it's 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ good friday morning. welcome back to "squawk alley. carl convent knee y quin-- quint morgan brenn and jon fortt we got to 223,000, unemployment

lowest in 18 years intrigue over the president's tweet. at 7:21 a.m. this morning about the jobs number. eamon has that at the white house. eamon? >> reporter: that's right. you've been talking to larry kudlow this morning, earlier today. on your interview he said it was his decision to talk to the president last night on air force one to give him those job numbers. the president then tweeted about the jobs report at 7:21, as you mentioned, saying he looked forward to employment numbers coming out at 8:30 this morning, the president not saying what those numbers were market participants and folks here in washington speculated that the president was signaling somehow that this could be a big jobs number coming up. the white house has been defending that today, saying that the president did not put out the number itself and, therefore, there was nothing inappropriate about his tweet at 7:21 this morning. you guys asked kudlow about it on the air he talked about that conversation he had with the president on air force one, said it was his judgment to tell the

president or not to tell the president what the number was that was going to be coming out the next morning after that interview, larry did an interview with a number of reporters here on the north lawn of the white house and i had the opportunity to ask him in that if he would tell the president what the jobs number was next month out of concern that it could leak out early, kudlow said that he wasn't sure he said i have no idea it's a judgment call he's the president here is that exchange between me and larry kudlow amid a crowd of other reporters on the driveway moments ago. >> are you going to tell the president the jobs number next month? >> no idea. >> mr. kudlow, what about -- >> no idea it's a judgment call he is the president. >> reporter: so, kudlow there saying he has no idea whether he will tell the president the jobs number in advance next week. also saying he is the president and kudlow emphasized it's his determination whether or not to tell the president he doesn't believe that the president did anything

inappropriate this morning because he didn't specifically say what the number was. he said the process followed here is the same process that was followed back in the reagan administration, the last time that he worked here at the white house, guys. >> ed lazear moments ago said the reason you protect the data is to prevent insider trading, as lazear told santelli this was a public tweet, that's a little different than something that requires fbi attention. >> that's right. there seems to be no law here that would prohibit the president from doing this, if he wants to make the announcement himself, he could simply make the announcement himself it's hard to argue that broadcasting it to the entire world on twitter is somehow preferential insider trader. so the president seems to be well within his rights here to do what he did it's just going against longstanding tradition and practice at the white house and the department of labor s. >> and sets up an interesting precedent for the next jobs number if he tweets or not.

>> will he know the number, will he tweet if he doesn't tweet, do we assume it's a negative number? >> something that the market now has to juggle. is the president taking to twitter? ag business and farmers very poorly for a long period of time highly restrictive on trade. they must take down their barriers they reported high surplus on trade with u.s. as jamie dimon makes headlines of his own. >> the eu response has been overnight, responding firmly to president trump's tariffs, saying that the eu offered dialogue but now we're not going to enter into any negotiations ft meantime, president macron of france told president trump in a phone call last night that the u.s. actions were tantamount to

and would take matters in their own hands and respond in a firm m manner jamie dimon at a conference moments ago. >> it's going to hurt sentiment. it's badly thought through it's not strategic there are legitimate complaints about trade but this is not the way to go about it you see it in the market. >> that said, outside of trade he remained optimistic on the economy, saying we're only two-thirds of the way into the economic cycle he touted a golden age for banking but warned of competition from china jm morgan still down week-to-date. >> calling this a trade war yet? >> i think people have tried to step back from that.

