merged with time warner. we have a lot to talk to them about. evan spiegel will be on later today. julia will be interviewing him we'll see you tomorrow and wednesday and flying back on thursday i'll see you on friday. >> where do you fly into >> nice. >> i'll have some rose in hand and maybe wear a beret or something. >> we got to go. see you tomorrow make sure you join us. "squawk on the street" begins now. i'm carl quintanilla with jim cramer and david faber we look forward to talking to evan spiegel stick around the futures down about 200 puts the dow on track for what would be five losing sessions. germany and france down about

1% oil near two-month lows. road map begins with trade tensions spooking stocks. futures point to a sell-off in the open amid heightened trade war fears betweethe world's two largest economies. taking on amazon google invests $550 million into j.d.com. that's expanding the region. >> and cnbc exclusive you don't want to miss snap's evan spiegel will join us live at 10:00 a.m. stocks are poised to open sharply lower on concerns about trade tensions between the world's biggest economies. u.s. and china going tit for tat in the tariffs the dow in the midst of a four-day losing streak jim, you were skeptical a moment ago about this trade tension. >> there were so many articles that implied the world is slowing because the 25% tariff on steel 10% on aluminium

left out, of course, there's a big opec meeting this week and a lot of our companies that have gone down, stocks going down because oil is up 50%. it's very rarely mentioned the banks over in europe are -- some are struggling so much. we never put in the deutsche bank we had an interview this morning and it's fine, i guess i look at what is going on overseas and i can't necessarily jive with what is happening with the tariffs. it doesn matter. there is a deluge of negativity. wait until you see what is coming if you wait to see what is coming, then you'll get germany, which is down .7 now double that decline. so i don't know. i defer to david david came back from a long, fabulous vacation which interpreted only by three days three days of the five but that's okay. it means two were good. >> yeah. you know, it's funny i did manage to talk to somebody who builds homes and talking about specific impact of tariffs, home prices

or building a home that's going up. lumber and metals already. you're starting to see the impact to a certain extent certainly on the canadians it's 15% homes more than anything else. but that's a precursor to some of the areas we're going to see price increases. what does it mean? i know as a percentage of the u.s. economy it's small, these numbers. but it can add up. >> you ought to oil come down. yeah timber, i mean, you know, yes. and we've got dollar sign. >> yeah. >> the canadian dollar sign. but it's worrisome the other thing, look, you know, europe has been slowing for six months china's growth is not great. so like the global synchronized thing that went out the window when the market peaked we have a 4% gdp here but the low peaked in january. we should think about that

it didn't peak yesterday. >> british chamber of commerce this week says they see the weakest growth since '09 also got sort of merkel's coalition. they've got a border dispute of their own. >> yes. >> which people are waiting to see if some of her allies defy her on the implementation of the policies. >> when you add a million people, don't ha to expand don't you have to do bond deals and find a place to build and house these people >> what about the prospect of merkel being in trouble? does the market care abo that at a germany, last i looked -- >> you would care about that. >> you don't want everyone to be nationalists look, i don't know what is going to happen in germany, but she is the -- she's a true globalist. i know the media loves globalism. the media does not, you know, if every part of the world was growing at h4%, maybe trump wouldn't be picked on as much.

and some of the news flow with trump is let's say it's erratic. >> it obscures everything else. >> yes it's hard to find a business story because every headline is about families being separated at the border. >> i know. >> it's been building for weeks. but it's really cresting. >> yeah. >> it's not about the numbers for tiffany or ralph lauren. those things are just -- they seem laughable a lot of what i do seems laughable. try to find a company that is up hugely like 5 below. who the heck is that we're dealing with global issues here not five below right. am i wrong to focus on canada? and restoration hardware the fact i didn't get -- >> canada goosz benefitted from chinese consumers. you know that. they love it >> they opened two stores. >> yeah. >> they love that label. >> yes, they do. >> but what you seem to be taken by that.

the whole world is falling apart. why is that such a focus for you? and nxpi, while you were away -- >> yes. >> i wasn't aware of it or my foent wasn phone wasn't blowing up. >> does he care about the rent a center take out? no he's worried about bigge things. >> what happened on nxp, jim i was on vacation. i didn't make a lot of phone calls. >> i find there were channel checks that indicated that deal was going to happen. >> i think so.>> andhe ubs evid. >> yeah. where they stand now, it's trading $16 and change below the bid. >> there was a moment it was up 12 i called you it was a tuesday and you had monday off. >> that's true. >> no, the south china morning telegraph. >> i know. >> south china morning post. >> we thought it was the government saying it's done. >> yeah. >> and that was a false one. >> or maybe that $50 billion in tariffs had something to do with

it. >> plus twitter is down today. jd.com is up sharply in the s premarket. the e commerce company gets a $550 million investment in google partnership will include promion of j.d. on google's shopping service in an interview the ceo said that a prolonged trade war would be horrible. horrible in his words. and would hurt american brands take a listen. >> you know for a long time. okay it would be horrible it will hurt, you know, the brands american brands. because,iously, china -- for the next five or ten years, almost half shopping come

from -- it will hurt a lot of american brands. >> ihe wrong >> a prolonged trade war is bad for growth i mean, there's no doubt about that i think the question is, how much decline in growth would the president accept and we right now to talk about a decline on growth when growth is accelerating it's difficult. if you're the president, i think you sit back there and watch a lot of tv. i think i recognize that some is very positive. and some stations are very positive and you kind of say, listen, our growth is good their growth is slowing. don't blink. don't blink. and, you know, right now, i mean, if i live in china, i don't think i'm sitting there thinking wow, you know, i know i paid a little more for starbucks. >> yeah. >> meanwle, couple questions i got this morning is why is google doing this they seem to be moving more, well, two things

they're already global but even more so. and more in direct competition with amazon. there were reports you were aware, i think, they were going to potentially partner with walmart on the flip cart it didn't happen. >> nope. >> are their ambitions changing globally at google for a company that generates the amount of cash that these guys do, it's not a large investment. >> no. they go to $20.20. they speak beyond the numbers themselves. >> i looked at this and said okay i thought that alphabet h fore sworn china they have. now they have not. you know, they forced china on free speech but when it comes to shopping, they're all in. >> right. >> are they moving are they movinoser to competing with aman inertain areas? is amazon competing with them on

search >> about time you brought up a negative for faang someone was talking about how faang is going to destroy the earth. that's a bit hyper bollic. you can say china -- >> the online market alibve60%. and the j.d. market shares come down to 27 and 25% year over year. >> wow okay they're teaming with somebody. the numbers are great in china but the overall growth is not as great. i don't think that's the tariff. i mean, the tariff germany exports 5% of thsteel to the united states. can that really hurt germany as much as dramatic increase as oil in and gas. >> no. >> canada is an importer of steel. can our tariffs really hurt them these are the things there was a major source in a "new york times" story. >> it goes back and forth. across our borders for all sorts

of reasons particularly with canada, right? sorry, i didn't mean to interrupt you about your "new york times" story. >> no. it's irrelevant. it was positive. [ laughter ] >> yeah. >> you are a protectionist let's get that out there. >> there was a major firm that is a so-called manufacturer of steel that was quoted in the "new york times" saying the tariffs are bad. i did homework and it turns out they're a major importer of steel so, yes, the sttariffs ar bad. was that identified in the paper? >> they're importing steel and making stuff here and they go to raise the price for people. >> the cost of a washing machine, the rolling through may is up 17%. >> that's a lot. >> that'a lot. it is a lot that's why we need the sharing economy. the cost of cars. >> i used to go to -- >> yeah. we had the laundry room in my

old apartment building. >> david, software raising price target think big. why don't you focus on these things >> i'm kind of liking our recurrent two-on-one globalist nationalist trade detes at 9:00 that's where we're going. >> tpp would be a good bay to deal with what you're talking about. >> when we come baseball, disney shares are moving lower. the latest developments of moving the media sector. david has that a downgrade from pivotal today stay tuned for an exclusive with evan spiegel more squa"squawk on the street"

minute it was my very first car accident. i called usaa and the first thing they asked was 'are you ok?' they always thank you for your service, which is nice because as a spouse we're the hayles and we're usaa members for life. is it to carry cargo... greatness of an suv? or to carry on a legacy? its show of strength... or its sign of intelligence? in crossing harsh terrain... or breaking new ground? this is the time to get an exceptional offer on the mercedes of your midsummer dreams at the mercedes-benz summer event, going on now. receive up to a $1,250 summer event bonus on select suvs. mercedes-benz. the best or nothing.

