already traded around almost 10 million shares in the first hour or so on average over the past 90 days. it only trades around 20 million shares all day long. in terms of relative performance within the overall energy sector, that spdr energy fund is already down 2.5% or so. companies tied to oil exploration and production underperforming versus that broader sector that spdr s&p etf, xop, it's off by more than 3.5%. similar percentage drops for the vaneck vectsors oil services fund, oih. a lot of stocks and etfs feeling the ripple effects of oil prices >> thank you, dom. now to sue herera for a news update at this hour. >> good morning, everyone. here's what's happening. police in canada are looking for two suspects following an explosion at an indian restaurant in a toronto suburb

late yesterday 15 people were wounded police say the suspects entered the restaurant, dropped an improvised explosive device and fled a yacht hosting high school promgoers crashed into a docked boat on the hudson river in new jersey last night. scary moments there. cell phone video shows the yacht rear ending the boat 75 seniors were on that yacht. no students were injured the docked boat was also empty at the time of that crash. and the numbers are in nbc's red nose day events raising more than $42 million this year. the money is used to help lift children out of poverty in the u.s. but also around the world and kentucky derby and preakness winner justify is making more money. breeding rights are reportedly set to be sold for $60 million with an added bonus if justify takes the triple crown next month. you're up to date. that's the news update

carl, back downtown to you >> sue, thank you very much. when we come back, everybody plays games. that's the president speaking out today on the meeting he canceled with north korea. what that means for the state of geopolitics and more neredow is down 94 and has just go gen back in a moment

welcome back i'm sara eisen with carl quintanilla and david fiber. post 9 from the new york stock exchange one hour into trading here dow has gone positive as carl mentioned, wiping out a nearly 100-point deficit earlier in the session. s&p around the flat line interestingly it's the beaten down consumer staples leading the market today with names like kellogg, clorox, general mills after canceling a planned

summit, president trump saying dialogue has reopened. here's the president last hour >> we'll see what happens. it could even be the 12th. we're talking to them now. they very much want to do it we'd like to do it we'll see what happens >> north korea in a statement saying, quote, we tell the united states once more that we are open to resolving problems at any time in any way joining us now from where we go from here, former assistant secretary of state ambassador lincoln bloomfield and the former u.s. special envoy to north korea, ambassador joseph detroni. thank you for joining us ambassador, since you've been on the front lines in these negotiations, how do you see this playing out from here >> i think there's a good chance we will resume and hopefully resume quickly the north koreans made it very clear they are open to negotiations and, look, basically kim jong-un had made a strategic decision that he wants to improve the

economy. needs security assurances and he's looking to the u.s. to get these things moving. and normalizing relations with the united states and getting those assurances will be the imi impetus to get the xheg moving forward. he studied in switzerland. he knows north korea is in desperate need of economic development assistance >> so ambassador, just if i hear you correctly, does that mean you're saying that the 25 years or so that presidents before a president trump have failed to do this and have hit walls when it comes to negotiate with north korea that it's different this time >> let me just say this. in 2005, september 2005, we had a joint statement which addresses the issues we're talking about now. comprehensive, verifiable, irreversible dismantlement the end of the korean war, peace treaty economic development assistance. energy assistance and normalization of relations with

the united states. yes, that's what kim jong-un's father kim jong-il agreed to in 2005 i believe the young kim jong-un sees this very clearly and wants to move in that direction. and now that he has, a nuclear deterrent. he's proven that in 2017 i think he feels that much more confidence that he can come to the table now and make the case for getting the security assurances and getting the economic development assistance. but i think key is normalizing relations with the u.s. which will give north korea access to the international community, international financial community and foreign direct investment opportunities >> ambassador bloomfield, the hawks still argue this is not a normal state that they don't respect with legitimacy the laws outside of their country and any kind of give in a negotiation is somehow seen as unpatriotic within the country.

