good morning and welcome to "squawk box" here on cnbc. we're live from the nasdaq market site in time square joe and becky are off today. sitting in with us, steve grasso good to have you here. >> thank you for having me >> on a wild crazy situation >> crazy markets >> right now >> not this morning, but yesterday. >> it was back and forth u.s. equity futures at this hour, a little bit calmer. dow would open higher by about 17 points. s&p would open flat. nasdaq would open higher by 16 1/2 overnight in asia, we saw selling the shanghai composite closing in bear market territory, down 20% from its high set in late january the nikkei however higher by just a few points.

european equities are right now positive across the board, but not by a whole lot let's show you what is going on with treasury yields dow below its 200 day moving average. ten year at 2.88%. and just a few minutes ago, you heard about ge's reported plans to spin off its health care unit and exits baker hughes they will sell 20% and redistribute the rest to shareholders it plans to exit its baker hughes stake over the next two to three years end of a more recent era for ge. sort of a sad story. and that news just crossings tape this second >> officially as opposed to before that is helping move the stock as you see but today also marks the end of an era because today is the day the company will officially be booted from the dow.

this is after more than a century of trading on the index. the stock down nearly 27% on the year and it is being replaplaced by walgreen's the change officially is this morning before the market opens. >> a lot going on. >> and they used to own us, general electric so a lot of additional feelings beyond the, wow, it was in the dow for so long. just when you think the company is invincible, it never ever -- >> and you want to see them survive. if they can continue the asset sales and keep their head above, everyone looks at coming out of the dow saying this is going to be the death knell, but historically the stock turns and moves up >> and do you think that this is a you true risk that they don't survive? >> i think people were saying that people were talking about what is it valued at, is it book value. how do you value something when

you have no idea what the assets are worth. so i think that was a real concern. you tell me. not too long ago, whether there was a concern whether they would survive at all >> yeah, a lot of companies we asked that >> and meantime let's talk trade. investors trying to digest what seemed like mixed messages yesterday. it started with a tweet from steve mnuchin in response to a "wall street journal" story that said that the white house was planning additional trade restrictions on china. his tweet called the story fake news and said that the white house won't focus its restriction efforts solely on china but all countries trying to steal our technology. and then president trump's top trade adviser peter navarro trying to calm the markets late yesterday, he comes on cnbc and saying wall street was overreacting to the trade fears and the administration was not working on investing

restrictions on china or any other nation for that matter listen to what he had to say >> there is no plans to impose investment restrictions on any countries that are interfering in any way with our country. this is not the plan all we're doing here with the president's trade policy is trying to defend our technology when it may be threatened. so discount it >> that is not the same message we heard from sarah sanders seeming to contra duct navarro here's what she had to say referencing this time steve mnuchin's tweet. >> as the sect said,retary saida statement will go out regarding all countries trying to steal our technologies >> so what is going on dow closed down more than 300

points on or about a third of a percent. you can see what looked like a wild ride. still hard to decipher what do we think is going on here >> i think that they will put trade restrictions on, they will put investment restrictions on countries that they think are stealing our technology which by the way happens to be china. >> for years we've been talking about it everyone has complained about it i think everyone understands what the problem is, but no one agrees on what the solution would be so this is the first administration trying to do something and yesterday as far as the market gyrations, the tweet from donald trump rallied the market and deeper in the day we were selling off into the abyss, navarro spoke, started to rescue the markets. but i sensed a little bit of both sides of his mouth speaking so -- >> in a vonavarro, trump or both >> navarro he pulled it back.

and then added it in just as a sprinkle when kelly evans hit him one last time about it, i don't think that he said it is definitively off the table >> the key phrase, we're just trying to protect our technology that sentence i think is extremely crucial, it tells you their intent >> but then why did the market rally back at all? shouldn't it have dived back the opposite way >> i'm not sure why the market was down so much we had tom farley yesterday saying they have been telling you investment restrictions are coming on china. they have been negative on chinese investments and they have made it clear that they will get more negative >> so i think people keep thinking that president trump is going to back away from whatever he says and at this point he knows that the world thinks that he is going to back away, so

that is why i think he is biting a little deeper. >> but reality is they have already stopped several chinese deals. >> butonundrum of this president is this idea that you are not really sure whether you believe the rhetoric because every time he's gone up to the line, he's then come off the line and so the question is when he ultimately has to have a conversation with president trump xi about this whole situation, does he, you know -- is the bark bigger thanes bite that is the issue. >> you have to bite every once in a while or else you lose the effectiveness. >> and there is also congress. changes to the committee on foreign investments in to the united states, what their mission and their definition is will be changed by congress. not by the president and you have a congress that is very hawkish on both sides of the aisle against zte, upset about his backtracking they could do things beyond what the president would do and they may have enough votes that they could even override a

veto, they are so anti-china >> if that is true, then you don't have to worry about what trump wants to do. >> that is why the market is playing both sides of it, waiting for the reality instead of thinking about what perception is. >> reality is we have already stopped a lot of chinese investment into the united states and if you look at the reaction, you see the numbers that just came out, last year in the first six months of this year, excuse me, has fallen 90% it is down dramatically. they are getting the message from their government and we are giving them the message as well. the reality is already here. speaking of trad other news. we told you first here yesterday about harley-davidson. president trump slammed harley-davidson late yesterday after the motorcycle maker said that it would movement production for european customers out of the united states to avoid retaliatory tariffs from the eu. the president tweeted that surprised that harley-davidson

would be the first to wave the right flag i fought hard for them and ultimately they will not pay tariffs seg into the eu which has hurtus badly on trade, down $151 billion taxes just a harley excuse be patient #maga. make america great again, that is the acronym shares fell 6% in yesterday's saying because i think the reason for that is because they said that they would absorb the cost of the tariffs, so margins will get squeezed. let's get a take on the broader markets and what all of this means joining us is chief equity and derivatives strategy and also co-founder of the spoke investment group and of course our guest host, steve grasso is it baked into the cake what is happening with china? it was to an extent, but i would say the market took the other side that it wasn't baked into

the cake >> i think yesterday the headlines were ratcheted up, the rhetoric was ratcheted up. but the other thing you have to take into account is end of quarter rotation because we saw yesterday the groups which had been performing best quarter to date were the worst yesterday are and the ones lagging were the best performers so not trying to minimize the aspect and impact of this trade rhetoric, but -- >> so you think the trade rhetoric is only a small piece >> i think part of the bigger puzzle and we're seeing rotation for the end of the quarter, managers rebalancing >> and we certainly are seeing rotation from our point of view, it is part of the potential for a broader derisking. if you think about the s&p 500, it has been a roller coaster the entire year. you've essentially gone nowhere. but there has been these very sharp xwleegs emotional swings

to us it feels like it has the potential to be more like april when the trade war really started heating up and it crowded out all the headlines. we've been talking for ten minutes about nothing but trade war. and that kind of psychology -- >> but the spirit of andrew's question is, is that what is driving the market >> yes >> three out of four guests that we've had on say it is earnings, it is rotation, this is just a side story to the underlying issues of interest rates, et cetera you think it is trade? >> it is definitely driving the market the level of uncertainty is heightening you now. and if you look at it, part of the issue is indicators have continued to all-time highs and if it is like a high multiple stock, any slight dent to the confidence can turn things quickly and we're at a psychological point where we don't know how far the president is going to go or how far xi is going to go but if he is came lates

rapidly that is where the psychology turns >> so the rotation paul speaks of is exacerbated by the headlines in trade that we're seeing but when you look at it through your prism, are you worried more about the fed or trade right now equally? because it feels like the fed has fallen by the wayside. >> if you go back to the whole idea of confidence, what is amazing is a week and a half ago, chair powell in his post fmoc conference, it was almost a drop the mic moment. the economy is great, and then five lays latdays later in port is he we're monitoring the trade situation. and that to us as the potential to permeate into the markets particularly in front of the july 6 deadline where the tariffs are supposed to go into effect >> but is that good or bad for the markets if he is suddenly talking about maybe trade is an

issue, does that make a more dovish fed and hence is it better for stocks? >> eventually it does make a more dovish fed. we think there will be only three hikes this year. but that is sort of an ex-post factor thing >> are you buying in right now on the weakness? >> we think you could fall back to the 200 day moving average in the s&p 500. so we're not necessarily in a rush to buy here >> we track every fed speech and the tone of the speech and we've seen -- the fed is more hawkish now than they have been in several months so i think that is the bigger concern for the market we've been down nine out of ten days since the fed meeting >> i have a very basic question. i got an e-mail yesterday from my mother-in-law she sees the market going down she says what is going on and what aim suppom i supposed to dt

it what is the answer >> we talked about the end of month rotation, half of the year is basically over right now. so when you look at what has worked, you said that the things that have worked have been sold off more than the things that haven't worked do you think once we start on the back half of the year that it is the set it and forget it again where the large cap tech names start to perform as well >> i think as you start to get into the second half of the year and you get through the rebalancing, you will see what has worked continue to work in the market >> should we talk about the yield curve? that seems to be the only thing anyone else is talking about >> did your mother-in-law ask you about the yield curve? >> she didn't, but there is a fascinating article that explains it in a brilliant way so for the mother-in-laws out there who aren't necessarily -- >> i love the yield curve. i think it is so elegant i used to say it is as elegant as an ipod back when the ipods were new

it is a beautiful thing. when you really understand the yield curve, i think it is breathtaking >> and powell already said after his first press conference, he sort of diminished the impact of the yield curve and its predictability of an inverted yield curve predicting recessions which we've seen in the past prior fed chair men say the same thing. and recessions came after the yield curve inverted but at this level of the yields curve when you have a flat yield curve right now like under 100 basis points is actually a very positive environment for equities and you're seen one of the most consistently forward returns for the market when you have the yield curve at these levels. >> guys, i want to thank you and i want to thank my mother-in-law. and by the way there are lots of mothers in law who are in tune to the yield curve as well so make sure we capture all of it in the meantime, want to tell you a little bit of news right now. ge ceo john flannery will be

joining the gang later this morning. it is a cnbc exclusive it is at 10:30 a.m. eastern. it will recap some of the ge news this morning. he will be talking about all of it ge is selling 20% of its health care unit and distribute the rest to shareholders plans to exits its baker hughes stake over the next two to three years and will maintain its current dividends policy through the completion of the health care separation. at that time dividends policy will be evaluated for both ge and the new standalone health care business. ge says it is on a clear path to cut its debt level by $25 billion. other big story in the last week, what is going on with oil following the opec decision to increase production. joining us now, matt smith fr director of commodity research bren hey, matt. what is the bottom line now that we've had a couple of days to digest opec?