new week back to what could become one of the great battles we've seen in some time. i'm talking about the potential

battle, well, it's already won between comcast, our parent company, and disney for control of all of thosx sets that disney currently has a deal to buy. that deal worth a little less than $30 a share comcast last week came at $35 in cash for those same assets let's set up the timeline for people so they can understand how it will go or at least expected to go from here fox had a regularly scheduled board meeting for wednesday. hey, good timing now they have something to talk about. other than i don't know laugh lynn and james not talking to each other they can talk about this they will. it's likely th'll say let's negt let's talk about why they think the deal will take 12 months to get approval 12 months. really or the other things dealing with anti-trust let's talk to them in general about how they see the future. and most likely they say, okay,

so probably superior proposal likely to lead to what they go back to disney let's call it, i don't know. early nextweek say, disney, we'reely to sign them up you have five days around our contract to match. that's what disney has the decisions to make they're already thinking about and very likely to do what? to match in some fashion. will it be dollar for dollardonw as i reported already, though, they are likely to raise the bid with cash. so leaving the stock component as it is by the way, benefitting from the move up in disney stock price that occurred last week, which haraed the overall value of the bid. it's $10 billion less than what comcast is bidding you can make the rest up let's say they have $5 a share in cash. we'll see. we don't know yet. if they meet and match, so to speak, then they'll sign a new agreement with fox

you'll have a new merger agreement. that's what you'll see the press release on we've signed a new merger agreement for disney to acquire our assets then it'll come back to comcast again. the real question is, how many rounds will we go here a round of $35 or 38 or 40 or past 40? how far is comcast willing to go how far is iger willing to go. >> what are you hearing about debt levels? >> you know, listen disney has a good amount of debt capacity comcast will tell you, as they did in the conference call that we can easily we're going to here it will flow an enormous amount of cash. they can take a half return of leverage every year after that pir they're -- they're willing to do it you saw today the journal piece at&t and comcast could have the two highest amounts of overall debt does it matter it's how much money do you have

coming in to pay the interest on the debt that really matters but the numbers are big. the numbers are large. >> right i think that at&t hit a level that was pretty heedous while you were away. there was not going to be a rival bid. >> people may have been encouraged by what we've been reporting it wouldn't be with stock. that could help. that also may have it's not clear exactly why did comcast go up so much? >> i think tpresentation itself was strong. >> they did a good job. >> if we don't get it, not that we -- we're not desperate to need it. there's a lot of good things happening. >> there was a downgrade today from the pivotal. >> i know. it's pivotal. >> yeah. they're echos what you hear from a number of people that disney needs it more than comcast. >> right. >> it would be more damaging to disney noto be able to buy it. we'll see. again, we'll go one round here

very well going to go another round. got that july 10th fox shareholder meeting. that can get pushed, probably will be at this point. we'll see. >> what do you think about this driven nature of producing video content production this is the solo mist. then we pick up, you know, this weekend my wife is going to "incredibles 2." these things are incredible. >> best animated open ever. >> yeah. >> new yorker saying this is the movie for our generation i mean, there's a lot -- these are not as episodic. >> i know. it's not my all time favorite. >> you should see "the incredibles 2. >> you can afford to lever up on a slate that is neveending. hink there's a lot of wins not that many loses. -- losses. i mean, honestly you have to admit there is something here. >> you do. but if you don't get -- if

you're focussing on direct to consum you have the opportunity to own the fox studio and the avatar brand and the simpsons and, you know, a lot. that's helpful. >> look, i think that the india -- >> not to mention the international assets. >> india alone makes it worthwhile but at the same me, i me, i don't want anybody to raise -- look, you read the article today about comcast and at&t what you say is too much debt taken down at&t in particular. >> yeah. you were a little mo negive on at&t. >> i didn't see the leases and all the other points that moffit brought. >> he uses a much higher debt level than randall stephenson uses. >> yeah. randall was on tv and he was very happy. >> yes. >> did you miss that >> i read the transcript. >> that's ic. >> on my vacation. i enjoyed it, too. cramer's mad dash and the count down to the opening bell in a minute. more "squawk on the street" in a moment

arnings season once again. >>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 make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggratthsandofnis estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a boof 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

with the new chase ink business unlimited card i get unlimited 1.5% cash back. it's so simple, i don't even have to think about it. so i think about mouthfeel. introducing chase ink business unlimited with unlimited 1.5% cash back on every purchase.

♪ all right. about five and a half minutes before we get to an opening bell for this monday. we'll get to a mad dash. you want to talk google. >> yeah. key to the market. because there are some people who are saying, listen, today is the beginning of the major roll over if you think that, i want you to watch google because mark may has a piece talking about a possible upside

surprise for alphabet. that would not be in the cards we know that there have been multiple quarters where the press release has been positive and the commentary has been positive then the stock gets hammered so watch this upside surprise. if we're going to have any sort of rally at all, and right now i don't know anyone that thinks that's in the cards. alphabet will lead us. also because the citi note about upside it's a hy unusual note the next thing that will happen in alphabet is a downside. things are positive with search. they did benefit from europe because of the gdpr, you know, the protection. >> right. >> yeah. >> exactly. >> yeah. it's exactly what they did and i know they're supposed to be a huge fine lurking for alphabet but the data points being positive is out of sync with the negativity. >> one of the names we'll keep a

close eye on. >> this will be the one. >> stay with us. island anymore. [ roar ] [ heavy breathing ] [ scream ] rated pg-13.

anna and a little nervous. into retirement... but not so much about what market volility may do to their retirement savings. that's because they have a shield annuity from brighthouse financial, which allows them to take advantage of growth opportunities in up markets, while maintaining a level of protection in down markets. so they can focus on new things like exotic snacks. talk with your advisor about shield annuities from brighthouse financial- established by metlife.

you're watching squa"squawkn the street". the opening bell in over a minute on a busy monday. evan spiegel of snap will join us in the next hour. in the meantime, futures are negative on more political concerns in europe and a continuation of e trade debate we've had over the last several weeks. >> we're waiting what is the next move? we've got the tit for tat. i know that the president is rsonally committed to working to thinking that our economy is strong enough. that this is the time to pounce as opposed to let's do more negotiations you know, larry kudlow at home resting. comes back mnuchin --