you heard cecilia maelstrom try not to use that term and a swipe toward the president, saying that the u.s. has gone to protectionism. and we've remained open. when people start to use the word trade war. >> they also said we're not talking. we're going to hit you back proportionately and we're not going to talk to you anymore. >> we can pick out the silver linings in the rhetoric. trade war is one thing that people are not trying to use justen trudeau yesterday in cana canada, and people feel it in the eu and the uk, the added aspect of we're meant to be allies and this is taking a diplomatic hit as well a blow not just economically but inside people don't like to be hit by an ally, whether it's by trade or anything else. >> one of the keys for our allies looking to put retaliatory tariffs in place,

they're not doing it overnight immediately either there will be a time period before it takes effect. >> whether it's that or people think this is art of the deal type stuff from the president we haven't seen as big a selloff in markets as you might imagine. >> monday is going to be big barclays. >> yes looking forward to that. it's great timing given that his first interview since receiving that million dollar fine from uk regulators for the whistleblowing scandal we'll dive into those topics, amongst others. >> looking forward to that thank you, will. >> close look at tariffs scott jones is the president of nova steel, canada-based steel company. thank you for joining us today. >> thanks for having me this morning. >> now you have operations and facilities in canada, mexico, but also in the u.s. how does this play out for your company? >> it's going to be very

disruptive probably a little more worried about our u.s. operation it's a little isolated in the northeast and canadian steel supply has been able to get to the northeast very efficiently through canada we source some steel from the midwest. trucking shortage is so severe now. if you're going to cut off the canadian supply, perhaps 15% of the overall supply, the situation will get worse truckers don't want to go to the northeast if they can't find truck hauls to come back to the midwest. >> what does that mean for operations for your company in the northeast do you end up idling factory lines and furloughing workers? >> that could happen in michigan we ship a proprietary product that is not made in the u.s. so the customer will have to pay

the 25% duty or he will not be able to get the product. and if volume shrinks because prices are going up. >> 25% tariff on canadian and mexican imported steel, do you think it goes away >> yes steel is not the problem the product is imbalance there's good two-way trade as i said before. our trucks go in, drop off steel and load up with products made in the u.s. and go back to canada we have fair wages, high taxes, strict environmental regulations, health and safety standards that are very high that's not necessarily the case middle east and asia. >> trudeau said they were close to some breakthroughs on nafta before this and other things

seem to at least sidetrack that. do you think this tariff move makes it more likely, less likely >> i would love to be a fly on the wall and hear the negotiations i don't know what's going on behind the scenes. i do know these tariffs will be very disruptive for both companies. very sufficient supply chains in place and now they're shifting i really believe in north/south trade and it looks like we'll be looking east/west. our energy business out west, probably buying a lot of coil from the united states now is going to have to start looking at canadian coil automotive businesses, honda and toyota in canada, importing u.s. steel. now they'll look at canadian steel. it's just changing the supply chain. i don't think there's going to be a huge drop off in canada there might be maybe the prices stall out in canada here and in

the u.s. because the supply is shrinking. you see the domestic prices in the u.s. start to rise and canada will have probably a little bit of an advantage in steel prices tanks, rail cars, you name it, might have a slight advantage in canada and they'll be able to export products in the united states and be successful. >> really quick if you were to pick an area where we would feel the impact the most, consumer prices, or just plain investment decisions long term book management where would you feel it the most >> it's difficult to say consumer prices, depends on the products some are very steel intensive. john deere and caterpillar will suffer more than the beer can companies where, as wilbur ross says, is a small percentage. some steel-intensive product also really rise and the consumer eventually will be paying. >> scott, thank you so much for bringing us your insights.

scott jones, president of nova steel. >> thanks for having me. and still to come, facebook reportedly close to unveiling a slate of shows, including new shows for its new video platform, watch. more on that, coming up. plus a surge of investments in self-driving, making a big splash this week what it means for the future of transportation and then why rbc thinks netflix could change its name to euroflix not seriously but ybe main rights when "squawk alley" returns.

