i think. >> we do >> before you know it it's, like, god almighty, when is it going to get good. >> that's how we think. >> larry, thank you so much for joining us today it's always a pleasure to see you. >> thank you >> that does it for us today make sure you join us tomorrow it's time for "squawk on the street." ♪ ♪ good thursday morning. welcome to "squawk on the street," i'm carl quintanilla, david faber and cramer will be in new york city and the u.s. assistant ag dell rahim, and futures are at record highs and the dow and s&p, and plenty on the tape including dimon and buffett talking to becky quick our road map will begin with the

long-term contract for companies to stop issuing quarterly earnings, and zte from wilbur ross breaking the news on cnbc that the u.s. has struck a deal to keep that chinese telecom giant in business. and stock futures are pushing to a positive open and it will be another session of gains as trade fears continue to ease >> two titans of business. berkshire hathaway's warren buffett and j.p. morgan's jamie dimon calling for guidance on quarterly earnings our becky quick talked to both dimon and buffett about taking the longview take a listen. >> the ills and problems of people making short-term forecasts particularly quarterly earnings forecasts, not transparency and not having quarterly reporting and it can often put a company in a position where management from the ceo down feels obligated to deliver earnings and therefore may do things that they wouldn't

otherwise have done. so if you have a good board and you have a great investment opportunity and it will cost me another couple hundred million this quarter and someone like warren will say absolutely do it that's future earnings don't hurt your company because you try to meet the short-term things >> this is something you've been preaching about for a long time, too. what's an example of where you've seen it gone wrong? >> i've seen where companies get living by so-called making the numbers they do a lot of things that are counter to the long-term interest of the business, and i've never seen a company whose performance has been improved by having some forecast out there by the ceo that we're going to earn because it's not only sending the wrong message and delivering the wrong results to the company and the country, it's teaching the people who work under him or her that quarterly performance is

the endgame. i tell our managers, just pretend you're going to own and it's the only business you and your family will own for 50 years and you can't sell it and you'll make the right decisions. >> have you seen this play out the wrong way in the boards that you've owned and other friends that you've known? >> becky, i've been on 20 boards of publicly owned companies and not counting berkshire, and i have seen -- i have seen managements that i think well of personally, and they would marry my daughter and moved as executors of my will and moved next door and their ego gets involved and when they find they can't make the number, sometimes they make up the numbers and it's a bad -- it's a very, very bad practice and once it gets

going it feeds on itself because the investor relations department you will earn $1.08 and you get a reputation for making your numbers or beating your numbers and you will do some very stupid things at some point because business just doesn't work that way and for 53 years at berkshire, i consider berkshire an unfinished painting all the time and the horizon really is infinity, as far as i'm concerned. >> jamie, what does this mean from a real perspective? the companies in the business roundtable are 200 companies are they not going to be issuing quarterly guidance at this point? >> first of all, this goes down on the company there could be pressure at divisional level and the sales level and they might do something different and it's very easy for a ceo to change a short-term profit number by not

doing the market and by not opening the branches they should open or by selling more product at a cheaper price so it creates disincentives and it starts feeding itself and you have to meet it and you have to meet it and years later you find it corrupted and you have to be careful about how or when to use the guys in particular if the brt or 60% of the members do annual earnings guidance, i would personally eliminate that, too, one day, and plus or minus do quarterly. >> let me ask you. you mentioned that it's up to a ceo's discretion to be able to do this. if you wanted to, how could you change the numbers of j.p. morgan if you were more focused on short term. >> you can choose exposure by making a phone call and add revenue. you can cut marketing. a lot of people cut marketing because that's one of the easiest things to cut. >> right >> you can reduce and pay people

up and you can reduce airplane maintenance and that's a bad idea >> people shouldn't be doing that >> that's kind of what it is you build a new data center and you should build the new systems that you need and explain it to the board and of course, some of the ceos will say it's the buy side and the sell side where we put pressure and i'm trying to say to people the companies have done it and the good, smart shareholders don't mind and they're telling you, it's better he prefers it. he does want to know what you're investing in and he knows that quarterly earnings, they're a function of the weather, commodity prices, volume, competitor pricing and you don't control that as a ceo and sometimes you're the cork in the ocean, but do the right thing anyway and you'll be fine in the long run. >> what do you want to hear from

companies so it doesn't put the artificial constraints on them >> i want to talk -- hear from them what i would hear if i were their soul partner in a business, and they would be operating partner and i were a person that did not spend day to day in the business and had a significant part of my net worth in it and they would tell me periodically the things that were important to me, and they would tell me the upside possibilities and the down side possibilities and where they were investing ahead of time and things that might pay off in a few years, and i would want them to -- i would want them to run it like we were going to be partner for 50 years and neither one of us could sell and keep me informed and don't -- don't worry about what we earn today or in the next week. what's magic about a quarter

we're in businesses for a very long period of time. >> joining us with more on her exclusive is becky quick good morning great stuff today. >> thank you you covered a lot of ground. you covered trade, the euro, the market and the economy, but on this guidance question it's raised an interesting debate about short-term as they argue, but also what shareholders deserve to know about how business is tracking at a certain point. >> i will tell you it spurred debate on our set with other people that we had there this is an issue that people who are investors who say, look, we want more information, not less information. you will have some ceos who might be a little skeptical of the ability to actually carry this out, but i've known both jamie and warren for a long time, and i can tell you that they're talking about what they think are best practices and they're talking about when a ceo stands firm against some of the

things buffetting them in one direction or another direction and they're talking about what they learned from their own positions and to try and feed the boss and to not disappoint anybody and to see the stock rocketed around and the sensation to pull something forward from a future quarter or as jamie mentioned, you can do this with the bank where you create a bunch of swaps and create hundreds of millions in revenue like that out of nothing. you should be giving real guidance or you should be giving real information and not being teased into a position of -- i don't know, trimming the trees or making things look better than they are. >> yeah. becky, i understand all that, and you and i have spent a lot of time with ceos through the years and you know how much they can value a long-term shareholder. >> right how important that can be to them, but at the same time, most of the people who in on our air to talk about stocks with a mutual fund or hedge fund

typically own them for nine, ten months at most >> right. >> the turnover is very quick and they're being charge judged on weekly, daily, monthly numbers. i just wonder how it all plays out because it is asking a lot from a lot of different parts of the chain here. >> david, you make the fair point. the reason that this has become so much important to jamie and warren than to others is because change we talk about it in technology, but the rate of change in everything has grown so much more rapid as you mentioned, short-term investors who were in this even if they're mutual funds holding it on for nine or ten months and that's an issue that all of the ceos feel closely. if it were different for warren buffett and a buy and hold forever type of investor they want you making these investments down the road. jamie says as a ceo, jamie wants to see you investing in things whether it be marketing and research and development, but david, you just hit on it.