>> -- [ applause ] >> right and peter navarro had the comments about trudeau and walked them back [ opening bell ] over at the nasdaq owner and operate of liquid vessels celebrating its liing today. oil $63.59 was a two-month low. >> yeah. >> as we await what could be a production hike. >> yeah. i thought it was interesting because it's obviously there's a coalition of the nonwilling building you know, iran doesn't want it venezuela. but the main thing is russia when they get together, russians and saudis, then i think what happens you see there are going to be more oil pumped. that's what president trump

wants. but, you know, it's got to be more than just 300,000 barrels a day. you need a million barrels a day in order to get the price down we don't have that we're down .83 versus germany being down far more. >> how about that. >> about half of germany's losses this morning, at least. >> right how many articles have you read in the last two hours about merkel being in trouble? well, it's interesting you put it in our heads. >> it's a big potential story. if we do walk in here one morning, one would expect there uld be an impact. >> it would be a global government. >> we got it in italy and hungary. i don't know where the spanish government rlly is in terms of the spectrum, but we know brexit nationalism everywhere. >> only one dow component green here that is chevron.

ray jay say a higher leverage than the peers, at least. >> yeah. >> plus the prospect of a resumed buy back. >> look, chevr turned out to be the golden child this year. and not exxon. chevron happened to be working on a series of projects in the gulf of mexico all of which came to fruition at the same time. very bountiful n we see if you're perm began you're doi crude by rail and truck. market continuing to go down as gloom takes over just disagrees with the weather. >> there's some semiconductor concerns vis-a-vis trade intel one of the worst performers on the s&p at the moment. >> someone took intel to the sell the firm itself was not necessarily a major firm unlike pivotal, david. it's interesting because the squawk not only it was shocking

when disney was taken down but it was shocking they didn't know the name of the guy that took him down. >> there was a lot of shock. shock waves. >> yeah. >> we have brian weezer on quite a bit. >> yeah. >> did he say that incredibles was bad? >> that would be hearsay. >> it wasn't as good as the first one. but what could be. >> how do you know >> i saw it. >> i thought you were busy working. >> we went -- what we do on saturday night in my family. nxp is down another 1.1%. >> wow. >> you know the only input i can get is i'm not sure what is going on they were very close, apparently. >> yeah. >> we know they agreed to the remedies and anything they needed to. one has to imagine the $50 billion in tariffs that the chinese, once again, to say not so fast. >> that's what i think happened. >> eventually the clock starts,

you know, begins to be an issue here we're in the middle of june. this thing has until the middle of july, right >> yeah. >> toward the middle or end of july before it's over and done with yeah it has to be somewhat concerning they seem to have been hours away only to be foiled. >> yes. >> by the tariffs. >> yeah. the idea that there is approval and then they take that away, that is really problematic or that they tell the president. that's problematic because at this point, i don't trust anybody. no sources you need to hear from nxpi >>well, yeah everything is down it's interesting disney shares are now down 1.7%. we'll keep an eye on those that will affect the overall value of their deal to acquire the fox assets in contrast, the comcast bid which is all stock and will maintain its value, despite what

is a 1.9% decline in comcast shares now both of which were strong toward the end of last week. >> yeah. >> interestingly, and somewhat puzzling to certain investors why either of them were moving higher. >> i think, you know, david, there was talk last week of a possible insurgent at disney, believe it or not. maybe that's any time you see a stock up these days. you think insurgent. >> what do you mean by that? >> someone taking a big position at disney. by the way, i think espn plus is doing okay i'm sorry. >> over the top. tesla would seem to be potentially at risk in china over automobiles but the stock is up. >> i was going to say when you say most things are down tesla is not down. el

elon musk did e-mail employees calling for radical improvements trying to get 5,000 cars a week. >> i got me-mail saying my tesla is available. >> i thought you cancelled it. >> i did maybe they're trying to get it back i put one in initially. >> i remember that. >> yeah. about a year ago. >> you got your money back. >> oh, yeah. no, that was not part of the $25 million used to buy back stock now people were saying that it was insider trading because he said after he bought the things were good. i would point out that before he bought, he said things were good things are always good it's like good, good, good, good >> good. >> you know that terrible fire with the car good because there's so few fires at tesla. >> yeah. i haven't done the ceremonial leading of time warner's stock symbol from my list here. >> you still have that >> yeah.

>> the deal closed it's gone now. >> what did you replace with it? >> that's a great question. >> you replaced it with discover with viacom? >> no. i've got those nothing. >> next star next star? [ laughter ] >>will soon have another ticker to add. we give it a market cap of just over $2 billion. they compete largely with sam's club and costco. >> costco broke out last week. costco has been a horse. the numbers. even though they put an increase on members still really good. relentlessly positive stock, costco domestic largely they have so in asia and mexico and canada. >> i made a list of the break outs in retail last week rh for sure. >> oh, my. >> costco, to a lesser extent. lululemon, etsy.

>> yeah. >> and goose. >> yeah. five below but yes canada goose was extraordinary. as david mentioned, china likes it we had a cold winter but it doesn't matter. >> no. it's the status. it's a status symbol in china, which is -- >> right. >> it's an important part of their demand. >> my wife caught a lot of canada goose but not the ones with the fur. >> right. >> because of the prest against whatever. >> right jim, where do you want to be in a market like this now where we have, you know -- >> in a fall out with a lot of spam. no. >> come on. >> spam liquid of choice during the nuclear war period. >> that's good to know. >> right. >> keep in mind. >> and cheese wiz. >> let the market come in. there's no harm in it. we need to see oil down a little we need to see someone coming

out and say, you know, we want to deal with the president and come up with some trade adjustments. we have had enough we don't want to hurt our country. what can we do let's do some car adjustments. let's do something otherwise we just suffer through this chinese water torture at the end of the day pepsico is up and everything else is down. >> how do you think the new -- i mean, a few more weeks before q2 begins will it be colored by commentary on trade >> i think on the dollar being stronger. >> seven month high. >> and that is a negative because a lot of people have changed things i think it will be comment about oil. i think freight is still an issue. i think that people will -- if there's not a further movement upward, they're going to say we have gotten everything we're going to get from the tax changes. therefore, i think there's some risk

but the risk will be blt in. by the time we get there at this pace, we'll get the numbers and say, okay, we realize that. >> the early estimate on earnings is 19 d ing into q1 we were at 10.3 so the bar is already high for q2. >> yeah. the bar is high and there's a lot of companies nonretail that -- take a look at the banks. i mean, the banks remember we have the c car test and then after those, if we get the results, the banks have historically run that could happen. that group has been destroye it stopped being a leadership group. entirely. >> okay. morgan is the leader of the big banks and it's flat on the year. >> when you left, jpmorgan was substantially higher. >> yeah. >> and yet what has happened during that period it means nothing the big fees talk to us about them. the profits are a mess.

>> you're talking about things on the m & a front >> yeah. >> the financing fees are where the real money is. and so when you do have a comcast borrowing as much as it will from bank of america and wells. or you have at&t, of course, and its huge financing to complete time warner. that's where the real money is the advisory fees are significant but they don't necessarily move the needle as much. >> no, they don't. >> for many of these they're an opportunity to get in there and then also clearly provide financing. many of them are private or smaller. you want tplay, you're more likely to play through every corps. as a public company than goldman sachs. >> yeah. >> but it does -- look, i think as we go down, people say wait a second the bargain is here. we have to go down and i think a lot of stocks that are going to call people are faang. i think faang will do well

i think it's a great consternation that faang does well people seem to want everything but faang to do well because faang it means we're in a hopelessly narrow market what can i say the faang there is positive now. >> yep. >> they are. >> yeah. netflix is still up 103% for the year. >> everyone feels that every deal is done in defense of net flix. >> against netflix. >> what do you think about >> i think that's true. >> this is going to be empire call in a large sample how many people on netflix this weekend? >> umm, two out of three. >> yeah. >> it was so beautiful out. >> yeah. my daughter was watching "stranger things." >> there you go. >> we were watching. i wanted to put on the world cup and she said watch it on your

espn plus, plus, plus. >> watching "the handmade's tale." >> i'm down enough i don't need to be more down. >> that's going to be get you opening a swiss bank account quick. >> i don't want to stick my head in the oven. let's get to bob on the floor. the dow is down 220. good morning, bob. >> reporter: good morning. three to one declining to advancing stocks we're not really rallying at all. it's even worse in europe. take a look at the european autos. germany is the weakest part of europe that's understandable given the concern about merkel's coalition there. but just like industrials are proxies for the trade war here autos are proxies for the trade war overthere. it's not just german autos like volkswagen or bmw that are weak but across the board rolls-royce, it doesn't matter what you look at these are proxies for the trade war. all of them are notably weaker here in the united states, as i mentioned three to one declining. not much leadership.

