s&p 500 off about 5 points also, the ten-year note as we flip the board around. ten-year about 2.935 and the bigger news next tuesday we'll be live here at 5:00 a.m. in the morning guys, thanks. >> have a great weekend. join us on monday. "squawk on the street" begins now. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber the president arrives in canada soon how well the tweets affect trade policies in the months will come we'll have full coverage all day. europe is relatively mixed our road map begins with president trump sounding off on

trade as he heads to quebec for the g7 summit. plus, the new face of verizon. that begins august 1st sflnch looking ahead to the judge's ruling on at&t time warner next week we'll get jim's hit down with the head of anti-trust at the doj. futures point to a lower end for a largely positive week for the street endangering the best week for the dow in about three months the trade tensions moving to the forefront as the president travels to canada. he did speak moments ago before departing. take a listen. >> we're going to deal with the unfair trade practices if you look at what canada and mexico, the european union, all of them have been doing to us for many, many decades, we have to change it they understand it's going to happen. >> everybody saw the tweets between macron and trudeau the president said he might

leave early, that would mean he would miss sessions on climate and energy is it noise this weekend do we need to listen >> i think it turned into noise because it's far worse versus china than these other countries. now we do a huge amount of trade with these other countries when he said, look, if it doesn't work out nafta is dead but bring back nafta i think the difference with the allies, so to speak, is that the rhetoric is almost -- when you say in the end it's going to be great. they're going to love us you're saying already the president has a different negotiating tactic he doesn't call them criminals because i guess they're not democrats. but he has a, hey, listen it'll be fine. you feel it will be fine with those two countries. with mexico and canada in the end, i think we'll put a

aft tariff on cars. >> that wouldn't be good if we do that, then we have to apply it to the eu. >> i was going to an arc here. i was going to say in the end that would be bad for the stock market. >> yeah. >> it would be bad. >> i would think you would get everybody's attention with a significant tariff on automobiles. >> that's where i think he's going. >> listen -- [overlapping speakers] >> it's not going to be this weekend. >> nobody knows. >> none of us know where this is going. [overlapping speakers] >> the president, i understand, from talking to the people, he would prefer to find a way to not have the germans stock cars in our country. >> do the germans really dump cars in our country? >> it's cheaper to make a car in mexico and send it to the union pacific than to make a car in michigan and send it down by union pacific. >> my audi will get more expensive? that's a problem.

>> that's what's it's about. i forgot it was about you. but it's about the mercedes and bmw sedans because they put those back in factory so quickly david, it's $5 an hour no pollution control and you don't have to worry about health care costs. >> i know. you come back to this. but they make -- >> their largest plant is in spartanburg. >> yeah. here is what they say, token token. largest plan token because when ford said no. these guys kept building he has to go to one of these towns. he won't go shopping with me if you go with me, you'll see what i'm talking about. >> i would like to do that believe me. >> i'll give you my house. >> we'll take the show on the road to go all these places we talk about. >> do you know when you open a

plant, you think it's like they make the cars there? the ppt paint plant. it's a -- >> the larger issue, the president's continued to cushion on the discrepancies they buy more -- they sell more stuff to us than we buy from them we're generating a huge deficit simply as a result of that, i mean, we produce less than we consume. how are we supposed to deal with this >> we want -- >> if we're not going to cut the deficit. >> we are a country of great natural resources. >> you want to wall us off from the world? you want us to be a nice bubble? >> you think i'm lindbergh. >> i don't know where you're going. >> that's the big sticks point is cars. it's the cars tariff they put on our cars in europe it's the tariff. it's the ease with which they can make cars in mexico and send them up. it's cars, david cars are the focus. >> okay. if you end up being right and

cars become the real area -- >> that's bad. >> that's bad. >> it's bad for the market. >> it's not bad for the world's economy? >> short term -- >> short term pain. >> that's five years >> we have to be able to readjust the peso. because four to one now it's 20 to one 20 to one. when i go shopping with david, he won't believe what he can get 500 pesos. >> i'm ready let's go down. soon. >> let's take a road trip. we haven't been anywhere together in years. >> we don't even go to the t.j. max across the street. >> i know. i've offered to by you socks, gold-toed socks. italy's agrees russia should be a g8. >> really? >> yeah. >> that's just crossing. >> he's a fire brand because you see his schooling? i mean, holy cow he was at duquesne and yale.

these are like radical institutions he gets a bad rap. he's a professor of law at university of florence this guy is so normal. that's a break with the past russia's dictator and the eu had a bad feel about dictatorship. >> there's a huge realignment going on. >> right nationalists let's have some nationalists in. this could spiral out of control quickly, david. >> good. so auto and spiraling out of control quickly. >> not this weekend. >> you have to stay tuned. >> it's all about ratings. speaking of realignment verizon naming the ceo succeeding mcadam august 1st

verseberg was ceo of eriksson and oust david has a lot on this. >> yeah. i did speak with lowell mcadam, of course, the current chairman and ceo of the company carl said he'll give up the top job in august. and then remain executive chairman until the end of the year very similar timing, by the way, to ivan sidenberg six or seven years ago. >> great interview by you. >> thank you june to august and mcadams said a few things to me in the conversation we just had. they didn't originally, it seems the board and mcadam view him necessarily as a competitor for the top job right away there are a couple of other candidates but he said that before they saw him in action, the more i thought, wow, this is the real deal and that he quickly elevated

himself into the conversation. that being mr. vestberg. it's good because the first couple of years you can spend figuring out how to do the job, to a certain extent. he has seasoning but he's young. somebody that can be positioned, potentially, for many years at the top of the company what, of course, as we know is a disruptive business. look no further than, you know, than mr. mcadams shareholder letter from this year to get a sense. you heard it from the interviews over the last year they're focussed on 5g and rolling out fiber all over the place. and then, also, the implementation of 5g this is the key for them the key, also, has been, of

course, organic growth yes, lowell did buy yahoo! and aol. that was the big bet in digital. he never let up on the network again, national fiber and 5g is what vestberg will continue to push forward and mcadam remake the senior team he inherited from mcadam and changed the composition of the board, as well, over that time this is a big change and potentially a name we can see at the top of one of our most companies for many years to come. >> when i spoke with tim armstrong this morning, the ceo of oath which is buried within verizon but a fortune 300 sized company. he emphasized 5g i think it's interesting, you've got agt that wants to go into entertainment. you have verizon that wants to go deeper into technology. is that cultural >> yeah, it is it's cultural. i think it is. and it's, listen, i mean, you can argue to a certain extent randall stephenson has been running away from their core

business for years. >> that's where i'm going. >> and making decisions based on maintaining the dividend and what he believed to be fair as a potential growth opportunities for at&t different than what mcadam will see and potentially mr. vestberg will see. 5g is the key for them they made no secret of that. the man who sat at the top of eriksson will fully capable of that but mcadam said, listen, it's a turbulent world now. it is always, of course. and, you know, you need somebody who is going to be seen as innovative with that fresh set of eyes. and i did ask, i'm like, well, the tenure at eriksson is tumultuous he said our board did a lot of due diligence. he thought he would bring him in as a cto but the more he saw him, again, he said this is a guy that should be considered for the top job. >> here is what i'm struggling with yesterday steve when i

interviewed him 5g, 5g, 5g david, how is 5g going to change my life? >> in so many ways you haven't thought about. >> give me a couple. i'm on 4g and i feel good. >> let me introduce a basic thing you may not think about. the lack of latentsy. >> everything will be so fast. so much of the processing power in here will no longer need to be in here it can be on the edge of the network. >> the time it takes is zero. >> exactly so what happens to this thing? does it need to cost $1,000 anymore? >> it's just a part of the pipe. >> exactly exactly. >> a branch. >> so apple may keep you in the eco system for all these reasons. but what do you need in the phone? i encouraged this when mr.