the key point is the idea that shareholders have become much more short-term focused and many more shareholders were in and out of stocks. that adds a lot of pressure for corporate levels >> i tried to dig up some data, becky. there's not a ton out there, but mackenzie has done research on this very topic and they looked at companies, and 600 companies from 2001 to 2014 that invested 50% more than other companies and they found and that was on rnd an average of 47% more revenue growth than the other firms and less volatility and cumulatively the earnings of the longer term investors grew 36% on average is that the goal here from dimon and buffett? is it the investment and is it that they want to see more companies go public? >> i think the goal is they want to provide cover for companies that maybe don't have a ceo who has been given so much leeway by their shareholders and both dimon and buffett are saying

here's how we're going to do it and not only do their employees follow suit, but the shareholders have known that they'll do it this way and they told people, look. you don't have to do it my way, but don't invest in you, and he has self-selected who his investors are during that time period there are a lot of ceos who don't have that latitude, who will not be given that much play with the shareholders which is bringing the roundtable which is 200 companies and we'll provide an umbrella of cover for you if you are a smaller company that decides you want to do something like this, too you can say hey, this is what biffet said to do as a major investor and this is what jamie dimon has said to do and it gives you cover to do this thing. >> we will talk all morning long about what this would mean if accepted widely to volatility. on the sell side they'd have to work a whole lot harder than they do how now on some of their models

very quickly, beck other headlines, they talked a lot about the economy and pretty much uniformly in a bullish way. >> yeah. jamie dimon said he thinks this is the sixth inning when it comes to the u.s. economy. so if you're talking about a nine-inning game you still have quite a ways to go we're nine years into this and that implies there's another year to go and that might very well be the case he said, look, if this is the sixth inning, we have our number three and our number four and five sluggers and that's our lineup right now they're both saying that the things look very strong and even when things level a bit with the italian politics and what that might mean for italy and along those lines, they didn't seem there was a huge risk and things like that will pop up and it shouldn't have an impact on the u.s. economy >> i thought it was interesting. both took the bet that the euro would be around in its current form in the next five to ten years. >> i was surprised there was some hesitancy

they were more hesitant and there was a bit more of a pause when i said hey, do you think the euro will be here at five or ten years? absolute lie >> both said yes, if i had to take the bet, sure it would be here and jamie thought it would be catastrophic, but they were more hesitant than i thought they might be with that. >> really good stuff, beck, in a way that only you can bring. appreciate it very much. >> thank you, guys >> dimon and buffett had the op ed in the journal and you can get a lot more of becky's interview on krshcnbc.com. the u.s. striking a deal to keep zte in business with big penalties and we have details on that a possible presidential run for dimon and what he has to say about 2020 and beyond. taking a look at the market, pretty good here the s&p up almost exactly 100 points below its all-time high aomt.s ck the street" iba in men ds! i'm carl and i'm a broker. do you offer $4.95 online equity trades?

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u.s. striking a deal with chinese telecom giant zte ending crippling american sanctions commerce secretary telling cnbc it ends a billion dollar penalty. the deal requires zte to change

its board of directors and executive team in 30 days. here is ross commenting on the deal >> we think this settlement which brought the company a $17 billion company to its knees more or less puts them out of business and now they're accepting having this whole new management and whole new board should serve as a very strong deterrent not only for them, but for other potential bad actors >> david, he says this is separate from the trade negotiations and says it's a world-class embarrassment for china. >> they have been saying it's separate all along, although the president seemed to link them or put pressure on commerce secretary ross through a tweet to revisit the deal. this was of no lack of significance to the chinese. everything i've heard who did business in china and aware of

their feelings about zte made it clear that the chinese thought it was extremely important given the employees involved and the company itself, the fourth largest company maker of wireless devices in the world. so this will put it back in business, and of course, as we said so often, take a look at shares of nxc semiconductor because these have been linked ever since zte was going to be put out of business by its inability to buy u.s. components for its devices. that stock is up almost 7% it's a $127.50 all-cash deal that has been waiting for the approval of the antitrust regulators in china for a very long time. the journal reports this morning that now it should be forthcoming. well, very, very soon, china, they say is ready to sign off on that deal. that has the effect of sending the stock even higher. i know steve malinkof, the qualcomm ceo is on with jim.

>> telling steve he's happy with the zte deal, and adds that discussions with apple are continuing regarding their dispute, but that a call between him and tim cook will not be happening. we'll be looking for headlines out of that. >> cook is scheduled to be deposed on the ongoing litigation, of course, between apple and the apple suppliers who are not paying qualcomm its royalty fee fairly soon. if malinkof gets the deal done, he's under a pressure is that man right there with the gray hair more than he had not that long ago given the myriad of issues that he's dealt with as ceo. whether the dealings with the chinese originally and the penalties there and the hostile bid for broadcom and the inability to close the deal and the huge litigation involved with apple. >> and of course, they're a customer of zte, right >> they provide. >> they provide it -- their

chipsets are in pretty much every phone in the world. >> i think it's striking that the u.s. will put a hand picked compliance team into a chinese state-backed company certainly that's tough and if that's what will pan out i wonder if it will quiet criticism from fellow republicans like a marco rubio who has said trump should not be making a deal. we're waiting for reaction from twitter and corker or other republicans? absolutely when we come back, we will count down to the opening bell and take a look tathe futures here. "squawk on the street" is back in a moment. the gig-speed network from comcast business gives you more. with speeds up to 20 times faster than the average. that means powering more devices, more video conferencing, and more downloads in seconds, not minutes. get fast internet and add phone and tv for only $34.90 more per month. comcast is building america's largest gig-speed network to give small businesses more. call 1-800-501-6000 today.