energy is the exception. oil has rallied a little bit it was a little weaker recently and some of the energy names are up nicely today. it seems like there's some rotation today into that group industrials they've had a little problem there. the proxies for the trade war. consumer staples you think theye a little me defensive. that's not happening it's generally overall down .6 or .7% the banks haven't been leadersa. teches held on very well, actually today it's the semiconductors on the weak side. our market head winds are simple remember, it's not that we're weak the s&p is upper end of the range. we were at 2800. which would be the old highs in march. just last week but that's maybe a bit of a tail wind at this point trade, of course, the concern is not what we announced but the potential second round of tariffs on chinese goods $50 billion may be the opening the chinese have announced

retaliatory tariffs. the president said there could sende might be coming. that's the worry the raw material costs have been rising we've been hearing about that om a number of companies overseas i would note the dollar strength has been a headache for the multinationals they haven't lowered their numbers and emergi markets, as well so trade issues, i think the important thing here, if you take a look at the standard names now you see caterpillar, boeing, 3m i think david mention the nxp semiconductor. we thought it was going to be announced. it turned out to be premature. we mentioned the weakness in tech primarily semiconductors intel is notably weak at the open look at that there down 3.95 finally, i want to mention that strong dollar because this month really this quarter it's been an issue for all the emerging markets. while a lot of them are closed over in asia, china is closed today. the dragon boat festival

philippines that's a 52-week low for the philippines. indonesia is down today. thailand is sitting at the lows for the year, essentially. vietnam is down about 15% so far this quaer so this is not 1997, but there's clearly an effect for the stronger dollar. they're better managed markets overseasre gerallyore locally owned, they're not just foreign nationals. this was a big problem 20 years ago. more stable. you do see the effect. that dollar does bring money home and out of the emerging markets. now we're near the lows ofhe day. dow down 220 points. >> thank you we'll get to rick santelli in chicago good morning, rick >> reporter: good morning, carl. all treasury yields are down one basis point. we're very close to unchanged. look at a two-day of tens. settle at $2.92. this is june, right? every single session in june,

10-year note yields closed in the 290. i picked may 25th to start the chart because we had the volatility on the th the end of may that'll give you a nice scaling you casee w we then pretty much wednesdnt sideways. we are up toward 298 now this has been a defining characteristic of treasury yields this year they've been firm right out of the box. they go through long periods of consolidation that don't result in any major reversals to the lower yields spectrum. now if we look at the italian 10s, and i don't think we should completely stop looking at them. just think about all the issues now going on with merkel, immigration, and italy and many, actually, figure in. but this is particularly interesting. they have a quasi double top on yields as you see just under $3.20. we want to pay attention to the

macro formation. in my opinion, i would think the volatility is over but it doesn't mean we could get an extra helping of volatility to lower yields now the dollar index, i heard bob discussing it. and it has been a big deal but so has other relationships against thdollar most notably the euro. considering mario an drag gi's dilemma. but we haven't looked a lot at the pound versus the dollar yesterdyet. there's a brexit vote coming up impacting the pound, as you can see. the pound against the dollar lowest level since november of 2017 bank of england meets on thursday, as does swiss national bank finally, the dollar index charts this one i'm starting since february you know, we settled at 92 and change and we hoovered just below 95. it doesn't sound like a huge move, does it? but we spent a lot of time in the 80s. the low for the year is right

around that 87 and change. reasoni bring it up, the percentages we have moved from that level really do give you a better handle how the dollar is affected many things, including emerging markets carl, jim, david, back to you. >> rick, we'll talk to you in awhile coming uptake you across the atlantic for an exclusive with evan spiegel the dow down 206 to start this week back in a minute whoooo.

when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want.

don't sweat your booking. tripadvisor. the latest reviews. the lowest prices.

oil stocks, chevron and exxon really the only two names omeping all dow 30 components fr being red we'll get stop trading with jim in a moment.

anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiinn express, be the readiest.

time for cramer and stop trading. >> at the same time there were a huge number of price target increases. now we see what happens and forget why it came down. i don't think it should go down at all it's moving up adobe is the one to watch because that has been the bellwether and the fact is that it was a great quarter the whole thing, the whole -- it was a kenard what hurt the stock.

they didn't have strong enough one part just a jpmorgan note everybody else loved it. the stock going to 270 >> jpmorgan talked about digital growth >> plateau, plateau, plateau david, when you're away, everything plateaued >> splunk got a plateau. amazon got a plateau that's the new curse word, plateau. that's different from the investment year. investment year just means send it down 25 slowly sl it >> investment year >> oh, my, plateau >> what's on "mad" tonight >> we'll talk about plateauing of o/o and then you watch the show "mad men" perhaps how about "mmedmen >> a lot of people confuse me. >> i thought it was george clooney they confuse you >> that's another one. i was on an auction with jon hamm i said a lot of people confuse

you with me. he said, no, that's actually not possible okay >> lennon and louis c.k. >> that latter #jerk and i loved him. doesn't matter >> jim, we'll see you tonight. "mad money" 6:00 p.m. eastern time when we come back, evan spiegel from snap. - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life. welcome to holiday inn! thank you! ♪ ♪

wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com the nation's largest senior-living referral service.

for the past five years, i've spoken with hundreds of families and visited senior-care communities around the country. and i've got to tell you, today's senior-living communities are better than ever. these days, there are amazing amenities, like movie theaters, exci rooms and swimming pools, public cafes, bars, and bistros, even pet-care services. and nobody understands your options like the advisers at a place for mom. these are local, expert advisers that will partner with you to find the perfect place and determine the right level of care, whether that's just a helping hand or full-time memory care. best of all, it's a free service. there is never any cost to you. senior living has never been better, and there's never been an easier way to get great advice. call today. a place for mom -- you know your family, we know senior living. together we'll make the right choice.

♪ good monday morning. welcome back to "squawk on the street." michelle ka ruse caruso-cabrerad david faber. markets broadly weaker today a lot of red on the screen dow down 214 on some lingering trade tensions that's where our road map begins trade tensions sending stocks sharply lower in the first hour of trading dow is posed for a five-day losing streak. >> plus, google's asia play. making an investment in china's second largest e-commerce player just with the partnership means for the likes of alibaba and amazon

