he was captured safely and going to be released folks, thank you very much for being here today make sure you join us tomorrow right now it's time for -- well, 10 seconds. we have time to check the futures quickly. we've been watching through the morning. we're still in green territory but just barely. dow futures up by 15 the s&p up by under two. now it's time for "squawk on the street." good wednesday morning welcome to "squawk on the street." i'm carl quintanilla jim cramer and david faber a central judge clears the way fed decision at 2:00 p.m. eastern fouled by powell's second press conference. futures pretty steady. europe is mixed. theresa may will join us at

11:30 a.m. eastern time. megamergers on the horizon at&t cleared to buy time warner. what will the federal government decision mean? >> and the bidding war for fox the latest details but what we can expect to learn today. >> and a big fed decision this afternoon. what investors need to know ahead of the annt. we start off, of course, with yesterday's decision. not unexpected, certainly, for those in the courtroom durg the actual course of the trial itself but as the days and weeks have stretched on, waiting for judge leon to deliver. certainly there were those that thought maybe the government does have a chance including the guy to the right of me there. >> boy, i was wrong. >> that was not the case 172-page decisn judge leon, jim, made it clear how he feels about the government's case and seemed to indicate why did you bother to bring it and we'll talk about what it means, but that will clear the path for comcast more on that in a moment

but big day for at&t let's not forget that. they'll be able to complete the time warner deal let's call it next week. they said by the 20th if not sooner they move on from what was a long, hard battle they didn't expect to actually face when they first announced the deal. >> yeah. a lot of people was saying it was a stunning rebuke against the government that's wrong it was more of a bomb thrown at the assistant attorney general for ti-trust ther2 pages of saying the justice department didn't know what it was doing it was embarrassing. the verdict was embarrassing it was kind of like your first year of law school. >> it's interesting because as we've said so many times, people and comcast was looking to this as was the fox board for a sign as to what it would mean in terms of the anti-trust risk and anti-comcast bid for foxwhat dos

i've spoken to the comcast side believes it's cleared the way. others say they're different companies. different situations and you still can't say without a doubt that the government will not oppose comcastase of x assets. >> right on page 171 he says the temptation by some to view this decision as being something more than a resolution of this specific case should be, let's just say absolutely not considered you know, david, this was a blueprint for comcast to buy and it basically said i felt you can degree with me, but old media better start buying each other quickly because facebook and google are going to crush >>well, listen, that was in hererupert murdoch's decision to sell most of fox after trying to buy time warner in the unsolicited bid and failing to do so. so much of the reporting i did around that was about mr.

murdoch's decision that the world of netflix, facebook, and google and amazon was too hard to compete in. he's now a very happy seller take a look at shares of fox what we expect this morning. comcast, our parent company, of course, is down as was reported earlier on "squawk box." comcast is expected to come with the offer for the fox assets by the end of the day most likely after the close. want to see how weak disney is it pressures the overall value of disney's bid, remember it's expected this afternoon people are wondering what is the timeline as we sort of head into this really fierce potential bidding war. fox board is going to say, okay, we'll take a look. we want to talk to you about it. they'll want to talk long and hard about the anti-trust risk and what comcast is willing to do that's a key part of whatever we see later todaomcast not just the number itself and the all cash offer and then is it a superior

proposal disney will have five days to match. disney will not be shrinking here. >> does it matter that murdoch wants to sell. >> that's a key question, jim. from what i understand, listen, rupert murdoch made a decision to sell his company. those who knew him during the process, that's the word they used with me. >> hyperrational he said this is the way i'm going to go. i'm not going to be emotional. i'll willing to take this company i built apart because it's the time to do it there's a expectations he's going to get as high a price for his shareholders he doesn't want to mire himself in some sort of deal where 18 months from now it hasn't closed and it's dubious whether it will close. i think that anti-trust and what comcast is willing to say it'sg

willing to enter into behavioral things what will come along with it the comcast bid will be a key. and that will be a part of a negotiation potentially between fox and comcast. and don't forget disney sits there as we reported a week or two ago, they're willing to add cash to their deal they have an unlevered balance sheet, to rtain extent this is setting up for migh a rlly classic bidding war >>well, i will say sub rosa, a lot of people are saying sub rosa in this verdict that trump and cnn. no sub rosa in this verdict, i felt, listen this is no longer the days of rabbit ears. okay it's no longer the days where cable is growing these are the waning days of cable. basically saying, guys, listen we will green light anything because we know prices are coming down. it's not even an issue prices are coming down we want your viability

i mean, and, you k when you read the moffiece thismorning. >> the at&t -- >> the viability i mean, the judge was dire about the current road don't forget what he did when he said you don't need a weather blowto know which way the wind nob he's saying this is sunset he even used that. joked nobel laurate. >> the moffit downgrade, you mentioned, jim they go toboutsion of the legacy business, which is whaty. >> right. >> but also cash flows and whether or not they can delever post deal -- >> this is at&t. >> yeah. >> at&t downgrade. >> i felt bad. that was lik 0 -- 280 pages.

you can't have a 7% yield. that's unbelievable. >> right now he's including in his debt assumptions, i think, operating leases which will be counted as debt in january, i think moffit said that's important many people may say they won't have $250 billion in deb on't have it now that's his point to your point, this end game consolidation where you have players who are desperate to ke sure the secured a direct consumer offering, and obviously for comcast that would come in the form of potentially of hulu. disney started for spod entertainmwhice aided by the addition of fox assets or comcast. ional is s f >> yes.

>> it has nothing to do with the anti-trust risk at all 70% of the overall company it's latinmeri sky assets they're already bidding for. the 61% that isn't owned by fox. it's star india. it's a lot of different assets that are very importan comcast. which never had an international presence of any kind can. >> can you raise revenue numbers for comcast? of course. >> yeah. but look what happened to the s. it lost a quarter of its value this year. largely on the idea they're willing to lever up the balance sheet in a significant way to pursue the lon goal. brian roberts has said and will continue to say, i think, listen i built this company on acquisition by being unafraid to make the big bets i needed to make. >> right. >> he's unafraid here. of course, he has 33% of t voting stock, which always helps. and that kind of gets into a key thing here to what extent will

disney, bob iger be aggressive no doubt they will be. will disney's board saying it's getting scary there, that number, and what will mr. roberts be willing to go to as he seeks to secure the assets that many people say are once in a generation at this point they're saying that they didn't say that a year ago. >> no. goldman takes their target to a new high. 490 on netflix. >> oh, my gosh he sai going to make a lot of money what a piece that was. >> yes and growing content. growing ecosystems going to drive swth abe expectations they raised their target in e e. >> that's a eat piece and netflix is throughout thiss jus. by the way, atne point i think that the judge was saying now the judge was doing a little m & a work and research work didn't he imply it would be

better for comcast to buy t-mobile this judge gave you everything he took comcast, he took comcast to a buy he downgraded at&t. >> it's interesting yo mentioned t-mobile there are those that believe the doj will have to move on to the more traditional territory if they want to oppose something, it has to be a horizontal deal. >> they need a win delrahim needs a win, man. >> sprint and t-mobile, which is is a classic four begin to three. of course, their argument would be not really becaus a competition with the likes of comcast and charte yeah. s going to grow in a significant way. >> did you gethat there was another just vicious, vicious bleeding with sarcasm moment in the verdict. he quotes th dean of anti-trust saying vertical mergere good horizontal are bad it was let me ta you back to your freshman year, your first year of law school.

