the same. >> no. within the u.s. focus more on the domestic oriented companies. >> like multinationals. >> got it. thank you. >> thank you. >> good to see you. >> good to be here. >> you've been razzed enough for two hours? >> no comment. >> you loved it. >> he's ready to go. >> i'm glad the mets are doing better than the cincinnati reds. "squawk on the street" begins now. ♪ good tuesday morning welcome to squauk on the street. market gets back to work today after the memorial day weekend futures down the focus on italy as government falls apart. euro's long-term survival being questioned europe is red. flight to safety back home 10-year yield 2.88 road map begins with the

geopolitical risk for stocks a sharp drop at the open the turmoil in italy and spain now spooking investors. >> oil prices are sliding. u.s. futures after opec could pump more. and closing time starbucks to close 8,000 are indications for racial bias training worries about political turmoil in italy weigh on markets around the globe the euro is down to a fresh six month lows the italian president has angered populace by rejecting the euro skeptic price for prime minister and choosing a former imf official to be minister, instead. the spike in yield goes back to the time the euro was established. worse than the crisis, these moves in the two year. >> right 1992 but remember they did on

november 99, 2011, rates dropped 90 points that day and a lot of people felt nothing could happen they had a fabulous central banker there jean claude van dam. >> he might be the central banker. >> he could have been a great central banker it went to a suboptimal figure instead and raising rates twice. so van dam is why i get the call anyway, mario an draghi came back and bought back the bonds he never solved the economic problems who can blame them looking for new government they have 11% unemployment they have the worst word records. they have one solvent bank

but, you know, we're going to make a lot of this over the next few weeks. the italians, as much as we may hate what is going on, and some people feel one of the two parties is a fascist party, italy needs a transformation i regard this as positive not negative and people will come around to my view if they go and try to business in italy like i do. you literally can't. they don't -- what kind of mortgage market do you think they have in italy >> not much. >> know what they call it? the glad bag market. >> because you have to buy a house full of money. >> bingo. i refuse to play that game. >> it's not just italy a no confidence vote in spain. you have brazil. another world -- >> yeah. >> a page one story today. >> brazil is hard. spain i think we got good gdp growth there

i think there's a good bank. both jpmorgan banks. i'm not as worried about spain or brazil. i'm worried about argentina out of nowhere is falling apart. i don't want to sell morgan stanley. >> the turkish lire. >> the stock market opened up and looked great and you realize they cut the currency in half. i urge people topanic and get out of everything now and come back in two weeks later and lose a lot of money. >> oh, okay. >> sounds like a plan. >> right that's the plan a lot of people lose i remember asking a group of people running for president republican running for president. at oakland university i said aren't you worried about the italian banking crisis they said i think it'll be resolved by identity ttalians. >> i'm surprised they knew at it

about all. >> it was the first i brought to their attention. >> okay. >> how is the word salt. >> yeah. they have yields on the ten year 2.6 now. >> negative earlier in the month. >> yeah. >> not on the ten year. >> they didn't have a chance to buy them back. van dam is nowhere to be seen. >> right. >> going back to '11 when they were -- >> yeah. november 9th. >> yeah. >> seen jean claude van dam and chuck norris who would have been a better central banker. >> steven seagal beats them both. >> do you know that steven seagal he once said he had a superior attitude and superior state of mind. >> under siege is a classic. >> yeah. >> under siege.

>> wow it made me lose my mike. that's how great "under siege" is. >> "hard to kill." >> come on wti declining off the lows of the morning saudi arabia and russia are expected to boost their output to compensate for the supply shortfall an increase in u.s. production playing a role in lower prices and sources quoting figures we might see in terms of u.s. exports this morning. >> yeah. we're not exporting nearly as much as the west texas intermediate is completely in disarray as a price forum because of how much we're exporting. we shouldn't be using wednesday. but it is true that if you go back and see what caused oil to spike to begin with, it was the saudis and the russians. the saudis and the russians, are the only two places in the world that have enough spare capacity to impact the price.

each one of those can produce a million barrels. we do not have any spare capacity those looking to us and say we need to pump more. we can't 11 is our max. >> 11 is our max. >> there's bottle neck and you need trucking. that's why union pacific union pacific is going to say what i said this week. and the stock doesn't buy into any weakness. >> they need to come down. >> you said that last week you also said 2.75 on the ten year we made progress in that direction. >> it's good to be the king. >> wow yeah you are feeling confident lately you'll say something that is going to be completely wrong. >> and at&t. and the government is going to win the at&t case. like the dean of penn law school. >> yeah. >> no i think my thesis oil coming in is on securing a lot

of good in that, i mean, because people are worried that oil coming in is going to be wrong i'm going to be wrong about a lot of it. oil can come down more because it was jacked up by the saudis but i am surprised the president who said he was going to call opec if oil prices went up and he did not the saudis did it on their own saudis are trying to so hard to figure out where the aramco deal should go. >> they won't hit the market with that until 19 aramco. >> right. >> local listing, most likely. >> a local trillion dollar listing. >> yeah. and the price of oil raised the overall value. they wanted to sell 5% that would overall the company at $2 trillion. >> i know. >> maybe they can get closer to that. >> the amazing thing is how much they want to diversify away from oil because they're worried about electric cars. that's why they hired halburton to do fracking from gas and not

oil. >> wow to provide electricity. >> right they want to diversify away. >> i want to get your broad are take oil prices moving down a bit as pressure by saudis and russia, if they want to. italy rates moving up dramatically concerns there we mentioned brazil, argentina we've dealt with it before when you come in today the day after memorial day, you do what? >> sit on your hands you have to let people panic that's what people do. let's use an example of a bank i'm not -- -- bank of america. people will say here is the thesis they need as far asser rafaster. >> and not to mention others who are talking down. >> right. >> normalization. >> right. >> there was time 2015 i didn't see eye toeye.