facebook reportedly close to launching watch that may include content from cnn and fox also op facebook today, new pew study shows that teenagers are using the platform less and less, down some 20 points from just four years ago. joining us this morning, inside.com founder and general catalyst phil libin. good to see you both. >> good morning. >> good morning. >> jason, this pew study seems

to fit with what we thought, that it's an older person's platform. >> it may have something to do with the bad press i'm not sure when the study was done it could have a little bit to do with the russian overhang and that bad press all these social networks are generational maybe they span two generations but not three generations. boomers and gen-xers love facebook but the z generation like to be on video and don't want to be around their parents and old people opening up snap chat and seeing the camera is absolutely a shocking experience for somebody over 40 years old. why would i want to be on camera >> yeah. >> for young people they want to document everything in their life when you look at kim kardashian at the oval office, we have a reality tv president and we have

kim kardashian going and doing human rights work at the white house. this is their aspiration they want to be on video and famous that's snap chat that's instagram. >> phil, i don't believe that these teens are telling the truth. it's kind of like i was studying all night at my friend's house you're not on facebook at all? instagram is number two here as we know, the way these products are linked together now. instagram data gets shared with facebook i don't know if they're counting facebook messenger snap chat, at the same time we see this big hit that snapchat has taken due to the redesign. how much should we pay attention to what these teens say they're doing, how much should we pay attention to the metrics that facebook is reporting in their earnings instead >> i would pay attention to the surveys. these are generally pretty well done and generally tend to know how to factor out inconsistencies and possible

errors, underreporting, that kind of stuff. i think from gallop, it shows facebook's share among an older audience is increasing it's actually more grandparents are on it. they've made progress, if you want to call it that, of reaching older generations i think this effect is real. having said that, they've done a really good job with instagram, with what's app, and other things they've got if the young demographic isn't using the core facebook experience, they're using some other part of facebook over the next month or years they can integrate those more closely. i wouldn't count facebook out among teens. i think the user trends are real. >> i think that's the key. >> really quick, jason, before we start, the president is speaking at a coast guard change of command ceremony. the lowest unemployment in 19 years

we are honored to be joined by today's ceremony by director coates, dan coates where is dan thank you, dan director alice, commissioner mcallenin, and acting director homin, fantastic job, walg many of our senior military leaders, general dunford, admiral richardson, general goldfein and general langel where is everybody stand up these are serious, powerful, incredible people. please stand up. we are here to mark a change in

command of the united states coast guard. and celebrate incredible career. >> monitor his remarks as he goes through some thank yous his tweet or anything else regarding trade we'll get back to it. big news for self driving as fiat chrysler is set to add more than 60,000 cars to alphabet's autonomous driving waymo listen to uber ceo and gm president on our air yesterday talking about autonomy. >> automation hasn't come to the freight brokerage business what we do at uber is match supply and demand in an incredibly efficient way the freight brokerage business if you take that forward to the

age of automation, you get to an interesting business. >> we believe it will have a huge, positive impact on the world, safety, affordability of transportation and we think that as a result of that, this is a really immense opportunity and we're fully aligned around that. and so what we're doing today is all about setting ourselves up to be in the best possible position to capitalize on that opportunit opportunity. >> all kinds of interesting questions out of this, not the least of which are we on track for these so-called deadlines and does it justify other companies not mentioned here like tesla, lyft and some others. >> i think that's right. autonomous driving will become mainstream over the next decade. starting pretty soon, this year, next year and expanding and rolling out for another decade or so. look, vehicle -- the fact that

humans drive older vehicles is one of the most serious problems in the world it kaus a tremendous amount of deaths, injuries, pollution, traffic. it actually takes away jobs in net/net because of how inefficient and dangerous it is. rebuilding this whole industry is a very big deal it will have lots of positive consequences and a few negative consequences but overall a very important force in the world. >> jason, one of the sort of big maybe underreported stories when you start talking about autonomous vehicles is the amount of data that those vehicle also general rate and what that's going to require in terms of broad baband capabilit and all the companies targeting that as well. >> if you can have a driver take over in a unique situation from a remote location that's going to be a pretty dynamic combination. the car is autonomous for 90% of the ride if something happens that is, in