i mean, oh my god. >> are you saying what is the percentage likelihood there's an appeal >> he even says at one point, will you please stop wasting everybody's time and money oh, my god. carl, i think there are many people believed there was a very high chance of an appeal and one of the key things we talked about this last week was would there be a stay granted. >> y. >> now i think that has come down in terms of the whether they will appeal given how strong this was. and it is interestin note that at the end of his opinion, the judge basically says don't even think about granting a stay. >> the answer, my friend, is don't you dare. >> that would be manifesy unjust it would cause harm to at&t. deal would go awaythe deal and hee int. he didn't disbar delrahim wow. >> wow there it is.

>> it was too vicious. too heavy handed >> i think it was like the ultimate green light to any it basically said comcast you can raise your bid i iger you can go high per. >> and you spent so much money $10 to $20 million how many times $20 million stephenson must be feeling great today other than the fact that moffit said -- >> randall stephenson? >> yes. >> other than fox disney is going down comcast is going down. at&t is going down faang is working out well. >> time warner is up. >> a little bit. owes delrahim an apology. >> when we come back, an

exclusive with uk prime minister theresa may days after the contentious g7 meeting between the u.s. and the european allies we'll talk to alan greenspan. sara eisen has that live in washington, d.c. nasdaq coming off a record high. big morning, as we said earlier. mo sawreq"squawk on the street" minute

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release the latest decision at 2:00 p.m. eastern time followed by chairman powell's news conference. the fed is widely expected to raise rates this time around and the investors will dissect the statement on how fast rates might increase theyconsider what pbdid today. up 3.1 looking for 2.8 year on year. >> yeah. a lot is what we keep talking about. when you read through the conference calls about storage about freight. this is the competition between the world of an versus everyby else and the cost that has to be formed there's a demand for fedex and

trucking it's raising everything. and steve liesman talked about they're not able to pass it on before the fed panics on that ppi, remember that the companies like a hershey downgrade today the companies are eating the coh is their margins are going down don't panic on ppi because cpi is not reflected. >> hershey downgrade is about commodity exposure and people online they maker impulse purchases. >> the whole online is bringing down the price to everybody. i hope that i wish jay powell would say, look, like gary cohn once said. if you don't include amazon into your calculus of inflation, you're missing the real world. because it does it's a deflationary force. >> you know it's funny given our last conversation, obviously, about anti-trust and amazon it comes up so often as maybe the next real target.

>> delrahim doesn't want to target innovation. >> you spoke to him. >> thas a big thing on facebook. >> judge leon is saying those e >> they haven't seen that much a medium. >> yeah. >> you need the government to go after these companies and i don't think the government is going to d he did say he's following the alphabet decision very closely. >> judiciary not congress. >> but he did say i asked him about alphabet in the eu hoping he would blow off the eu's big fine but he didn't do that. >> right. >> i think he has no desire to stifle innovation because he believes it keeps costs down. >> to the point that amazon continues to bring deflation is good. >> anti-trust, as judge leon says over and over again to keep prices down. and amazon is the ultimate price cutter. >> friday is the one-year

anniversary of the whole foods anment and just this week we got more hundreds more price cuts on whole foods items for prime members. out of amazon. >> oh, my gosh. >> it continues. >> i think amazon is a major game-changer for the fed and the fed has got to acknowledge it. i go to whole foods now. it's like whole foods is now cheaper than my regular -- >> it's no longer whole paycheck >> no. it's all gone. >> really? >> the rebate and prime and they deliver it to your house thing the not doing is paying you to go there. >> really? it's that cheap. >> it's that cheap yeah i don't think that's quite the case glad it's gone down in pce. >> it's good if you're not vegetarian vegetarian is the same as usual. you like vegetarian stuff? that kled >> yeah. i'm all fos that beg

with "q" but not that. >> in abou hour, we'll head down to washington, d.c. sara eisen will have a live interview with alan greenspan. talk about what the fed may tell us in a matter of hours. cramer's mad dash in a moment and count down to the opening bell don't go away!

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worry whether there's world wise expansion. remember that we heard about it until the last week january caterpillar has three-month numbers. caterpillar made america up 43% that is whatthe global

that's good for utilities. there's drilling going on. there's economic expansion going on i kind of like it here >> you like this too >> oh, yeah. i'm looking for it to, you know, break out. the comcast charter. >> yeah. >> what do you think of it >> dynamite. what do they call those in ice skating? >> triple lutz. >> it's a head and shoulders i like proctor here. >> the triple lutz followed by a toe tap. whatever they call that. is opening bell coming up after th ♪

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i think it's going to be hawkish. >> hawkish i think goldman has a note today arguing investors are out of position [ cheers and applause [ openg bell

>> hulu mentioned repeatedly as asset of choice. and hulu is at stake in the comcast disney and the judge seems to put hulu in the same vein as netflix throughout the. >> yeah. >> if disney is successful in acquiring the fox assets, it would gain control of hulu and that would be same f comcast, which cannot exercise any actual control over hulu even though it

owns 25% of the company. because the consent decree comcast enteredinto when it bought nbc universal i think a key thing might be say comcast say we would potentially divest hulu, ifeeded. >> disney stk is only down $1. i can't figure it out. >> maybe fox would or, you know, keep it. so i don't know where it ends up i don't know how it's going to end up that's one of the key considerations that the fox board is going to have to take into account if and when it negotiates with comcast about the willingness to undertake certain things beyond even what disney has said it would do. because i think there is still a higher bar for comcast regardless of whether you think it's right or wrong. and people have very different views in the anti-trust on this. it may need to be a bit of a higher bar from the fox board. that's what i'm picking up. with the idea of how i struggle

important -- how much time in my brain that i want to devote to this i kept saying america wants to know what is going to happen here these are all the bills you pay. right here every llou pay. >> great point. >> every bill in front of you. >> great point the scope of a big part of our lives changed. and the leaders at the open are all media, i mean, there's express scripts. there's cvs, there's stryker. >> the idea verticalration shouldn't be measured. i also want to point out that repeatedly mentioned other than facebook apple is mentioned. it's almost like the judge saying apple is going to make a move tim cook would probably disagree with that but, you know, everything we care about. >> going to start going to judge leon >> i think he has his own research firm going. >> he spent a lot of time on he has to let everybody know he's well studied.