>> snap co-founder and its ceo, it's the same guy, evan spiegel. he's going to join us live exclusively this hour. first up, though, markets sharply low are with the dow on pace for five straight days of losses for a closer look at trade and the impact on the markets, brian belsky and scott rand. good morning, guys good to see you. both of you guys have been construct identify equities overall for a while, especially in your case, brian. what do you do on streaks like this do you waifor it to come in, and how do you know when that period is coming to an end >> welcome to the summer doldrums we've been in a bit of a news vacuum the last two weeks of the quarter which i think is important, number one. numberwo, the fed is out of the way and we're entering this quiet period where a lot of companies can't say anything so again, valuations look pretty

good earnings continue to go up the majority of the market participants are missing sales growth is strong something we've been complaining about onwall street for the last five to ten years so we think fundamental conditions look very, very good. we want investors to focus on those areas that are providing, we think, fundamental value in the market and we think there are two sectors screaming value. one, of course, are financials everyone is too focused on near term tightening of the yield curve. ten-year treasury yields are up way more than two-year treasury yields the last month or so. people are missing that. and the mber twoecr people should be focussing on in terms of fundamental value and strength are industrials the operating performance of industrials remain very strong and earnings are going up. those are the two areas we'd be focused on heading into the summer here which could be dicey. >> scott, what would you be doing? do you agree with those two areas being good for opportunity

or directing investors elsewhere? >> you know, for us, we've been overweight financials and overweight industrials, overweight consumer discretionary. we want our clients invested here many retail investors are sitting on too much cash on days like today, you ha to think about this and i would argue we're a fundamental shop but since early february, this market has been trading very technically and i'd argue monday, tuesday, wednesday of last week we're battling to get through some resistance. we couldn't make it. people are taking a little money ofthtable. there's still probably good support down at 2700 or just a bit below. from a fundamental standpoint, we're going to have good growth, modest inflation and we don't want our clients hiding we've been underweight staples,

utilities. i think this market has some legs in it now >> every day we ask about trade, trade, aren't you worried about trade? the market it down >> is an all-out trade war an impossibility? it's not but i think it's a low probability. it's going to be very targeted i do think this is a lot of negotiation. it's probably going to play out over the next couple of years. ides like to think and this may be naive but i'd like to think over the next couple of years rather than everybody having tariffs we'll see the entire tariff system lowered. so i think that's a possibility, but you know, in the meantime, clearly global trade is a big deal and the market is going to get worked up about it from time to time like they are today. >> does that put a real ceiling that 2800, and for how long?

>> we don't worry about ceilings or technical levels. we want to invest on where the puck is going, not where the puck is right now. to quote scott put it right people are worried on tariffs. retail verizonor are -- our clients are massively underexposed financials. and we think that's where the trade is going to be folk ous where investing is going. riddle me this, batman, how many companies have paid a tariff yet. i think the answer is zero so i think we have to focus on what is the reality. the reality is we're still in the negotiating phase. the united states stock market remains the most high quality asset in the world and that's why the dollar has en strengthening the dollar and equities can be positively correlated through time we've proven that on an analytical basis, and we think we're entering one of those

periods like the 1950s, like the mid-90s when the dollar and equities went up together and we believe most investors from a longer term perspective lack perspective and so the more fundamentally biased and process driven you are, the better >> yeah. we'll have you back on july 6th when customs starts collecting tariffs officially one last thing scott, there's been some work done in the last few days.stly t depression era where equities did rise in an environment of rising rates how possible is that over the next few years >> well, carl, i tell you. when that happens, it's when you're seeing a decent run-up. growth is accelerating we're at 2.9% for gdp this year. i don't think it's going to be much different next year it's not like 2018 is 2.9. 2019 is 3.5. i don't think you're in that kind of a situation. now, obviously, we're going to have a heck of a good number in

the second quarter but i don't think you can extrapolate that forward. interest rates, when the market is accelerating generally nearly the cycle than we are now, stocks are fine with that. i think one of the biggest risks is the fed making a mistake here but we're not going to see a huge surge in gdp growth from where we are right now, at least based on our analysis. >> q2 looks like a nice pop. we'll see how sustainable it is. guys, talk to you soon >> have a great day, guys. we'll stick with trade while some economists don't see the current levels of tariffs and retaliation g growth substantially, the bigger concern for now is the unintended consequences. steve liesman has more on what those are and what it could mean for markets and the economy. >> there's fear the trade war could escalate and become meaningful in terms of world and global trade but it's t that right now. the biggest effect is on sentiment and investment that it could undo the positive

impacts. the second order impact of tariff increases would be to dampen currently robust global growth momentum. fed officials say their contacts in industry are telling them it's causing some to question cap ex already >> concerns about changes in trade policy are arising, i think it's fair to say and also you're beginning to hear reports of companies holding off on making investments in hiring people >> and an interview this morning on squawk box, president trump's top economic adviser kevin hasset agreed tariffs have boosted uncertainty. >> we're in a period of uncertainty, and that period of uncertainty is visible in some places you can see it in lumber prices and steel prices and so on but the president's long-run object sieive is one all would share. think about the barriers in china. china is stealing more than $100 billion a year worth of our intellectual property. >> daniel ikenson in a back of

the envelope calculation says if the president follows through on recent threats and imposes more tariffs on autos and auto parts which would raise the total to $800 billion, the extra profits from the corporate tax cuts could be entirely wiped out for the manufacturing sector carl >>. >> steve, it's michelle here scott raised an interesting t. i've heard it from a couple advisers out there which is we are all rightfully concerned about what happens if there's a trr. what is the market pricing in? but a lot of them argue to kevin hassett's point. what if we have lower tariffs finally getting reciprocity out of china they don't think that's priced into the market in terms of a probability. and that would be enormously positive >> it would be i just don't know where the market is right now on this issue of it's all a negotiating tactic

they're going to be implemented. they're going to exist and watching the pushback from our trading partners and saying, you know what, it's not helping out at all he's lost the ability to get the low hanging fruit of se the changes that may be made canada is reluctant, cna is reluctant. we're getting the retaliatory not the negotiated and the progress it now sees the imposition of tariffs on china as the base case before they wouldn't do that fore they'd say, you know what we think this may be negotiated away now implementation is a base case >> got it. all right, thanks, steve >> pleasure. when we come back, taking on amazon google making a big investment and an e-commerce giant in china. got the details live from beijing. plus an exclusive with ubs' ceo first to julia boorstin as she gets ready to sit down with snap's evan spiegel. >> hey, carl that's right

i'm here at cannes at the lyons festalnd evan spiegel has been coming here for years now there's more interest than ever in what the company has to say. they opened their platform to integrate with app developers. the question is whether they'll be able to gain shares i'll have that interview coming up later this hour

when it comes to banking of the wealthy and super wealthy, companies focusing more on asia. when i show you the stats you can see why. in the americas they have nearly 7,000 advisers theyontribute roughly 33% of the prits be taxes 1100sia, far fewer advisers. and they contribute 27% of profits before taxes so he says they are going where the money is >> even in the u.s., we have been migrating our businesses skewed toward high net worth alternate work plans but in asia, more so in asia, you have to think that we basically bank with one of out of 2 billionaires in the region every four days. in china there is a new billionaire. last year the numbers of billionaires in china -- to cover the u.s. and in a few years time they'll add more

wealth they'll have more wealth than the u.s. billionaires. we are the leader there. we are the leader in the region. we grow very fast and we grow -- we help thosclients to not only diversify their business but also to monetize their business, to risk manage their businesses >> do you help them diversify geographically i'm wondering, does someone in china want to move some of their money out of china >> a couple of years ago, asian investors in general were focused on investing in asia and they had so much opportunities there. and now we see more and more investors being willing to diversify their wealth across globally in the u.s. or in europe and we have 2,500 people in hong kong also around 0 iningapore so helping asian clients and in general to diversify and grow their businesses >> and the high net worth

tranche of the business is expected to grow faster than worldwide gdp. another reason he goes after that area of the market. >> trade, how acute are hi concerns >> he's worried something could be said that sets off some kind of storm, issue with the markets. and he says his clients who have their money with ubs but choose to make their own asset allocation decisions are running pretty high with cash compared to historic levels mid to high 20s. when everybody is feeling really good, usually around 15. >> there's clients who passively do what they're told others want more active voice. >> those are the ones with higher levels of cash right now. >> all right well, it mayble for tesla is ahead hollywood actress mary mccormick posting a video of her husband's car after it burst into flames >> and yet despite the fact this was video that went viral over

the weekend, got a lot of attention, tesla shares are up today. here's the video this happened on friday. then miriam mccormick posted it on social media and other news outlets picked it up it happened in west hollywood on friday we should point out her husband was not injured in this fire he got out of the car once people alerted him to the fact there was a fire under the front wheel section. tesla says this is an extraordinarily unusual occurrence and we are investigating the incident to find out what happened our initial investigation shows that the cabin of the vehicle was totally unaffected by the fire due to our battery architecture we followed up with a question, if you're investigating, do you have the vehicle are you looking at vehicle we've not heard back from tesla. the other story over the weekend, elon musk saying we need radical improvements in the output of our model 3 production the target is 700 a day by early july currently 500-plus according to elon musk. you look at shares of tesla.