mcadam and i went to the test center and i saw what they're able to do in terms of games it suddenly occurred, wait a second, you don't need an xbox anymore. it means you connect to the network >>well, that's incredible. i remember when games were andy grove was wrestling with the notion of games. it was not clear now it's just have nvidia processing power. >> there are applications we haven't thought of things, of course, we won't until we're up on 5g it'll be years but it's going to be very different. >> look, my wife somewhat flawlessly put my phone in the wash machine last week. >> yes. >> i didn't need say flawlessly. it wasn't deliberate there was about a 15 minute period that i could live without this are you telling me that it's going to be even more important? because it's what i watch everything on. espn i don't even need a tv i have this. >> yes

all though, again, the applications for -- 5g are beyond personal consumption of content. it extends far into the internet of things. my point is, you're not going to need a lot of chips in here anymore. >> that's good because apple is down because apparently -- >> the headline. >> see citing sources. industry sources. >> every time. the greatest opportunities ever when industry sources suggest that there will be fewer chips made have you ever talked to the guys at apple about these >> that makes no sense. >> just never be an industry source is the way i look at it never. don't you ever be an industry source. >> okay. >> swear by it. >> i will. >> when we come back, wall street and washington the heavy weights sitting down with jim at the deal's corporate governance highlights

he has tim armstrong tonight another look at the premarket. off the overnight lows as trade tensions are front and center. the president making his way to the g 7 in canada. full coverage of that today when squawk on the street continues experience the thrill of the moment with the lexus is. lease the 2018 is 300 and is 300 awd for these terms. experience amazing at your lexus dealer. hi, kids! i'm carl and i'm a broker. do you offer $4.95 online equity trades? great question. see, for a full service brokerage like ours,

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fox disney is is a good example. they didn't acquire as part of that or propose to acquire fox sports 1 and 2 they didn't acquire fox broadcasting and say, you know, we'll combine this with abc broadcasting and don't worry about it we'll have an arbitrator decide if prices to advertisers go up or competition for content creators goes down they, i think, had good advice and carved out surgically what a transaction might be doable. who knows where the transaction leads. >> u.s. assistant ag sitting down with jim yesterday. a remarkable interview given what we're days away from, jim. >> thank you i thoughts i was echoing what you talked about with me

including david's reporting about the possibility of seeking an injunction. >> yeah. time warner next tuesday 4:00 judge leon what will he rule and if he rules against the government, will they appeal if they appeal, will they get a stay. >> right it did feel he starts out by talking about enforcement. i'm trying to make this particular department back to being enforcement business it made me feel it was a green light to what you said what i liked with the clip it was almost as if you want to do a merger and not be in our faces? do it the way iger did it. >> disney and the supporters are happy to take it i didn't take it that way. >> you didn't? >> they've done a good job making that deal but we'll see he certainly didn't -- >> he didn't -- >> right. >> this is my sub rose view. at&t time warner didn't necessarily approach this the right way. that they were more coming out

fighting they were not thinking about what, you know, a vertical deal when in your face is going to get reviewed far more than a vertical deal that is kind of, hey, you know, we'll give you this we'll give you that. we'll give you this. i think it's it came off in my read through he was more combative from the get go. that's what made him more visible on this. >> does your view on the government's case still stand? >> yes absolutely yes. i still am thinking like the pulitzer prize winning journalist jim stewart. >> okay. probably not bad for me to come back to this on the fox portion of it. and the anti-trust implications for disney and our parent company comcast. that's going to be the key here. it's not necessarily going to be a differential in price between the two, if and when comcast makes a bid. it's going to be more about how the fox board views the anti-trust risk and what is done

to mitigate that maybe we'll come back shortly. >> i was thrilled. >> he was great. that was a great conference. >> thank you >> i was there. >> thank you >> we'll have to go. i love to come back to that. >> yes we'll get cramer's mad dash and the opening bell this morning. lots to get to it's going to be a crazy week next week. a t loin front of that including the g7 today back in a moment because, when you really, really want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies see it- and see it through-with digital. well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to

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all right. we got a mad dash here for a friday a lot going on looking at dave cody will be involved in ringing the opening deal. >> sporting a david leathermtte

look. >> yeah. hot tan in the mad dash. >> i'm not calling it subdued. this hasn't done a big deal lately but this is a man who returned -- this is incredible go back 1.5 billion in stock 6.4 million in shares and he continues to be active at the top he says that. he said our stock is too cheap and people are conditioned to think what is the next big thing and that was not the discussion. it was wireless being fine every single line is a little better than expected it was, i think, to say this, don't get mad at me, an unexciting conference call it was business as usual which is pretty darn good. >> that's probably what they need. >> yes i loved it he said, listen, i'm putting my money where my mouth is. >> what about those who say this is a typical roll up and has to do the next deal in order to maintain the rate of growth and everything else. the metrics, at least, has been

measured by and the inability to do the big deal in the form of ca qualcomm will kill it. >> do you know what stock was mentioned repeatedly in the same sentence with broadcom, and i disagree this one. >> valeant. >> i degree with that. because, actually, everyone because qualcomm itself is doing fabulous it's doing fine. but, you know, david, the president did not want this qualcomm deal. why? a number and a letter. 5g. >> all right we got to go we have got to go. it's a friday. we got opening bell coming up re."n e on "squawk oth stet there's dave cody. i'm april kennedy and i'm an arborist