edge case, having the ability for a driver to take over and mitigate that situation but more importantly we'll be able to analyze every single accident and understand why did this happen this person was on their phone they were eating a bagel, changing the radio, whatever it happens to be. could be a pothole, some poorly lit area of the road we'll learn those over time just like we know traffic sitting here ten years ago, the way you would navigate traffic in l.a. or san francisco, you would have some experiences about the 101, 280 or 405. now you put on waze. it els it you exactly where the traffic is we'll do that for accidents as well uber -- dara did an amazing talk at the code conference just yesterday. and i think the big picture, uber is going to win a lot of this because they already have the platform and they're designed to let customers on to it

it will be an amazing opportunity for people to choose between different partners and that's already what uber does. they don't own the drivers that's going to be the next thing. >> i'm having trouble keeping track of the auto manufacturers and who, perhaps, is -- we were talking about fiatt chrysler now. there was this deal between waymo and jaguar for 20,000 cars at the same time it's unclear what the long-term economic benefit is to these economic factors. i suspect waymo is not planning to bring these cars to the dealer for service necessarily over time. how do you think people, investors, phil, should think about what this means for the manufacturers doing these deals with the likes of waymo? >> it feels unlikely to me that in the long term the winners will be the traditional auto manufacturers. it's very unusual for a company that dominates a previous incarnation of an industry still

be the one to dominate the next incarnation of it. there's not very many horse carriage manufacturers that became dominant auto manufacturers. they kind of get wiped out or become niche players long term i would be looking to invest in manufacturers that are making things that will look nothing like today's cars. when people have a vision of autonomous cars they imagine something that looks like a normal car with nobody at the wheel. that's not what things will look like in 10 shall 20 years. whoever will manufacture autonomous vehicles will be very dissimilar it's hard to say which of the current ones will breakthrough and succeed but all of them will be held back because they'll be reluctant to cannibalize their existing fleet of vehicles

even more new start-ups that are coming up that are making stuff that don't look like normal cars at all. >> the legacy players have deep roots. your point is well taken on the innovator's dilemma. good weekend see you soon. >> have a good one. >> still to come, counting down to the european close on the heels of shake-ups in spain and italy. the dow is up 200 points poised to end the week lower "squawk alley" will be right back alerts -- wouldn't you like one from the market when it might be time to buy or sell?

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stocks about to close in uk, continental europe italy and spain led the way reerks bounding as both count countries recover from changes in leadership. socialist party leader pedro sanchez led the opposition and is replaces rajoy as pm. in italy, the populous five-star

and lead parties did get that coalition. yields pulled back from the mid-year highs now that the risk of a snap election has been removed. european banks on the rise today. the sector still on pace for the worst week since march and what a week it was, at least a few days ago. >> absolutely. >> yeah. let's get over to hq sue herera has an update. >> good morning, everyone. here is what's happening at this hour the man suspected in the shooting death of a tennessee deputy has been captured he is suspected of killing sergeant daniel baker wednesday morning. north and south korea have agreed to hold talks later this month on military issues and the reunion of families separated by the korean war officials from both sides meeting today at a border village on the north korean side of the dmz defense secretary jim mattis meets with singapore's foreign minister and his vietnamese

counterpart, reaffirming the u.s. commitment to security. lunch with warren buffett, bids already surpassing the $3 million mark raising money for the glide foundation's work to help the homeless wraps up tonight. record price is just under $3.5 million. so you have a little more time to get those bids in good luck, everybody that's the news update this hour back downtown. joh jon, have a great weekend. >> you, too, sue thanks what mark mahaney has to say about netflix. plus live to walmart headquarters where doug mcmillan is set to speak at the annual shareholder's meeting.