how much of that is true >> i'm not surprised that the hawks are very nervous and very negative about engaging with north korea in light of the history but i agree with ambassador that something is different this time. going back to sara's question. north korea used to be a very closed society now it's open. the people in pyongyang know what's happening in the world. they came to the olympics. they had the historic meeting of the heads of the two koreas at the demilitarized zone no putting the toothpaste back in the tube from that. so the question is, how does kim move to a situation where he has security for his regime, opportunity for economic advancement and the way to get there is not to take baby steps. this is about ending the korean war. this is about reunification between the two koreas which washington does not control at all. this is about security for japan. this is about security for

china, which is very nervous about what may happen under reunification. there's a lot of work to be done here but it is possible and don't forget, kim's father and his grandfather never had an american president travel halfway across the world to meet with the head of north korea that's a huge gesture by the american president and it deserves to be met with serious comprehensive geopolitical measures which will take a lot of work if both sides are willing. it's not easy but they have to -- this is like reagan going to reykjavik and meeting gorbachev. it could be a big deal >> ambassador, one thing investors we talked to are trying to figure out is, where does china fit into all of this? does it have leverage as a power broker with north korea when it comes to the brewing trade fight between the u.s. and china, or does it take a back seat >> china is key to the north korea issue.

there's no question about that and china and i think they just made a statement yesterday is supportive of comprehensive denuclearization of the korean peninsula. so china is on board with certainly the united states and our allies in japan and south korea. and it's in chinese interest to see a negotiated peaceful settlement to the korean issue i think the issue of trade with the united states is a separate issue. i don't think china would be using that as leverage with the united states. i think the memoriance of resolving issues on the korean peninsula is immense with china. instability in north korea is not in china's interest and certainly conflict on the korean peninsula is not in china's interest what is in china's interest is a peaceful resolution to these issues >> final word to you ambassador. how does the trade picture complicate things? it's hard not to eng tangle that i understand what the ambassador was saying but what he said last week when he was thinking of china and trade, he thinks of the border

with north korea and how much they're doing to help. >> it's a little bit hard to read president trump's methods obviously, when they wrote the letter and canceled the meeting june 12th of north korea, he really wanted to have the meeting but he was threatening back saying, don't do it this way. let's do it the right way. when it comes to trade, president trump has established a relationship with xi jinping and i don't think he wants to put that at risk so, you know, i would -- we need to separate the tactics from the long-term strategy the goal is to settle terms of trade with china and i think that china, to add to what was said, what will be the u.s. military footprint on a reunified korean peninsula will we still have all these troops that's a major question. they need to be in close consultation with us at every step of the way. >> gentlemen, thank you for

shedding light on this complicated issue. ambassadors, thank you adobe competitor autodesk with a weak earnings outlook we'll dig through the numbers and talk to the ceo. dow down 20 as we keep our eye on volume on this friday before a nglo weekend "squawk on the street" is back in a moment. [whistling] hello. give me an hour in tanning room 3. cheers! that's confident. but it's not kayak confident. kayak searches hundreds of travel sites to help me plan the best trip. so i'm more than confident. forgot me goggles. kayak. search one and done. with dell small businessout your technology advisors you get the one-on-one partnership you need to grow your business. the dell vostro 15 laptop. contact a dell advisor today.

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netflix hitting another all-time high. its 27th this year find out why one trader says it could soar another 40% from here that's on tradingnation.cnbc.com more "squawk on the street" right after this

time to get to the cme group and join rick santelli with the santelli exchange. good morning, rick >> morning, david. back in chicago from arizona when it's cold you go to arizona which is going to be the title of this piece. everyone remembers this story.