a particular speech that was gave at sirius xm radio. i think you have to let people get scared, david. i'm not being facetious. people will wake up and say bank of america doesn't have the rate hikes, therefore they're not in the interest margin. therefore the stock will head to 28 i want to get out now and get back at 28 that's too hard to do. i don't want people to do it it's too hard. it's not right. >> yeah. and maybe harder now than a lot of previous eras. >> yeah. there's no liquidity if you want to panic, citigroup 67 will get you $3 off companies buying back 7% 7% and you've got c-card the end of next month and historically the banks after the review period have outperformed almost all the sectors. so you want to sell citi down to 65 you're selling it to michael and he knows more about the bank

than you he's a smart guy i don't know if you've met him spent any time with him. >> not really. >> you don't want to -- >> not quality time. i would love to. but we haven't been able to get together. >> so busy. >> we are. >> we have to move on. the family itself is terrific. friends of my executive producer david mentions north korea in fact, the u.s. and north korea not giving up on hopes for a summit meeting we have been all over that good morning, amono. >> reporter: good morning. the white house is suggesting for the summit between the united states and the north korea doesn't happen on june 12th, it could happen smartly thereafter remember, this is the summit that the president cancelled last week on thursday. that prompted a furious weekend of diplomacy we saw a surprise meeting over the weekend defeat north and south korea. leaders in the region getting together at the dmz for a hug

between the two leaders indicating they are prepared to move forward with something. not clear exactly what form this is going to take we also see that the top north korean nuclear negotiator arrived in beijing on tuesday. the president said he's on his way to new york to talk to the american side. so we'll see where all this comes together the president putting out a tweet this morning saying we've put a great team together for our talks with north korea meetings are currently taking place concerning the summit and more the vice chairman of korea heading to new york. solid response to my letter. thank you. unclear where it lands it's very clear after the weekend of diplomacy that we saw that the president is anxious to have this summit go on after cancelling it last week. clearly something changed in the diplomatic calculus over the past three or four days here and now the president committed to the idea of having this summit committed to the idea of sending an american team to north korea where they are now laying the ground work for that summit.

unclear whether it'll be june 12th or some other date. the white house wants to get on with it, guys. >> you have that and canada's fr freelund coming back a ross and lighthizer meeting in paris. all this trade stuff is starting to commingle. >> absolutely. it's intertwined here. i think the one interpretation that we had after the president cancelled this summit last week was that that's a signal he'll get much tougher in negotiations with china on trade. because he blamed the chinese for stiffening kim jong-un's spine in terms of the nuclear negotiations now, though, the summit is potentially back on. there's a delicate dance going on how tough will the president be on china and trade over the next coming weeks that's an open question and there's a lot of give and take here there's a lot of elements on the table for this negotiation it's very complicated. but you could assume that would

suggest that the president might be a little bit more willing to talk turkey with the chinese in terms of trade than he would have been otherwise. so a lot going on. >> a lot to process. >> yeah. >> we didn't mention zte. >> yeah. or nxpi which they said is a done deal. >> we'll take a look at nxp around the bell. >> you have something? >> i did my reporting on it last week and shared there was optimism there continues to be. >> okay. >> thank you when we come back, thousands of starbucks are set to close for the day as the company kicks off the anti-bias training for employees. we'll talk about the implications for that. futures we're watching 50-day once again the 100-day is 2710. "squawk on the street" is back in a moment. this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets

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today about 8,000 starbucks company-owned stores in the united states will be closed during the afternoon hours for anti-bias training it will include recorded remarks from starbucks executives and the rapper kommon. the training follows last

month's incident in which two african-american men in a philadelphia starbucks were arrested while they were waiting for a companion to join them usa today quotes estimates it might cost the company $12 million in lost profits. >> i think starbucks has been the vanguard trying to figure out the right way to be a stakeholder. to be a company based on, you know, that is customer oriented. this third way andrew, with a good piece out this morning in the "new york times. i applaud them what can you do? they want everyone to figure out how to deal with one of the most difficult issues facing our country. i wish schools would do this it's a great thing to have a discussion in a time when i know the nfl is deeply engaged in similar issues just having discussions. so, you know, nfl and howard schultz you don't think of them together but they're trying. >> no. grappling with the same issues. >> exactly. >> it brings us to j.a.b

buying for a reported $2 billion. >> i think this is incredible. i have a conference on june 7th where i have ron shay speaking and ron is adamant that it is just too difficult to even be public something i was talking with david about during the break some companies can't take it and ron -- this is panera. number one performer in the group. >> okay. >> and still had to go private. >> he's been outspoken on the air when we've had him on. many times discussing it obviously it's an area for some debate. >> you're saying it'll be over by the time he speaks at my conference. >> not at all. i can't wait to see what he says i'll be there in attendance listening. >> what matters to me, it's a ridiculous time in america when you do the best and you're still under siege from activists

whole foods was correctly under siege. they had a plan to take over 1200 stores. they botched the plan. but panera is good i think this deal j.a.b. is becoming a real power. and i don't know, david, if you look at the reverse deal with keurig and dr. pepper. >> market didn't love it. >> no. >> nestle starbucks. those $7 billion there. >> these things are happening. e thought that starbucks stock should have gone up. i thought it was a great deal. i think there's a group of people who feel that starbucks is not as oriented as profit as it used to be. that's is untrue >> the joke on twitter this morning is selling the j.a.b. is the new ipo. >> after panera and krispy creme. >> they're happy to keep it private forever. >> that's a great analogy.