>> he a sound board at the bench. >> justice just became public today. >> just. >> yes justify. just i mean, the whole match. wow this is so important he touches on everything. >> carl pointed it out but cv cvs/aetna is more challenged. >> given how much the judge is worried about amazon's power cvs is amazon. >> meaning it's done to oppose amazon. >> yeah. >> i'm willing to say analysis disaster the front part of cvs. >> what does that mean a disaster. >> you go to amazon. you don't want to do that. amazon can do same it can do same day. >> interesting. >> i know you don't shop, but if you did. >> i go to cvs sometimes. >> you do? >> yeah. >> really? >> well, the food in the front there. if i need cookies. i run across the street.

i'll make a cookie run. >> really? >> you like tate's cookies >> yeah. >> i enjoy them. i like lots of cookies. >> and restoration has been boar, i had one today. it's up another 3. >> you said don't expect it to peak too early. >> it's going 165. a lot is the order my wife placed on monday. >> it's not just fox, which is up dramatically this morning but cvs is up, discovery is up, viacom is up i don't know what people expect there, frankly. >> i'm working on that. >> that's still viacom and cvs probably in a hold pattern until october when chancellor br broushard hears what is going on. >> consolidation that's the other hot sector good interview yesterday with julia and strauss. he's not a seller.

he doesn't want to sell. >> e sports aren't they a center of that? >> e sports is incredible. >> gm new cfo chuck stephens resto retiring after 40 years. and the new ceo is a woman. now gm is run by two women. >> chuck is laying out a vision that is so much beyond the switch around. stock is incredibly inexpensive. >> if you're randall steph and you've gone through the incredible amaze for 18 months to get your deal to the finish

line and finally you're done, you wake up to see your stock down to, you know, down another 4% not that far off its -- not -- all right. not at the 52-week low but not doing great. how do you feel? the market has it wrong? i'm going to dominate? i don't know what am i dominating >> i would think youon't feel all that great given the decline. and given the incredibly stunning negative well-thought, rigorous piece out from moffit which i joke i sent him an e-mail saying this is mutual mutual this is basically saying for you don't sell the stock right now your head is going to spin. >> yeah. no, it was a strong sell. >> yeah. >> super strong sell. >> talking about the increased debt load of putting in question his mind the rating agency's response and the

ability to meet the debt load and would they be in a position to cut the dividend. that seems to be the central part of moffit's piece. >> rigorous. look at the thing. i read through all of it and i said jeez i didn't know. they talked about the cash flow they get from time warner being a drop in the bucket. >> yeah.at&t is a widely held sr heaven's sake. it's interesting the verizon is unscathed because people just don't think -- people think their cash flow is better. and that the dish -- the direct tv deal, david. >> direct tv deal, retrospect. many people said it was done to support the dividend because of the cash flows, but clearly you would not pay what at&t paid for that company a few years ago given the erosion of the sub base. >> no. >> and as we pointed out many times, they're replacing the higher paying subscribers with

lower paying oner direct tv now ich is a very successful so far over the top service that at&t has raises the larger issue of everybody wants to get direct consumer and netflix model but are they going to get the netflix multiple >> they're not this is alsobout millennial's. the cord cutting what do millennial's do? they order from dominos or order from grub hub. they sit and play video games. they don't drink beer anymore. they like the fancy waters that. okay and then they go to bed. >> and they're about to surpass boomers in number. >> yeah. now they have the fortnight that placed any mental stimulation whatsoever i mean, like books. >> listen, it's a real issue in my house. >> yeah. >> grub hub. i mean, it keeps going up. what is grub hub about the desire to play video games

every second after you come home from work. if, indeed, you're not doing it at work. >> work? wait, wait, what is work >> shifts. >> i don't know if they're going to go to work at the rate they're going, my kids. >>well, ifhey do go to work, it's going to be shared. >> they go and drink $12 margaritas they love it. >> let me pay more for the margarita. i'm trying to join the experience. >> they watch a lot of netflix which is up 92.5% this year and has a $160 billion market value. that's higher than comcast it's higher than disney. >> do you know what s&p name is up behind netflix? >> i like this. >> i know. >> do you have to state it in the form of a question. >> it's twitter. >> oh, my god. jack dorsey.

square and twitt jack dorsey's father was happy i acknowledged it was great his father said you, you admitted it. thank you. >> we saw kim and what she said last night that at kanye's birthday party that she and jack dorsey and she talked and he heard her out on the edit button jpmorgan yesterday taking their target to 15 raising their revenue about 3%. >> she's all over. she's getting an edit button she's getting people pardoned by the presidt. >> rarely confused with einstein. >> we shouldn't go to bob without doing tesla and hr block. >> in guy from bear what is he trying to do does he wake up every morning and say bash the shorts? he calls out a new idea. he's been doing it every day he said why do people hate the

fact they're laying off people it's fabulous they're laying off people he said that laying off only white collar workers not the blue collar. this is great. and hrb? >> oh, my gosh down 21%. >> it was a nightmare for people like you they sneak in. it's going to be horrible for 2019 it's great, it's great but if the 2019 will be bad. and don't forget looking into it. >> brick and mortar is not working. they have to close 400 stores. intu it is crushing them crushing them.

destroying them.y're winning winning. >> let's get to bob. the dow is up 28 good morning, bob. [ inaudible >> reporter: market leader is pretty clear it's health care that makes a lot of sense with the veical mergers more promising approval. take a look at the sectors now so health care leading we're getting modest moves up ns but they haven't been market leaders much this month, unfortunately. tech is flat industrial is another one not doing too much and energy has stopped being a big help to the s&p more thaa week ago and that's a little bit of an issue here health care, as you can see, is mark and the vertical mergers areto . you see cvs and aetna. you can see express scripts up nicely there

some affect overall mas on that important to remember where market leaders are s&p up about%. it's been a terrific june. retail jt far and away fantastic numbers here some of the big classic retailers up double digits material strong. consumer discretionary because everything has been strong tech is performing about in line with the markets financials have been lagging a little bit financials and energy don't quite have what they had before and are not contributing as much as they used we're relying on consumer discretionary and to a certain extent some of the other stocks like materials elsewhere it's market movers today. we've had some positives this week obviously north korea is incrementally a positive certainly the at&t/time wa deal is a clear positive for the markets. there ars out there. i think the federal reserve is potentially risky today. there's been discussions about