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from where you sit >> if we're in the sixth inning we have ours coming to bat right now, number three, four and five in the lineup. business is good i'm no good at predicting out two or three or five years from now although i will say this that there's no question in my mind that america will be far ahead of where we are now ten, 20 and 30 years from now, but right now, business is good. there a no question about it as a result, you think the stock market looks affordable, warren? >> not as a result the decision on the stock market should be made independent of the current business outlook you should buy socks is when you think you're getting a lot for your money and not necessarily when you think business will be good next year >> that was warren buffett speaking to our becky quick. we will have a lot more from that interview ahead plus, when we come back, jim cramer, he's going to join us from the deal conference you see him right there. it's on corporate governance,

malinkof has a lot on his place as they discuss the deal with qualcomm don't gonyer awhe. benjamin franklin

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you're watching cnbc, "squawk on the street" live from the financial capital world. we covered the buffett/dimon news not a lot of individual movers and people talking about g7 and warnings reported out of france and germ ney they may not sign a joint agreement without major concessions from the u.s >> it looks like it will be an intense and fractuousg7 meeting and they closed and nasdaq at a new record high and it seems like the gains are set to continue today as far as economic data, we got initial jobless claims and 322,000 and they remain super low. people aren't getting fired and the labor market is hot, hot, hot, and i think it's something that both jamie dimon and warren buffett were talking about, the

sort of best jobs market in a generation and what's interesting, david, i mention this to you earlier, president trump said it. we are getting an approval rating from the nbc/wall street journal poll, and they gave the president credit interestingly, not the gop so unclear what that means exactly for the midterm election. >> seven out of ten say the economy is getting stronger and last summer it was sixout of ten and the percentage giving potus credit, 44 versus 38 last june that is tilting in the white house's favor. >> no doubt. it is a strong economy we hear it all day and, you know, the concern is great and what's going to happen -- and how tensions will continue to rise. >> it was wild to watch larry kudlow yesterday in front of the white house press corps defending the tariffs, remaining strong saying this is -- he said

this president is a trade reformer and we will stand up for the interest of the united states. >> not huge concerns if you look at some metrics. there is the opening bell and the s&p at the bottom of your screen at the big board today celebrating its ipo is m17, a live streaming platform and dating app based in taiwan and animal planet's new series "dodo heries," smuckers, if there is a corporate leading, it might be it the guidance there not good and a big miss. >> not pretty. this follows the trend of food companies and primarily domestic-based companies in the u.s. not doing too well. smuckers makes jif peanut butter and crisco >> they're more into coffee and pet food >> coffee did better. >> pet food is a problem because

of the private label and they just announced a deal to acquire it back in april for $1.7 billion not a great cut. sort of like campbell's soup requiring it, and putting up bad results and the execution and integration of the acquisitions just aren't going according to plan and it's interesting because you have a lot of the retailers having a much better quarter and yet some of these staples especially the food companies just are not with competition with private label and getting stuck in the middle of a retail war where margins are squeezed and they don't have a lot of pricing power anymore >> and it's where mars, nestle and smucker and the private label question and it went to general mills >> right right. and then also coffee i don't know folgers, whether or not there is an impact at all there. >> coffee volumes were better and the competition from, i

don't know, jb. >> it's the oils and peanut butters and that sort of thing that is not doing too well and smuckers will get punished like the other companies. it's the worst-performing group in the market and part of that is the yield story and the dividend players aren't as attractive and part of it is the general weakness in terms of sales trend, something we saw from smucker. >> tesla once again in focus adam jonas with a note saying that a 5,000 per carper week -- a 5,000-car run rate is not expected from morgan stanley in the first half of fiscal '19 even though musk says it's coming at the end of the month >> the stock had a very strong day increasing its gains as the day went along and it ended at 9% after there seemed to be a lot more confidence from investors in his seemingly

growing confidence, i guess, in terms of meeting those delivery projections. >> i wanted to take a look at shares of at&t this morning and not down that much and we did get research from both jeffrey, and today isi yesterday. neither one of them particularly positive for at&t. first, the key here is coming next week. judge leon on the 12th potentially at 4:00, and he wanted to issue his ruling on whether or not the department of justice has succeeded in blocking at&t's agreement to acquire time warner or whether that deal would be allowed and this morning jeffrey weighs in and says even with that deal we still think that the threat from virtual mvpds are only growing for at&t and that with industry and transition and the proliferation of these gaining share and video options and that

will pressure average revenue per user and there's investment and the drive growth and the advanced advertising opportunity may take longer to materialize so their part at isi would be a good thing even if the doj loses and they appeal and were able to get an injunction to stop the deal and then it didn't happen time warner shares were being able to go higher as a result of that >> by the way, real quick on that whole question, the doj, if they lose -- there it is we'll give it to you and it rules in favor and they would expect an appeal and in the event from doj preventing the close, it could create a decision point for time warner if the doj were to prevail and then they'd go on their merry way, but the point they're trying to make is maybe time warner would be better off >> on the specific question of whether or not the doj will appeal, the answer is most

likely absolutely they're going to appeal, but the key question is will they be able to get an injunction to save the transaction and in other words, not allowing at&t to close it. i have spoken to a lot of antitrust lawyers in the last two weeks and most believe that it is unlikely that the burden is fairly high, even though judge leon has been reversed with some regularity by the appeals court that they will allow at&t to close the deal because if they did not, if the doj was successful and stay on the deal, that would essentially be a death knell, as well even if they were to have won the trial so we'll see and it's an important point and most people put it at a fairly low chance and not remote, but fairly low should they lose the doj and then seek -- >> tuesday the 12th. >> the singapore summit. >> the same day as the singapore summit and the next day, of

course, comcast will probably make a bid. >> and i'm on vacation. >> yeah. they have to come in >> the busiest week of the year, the tcb, fed, doj, the cpi you name it. jim is joining us from the deals and corporate governance conference having made news with mal m mollenkopf >> he's the assistant attorney general for antitrust because i want to know if he will go, and i talked to steve mollenkopf today and it was much different than the steve mollenkopf i spoke to last night on "mad money," before we learned about zte and he was so confident that i think it's as close to money in the bank as you're going to get. >> we've got so much going on, jim, i don't know if you had time to listen to dimon and

buffett talk about what they describe as a roaring economy and also this new view of not new, but evolving view on the legitimacy of corporate guidance, quarterly guidance. >> well, look, i'm from the andy groves school. it's the late, great andy groves who was so important at intel. he said you can grade managements by a quarter is the seminole statement that he made and if you're paranoid you will survive and the ceos were on a quarterly basis and it doesn't matter if you have guidance or not. the ceos will be at the mercy of the spread sheets. so i've got to tell you, carl, i don't like short termism and i like value creation and what you got from nxti with the zte announcement, that's okay, too it comes in all different colors i like to make money >> on that subject of nxt. you did ask mollenkopf about

wilbur ross telling us on our air a short while ago that they reached a deal with zte and let's take a listen who has that deal at 127.50, waiting for chinese antitrust approvals and let's listen to what he had to say. >> happy to see it from the perspective of they're a customer of ours i also think any time you have an event that's moving toward stability and the international relationship between the two countries it's good for business >> good for business, that relationship hey, jim, talking about relationship, did he have anything to say about the relationship between qualcomm and apple? >> well, i probably asked him of 27 different questions like that in different guises and i was shut down. the deposition with tim cook, wouldn't that be a perfect time to settle? he didn't take the bait there. i asked him if he would have