the big thing that everybody is focused on is what happens come july when the company reports q2 deliveries and will it hit that target of 700 per day, basically 3,500 per week that allows -- or 5,000 per week, se me. that allows them to be casflow positive and that's why you're looking at shares of tesla now back over $360 a share this is the high point year to date for tesla shares. >> what do we know of course, they have to hit that number because they're trying to hit the cash flow numbers. if they don't, what other things are they doing at this point in order -- because we've asked continuously will they have to raise more money? >> they continue to say --n ays we do not need to do a capital raise. whether it's debt or equity. we, being tesla is what he's saying, will have to be a little more prudent about our cash outlays. so they're laying off 9% of their nonproduction workforce. and they are make something

changes especially when it comes to the energy unit in terms of sales positions at home depot. but at this point, this is a big question for the bul and bears when it comes to tesla do they have enough of a cash cushion to make it until they are cash flow positive elon musk says yes >> that changes the story a little bit we'll watch them closely, phil phil lebeau covering tesla today. this morning it's a rare interview you do not want to miss we'll take you live to cannes lyon to hear excluvely from snap's evan speegle in le spgelw moments. dow holding on to some losses. we'll be right back. with the hp elitk 60, and its innovative security features, including multi-factor authentication, hp sure view integrated privacy screen, and sure start self healing bios, preconfigured by the experts at cdw, so your defenses go wherever you go.

secured productivity by hp. it orchestration by cdw. introducing e*trade personalized investments professionally managed portfolios customized to help meet your financial goals. you'll know what you're invested in and how it's performing. so you can spend more time floating about on your inflatable swan. [ding]

welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com it's not theirs, it's mine. the new rx 350l with three rows for seven passengers. and rx 350l awd for these terms. experience amazing at your lexus dealer. at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. & so this won't happen. because you've made sure this sensor and this machine are integrated. & she can talk to him, & yes... atta, boy. some people assign genders to machines. and you can be sure you won't have any problems. except for the daily theft of your danish. not cool! at&t provides edge to edge intelligence.

it can do so much for your business, the list goes on and on. that's the power of &. & this shipment will be delivered... a new week, a new chapter unfolding in the battle between disney and comcast all-stock deal signed up late last year. last week comcast, our current company, bid 35 their all cash to acquire those assets, meeting the same regulatory tests disney has agreed to in terms of div t divestitures it's willing to

make where do we go from here as based off disney's opening pre is morning which is down a bit. 1.7% comcast for its part also down 1.8% but that doesn't affect the overall price, does it because it's all cash as opposed to disney's current bid. what is going to happen is the following. well timed regularly scheduled board meeting from fox for this wednesday which they will discuss this $35 a share all cash offer from comcast. they will likely enter goations with comcast. talk to them about their thoughts on regulatory whether or not, as they sa they really think why it would only take a year to close. most deals don't seem to take a year anymore, they take longer especially when they're complex. why they think they are more or less at the same timeline as disney for regulatory approval

and all those kinds of things around it. still with any potential perceived regulatory risk, at a st you have to finishing you -- to think that one is likely to lead to a potentially serious offer and that would be comcast. doesn't mean you sign them up. you go to disney which has the right for five days to match if fox believes that comcast would be a superior proposal and disney is likely to do just that of course, based on sources close to the situation, disney not seen backing off in any way, shape or form. as i've reported previously, were they to increase the bid, it would likely be with a cash component. all stock right now but seen as adding cash to meet if not exceed comcast's current bid and then you'd have another round potentially as they'd sign a new merger agreement with fox for that new deal and comcast would have it put to -- as to whether it wanted to exceed that

and get the fox board to deem whatever new proposal was out there as potentially leading to a superior proposal. we can go back and forth for a while. the question is, how high is too high for either disney or comcast which is what makes this such an interesting battle at this point as e two sides continue to put into premium so much of the synergies they might have gotten at a lower price and in the case of comcast certainly, add a lot of debt to the balance sheet, taking it on over four times, something they said it's willing to do for an asset like this for a short period of time given the cash flow characteristics of the overall business, including the disney assets. >> it would make them one of the most indecbted companies in the world in the meantime. >> along with at&t who took on an enormous amount of debt it's not the amount of debt but

how much you've got to pay off that debt. >> disney would never offer all cash d the initially the deal was viewed as favorable but not just by the fox board but by the murdoch family because they wanted to become a significant owner of disney shares because they believed that the benefits of the combination were significant and would accrue to fox shareholders getting disney shares and also the tax benefits of the deal all stock were significant for the murdochs as well when you get to economics and the price differential, it's still over $10 billion that's a lot of money. >> it is gets their attention. >> you'll be covering it for days >> you know it >> weeks, months >> we've got weeks ahead >> okay, thanks, david our etf spotlight, jackie deangelis looking at the energy sector with wti crude hitting its lowest level since

mid-april. >> crude prices did fall they're bouncing back a little in this session, still range bound ahead of the opec meeting on friday. a little stronger dollar, a residual effect of currency moves based on china trade fears. then reports that opec m only raise output slightly friday. maybe half a million barrels a day. the market doesn't feel that would move the needle that much. wti and brent are in positive territory despite being down over 8% over the course of the last month how is this impacting energy stocks they're slightly higher this morning. xle, that's trading higher s&p oil and exploreeration a couple things to remember here, even if opec raises output and the dollar strengthens, you're still in the thick of summer driving season. that has an impact on demand we're starting to see that in

the weekly inventory numbers those factors could potentially cancel each other out, unless any of them becomes extreme in any way. wti around 65. brent around 75. those seem to be the comfort zone levels that we're in until we know more, guys >> got it. thank you, jackie. when we come back, google is making a big bet on e-commerce in china it's taking on amazon. and goldman's internet analyst is going to join us to discuss plus, snap's ceo evan spiegel will join us from cannes lion you won't want to miss that rare and exclusive interview. squawk on the street will be right back

anyone can get you ready, holiday inn express gets youhe readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express, be the readiest.