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walmart's doug mcmillan speaking this morning. that's where we find courtney reagan morning, court. >> good morning to you, carl that's right in this arena right behind me at the university of arkansas, walmart ceo doug mcmillan is speaking now mason ramsey, the famous yodeling kid introduced the ceo here doug mcmillan will be talking about embracing technology and how technology will be taking walmart into the future for its continued success. of course, this event is a mix of fun and business. we have a celebrity emcee, jamie

foxx musical performances by carly rae jensen we heard from married to one of sam walton's grandchildren and talked about how risk take something back at walmart. cfo talked about how it's disrupting its own retail model. mark lowrie detailing the tech innovations behind and in front of the scenes that consumers have seen over the past year the co-founder of rent the runway who works for tech incubators spoke about the new jet black text messaging concierge just launched in manhattan and brooklyn as of yesterday. there's a lot of excitement going on in the arena. one thing that's not happening this year is any shareholder business that actually happened two days

ago. that's a departure from what we've seen in the past the board has already been elected and in place walmart will move their executive suites off to another site after this event concludes. back over to you guys. >> courtney, i'm curious, given the fact that walmart was on the forefront saying it was raising wages. in the last 24 hours we saw higher labor costs impact dollar tree, dollar general, costco saying they're raising their starting wage to $14 an hour has that been a topic of conversation at the meeting this year >> reporter: that's interesting, morgan i actually asked walmart's u.s. ceo just yesterday if they had considered looking at wages again. when walmart raised wages the first time across the board -- remember they're the nation's largest private employer, it was cheered by many and they saw the benefits in the stores you always want your wages to

continue to increase over time they said it's an issue they look at every couple of weeks. just yesterday the board met and actually discussed that. so no further plans but it is certainly something that walmart has to and appears to be keeping, at least on the forefront. back over to you guys. >> all right thank you, courtney reagan meantime, we're keeping our eyes on netflix. rbc out with a new note updating the thesis on netflix and their bullish call on the international expansion, going as far as to jokingly say it could be called euroflix we are joined by mark mahaney. good morning. >> good morning, jon. >> people actually getting off of netflix look lower, i guess, at this stage than you might have expected. and also europeans showing some willingness to pay for content how does this change, really, the bullish position you had before you've been pretty pro netflix

for quite a while now. >> i think there are maybe three things that are still somewhat under appreciated about netflix, maybe four first is how popular they are in international markets, secondly how profitable they can be and third mouch pricing power they have what this survey does is gave us more ammunition on the bullish side in france and in germany, about 35 to 37% of internet users in those two large markets, france and germany, are now watching netflix. those are levels -- that kind of ramp is what you had in the u.s. several years ago. what we're seeing is more evidence of international markets can be as successful for netflix as the core u.s. market. that's the big so what that came out of the report. we also found some interesting trends amongst the most popular shows. money heist in the u.s., spain it's now becoming a global hit for netflix. they're showing the ability to create original content in the u.s., house of cards, orange is

the new black, stranger things but also with shows like money heist. it's becoming a global media phenomenon. >> have you modeled in what happens to netflix valuation if at s&p t w tchlt&t wins in cour? >> no, we haven't. the big so what, though, about this is on both sides. netflix has got longstanding contracts with the carriers as a large media company, it does use them it's in their cogs i don't think there would be any dramatic change to cost structure. in terms of sources of content, they're now spending $12 billion a year cash wise, 8 to 9 billion a year on content. they're becoming quickly the largest buyer of content globally their ability to get access to content, i think, gets easier as they become bigger, they help media companies make quarters. if you don't sell to netflix,

you're going to come in shy on earnings and that's leverage that increasingly we think netflix will be able to pull. >> is that the biggest risk for netflix, the fact that it's spending more and more on content? >> i think so, megan there is an issue here that, you know, are you managing the pnl correctly? they've been able to show in the u.s. that they can grow subs, spend more on content and rise margins -- raise margins whether they can still do that in international markets, however, we think they can do that the proof isn't definitive yet probably won't be there for a while. that's a bit of the bet. there's a competitive risk one thing that came up in our u.s. survey is netflix is the leading streaming service. the fastest growing streaming service is amazon. >> right. >> survey seems to suggest that prime customers adopt both services, that the bigger trend here is cord cutting and going to two services, amazon prime.