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all right. we got about six and a half minutes before we get started with trading on tuesday. a short week this week all think it's monday. it's not thankfully tomorrow is hump day. >> i like the call out of jeffreys they're take dragmatic cost

actions. i completely agree with this i don't think people realize how aggressive they're being they're willing to drop out of any market they're not making any money in they're willing to drop out of whole classes of cars if they're not making money this is not ford. >> the ceo you were critical of, if i recall. >>well, yes. that's true. he came from the steel cabinet. >> yeah. >> his name is jim this is what i like about it he has a great team and they're saying we're taking no prisoners. we're no longer going to lose money. they're a beneficiary of the new tariffs in china, if they want to be. watch ford i think ford will say we're willing to leave latin america. >> leave >> leave latin america. >> not profitable. >> they lost money, you know, since the model t. >> right. >> it's incredible how poorly

they've done in latin america. they have a good self-driving autonomous group think carnegie melon in pittsburgh not in the valley. there you go. >> a lot of smart guys and ladies at carnegie melon. >> thank you for saying that. >> i'm going out there in the fall and i just want to see their antonymous driving school, basically. that's where a lot of action is. it's not all in waymo. >> you're right. you're right about that, too so many things you're right about. let's see if he's right about the opening bell he's got his predictions we'll see what happens a few moments from now

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declines in the premarket at 4 to 5%. >> yeah. a lot came off deutsche bank a lot of people are saying these banks own a lot of the debt. italy's bond market is the third largest. that debt is somewhere remember the central bank bailed them out there's a lot of talk, by the way, that italy wants to succeed. this is false talk. >> you mean from -- >> the euro. it's false talk because their bonds would be at 10% overnight. they may want to have a kind of discussion that said we hate the euro that's more we hate germany. we hate germany. they feel second fiddle to germany. but, you know, look, if you want to take our bank stocks and their bank stocks, remember there are many international companies that can choose who they want to bank with they're going to bank with us and not them deutsche bank is losing so much of its business in this country. to our own banks because of the

cut backs they're making. >> yeah. they've withdrawn. >> yeah. remember how powerful they were. >> yeah. >> at the wrong times. >> at the wrong times. >> yeah, during the crisis [ opening bell ] the nasdaq and the indy 500 winner up ed carpenter are ringing the bell there, as well. so you've got these big themes going on. >> yeah. >> you've got the reversal and risk appetite, the failed break out in energy. >>well, i just keep marveling and dislike the fact that the amazing fear around that 2.9 going to 3.1 on the ten year where everyone said the world was going to end now we're 2.86

does the world does it enhance the bulls lose tales that the bears win? >> no. >> i mean, you cannot have this level of emotional ill logic i find it unnerving. it's true. there are banks, the bank of america does better. but there's 90% of our stock market does better with what is happening now. 90%. so you're selling 90%. you're going sell clorox here. i mean, do you know that prices at clorox's products are based on the price of oil. >> we talked about packaging last week. >> yeah. and you've got oil coming down rather rapidly i'm not talking about last -- plastic straws we'll go there later it's good for the paper industry i'm not playing. it's bad at 2.9. it's bad at 3.1. >> there's a lot of shade thrown at equity bears last week for complaining about the ten year above 3. now they're complaining about

the ten year below 3. >> please, it's great! we had a quarter last week from a company called squawk. it's one of my cloud kings you know, it's a company that has security and analytics it was a beautiful quarter and the stock got banged out so it's like a rainy day the wife wants to see the dead pool i say listen, you know, let's have a comprise. you get to see "deadpool." i get to read the splunk quarterly conference call. they're both equally as marvelous. we can say okay it means splunk is bad or we can say stocks that typically go up when rates go down, which are the high fliers are going down that's wrong. >> yes. >> sales forces is going to report and when sales force reports and if it beats, we're going to say, agree, why didn't we say something good about the sales force on "squawk on the street."

i will come on with great regret so i'm saying that take a look at high growth, high multiple tech stocks and know that's what goes up in this situation. that's what went down as rates went up. so the corollary is true there. i said what i said i had to go to "deadpool" today. >> think we go turn today? >> no. it's too scary they have to give you an interesting perspective on monty. >> one name that is up, which we followed closely, is nxp we mentioned it early we aier, course the cash deal acquired by ca qualcomm as we reported last week, certainly, people close to it have been coming more optistic and thatn continues with the zt

deal and certain things changing there in terms of being able to perhaps the u.s. allowing that company to not die. >> right. >> and the expectations that the chinese will respond in kind to a certain extent, perhaps another deal will also get through at the same time could it be soon yeah it could be. it's the highest the stock has been in some time. you can see it there closing in now $8.50 away from the actual deal price. [ applause ] >> how great is this from qualcomm, if they can get away with not being just the cell phone company semiconductor, this would be great. that's why nxp is important. >> yeah. you'll know that qualcomm can move on. >> then they can focus on their

litigation with apple. >> maybe settle with apple and the stock goes to the $80 price that steve was talking about. >> that would be something. >> wouldn't it. >> a man of great honor, by the way. >> yeah. a very nice man. >> sales force is what >> getting clubbed. >> like someone knows something. they obviously do not know anything. >> oh. >> no, this is not 1985. >> no. >> no. >> no. someone is saying sales force is bad. i'm going to sell it based on absolutely nothing. you have to love that kind of stupid moxy. right. i'm selling sales force because other guys are selling sales force and i can sell it as hard as they can >>well, they have the right to trade ahead of the print. >> they have every right they have a right to be massively wrong. remember that's what madison's part madison gave you that right. >> the right to be wrong. >> yeah. the right to be wrong.

>> crm and nhaq report tonight all in the red disney, by the way, let's touch on the solo disappointment over the weekend. $101 million for the holiday weekend. they were looking for closer to $150 people asking if the "star wars" strategy needs to be revisited if the distribution chief told the hollywood reporter that maybe "avengers" and "black panther" coming out in a squeezed window satisfied movie goers. >> i wouldn't bet against that series maybe they'll have some lags one stock disney stock did well. one stock i want you to watch in terms of being facetious about tech versus not. i want you to watch micron micron was down 85 cents at 4:00 a.m. >>okay >> 85 cents. this stock is trying to get to six times earnings all right. and it's a big winner. the other one is oled which is