breakfast and pick up the phone and he didn't take the bait there. >> even if you overpaid in an agreement with apple and he said i think we'll do well. so he actually did in a kind of a really exceptional way, a tremendous song and dance to keep me off of anything. put it that way? hey, jim, it's sara, on this short term corporate guidance thing, i think it's interesting that you will talk to nelson peltz and a few other big-name investors and i'm curious what you think of that because they like to portray themselves as long-term investors like you and they want to see the value creation, but they also hold management's feet to the fire. >> well, look, it's a great question, sara, because what i think you always find is people want to say, it's about good or bad ideas and it's not about short or long, but yes, nelson peltz and you have a six-year time horizon by the way, i've got mr. singer later from elliott management and they're talking about incredibly long time horizons

and you may need one from procter & gamble procter & gamble has really become one of the ultimate quarter story and when they missed, the stock's down 28 points they did not have a good quarter. wall street is determining the nature of guidance, not proctor which has actually done guidance and kind of, like, hey, we will do okay. maybe procter & gamble is doing better and we're long at 74. maybe it deserves to be high are. i can't wait to talk to him. >> down 19% so far this year procter & gamble so good. >> eye good year for procter's stock. >> yesterday's best day since late march, you were positive earlier in the week that we would start to see them rejoin or assert some leadership. is that happening? >> yes we are too close to the federal reserve's stress test. there has been a before and after pattern the last two years

that is so remarkable. goldman's stock went up 60% after they got the blessing. j.p. morgan has acted better in the second half and they'll say i'll get into it 13 times, rather than pay 13 times after seacar bank of america has been terrific after seacar and goldman sachs, morgan stanley and it will be wells fargo because they're operating under different structures >> how about srt >> yesterday it was signet, and i know you like the new ceo today. it's five below. >> it's really terrific. i've got to tell you, five below is interesting because a lot of people thought it was a canada goose store. basically like it must be clothing and this is one of the most exciting stores i've ever been too are to and not just because it's from philadelphia and they always have the flavor

of the month and it's a remarkable aisle by aisle treasure hunt and most important it's a regional and national story and you can put up five belows all over the country and what's amazing, it still managed to deliver and it's got great mvenlgment and all of the distribution capabilities and by the way, 5 below, we will see them in every state in the country. that's why you have both the short scrambling and and maybe this is the great next story that we have in the country. >> it's a retailer that's opening stores and not closing them 124, the current fiscal year who knew >> yeah. >> who knew? i will take david for my five below. it will blow your socks off. >> in brooklyn, right? i don't think you want manhattan. >> you never see video of you guys shopping together >> we really do need to do this, jim. >> the burlington store in

brooklyn, david. they have stuff i could have gotten at macy's for $30 they had it for $18? >> how do you think you get rich in this country? >> i'm all in. i'm all in i keep waiting and we never deliver on this trip that we're supposed to go >> i was going to go >> yes exactly. >> i can take you shopping although he did drop knowledge yesterday about jewelry and engagement rings. >> you like that you see? >> we're not just going to go. >> this is not about bergdorf. it doesn't trade much more about marshall's which has a great deal right now on socks and underwear. >> speaking of all of this, there's been some -- another company today, jim, mentioning or talking about higher prices at starbucks, adding the price of coffee about 10 to 20 cents and american airlines earlier. the classic cycle patterns and

dimon is talking about three potential more years of growth >> he's in the camp of my friend larry kudlow they're always optimistic and he bought his first stock when the philippines were coming down in world war ii and i would point out that this is exceptional and a lot of times what people are doing is taking advantage of some boon times to put through price increases and oil's coming back down to 60, and i think it was artificially up. i can't speak to coffee. i know the maker said we'll be hurt by aluminum and steel can i just say when thor's mr. martin was on "mad money" in the first part of march, he said don't worry about the tariffs. they're fine and if you're going say they're fine and then drop two nuclear bombs, nuclear and steel, you will have to pay the price. that was ill-advised to say the

tariffs wouldn't hurt. >> yes secretary ross today saying the idea that these tariffs would result in layoffs, he said, i think that's just silly. >> have you seen brown foreman's chart lately >> or the mention of jack daniels and unable to talk about the futures. we don't know yet. very quick what's on "mad" tonight? >> tonight is an educational show because i will be at the conference i have jeff from macy's that will bleed into where i would normally be for "mad," but look, i have an exciting day here and i have to give david's regards to making the assistant attorney general and let him know that he's already lost the case, right, david >> no, don't do that, jim, and i'll try to rush up there on the subway so i can see macon in person and just prevent you from feeling future debt. >> did you hear how he dropped sub w

subway he dropped subway in order to become common man. >> there's no one that takes more subway trips than me, three a day. >> subway is under ground. >> you can't use your phones that's why i prefer uber >> subway is not a word in her vocabulary >> oh, stop it >> i will see you shortly. i will be there. make sure macon stays around i want to talk to him. >> i will. >> thanks, jim good luck with everything. an incredible conference well done. well done, jim cramer. >> i did want to get to a quick faber report altabba, the old yahoo which owns 300 shares of alibaba, and it's basically an investment fund, but this morning a big announcement from altabba buying

company shares and an enormous exchange offer put on the table worth roughly $16 billion and the way they're going to do this is 195 million shares of altaba they're buying back is by offering you alibaba share, .35 is what they're going to be offering so essentially over 100 million of the 384 million alibaba shares will be going out the door they will also offer a bitter mo, .5 in cash, as well. that cash component, they're going to figure that out closer to the close in terms of altaba. .4 baba is what you will get for each share of altaba that you will exchange and by virtue of doing this, they will reduce the overall flow by about a quarter. about a quarter. so it's almost a $16 billion exchange offer, and i spoke to tom mckernie, the company's ceo

this morning and he said, listen, we traded at a significant discount we have for a long time and 25% free tax when we own of alibaba and what it trades at in the market and we're not sure that will reduce the discount over the long term from here, but we certainly by doing this will reduce the discount on these shares no doubt about that and that's for the hopes that some had had that there was a tax-free way to do this. he said thery is no magic bullet to do it it's a taxable transaction, but a beneficiary would be sure of tax reform itself that has brought down the overall tax rate and they had the benefit of stepping up their bases to a certain extent and they will recommend that offer to repurchase those 195 million shares and own roughly 11% of alibaba shares even after this, but we haven't mentioned that

stock for a while with basically an 18-year high on altaba, carl. >> let's get to rick santelli this morning at the cme group in chicago. good morning, rick. >> good morning, carl. if you look at treasury, and they're highly unchanged however, we came that close to 3% ten-year as you see on the two-day chart and if you open up to the third week in may you will see the last time we closed at 3% was the 22nd and what's even more interesting is all of the yields i see as being unchanged are unchanged basically at levels that we closed at about two weeks ago and yesterday. so these are lofty levels. we continue to hold them and stick. one of the impetuses are what's going on overseas and a lot of central banks next week, but look at bund yields and look at the tens and they've also been moving higher.