i'm contessa brewer. u.s.-backed syrian force says it's captured an important

village near the iraqi border from the islamic state group the village was a major crossing point between iraq and syria when isis ran its self-styled caliphate. a major hquake struck osaka this morning the 6.1 magnitude quake struck just before 8:00 a.m it caused fires, damaged buildings and left many homes without water and gas. three people have died after being struck by a train in south london according to the british transport police they're trying to figure out the details. three men who died are believed to be in their 20s a freight train derailed in southwest indiana last night forcing the mandatory evacuation of nearby homes and businesses rail operator csx says preliminary reports show a rail car leaked propane no injuries have been reported there. that's our cnbc news update. back to you, carl. >> contessa, thank you welcome back to "squawk on the street." i'm carl quintanilla with

michelle caruso-cabrera and david faber at the new york stock exchange only a couple dow components in the green. some political clionof fighting in germany has people's attention.googakinon amazon. the tech giant investing $550 million in chinese e-commerce giant jd.com eunice joins us with more on that >> hey, carl i'm at a jd facility here in beijing where workers are sorting 600,000 packages a day now it'sn espeal busy time because today is a major shopping festival in china called 6/18. last year jd generated $17.6 billion in sales during this period and this year the company's founder expects this sales to break records. this is the kind of action that google wants a piece of. google has been largely shut out of this market but the investment they'll make will allow it to get some access to

the china market and also comes at a time when google at home is trying to expand its shopping service back home against -- so that it can rival amazon now this deal is going to be good for jd as well. jd primarily focuses on the china market, but this initiative allows it to go global under the deal, jd is expected to be able to sell products to americans through google it's still early days for both of these companies but it's going to be interesting to watch with jd facing off against alibaba and google facing off against amazon just how all of this plays itself out guys >> eunice yoon, thank you. netflix and twitter continue to trade near record levels. facebook all-time high today goldman with a bullish note on netflix with the target highest on the street.

to discuss those trends, we're joined by heath terry at post 9, goldman sachs internet analyst is money funneling in to some of these faang names because they're less concerned about banks or industrials >> you look at the way these companies are growing relative to everything else and it's hard not to put money into them especially talking about larger cap names like facebook, alphabet we're not talking about demanding valuations this is not what we've seen with frothy internet before where valuations kind of got out of hand i don't think anybody would argue that that's the case with the largest cap names. in the mid cap names we're starting to see valuations that are causing some investors to wonder whether we've hit a moment, but i don't think that's the case >> you're referring to the squeeze we've seen in social

media names? >> notust social media but you've seen it in names like grubhub,tsy. certainly twitter has been a major beneficiary of that as well >> you cover amazon. and now the second deal we see, which is the jd.com, walmart, footart india, trying to stake claims overseas to slow down amazon's expansion what do you make of whether or not amazon's kind of losing on international fronts >> i think china is obviously a unique market. alibaba is so incredibly dominant there that anything below that level is deeply secondary. i think for google to invest in jd the way they have shows they are interested in getting in that market and it's a way for them to be there without their search engine being there which is, obviously, important to them but for amazon, those are two markets, china, that they've been investing in. india they're having meaningful

success in that, you know, are still relatively small when it comes to their entire international strategy where they have a lot of traction globally >> are you surprised that google in a sense seems to be willing to come after amazon a bit, and i think amazon conversely also doing a -- they are selling plenty of search terms on the page >> and google has done some things around the edges in e-commerce a lot before. google express shopping. obviously have their product listing ads that weigh heavily in e-commerce. what's interesting is seeing the u.s. company invest in to china like this because i don't think -- we really haven't seen the chinese companies like jd and alibaba and ten cent be as aggressive outside of their home market as we thought they would have been a few years ago. seeing them take advantage of an opportunity to partner with somebody like google on something outside of china is really interesting >> you talked about twitter. we're going to hear from evan spiegel in a few minutes

is it time do you foresee a downgrade on valuation on some of these names in the near future >> you're probably going to see some of that from on some of the names. we bucket the companies into three categories there's the expensive where we think numbers are too low. expensive where numbers are too high and expensive where numbers may be right we want to continue to own that first bucket we're going to be really careful about the second two with valuations where they are right now. twitter for us falls into that camp where we still think numbers are too low. same thing about snap. >> why why do you think twitter's numbers are too low? >> it's largely because we're seeing them get traction with advertisers. company has been making big investments. first to improve their product for users. but then second to improve their product for advertisers and we're just now starting to see the payoff on that >> is that -- does that pivot around video or better curation or better safety >> it's all of those things. video certainly a big part of it

for the advertisers. but google's made key high ears sorry, twitter has made key hires. it came in and brought some of those best in class techniques to twitter in terms of targeting and management that they didn't really have before and advertisers are starting to pick up on that. >> what's expensive with numbers that are too high? >>e downgraded the online real estate space today zillow, redfin those are names we think are relatively expensive and where not necessarily because of anything specific to the companies but because of the macro housing environment we're in a very tight supply environment that you could see numbers that are too high in that space >> we went through a period a few months ago where everything was about tech and regulatory risk was that too squishy a story for the bears to hold on to long term >> ultimately for these things to matter to investors, they have to impact numbers and as much as regulatory risk

long term has the ability to impact numbers, we're not seeing it on a quarterly basis. that's what you need >> facebook was going to hire a lot more people. costs were expected to go up are the expectations for earnings so much greater that those higher costs don't matter? >> as long as revenue numbers look as strong as they, do investors are willing to put up with that kind of investment if they think it will make the product better >> would you expect as we get q2 for daus to be soft, on the softer side of neutral because of, i don't know, people deleting facebook or -- >> has -- did anybody that you know actually stop using facebook because of any of this? it doesn't feel like it from what we see. we see the numbers coming out of some oe ird parties. wouldn't suggest that that's the case >> we were hoping for maybe a scotus decision on sales tax maybe next time you're here. >> thanks. so when we come back, a rare and exclusive interview. we were just talking about the internet sector. snap's ceo evan spiegel is with

us live from cannes next first, to jon fortt with a quick look at what's coming up on "squawk alley." >> we'll have more on google jd. that's a big deal as you guys mentioned. $550 million from google going into jd. whlogistics and retail may be a really important way for it's long avoided. this market "squawk alley" in just a few welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com

long time tech investor paul meeks is ditching high-priced oc f fstksorinancials. find out why on tradingnation.cnbc.com more "squawk on the street" coming up.

welcome back to "squawk on the street." let's send it over to julia boorstin at cannes lions with a very special guest >> good morning. i'm here at cannes lion with snap ceo evan spiegel. full disclosure. nbc universal, cnbc's parent company, is an investor in snap. evan, thank you for joining us

here today we really appreciate it. your first tv interview with your ipo over a year ago here you are at cannes the big question is, are you winning ad business from the kes of facebook this year? >> well, there's definitely a lot to go around, obviously, as people start transitioning dollars away from traditional mediums like television. the really important thing has been the way we've evolved the years.ss over the last three three years ago at cannes we announced full-screen vertical and people thought we were crazy. at the time everyone had postage stamp sized video. and that's how they were running ads all over mobile. vertical and now that's just become a dominant format all across mobile. and what we tried to do since then was start solving problems advertisers were having. gosh, advertising is really expensive on snapchat. it's hard to buy, hard to measure. over the last three years we went from being one of the most expensive ad products to today the least expensive in our peer set. >> there's been a lot of tension

on the fact that facebook has copied some of your most popular features how do you address that when you're talking to advertisers? >> i think we just have to continue to innovate and, obviously, i think one of the things that's become clear over the past couple of months is how important values are to consumers and, therefore, to advertisers. a lot of times when people are buying advertising products they want them to work so we have to provide a lot of roi and value for advertisers. they also want to feel like they're having a positive impact on the world >> your stock is still down 90% from your ipo price. what does it mean if you're innovating and someone is copying that how you talk to investors >> ihink the innovators win in the long term. we have to stay focused on our customers and continue to deliver great innovation >> does that mean you'll continue innovating? how do innovator win when you have a giant that massive that can copy the innovateion >> we believe ultimately in the

will be overlaid on the world around you and ultimately that's why it's so important to focus on the camera when you open our application today, you open into your own experience rather than a feed of everyone else's experiences. starting that journey to opening into your own experience and overlaying computing on top of that will be very important. >> those lenses are something that facebook does facebook is competing against you in the premium content business they are investing in content for watch. you have discover. facebook has talent such as tom brady making content for them. how your going up against facebook when trying to get the same premium content >> one of the unique things we've done is really protect the -- it's important to feel comfortable expressing yourself on snap chat we've tried to make sure you add people you really care about so you aren't in that awkward situation with 1,000 friends you don't know at all. that's a long-term competitive advantage by being really careful about who you're actually sharing your content with it makes you more likely to

create and feel comfortable creating >> what about the premium content. facebook is trying to do what you're doing with discover there are now a lot of people competing for that same content. >> you look at the premium content business how you're generating that traffic in the first place if you look at a business like n netflex, they invest in temple shows. ours is content created by your friends. it's important to continue to protect that friend graph and make sure people feel comfortable expressing themselves that brings people back into our service every day. when you're done checking out your friends' stories, check out a whole world of content on snap >> do you think of yourself as a media, tech or sociacompany? >> definitely media. >> you sell advertising like a media company and --