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>> yeah. there's a reason why we talk about him. it's not he just ran a big company. he did a fantastic job at the s&p. he's doing a great job what i love about this is he's told the company don't bother me then he goes on to do great things i love that. that's how you do it. >> that's how you do it. >> yep. >> and busy morning. tons to talk about as the president goes to the g7 this morning. we'll be having full coverage of that, of course, all day long. news on apple. we have covered verizon a bit. we haven't yet gotten to the weird squeeze in treasuries yesterday that had enormous volume people wondering whether it was a fat finger or remember we went through this a couple of years ago. >> yes, we did it was meant to be about $5 million. i don't know what matters is you knew it was not real because, you know, jpm was going on

jpm has become the ten year. it's not just about the treasury first. >> there's the opening bell. [ opening bell ] >> celebrating its ipo today over at the nasdaq the principal charity classic ringing the bell from des moines, iowa. so apple has been down in the premarket. we'll see how it influences overall trading. this headline says nikkei they warn some of their supply chain of a 20% drop in new iphone component orders. >> the reason we're jaundiced about this we've heard these things time and again. they have proven to be wrong most recently the last quarter was supposed to be a huge disappointment and it was 100% sources,

sources, sources and i speak to apple and they say the same thing how is it possible given how much they do with different customers, with different suppliers. how is it possible for analysts to believe this stuff? so i come at it in a very skeptical way. because apple has a number of suppliers and you don't necessarily get the right picture from one you never know whether how much apple has brought a lot of stuff in house. >> it's not stopping the chip companies from leading the s&p down today. >> they've been so great i think they're getting a bit of a breather remember, we just put we've got the good supplier picture there. by the way, you know, let's not forget qualcomm. >> let's not forget what >> qualcomm. >> qualcomm. well now, i mean, okay you talked about it on your show and yesterday. >> i spent a lot of time. >> yes we all have over the last year. >> yeah. he's from baltimore. >> yeah.

a nice man engineer. >> engineer. a lot of patents five patents. >> and certainly a tough road that he has already traveled are they going to get to the promise land >> i have asked him point-blank. don't forget the june 27 deposition of tim cook said the day before that, that would be the classic on the courtroom steps lawyers get together and he said anything could happen and then i said why don't you have breakfast with tim cook he said anything could happen. i said i see this line of questioning is definitive and getting me nowhere he said anything can happen. they are really playing it hardball. >> that's true. >> nxp, again, one of our favorites here i haven't looked i would assume it's down a bit on the potential senate action to try to -- >> right. >> to prevent the president's deal and commerce secretary's deal to let that company live.

they'll try to -- >> yes corker is sort of championing into the legislation i don't think it's given strong chances. >> yes and yesterday he was very, very i would say sure as you could be after zte. now i asked him five minutes after the zte news came out about wilbur ross. he said there's no real reason he actually said that the chinese don't mind this deal happening. they actually like the companies together he said he reminded me they have a great relationship with china. that they agree to pay a fine a couple of years ago, and that the chinese relationships are super. and that would matter. because his company is known over there as somebody who plays ball versus, say, tim cook. i went to him and said, you know, if you settle for far more than you think the stock goes up immediately. >> you said that >> i said that he said it's not my job. you're the guy that predicts the

stock. i said that's going to happen. and i'm going it take my numbers to $8 and raise my numbers right here right now. >> it was fun. >> he's such a nice man. >> yeah. he chopped a lot of wood we'll hear tim armstrong tonight. >> and pelts. >> yeah. >> talking about some of the parts of proctor i want to be careful. >> yesterday you interviewed nelson pelts a member of p & g. he did at least give some air to the idea of a break up tell us. >> i think what he basically said was he -- nelson submitted a white paper that talked about the way they should have global business units better siloed that report and are competitive. he said that they're certainly willing to consider that very seriously. >> i see. >> when i pressed him on a break up, i did not get that it's

going to be broken up. >> okay. >> i think he wants more accountability and somehow the press was a bit of fake news yesterday i was there at the creation of fake news. he did not say that proctor wants to break up. >> yeah. >> he was confident that proctor's growth could accelerate i think that's a better reason to own the stock and the balance sheet is driven. if he can get his point clear how each division has to happen. just complete, you know, sales, marketing, product innovation. i agree with him it would be terrific he did say once he's in the board room, they were more kind to the idea. i was very interested. >> yeah. he shared a lot. he had some things to share about ge, which i know down to $13.73 we know before the end of the second quarter, as the company has said, it's going to outline for us its plan. >> right. >> its vision. i can tell you not to expect necessarily some sort of

wholesale break up of ge. >> yeah. >> that is not going to happen that said, we're going to get certainly an expectations, i think, we're going to get some sort of path that will involve potentially a unit, if not more than one being -- >> yes. >> divested in some fashion or something. not that we'll get a lot of specifics. i'm talking a particular deal. the stock keeps trading up. >> i'll tell you what was interesting about nelson he was talking about the chairman of athena health and how the chairman didn't necessarily -- >> whose name you don't say. you don't say out loud we've noticed this. >> no. there's no need to why? he mentioned the name. the chairman of athena health was with nelson and nelson was trying to -- he was talking about the $15 billion hidden obligation. >> yes. >> $15 billion

that's with a "b." >> that means annuities. >> for long-term care. >> long-term care insurance. >> right he wanted to know nelson was saying, you know, john flannery didn't know that it was kind of i don't want to use the word "hidden" because that implies a different level of involvement. >> but $22 billion, wasn't it? >> the $15 was -- >> i see. >> did peltz take any responsibility for what has been a horrible investment? >> i didn't go there i guess i should have said -- what am i supposed to say? >> i don't know. it was one of the most highest profiles ever made it hasn't worked. >> what he said if he knew all the information, it would have been a different story because he wasn't in the board room. he didn't know about the $15 billion. the missing $15 billion that the athena health chairman he thinks

knew he thinks that the auditors knew but didn't think it was going to -- he thought it was out there and disclosed. it was a very sobering. >> break up shares of athena health >> what are you even talking about? >> i wanted paul singer to go to at the end. >> that's lightning fast control. one of the big things has been record highs for tjx and nike. >> oh, my! >> the retailers easing a bit today. we did get stitch fix come out with a bead. >> a good quarter. look, i was with jeff gannett yesterday. i interviewed jeff gannett yesterday. >> you had an incredible day. >> thank you. >> what did you say? >> incredible. >> thank you. >> i can't wait until "incredibles 2" comes out. >> they were talking about retailers. this is the quarter it came together for retailers

they figured out you start your purchase online and macy's has gotten more digital. and one of the reasons he cited he's hired all these people from ebay that mark lauri suggested. why don't you hire people from e bay. and they have been -- basically i'm now saying some people wanted to outsource. he said i'm bringing in the best he has real estate people. people that are technologyists they have made their websites more attuned to what is going on in fashion he addressed all the issues just in terms of the brick and mortar he feels more about brick and mortar he fixed the balance sheet he thought that was paramount. he said i had to be a banker i'm a merchant, a fashion guy, but i had to be a banker i had to be a real estate expert and a technologyist. he called it reverse mentoring he hired people that were much

smae smarter than he was and sat them down and said "teach me. his humility was charming. >> wow. >>well, we also referenced, of course, the fact he had -- interesting. i was in the room for that conversation, jim. >> what did you think? >> i thought it was interesting to hear his thoughts. >> not incredible? >> he and the doj -- no, not incredible almost close. >> go ahead. >> i want to come back to fox next week will be an important week we'll hear from judge leon the man overseeing the doj's case against the at&t time warner deal, which jim was talking to the man behind that decision to go to court about yesterday. and we'll see what judge leon has to say will we get , as many expect, a ruling that will allow the deal go forward will the doj appeal, which i think is likely, if they lose.

will they have the stay which will have the effect of killing the deal unlikely but not impossible. but what we're also going to get, if we do get a decision from judge leon that says you can go ahead is a bid from comcast, our parent company, for the fox assets that disney has agreed to buy in a deal worth roughly $28, let's call it, a share based on the ratio to fox shareholders now that's $28 in addition to, of course, new fox you'll get, as well comcast come out with a bid. it probably will be the 13th, is what i hear, if you get a clean ruling from judge leon in the affirmative saying the deal can go ahead expect it on the 13th. and then, really, you'll have this -- >> the 13th? >> correct 4:00 on the 12th with judge leon. >> and i'm out next week. >> two of your most important days.