right there you're scratching your head. no flight to safety. and they're getting close to 3%. what's interesting about the italian yields they surged off and they resurged in the last 30 hours the low yield yield has bn 2.5 and the high yield has been 2.94 that's a heck of a range et want to continue to pay attention. the big. day is coming with regard to the fate of qe in europe it looks like us the other two charts it's bullish for the euro. if you look at a longer term, since early may and finally a long day you see what jumps out at you the reason the market is jumping. everybody is thinking 120. let's see if it happens. back to you. >> see you in a bit. when we come back, running in 2020 jamie dimon and warren buffett has been walking a presidential

bid. we'll see about that dow is up 119. we'll get a lot more from the interview. i'm not running for vice president either we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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should companies provide guidance to the street a debate about transparency and long-term and short-term thinking morren buffett weighing in re "squawk on the street" is back after this. dow is up 100.

good morning, welcome back to "squawk on the street." building on wednesday's rally. dow is up 105. another subdued session as trade in the headlines >> a road map for the hour begins with -- >> i have been on 20 boards of publicly owned companies and i have seen managements that i really think well of personally i would be glad if they married

my daughter or moved in next door, but they get tempted by th this >> an exclusive interview with warren buffett and jamie dimon more throughout ut hour. >> and byron weens with us to dig through the comments and later jim stewart is going to join us his take on the tariff talk, next we begin with the interview of the day sitting down with warren buffett and jamie dimon following their op-ed on short-termism in "the wall street journal. some of the highlights, i was just thinking in the 9:00 a.m., the news that they have essentially selected a leader for the health care. >> that was huge news. it kind of popped up and caught me by surprise as you mentioned, short-termism really the focus of what they were trying to get out with the business roundtable.

now saying that its 200 members are behind this push to make it so companies will not be managing for the short hall. buffett ahas been looking at th big picture and not managing on a quarter by quarter basis >> some of the problems people making short-term forecast, quarterly earnings, not transparency, not having quarterly reporting can often put a company in a position where management from the ceo down feels obligated to deliver earnings >> what's magic about a quarter? we're in businesses for a a long period of time >> they talk specifics jamie said if he wanted to he could call up and create some swaps and create hundreds of millions of dollars in revenue just like that if he wanted to they also said that if you are under this student type of pres you'll cut your marketing budget all things that are good for the long haul, but may not make

sense or a quarter by quarter basis. as you mentioned, they talked about this new health care initiative that they have been working on with amazon's jeff bezos. they gave us news on that front. they have identified a new ceo they are working out a few kinks but expect to be making annou e announcement in the next couple weeks. you talk about health care, short-termism, these are things that affect not only corporate america but america at large and that's one of the reasons there have been so many people wondering if jamie diamond was going to run for president he said he's not warren buffett said he's not running for president either but we talked about what howard shultz had to say when he announced he's stepping down as the chairman of starbucks and just this idea that howard might actually be running for president. i think they are both in favor of the idea of ceos getting involved in policy but both seem to indicate it might be difficult for somebody who has been a ceo to do all the things that it would take to run for president.

>> if you want to do it, i applaud it i'm not sure it's hard i saw howard i think the world of howard. he would be a great chief executive or governor or senator, whatever he wants to do but it's hard. and you have to want it. >> warren, your thoughts >> most business people would have trouble starting out a year early in iowa and going from motel to motel and repeating themselves six or seven times a day and listening with great interest to every possible voter as to what their suggestions might be so i'm not recommending it to any of my friends, but i think it's very important that business be a hand maiden of government business has done wonderful things for america and america has done wonderful things for business >> this was just part of our conversation we talked about a wide variety of issues. everything from what's been happening in the stock markets

and economy to what they think on trade lots of different things we'll play that throughout the day. back over to you >> speaking of trade, macron is making comments on tape about g-7 hinting it's going to be tense saying we can't wage a trade war between friends. they talked about favoring a multilateral approach to nafta tariffs have negative consequences >> he said very specifically that he does not like the idea of -- he said the business roundtable appreciates the idea of america getting a better deal but doesn't like when we're putting allies in difficult positions where we're fighting with allies rather than united with them and going after other countries. >> thank you very much great interview. you'll hear more all hour long here on cnbc we'll continue this debate i think it's a big one what do markets think about short-termism and the need for company information to make

investing decisions. joining us now is another cnbc exclusive. the vice chair, byron, welcome back so good to have you. >> thank you >> what do you think of this buffett proposal not necessarily -- that companies should get rid of quarterly guidance can they get away with that from an investor take >> i think it's going to be a problem. the bulk of investors are institutional. they are judged on their quarterly performance. so they expect to transfer that responsibility to the corporations so i think there will be pressure on companies to give guidance quarterly but i think it's a great idea. you run a business on a long-term basis. i'm even worried about the federal government running itself on a short-term basis

reducing support for research and development, allowing other countries to get ahead of us in technology so i think it's a universal problem in the united states as a country, we're too short-term oriented. >> byron, since the time that you have been following the markets, the hold period for a typical institution has decreased dra mmatically to you point about being judged quarterly or monthly some guys even weekly or daily how do you change that dynamic does it start with companies no longer give iing the short-term guidance or does it have to start on the buy side itself >> i don't think it's going to start on the buy side because the buy side is always going to be under pressure to deliver performance. if it's going to happen, the business roundtable or some other organization has to as a

group decide they are going to pull away from short-term guidance but analysts are continuously visiting companies and companies are having quarterly earnings conference calls. so there is always going to be some form of company guidance. so i think it's going to be very hard to transition from short-term orientation to long-term. >> people wondering whether or not the sell side models are t accurate enough. whether analysts are rigorous enough to come up with if they don't have the guidance, are we left with quarterly prints that come as more of a surprise and that lead to higher volatility on earnings days >> it may, but that may be the price we have to pay the companies give such specific guidance that the analysts are pretty much on target. and when companies leave or miss, they do it by a few

pennies. this would result in dimes and quarters the implications of it are great, but i think if america is going to remain competitive on a long-term basis, turning away from a short-term orientation is necessary. >> i'm wondering if it matters what company it is whether you can't just group everyone in together not everyone is an amazon. not everyone is a google and not everyone is a coca-cola, which had proven to the street for so many years it was consistent before scrapping its long-term guidance >> i think the companies that are more established that have been around for a dozen years or more it's less than necessary. because analysts have learned how to follow. but for new companies is

necessary. and constructive so i agree that you have to have a two-tier system. quarterly guidance is probably a necessary thing for fledgling companies. for established, not so important. >> do you agree with the overall view that companies are not thinking enough about the long-term? i mean, it occurs to me when we talk about stocks we're looking at there, facebook, amazon, all controlled companies interest ingly. and all very much focused on the long-term future and the ability to spend enormous amounts of money as they see fit. >> look, those companies are the companies that are dominating the market if you look at market performance, market performance is very largely determined by ten stocks inchuding the ones you mentioned.