i call it opec math. they will raise production, but that actually means not as much oil as people thought. it is very confusing what will it mean for the price, 68 for wti, higher or lower from here >> what i think is let's use the world cup analogy. you have essentially owe poke as a soccer team and you have certain players that are playing defense. so you've got iran, you've got angola, nigeria that are really sort of dialing back on their exports. so they are on the back foot whereas attacking things like saudi arabia so venezuela, et cetera, pulling off the market >> and a lot not by choice >> absolutely. and that will only continue with the likes of iran. you have saudi arabia, united emirates that is stepping up to fill that gap. so in theory, what we've heard from the saudi oil minister is that we should see the market kind of staying where it is here

because they are trying to balance it around that $75 mark for brent. we've seen a bit of the rise from wti but that is more do with u.s. specific issues. in terms of brents, we've got up to $80 there everyone got scared about demand growth and now we'll see them pulling the levers to try to keep this in the 70s there >> did you hear how he phrased that to me when you look at saudi arabia, united emirates and kuwait, it sounds like that is a market share grab because of what michelle just said that iran and other countries can't increase their production. te tho unds like at the end of day those three will increase their share of the pie not a noble endeavor that you would look at, so that million barrels turns in to 600,000 or so per day so that is what it looks like to me and what happened to the glut of oil, the overproduction, the usa producing? why did that go away

>> it hasn't in terms of u.s. producers. actually the data is out for the weekly tomorrow and we should see three records from the u.s we'll see record refinery runs potentially, record u.s. production, and we're going to see record u.s. ports. and so all that is happening, but at the same time, you've had saudi arabia and the rest of opec reigning in the production some because they had to and some because we are seeing production dropping like swen way venezuela and why we're back te five year averages and u.s. inventories now are 100 million barrels lower than they were this time last year so that is why we're really back in balance here. even though u.s. keeps production coming to market. >> i was going to ask you how much more do you think the u.s. will produce at this point oil as these levels is profitable for the vast majority of producers in the united states and yet their capacity constraints in terms of

delivery, distribution, et cetera so we're at 10 million per day now? >> 10.9. >> wow okay where are we going that is a 10% move in production under a year that is insane >> yeah, from like basically april. so we're looking at getting above that 11 billion barrel a day mark in a month or two and then up to 12 next year. but there is those capacity constraints, pipelines are getting full, essentially taking the crude from texas down to the u.s. golf where tulf. >> and so our ability to produce more no longer is a ceiling on the price. because we get a cap on distribution >> yes and then that turns down those regional benchmarks to the point where it is getting trucked say to the u.s. gulf to be exported. >> but you think the price is staying here roughly >> with opec, yeah with saudi arabia being involved, they are looking to

keep it in the 70s there >> thanks for coming on. >> thank you coming up when we return, tim cook speaking out about data privacy and how he decides when to take a stand on a political issue. we'll show you what he said next alerts -- wouldn't you like one from the market

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our top story this morning, ge will sell 20% of its health care unit. they plan to exit baker hughes to the next two to three years ge says it will maintain its current dividends policy you through the completion of the health care separation at that time dividends policy will be evaluated for both ge and the new standalone ge says it is now in the clear path to cut its debt level by $25 billion. you can see the stock higher by 2.5% john flannery will be joining "squawk on the street" later this morning, 10:30 a.m. eastern time to recap that ge news and to discuss what the plan is, so they built up this huge con g l

conglomerate and now bit by bit trying to value anxious what is left >> when i think of survival, i think of bankruptcy. i don't think that this company is necessarily headed for that i mean this is a company with re assets. >> and when i'm talking survival, i'm an equity player so when you start to look at the stock getting demolished, then you start to think is that stock surviving after a cataclysmic selloff. and we've seen basically that in ge so if they can get don $25 billion in debt cut, you are looking at a stock that is probably double from where it is here i am long the equities >> if you look at this chart show, wherere investors hoodwind did they not understand? which side of that equation are

you on >> a dramatic change when the new ceo came in and suddenly discussed a situation that seemed very different than the message that we had gotten before attitudely we weren l suddenly it wasn't growth, it was cash preservation. because the cash flow numbers dropped. >> and do you think that jeff immelt knew this and turned a blind eye? do you think he purposely puffed up the stock >> or was he just an optimist. >> was he just a professional optimist exactly. what was going on here a little armg cha chair >> i always like to think the best >> i do too. and it is hard to look at that chart and try to understand how -- there was clearly a mismatch on some side of this. >> for sure. at the same time, every time a new ceo comes in, what do they do they kitchen sink things they make it look way worse than they were. i get this is more than that, but there is probably a little

bit of both there. >> this is a lifetime in the making unfunded liabilities that everyone talked about worked for a long time as long as rates went with you and as long as growth went with you but once that started to logjam up on you, you sort of start to smother and that is the domino effect so i don't think what happened and i don't know what the catalyst was and i don't know what his thought was >> you could also think if you are jeff immelt at the time you think don't worry, power will turn oil will turn. these are long term businesses we have to think for the long term don't think quarter to quarter >> ceos make bets and that's what you pay them for. sometimes they are wrong >> and what is the chance that this sort of mass selloff if you will, and i'm not talking when the stock, but the selloff of all the as setsets, is the wrong time the timing when it comes to the

sales and acquisitions has been so absolutely backwards. >> and doing it all over again >> but what is the alternative >> that is the question. >> the issue now, they really had to figure out the casual situation. pay the dividend you you start to get pushed to places that maybe you wouldn do >> but you does it create questions about the dividend is this a company that should have been paying out this crazy dividend every quarter >> the very first day -- >> when you look at the amount of money that they would spend on buy backs >> we can second guess everything, but at this point everything has to be on the table. if they can start making the asset sales and get to where flannery wants to get it, to the stock should be double what it is noud. >> and we'll talk tim cook's comments in a little bit separately on privacy. coming up, cnbc has teamed up with linkedin to take a

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good morning welcome back to "squawk box. take a look at equity futures this hour. it is not nearly what we were looking at during yesterday's wild ride. dow looks like it would open down about 25 points nasdaq on the up side about 4 points and s&p 500 looking to open 4 ps the top story this morning, ge will sell 20% of its health care unit and distribute the rest to shareholders it plans to exit baker hughes stake over on the next two to three years. ge ceo john flannery will be joining "squawk on the street" later this morning at 10:30 a.m. eastern. what is left of ge will be aviation, power and renewable energy so lots of different companies from the once great large ge >> in the meantime we're also watching shares of netflix this morning. the stock suffered its worst day

in nearly two years falling 6.5% part of a broader selloff in technology square, twitter, micron each fell more than 4% as well. >> and [we're launching a new series focusing on closing the gap in the workplace we can floor t explore gender gs of discrimination. julia boorstin joining us now. >> thank you so much we surveyed both men and women at financial institutions including banks, research firms, hedge funds and private equity and the results show women see a bigger gender gap on wall street than men do. in the workplace more women have seen gender discrimination and harassment at their companies than men 72% of women say they haven't witnessed it versus 84% of men and wait a minute are about four times as likely as men to believe women are excluded from

after work activities. this translates to concerns about women's ability to break through the glass ceiling. 37% of women say men and women are equally likely to become leaders in their industry. that is compared to 56% of men who see equal potential for men and women to become leaders. so why is that nearly three quarters of men say men and women are promoted at an equal rate, but fewer than half of women say they have the same opportunities for promotion as male peers back in march big banks reported paying women about half as m and there is a similar gap here in the u.s 40% of women say they agree men and woman working at the same level are paid equally while 75% see equal pay. men and women agree that an unsupportive or by as aed corporate culture is the biggest obstacle preventing women from advancing.

they point to the importance of having more women in leadership positions as well as more mentor ship of women as key ways to drive change >> i don't want to upset the apple cart here. >> we had a great conversation this survey with linkedin. and we have caroline fairchild from linkedin here to talk about it >> and we are all about starting productive conversations amongst professionals around the issues that matter most and in the era of "me too," times up, we haven't heard a lot from members in finance which is interesting. so what we really wanted to look at is what is going on here, what are financial professionals saying about these issues. and what we found is that the way that men and women you view these issues, the way entry level workers as opposed to senior leaders view the issues couldn't be more different >> have you read liars poker

things have gotten better, haven't they >> tlef ghey have gotten better what we're hearing from young professionals in the industry is that the nuances of what they are seeing is very different than say senior leaders. senior leaders are saying things are getting better, but they aren't sure how. >> so tell me more about the nuance what doesn't happen, what is it that when they walk in the door the execution of their day versus what happens to the male is what and therefore they don't get what >> so i spoke with more than two dozen women across the industry and what they are saying is that whether it is access to promotion, pay, or raises, they are just not seeing as much as their male peers one 24-year-old at a boutique firm told me she is the only woman in her firm and men stare. another said she had a mail boss who said i won't give you this choice assignment because you you are a woman.