we don't think there's competitive risk from amazon if there's something that will blow it up, that's the one to watch. >> how long before this starts to become maybe not a zero sum game but disney is coming out with its service that will have a lot of great content at&t is making its move, et cetera youtube is very much pushing facebook, maybe they're not making big waves at a certain point does it become a detriment that netflix has been in the lead with so much running room up to this point? >> could be, jon i think they're streaming video, paying subscribers worldwide, less than 200 million of those paid cable tv subs worldwide, that number is closer to 1 billion. arguably, we're still second or third innings in the adoption over time of streaming video if that's true, if we're that early on in the s-curve, it's not market share that matters

but market growth and netflix will be the major beneficiary if they continue to execute well. there's always that risk they've made mistakes over the years in terms of we're a little too aggressive in terms of price hikes but seem to be in a pretty good cadence now. >> they sure do. mark mahaney, thanks. >> thanks, jon. >> vm ware surging, following a strong earnings beat cnbc exclusive with the company's ceo is coming up. >> first rick santelli, what are you watching today >> the markets we had a solid jobs report there's been hand-off this week, from politics, which the markets ndenls tike, to economic fuamtahat were pretty good we'll talk about that after the break. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

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 i'm scott wapner summer setup for stocks. why this could be the perfect environment forthe bull market plus, one analyst changing his price target on twitter. where he thinks it could go now. and trading health care before one of the biggest industry events of the year, our meg tirrell will be here with the names you need to know about that's all at noon carl, that means we're less than 15 away. see you in a bit. >> see you then scott, thanks. meantime, let's get to rick santelli what a morning get the santelli exchange. >> unbelievable morning.

i see 289 in exchanchange we're down several basis points on the week. when you consider we had a settlement this week of 2.78%, it's a rather incredible week. may jobs report was solid. if we look at it, 223,000 jobs, much more than anybody is expecting. if we look at the unemployment rate, 3.8, average all the earnings, they were pretty good. what bothered me was that the pool of workers that are not counted anymore -- we'll call those the permanently unemployed they have the ability to work but they're not working. that reached 95.9 million. if you look at the unemployment rate of 3.8%, that implies 6.1 million unemployed which means we have 102 million people that we need to work along with to create better opportunity. now, i talked with ed lazear today. everything about this report is good i don't mean to besmirch the

report in this regard. this administration is not looking at entitlements. we're all looking at debt. we have options every other week that have grown in size. these people need assistance and the economy has to generate that but what would be better if we can expand the employment roles and bring them back into the workforce. here is something interesting. if we really dig down deep in these numbers, the 3.8, i'm not sure if it really means anything but still, you have to go back to december 1969 to find the lower rate there's been plenty of 3.8 since. to find a lower one, have you to go back to december '69. today is up .3 of one percent on hourly earnings was good we started the year out in january, going forward in time, december ended up .4, it puts a face on it it's good but until we start to get into the bigger numbers just like on the year over year, 2.7. if you recall that was released

in january 2.9, a whole inflation scare. it's been pretty steady. average hourly workweek every month but january has been 34.5. it's important it's solid but it's not breaking out. finally, the biggest thing of the day, in my opinion, jamie dimon. here is what he said lower u.s. tax rates are making foreign competitors nervous about keeping up you're darn tooting. we talked about that when they were working on the tax rates u either empower or discourage it's about small businesses. they're empowered. the rest of the globe? not so much. of course they're going to come around once again, the u.s. is going to turn the global markets. carl, back to you. >> that's one of the big headlines of the day, rick thank you. rick santelli. as we go to break take a look at lululemon, record high surging on this beat pretty good outlook for the coming quarters and that does snap a four-day losing streak. "squawk alley" is back in a moment it's really not very important.