display that apple might choose. there's some winners here. so i like tech i like media i think disney is going to turn out to be okay i rely on david entirely because i like viacom and i want to be why i shouldn't. >> speaking of viacom and media, let's get to the latest on that credible battle between cbs and its controlling shareholder national amusements. we did get the response to cbs' complaint last week. remember, they are in delaware court debating whether or not the company actually had the right the board of directors of cbs had the right to declare this dividend that if, in fact, deemed effective by the court would have the impact of vastly diluting that controlling shareholder nai. the complaint out this morning is great reading i highly recommend it. there's a lot more detail in this complaint from nai about relationship with moonves, about a lot of things. let me get to it, actually i have a lot of writing for

people to read bear with me it's worth it. for example, nai says we've made it clear that we would eventually being relinquishing voting control we said that to mr. moonves. they discussed and agreed that a combination of cbs and viacom could benefit -- say you put them together and sell them to verizon or maybe there's another buyer out there, obviously, would be relinquishing control because you would be selling the whole thing. also, getting a little nastier here, as you might -- can't get nastier. they're pointing out moonves' compensation it's something we've talked about here a number of times

he's made $700 million, they say, in aggregate. $700 million so you got that. how about these talks with verizon. were they real or not? here is what they say in the

complaint. he said the assets of cbs appears over period of time and digital is the way to go for us. we have no interest in the linear content company a lot of good content in the complaint. resolving absolutely nothing we'll have to wait and see what happens as it winds through the delaware courts. but importantly miss redstone saying that they did not and do not intend to force a combination of cbs and viacom by moving and replacing cbs directors or otherwise which is in contention from cbs and the reason they needed to take that highly unusual step of voting in this dividend. >> wow that's an interesting concept. >> against the change of bylaws made. >> and someone comes after them. >> right. >> because they want a combined studio. >> right. >> the feeling was together you can get a higher overall premium in the combination than as a

part and i heard many times there was that possibility certainly that once this deal was done, the controlling shareholder would consider an overall sale it doesn't appear based on the comments we got a couple of weeks ago that verizon is an interest interested party any longer you never know. >> that's great. that's kind of a whole new wrinkle. >> yeah. >> i want to explore that. >> yeah. and this stuff is good. >> you're going to enjoy the complaint as i know only you would. >> why not maybe this is where i am i've been thinking viacom is a better company. >> you know i hate when you get quiet. don't get quiet. >> only two words spoken in the whole meeting. that's not that many words. >> no. dow is down -- >> 15,000 words a day is what i usually say. >> you know that because your vocal trouble.

we'll get to sima. >> that's right. global beer is driving u.s. stocks today the $1 down about 225 points down triple digits right at the open the s&p 500 breaking below the 100-day average which was 27.10. now it's important to note that the local uncertainty in italy has been rising for weeks now. but the reason wall street is paying close attention today is because of these fresh worries of a snap election which could be treated as a sort of pseudo eu referendum. barclays this morning writing that if these two anti-establishment parties in italy, the league and the five-star were to team up, they might decide to adopt an expolice bli anti-european stance that would raise worries about italy's eu membership. the sudden turn of political risk comes as the european central bank is pondering whether to squal back the qe program. this september, remember, italy is the eurozone's third largest economy. if it were to leave, that would

certainly spell trouble. that's why you're seeing global assets react back home here, may consumer confidence out at 10:00 a.m. eastern. all eyes will remain on thursday's inflation number following by the may jobs report this friday. that's the last before the june fed meeting. sales force does report after the bell tonight the stock had a nice run up about 25% compared to the 10% rising scene in the tech sector in 2018. right now in terms of today's market performance, energy leading the s&p 500 lower here as wti crude trades at $67. >> thank you. >> yeah. i got a faber report, too. >> do you? >> yeah. coming back to another of the big battles about to take place, which is, of course, disney versus our parent company comcast for control of those fox assets .2745 disney shares reach 20% a

deal worth about $54.5 billion when it was announced on december 14th of last year but as we reported and as comcast has made clear and every intention if jim is wrong about his contention about the doj winning the at&t time warner case if jim is wrong, comcast will come with an offer they expect it to have it all cash and it'll have a lot of deal protections. i can tell you, as well, that disney is preparing financing in the unexpected -- maybe not unexpected, in case the fox board says, you know, disney, we would like some cash in our deal with you and so disney is lining up financing. it of course, has an enormous amount of balance sheet capacity if the fox board should turn to it and say we would like you to change the composition of your deal we don't want it to be all

stock. unclear whether that'll be the case unclear where it goes from here. we don't know what the comcast bid will be. perhaps more importantly what deal protections will be in there. how far comcast is willing to go to try to take away the risk of a anti-trust disapproval of a transaction. until we know that, disney is preparing itself, it would seem, for the possibility it will need to add more cash or include more cash in the composition of a deal that is currently all stock and had been accepted and approved by all the members of fox's board. so yet another little wrinkle in what hasn't gotten going yet but perhaps the 13th or so of june, if you're wrong, we'll get going in earnest and that battle between comcast and disney. >> i was ready on this this weekend. is it conceivable that let's say the judge goes the way of the

cognizant. that we'll be talking about this could it go on for literally for months like until 2019? >> we haven't seen when fox is scheduled to shareholder vote. that can be announced as a date and pushed, of course. but you have a process let's not forget that. where by it's not like in the uk in the u.s. comcast will make some sort of a bid the fox board will have to meet. if they see it as reasonably expected to lead to a superior proposal they'll pull the recommendation for the disney bid. then you get it back and forth disney will have a certain amount of days to respond. we'll see. it could play out over a fairly short amount of time. >> is there an analog i could think about that will tell me that, listen, in september this is going to be over. we're two different companies bid. one had a family, you know, kind

of wants it to be grown. >> yes. >> because like to me, i think thinking -- >> remember murdoch is voting 18% on the transaction they only vote their economics they've shown fairly good governance here. it's not like anybody is getting a job at disney. it's all stock everybody was getting the same consideration. they're voting their economic interests. >> this is hard. perhaps there's a date within several months that we will know the answer. >> yeah. >> and these very large -- >> let's not forget about the 12th june. that's date we'll learn a lot. if you're correct and many of the people who see him ruling against the government are wrong, that -- >> espn plus decided to put one my favorite things openn e spors