hr said we'll talk to your manager. and all he did is just say i'm not giving you this choice assignment, didn't say it was because of her gender. so things like that. >> that is outright discrimination is that an outlier in the current environment? first of all, he is stupid, right, you're not going to get this choice assignment because you are a woman? who says that outlewd. you have to you have to be an idiot >> and we saw it play out in the numbers. women said that they feel like they are more likely to be cludclud excluded from work outings >> i'll bet 20 years ago that was 80%, nobody got invited. now only 8% complain >> but if you look at the networking and what it takes to have the relationship to ask for a raise or promotion, it seems based on the results of the

survey that more of the casual networking opportunities are available to men and if you position look at the id idea of the promotion gap, it seems to be playing out here as well even a good chunk of men say they see men being promoted faster >> and can i ask a separate question you talked about "me too," or at least there was an illusion to "me too. and the glidea that we haven't heard about "me too" on wall street i get asked all the time, do you think there will be a "me too" event, a harvey weinstein like thing on wall street but it hasn't happened or at least we don't know about it yet. why do you think that is >> i think a lot of the leaders in finance are really focused on

these issues we spoke with leaders at fidelity, morgan stanley, gho goldman sachs. it isn't news to them. they know they need more women talking about mentoring issues and so i think that this isn't an issue that necessarily it is blind to them. they know that it is a problem and perhaps why they haven't had that moment yet. >> is it sort of helpful that when we look back, when i started on wall street in the early '90s, i bet my wife on wall street and she was an anomaly to be on wall street and now you look at the president of two of the premiere exchanges are women. this has to be changing in a ferocious manner in my opinion especially spread from the top down on wall street. i think things have to be a little more silver on the horizon versus where we came from about that. >> and the respondents are optimistic most people do believe that there will be change men are more optimistic than women are and leaders are more optimistic that there will be

change so i think people are hopeful and i think there are these examples of women now who can be role models. but statistically the percentage of leaders and senior managers, whether at hedge funds or private equity or investment banks is still relatively small. and especially in industries like private equity and hedge funds. latest statistics is about 10% of the senior executives are female so still relatively small. >> and i think it is interesting that you mentioned stays stacy cunningham because several talked about her and said they have done it, hopefully i can as well >> and i'm chuckling because i'm back to my original question, if you read liars programming, hookers on the trading floor, women being harassed incessant y incessantly. >> things have surprised, but i spoke on with a major managing director at a firm here in new york who will remain anonymous, but she told me that she has gone to client meetings in

brothels another told me that a client of hers asked her if she wore a certain pair of shoes to turn him on so these things still happen >> i didn't everyoneare brotheld >> this was in asia. >> i think that the gender pay gap put pressure around disclose smur a slur and the more there is transparency, the more there is a force for change >> and how much push back do you hear from companiesclosure for r how many females in a particular group? was there anyone who was like, no, i don't want to talk to you about this >> i better view cinterviewed cn and i asked her about the pay gap. and what she said is interesting. she will actually withhold

employee bonuses if she notices a discrepancy amongst two different groups in the pay gap and that is how she decides to figure out how this issue. and i think that is something that other leaders can learn from there are ways that can advance the conversation >> and a lot of the big banks are starting to be forthcoming about the diversity numbers. citibank, they had a huge report 2017 diversity report and they talk about their initiatives their statistics and so you will see this increasingly from all of the banks as their peers start to do it >> all right, ladies, thank you. for more, you can go to cnbc.com/closing the gap coming up, being a stwres and ma actress and mathematician is adding two new titles to her series of math books for kids. and then also richard turnill will join us he will tell us where black rock

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♪ joe cocker probably wasn't singing about his math homework when singing about having help from friends we're joined now by danica mckellar known for her part as winnie cooper in "the wonder years. and today the author of "do not

open this math book" for ages 6 to 9 the second one is called "bath time math time" for ages 2 to 5. welcome. >> thank you so much >> you've been doing math for a very long time how did this happen for you? how did you get involved in this >> oh, gosh. i have a degree in mathematics and i learned from everyone saying, my gosh, you were an actress, why would you study math there's so much math phobia. i started writing math books geared towards girls middle school and high school books like "kiss my math." i have so many books i've written. i started doing that with middle school and high school really tackling things like algebra and high school geometry earlier math is much more clear, straightforward. except not anymore not anymore, right so they changed math common core came along -- >> why

>> right >> what was the catalyst of that >> i'm not really sure, but i do know there's a lot of good stuff about common core, but there's a lot of confusing stuff >> there was financial incent e incentive. if you followed common core you'd get more funding from the government >> for those who don't know, explain what the new math is >> common core math started i think around 2011 or so where ey made it much more visual. so we're breakingthings down there's a lot of deconstructing numbers and looking at place value. what are we really doing when we're carrying a number. but we're not calling it carrying now it's grouping or ungrouping. it's confusing for parents who are expecting -- look. some parents have math phobia. but they're not expecting that to be an issue until middle school or high school not helping with algebra they figure they can help their 7-year-old nowadays, it's unfortunate --

>> steve no s not allowed to help his children anymore. >> i grew up as a math guy, basically. that's how you classify yourself when i try to help my children -- i have four children -- when i help them, my wife says you can't do that. you're going to confuse them and that to me -- >> because it's different than the way you learned. >> it's different from the way we learned especially with what you said, regrouping >> the new terminologies, do not open this math book is is ages 6 to 8 in the back, there's a new math translation guide for parents. because i realized there is no resource like this except for -- so i thought this needs to be made i want to make sure parents have a fun time with their kids and math at home so they're not going, my gosh, i don't know how to do my kids' homework and they're 6 to 8 years old. >> you wrote this for adults >> really. it sounds like it's for me to help. >> the title is for kids because i have a 7-year-old as well. and if you tell them not to do something, what becomes

irresiible that thing you said not to do. and mr. mouse. and there's a danica cartoon as well they're the host through the book there's fun dialogue back and forth. my son loves reading the mr. mouse dialogue he's resistant danica is patient. and they have all this funny -- >> is this the category of new math or old math >> both. >> but without confusing >> here's the thing. the new math, they make you learn the old math by the end. they teach you -- so common core is visual. breaks things down it takes simple things and makes them complicated so you understand the nuts and bolts of what you're doing when you're doing the so-called shortcuts we learned. >> the shortcuts we learned was just called memorization >> yes once they learn all the nuts and bolts of what's going on behind the scenes, now they're saying, okay, now you can do it this much faster way. which is the way we learned it so this is what they're doing in school they are learning both >> this is terrific. are you going to do other

formats besides books? >> you know, i have a few videos up, but i -- this i find -- it's more togetherness time >> you're not good on camera, right? >> right i'm just afraid of cameras and i don't know how to present myself for now this is where it's at. although i do have some videos for "do not open this math book". >> any chance of a "wonder years" reboot? >> you're the first person who's ever asked me that that's amazing >> thank you, danica thank you, steve, as well, for joining us this hour coming up, our guest host for the next hour is the chief investment strategist to blackrock. plus we'll talk about ge don't move what about him? let's do it. ♪

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stocks to looking to rebound from yesterday's selloff as investors look for clarity from the white house over its trade policy blackrock's richard turnill joins us for the hour. is china stealing our technology former morgan stanley share will join us to discuss china and more plus walgreens replaces ge in the dow this as ge announces it's going to spin off its health care business a look at the health care sector straight ahead as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is "squawk box.

>> good morning. welcome back to "squawk box" here on cnbc we're live in times square i'm andrew ross sorkin along with michelle caruso-cabrera and mike santoli joe and becky are off. take a look at u.s. equity futures at this hour dow looks it will open up marginally higher. nasdaq looking to open a bit higher now about 20 points higher and the s&p 500 looking to open off just a tad here's what's making headlines at this hour the biggest news general electric spinning off its company. all announced in the last hour as we came on the air. ge plans to focus on power, aviation, renewable energy which accounted fomore than half of ge's revenue last year john flannery is going to join the "squawk on the street" gang later this morning to take questions and really help us understand exactly what ge is going to look like when all of this is over meantime, shares of home builder

lennar are beating estimates on the top and bottom lines during the second quarter new orders surged 60% from a year ago the average sales price of a new home was more than 10% higher. by the way, speaking of home prices, we'll get the latest overall read on the housing market at 9:00 eastern time. that's when april's shiller report is released economists expecting a 6.8% increase in prices from a year earlier. trying to i did just mixed messages from the white house over trade started with a tweet from steven mnuchin in response to a wall street journal report. his tweet called the story fake news and said the white house won't focus its restriction efforts solely on china but on all countries that are trying to steal our technology then president trump's top trade adviser came on cnbc saying wall street was overreacting to trade

fears and the administration was not working up investment restrictions on china or any other nation for that matter >> there's no plans to impose investment restrictions on any countries that are interfering in any way with our country. this is not the plan all we're doing with the president's trade policy is defend our technology. so this idea there's going to be restrictions to the world, please discount that >> but that's not the same message we heard from sarah huckabee sanders here's what she said referencing secretary mnuchin's ee >> as the secretary said, a statement would go out that targets all countries trying to steal our technology the dow closed the session off more than 300 points or

about 1 1/3 percent. off the worst levels but still a decline of 1%. >> joins us is mike santoli. what are we supposed to make of all this >> the messages were mixed as michelle detailed there. one thing that was clear is the white house was not seeing the market panic on a given day. they wanted to down plai the immediacy of these threats the thing with the markets is it's not necessarily about trade. yes, the trade tension incremental news yesterday did seem to trigger the downside look where it settled out. if you look at the chart, the s&p stopped going down around this 2,700 level we have a line through that level. so far this year the market has really not been able to get much distance for any length of time away from this level there's no magic to it what's behind this trading range is really the familiar push/pull

that has been driving the markets all year very strong corporate fundamentals strong economic data on the positive side. the negative side, fed tightening and the idea other trader issues might slow down global growth as trade flows are threatened and some of the u.s. economies come off the index i wanted to point out yesterday, the whole structure of the vix futures and the rest of it we got consumed with in february, keep an eye on it. the vix got above 18 and some of the structure is looking it might be indicating volatility u.s. macro data again i think in the spotlight. we're going to get consumer confidence again today we're in generally the very boring, positive phase of the economic expansion for the u.s., but i think investors want to see that remains the case with these numbers. >> got it. let's head to our guest host this hour richard turnill from