tradnsion perhaps president trump would impose trade tariffs on china there was a big story on politico this morning. so that sort of floats out there, as well in terms behalf the federal reserve is talking about today, there's an unusually large number of questions traders have there's a general feeling that a lot of fed may remove or alter the phrase that's the key classic phrase. maybe either remove it or put in "somewhat. that will change one or two more hikes. this one is the big issue here conference every meeting a press it doesn't sound hawkish it seems logical people are greeting it as potentially hawkish. then a potential for more aggressive economic and inflation forecasts. that's good news we get a better economic forecast overall but it may add to rate pressure. remember ppi this morning was just a tad hotter than people were anticipating. so a lot of stuff floating out there that could potentially

move the markets later today finally, want to note i don't pay a lot of attention necessarily todowngrades and upgrades, but a comment they downgraded hersheys today. down 20% this year a little late on the downgrade but shifting to online purchases, they say, by shoppers reduces impulse shopping at the check out lines. it seems obvious to me it's a little bit late for the company to come out and mention that but you see it's moving the stock down 3%. we're now essentially at the lows for hershey for the year. $90 was the low here th be probably at least a two-year low for hershey at this point stating the obvious is moving the stocks now right now the dow flat at 25 points on the upsi back to you. >> bob, thank you. got a busy day headed our way in the bond pits. we'll get to rick santelli.

>> jay powell is going to be greeted by steeper inflation and a flatter curve. and potentially, as you look u twos, threes, fives. they're unchanged. ten are up one 30 are minus one look at two day of twos. you can see the upward to it interest rates don't have as big a bias leading into a fed meeting as they normally do. maybe that's the attention being paid to over central banks or the notion this is sbuilt into the cake if y look at what going on with ten year, considering we have hot inflation, it doesn't seem to be rnding very much. as a matter of fact, i know you mentioned, carl, the yield curve tens minus two there it is.ptember '07 the lase wet 41 we've flatt tn that today at 40 basis points if you open the ten year chart to february, and this is very important, because markets tend to kind of learn their trading patterns questionable with central bank

policy as this year. so you see in february we had many sessions in a row we talked about that closed in the 280s. now this could be the ninth session, depending on where it closes that's in the 290s. ife look overseas, you the way the two-year has an upward bias this is a june 1st start to the two-year shot. the negative two-year yielding instrument in europe it doesn't look like it's getting ready for tightening maybe balance sheet reduction. therein lies the issue that investors to deal with and look at the dollar index see the drop at 8:30 a.m. eastern when the hot inflation hit. carl, jim, david, back to yo >> rick, talk to you in a bit. when we come back, walter isakson weighs in on the at&t time warner ruling talk about what is at stake for media. e dow is up 22 points. a lot headed our way over the next several hours don't go away. whoooo.

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some big news coming from 10 downing. steve sedgwick is there. morning, steve >> very good morning to you. we've been given exclusive access to 10 downing street. i can tell our viewers, i'm in historic room i'm in margaret thatcher's study where later on this morning, i'm going to be speaking to the current prime minister, theresa may, about a whole host of issues we'll be talking about brexit, about what she believes mr. trump is doing on the global stage after a pretty disast was g7 and a very strong meeti with kim jong-un plus we'll be talking about tech as well. this is important for the prime minister it's london tech week as well. and what the uk is trying to do amidst brexit is prove to international companies and esph tech companies that the uk is not only open for business but is better than some of those rivals on the kontinent who are trying to attract the same kind of talent as well. we've had commitments from the

likes of salesforce. 2.3 billion private investment 1600 new jobs as well. there are concerns that is not enough as well because there's been some bad news in the last week and jobs will be lost at jaguar/land rover. picking up tech jobs as well and the fact is despite the fact we've got brexit ongoing and huge, tumultuous scenes just a few yards from where i am in westminster, others such as emmanuel macron of france are trying to attract the same kind of talent. ibm, microsoft and in paris for a big tech hub there the prime ministers in a big fight to prove those big tech companies want to be here. >> big, big interview, steve thank you for that pound down four days in a row. inflation tough to get over there. longest losing streak in a month. >> sedgwick does great stuff

he's a staple. he's terrific. we'll get stop trading with jim in a minute. dow is up 16 at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, only pay $4.95. fidelity. open an account today.

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time for cramer and stop

trading. >> $125 billion company with everything involving e-commerce. it's an e-commerce play writ large. i think they can blow away the numbers. that's why the stock has been advancing. there's a company that really understands its mission which is really to keep track of everything that happens online, e-commerce, and they do a fantastic job. i like that one. >> going to be acinating one. unbelievable chart that's in the top 5% of all the charts we show >> earnings could be up to 55% want to thank david faber for coming in on his vacation. didn't need to do that did remarkable work. >> thank you happy to be here i think i did need to do it. >> it's your day >> and gary freeman tonight from re re restoration hardware business doing $5 billion in sales. he is remarkable and he's got a membership strategy not unlike costco. very high end. does save you a lot of money

very visionaryhought that for ag time also bought a lot of stock >> rh and costco, fresh highs today. >> the membership, he's going for earnings not like wayfair going for just rev. and he's delivering numbers. constantly underestimating. i don't understand why >> we'll see you tonight >> great show, guys. >> mad money, 6:00 p.m. eastern. chaian genanrmresp is with us in a few minutes. dow is up 5. hi, i'm joan lunden with a place for mom every day we hear from families who partnered

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♪ good wednesday morning welcome back to "squawk on the street." sara eisen is with us from washington she'll be talk with former fed chief alan greenspan about the fed decision that's imminent later this afternoon meanwhile, a quick check on the market dow holding some cards close to the vefst relatively close to te chest. our road map begins with the judge approing at&t's takeover of time warner

>> and is it paving the way for future media plays including our parent company >> ready for a rate hike the federal reserve is expected to raise interest rates at an fomc meeting alan greenspan will join us exclusively this hour. >> all right let's get to our big story, of course, for today and, in fact, it was yesterday when we finally heard from judge leon after his deliberations over the course of a couple of months after that trial that took place in which the government was trying to stop at&t from buying time warner but it simply, the government failed to do that. the 172-page opinion made it clear that he sided firmly with the view of the lawyers representing at&t and time warner, believing their deal to combine would not pose a competitive challenge, would not be a hardship for consumers in any way.