i said it's david's world. >> we'll talk about e sports another time now we have to get to santelli rick joins us. >> reporter: there's a lot going on all space doing with interest rates. we can look at what is going on in italy and have our personal thoughts how important it may or may not be, but the transmission to much of what is political moves markets. whether it's brexit, whether it's the election of donald trump, whether it's what is going on in italy. what has gone on in spain. all these issues continue to move to the front and center and they are moving markets making central banking, especially from the ecb quite difficult. if you look at our two year, we're down five basis points should we settle around 243. it's the lowest close since the 19th of april. for ten year, you see on the chart it would be a couple of days after tax time around the

at the same time as two year note yields. now we're at 2.87 in tens. up 46 basis points on the year if you look at bunds, the ten year and two year in europe, you can see they're both trading at levels that are lower than they closed 2017. going back forwatoward more ear december just above 30 basis points for ten year minus 70 plus for two year shots. these are unbelievable especially considering why safety is pushing the yields into very strange territory. it's because of the next two charts a two year of tens flirting with 2.5% excuse me, that's two years. and you can see these are yields we haven't seen since right around november, september, october, the fall of 2012 for the ten year flirting with 3% in italy since early 2014

june of 2014 finally, the dollar index certainly not getting sidetracked based on all this volatility of lower rates in the fixed income space it continues to mount higher and for you macro technicians, you nailed it. take a step macro technicians you nailed it. that 95 is what technicians thought would draw the dollar and has, just in a short every time frame carl, jim, david, back to you. when we come back, roger mcnamee on one country's decision to ban the network for a month. looking at a state-run alternative. dow is down 193, biggest drop since april 24th back in a minute

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jim, what's on mad tonight >> we have salesforce, obviously that's the big quarter this

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welcome back we have our may read on the consumer confidence. we're expecting around 128 we received exactly that, 128 right on the nose, matching expectations we did see last month's 128.7 downgraded to 125.6. 128, how does it stack up? it's the second best read to february's 130 the 130 was the best going all the way back to november of

2000 so pretty lofty read, but we continue to see downward pressure, rising pressure on the dollar index, and italian interest rates front and center with the rejiggers against the bund or yield curve. carl, back to you. good tuesday morning about we did lose 2700 briefly, but nibbling going on particularly in the semis and tech space. >> the euro falling to the lowest level against the dollar this year. investors are watching global political uncertainty. plus starbucks shutters, closing all the u.s.-owned stores this afternoon. and we're keeping an eye on oil. u.s. prices are dropping, that

oil could as u.s. output nears record highs. let's begin withal unrest in europe italian voters are possibly facing a showdown. more on how we got to this point and how risky it is. >> yes, super bowl good morning, we looked set to form a new government that would have seen an unprecedented coalition between two populist parties, the right-wing league and level-leaning five-start movement this already had sparked markets. but late last week the president blocked the combination.

it will almost inevitably lead to and markets fear a further surge, the debt to gdp is 130% and the banks hold a lot of its own sovereign debt despite rising yields, there has not been significant contagion to the extent as 2010 to 2012. there's been buying of defendant. spain is the one to watch with its own political vote of confidence, but these are national issues, not european union issues and they also promised not to form a collision together, two major issues they would have to explain and overcan um in any french elections, but clearly the risks are there. guys

we have certainly seen it in the currency today i think it shot up to the front of people's radars when the euro dropped not at level we saw back in, say, 2010, 2011, euro prices it is declining. i wonder, wilford if this becomes a situation where they do have to form z call unexpected election. it will be a lot more serious, because it's part of the common currency exactly. fear that everyone has the key thing with brexit is it was a simple referendum, allowed the left and right to unite around a single issue. in the french election despite 48% vote fog anti-eu parties, the far right and far left never had a -- we wouldn't expect them

ever to form a government. they promised they wouldn't. the big question now is now they have shown they are willing to below the voter vote the same extent if that happens, markets will be significantly shaken that said, to get to the point of a referendum in italy for departure is pretty complicated, because article 75 of the italian constitution forbids a referendum on an international treaty you would have to have a referendum to reach a referendum, but clearly a big worry for the europe and in terms americans may relate to, imagine that bernie sanders and donald trump decided to form a government together based on a plat much the -- i

think that's an interesting metaphor for the mess in italy >> exactly right. >> some would say not out of the realm of possibility in the world we'rein. will, thanks very much liz ann saunders joins us, and brian leavitt also i hope you had a good weekend. good those you both. here we are getting educated get on the intricacies of european politics, but also turkey, argentina. what is the impact >> i'm not sure it represents the 15i78 systemic problem, either i think it's an interesting rolling event, though, here. i get asked the question all the time that was more on the private sector side. globally as well

there was much more leverage broadly. now we're morphing into these rolling crisises, debt-related crises that more recently have been on the governmentside, not on the personal side, not on the private sector side. with interest rates rising around the globe, i think that this has significant implications for economies and also likely continuation of these fiscal problems, because we've morphed from monetary policy being the stimulant to now fiscal policy being the stimulant. this has huge and i think these are a bunch of rolling crises. >> brian, is it all part of the unwind would have been trying to imagine the past six, seven years? >> no, i had would view it from a -- the peripheral european companies are borrowing at very low interest rates this is not a matter of inable

to fund debt this is more the politics of europe, and you have italy, which has had to suffer through severe austerity, increase rate hikes in 2011, all of which was pro-cyclical policies, and actually three some of the periphery into depression. what you are seeing now is a comeuppens on a political front. i want to be clear to investors that a regional event like this is not going to end this economic cycle what investors should be watching is the u.s. dollar. we're in a bit of a correction on that right now, as the dollar strengthens. so if the dollar strengthens because of this and the yield curve flattens, you're going to see the u.s. moderate. you'll still want to own things like technology?