blackrock. >> good to be here. >> if we were to put up the year to date chart, you'd see we're kind of stuck at this level. why are we stuck here? is it trade or is it something else >> so uncertainty is increased you have great earnings, great economic data, particularly here in the u.s but the market simply hasn't been prepared to put a value on that the reason they haven't been prepared to put a value on it is the certainty about future growth and earnings. trade one important part of that also it's about the implications of fiscal policy in the u.s. uncertainty of the higher oil price. and uncertainty about europe all of which contributing to a market that's in a range but still supported by those positive fundamentals. >> when you say uncertain about the price, are you talking about what multiple to assign to earnings >> that's exactly right. you've seen earnings pick up but they haven't put a multiple on you've seen valuations steadily

improve this year particularly in the u.s. but also the rest of the world. the market is placing a higher risk on the earnings as the uncertainty rises. >> do you agree with the multiple the market has assigned or do you see value here would you sell as many. >> the beginning of this year, many people were looking at the market thinking it's expensive now it's trading slightly below its long-term average on forward earnings >> what's that number? >> we think it's fair. trading around 16 times earnings given where the level of interest rates are, the long interest rates are, that looks fair to us one important thing has changed going forward which is that we look at what's going to drive returns. it seems to ask that unlike last year returns are going to be driven by earnings growth and driven by carry or yield and they're not going to be driven by the market putting higher and higher multiples on stocks >> what do you think it'll take for this stalemate to be broken if you want to call it that in terms of the markets sticking

with this valuation? some are saying that the fed has to blink at some point right? >> i think the fed blinking is very unlikely. the fed's on a path now where they've indicated steady one quarter point a quarter going forward. and i think the market is at ease with that level of tightening we've seen the u.s. economy has been able to withstand steady interest rate hikes. i think whthat earnings growth going to be strong this year and next year. the market is looking for some easing in those trade tensions and the stability in the long-term interest rates which we're starting to see. if we can see bond yields settle around the 3% level, i think investors will be much more confident about putting that cash back to work. >> how do you think about tech names right ow >> so the market is becoming narrower we talk about this market trapped in a range

>> right >> and the u.s. market in low single digits now year to date it's hard for many investors to make returns across multiple assets then you look at the share prices of many tech companies. straightforward up from bottom left to top right on the charts. that's the one area where multiples have been increasing so the reason we're seeing huge climate flows into these assets is because so far that's where the resilience is. so you're seeing companies with strong balance sheets which have proved to be resilient to high interest rates and earnings growth that has continued. >> therefore not overpriced when you're looking at multiples that are significantly higher than the rest of the market >> we think the valuation of the tech sector is fair right now. given it was very different in this cycle compared to the '90s is the earnings are coming through. you're getting earnings growth driving that move up in tech again, when we look forward, our

expectations are the earnings growth that will drive those returns. we do like tech. we think that's going to be driven by the earnings rather than multiples just getting higher and higher. >> you're the global chief investment officer, so where in the world is the best place to put money right now? >> so, we're looking at two places to focus on for putting money. first of all, let me start with equities we think to put money to work where you're being paid to take risks. we think you're being paid to take risks in the equity market right now. particularly when you compare it to the alternatives. >> fixed income. >> fixed income and actually i look beyond that as well and so we see the equity markets being attractive in this expansion. you want to focus on those areas. in an environment where financial conditions are tightening, interest rates are starting to rise here in the u.s. that means you want to focus on where you're going to get the growth where are you going to get the growth two regions here in the u.s. still the strongest developed market

over 20% earnings growth this year up to 10% earnings growth next year and emerging markets we've seen some volatility in emerging markets in terms of the price action of the indices. but actually the economic fundamentals in me merging markets remains strong zblif a joke about emergin markets i can only use one more time whre rates go up, emerging markets go down isaac newton said that if i can get -- if cash can almost start to pay me for the first time in the united states, i've got to be paid more money for me to keep my money there. it just seems natural it's just tougher for emerging market countries. what's different now >> the rising return on cash in the u.s. i think has implication for all asset processes.

i think that has huge implications for markets >> for high yield, everything. everything people ran into >> financial conditions are tightening economic uncertainty is increasing >> tell me why you like em then. >> we like e.m. because you're going to get stronger earnings growth 11 times earnings is the one market which is materially below its long-term average is a significant risk premium or discount in the market priced in. emerging markets are relatively early in the cycle it's important to think about what drives the cycle. look for two things. look for china to slow materially at the moment we're not seeing that look for u.s. rates to rise sharply. >> we'll hear a lot more from richard in the next hour because he is the guest host when we come back, walgreens joining the dow today. the move highlighting the role

of the companies in the health space on the economy we're going to take a closer look at the sector after the break. then later yale, senior fellow and former morgan stanley asia chairman is going to join us to discuss the nation's stance on china and what it means for investors. stay tuned you're watching "squawk box" right here ocnn bc weather emer. extreme risk of burst pipes and water damage... soon, insurance companies won't pay for damages. that is, not if they can help prevent damages from happening in the first place. at cognizant, we're turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. get ready, because we're helping leading companies see it- and see it through-with digital. with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done! simply enter your destination and dates...

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welcome back to "squawk box. futures right now are suggesting a flat open. not the volatility we were seeing yesterday s&p would open flat. nasdaq higher by about 21.5 points walgreens replacing ge in the dow jones industrial average. ge spinning off its health care business joining us right now is the senior health care services analyst at jeffreys. this is a big move and we want to know how you think walgreens trades and how that impacts the dow. >> yes as i think about walgreens, we've seen some buying over the last five days since the addition to the dow was announced. i think we've seen 50 million shares traded. there's been a boost of walgreens shares already from their inclusion into the dow >> historically, there's usually a boost on the way in and then usually a little bit of a boost on the way -- once it's actually in then oftentimes and i've been

looking at this because there's been a lot of research on this usually in the weeks after, it sometimes takes a little bit of a dip. what are you expecting here? >> that's interesting. walgreens reports earnings this week i think that's something to think about. there is a potential catalyst, earnings related that will come up i think that'll be a key driver in terms of how the stock trades over the next few days there's a lot of discussion about strategy for the company, you know, what are they going to do to remain competitive if management can answer all these questions on their earnings call, i think that will go a long way in helping boost the stock. >> this is still a retail company. >> a few weeks back, management held a meeting with its suiciouh side analysts. one thing they highlighted is they will shift this company into more of a health care business you'll see they're partnered with united health they're building urgent care facilities inside walgreens stores they're partnering with

laboratories of america. in the next five years you'll see the pharmacy of the future will be different from what we see today. they're shrinking the retail square footage by 20%. this will more of a health care business than a retail business >> brian, now companies that are added to the dow when you have one of these moves, not necessarily ask permission or anything like that maybe they didn't expect it. from your communications with the company, do you think it came as a surprise even if they were going to be ejected from the dow, i didn't think walgreens would be the one in there i wonder if the company thinks this is something they saw coming >> i don't think they necessarily knew it was a done deal or it was certain, right? but i think there are discussions that had happened prior to the inclusion to the dow. >> interesting do you have any strong thoughts ither of these companies >> you know -- >> we got richard here on the set. one second >> i look at the retail sectors,

it's interesting how well retail's been doing lately that's partly because i think many retails are starting to reinvent themselves. they're starting to move away to see whether they can get growth going forward like focusing more on pharmaceuticals where they can expand their business. two big head winds for this sector one is obviously technology. more and more consumers looking to buy online. for investors makes these relatively stable stocks look less attractive as you can get more attractive returns on the short end of the curve >> some of the big news in the health care sector today is they're going to spin off this health care unit as we see this whole area merge, reinvent itself, et cetera. any thoughts on that >> yeah. i'll start with richard's point. if you think about walgreens, they think the retail side of the store has been under pressure i agree with richard

i think amazon has been a pressure point for them. sales of toothpaste and detergent has been declining now, we actually just published a note this morning showing that amazon just started private labeled brand for personal care products lotions, moisturizers. there's a risk coming in from the online retailer. what thinkalgreens is doing strategically is to shrink the percentage of their business from retail. i think that's a smart move. i think to richard's point, that is the strategy that is the pivot point that we're seeing with this company. now, as it relates to ge, we've obviously seen ge shed of businesses over the last few years. the health care business is a $19 billion segment for them it is a very strong brand within the health care industry especially in diagnostic imaging. now, i think the move -- does it make sense you know, obviously that's for ge's board to decide but i think that health care unit will remain competitive

they have a strong market position in the diagnostics world. it looks like it's a good stand alone company. >> where are you on ge richard. i'm sorry. i confused myself. >> as you know, we're not allowed to talk about individual stocks but what you're seeing in the u.s. is increasing examples of companies looking to divest assets, focus on their core business as we move into a more challenging growth market going forward. we're looking to invest in those companies. >> thacnks, brian >> programming note. you don't want to miss this. ge ceo coming up on "squawk on the street" later this morning ge announcing it's going to spin off its health care business we're going to have more on ge in just a few minutes. plus, tech and intellectual property front and center in the trade war with china stephen roach with us on what it

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♪ president trump slamming harley-davidson yesterday and this morning they said they would move out of the uned states to avoid the retaliatory tariffs. president trump said harley-davidson would move much of their plant operations in kansas city to thailand. that was long before tariffs were announced hence, they're just using the tariffs/trade war as an excuse shows how unbalanced and unfair trade is, but we will fix it you're going to see margins squeezed there one of the great china hands will be with us when we return stephen roach is going to join us we'll talk markets, the economy, and of course china and what these tariffs may or may not

mean at the top of the hour, is $80 oil on the rise? dan yergin, he's going to be our guest. we'll talk to him about opec's move to raise output and ase head to break, look at u.s. equity futures this morning. back in a moment

♪ good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square among the stories front and center, the s&p 500 getting a change the company comes -- the move comes because dr pepper snapple is in the process of merging with green mountain. they will be replaced in the mid cap index by drug maker exelixis a ruling on whether uber can

keep operating in london they overhauled their personnel with objections. china is cutting tariffs but not ones imposed on the u.s. dropping on animal feed products that come from five asian neighbors. among them soybeans, the largest agricultural import from the u.s. all this seen as they want to boost foreign commodities with the trade dispute with the u.s and big breaking news this morning. ge's going to spin off its health care business as part of its latest revamp. morgan brennan has more. >> what a morning it's been. take a look at shares of ge right now. they're up about 5% pre-market on this news investors, wall street have been looking for this longer term plan, this longer term strategy to be unveiled for the last couple of months finally getting it this morning. a lot of headlines here.