"christmas story" "fragile" on the box. there's a lot of fragile going on in the world if you have debt in dollars or -- or you are in markets that have moved more in the last two weeks than they have by all the micro management of central banks i'm talking italy. these are fragile economies, fragile bank balance sheets. what's going on in europe and italy? >> we've been talking about this, you and i, for several years. how it's coming to fruition. as i've maintained, mario draghi has been the most dangerous man because he's quietly built up this massive balance sheet of all different sovereign decbts n to the ecb which if it doesn't get guaranteed by the germans, this all falls apart >> what prices would they collateralize this paper at. when you are long a market where the price moves down as aggressively as the price of italian sovereigns, somebody is going to take a hit on this. >> i'll tell you who is taking the hit.

a lot of asians, japanese and chinese, who have bundled together european debt, meaning they've almost created a subprime type of debt where they've bought some german, some french, in order to get higher yields and, of course, more italians those instruments are now going to struggle. but, of course, the biggest question is, who is going to cover the losses for the ecb because the ecb -- >> we were talking off camera that italy may try to behave a bit like greece considering they are the fourth largest bond market in the world. largest bond market in europe. what affects them is going to affect the entire eu system. how is mario draghi or his successor in 2019 going to deal with this issue? >> it's enormous and not only that. people talk about some type of deflation because of oil ridiculous >> you mean our rate is going down >> but there will be -- >> we need to stop right there whether it's bund yields going down or even in my opinion a large extent of u.s. treasury rates going down, it has nothing

to do with the normal inflation/declags. it's a debt t all the europeans banks are loaded to the gills with italian sovereign debt, which is severely under water they're sitting on enormous losses, and you've got to give five start and -- a lot of credit like cool hand luke, sometimes nothing is a pretty good hand. they're playing a nothing hand to the fullest extent. >> checking to the highest bier of are in their world. >> if germany doesn't go all in to defend this, it all blows up. >> we're out of time ira, i appreciate your thoughts. rick, thank you and have a great weekend. jon fortt has a look at what's coming up on "squawk alley." >> just as new consumeers data protection is -- amazon getting

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tack a like at the shares of autodesk andrew, the ceo of autodesk, joins us, talking about a nice beat, but the forecast overshadowing that for now what's ham in the current quarter? >> you know, i think the keyword there is profit. we have seen our return to profitability after going through what was the big trough of the business model transition so clearly showing ourselves on the up side right now. we grew our recurring revenue under the old accounting standard, 25% under the 606 standards. just the fact that a tech ceo is mentions accounting statistics, that should terrify you. it horrifies me, but i think that is part and parcel of how people are confused. the accounting standards change the way we recognize our

experiences other time >> we brought jon fortt along for the ride he was explaining about the business and whether you were directly an adobe competitor, but it sounds like, jon, sort of not really. >> it seems autodesk is more focus odd infrastructure, computer-assisted design, larger projects companies are involved in andrew, i wonder, to what extent is the increasingly complicated cloud transition a number of companies are going through, we saw adobe going through it we're seeing oracle experiencing some chopiness to what extent is it that, and what you say about the pipeline on big construction projects, and what you see happening in infrastructure globally. >> jon, that was an excellent point. you're right we're not a competitor of adobe.

we are transitioning our core business and being a new cloud business, so that's really kind of muddying the picture for a lot of people. on the core business we're doing absolutely great that's why we break it out in construction, we see nothing but tailwinds right now in terms of pushing forward with the construction projects. all around the world people are engaged in major infrastructure construction efforts and we're participating in all of that all of these companies want to digitize the way they're doing things they can't do things the old way anymore. >> give us a timeline. is it a matter of lapping it by year >> we didn't change our annual guidance at all. we full good about what we did in q 1 our annual guidance is completely unchanged what it is right now is just a

confidence game. people want to see consist president profit growth, they said to see free cash flow growth once you see those continuously coming, people will say, okay, now let's focus on the long-term outlook, and what they're trying to accomplish there. andrew, appreciate your time today. as we look at both the print and the forecast we'll see you soon >> thank you very much coming up a bit later today, joining us on "power lunch" we're talking to the c.i.o. ofs calstrs. a lot to discuss on facebook, apple, what kind of changes they want to see. "squawk alley" is up next, with the dow down 31 points

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good friday morning. welcome to "squawk alley." we're at post 9 of the new york stock exchange, a lot to get to today between am zone's eavesdropping echo, web sites going dark in europe and netflix becoming the