so this is not a broad market move the established companies are not doing as well. my feeling is that those companies that you mentioned, facebook, google, a.mazon, have great. deal of flexibility in earnings reporting. and they should be long-term orient ed but. the established companies should be long-term oriented too. but they don't have the same flexibility. so i think it's a problem at the corporate level and i don't know that the buy side is going to be tolerant enough. and their margins are great enough so those companies have enormous margins that the higher the gross margin is, the more flexibility you have >> really quickly on the markets here we're coming up on a week where we're going to have a big trade

summit big geopolitical summit. at least three central bank meetings including our own and the vix is below 12 for the second time of the year. why is the volatility subdued again? >> last year i wrote an essay called low volatility is here to stay that sort of seems like it my feeling is that there's something lurking out there that's going to upset the market it's probably a geopolitical event. maybe the upcoming north korea summit but generally i think we're in a period of low volatility because there isn't a recession in sight. my view is the earliest we're going to have a recession is 2021 >> wow, so you're sort of in the

dimon mode where given the amount of growth we have seen post crisis that would suggest another couple years of continued growth >> the signs that usually indicate, you and i have been talking for a long time. the signs that i use to determine the edadvent of the t next recession is is to earn in place. usually they take awhile earnings are still increasing. unemployment is low, but inflation is also low. maybe some of these things are going to change abruptly in the the yield curve and going to invert but right now, i see this cycle going on for a couple more years. and as long as that's the case, i think volatility remains low there will be 10% corrections along the way, but i don't think anything more severe than that >> so if the economy is doing so great, do you think we're going

to continue to seat president's approval rating rise, which we saw in the nbc poll today? and if so, what are the implications for the midterms. you made in your predictions for the year ahead that the democrats would sweep. you still think that what are the market implications >> i still think that the democrats will take the house. but i think the odds are against that are going up all the time i think the economy is key to the outcome of the november elections. and if people feel they have more money this their pocket that regulation is being dismantled and that trump is doing a good job internationally, then i think the democrats are going to have a tough time of it so the development of events during the year are such that the republicans are gaining power. and that jeopardizes the democratic position in november.

>> byron, always good to get your take. thank you for joining us >> thank you when we come back, as the president promises to fight for good trade deals, "new york times" columnist jim stewart will join us to discuss what it could mean for american farmers. dow hanging on to early gains up 96 wee ck'rba in a moment your company is constantly evolving.

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real estate investors commenting on gender diversity in the me too movement at the investor conference. they spoke about promoting women based on merit but used some vulgarity. i never promoted a woman because she was a woman. i never demoted a woman because she was a woman. my issue is what do you do what do you produce? i don't think there's ever been a we gotta get more blank on the block and used a crude term for women that we heard the president use. actions speak louder than words and he does have lifestyle properties but words matter i think this is some of the cultural problem that we're seeing across corporate america. it starts at the top

and ceos need to be more careful and will come under scrutiny he said this on stage at a conference what was he thinking >> i'm not sure what he was thinking he's been somewhat outspoken >> i remember once interviewing him i said how is the ad market. he said what ad market and that was his answer >> he's blunt. but that's not an excuse you have to be sensitive at this time more than ever. what was just this week alone the qatar airways ceo. i think it matters, especially hearing that at the top. when we come back, will the third time be a charm? looking to launch a new etf back ed by bitcoin. they have been rejected before we'll see what's different now the founder and ceo of the joining will be us stay with us >> you both said nasty things about billionth coin which one hates bitcoin more

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money management firm filing with the sec for r a new bitcoin etf. they withdrew in january after a similar etf backin september yesterday the s.e.c. chairman spoke with us who asked about the regulatory hurdles that the commission has in place for bitcoin. listen >> those hurdles are the hurdles that we think main street investor expects if they are going to invest this a product. i understand that there's a great deal of discussion about these crypto assets, but we're not going to relax our rules based on the level of discussion we need to know that the pricing is certain we need to know the assets are there. we need to know it's going to function as our retail investors would expect those products to function >> joining us is the ceo at van

effect so twice you shelved plans because of concerns. what's different this time that you think it's going to go through? >> we're going to keep knocking at the door until they let us through so persistent is the game here. but this is a very different filing than our other filings. the others were on futures which came out in december of last year. this one is actually kind of a call on the physical itself. so the trust would own bitcoin not a derivative >> with your conversations with the s.e.c., do they seem like they are going to be okay with that what was the concern with futures versus the asset >> investor concerns and regulatory concerns. so let's talk about investor concerns first when you invest in aderivative the shape of the futures curve can affect the price like oil futures is different than oil and that can be misleading to

investors overtime in terms of the s.e.c.'s expectatio expectations, they care about what's the right price and how the fund isn't going to lose bitcoin. the answers here are pretty different than some of the other answers. so to keep talking, the price. one of the big changes in the market is if you want to trade $20 or $30 million of bitcoin you can do it. there's an over the counter market for that. it's not visible on yahoo! finance or visible on coin base. we are bringing that visibility to the market in the index that this new will track. so that's number one secondly, how do you know you don't lose the bitcoin they had arranged for insurance over the loss of the private key chrks is kind of the best you get these days in terms of custody. so hopefully it will be met with a little bit better reception. >> so the s.e.c. released a long letter in january where they

basically outlined a whole list of concerns they have about bitcoin and bitcoin etf. some of it was pricing and some was custody. but they had a lot of questions. they basically said you're going to have to answer all of these questions before we approve any bitcoin. do you feel your new application has gone further than anybody else's to address the s.e.c.'s concerns have you increased your chances? >> we hope so. and it is a dialogue and this is what's different about bitcoin and other etfs that you can launch because the market is changing so much the market infrastructure. i call this the year of regulation it's walking quietly to get what a year ago was literally 100% in unregulated market everything about it was completely unregulated. and now they are bringing the broker dealers under supervision. everything is slowly without

trash iing the whole party. they are bringing everything by the end of the year you're going to see a pretty regulatory engaged market >> if you have an exchange that wants to register to trade, how do you regulate the pricing? they are going to be involved in create canning this inf infrastructure they seemed to imply they are not opposed to setting this up, but they are not changing the securities laws to accommodate or make it easier for people to provide financial information. >> fair enough, but there are other markets, gold and most of the bond markets over the counter. so i don't think we have to wait for the day that bitcoin trades either so that's kind of -- let's be reasonable in terms of our expectations and not apply a