ge of the future ge says it's going to be aviation power and renewable energy business. it's going to spin that ge health care unit into a stand alone company over the next 12 to 18 months it expects to monetize 20%, distribute the remaining 80% of that health care to shareholders tax free it also is going to fully separate ge baker hughes over the next two to three years. that's exiting that stake it has had since that merger situation last year. now, in terms of the dividend and dividend plan because that's been another big focus, plans to maintain current quarterly dividend at that time, new ge health care board will decide that company's dividend policy also at that time the ge board is expecting to adjust the ge dividend with a target dividend policy that is in line with industry peers some other financial details here, clear path to reduce industrial net debt by $25

billion. also says going to focus on higher cash balances, less use of commercial paper. also want to point out ge capital. it's been a drag on the company and been an area where we've seen some unpleasant surprises, if you will. says further risking ge assuming approximately $3 billion capital contribution to ge capital in 2019 this taking shape under ceo and chairman john flannery a year after he took the helm. investors have been looking for this for awhile. we're going to be getting more details on an 8:30 investor call eastern. then john flannery's coming on set later this morning >> so if i own ge shares right now, if our viewers own ge shares right now, they will have a ge share and also eventually a ge health care share >> it would appear that way. i expect we'll get more details as the morning goes on

i'll be bringing all of those headlines to our viewers as we do >> often what they'll do is do an ipo of the 20% stake in the division and then spin off the 80% afterward. and that gives -- that allows to get the valuation. >> right >> the other thing i would note, in many ways if you were going to break the company apart but not fully, this makes sense. i think a lot of folks would have expected it to play out this way because power and aviation have a lot of synergies when you're talking about manufacturing and production in many ways it does make sense to keep those together those are the two biggest businesses >> can you help answer one debate this has been going on online all morning. and e-mails have been coming in and people on twitter. we had talked about just a little bit of monday quarterbacking but the idea investors missed this or management didn't tell everybody properly what was going on which one do you think it is >> you mean longer term? >> you see the chart -- say see

something is terribly amiss here it looks that way from the outside. is terribly amiss? >> i think at this point you're looking at a company that has been struggling and has new management in place. new management in place for a reason i think one of the areas that i've heard a lot of finger pointing at is, for example, the insurance reserves how could you miss $20 billion-plus in charges for that long-term care piece of the company that still falls under ge capital. that being said, i think in general the fact we've seen a lot of skeletons come out of the closet would indicate that, perhaps, this was not a company that was as strong as had been previously indicated but i don't know i'm not sitting in the board room and i don't have those answers. >> okay. thank you. appreciate it. other big story we've been talking about for days now, trade turmoil bubbling up between the u.s. and china this time over technology and

intellectual property. peter navarro called the sharp reaction in the markets yesterday a misunderstanding >> i look at the stock market today and i'm thinking what's going on here when in fact everything is bullish. i think what's going on here is simply some misunderstandings about where this president is headed all this president wants is free, fair, reciprocal trade by taking a tough stand on countries that have high tariff barriers that restrict our investment, that's going to lead us to a better place >> yale university's stephen roach joins us now he's author of "unbalanced: the codependence of america and china. good to see you. thanks for joining us. >> thank you, michelle >> what do you make of what happened in the last 24 hours in the back and forth of the white house on whether or not there's going to be investment restrictions on china? >> well, we've been doing back and forth since the election in

november, michelle so this is just the latest installment. but to have me follow peter navarro who in his previous life is the author of a scintillating book called "death by china" is, you know, very important contrast navarro has been an avowed china basher, a real zealot masquerading as an academic and now a policy maker the case he is making is not a credible case. there are issues that we have with china and you and i have talked with him about them over the last several months on the air as well but the navarro case is really a real fabrication along the lines of the book that he wrote several years ago. >> let me ask you this you've made the case for a long time you know, the president is so upset about the trade deficit with china and you rightly point

out that the trade deficit exists in large part because americans don't save very much and we spend a lot and we have deficits, et ceter so you end up importing somebody else's savings which is what we've done but the converse to that is that over in china, the chinese save a lot, maybe more than they should because the government controls interest rates at banks. and so they can't make that much money. there's so few places for them to put their money they're so worried about having to take care of themselves in their retirement or when they get older, they save much more i mean, there's issues on, dare i say, both sides with these countries that have incentivized this description between the two. how much could be done to alleviate the situation? >> your outlook on chinese savings is spot on i and others have emphasized this for the long time

and the chinese get it the main source of surplus sa saving is that latter point, the lack of the safety net they fear for an uncertain future they need to address that if they're going to transform themselves into a society. they're doing that too slowly in my view. but the savings rate has come down from a little over 50% to the low 40s and is headed considerably lower they need to absorb their surplus saving to support the consumer-led model and by the way, if they deliver on the consumer-led model, that's a huge opportunity for us if we were really focused on trying to get a piece of that market rather than trying to restrict them from our markets >> stephen, how would you do it? given how upset you are, it seems, about how the administration's approached it >> what i would do, andrew, is really focus on this issue of

market access. china like it or not is going to shuft its model. it's doing it slowly from an economy that focuses to an economy that increasingly focuses on consumption in doing that, they're going to grow consumer demand for goods and services in my book, i estimate that the tradeable growth opportunity in chinese services is going to be between $4 trillion and $6 trillion between now and 2025. if we were to get a bilateral investment treaty signed with china that would give us access to those markets, we have the greatest services economy in the world. shame on us if we couldn't get a great -- and capture a great market share of that that's the way to make america great again. not by trying to resurrect industries in manufacturing that have long been lost.

>> so stephen, it's richard here so this year we've seen the chinese economy actually hold up much better than people anticipated. and the chinese have shown a consistent ability to focus on the quantity of growth and to achieve on their growth targets. there's been a lot of talk about them focusing more on quality of growth we've now seen requirements cut again. to what extent do you think if we see chinese growth slow, we'll see more being more pragmatic in their approach and a limited agreement on the deficit? >> well, always good to talk to you, richard the quantity quality tradeoff is something that has been debate ed in china for the last ten years. you're right two steps forward, one step backwards. economic risk and turmoil they back off from quality and go back to quantity and that seems to be what they're doing right now.

the good news is they have made some progress on the quality front. and the so-called supply side initiative of the government are very much aimed at productivity, efficiency, and they're not the threat that lighthizer and the president like to portray. this is a perfectly legitimate effort by an economy that's r p reached the middle income status to avoid the middle income trap. and the focus on productivity is about the improved quality of the chinese growth experience. >> stephen, thanks so much going to lose the window here. thanks for joining us from boston >> thanks. coming up when we return, we're going to speak to venture capitalists about the moves in the white house and where they're putting their money to work check out futures right now as we count down to the opening bell on wall street.

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welcome back to "squawk box. worries about the white house taking action against foreign investments sending a shock wave

through the markets. >> there's no plans to impose investment restrictions on any countries that are interfering in any way with our country. this is not the plan all we're doing here with the president's trade policy is trying to defend our technology when it may be threatened. this whole idea that maybe there's going to be investment restrictions to the world, please discount that >> okay. joining us now to talk more about tech trends and venture capital -- good morning. >> good morning. >> there's interesting stuff on ai and blockchain. speak to this issue. how much is the valley worried or maybe not worried, happy about the idea that the u.s. is going to prevent or try to prevent china and others from

taking our best kept secrets >> i think right now we're listening to the shorter term sound bites and wondering if this is about good politics. it's certainly not about good business, necessarily. so right now it's a question of is this a long-term trend, and if so what's that going to mean for our businesses many of those will move offshore or they'll adapt looking for other ways to adapt to -- >> how much do you worry about the businesses you've invested in their technology effectively being stolen by china. >> intellectual property has been an issue for decades. i've been in this business for decades. it's always been a question. and in fact, china's gotten much better in many respects around intellectual property protections than in the past however, we're trying to always fight that battle. but that's not our bread and butter our bread and butter is about driving innovation and putting that out as our -- our tentacles

out as far as we can every one of our companies is not only playing in china but all over the world >> when you looked at ai -- and people talk about an ai war going on between the u.s. and china. where is china relative to the u.s. right now >> i think the u.s. clearly has an edge. we have a lot of the intellectual fire power behind the innovation and they've built an incredible team around that so for china, they're building from the ground up from an education perspective and they're behind for the u.s. to maintain that edge, it's about innovation and not just about trade battles. >> you hear alibaba and tencent, for example, when it comes to ai are in league or very close. how much of that is a function of what they've done on their own? how much is stolen >> how much of that is about hiring u.s. talent and taking folks from the u.s. back to china? >> and how much is china never

let us in very much so therefore they tried to force a home grown version of what we could have done cheaper and faster for them. >> for china a lot of that hasn't been around driving intellectual property. it's been much more around manufacturing. it's been much more around the trade secrets that we talked about. the ai game is a relatively new one. just because you have a couple of companies that have been competing doesn't change and does not have great implications in the trade wars much more about politics >> one counterpoint i've heard is the fact of having 800 million people with smart phones, the raw material so s so deep in china. therefore you can kind of teach whatever applications that much better. >> that's a great point and great question, how data's going to play out. y how you use your data is going to be affected >> you're invested heavily in

blockchain horowitz, they just announced a blockchain fund just yesterday are we dare i say is this 1999 is there a bubble going on in this space >> let's think of blockchain in a couple of ways you have an asset class. that has a whole host of implications for everything in the financial institutions and how they think about their business we're thinking about it as a technology and infrastructure for how businesses are going to be theiring information. and we're barely in the first inning. >> are you relieved to see interest rates going up at all in that i think in your sector you must have dealt with a lot of tourism money in the space. because they couldn't get anywhere for the longer haul plays, the more speculative stuff. because when you're not getting paid, you do stuff you wouldn't otherwise.

if you start to see interest rates, you're going to wash out some of those johnny-come-latelys? >> well, ours is a long-term game it's hard for us to be and even for our investors to playing jumping in and out we're ten-year funds so you certainly have times where people are chasing yield and chasing higher returns that's when venture capital starts to see a lot of capital >> let me put it in a different context. masa-son >> yes >> and maybe another 200 coming if you believe the speculation will this end well or badly? >> we're a cyclical business what comes around, goes around but for early stage venture where we are, we're fairly insulated from that game we want it to be investing in all of our companies >> we've seen record flows across the industry into private equity over the last few years there's competition for the good

assets as they come up when you think of that cyclical business, where do you think we are in the cycle are you finding it still easy to find those attractive assets are you finding them at the right price? >> the biggest challenge in our business is finding technology innovation what really drives our business is how well the u.s. is doing from a technology innovation perspective. not necessarily from the money flows. though you certainly see the impact on the funds in the cyclical basis what drives our business is how well we're doing when you ask that question about ai, it was a brilliant question. that's what really drives innovation today >> got to keep him around. >> there you go. >> thank you ch> coming up, our guest host riard turnill tells us where to put our money to work in the second half of 2018. "squawk box" will be right back. are you done yet?