and that deal will close after being announced more than 18 months ago it will close next week. that, of course, is good news conceivably for time warner shareholders, sh quite weak in part on downgrade this morning from the firm of mofet nathanson who is concerned about the increasing debt load at the company and its ability to maintain its current dividend. as for what comes next, the key thing that comes next involve ourselves parent company comcast and its pursuit of those assets that fox is in a deal to sell to disney yesterday's ruling paves the way, in fact, comcast views, in fact, the ruling is really allowing being as good as it could have hoped for i it to move ahead with a bid for those fox assets it previouy had competed to buy those assets but there had been concern on the part of fox board about the anti trust implications of the deal and it wanted to wait to see

what judge leonad to say and what the government would end up doing with regard to at&t and time warner. we've gotten that decision most people feel is does mean or open up certainly the possibility of comcast buying this without a lot of regulatory impidiments, though many still say this is an independent deal. it is not quite the same as time warnereal with at&d that it will get a hard look from regulators and may require certain divestitures when we get this bid from comcast, it's not just going to be about the number, which is said to be significantly higher than disney's current all-stock deal to acquire those assets which is worth a bit less than 28 bucks a share, but it will also be the language that is accompanies it in terms of its willingness to take away the antitrust risk for fox and that will be a key part of any consideration by the fox board as it begins

deliberations. it's having a meeting, the fox board, on the 20th of this month which we'd expect given this new bid in hand it would deliberate whether it is likely to lead to a superior proposal to acquire the company. and if that's the case, disney will have five days to respond with a higher bid settg up significant bid for what many say is a property that doesn't come up too often. in fact, some call it generational in that sense ompanies look for both increased international distribution and direct to consumer offerings in this changing landscape so much more here. >> here to talk more about it, on set, erica poe and jim stewart. his column this morning, ate ae at&t/time warner ruling shows need to boost antitrust law.

you use thword high time, jim. >> absolutely. antitrust experts have been waiting almost 40 years for a federal court ruling that deals with it. meanwhile the internet has been born cell phones have come onto the scene. google and amazon have launched. we're in completely different world from the last time a court considered these issues. a huge win for at&t buso for the traditional view which was championed by the late robert bore, a chicago school approach toward mergers which the mainstream of antitrust scholarship has really moved away from in 40 years. >> this morning in "the times" andrew ross sorkin writes the government's case always felt political. sounds like you kind of agree with that. >> first of all, vertical mergers are not usually challenged in such a way i think that the administration has made it very clear that,

like cnn perhaps or some other aspects of time warner but i think the main point is that the justice department lot it from a cable television pointf view and whether going to raise prices in that particular world, which possibly could, but the real issue was, is time warner better off to fight a netflix or tech companies by itself or is it better off with at&t? and the answer is resounding that it's better off with at&t look at the terrible job the did competing with hbo, which was kind of precursor to a netflix if you'd like. they d a v very bad job. that's the real battle is the tech companies, not the cable companies. >> one of the key questions is what does this mean for comcast in terms of its pursuit for fox and could it expect to meet a challenge fromhe doj many say given that ruling yesterday, it becomes less likely where do you come down >> i think it's an open -- it's a clear green line for t

comcast bid. now it is true it's not exactlyt time warner, at&t is a pure vertical deal. a buyer and a supplier comcast already owns nbc universal. they already own a studio. there is a horizontal component to this which they will look at more closely but there's a big horizontal component in disney. they already own the studio. it's anything, if the content creation will be less concentrated after a comcast takeover than there would be with disney because disney has such a market share. it's still a competitive market for content. i dot see any impediment unless the justice department decides to ignore this ruling and tee this whole thing up again. >> what do you think the chances of that are? >> very remote at this point >> they can't really do it until they get a district court opinion on appeal. i think e govent will appeal this. you do believe they will? >> i do lieve they will, even if the merger goes ahead and they recognize they probably can't unwind it, although

would be a peaceful remedy in an attempt to clarify their doctrine and give them ammunition going forward, the judge did give them, i don't know, i don't know if i could call it a bone, maybe a splinter of a bone when he said he wouldn't presumptively approve a vertical merger. he said vertical mergers deserve scrutiny and applied an analysie said for mainstream scrutiny so there are some things they could work with on appeal. i can't imagine they'll step up on another case until they get some encouragement from another court. >> we talk a lot about the implications for legacy media. does this change calculus for tech does it allow them to be more a maybe that aren't for sale yet but might be down the road >> you know, the tech companies have taken a position that they want to acquire e best content out ther netflix has -- so this content creation is not

attached to a particular company. it's not attached to a particular distributor this is why it's a little bizarre for the classic company. these mergers can only work if a bunch of money has been freed up as a result of synergies or whatever to create more content because that's really what people want they want to see the shows they don't ce about the channels anymore >> but disney to certain extent is -- undertook the fox deal in part because it's seeing some erosion people are disconnecting from their video service. comcast is a provider of that video service. it's much more focused on the broadband business but it, too, is looking for an opportunity to bring direct to consumer a la netflix. but i wonder if either company is successful, what do they get here because they'll not get a multiple that netflix gets current lie for adding enormous amounts of subscribers but not having a particularly profitable

business >> exactly so that's the point. like in the case - >> 8 bucks a month will go a long way, or more. >> is in fact now aroundheir neck because the agreements don't alw them to stream a lot of the shows they do on cable. so unless they change the landscape, they figure out ways to spend money in direct to consumer, these mergers are just going to be a consolidation of cash flows >> jim, you have a favorite here as brian roberts and bob iger go toe-to-toe as i believe they will >> this is a battle of titans. strong willed people with deep pockets. the numbers are going to go off the charts i do think what's a key thing here and the judge referred to this explicitly in his opinion is the landscape changing with the netflix and amazons in the world directly competing and i think direct to consumer is the new battlefield

comcass they have to get the quote/unquote must-have programminto dt consumer disney wants the same thing. that's why they're competing for this and it is to go against netflix and amazon the amazinthing is they built this from scratch. net flix came out of nothing both on the distribution and content side noverticly integrated. and they cre content they didn't have to buy a studio i sympathize with the judge that this competitive landscape has become intense and we'll see the fruits of that in the bidding war which is going to start this afternoon. >> and the media titans weave discuss we've discussed, murdoch's -- do you think his eyes are the most open of all of them? >> murd ok has been well aware of what goes on in technology. in his case, he prefers disney thinks disney stock will appreciate if he gets a cash off, he'll have to pay taxes on it. it's not as good >> accept if it's a lot high are than what disney is willing to

offer. >> also fiduciary responsibilities >> they've acknowledged. >> it's going to be crazy for you. >> it could be an interesting period of time, jim. but we're kind of done with the worries then about antitrust you think? >> yeah. >> and that, by the way was for the time being i don'ink the very influential crowd of antitrust scholars out there is going to just give up they'll keep p on this front. but at this point you have to see it as an uphill battle in terms of the comcast battle, their nt- that one has been pulled out from so if murdock does want to go with disney it has to be one that applies to all shareholders, not just him >> fox's board is going to take going to be annteresting few weeks. >> thanks, guys. good stuff, jim and eric let's get back to sara in