>> there's talk i'll be here wednesday. we'll figure that out. >> you'll call in. no matter where you are. >> yeah, i will. we got to figure out what judge leon says. we don't know. in fact, jim has a different view of many others behalf he's goi -- of what he's going to say. the fight over anti-trust and the risk that, obviously, disney believes this deal is far better positioned for any number of reasons. including the currency, the combination itself, the desire for the murdoch family to own the stock. anti-trust will be key here. comcast, remember, when it put nbc at comcast together years ago, did have to enter into behavioral remedies with the department waof justice in a consent to create much of which expires this summer. if you add more content to the distribution platform will it be a problem? they're a key offerer of

broadband services in many parts of our country it's regional. not national unlike direct tv disney would argue that merging of distribution of content and the key broadband place they have in our country in terms of delivering would give them dominance in the region and direct distortion of competition. they can favor certain over the top offerings including perhaps hulu, if they acquire hulu part of the deal. >> that's something he felt fault with. >> yeah. that's the key contention on disney's part. that said, comcast will come back and said wait a second. how much content are we offering here by the way, disney, in the merger agreement, offered to divest all the rsn the regional sports networks 22 of them and businesses that generate $250 billion we're willing to do the same we're willing to get rid of the rsns, if that's what it takes. what are we left with when it

comes to content gn nat geoand fox one of the things we'll talk about is even though you may see a higher price point from comcast, the fox board will have a lot of work to do in terms of determining what has the most likelihood of occurring, the most safety for the shareholders in terms of happening, and disney has a lead on regulatory, at least by a couple of months. >> how much do you expect to be lock, stock, and barrel on tuesday. if the judge says some not others in other words it's not clear cut we'll come in wednesday. okay all systems go. >> right could end up with a complex ruling, jim. >> yeah. he made some points made me feel we can win something. >> and then that for comcast may take another day or two to figure it out. >> next week will be amazing i believe a lot of stocks we're talking about will go up

i don't believe that comcast and disney will stay down here. >> comcast has gone down so much the multiple is so much lower than the multiple they're playing. >> their worried about the shrinkage and the amount of balance sheet fire power they have has gone another direction. interesting. >> stocks will have to jump over that the fed presser, doj, ecb, may cpi, north korea. >> yeah. north korea. >> yeah. >> what a week. >> for the time being, though. dow is down 40 worst day for chip stocks since the middle of april on that apple report we'll get to bob. >> good morning, guys. happy friday slightly defensive tone, you know, unusual when you see consumer staples utilities, once again technology is lagging i think that's a big story overall for the week in fact, you take a look at the sectors this month, you can see very, very clearly retail, the big story is resurgence of retail resurgence of banks. the regional bank index is at a

historic high yesterday. retail at a three-year high. consumer discretionary retail in the group. also a historic high-tech is a slight laggard overall emphasize retail how strong it's been amazon is up 3%. but we have nice moves in kohls and macy's and gap because the earnings commentary has been stellar overall after the middle of may that came out and said inventories were low. traffic was very high. you can see the response overall. here is the problem, s&p 2800. that's big resistance. that's the march highs i think the important thing here is if we just get rotation into banks from tech, we'll have a hard time getting over that. we'll see if that actually happens. but that's the big issue for the tech to come back a little bit here we have talked a lot about earnings earnings is not peaking at all q1 up 26% but estimates keep doing well for the second and third quarter. 23% in the third quarter we'll likely go over 26%

so we're not peaking in earnings yet. the story was wrong. we'll see what happens in the fourth quarter that's up 20%. none of these numbers are coming down that's the important thing yesterday a lot of discussion about emerging markets i'll explain this as simply as i can. basically this is about a dollar rally. pressuring the emerging markets. we had higher rates hurting emerging market. that's traditionally a problem we have the fed unwinding which means the fewer dollars in circulation overall. we also have another issue heavy u.s. debt issuance thanks to the deficit. that's competing for global investor dollars they're bringing money over here you get the idea this drives the dollar up. you're getting a very predictable pattern here that is emerging markets stocks have been weak for the whole quarter. malaysia, indonesia, thailand, this is the group that got killed in 1997 during the crisis they're down emerging markets are down. these countries are buying into the economy better

it's no 1997 crisis. right now the dow down 66 points >> thank you let's get to the bond pits we'll check with rick santelli. >> good morning, carl. it's been an interesting week. when you throw in yesterday's notion of volatility, and, yes, it was fairly interesting. i was basically on the air as we had what was perceived to be transmission lines from a number of areas we have, and you have highlighted all the events happening over the next seven or eight days in the form of policy whether it's monetary policy, trade policy, foreign policy and emerging markets we did get some movement obviously yields down. you look at the two-day chart you can pick it out yesterday. previous flash crashes put this one to claim it wasn't a flash crash. it was just a market move. and full basis points nowadays may seem like a lot because, for the most part, other than a few moments of crazy volatility, the treasuries and yields in general

have been rather orderly with long periods of consolidation. look at one week of tens what is interesting here we sit at 293 up one on the day. we've had voyages close to 3%, depending which you look at. we traded at one point yesterday prenew york time zone. on the downside we've below 2.80 all in all it's been a steady week let's look what is going on in bunds. bunds a bit more volatility than you're used to we've been consolidating the italian market has been making the safety market go crazy one week of bunds are down 4 on the day but up five on the week. we can't seem to hold near the 50 basis point level you realize monday we were trading 2.50 it has been a wild journey. very quickly three month chart of investment great. thank you barclays orderly. acting well. high yield

completely different story one week of the euro versus the dollar what is going on maybe on the canadian side on g7 today is taking toll. but losing the bids in the euro today. back to you. >> all right, rick thank you so much. speaking of that, tariff tension is in focus as the g7 summit begins in canada. billions of dollars in global trade hang in the balance. stephen roach will join us late they are morning dow is down 60 points. week back in a moment. finally. hey ron! they're finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again.