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welcome back to "squawk box. president trump just tweeting again this morning, quote, we are finishing our study of tariffs on cars from the eu in that they have long taken advantage of the eu's -- u.s. in the form of tariffs and trade barriers in the end it will all even out and it won't take very long. european automakers have gotten hit recently they're lower again this morning. quick look at the futures this morning let's show you what's going on right now. it's been kind of a little bit of a weird ride. dow off about 13 points. nasdaq looking up about 14

poin points want to get some final market thoughts from our guest host richard turnill of blackrock for this hour. is there a way to trade this i know that's not your business, but there are people that woke up yesterday trying to figure out what's going on. what do you tell those people? >> for the vast majority of investors, trading is the wrong thing to do. you should be investors, not traders. you should focus where you're being paid in the market and where you need to have resilience what does that tell us today u.s. equities, attractive strong earnings growth and balance sheets emerging markets we're getting stronger growth. short dur race credit looks

attra attractive. >> we have paul tudor jones on a couple weeks ago have you seen it >> you have not. >> i'm curious about all of these socially minded etfs and whether you think that's real or it's all made up >> it's real you're seeing huge client interest now with investing. so what that means is whatever the historic data tells you, clients are carining more about these going forward. we're looking for resistance in the portfolios i think this is going to be one of the characteristics you need to pay attention to. >> thank you, richard. good to have you on. much appreciated coming up, oil on the move ihs market vice chairman and pugh li pulitzer prize winning author joins us we'll see if he feels the same way after opec's move. here's the mixed to flat open on the futures.

"squawk box" will be right back whoooo.

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company has left tech wrecked stocks like netflix and twitter bouncing back. we have a list of the biggest movers and decision day for uber. we're expecting the decision from a uk judge that will determine the ride sharing's status in london "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box. >> good tuesday morning. welcome back to "squawk box" right here on cnbc we're life at the nasdaq market site in times square lots going on this morning i'm andrew ross sorkin with michelle caruso-cabrera and mike santoli. want to get a quick check of the markets, show you what's going on dow off about nine points. ten points right now nasdaq up about 16 points and the s&p 500 off by about a point after what was a wild ride yesterday. we'll also show you treasury

yields the 10-year note at 2.73%. the 2-year 2.525%. general electric is spinning off its health care business as a stand alone company and will unload baker hughes. they're looking to focus on power and renewable energy which accounted for more than half of ge's revenue last year been climbing all morning on this news. ge ceo john flannery will be joining "squawk on the street" this morning you can see it at 10:30 a.m. eastern time right now let's bring in brian langenburg he joins us on the squawk news line what do you make of this news? >> well anticipated. both because you have them involved and their whole pattern has been to break off under

assets or simplify company structure. so this is not a surprise. this is resolution and part of the path we were expecting anyway >> so for viewers, an investor in ge you tell me it's not anticipated but the stock is higher than 5% why is the stock reacting so positively >> well, two things. first you have a stock that's been depressed enough, there's a little bit of relief and also while this was anticipated, it's never done until it's done. so this won't be a shock obviously a 5% move is nice. but in the scheme of things, we're talking 50, 60 cents, way below my upgrade last december i have to be patient. >> is there any chance we'll look back and say ge was forced to part with one of its better assets in health care that basically a long-term growth story that they're sort of untethering it right now because they feel lake like they have to simplify the company >> that's a great question

if you're a current ge shareholder, when spun off, there's no change. we just took a slice of the pizza but we still own that slice. it doesn't hurt you at all there's a misconception about their health care business being a high growth business if you look at the core growth over the years, it's been a gdp-like grower. there's nothing wrong with that with healthy margins and returns on capital but it's not this fast growth business it's a steady growth business. as a shareholder, you still own it there's no change unless you choose to share your news after it's spun out. >> what about the dividend when you read what you're putting out and we're going to get the call later on this morning. there's going to be a decision on the ge health care dividend once that company is formed and then another discussion about what's going to be the dividend on the remaining part of the company. what's your assessment for viewers who a long time ago got in the stock, where do you

think this is going? >> let's think about the overall dividend when you take that piece of ge health care out, there's a portion of the cash flows going into e the dividend from health care you should have that piece the question becomes, okay, you also have the oil and gas business they're going to unload that that would have been supporting a little bit of the dividend but not a lot. now, i would say, okay why is it looking to sell rather than spend the answer would be that oil prices are up. i wouldn't be surprised if the dividend on the remaining ge gets cut not only for health care but also for the sale of baker hughes there's not reason not to take it lower >> just to follow up on that, because ge has said that after the health care spin they'll bring the dividend back into line with its industrial peers do you think that means in terms of yield now the other industries yield between 2. 5%.

or how much of earnings they pay out in dividends >> well, there's -- i'm snnot se how to read that statement let's start with that. if i'm john flannery, i would take it down in terms of yield what it should mean is relative to some kind of percentage or long-term payout ratio on the earnings of power in the rest of the businesses however, since power is performing to poorly and earnings are depressed, but that's a fair question >> brian, help us -- i don't know if we'll get to end the debate it may go on for a long time will history look kindly upon jeffr jeffrey emultz >> hell no. >> that was a soft question, right? what we've been discussing throughout the show has been much tougher

how much did jeff know and when did he know it >> of all things i was having dinner with a former ge executive last night you know, it's a lot easier to get answers when someone's not there for a long time. i think there's a pretty good body of knowledge that it's not that jeff wouldn't have known something. but if the emperor doesn't want to hear bad news and wants to look at things a certain way, he or she is going to do it and that's what has happened >> is that a good faith professional optimist or is that hide the bad news? >> more of the human condition i'm not his imme-- he thought wt he thought people can frankly talk themselves into a lot. i think that's what happened here at some point did he realize things were going wrong?

yes. i think in the last couple of years, you would think but by and large, i just think it was bad decision making and consistent bad decision making >> brian, thanks so much >> you're welcome. >> reminder, interview with ge ceo john flannery this morning on "squawk on the street." >> he had a i ddefinitive answe, hell no. without even a beat. in washington mixed messages from white house advisers on policy but this morning the policy doubling down on criticism of harley-davidson. kayla tausche joins us now she's got more on that story good morning >> good morning. the president with a deluge of tweets on trade-related issues but harley-davidson said the cost of tariffs would shift productions overseas yesterday now president trump is calling their bluff noting the company would move its kansas city operations to thailand before the tariffs were announced

last night a rally in south carolina home to boeing and bmw plants, trump defended tariffs as a means to an end >> so i told them, here's what we're going to do. until such time as you straighten out your act and you let us have fair >> trump also backed his adviser peter navarro who said the u.s. was only looking to hit china with restrictions. not other countries. >> the only thing that's going to happen in the near term is on friday the treasury department is going to report to the president about the issue related to china that's all that's going to happen with respect to other countries, there's nothing on the table >> but that put the president at odds with the treasury secretary. reports of targeting china were fake news saying there would be a statement warning all countries trying to steal u.s.

technology despite the mixed messages, the white house has a saturday deadline to introduce those restrictions we're expected to be met with more vitriol from china. >> thank you for that. by the way, do we think -- what do you think is going on inside the white house this morning or even last night after all the back and forth did you get any sense? >> i think that there is a question about exactly what's going to happen on friday. the treasury secretary and the press secretary kept pointing to a statement that would be coming out talking about the value of u.s. technology. meanwhile, peter navarro seems to be talking about this deadline that the white house put in place in march, reiterated again in may specifically dealing with china, specifically dealing with investment restrictions. i'm told there are still revisions within the administration about what kpktly those look like. maybe they would be able to reach a consensus.

>> is anybody talking to each other? does the president call up mnuchin after the puts up me tweet and says what are you doing, why are you saying it this way does that even happen? >> i think so long as the market is calmed, everyone goes to bed happy. they're talking to each other, talking over each other. they're trying to share their views with the people in the room they think will help them get their message across there are meetings between the principles on these multiple times the week when they're trying to finalize these decisions. there was not a meeting yesterday. so this is basically just a defense mechanism to try and calm the fears in the stock market yesterday >> thanks, kayla >> let's move to another big story we've been talking about, what's going on with oil our next guest joins us from the gas conference dan yergin lots of hot air where you are?