washington ahead of that big fed decision this afternoon hi, sara >> good morning, carl and david. that's right the focus this afternoon is on the economic outlook today is a big day at the federal reserve. 's baked in the cake that we'll get an interest rate increase look what we show you heret has federal reserve raised interest rates back at the end of march the s&p 500 has been strong. the ten-year treasury yield ticking up a bit the united states economy has been going very, very strong the unemployment rate as an 18-year low. but there haven worries. the italian ten-year yield for instance shot up on all the political turmoil. the big blow-up in the bond rket emerging markets have been hammered i just picked the brazilian real to show you. it is $1 to the real and it shows you the weakness we're seeing in the emerging markets

currencies and some of their stock markets. that's going to be the big question, guys, for chairman powell how much does he pay attention to some of those risks, not to mention fears of a trade war, retaliatory tariffs, including the tariffs we're already seeing from the united states and whether that factors into the economic growth outlook and the inflation outlook. >> trade yesterday he said it's an irritant right now but could turn into more and then the webcast saying that increasing the size of the deficit while rates are going up is a lot like a suicide mission in his words >> absolutely. and that's one of the other concerns and that is that we're heading toward the end of the business cycle. it's a bigent what we've seen this deficit-fueled stimulus and how is that going to end when it comes back to rates. we've got a lot to talk about all day long on cnbc coming up on "squawk on the street," you'll he from alan greenspan, the former federal

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welcome back to "squawk on the street." live from washington, tes, the recent heightening of trade tensions, the overall strength of the economy front and central. joining us, the 13th chairman of the federal reserve from 1987 to 2006, dr. alan greenspan nice to see you. >> i'd forgotten i was the 13th.

>> you did >> lucky 13. >> i know you are sort of shy to talk specifically about fed policy >> well, paul volcker took the position that he was never going to comment on trade policy while i was chairmani was the success. >> so you're trying to be polite >> i think that was a terrific policy i haven't commented at all on my people who succeeded me. it's not fair. >> so we can talk about, though, is the economic backdrop that this fed is dealing with and specifically trade because you have some strong views about what's happening the president's policies and what we've seen from some of our closest trading partners >> correct >> are we in a trade war >> i think it would be very sad if we do because the premption is that foreigners are ripping

us off it's nonsense. the best example i can give you how we hit our trade deficits is my own personal experience when i first started out in business, i bought a chevrolet and then a buick. as my little business prospered, i moved up the snd eventually bought a lexus, which is a japanese car. when i went to the dealership and put my order in, they bought the car. that was an import into the united states. i volunteered it it was my decision they did it for me i wasn't -- >> yes, wet a lot more than we export >> and the question of -- the whole issue of the trade deficit is being put upside down it is truehat merchandise

trade net is close to minus $800 billion. but half of that, or more than half, is offse services. >> of cour >> doesn't matter how many smart economists like you say this the president has pursued his policies and he's going deeper and deeper into it we could even expect a $50 billion worth of tariffs on chinese goods. the question is, what does that do to the u.s. economy and the global economy >> first thing, what it does, when you put a tax on a good, the question is, who pays for it the united states pays for it. what he is talking about is something quite different. remember that when we import something, we buy it with a

claim. we give the claim to a foreigner and it's a -- that's an even deal but our trade deficit, which is for merchandise account is close to $800 billion as the president says it's offset to a large extent with services. >> so i mean, i guess what i'm wondering is, we've had this great economic recovery and this burst of growth. the president may get his 3% number on gdp thanks to lower tax rates and improved confidence and a number of other factors. how much does that get hurt, or do you think it does get hurt by the trade policies >> frankly, not terribly much, though thae issue here is base ical basically what's going on in the world economy, how are we

affecting it in at we are doing. and international trade like everything else is double entry bookkeeping. we are exchanging our paper, whether it's dollar bills or treasury notes for goods and services it's a zero-sum trade. so the view that it's unfair somehow is a mistaken and somehow most importantly it is essential essentially initiated largely by american citizens. this is not a rip-off by >> the president has the sign reversed >> i know youwanted to make that point clear and come out and say it overall, how does the u.s. economy look to you? 3.8% i think that's lower than it got in the '90s during our tenure as

chairman of the fed. >> i happen to approve of some of the policies this current administration is doing. i think the extraordinary cut in the marginal corporate tax rate was a very i thing i mean, i never thought i would see it in my lifetime. but they pulled it off it's working it's having an effect. the major problem that we're going to be run into is that the economy is picking up but that it is beginning to pressure long-term interestates and as long-term interest rates begin to move up, thatauses, obviously, sales of equity because critical factor in the determination of basically equity values is the long-term rate and i look at it in the reverse in a sense

i look at the earnings price ratio and you can get a set of s which are additive which is the real interest rate, equity premium, inflation expectations and a few other minor things but thr things driving this price level is essentially -- >> low rates >> the long-term rate which -- >> so you don't buy this idea? and the legendary macro investors was on "squawk box" yesterday talking about third and fourth quarter sharply higher interest rates. but also rising stock prices >>l, tt is conceivable to me but i don'k it's going to be happening over time is a gdp that stays close to 3% and the reason essentially is someg which n discussing for years, namely that entitlements are crowding out gross domestic savings

gross domestic savings coupled with monies borrowed from abroad which is essentially what we've just been talking about.finces,c investment gross domestic investment adjusted for a few things like degree oeducation in the workforce, that gives you productivity productivity is the key to economic outlook instead of talking about, is it a 3% or 3.5% or 2.5%, once you have the productivity number projected and, remember, all productivity growth rate which used to be 2% a year and more is under 1% >> very low. when do you expect growth slowing in the u.s.? >> it's slowing now. i think it was slowing coming off-- most forecasts that i've seen which i find credible show

while we are at currently close to 3% annual rate, it's not going to stay there. >> atlanta fed has this quarter going above 4.5% growth. >> i don't believe it. >> what about inflation? is that becoming a problem or is what we're seeing healthy? >> well, the real issue is that we're moving from a long prolonged period o into a perioof back the 1980s we called stagflation which is a combination of inflation picking up and the -- >> growth not being superhot >> the euphoria from that gives the aura of something that's fairly impressive. but when you get beyond that, i mean, look at all of the various underlying demographic data, it

is very difficult to go much above 2.5% and much of the forecasts, global forecasters have the united states down at 2%, 2.25%. and even that presupposes that our demographics are going to stop deteriorating >> you're not painting a pretty long-term picture. i guess we're all just wondering, within current business cycle, how much do we have left of a recovery? >> stagflation was something which was theoretically not capable of happening until it was recognized in the 1980s. and essentially set the framework for how people forecast the economy so-called philips curve which said it was a tradeoff in

unemployment and. >> -- inflation, wages >> and if that is true, you couldn't have stagflation. one offsets the other. acquiesced and what we're doing now is we're moving into stagflation. the long-term inflation, the real long-term inflation rate is the lowest in american history and i mean going back to 1789, this is a very unusual phenomen phenomenon can't stand at that level. human nature by itselfnd what economists call time preference is a fundamental aspect of how we evaluate things we're going to be going down -- we're going to be consistently looking at an issue which is downward pressure on real economic growth.