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keep your eye on ge this morning. it declares a regular quarterly dif divide dividend no cut we will see how that affects sentiment. >> he is on ice there. i am recommending a stock, paypal listen, we will put on the best idea of the areas exciting, square,

paypal, mastercard, global payments, this is the charmed area this is what people like just keep it in mind you can throw a dart at it and you would get an "a. >> fascinating world >> is it >> yes >> tim armstrong tonight listen to what he told him in an earlier conversation >> it's really about 5g. verizon has been the leader. 5g is where the world is going today's announcement with hans coming in at ceo really tells you how serious about 5g and building the next layer of connected consumers. this is a signal, a leadership sign that verizon will be the leader. >> there's more of that. >> yes one of the things i want to emphasize is he is talking about making sports again. you will put nfl games on.

he knows that he lost the fantasy contingent to espn he will take them back is what he says. he says, jim, you are not going to do it on espn you will do it on yahoo like everybody else. >> you saw the amazon english premiere league news yesterday >> i mentioned that. maybe this is the beginning of when -- it's not amazon doing regular sports programming things are happening so fast i cannot wait until next week. it is going to be so exciting. >> not to mention e-sports >> blizzard, take two. >> the rights to that. >> it's so big don't forget, gambling >> amazon involved there twitch has become -- >> twitch is number one. a lot of people talking about microsoft. you are overlooking the gaming gaming turns out to be a lot more. >> doesn't morgan stanley have a note saying microsoft is working

on gaming? >> they are talking about the trillion congratulations the 100 billion club $100 billion market cap. why don't we have a $100 billion market cap our show unit. >> be nice if we did >> how much -- >> i will take $100 market cap start there. >> you guys are the best. >> good weekend. >> thank you >> "mad money" is tonight 6:00 p.m. eastern time. when we come back, more on the g7's summit. we wait for the president arrival. do you is down 47. don't go away.

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markets down marginally. 28 points on the dow g7 is the lead in focus as we wait for the president's arrival. full coverage coming your way all day. >> that's where our road map begins with the tough talk from g7 leaders as the summit kicks off. president trump will arrive shortly. we will take you there live. >> tech stocks running lower have we seen the highs for the year >> verizon's ceo is stepping down naming a new chief executive >> let's get to rick for some breaking economic data this morning. >> good morning. we have wholesale trade. the sales figure is not a final number it's our first number. on that, it's up .8. better than expected it's double our last look. as we move to wholesale inventory, we already have an april preliminary. this becomes the april final

it's up .1%. that replaces zero which was holding the marker until the final data came through. that follows up .4 with regard to this number, up .1. up .1 is going back to october but october was minus .5 last year we want to pay close attention to inventory, especially after we had ism, especially non-manufacturing and various features of transportation that may keep products and services tougher than normal, especially on the service side with regard to what you need to fix and service certain areas. back to you. >> rick, thank you european leaders gathered in canada have been speaking out against president trump, setting up what may be a tense confrontation today at g7, not to mention some of the tweets that have gone back and forth. i have covered a number of these.

they are usually super boring. this one not so much >> not so much at all. it's usually a pre-baked consensus going into it. now all of the european leaders and japan's leader trying to figure out how to posture, bracing for the president's arrival today, which sis expecte to happen in the next hour or so there have been bilaterals happening throughout the morning, namely by canada's leader, the host country justice trudeau has been meeting with the prime minister of the uk, of japan and with france the president of france. those two leaders have been the targets of a twitter feud with the president in the last couple of days. there's also been inbound criticism against president trump from prime minister theresa may and youangela merke. g6 plus one, the dynamic that's

been talked about ahead of this week's summit. trump's second as president. this morning when he was leaving for quebec city, he was asked about that dynamic he told reporters, you can call it whatever you want but he used that opportunity to suggest the one-time eighth member of the group be invited back in. >> whether you like it or not -- it may not be politically correct, but we have a world to run. in the g7, which used to be the g8, they threw russia out. they should let russia come back in because we should have russia at the negotiating table. >> that is the president saying that russia should be invited back to the negotiating table after being expelled in 2014 for

its an exatinexing of crimea this has been described as a family quarrel by the president's top economic adviser. that family will have a working lunch later today, a family photo. we will see whether they can make any policy happen in these 24 hours back to you. >> the president say he may leave early and miss sessions over the weekend questions about if he would sign any kind of joint statement. has the white house given any guidance on any of those things? >> there's an expectation the president will be leaving tomorrow morning in order to get a head start on his travels to singapore, which, of course, has been on the agenda and has been reported that the president did not want the g7 to be a distraction from that summit of course, the g7 goes until tomorrow evening it's at that time when the joint communication is usually released if he did decide not to sign on to the pledge, which usually is in the works for weeks ahead of

these summits, that would potentially be an out for him if he is in the air on the way to singapore instead of being here on the ground backing those principals that the other six leaders would be >> i know there's a session on women's empowerment tomorrow i believe president trump is expected to stay through that. one interesting thing here is the timing ahead of the singapore summit on north korea. i wonder how g7 leaders are going to tackle this they should rally around him right? ahead of this summit it's in the world's interest for him to make some sort of deal with north korea at the same time, scolding him on trade it will be an interesting balance. >> right that's been the case at previous summits. you will remember last year, the group allowed the u.s. to not sign on to the part about climate change still signing on to the parts about trade. there is consensus on syria, for instance, on the need to denuclearize north korea

there are areas where there is common ground. canadian officials specifically have said they will try to reach consensus in areas where it exists we will see where thepresident decides to make his views on those policies known >> we will see you later this morning. joining us here, director of international economics and author of "the marshal plan," ben steele, along with mike santoli. happy friday new yorker today says the most contentious g7 since '79. >> unprecedented this summit is really shaping up to be more a g6 tribunal it's not surprising the president has not been looking forward to it. >> where does -- when macron makes these threats about signing an agreement ex-u.s., if

that were to happen, what would it mean? what are the first consequences? >> we are moving in the direction of a trade war, carl it's really quite remarkable, despite the fact the advisers as the villain. trump's tariffs hit america's g7 allies canada will be hit on tariffs with $12 billion of its trade. >> biggest steel exporter. >> absolutely. the eu, $8 billion china is at $4 billion >> mike, you talk to big and small invfteestorinvestors. it's going to work out this is a negotiating tactic it's not in anybody's interest to have a trade war, especially president trump's. is that the prevailing wisdom on wall street? why are they so confident with that outcome >> we are not going to panic about possible outcomes that we don't know about yet

i think that most investors view this as kind of a war of choice. why are we doing there right now in this way? with more down side than up side i don't think people are assuming it's the major swing fw factor for whether the u.s. economy, the world economy really has a sharp setback i think those two things are in balance. the whole trade discussion is part of this kind of geopolitical and macro wave of potential concerns that's striking a market that has preferred to focus on strong domestic economy, corporate profits and the rest. >> it has drawn attention to european tariffs that are in place. what he calls non-monetary barriers right? his base obviously agrees those need to be remedied. do they not? >> look, the president's got a difficult balancing act here he has a domestic audience who wants to see him follow through as the america first president on the other hand, he wants to be the leader of the free world. no doubt

he has to try to change the narrative in quebec. one way he could possibly do it is to reach some sort of agreement to, in effect, gang up on china, legally, for example, within the wto, in return for which the europeans will come into conversation on these wider trade issues and the taf ririff will disassembled. i think if the president is politically wise and wants to keep the markets happy, that's the direction he will go in. >> that would be worth what in the markets? >> it would change the discussion a little bit. just enough to have the other fundamentals come to the floor i'm not convinced that that's necessarily a magic switch that's says now we're fully in positive mode for the market we also have the big three central banks meeting next week.