>> yes, an obvious joke. this conference only takes place once every three years and it's really fascinating to see the emphasis on the growth of natural gas an the lng business and the united states has what we call the shale gail really changed the gas business in the united states making it a big player >> tell us what they're saying about trade there specifically because wilbur ross has long talked about using natural gas to talk about the united states and our ability to export it >> certainly that has been a key point. the chinese they talked about putting tariffs on u.s. oil. they did not talk about tariffs on u.s. natural gas. this is seen as one of the major ways to that energy balance. and also because china is going to be the largest importer of natural gas next year.

so i think it's going to be an important element in the trade balance. the u.s. is one of the two top exporters of lng in the world which is something that was not imaginable >> what's your assessment of the crude market here as looking at opec >> the market sort of had to figure out what was actually agreed upon. but i think becky was saying before we went on, those exporters -- the key exporters were looking at that key number of $85 that was likely in the summer they realized there were going to be a lot of problems with that including here in the united states said these prices were causing us great pain. so these countries, saudi

arabia, russia, united arab emirates, kuwait there's still big risk out there. one is how fast venezuela goes down second is are these sanctions on iran going to be put in place more quickly if they do, they're going to take a lot of oil out of the market then you think things like an accident in canada so the market is still tight, but the decision was made that opec is to basically get a million barrels a day roughly into the market beyond what was there before and kind of -- and let me just say, what it also means is the period of the oil collapse is well behind us now >> hey, dan, end this debate it's my favorite question. we've been talking about this saudi aramco ipo if when ever. yesterday we had tom farley on, former head of the nyse. he'd been trying to compete for that ipo we also had john kilduff on.

mr. farley says we will see something in 2019. kilduff says never what do you think? >> i think it's still on the agenda for 2019. the crown prince h made it one of his very first major niche tiffs. so in some form, i think at this point you have to say it's going to happen in 2019 but there is that phrase they use when it's the optimal circumstances. >> got it. thanks, dan. coming up when we return, stocks on the move ge trading higher on the spinoff news won't help the dow today we'll talk strategy after the break. plus we're going to talk about yesterday's tech wreck bouncing back after losses of at let yteay ay tunedrd you're watching "squawk" right here on cnbc hi, i'm joan lunden with a place for mom,

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welcome back to "squawk box" on this tuesday morning. we're having a big debate in the commercial break we will do some of that on camera in a moment futures right now, dow looks like it would open up about two points nasdaq looking up 22 points after it was a down day for tech names. and the s&p 500 up marginally as well joining us now on the market is

chris isse and brian belski. good morning to both of you. >> good morning. >> morning >> did you guys do anything yesterday at all i mean, i know everyone says no, we're not supposed to be short-term but has this trade talk at all changed your outlook >> it's a little bit more of the same it's gathering a lot more momentum than i think most people thought at the begin og the year but not certainly in the last four or five weeks i think this was really expected each week we're going to hear something around this. now you're going to start to hear whether or not this is going to affect corporations putting money to work. that's the key before, it was a lot of talk a lot of negotiations. all about whether or not the broader geopolitical spectrum is moving forward or going backwards. and now as we head into second quarter earnings, we'll start to hear whether or not people are pulling back at all on capex and things like that >> and your suspicion is that they will.

>> i think you're going to hear a little bit of that, but you don't just stop plans on a week-to-week basis with what's going on right now you have three, four, five-year outlooks we expect capex to be moving forward and probably in the the economy and fundamentals and all that is not necessarily dented by what we've seen recently >> correct. >> what do you think correct? >> correct at the oend end of the day, the main question we receive is how do we combat this? right? how do we combat this volatility and week by week, day by day, we continue to come back to high quality investments. the bottom line to that is the most high quality investment in the world are u.s. equities. period because of the stability in earnings, because of where the operating performance is, and cash flow. this day-to-day binary action type of investments is not the way to run money

now, from a quarterly perspective, earnings continue to go up i think the main thing people are missing, ladies and gentlemen, is that earnings are going to be at more of the price this year. nobody's talking about that. all we talk about is a ret ricket and tweets and all this stuff. we're looking perspective. we're not believing in the fundamental condition of investments anymore. we remain bullish. >> it goes back and forth on yooer to year. >> doesn't go back and forth on year to year because 2017 multiples went straight up. we've not seen an area where it went up like that. we think there's a general lack of perspective and perspective matters. that's why, you know, chris and i are talking off stage aub investing. about longer term. and the institutional world day by day >> cable news too.

>> with apologieapologies, i wao pause. i know you want to think long-term. i want to tell you what president trump is tweeting at this moment. i know this is completely antithetical to what you're trying to say. but it is important on the trade front. this on harley-davidson. he's back again on the topic he says a harley-davidson should never be built in another country, never their employees and customers are already very angry at them if they move, watch. it will be the beginning of the end. they surrendered, they quit, exclamation point. aura will be gone and they will be taxed like never before >> this is a company that with lots of operations in -- >> talk amongst yourself >> -- it'd be hard to strip the all american aura away from harley-davidson as a product, i'd have to say. >> this is a good example of

talking about whether physical location of something or the full supply chain. that's why this is so difficult. >> nobody buying a harley in the united states is going to get one built somewhere else you're talking about local markets. >> that's right. but is the end consumer going to know where it's actually built >> now they might. >> are they going to change that behavior the answer is no just because they make it in mexico, doesn't really matter. >> corporations are a lot more plexable than most people give them credit for. it's about operating leverage. and if you can control operating leverage and if there's one input on you you can control, you're going to go to another one. >> we got to go. you think if a harley was made in mexico, it'd sell just as well i'm not sure about that. >> i live in minnesota if you go to wisconsin, are you really going to look at the tag to see where it's built? >> wisconsin and mexico aren't the same thing in this current environment. you know that. >> i know that i'm trying to prove a point. if you want a harley, we're buying a harley. period >> thank you, guys >> i don't know about that

anyway, thank you, guys. coming up, apple ceo tim cook speaking out about data privacy and how he decides when to take a stand on a political issue. we'll show you what he said next

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apple ceo tim cook speaking last night at a fortune event in san francisco. he talked about the decision to speak out or not about political

issues. >> there's no formula about when you speak or when you don't. but for -- the way i think about it is, is it something that apple has a special expertise on because i don't want apple to be another talking head right? we should only speak when we have certain knowledge to bring to the subject what that means for us is we typically speak about education, about privacy, about human rights about immigration and about the environment. >> cook also talked about the spread of fake news. he said for apple news is the app for human beings and breaking news and analysis comes from reliable sources selected by apple news editors. i like that. real people. >> those are a lot of topics

i mean, that's almost all the hot issues, right? >> at the moment >> yeah. coming up, new survey data on president trump's handling of the situation in north korea that's next. plus we're going to head to london where we're awaiting a judge's decision on whether uber will be allowed to operate in the city and as we head to break, look at u.s. equity futures at this hour whoooo. looking for a hotel that fits... ...your budget? tripadvisor now searches over...

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good morning, welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square among the stories front and center at this hour, shares of lennar, they are one of this morning's pre-market win perps beat estimates on the top and bottom line for the second quarter. new orders soared more than 60% as average prices jumped more than 10% another stock on the rise is gw pharmaceuticals gw won fda approval for a new epilepsy treatment what's notable about this

particular treatment is it's the first cannabis-based drug ever to win fda approval. a lot of people are going to be watching that. we'll be getting the latest reading on consumer confidence later this morning expected to come in at 128.1 for june it's time now for the new results from the cnbc all-america survey steve leisman joins with more on president trump's handling of north korea. >> and foreign policy more broader. first the overall ratings of the president -- the rating on his presidency and foreign policy. 800 americans polled across the country. june 16th through the 19th there's the overall rating as we reported yesterday 41% approving of his handling of the presidency on foreign policy, not a whole lot different. more or less in the margin of era there. 43% approve. do people agree with the idea of

negotiating with north korea and on the next screen you'll see 58% agree with it. 27% disagree so positives there for the president on his reaching out and meeting with the north korean dictator kim jong-un. let's look athnext thing is north korea a serious threat? and what's happened to that, we've come off the boil as a nature in terms of how concerned we are with north korea. using the april survey, we're down from 64% saying it is a serious threat and saying not much up to 43%. so you want to know, was the summit a success what do americans think? 55%, masmart americans right? saying it's too soon to tell and 15% saying they're unsure. probably like most people on this panel right here. now, on the issue of speaking of

threats, let's talk about economic threats do canada -- are canada, mexico, and china, are they economic threats? we have asked this question consistently >> we've asked if canada is an economic threat? >> back in 2016. >> wow so around the election >> that was smart, wasn't it >> yes >> what led to ask the question then >> perhaps the rhetoric of a certain candidate at the time. what's interesting, i'm going to describe this for people on the radio. they're driving. focus on the road and i'll give the data the percentage of those who see china, mexico, and canada as an economic throat has declined china's gone from 49% of the public thinking they were an economic threat down to 25%. mexico 27% to 15%. and canada, yes, there are still 5% who think it's a threat >> and it went up from 4% to 5%. >> that would be substantially in the margin of error the point is that to me the huge

number -- the huge amount of rhetoric from the president on this issue does not seem to be registering with the broad public on this of seeing him as an -- however, you do need to keep that in context of the next slide which asks do you agree with the president's policies of renegotiating trade deals? and people like that 52% approve. and that's up a little bit 30% disapprove by a 5-3 margin, ty approve of renegotiating the trade deals. however, i don't have the numbers here but when we ask about tariffs and taxes, there's still a bit approving it but less. they don't like that idea. when you go from the conceptual to the specific, that's where you get some dropoff in support. so that's the story. he looks like he did well on the north korea thing. but it didn't have a whole lot of help to the overall either foreign policy or presidential approval rating. >> you imagine that will change,

if in fact, a deal is struck >> it's a big deal but i like the way americans discerned on this issue. the double nickels, the 55 who said it's too soon to tell to me that's the smartest assessment of what happened in north korea. michelle, you agree? >> yeah, no, that's my assessment as well thanks, steve. good stuff more trade topics this morning. harley-davidson says it plans to shift production overseas to offset eu tariffs which prompted response from president trump. yesterday he said he was spriessed harley was the first to, quote, wave the white flag this morning he's tweeting again about the issue saying, earlier this year harley-davidson said they would move much of their operations to thailand that's long before tariffs were announced. hence they are just using tariffs/trade war as an excuse shows how unbalanced and unfair trade is but we'll fix it then he tweeted again.