and i don't see how we get out of it unless we do other things which the -- >> entitlement reform -- >> the trump administration has actually done the most important thing is the deregulation. and the combination of those two, the deregulation and the marginal corporate tax rate are very positive forces if it weren't for those factors, i think we'd really be in the sewer but the presumption is that we're going up from here i thinis wishful thinking. >> wishful thinking. and finally, you don't want to talk about fedicy but would it be useful to have a press conference at every fed meeting from chairman powell >> that's commenting on things that -- >> all right i tried. chairman greenspan, always nice to speak with you. alan greenspan, former federal reserve chairman back to you, carl, in the studio >> we're always wrapped with

attention. coming up later on, salesforce announcing it's investing $2.5 billion in the uk we'll talk to prime minister may on halftime exclusively and later on "closing bell," don't miss b of a's brian moynihan squawk on the street back in just a moment. eligible for medicare? that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan,

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good morning here's your cnbc news update president trump back in the united states this morning arriving at joint base andrews at about 5:30 a.m. eastern time. the arrival marks the end of two summits with world leaders the g7 in canada and the korean summit in singapore. secretary of state mike pompeo arriving in south korea greeted by the commander of u.s. forces in korea at osan air base he'll meet with the south korean president tomorrow he'll also confer with japan's foreign minister an italian coast guard ship arrive with 932 immigrants on board. the passengers comin etria, sudan, ivory coast and

guinea this as another rescue ship was denied permission to dock by italy's new government that ship is now headed to spain. bill clinton's debut as a novelist is already one of this year's biggest hits. the thriller he co-wrote entitled "the president is missing" selling 250,000 copies its first ek that includes hard cover, ebooks and audio sales. you're up to date. that's the news update this hour carl, back downtown to you >> sue, thank you. we'll take a quick break a little over an hour into the trading session on this busy wednesday. take a look at the m averages record highs for the nasdaq. dow up about 13. look at shares of zte plunging 40%. of course, after resuming trade after a very long halt chinese telecom equipmentmaker will pay a billion dollars to the u.s. as part of that settlement agreement, thghalou congress has additional ideas about that "squawk on the street" back in a minute

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a federal judge clearing the

way for at&t's acquisition of time warner. joining us now on the cnbc newsline is former direct tv chairman and veo michael white also a board member of whirlpool and bank of america. always good to get your thoughts on things. well, start with at&t. they get this done not without some unexpected hurdles, but they are at the finish line. good thing for the company >> i, d, f an, i thought yesterday afternoon when i was on that the deal would be approved and having read the 172-page opinion, it's pretty clear that the judge did, i tnk, a pretty good job of sorting a lot of facts, a lot of testimony, the incidental clearly the government's model had some issues. their expert witness had problems and more importantly, the judge was pretty smart i recoizing the changes in the

industry, particularly the rise of amazon and netflix in the decision i think it's good for at&t it takes a huge cloud off of the stock. i think, you know, onward and upward now they have to focus on retain the key talent in the media business ensure that they have a continuation of the kind of creative culture that's been established there and deliver the synergies. i'm sure that's what john stanke's focus will be >> stanke will be running those assets let me now put you in rupert murdock's shoes. you're there you've seen this decision. comcast feels asugh it's not a green light to move ahead with its bid for the fox assets what do you do if you're rupert murdoch? what are you looking for and how do you approach this potential bidding war between disney and

comcast? >> probably the biggest winner out of yesterday was rupeert even though the judge was clearly that don't try and generalize from this decision. in fact, if you read it, it's very case specific in terms of all of the logic and the presumptions are quite different in horizontal des than in vertical deals where the burden of proof lies. with that said, if, you know, if i'm sitting in rupert's chair, you know, i think there are a lot of factors he'll be considering. one is, what's the best home for the assets that will enable them to continue to thrive and grow from a creative standpoint i think -- but i think the other one will be the clarity of what is it that they enable the combination to do in competing with the netflixs and amazons and other digital competitors in the world going forw and that might become a bit more of a focus to be honest with you as he looks at it in addition to

just the money and the form of the money. equity versus debt or cash >> if he takes cash he doesn't care what the combinedompany looks like, i would guess. >> that's right. >> obviously the disney deal is all stock but as i reported if disney does choose to meet comcast at a higher price, there's a likelihood it would include some cash as well. who do you think would be the better -- would deliver more value to their shareholders as a result of a fox deal, mike, disney or comcast? >> you l they're both tercompanies. probably the two premier companies in the industry with two terrific ceos. so i couldn't -- i wouldn't say one versus the other i would say the challenge for me would be the two tests which is e creative support to grow the business and both of them, by the way, have done well with theired ed mmedia content and d would be the digital agenta and the vision they have on that

front. and i think they'll -- rupert will undoubtedly sort that out as things evolve i think you'll see much more -- i would guess -- of the companies being a little more forthcoming with just as early on talking about baseball-style arbitration and not doing blackouts because there still are issues, particularly with the regional sports networks that will get some scrutiny by the government before those deals are done >> yeah, and both companies have agreed potentially todest those if needed under antitrust. finally on at&t, the reason it's down today, mike, people may be looking at it as because of this downgrade from moffet nathanson, questioning whether the dividend may need to be cut as a result of pressure from ratings agencies is that a fair concern for at&t? >> no, i was assuming it was down a little bit just because, you know, buy on rumor, sell on news and -- >> yeah. >> and you'll spend the money

now for sure to buy the asset. but i felt first of all, i felt with tax reform that t dividend was secure. whatever questions that were tax reform clearlyakes a hugdifferee dividend this only adds to that security. and you know, in that sense, no, i feel they've got clearly their hands full in trying to manage a changing landscape for both the wireless and the entertainment business they are changing very fast and makes it hard for any management team to keep up. but, no, i think the proof will be in the pudding. >> yeah. >> can they really run -- can they reload game of thrones into hbo and all the operating questions you'd want to get at making sure that the joint company continues to thrive and liver the advertising synergies. >> mike, we're going to leave it there for now. worth noting, thank you, by the

way. michael white, forr directv chairman and ceo disney shares have come back sharply during the session and are now up about 2.5% this morning. let's get back to sara in washington, d.c. sara >> on the other big story of the day, the federal reserve just moments ago, i spe withede alan greenspan here's what he had to say when i asked m whether we were in a trade war. >> we're on our edge i think it would be very sad if we do because the presumption is that foreigners are ripping us off. it's nonsense. >> with me here in washington, cnbc's senior economics reporter steve liesman ahead of his trip to the fed this afternoon and his questioning of jay powell. supportive of the corporate taxn greenspan, but not at all of the current trade policy >> that's in line with what a lot of economists think.