we have -- i was half joking the fed is accused of an america first monetary policy, because they are intent on trying to -- >> no matter what happens to emerging markets i think it's a good point. i have reading this morning about unfiltered milk. the president has accused canada of this 270% tariff on dairy farmers in the u.s that's true. canada has protected its milk industry for whatever reason i just wonder about the process. are we going about it the right way? even if the goal is noble and the president is correct >> absolutely. i think the canadians are very willing to engage on these issues, provided the united states doesn't put them into a corner as i said, canada is the primary target of the president's tariffs right now. that does seem disproportionate. of course, it's not playing well in canada. >> people are remembering the

president's appearance in davos where he backed up what his -- what gary cone said, which is america first, but not alone then gary cone and mcmaster who who wrote this piece, are no longer in the white house. >> people go into the administration hoping to push the president in a certain direction. lar la sometimes they come out disappointed. >> the free trader, defender of tariffs, where should we look, industrials? which group is the barometer >> the big kind of huge durable goods, industrials are the ones where people decide to focus in their anxiety. i would point out the market is at this point, up 7% in nine weeks, you are at levels you haven't been since early march there's excuses that could say, let's take a step back whether it's in fact anything tangible on trade or not >> people are thinking -- you

watched macron, trudeau come down here to try to sell him then got embarrassed, facing tariffs afterwards all this bromance, bear hug diplomacy is now turning to harder-edged tactics >> yeah. macron wanted to believe in the trump that the markets believe in a man who talks tough, who wants to do deals, ultimately will back down and be sensible. right now, donald trump is really pushing this. to the brink politically and economical economically he has gone forward with the tariffs. they are biting now, not just in europe and canada but in the united states. >> it really is stunning to see this new bout of risk taking in the markets. some really steep, painful sell-offs in emerging markets. >> technology really carries that load. it seems a little insulated from

that it seems like -- it would be a very strange year if corporate profits in the united states were up more than 15% and we did not have a flat to up market that's what we have. it's a push/pull in there. the push in support, it has been the strong corporate results and the buy-backs and other stuff. i think there's this sense that we are maybe later in the cycle. this is one other kind of vulnerability point on trade that we have to be worried about, that we wouldn't otherwise. >> the ten-year yield is at 2.9. it barely moved in months despite the changing fundamental pictures. >> we will see what we get later today. benn's new book is "the marshall plan." verizon, big news in a press release, a 52-year-old who used to run ericson came over to

verizon to become the company's potentially chief technology officer. the company's current chairman and ceo will step down from the ceo roll on august 1 and remain executive chairman until the end of the year. vestberg showed there was more than just the role that they thought he might fill there as the cto. telling me in a conversation we had this morning, the more i saw him in action, the more i thought, wow, this is the real deal as i said, vestberg, only 52 that seems to be an important component. mcadams saying he has been a public company ceo the experience of that will allow him to hit the ground running in terms of at least sort of the key tools that you need to know how to operate a public company he is still young and conceivably could be at the helm for some time. mcadam took over in 2011 as ceo.

at 64 year fs of age his tenure thought to be around six to seven years that it will, in fact, be. having ta similar timing, june announcement, august stepping down same thing that they did.simila announcement, august stepping down same thing that they did in a potentially disruptive world that's changing quickly, the focus on 5g, the national rollout of fiber and what they hope will be 5g capability around the country are the key thing that differentiates verizon from its competitors mcadam told me as much a few months ago >> i have been in this business since the first phone call back in '84 i have never seen a technology that will be more disruptive and have more benefit for consumers than 5g. it's so completely obvious to me it won't be the traditional way

where your speed to your handset will get you excited it's the ability to do autonomous vehicles. you can't do it without 5g. >> a lot of other things as well this will be the key focus, of course, for vestberg as he takes the helm it will remain to be seen how he does they seem, usa migas you might , the board and mcadam excited with their new ceo >> is this company doing anything with 5g that's all they are talking about. >> that's all they talk about. by the way, it may be all we talk about if and when it becomes a reality. >> are they the leader >> in our country, that's fair to say there's a larger question as to whether overall in china they are ahead of us in terms of their deployment of 5g very helpful in a surveillance society. >> know where people are at that exact moment.

>> facial recognition. instantaneo instantaneous, ai, recognize everybody. we're not thinking about those applications here. we are thinking about our things autonomous cars one of the things >> that's what t-mobile has been arguing in its effort to merge, that china is ahead of us and we need more scale. >> although, verizon is spending plenty of money. the rollout of fiber is for 4g and to enable 5g in so many parts of the country >> that's why they call them big bangs in tech. this would be a big one. are tech stocks mimicking the dotcoms? the president set to arrive in the g7. we will talk about that when we come back. . now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines.

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number of earnings movering to tell you about. docusign beating earnings. another company beating estimates this morning, stitch fix. reporting stronger user growth, a new platform for kids and a new cmo. broadcom moving, this is lower, despite beating on earnings. it saw strong demand in the data center market but did issue weaker than expected current quarter guidance

this could end up like the dotcom bubble. nasdaq is up almost a percent for the week markets are moving lower on what has been a higher week coming off the record highs for the nasdaq and, of course, the russell 00 'lbeig bk.20 legendary jockey víctor espinoza is insatiable when it comes to competing. ♪ ♪ so is his horse. ♪ ♪ when it comes to snacking. ♪ ♪ ♪ ♪ that's why he uses the chase mobile app, to pay practically anyone, at any bank. life, lived victor's way. chase. make more of what's yours.

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not a good day for chip stocks etf down over 1etf down over 1% tech still the best performing of the year. let's break this down. larry and jim are here happen if i frid happy fridahappy friday you look at basically s&p

ex-tech, tech etf as a percentage and you basically are arguing this rhymes with the dotcom boom. >> right it is starting to. it's not so much -- it's not nearly to the same magnitude we were at in 2000. but it's very interesting, the character is very similar. tech stocks have been outperforming. you may be surprised for how long the s&p 500 ex-tech index, relative to the overall s&p, has been underperforming fairly significantly now for five years. it really began in 2013, which is precisely the amount of time that the dotcom episode went on from 1995 to 2000. to give you an idea of magnitude, if you start each cycle in 1995 and in 201 1 .0, today s&p ex-tech is

under .9 back in dotcom, it went to under .8..0, today s&p ex-tech under .9 back in dotcom, it went to under .8 the concentration has been extreme. tech stocks in the s&p have outpaced ex-tech stock s two to one. three or four years, they have outpaced three to one. if you look at the last year, it's been four to one. year to date, as you mentioned, tech stocks are up about 15% within the s&p ex-tech, you are flat this year. it's getting quite extreme the attitude surrounding it seems similar to the culture that existed in the late '90s where tech can't lose and it's a defensive investment i wonder if it might end similarly, not to the same magnitude but similarly again.