i chided them about other companies being too high companies are now coming back to america. harley must know they won't be able to sell back into the u.s. without paying a big tax president trump just tweeting again about harley-davidson. a harley-davidson should never be built in another country, never. their employees anomers are already very angry at them if they move, watch. it will be the beginning of the end. they surrendered, they quit. the aura will be gone and they will be taxed like never before. joining us now to discuss trade and more, ceo and co-cio of evo capital. goo good to have you here. >> hi, michelle. >> we talked about the eu not necessarily benefits from this move by harley tell me how you're thinking about this >> i think the narrative is slightly the reverse so originally the eu countertariffs were put in place

to implicitly go for republican congressional areas and where production was made there. harley is a prime example. what's interesting today, i was looking at the european press. in particular the german press this is a great victory for the eu it's not really. i actually think despite the tweets we've seen from the president, i think this proves his argument to him that tariffs work because actually if you think about the german automakers, what's the sensible route for them to take full production capacity here. >> right just move production here. and the president understands that very well >> of course he does he absolutely understands it and i think that's what you will see. you have to see that let's take the example of the german automakers. they're in real trouble, actually you've got the diesel-gate

situation. then you have 494,000 exports to the u.s. of german cars. then you add brexit which is another 769,000. there's only 258,000 sold to china. so look at that huge number of german cars that could be facing tariffs. particularly if there's no brexit deal. so they've got to start shifting production and actually that, you know, as an aside, i actually -- you would expect germany side by side with china and has been for a long time in my opinion has been benefitting from the eu in the mercantilist policy. the german manufacturers understand this. at some point you're going to start to see what the japanese have announced and even a couple of chinese companies have announced production being -- >> so this is working? >> it's going to be up and down. it's going to be rough but i think that there's an --

>> why is it going to be rough if -- >> it's working the way the president wants it to is what is saying >> i think so. i think the europeans -- rather like the president's tweet is misdirecting, i think the europeans are misdirecting by saying this is a victory that wasn't their intent. >> do you get frustrated when the president gets angry that harley-davidson is going to build in the eu, when to your point it proves his point. right? if they're going to sell to eu citizens and they want to avoid high tariffs, they produce there. right? he gets angry when they do what is the obvious converse to what's happening here. >> unfortunately, with the case of china, the government can speak on behalf of industry. in the case of the european union and bear in mind i think german cars were one of the prime targets. brussels can't talk on behalf of industry and germany can't talk only industry can talk on behalf so the news flow from there will be much more piecemeal than what

we're seeing at a governmental level. >> so if we play out your world as you see it, what does that mean for the macro environment for world gdp, et cetera >> i'm actually optimistic. >> because >> i think in terms of the trade situation, despite all you're seeing, every time you see a market swoon, there's a comment coming out from the administration here. we didn't mean restrictions on investment that comes from navarro. i think we end up with a more open china in terms of trade and i think you will see something come through at the company level. it makes too much sense. if you were the ceo of an automaker, of course you're going to shift production here and make the engines here. >> nicolas, we want to thank you. >> pleasure. >> going to talk to mr. faber. >> yeah. ge spinning off its health care

business as part of the latest revent david faber joins us what you got >> obviously a big day for ge as it sort of remakes the company and tries a new attack which is to underpromise, perhaps, and overdeliver. we're going to be speaking to john flannery, the company's ceo not too long from now right here from the new york stock exchange a few notes this morning health care is the key asset that is being sent into the public markets eventually. they're going to monetize 20% of it that will have the effect of raising some cash much needed for that balance sheet at ge as they seek to delever on the announcement of health care as on the balance sheet ramifications overall and what the company's announced this morning. in which they're going to be saying this morning. remember this is a company that

as a result of buying back $26 billion worth of stock in 2016 and 2017 added debt to its balance sheet at really no particularly good time now they're trying to take it the other way. another $500 million in costs is what they're also trying to take out. that is beyond the $2 billion in cost reductions they already had in sight for this year for 2018. and my sense is they hope to actually out-perform on those numbers again to this idea that perhaps this is a company now that is going to be underpromising as opposed to as seen in the past certainly under the leadership of mr. immelt over-props sometimes and not deliver. health care probably dispatch the next 12 to 18 months, it's not something that happens overnight. again, 80% of it, is it a spin or a splitoff or essentially 20% think it's monetized through the selling it into the public

markets in some fashion. and then 80% is given to shareholders, most likely. the key is then you have a -- a really much more focused set of businesses they seem to make things that turn to put it very simply whether it's turbines as they like to call it in power or for what really is of course a jet engine and renewables. that becomes the company what becomes mr. flannery's focus? well, turning around power has been the case. that will continue to be turning that -- then it's about reducing ge capital significantly from here and that 85 billion or so, call it 42 billion of kind of bad insurance claims most of it made

of long-term care liability, yes. >> mike santoli asked a good question earlier a lot of people way back when bought the stock for the dividend what's left of the company, what that dividend is going to look like they've used this to match peers. do we know is that a measure based on a yield going to be a capture of cash flow do we know what the definition of that is >> you know, i don't know a number specifically. but it would be a payout ratio that is in line with its industrial peers the same way that health care once it is removed from the company and the dividend will not get reduced, ge is saying, until it has been separated. that being health care going to have its own dividend commensurate with what its peer group has in that industry and then, yes, you're going to have an overall reduced dividend, michelle, given what it is now. but i don't know what the number's going to be

it's based on a payout ratio the hope is they can, you know, be freer with capital allocation at the new health care company, newly public health care company certainly perhaps spending more than they otherwise have in the past >> david, what kind of a -- i imagine it's a bath, i don't know did nelson peltz take on all of this >> well, they still own it they're down significantly i'd have to go back in my large file here to remember their average cost, andrew i think it's high 20s, low 30s but it's -- yes. this has not been their finest hour now, they are still in there and he's on the board. he's one of the co-founders of trian. and they hope eventually they're going to exit this thing in the distant future with a profit i think they still believe that is a real possibility.

>> do ethey think that immelt suckered them into this investment if you think about this, it was really them -- from my time perspective thinking back to the moments, that was a singular moment when they made that big investment and everything seemed to turn the wrong way right after that >> yes i have their presentation in here somewhere i agree, andrew. they saw it becoming a $45 stock at the very least. i don't want to speak for them i think at some point we'll probably get the opportunity to ask either nelson peltz or ed garden to your point whether they got suckered. but i do think that there was a feeling that certain things were misrepresented i think a separate story not having much to do with what's going on today with ge is those long-term care liabilities which really spooked the market. and continues to because it's a liability even though they tell me they've

looked under every rock and they don't believe there's anything we'll ask mr. flannery about it. but were they understated for years? were they knowingly understated is the question. >> thank you john flannery is joining david on "squawk on the street" later this morning you don't want to miss that. and clearing the fog on london a judge rules later this morning on uber. we'll get a live update after the break. "squawk box" will be right back. - 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.

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we are expecting a decision about uber's future in london. we are there waiting on the ruling >> good morning. i just set the context real quick. last year transport for london was not fit and proper to operate in the british capitol they've laid out some of the changes they've made about the wait they reported incidents about the police to the maximum hours for drivers and said they got it wrong. the message is we're changed we're a more mature company and able to operate in london. now i've come out of court and the two sides are thrashing out details about a potential license. tfl the regulator wants conditions like training drivers. uber agreed with some and opposed some uber proposed a shorter license rather than five years, which is the normal contract. they said 15 months which will

let us prove we can do it. london is an extremely critical market 3.2 million riders here. london has become an increasingly big part of the international expansion. next year it's hurdling toward an ipo it needs to show it can justify it back to you in the studio. >> thank you for that. when we return, stocks like netflix and twitter bouncing back after yesterday what you can expect when it opens today. what's critical thinking like? a basketball costs $14. what's team spirit worth?

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welcome back to "squawkbox." joining house is michael ho holestein. good morning to you. you saw some of these tech names really get clobbered what is your sense of what is going to happen today? >> well, we think any time you're making an investment decision based off mixed messages coming out of the white house, it's maybe not the most prudent strategy from an investment standpoint. we take a more bottoms up view

we think the fundamentals of the sub sectors and the companies, specifically the ones i cover in the large cap world of amazon, apple, and netflix remains strong we think it will prove to be a buying opportunity as we've seen in the past. >> how do you explain netflix gd yesterday? >> i think there's a couple of things you know, in addition to the chatter out of the white house, just the fact that the stock trades at a pretty, you know, ridiculous evaluation in some people's minds not necessarily in our mind. we continue to be positive on netflix. i think that can weigh heavily any time there's a wrinkle in the market, there's going to be more beta around that stock, in particular. >> i wonder if general that's the thinking that might, you know, the group in general you actually have no real dispute about the strength of the fundamentals and the large consumer internet and tech companies. it's a question of what you'll pay for them

>> i think that's right. you have to look at what the opportunities are for future growth over the next several years. you have to look at specifically what the potential growth rates are and focussing on netflix if you look at the average eps growth that is built into our model for the next three years, we're modelling 75%. so sometimes you look at the evaluations and they seem ridiculous again, you know, a multiple of, you know, 70 times 60 times whatever it might be off next year's eps isn't that crazy when you see those kinds of growth rates. >> given apple's exposure to china, both on the manufacturing and selling side, how do you think about that given the trade issues >> well, there's no question it's a global economy. we have to certainly take that into consideration but i think ultimately what will drive apple's stocks over the next 12 months is how the iphone launches this fall iphone 10 was a bit of a disappointment we'll see what we're calling a

wider array of next-gen devices coming over the next few months. >> michael, the music is playing. we got to go thank you. re."coming up "squawk on the an exclusive interview with john flannery can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. 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.

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so you can get the best deal on the right hotel for you. dates, deals, done! tripadvisor. visit tripadvisor.com well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings 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 box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. the consumer discretionary is 10% this year. gaining another 10%.

here what is going on with the futures. dow open higher as of 26 points. as of today, that doesn't general electric the dow would be higher if the ge were in it. but not by much. >> a few points. >> thank you for hanging out, guys. >> fun. >> make sure you join us tomorrow ja "squawk on the street" begins now. ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with david faber. cramer has the morning off the bulls face a new round of trade rhetoric as the president threatens harley-davidson. a historic make over in ge europe