higher standard to bitcoin than exists for other assets. >> finally you mentioned u.s. regulation vladimir putin made some comments about bitcoin today how important is it for regulators coming to the table >> the first big step last year was to address aml concerns of money laundering and terrorism and basically treasury around the world saying south korea and japan. every bank that's involved you better make sure you're doing your aml that was last year every country is approaching it differently. the u.s. may be behind the curve. we'll see. >> it's not for everybody at $200,000 per share you're aiming at institution there is we'll see if they get approved let's get over to a fuse update >> good morning, here's what's

happening at this hour a boy scout who packed a toy grenade in his carry on caused the shutdown of a security check point at houston's airport the 17-year-old won't be charged but he could face a federal fine more than 15 southwest flights were delayed the u.s. evacuated several more government workers in the southern chinese city after medical testing revealed they might have been affected by unexplained health incidents that have also hurt u.s. personnel in cuba. the u.s. has sent a medical team to screen those workers. alice johnson who had had her life sentence commuted by president trump as a first time nonviolent drug offender reuniting with her family yesterday after being released from prison. she spoke about the release on the "today" sew a bit earlier this morning >> it was just a moment of shock. just to see my family there. i knew that i had walked out the door that was the first shock top

to see them, my heart was leaping. >> that's the news update this hour back down to you guys. >> thank you very much let's get a check on the markets as we go to break. a bit of a tech sell off as the nasdaq is down half a percent. viju ave2. ckn a moment

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welcome back to "squawk on the street." jamie dimon and warren buffett bringing the issue of short-termism to the front today. we are breaking down the comments on ending quarterly earnings guidance and why that might be more difficult than we think we'll try to get to mike in the meantime, we want to check in on the markets.

we are seeing the rally gain speed for another day in a row actually it's lost a little, but the dow is higher. the nasdaq is negative this comes after the s&p and dow closed at the highest level since march. nasdaq at a new record high. so this new risk taking despite some of the worries about trade. mike is with us now. is it realistic to end quarterly earnings guidance? >> i don't think it's realistic for every company. i think it's been a complicated debate as to whether each company and each ceo decides it's the right thing to do some history helps out here. one of the reasons we have as many companies as we do giving quarterly guidance is back in the old days when we had regulation fair disclosure, you had had a lot of companies who would call each analyst and say your numbers are too high or too low. do it selectively. it's considered a big problem. so the idea of getting out there publicly and letting all investors see what each company

might expect for the quarter if they are going to do that at all made a lot of sense. i do think that warren buffett's goal is a good aspiration. most companies wish they had the kind of business and the kind of shareholder base where having a long-term orientation is all you needed everyone wishes you could be playing by jeff bezos' rules but when you're a smaller company, when you don't want to tolerate as much disagreement about prospects over a course of a quarter, it becomes complicated. the information that's in guidance is going to exist somewhere. within the company perhaps they have budgets and expectations is it a good idea to withhold that good information from the public markets until they kind of report their official numbers, that's a debate a lot of ceos have to have >> have you taken b a look at companies that have gotten rid

of quarterly guidance and whether they are more unpredictable or volatile or cause surprises on the investor side versus the ones that continue to do so? >> there's research on this. it's not fully conclusive. i think it's complicate d by the fact that many companies that decide to cease quarterly guidance do so when they are having a struggle. it's a desperation move to say let's reset things we don't like this quarterly clock that we're on. it's not necessarily a clean break all the time i do think it makes sense. you mentioned this this morning. one of the goals of buffett is is to make it okay for companies to say we're going to stop guidance and not having it be taken as a negative. it's definitely not one size fits all afor all companies. but most would love to be able to play by these rules >> we just asked byron about

whether we could expect if this were to. happen at scale, if we're going to see wider gaps up or down on earnings days. >> that's one of the results you have a wider spread between analysts forecasts and maybe it means the volatility we see upon the earnings report would be dispersed over the course of weeks and months before and after. so we have a build up and then you have the response after. but i do think there's a lot of people saying if we didn't focus so much on the short-term number, then companies wouldn't worry so much about missing by a penny or if they made it by some other means, we all see this right away if we think it's a bad beat, we see stocks trading off all the time when the street basically says they pulled short-term leverage

>> speaking of short-term, i do notice something you and i were talking about continuing today in the market. the fang stokts are down the likes of dish and at&t names seem to be getting some money in >> it's a good question. i do think as a rally has gone on for awhile. over two months into this upswing we have had. you see the leadership get stretched and then investors looking for what hasn't participated in rotating back. a lot of shorts got burned yesterday by them gaping and also by tesla going up i think you're seeing that shuffling around quarter end isn't that far out maybe you're seeing a catch up trade happening. i don't think it's necessarily some kind of mass reallation you had an s&p 500 rebalance yesterday with small companies going in and out and also i heard some people talking yesterday about how some investors are trying to get ahead of this sector shift

between the tech and media stocks that are going to be moving around in a few months. and that might have something to do with bringing up some of the traditional cable and media stocks >> thank you the president says he's ready to fight for our country on trade at the g 7 tomorrow jamie dimon says we must be weary of retaliation >> we think the president has raised critical issues about trade with china around enterprises, fair competition, market access, the ability to own 100% of a company. these things should be negotiate. ed out and the business roundtable support the issues. the roundtable has been clear we don't think tariffs are the way to do it tariff has unpredictable outcomes you hurt allies more than anyone else people tend to retaliate >> senator chuck grassley with

similar warning tweeting that agriculture will be the first to be retaliated against. joining us this morning is "new york times" columnist jim stewart who spoke with the senator for your column. it's good to see you it's so interesting because it's really at the cross roads of economics here and politics too. >> absolutely. i think it's important to understand when looking at what's going on here how important the farm build isand the farm vote is to trump and the republican party they are geographically concentrated in a handful of states critical to his majority and will be going forward. they also have a lot of senate races up for grabs even though people think of these as republican states, it would not take a big swing in farm voters to move them into the democratic column. and this is a huge issue for them they do not want retaliatory tariffs on corn, soy beans and

our trading partners know this that's why grassley says, of course, the first thing they go for is agriculture because they have a lot of leverage there >> how much leeway the farmers you have spoken to, are they giving the president >> they are giving him some, but their patience is starting to ware out this is a huge issue for them along with ethanol requirements. but already china has basically. stopped on soy beans the uncertainty is killing them. they have built up relationships with buyers in china i talked to a guy in iowa who made 17 trips to kentucky na he hosted the president at his family farm. these are deep ties and they are worried they are losing this relationship yes, we are patient. we hope trump pulls a rabbit out of his hat we don't quite get this. but at the moment we'll give

them the benefit of the doubt. if this doesn't happen, there's going to be a big price to pay >> i talked to a senator from ohio about this yesterday. and asked him if farmers stand to lose from some of these tariffs, don't you guys stand to lose in the midterm elections? he said, you know what, trade politics is not that simple. and it might actually surprise you. we said he talks to farmers that say we haven't been. given a fair shake and we're glad someone is standing up for us even if they are going to take a hit because of the tariffs on our exports. >> there are some people i heard say that who -- they all say that china does cheat. they want to see that addressed. very few said they wanted to see riffs as the way to do it. i talked to people in and around the white house who are saying don't forget the farmers really want to see china taken to the wood shed here there's some truth to that, but they are overstating it. the bottom line is they want open markets and free trade.