>> the differences in business model maturity, obviously, corporate profitability, nowhere near what we saw in the late '90s >> that's true but there are warning signals. i think what jim said, he is looking at the puzzle from a different angle than i am. let me give you a couple really juicy points here. first of all, we're getting security issuance. you had opening the new york stock exchange today a spack in the good old days, they were blind polls. they had billboards on them. an extraordinary investment opportunity but no one to know what it is the guys doing this blind poll looked very happy, public throwing a lot of money at them. twitter just did a billion dollar convertible, i believe. i used to work in the

convertible business 30 years ago. it's the most expensive convertible i have seen. i don't understand why the buyers would buy it except for a technical reason they sold capital at 47 times. not one dime of that is going to increase the demand for twitter services this is what you saw at the end of a previous tech cycle you know, from reading the headlines that the regulators are all over these companies now. facebook has had to hire thousands of people to protect privacy. i think it's a matter of time until amazon gets invested -- gets investigated for antitrust. as a consequence, the margins on these companies, no matter how bullish you are, are going to be coming down. one thing you learn is that tech investors don't like margin decline. not only is there very, very high valuation, but around

fringe, there's warning signs. on the other hand, these are extraordinarily good businesses. i also am worried about the law of large numbers there's so much sheer in the advertising business that google and facebook can take. they are pretty much, i think, at the limit we are going to see a slowing of revenue growth for both companies. >> larry, are you cutting your exposure to things we talk about technology fang makes up so much of it. you can make an argument that facebook and alphabet are both companies that have seen their multiples low versus their incredible growth rates. amazon and netflix different apple has never traded above 17, 18 times i'm curious, larry, are you selling some of the stocks as a result of what you shared? how do you view it. >> we only own at the present time apple and google. i'm comfortable with the multiples there. i think your analysis is spot

on i just don't understand the multiple on netflix. if netflix goes up 40%, it basically becomes another time warner as good as the business is -- i don't think it's a particularly good business, because they don't generate cash. you know how i like cash >> yes >> eventually, the law of large numbers is going to get them amazon, i think the demon is antitrust. i have very little doubt that someone in washington is thinking about the standard oil model. i think it's only a matter of time until amazon's dealing with the justice department >> that will be fascinating. >> they're a risk. >> when i heard you talk about we're only halfway there in the bubble, i thought, we got another half to go it's funny because we go back to that time. i can remember people in '96, '97, '98, '99 all saying, my god, it's a bubble the end is coming. it took a long time. >> yeah. but it's been five years in both cases. i agree with you on a

performance basis, we're halfway there. on a time basis, we have done the full five years that we have reached the five-year mark, 2013 to 2018 when they underperformed i want to respond to the question about what do you do here there's been significant narrowing of participation in the s&p 500 as the fang stocks have taken over the marketplace. the equal weighted s&p is underperformed within the russell 2000, it has not been the case. it has been outperforming the s&p. tech stocks are doing well there as well. what's happening within the russell is tech stocks are just matching market performance within the last year rather than significantly outperforming it unlike the dotcom in the late '90s where small and large cap tech stocks were far outperforming the average stock, that's not happening in the small cap universe

it is happening in the large cap universe i think it says something about the risk of the large cap popular etf invested retail invested index one way to deal with this is to maintain a technology waeighting but do it in small and mid-cap stocks >> i feel like bubble is strong. i don't know isn't the whole difference very -- we're out of time. but maybe ten seconds here >> in fairness -- >> it's not speculative investing? >> don't use the "b" word -- >> i never used the word bubble. i think the character and attitude of the marketplace is similar. given up on value investing. it's the dust bin in history tech stocks is the only game in town i think it's similar certainly, the magnitude is far, far less than what the bubble was in 2000 much doesn't mean we can't have a correction of much

smaller proportion than what we experienced in 200 >> we will watch it. >> now for an update >> here is what's happening. in beijing, russian president vladimir putin telling his chinese counterpart that cooperation between the two countries is at an all-time high following their talks, xu presented putin with china's newly created friendship medal hawaiian officials say the kilauea volcano destroyed more than 600 homes geologists say eruptions have spewed enough lava to fill 45,000 olympic-size pools. the state's governor releasing $12 million in state aid to help pay for the mounting costs a wildfire that's ripping through southwestern colorado is expected to hit homes today. nearly 500 homeowners have been evacuated as that blaze

continues to burn in nearby durango. the fire has blackened nearly eight square miles a sad note today anthony bourdain has been found dead in his hotel room in france of an apparent suicide he was working on his latest tv series for cnn he received numerous awards for his work on television and cu culinary books he was 61 years old. you are up to date i will send it back downtown >> a lot of people thinking about his ability to show occur o curiosity about the world and humanity >> he will really be missed. it's a sad day >> when we come back, trade rhetoric ahead of the g7 we will look at what to expect moowy d t meeting todaan torr nasdaq 31.

welcome back to "squawk on the street." one hour into trading, there's a defensive tone to today's trade. capping off what is a strong week overall for u.s. stocks dow is down 21 consumer staples are leading the s&p. treasuries and demands with yields lower most of the groups are lower, led lower by telecom materials and technology president trump meeting with g7 leaders today. the president making some strong comments before departing for the summit earlier this morning. listen >> we're going to deal with the unfair trade practices if you look at what canada and mexico, the european union, all of them have been doing to us for many, many ecades, we have to change it they understand it's going to

happen >> joining us on the news line, senior fellow and former morgan stanley chief economist for asia, stephen roach. nice to talk to you. thank you for calling in. >> thank you always good to talk to you >> we usually turn to you on u.s./china trade disputes. let's focus on u.s. versus the other g6 members, our allies and top trading partners that are going to be gathering in canada. what's at stake economically >> the president misses the point that you can't address trade on a country by country basis when you do not save countries that don't save and want to grow have to import surplus afsh isavings from abro. they run deficits to attract the foreign capital. last year, we had deficits with 102 countries. the president constantly beats up on europe or canada or mexico or, of course, china, his

favorite target as if they occurred in a vacuum they do not. if the president wants to get tough on this country or that country, it's like whack a mole. he knocks one down and the other countries will more than pick up for the deaf sificits he attemp eliminate on a country by country basis. >> what the administration would say back is the u.s. is in a great spot with our economy, with our markets we have the leverage we have the bargaining power and economic power to impose tariffs and get better, more fair trading conditions from some of our neighbors which have imposed tariffs for a long time going unnoticed. >> that's a very myopic point of view it really is in denial of possibly the biggest flaw in our perceived brain, that

politicians want to celebrate, and that is our lack of savings. the domestic savings rate is a share of national income with 1.5% in the first quarter of the year that's a data point that somehow escapes the assess ment ment of president and his advisers when you have a savings rate that's that low, the current account and trade deficits are automatic from the standpoint of creating problems that must be addressed. the budget deficits that now getting larger will make that problem worse. it may look good today, but what about tomorrow i guess the related point to that is, we appear to be squandering perhaps our most cherished -- we raise real problems within the g7 construct.