ultimately i suspect this isn't about italy being in the europo or being out of the euro it's going to be a negotiation, and my hope is that you'll see greater fiscal flexibility, or at least some for the italian to remain in the common currency. >> can we sit that global si synchronize synchronized -- >> two thirds of them were in an accelerating growth i think there's more dispersion. we may be able to still end 2018 with certainly most major economies in growth mouth, but i think the level of how correlated and coordinated that growth was is starting to break down >> brighting, your point about the dollar is a good one, but

are we back to -- we used to call it best house in a bad neighborhood does the u.s. look appealing globally relatively to some of necessary ongoing rolling moderate issues that were seeing >> the u.s. is still in a reasonably good position we have a lot of stimulus coming in the second half of the year u.s. economy is going to do just fine at some point if the fed gets too tight, the economy will slow in 2019. what we're focusing on are a lot of the emerging market economies. obviously up to deal with things like turkey and argentina, but a lot of emerging countries are doing well we might be in a period of a stronger dollar where $assets may outperform into these handful of summer weeks.

>> let's -- we're going to watch this closely we have long memories. thank you both see you seen. deja vu, referendums when we come back, starbucks closing down every store for an afternoon of bias training. and a big bet on british sand wish and coffee shop pret we'll be right back. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

more than 8,000 of starbucks company stores will be closing to racial bias training. our kate rogers has been following the story. she joins us live from a new jersey starbucks. kate, good morning. >> reporter: good morning. they will close at 2:00 local time for the racial bias training which will reached about 175,000 of the company's u.s. partners or employees the company has said the training is not mandatory. it's for anybody who wants to make starbucks more welcoming. in a preview, starbucks said each store will receive a toolkit to alloy you blot aye to work in small groups training will focus on understanding racial bias and gut trainings will focus on all

access of bias the goal is to make sure everyone who comes to a starbucks feels safe and welcome there. the company says we sat done with the ceo earlier this month. >> this wasn't one of our best moments, but one thing i can tell you perfectly is this company already had such a great foundation we have the ability to start a national conversation. that's what we plan to do in this respect, not let the work stop just here at starbucks. closing gown for the afternoon doesn't come without a price tag. there have been estimates they could lose between $12 and $14 milli million while they close down. >> let's bring in nick satian, he covers the company, has a neutral on the stock

how did wall street look at this, nick >> i don't think anyone at wall street is looking at this as a big event. our estimate is about 5 to 7 million in terms of the impact that's in the contact of 3.7 billion of revenue this quarter in the americas segment. so about a ten to 20 basis point hit potentially to the comp. it's really not that big of a deal. >> what about going forward? how do you see the impact of what that are bucks is doing i think it raises the question whether the company can evaluate whether these measures are working. >> yeah, i do think the company has built up enough goodwill to be able to withstand some of these hits in the near term. you know, i think they're doing enough in terms of damage control to really come through you this probably better and stronger in terms of brand

equity if it happens again and again, it's a problem, but if it's a one-off type of event, i think they'll come off this just fine. can you sum hides how the philadelphia debacle has impacted sales at all? >> the company came out and said they have not seen an impact, our checks confirm that it hasn't been much of an impact at all. today as the press talks about it today, it comes back into the customers' minds, but i think if you look at where the customer sentiment has drifted in the last few weeks, they have already moved past it. this j.a.b. story, pete's, stumptown, caribou, now pret, i wonder what you think is the overall cumulative effect on chains like starbucks.

>> yeah, i mean, i think that nestle deal with starbucks was one of the reasons that happened was because of the consolidatation we're seeing in the grocery aisle. in fact that really helps nestle gain a foothold. it helps starbucks stake off some of the margin pressure potentially from a consolidatation by j.a.b. in that grocery aisle the cpg business, especially in the asia pacific and europe so i do think the consolidation was one of the reasons why, you know, nestle went ahead and did this deal with starbucks not necessarily why starbucks did it, but i think that's what brought nestle to the table. >> they're face ago more formidable competent irto? yb, thank you, nick setyan.

really for another food deal, j.a.b., details on the trade ahead. hyatt making a big bet in china, wcoin tase ntueo eat away at some of the early losses

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where would we look if we saw a contagion effect one would be global financial stocks the european financials trade as an etf they were getting hit. the isg is more global, so it isn't showing you a huge spillover effect also credit markets, that's usually where it starts to impact stocks the hyg is u.s. junk bonds essentially and cred, credit is a broader global

credit portfolio these will also go up when government bond prices are going up so they'll have an effect the not showing dramatic movement. finally the dollar, definitely showing a risk-off impulse i would argue we're seeing marginal tightening, nothing like an unhinged contagion effect, but we're getting stress tested by this stuff you always go back to the question of how is u.s. companies affected it's not that we do a ton of business with italy, but we have a ton of business in euros, so do the global banks, when you're talking about stresses for the currency and existential problems -- >> that's why the credit markets are the pipelines. i think you would have to see earnings estimates starting to

come down. maybe it has to go on for a while. otherwise it's just a risk appetite, thing, or huge bets. i did like this report on the five sometimes inverse italian bond, etfu up 25%. >> this is the one day you own that for there is obviously isolated bets >> thanks, mike. >> see you soon. deal news today, j.a.b. holdings buying a majority stake in pret, which actually has more than 90 stores here in the united states. terms were not disclosed it's just a latest in the string of acquisition for j.a.b the list goes on and on. this is a company that'sic hungry for deals in the coffee

space, which has been one of the faster areas, and in u.s. food they're sort of setting up a mcdonald's like network of healthier and faster-growing chains >> what's interested is people may not be that familiar with j.a.b., because it doesn't trade publicly you may want to think about it along the lines of a berkshire it does seem to have the attention of holding them for a long period of time. not your typical private equity model, some you're thinking about an exit five to seven years after the acquisition. >> and let the companies invest in the future, like panera going into a delivery network pret has been in the sweet shop they had chia putting on their

shelves before way before you saw pots of chia pudding and that sort of thing i've been doing a work on the slow death of consumers brands there's some real questions about the survival and relevance of about ig names. and the question is what's gone wrong? campbell's soup case, consumer shifted to eat soup as an tieser rather than a main course, and the company didn't move fast numb other companies didn't move fast enough to take out art terrible materials or sugar, but they failed to learn and change the broader culture. the founders that made the game-changing inoy investigations, you also at the

same time shall a retail war going on they're all slashing margins it's the confluence of negative factors so pay attention to those executing in these areas, david, maximizing the m & a, shaking it up inside the established bure, there's so much going on in the sector that you know well, and consolidation is part of it. various sales. >> right they've been slashing costs, and therefore don't have the extra cash to investment to invest in potential growth initiatives. >> i will point out there are some companies doing it right. i talked to a lot of analysts about this for instance, jonathan finy points to conagra, which totally revitalized its frozen business.