>> the role of the camera and the way it's changing all sorts of things we do every day. the cameras dramatically alter it's obviously changed the media landscape for sure as we look at our company, we're a technology company focused around the camera and that impacts media and communication. >> you announced you're opening up snap to integrate with developers pandora is one of your launch partners people on snap will be able to access pandora and pandora access information about users you criticize facebook for doing this very thing and the risk that opened facebook up to in terms of data privacy. why are you doing this >> we think it's important for people to understand they can get a lot of value from developer products without compromising their privacy so, of course, it's all in the way you do it. one of the things we've done with our customers is built a lot of trust so people understand we're respect their data and give them choice. >> why are you doing this at all?

this is counter to the way you've been running snap is it to reverse slowing user growth >> we haven't yet been in a position to expand all the great services we offer into other applications and services. it's really only now in the sixth year of our existence as a company that we've really been able to invest in growing other platforms. >> you've been adding users but the growth has been slowing. do you think this specific addition, the integration with other apps will rev up growth? >> the thing we're focused on is our android product which has unfortunately not been up to our standards for quite some time. we've been investing in tally rewriting the android product and we think this modularization of android is really what's ard.g to push the busine >> that's re so than integration with pandora and all these other apps >> i think a lot of things we're working on to grow the business. as i looat a big opportunity ahead, getting android right is critical for us. >> what about this issue of user data do you need to be giving developers access to more user data for you to really properly become a third player and compete with facebook and

google >> i think today given all the first party data we have and i think our very rigorous privacy policy, we've shown we can effectively target ads and deliver without compromising the integrity of the user data >> what do you have to say to mark you would have handled his cambridge analytica scandal differently? >> one of the unique things, whether in my dorm room my dad's house, it hasn't become clear until recently, over the past few months, how important that is. >> from the beginning you were more cautious? there are all sorts of concerns about skroo of screen grabs being taken, snaps that were meant to be private. these are issues for any app, any platform. >> you go back to the beginning snap chat and this focus on empowering people to express themselves for you to feel comfortable expressing yourself, you have to have control over your data. how can you feel comfortable communicating if you don't know

who has control over your data self expression is dictated the way we built it over time. >> are you saying you would never have an issue like face book has >> i definitely won't say that we've had issues and will have in the future. but the way we built this will certainly help us navigate any issuesin the future. >> keith weed said he's really cracking down on influencers buying followers, bots as fake followers. how important is that to you you have a lot of influencers in your platform. >> that is really important to us we really focused on having real users and we do that by doing a lot of advanced bot protection even as you're signing up for our service. rather than having this approach where other platforms let these bots and fake users proliferate, we try to keep them off in the first place. >> are you referring to facebook

and google there >> there are a number of platforms. >> you're doing a great job of not uttering the word facebook i think that's by design. >> our advertising model is different. snap ads or our lenses, what we try to do is integrate advertising into the user experience on other services when they rely too heavily, it can feel like you're getting marketed to all the time even when you're not viewing so-called ad so it's a lot higher on those services. >> kylie jenner did not like your redesign. how often do you hear from celebrities or popular influencers on the platform with problems and issues? >> we hear from people all the time we love getting that feedback. to help people understand why we're making the changes that we are. ultimately there will be some bumps when we make a change. historically we've always tried to do the right thing for the long term. >> four months since your initial redesign and you tweaked

it since then. users responded pretty badly were you surprised >> i wasn't too surprised. my wife, first thing she said was what are you doing i thought it would be a little choppy but the really important thing is to help people understand we're my gre migrating to this d we won't be amazing at it overnight. but laying that foundation to open up the whole content on snap rather than a small list of your friends while still having a small friend graph on snap is important to us in the future. >> do you think the fact that people responded so badly, do you think that damaged your brand in a more important way or do you think you'll be able to earn back that trust and in what way? >> with our programattic, that was a disruptive change to our business 18 months later that was very obviously the right thing to do.

hopefully, we look forward to 18 months from now or the next cannes and can talk about the benefits of the redesign. >> even though it was critiqued, the redesign, walked back some of those changes do you think the critique to the redesign was fair? >> absolutely. we made changes to the redesign service that we didn't need to make i'm frankly happy with the changes we've made. >> do you plan to do as much dramatic changes to the app? >> the three pillars that we have, snap chat the application, lens, it's important for us to stay folcussed and execute the little mini apps inside snap chat work together our map application. i don't think we would see the same traction without that being an integrated service. >> a lot of people say now that facebook is under such scrutiny

and google, they're so massive, that gives more opportunity for you when it comes to building out your family apps. >> some fantastic teams have joined us so i wouldn't rule it out. >> five years from now is snap chat one app or a family of apps like facebook is >> i don't want to give that away we have a lot of work to do. >> your focus on management of the company acres number of executive exits. do you need to invest more in recruiting top talent to come to snap chat? >> it's important to constantly keep improving the team. it comes from growth, new hires. tim, for example, who just joined us as our new cfo is fantastic. >> just a final question you control the stock at snap chat would you ever consider changing that structure, generating more shareholder value by giving shareholders a vote? >> never say never to anything

at this point, bobby and i have a shared vision of the company. >> thank you for talking to us here at the cannes festival. really appreciate it back to you. >> julia boorstin at cannes, covering a lot of ground with evan spiegel we always said they do things differently. it's a camera. they're l.a., not the valley. >> android is the largest opportunity he sees, in terms of redoing the platform for that, upside from at strong job from julia, asking all the key questions. >> i also noted the android is it discussion. i have an iphone so, clearly, he doesn't believe the user experience is that good when you consider that actually there are more android phones in the world than there are iphones, you need that user experience to be very good if you wanto have solid growth there.

>> a camera company, still sort of the mantra and the overla technology that will continue to evolve on top of the camera. >> they're not kidding about that stock up, as you can see, more than aercent at will take you back to the end of april, the last time was above the interday average former twitter ceo dick costolo wef the lows lostnow down 166 just another day on the farm. or is it? this farmer's morning starts in outer space. where satellites feed infrared images of his land into a system built with ai. he uses watson to analyze his data with millions of weather forecasts from the cloud, and iot sensors down here,

for precise monitoring of irrigation. it's a smart way to help increase yields, all before the rest of us get out of bed. directv now gives you more for your thing. get all the good stuff about tv without all the bad stuff. yes! you can still stream your favorite shows... yes! ...with no annual contract. wait, what? it's live tv. yes! with no satellites. what? and no bulky hardware. no bulky hardware! isn't that great news? yes! noooooo! no!

noooo. try directv now for $10 a month for 3 months. more for your thing. that's our thing. visit directvnow.com this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.

good morning it is 5:00 p.m. in qualm, 11:00 a.m. on wall street. it's "squawk alley" ve ♪ good monday morning. welcome to "squawk alley." i'm carl quint,