grassley stressed that over and over again he also mentioned something that i was surprised. if we do go through with this, we'll give you federal assurances they are all saying we don't want a federal bailout we don't want handouts we want to compete fairly. and they are saying if that doesn't happen, there's going to be a political price >> xi's ties to at least iowa run pretty deep. does that count for much in the midst of all of this >> it's part of the reason -- the bottom line the farmers think there's going to be a deal they think in the end there will be posturing and both sides will talk they talk to the chinese they want a deal they don't want tariffs either they need the soy beans that feed their population. that's hunger and food is a basic thing. there's a risk of unrest in china. i think the chinese want it.

so they are optimistic in the end tlgs going to be a deal. and that's also why markets haven't responded that much. they watch the spot market very closely. the prices have been down for several years but they haven't really moved much over the tariff talk because traders believe the stakes are too high or too important to the u.s. and china and our trading partners >> is there an argument that russia and brazil although they are sell inging a lot more now there's no way to continue to supply what china needs. >> there's some talk about this. they say there's a finite number of soy beans in the world. so someone is going to buy them. brazil has the capacity to ramp up production ask they are doing that and it looks already like brazil is increasing sales pretty dramatically to china. there are only three big soy beans producers.

so there's similarities, but long-term, brazil could step in and benefit a lot from this. >> it's going to be one to wa h watch. definitely important to the markets. good to see you on a thursday. thank you. >> thank you when we return, a former economic adviser to president trump is with us for an exchange you'll not want to miss. the w doup 95 points more "squawk on the street" right after this

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retail is on track for its best quarter in nearly four years. one technician says the rally can get even hteotr. find out what levels to watch. trading nation, more "squawk on the street" coming right up.

we want to get to a little news postoperative ongoing dispute between the company and the controlling shareholder r. it does appear we have a potential trial date i'm told that in a letter submitted to the delaware court

yesterday, the actions scheduled for trial in early october said to be october 3rd. that kind of gives you a sense in terms of this dispute and when it may be resolved about the ability of cbs to issue a dividend to have the effect to dill lute the voting power of nai and we may get a ruling on that or on the bylaw change. which would basically procollude the ability to have that board issue the dividend regardless, it gives investors a sense as to how long they have to wait to see something happen here cbs did reschedule their annual meeting which it had pushed to august 10th. let's get over to the cme group. good morning >> good morning, i'd like to welcome dr. judy shelton from the city of lights in paris. there's a lot of issues going on

these days about trade but the one thing i notice is mostly half empty opinions given by the economic community. the markets seem to have a different stand. as an economist, what do you think? what o type of grade would you give this administration on their negotiating and what chance and issues do you see coming up in g-7 >> i would give them a high grade. i think people need to keep the faith a little longer during this negotiating phase we're going to end up in a better place >> as far as the eurozone, recent data yesterday showed as a unit the eurozone gdp month over month change was up .04%. but if it you look at the data, quarter over quarter, that's the slowest rate of growth since 2016 are we looking at a slowdown and what does that say for the

timing of the announcement of addressing winding down qe one week from today by the ecb and the committee? >> right, that's going to be a very importantmeeting, potentia in latvia next week. because we will find out if europe has confidence that their economy is finally gaining a little bit of strength they're talking about phasing out their $35 billion a month purchases of bonds if they're willing to get rid of some of that stimulus, it would be a sign that they do feel more confident and generally that would reflect well on the prospects for the european economy. >> you know, traders frame the issue, judy, in the following fashion. we have the u.s. on wednesday, the ecb on thursday, the bank of japan friday when it comes to the ecb and, to a lesser extent, the bank of japan, it isn't only timing.

it's impact. what traders believe what will actually occur versus what's advertised the biggest issue of all is the commitment to alter policy and follow through could you address the commitment issue of mario dragi to do what he says he will thursday >> right generally, the world economy does better when the most influential central banks are not heading in different directions so, it would be good if the ecb decides to kind of follow the lead of the united states and start slowly increasing rates. but your question about what kind of commitment, their commitment of reducing stimulus is not the same as ours. they're not talking about raising interest rates they're talking about maybe if not by the end of september, maybe by the end of the year they quit engaging in these massive asset purchases but they're not talking about raising interest rates until maybe june of 2019.

>> judy, thank you so much for your opinions. most market participants, at this point, feel the anxiety of investors with the unknown commitment central banks is racing market moves. we'll have to wait to see the way it looks the day after the meeting. thank you for your time. sara back to you. >> it will be an exciting week, the full trifecta of central banks. let's send it over to jon fortt with a look at what's coming up on "squawk alley." good morning, jon. >> good morning, sara. amazon wants to be able to control everything in your entertainment center from this device we'll talk to the vp of power development from amazon. he is here about what nisext for alexa. that's coming up on "squawk alley.

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welcome back to "squawk on the street." i'm dominic chu. s&p 500 has drifted into slightly negative territory. energy and telecom and staples they are the relative winners so far today. take a look at the laggerds, material, health care and technology let's focus in on that a little bit more

it was one of the big gainers in that rally yesterday we have the s&p 500 technology sector moving down by about a percent, as you can see here one of the worst performing sectors. right now the worst. advanced microdevices, applied materials, intel, nvidia all down take a closer look at this etf the tick er shm certainly, sara a big etf to watch when it comes to tech. back over to you. >> highs and lows on the consumer trade we talked about this theme that staples are under pressure while discretionary is hot smucker, which just announced an ugly quarter, trading at lows not seen since october 2014.

for campbell's it's august 2012. on the flip side other names in this space, consumer discretionary that are flying high today nike trading at a record high. macy's back to levels that we haven't seen since 2016, kohl's is also doing well on "power lunch" today, we have an important interview with senator mark warner who just introduced legislation that would limit the national security designation for trade tariffs. he will outline conditions for any deal with north korea. of course, guys, he's right out front when it comes to regulating facebook, google, and what he has planned for them. >> big interview he was at code last week, too. interesting to see what he has to say since w u11e amazon cube. doisp 6. mom and dad got a new car...

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good morning it is 8:00 a.m. at amazon headquarters in seattle. it's 11:00 a.m. on wall street and "squawk alley" is live