they actually raised the prices. they have been doing well. estee lauder is another one. and also being ahead of the trend when it comes to connecting with consumers on e-commerce and digital conagra also moved the headquarters from omaha to chicago, just an example of what they can do to shake up the culture. we're watching markets to shave away at losses a big reversal in oil, prices falling fast we'll get on check on whether the major averages stand we hit some interesting level. back in a moment

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good morning, everyone here's your cnbc news update the supreme court rejecting an appeal by abortion provider planned parenthood, which was challenging an arkansas. a senior north korean official is heading to the u.s. as pyongyang precious ahead on denuclearization process he was seen in the beijing airport on his way to new york. a man with a knife stabbed two police officers in the belgian city of liege, and shot them in an attack that official fear could be terror-related the attacker was killed later by

police what happens to be the largest single barrage since the 2014 slaul will hamas warrior. n netanyahu says israel will respond with great force back down to you guys. sarah, back to you. >> sue herera. welcome back i'm sara eisen, live's always from post 9. one hour into trading, let's look at where we stand s almost 0.75 of a percent, the fear this morning is on europe, on italy with a big jump, a decline in the euro back to a ten-month low against the u.s. dollar, as the country trying to figure out a government and whether it will have to hold a new election. oil meantime off a buck and

change jackie deangelis has a look at what's driving those move. wti continues the decline. brent is a little higher now it may be time to put the oil back on, especially when you consider half a million barrels of iranian oil could come off-line at the end of the year and venezuela is -- recall, the russians complied with this production cut, but they were never really happy about it. the saudis have a vested interest in keeping praises higher some are speculating it could have to do with the relation of the united states.

they implies there's more up side to the prices if the saudis attempt to balance this with more supply it could key the all eyes on -- and the average glad price, that's according to triple a. they fall a bit less quickly. also capital founding partner, good morning, guys >> you think the degree -- i think the saudis have to walk a very fine line i think this is all about pleasing donald trump in a --

they very much wanted the u.s. out of the nuclear deal. so i think it's going to be a fine line. >> john, are you there >> pretty much maybe in my life, but i will also say that like could lima said, it's about the actual number they're going to point directly and say, see, it's all speculation, the mark is just modestly balanced, and they're going to try to walk it back >> you're say further cuts down the road will be harder to get >> i'm saying that the additional barrels will be driven by this price action, say

we break 66, which is a key level, they might not add another barrel. >> again, the saudiings and the number of key opec states, they want higher prices it's the russians corporates, who don't want -- because the up seed is taken by the russian state treasury >> how does the iran story unfold from here the haas has pulled out. what is the political risk going forward. >> sara, i think this is a question the market is ignoring, i would watch the announcement to pull out of the mpt that would signal that nom the iranians going to resume it the program, and with an military option i think this is the big story in terms of what do the iranians do, that i economy is taking, they're having protests there. i think we could goat a very

nasty iranian response. >> though pompeo has thrown cold water on the gold of regime change >> so they say they're playing a game of genno, because they're hoping for the, they want a work-around, all the companies, the banks and oil companies are all the in the process of pulling out >> but is the saudis' willing indeed to cooperate related to something they're no do you. they're sayers don't stay stressed iranian barrels, take our barrels indeed again, i'm just not sure they're going to take is so well. >> what would happen to the price of oil >> that's something if it plays out particularly if they pull out of the non-proliferation treaty, that's the rocket feel

that's when we diskick from fundamentals >> are you -- we talk a lot about logistics constraint delivery is the problem, are we making progress? >> it's a tough row to hoe here. you'll probably see advances next we're, but right now almost a $10 differentian the price in midland, texas, vest another wti is another six to eight dollars very much a ton of production. if this episode should tell us all, we not the swing producer, saudi arabia is. we're back to hat in hand to the saudis saying put more barrels on the market. this goes the issue, the u.s. cannot deal with a supply shock. we have to go back to the countries that hold spare capacity so when venezuela potential loses over the course of a year over a million barrels, if we

talk off several hundred additional -- >> wreck get it all to market, so we're not in a position to affect the price, but the saudi, has helima said, with all the spare capacity. >> so those who wanted to declare energy independence were early, are wrong >> shale is not superman in this case. >> we're definitely a player we are definitely a player goodness noises where the price would be if we weren't producing 11 million barrels a day >> no a sawyeris plan to -- there a certain price as which they would like to maintain. >> the degree to which it's an anchor of policy and we had heard initially 60, 65, now when we hear 80, 85, i think that's about saudi needing to maintain spokening, as they keep the

population effect. some of it is aramco, but some of it is a very that the crown prince is pursuing. >> in the harsh light of disclosure, i think it's a tough pill for them to swallow. >> do they even need -- >> i think they want to do it, because he's come out and said this is a big policy priority for me he wants to check that box, but they also want money for the public investment fund they see that as a future for saudi arabia >> and it's huge, yeah. >> huge am billings to build the largest somplg wealth fund in a world. but with those price levels, they could push it off indefinitely. >> thank you both. when we come back, an inside look for hyatt's big plans we will hear from the ceo on his latest project there much more ahead with the dow down 160