the nafta construct. by walking out of the tpp agreement early last year. the idea that we're strong and tough and we can go it alone is really very much at odds with what our strength as a global leader could be. >> argentina negotiated a massive financing package worth $50 billion with the imf, one of the biggest ever rescue packages i think it reflects some of the pain we're seeing in emerging markets. argentina, turkey, brazil this week, ugly chart for the stocks and currency how does this end for emerging markets? how much worse is it because of the trade tenses >> i think the emerging market issue is more of a collateral damage from ending quantitative easing and the fact that the

u.s. is a low interest rate economy, which was not attracting much in the way of foreign capital. now it looks more trackiv iattre the hot money in a zero interest environment is now fleeing some of the higher risk market economies. we saw this in 2013. we're seeing it with argentina and brazil it's an indication how difficult it will be to navigate this. >> it doesn't look like the fed is going to blink on this. stephen roach, we will leave it there. thank you. >> thank you >> yale university we did mention, argentina reaching a three-year deal with the international monetary fund thursday for a $50 billion credit line. the deal places requirements on argentina to cut the country's fiscal deficit, increase

inflation rate decrease the inflation rate. thank you. it reflects support for the international community in argenti argentina. it's very good news. when we come back, we will dive into the trade issue a little bit further go where else, to the park expo in des moines, iowa. a look at what's coming up there. >> they have just finished up judging the final class. 20,000 people here god knows how many pigs. up next, why the u.s. pork industry suddenly has a beef when we comeac bk.

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we are seeing air force one

land the president arriving there for the g7 meeting this weekend. has a packed schedule today. we will get an official welcome later this morning there's a working lunch, some sessions a couple bilaterals with macron and trudeau. cultural event late tonight. we will keep our eye on that dow is down 37 let's get the santelli exchange. >> i will tell you what. i interview lots of people this guy is special. literally, the father of financial futures. he wrote the first interest rate futures contract it changes into a security delivered bond contract. i was lucky enough 34 years ago and one month to be hired by richard. eventually running the drexel bond it's a pleasure. you started so many businesses what i want to start with is you have a new book out. i know you are not as young as

you were 34 years ago and a month -- >> i'm 700 >> i will tell you, always amaze me, you steer yourself you are hot on block chain >> i think it's going to be a total revolution as important as electronic trading. one of the chapters in the book was written by donald wilson don describes from the pit to electronic trading i think block chain, pre trade and post trade will revolutionize and drive down costs for exchanges. >> donald trump is going to be in canada for g7 he has to boogie early for the summit not only did he do everything i mentioned, he is the first person to start a climate exchange still exists in europe you sold off a division that's in china do you think that we are -- i

know the barack administration made you excited thinking it would be big will we see climate trading? >> not only will we see it the open interest in north american environmental products is 500,000 contracts. it's approaching gold. california carbon, renewable energy in texas, in new jersey, are a a major commodity under the radar. in china, the old exchange we started is owned by petro china and alibaba. >> i think they may have big plans for some of these carbon emissions coupons. >> somehow i think the same thing. >> it doesn't stop there you also started a group that traded catastrophe bonds down here in the '90s, which i didn't work for you at the time, but i used to trade as well.

the biggest issue i want to talk about today, london innerbank. it has a reputation that is horrible there's one problem. people that use it like it there's a boatload of it and there's a boatload of corporate sponsors pegged to it. what's the dollar amount >> $300 trillion. >> okay. let me get this straight that amount still sticks, mortgage history and many, including ice, who you sold your exchange to, are really dedicated to t the fed wants to go with a secured rate called the sofer. >> it's an overnight repo. >> and it's secured. does that make any difference? >> a huge amount of difference because you can't hedge unsecure with secure. >> risk in a variety of way. >> huge. when you and i --

>> here is my question i could talk to you for hours on every topic. is liberg going to end up in an explosion in the markets with all this money and many being told to try to avoid it or will it be more like a y2k whimper? >> it's a whimper. why? we'll have multiple benchmarks. >> take your choice? >> yes portfolio. >> richard sander, father of financial futures, please come back it's been an absolute pleasure. >> thank you very much. >> david faber, back to you. >> thank you, rick santelli and the father of financial futures. as we head to break, take a look at air force one. president trump has arrived in canada for the g7 meeting. we'll be following that all morning. "squawk on the street" will be back aft ts.erhi my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets.

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the world pork expo is under way and world trade is in focus after the president announced tariffs on pork products jane wells is at that expo

good morning, jane. >> these are not pork hog force eating exports are huge over a quarter of the u.s. pork market is the export market. >> every time we get a free trade agreement our exports are growing. exports are a very important part of my business. >> american hog farmers like randy sprock sold a record 5.4 billion pounds only behind japan in terms of how much they pay for it first came china's 25% pork tariffs a couple of months ago now mexico slapping on 10% tariffs. sprock hopes the president gets back to free trade. >> i'm sure it's going to be a difficult time, take one for the team i believe we'll survive and be stronger as we come out of this. >> lot of talk about taking one for the team

this is happening at the same time that pork prices are up we may have more of it here at home, competing against cheap beef and poultry good news for you, bacon prices should go down this summer back to you. >> just one consumer impact. jane wells, thank you very much, on the pork tariff story coming up on "power lunch" we'll talk more about agriculture tariffs ahead of the g7 meeting we'll fact check the farm. how accurate are the statistics being thrown around from the president and other leaders like europe and canada about the rules being fair that will be a big debate. it starts 1:00 p.m. eastern. meantime, "squawk alley" is next

back from commercial break a little early here, breaking news as the president arrives in quebec city for the g7 busy day for him as he is going to have some bilaterals later on today, an official welcome before that. cultural event tonight did say this morning to reporters that he may leave the g7 early. maybe midday tomorrow, which would mean he would probably miss some sessions about climate change, energy, oceans and so forth as he then makes his way to singapore, obviously, for the north korean summit with kim jong-un. a busy day ahead today as we take stock of everything that's been said on twitter between him and macron and trudeau

covering all of this from quebec city, and eamon javers is in d.c., where he can recap what he told reporters this morning. >> that's right, the president held a 19-minute session with reporters as he was departing the white house this morning he told reporters he would like to see russia brought back into the g7, which he pointed out used to be the g8. russia was expeled from the organization after an ex-ing crimea he says he thinks they shouldn't have that meeting without russia being there. that is sure to wrangle u.s. allies in an da now for this meeting. it's fascinating to watch this dynamic play out, carl the president does not seem to be all that happy about going to canada i've been told by folks at the white house that the president was reluctant to make this trip, that he felt it may not be very productive at all. peter navarro, the president's trade adviser, was asked whether

the president wanted to go on this trip and navarro said that the president is very focused on an issue that is far more important. that is, the singapore trip. this is a president who does not like personal one-on-one confrontation, who will meet with some of the united states' closest allies that he has been in spats with, whether over twitter or in person over recent days a president who is very much focused on the north korean summit, which is coming directly after this this is a summit that is going to be fraught with all sorts of tension, carl. definitely worth watching. >> tension, indeed kayla tausche covers this, the 14th foreign nation that the president has visited so far kayla, widely said to be potentially the most contentious g7 we've ever seen. >> and it was thought that last year's g7, which was trump's first as president, was going to be contentious it pales