the former chairman calling out the presids argument which are he's really been demagoguing the issue. the president is arguing when it comes to trade, we have a trade surplus with canada, a massive dairy surplus with canada. balanced ste trade and i was just reading a piece by ben steele, the tariffs from this administration have hit canada the hardest, europe second and china third china is only $4 billion of s e like $13 billion >> yeah, and they're closer trading partner with us. so it makes sense. how does the fed process all of this because it hasn't really made an impact at this point on the economy. >> i think your question was good in that you ask, what does this all mean for gdp? so farks not very much the concern right now is that this round and then potentially another round of tariffs n another round of retaliation drag on gdp and meaningful

increases in prices and, i fectsively meaningful job losses there's already a study out that the existing tariffs as they right now would add 29,000 jobs in steel and aluminum. you're happy, right? they take off 400,000 jobs in the industries that use steel and aluminum and that's the trade partnership putting out that study >> as it relates to the fed meeting today. you have trade ithe backdrop overall, the u.s. economy is looking pri inin ining pretty g. small business confidence, second highest on record the unemployment rate. how hot is it and what do they do about it? >> that's the question jay powell has to figure out, the fed chairman i think his idea was, i'm going to coast on the janet yellen tra jectry for as long as i can until the facts change and the facts are slowly changing a little higher inflation both yesterday and today in the ppi and the cpi. you have growth rachtcheting up

and the underlying questions which alan was getting at is, why is growth higher is it higher because w doing massive fiscal spending and cut taxes, or is it gog to be higher because we're going to change the dna of the economy? and that's really a substantial question here. are we going to have this capital investment boom that will lead to worker productivity that will lead to higher wages and create an upward shift in potential? that's what jay powell wants to know that's what all economists want to know. and that is the sort of thing that will change the outlook for fed rates. a temporary blip the fed is going to ride that out. >> anything in the language of the statement we should be looking for to get a signal for rates? >> it's a close call i think today is not that day where they'll make that change, removing accommodating and saying the fed is going to be running be they could remove that one today while -- i think thefed thinks it's accommodative it's heading to a place where we'll no longer be below the longer run rate. >> this is fun

i'm glad i got to join you in washington back to you, carl, in new york when we come back, t the united states will host the 2026 fifa world cup after winning that three-way bid with mexico and canada we'll talk with the u.s. soccer secretary general dan flynn. "squawk on the street" is back afr this quick break i was a c130 mechanic in the corps, so i'm not happy unless my hands are dirty. between ruing a business and four kids, we're busy. knowing that usaa will always have my back... that's just one less thing you have to worry about. we are thehran family, and we'll be usaa members for life.

the relationship between stocks and gold is doing something it hasn't done in over a dkaecade. find out what that is on tradingnation.cnbc.com

time for our etf spotlight mike santoli looking at media stocks stocks. >> all in play what's interesting about the etf space there is no single fund that really captures everything that's converging here, telecom, communications and media one that is probably the close

toast wh we think of as old and new media combined is the invesco dynamic media portfolio. it is up today a lot of these stocks are moving to the upside. these would be more like the sellers. twitter, alphabet, sirius, fox and facebook, are the top five holdings here. i think when you look at the performance year to date it's up 4.3%, it really is twitter and alphabet google's parent that has probably been driving. you want to go somewhere else it's going to be more looking like the traditional telecom area, the vanguard communications services sector fund verizon and at&t just dominated. it's just about alst half of the fund that's going to be the case for a when we still have the telecommunications services sector of the s&p. another one that basically captures that with cisco interestingly is the top holding yz, that's the i shares u.s. telecom fund.

what's fascinating is you're going to have perceived buyers and sellers in either one of these, but we are getting the shift. i keep talking about s&p will reshuffle the sectors and there will be a communications services sector unveiled the stocks that are going in are going to be named july 2nd, so that's coming up in a couple weeks. and what you're essentially going to see is internet companies joining telecom in a new communicationservice basket that's g to look a little more silar to i think what we now are coming to think of as media. >> that's kind of like regulators is trying to keep up with tech. >> exactly the net effect the market will look less tech heavy even though it will have the same stocks we're trying to redefine these things as we go. >> happens fast. >> thanks, mike. >> all right over to jon fortt and a look at what's coming up on "squawk alley. jon? >> we got a lot more on this blockbuster approval by the judge of the tie up between at&t

and time warner including the implications for tech. kay, the founder and former ceo of usa networks willn us and is a tech investor that's coming up on "squawk alley." .

obviously a day to keep a close eye on washington. three hours from the fed decision as we look to see what the pathf in will be ad into the bk half of the year. sara eisen in washington with a look at what's coming up until then. >> we have a big fedy on "power lunch." 2:00 p.m. eastern, is the decision we're expecting an interest rate increase what will the fed say in the statement d fed jerome powell y during h news conference at 2:30 eastern time about the economy, about inflation, about fiscal policy, trade, emerging markets. a great lineup of guestsreprese chairman of the house ways and means committee on taxes and his committee has jurisdiction on trade, that will be interesting. bill gross, bond gur weigh in on what the fed decisiod outa we will see you then i'll see you back in new york

tomorrow and david, enjoy the rest of your vacation. >> thank you, sara i will see you on monday i think. o next week we're ships crossing in th night. >> all right >> ships passing. >> good to see you. >> thanks. when we come back, much more on the future of media deals. former head of cnn walter isaacson will join us. later on another interview, prime minister may will join us exclusively. brian ynanmoih this afternoon. "squawk alley" starts in a moment (baby crying)

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good morning it's 10:00 a.m. at at&t headquarters in dallas, 11:00 a.m. on wall street and "squawk alley" ive. ♪ ♪ your love lifting me higher ♪ than i've ever been lifted before ♪ ♪ so keep it up good wednesday morning welcome to "squawk alley." i'm carl with morgan brennan and n fortat the new york stoc