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time to get to the cme group. a busy day, rick. >> absolutely. thank you, david i'd like to welcome my first guest of the week, peter tur. >> thanks for having me, rick. >> a tale the two different markets classified certainly securities, so if you have rirmtsds to hold them, they were treated in a beneficial way in respect to their collateral value. munis didn't have that classification, but they now do. they're going to be a more favored security what are your those may happen in that muni market? >> short term, some bullishness. they've been a bit weak year to date

i expect a short-temple boost. >> it's exactly what's going on with the italian paper the ecb owns a lot, but that's not the real value, what we are seeing now is the real value contrast that with what's going on with munis with respect to how highly it's classified and what that may mean for owners such as french investors. >> we're in the muni phase, the initial phase, where this is now a more acceptable product. that already happened for the last four, five years. now you're seeing that spread decompress it's something we have to adjust to also even in the u.s., one thing

we have seen is policy pushing towards passive investing, right? a lot of policy has been created, particularly in your 401(k)s to really push passive investing. are we creating that same sort of problem >> right you're exactly right passive investing decrease at a time that certain areas, sectors, spaces are blessed, winners and losers are picked with respect to big policy decisions. now what do investors do in the states as they see german yields move down, pushing our yields down, are those distortions going to make mar use draghi and jay powell's missions more or less different or more different, peter >> i think it's going to make it more difficult i think powell has already been too's gressive we had academy securities think it's only going to one or two more, and i think the situation

in europe will solidify that view for better or worse, we have dug ourselves a deep quickly it has to be a gradual return to normal irs finally all of this doesn't seem to have slowed down the rice the strength in the dollar goods to continue to affect the situation of pricing not only in italy, as it gets more pricey? >> i think not only does it hurt other emerging markets ist doing damage against their own policy. they've been very successful at first. this dollar strength i think is annoying the white house i would expect us to have to ease back on rates or something. it's just defeating the purpose of building trade, which is what the white house wants. >> what's even more interesting is, as the rates in europe with

bund yields now approaching 30 basis points and minus 70 plus on the two-year shots, how will that effect what's going on with respect to not only issuances, but how will that take away the room for more tightening should they go that rude and the inversions of the curves >> yeah, i think it's a real dilemma. you have to yield negative rates, which is very unattractive or two-year italy, which is a very, very scary piece of paper to own. again, i think we have to be a bit accommodative, especially in the belly of the curves, i don't think we'll see much at the long end of the curve that'sen over-bought already, and as there's a sense that powell might have been tore mob cautious or more dovish, i think we'll see that end of the curve

not perform particularly well. >> it's interesting to see all your various shots david faber and the gang, back to you. rick, thank you very much. when we come back, ignoring trade fierce why hyatt is making a big bet on china. "squawk on the street" will be right back don't go away.

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welcome back to "squawk on the street." i'm dominic chu. financials, as you can see there, among some of the hardest hit stocks i shares europe financials etf, eufm, down sharply today that's carrying over into trading here with the likes of morgan stanley, citigroup, morgan chase and stanley. >> dom thank you very much. we are following trade news out of the white house this morning, guys. the white house sending a statement saying that the u.s. will move ahead with its plan to levy tariffs on imported chinese

goods as part of its broader campaign to fight what it calls unfair trade practices and specifically when it comes to technology transfers, intellectual property and innovation it's just very confusing when the treasury secretary says, what, less than two weeks ago that trade war is on hold and then we wake up to this kind of news of more tariffs on $50 billion worth of goods. >> right there has been progress or zte, for example, which is a separate issue, seemingly, but kind of connected and is having a positive impact on nxp, that huge deal awaiting anti-trust approval in china. a lot of different tracks here. >> different tracks, different deal. >> and north korea, which obviously has such an impact on this whole matter as well. >> the president himself said t i think the question from here is, do we start to see even bigger tariffs even if members of the administration, like larry kudlow and secretary

mnuchin come back and say we're going to make a deal thanks. >> all right hyatt is making a big bet on chiena speaking of china our own eunice yoon spoke to that company. >> reporter: the ceo told me all about the ambitious plans for china. i'm standing outside a brand new grand hyatt in the city of xi'an. it's famous because it's known to be the home of warriors and it's the fastest growing market. here is what he had to tell me earlier today. >> if i look over the next four or five years, we'll fully double our presence here, moving from the 58 holds we have today to more than double that number. and from a financial perspective also quite important for us, more than $50 million worth of fee revenue coming out of

greater china. that will more than double also over the next four to five years again because of our growth. quite consequential and increasingly important piece of our total business. >> hoplamazian also took us behind the scenes to the operation center, what he calls the heart of the house hyatt operations are different here, especially when it comes to technology because both the staff as well as the customers are much more digitally savvy. this is what he had to say. >> you also see more advanced technology in china than you will elsewhere you'll start to see more facial recognition as a means of gaining access to different parts of the heart of the house. there's some interesting advances and i think china is ahead of the curve i think a lot of the best new technology advances will be born here and then be applied -- be able to be applied across the globe. it's pretty powerful. >> and because it's the hyatt, you think that most of the

people who stay at a hyatt would be international travelers hoplamazian said that is not true in china, 70% of the people who stay at a hyatt hotel are chinese. that's really important, he said, because he believes if the chinese who stay here really start to build a brand loyalty, have a good experience here, then they'll continue to follow hyatt overseas to give you a crazy stat, 130 million chinese travel outside the country in 2017. so, these are really big numbers. also you were talking a little bit about the trade tensions i asked him about the trade tensions between the u.s. and china. he said so far he does not see any impact on the business here. guys >> yeah. travel to china is an amazingly huge industry. thank you, eunice, joining us on the hyatt story. on power lunch we'll continue to follow the story

about the slow and painful decline of some of america's oldest and best-known consumer brands what's the future for some of these companies and how do you spot winners and winning strategies within that it's a big theme for us. not just for investors but consumers in general. >> really nice when we come back, reports that apple may swap its screens on all new iphone models. what that means for the ecosystem.

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