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make sure you join us monday morning, 9:00, for "squawk on the street" with stooes easterbrook, the ceo of mcdonald's as we talk about the future of the company, technology, wages, commodities and quick rvseice in general dow up nearly 200 points back in a moment

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welcome back take a look at shares of vmware, up a little better than 6.5% the company reporting a first quarter earnings beat, revenue beating estimate for the fifth straight quarter the stock is up 50% over the past 12 months pat gelginger is the ceo and joins us now pat, good morning. >> good morning, jon always a pleasure to talk to you. >> great to see you. got to go right at it here

a lot of analysts, some investors, despite this big beat and raise, unwilling to give vmware full credit because of this uncertainty over what your controlling shareholder dell might do any timeline you can give us on when dell is going to clear up plans for vmware? >> yeah, unfortunately, there's no specific timeline obviously, the boards of both companies are motivated to move things along as quickly as possible that's indetermiaeretermine nltr performance has shown even though there is some over all question in that respect, our performance in the large beat and the raise for the year, the great response from our customer, it's not affecting our corporate performance in any way. we're quite positive in that regard >> you mentioned on the call that europe has been a big stand-out market for you for the past couple years. double-digit growth there. no question from analysts on the call over any trade war potential fallout for you.

it doesn't seem to have really touched the cloud and data center players, but what update can you give us on the potential for these trade tensions with europe, the tariffs, to affect the technology sector? >> yeah, overall, we just say generally that, you know, any trade disputes, we don't view that as a positive thing for business but as the question suggests, you know, we think that tech overall, it is a good market for tech and tech is breaching into more areas of business and more businesses are becoming tech centric. we have clearly seen that in our european business, which has been particularly strong overall, as these discussions have been going on of different trade aspects we have not seen it affect our business, the custom customer's interest in that, and we're quite interested for multi years of performance for companies that are strategically well positioned in tech like the mware is >> you mentioned a few potential big growth areas

thus far, your cloud partners have been amazon with aws, and ibm as well. there were questions about microsoft and google you also talked about the potential for moving some of the newer products of yours in networking, for example, more into the mid-market smaller customers could show growth. what should we expect to see more growth from in the near future the cloud build-out on other platforms like azure, like google, or moving some of the newer products into the midmarket? >> yeah, overall, we do see that the broader networking vision that we laid out this quarter, we call it the virtual cloud network, and it's becoming a hyperdistributed world, jon, where there is no edge to the data center anymore, and customers have multiple clouds and we extend that vision late last year. we're seeing great response from this broadened vision for networking we see that being a bigger driver in the near term.

that's a larger business for us. but that said, the enthusiasm for our cloud products and we announced several major customers now running on the vmware cloud on aws, so great momentum there and we do see that we have interest from our customers to expand our relationships with google, microsoft, and others. we have announced some incremental expansions of those agreements and then finally, the broader vmware cloud partner program, which includes ibm, again, had a very good growth of 30 plus percent this quarter overall, our cloud strategy is getting great resonance with customers and it's increased the strategic commitment we see from customers overall. because if we're the pathway to the cloud, they look at us and say wow, a bigger strategic partnership with vmware is part of not just my today environment but a critical aspect of how i get to that digital future >> right, well, these results certainly made the case.

patrick gelsinger, thanks for being with us. >> thank you, jon. >> keep your eye on tech today record highs for amazon, for adobe, nasdaq within 2% of a record as we go into june, which hasn't had a down dow or s&p since 2015 >> have a great weekend. >> yeah, we'll see you on monday let's get to the judge and the half and welcome to "the halftime report." i'm scott wapner our top trade this hour, the summer setup for stocks, why this could be the perfect scenario for your money. with us for the hour today, jim lethenthol, josh brown, steve weiss, jon najarian, john seechen is here, one of barrons and forbes top 100 financial advisers lindsey bell is with us, good to have you with us let's begin with the market. stocks are higher following the strong employment report equities coming off their best