good morning it is 10:00 a.m. in kansas city, 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪ ♪ but i still have found what i'm looking for ♪ but i still haven't found wha i'm looking for ♪ but i still haven't found wha i'm looking for ♪ but i still. good tuesday morning i am carl quintanilla with jon fortt. morgan brennan has the morning off. what an interesting day we have to tackle with us. with us, professor scott

gallaway, and stephanie meadow good morning, guys good to see you both. >> good morning. >> there's a lot happening, there's trade and shares of alphabet surging, hitting all-time high. the ag machine is powering ahead, hoping to offset that potential fine out of eu that we heard from regulators. scott, you've written a book on faang. are you impressed by this quarter? >> their quarter it is awesome to be a monopoly in a growing economy in the time it takes me to do this in my phone, 2 million declare intentions to google who can serve them ads across the entire internet, figuring out how they translate that intention to action, whether it is to take a trip, go to a certain hotel, what car they choose, what jobs they look for. i mean, this is a juggernaut am i surprised no >> my question is were you

impressed? >> they grew core business, 23%, which is cloud basically, 36%, and really smart, called other bets big bets, which is good bank bad bank. they basically said this stuff doesn't work, don't think about it, we're going to break it up unbelievable machine that continues to employ us super nova business model. >> 4,000 new hires in the quarter which is another thing scott, i would beinterested in your thoughts how this sets google, alphabet up. if i'm a young engineer looking at what's hot, google is looking pretty good, vis-a-vis alphabet or facebook or other companies. >> google, second largest recruiter at the school i teach at who do you think is number one, who is the largest recruiter at stern. google number two, who is number one. >> facebook? >> good guess. amazon number one. google grew hiring 17%, grew revenues 23%, which means

they're getting more yield out of human capital. >> interesting i wonder are there potentially dark clouds on the horizon with the eu, not just with this find, small potatoes for google, $5 billion, it is a lot of potatoes, was a footnote in the release. but they're small. it is the behavioral issue that's interesting because the eu argues that google hasn't effectively locked anybody else out of making an android amazon can make fire, but they need to use google apps. if google's behavior changes, others like amazon, like facebook even will have the ability to perhaps make android devices that could get some scale. is that going to perhaps change the game one way or the other competitively? >> well, of course, there are always clouds, always risks.

i think a lot of it will boil down to consumer behavior. when i had an android phone, i went all google apps it just made my life that much easier and i'm somebody that has a tendency to not want to buy into the monopoly, doesn't want to be locked into a walled garden if you will, yet as a consumer for me i made a choice on mayan droid pho -- my android because it was easier google can change its behavior, it can make its platform available to others, but if the consumer wants google, the consumer goes with google. that happened with search. nobody uses bing. >> one of the take aways is the degree the investments are starting to pay off. talks about early stages of mondayitization, youtube, clouds and maps and the mondaopoly, is it worthi

for the innovation we get in five or ten years? >> that's the argument you need big companies who now have replaced government in terms of r&d the question is we don't know what we're missing because we don't know what other companies would have been started but can't get funding. try to pitch a search company to venture capitalists, it won't happen jon, your comment, if they change their behavior. let me ask another question. if you're google and fined $5 billion and that day the stock goes up, do you change your behavior do you change? >> it is threat of 5% of revenue per day of violationgoing forward i think that perhaps gets them to the table, more than $5 billion, one time hit. that could be a cost of doing business. >> that's a great point. the argument i would make is if there's a parking meter in front of your house that costs $100 every 15 minutes and the fine is 25 cents, and 5 billion looks like a quarter to google when

stock goes up that day, what would you do i would bet you would do the smart thing and break the law, continue to lie. >> hire somebody to move my car. what's the equivalent of that. >> but i believe there's no evidence even with the fines that these companies won't continue to do the shareholder driven thing, and that's to continue to lie and break the law. >> going to move on to apple apple's ties to china are exposing the tech giant to escalating trade tensions between the u.s. and china the journal today highlights that iphones are not included in tariffs outlined by the president. one expert said, quote, they should be nervous. this is that lingering outlier do they boycott through state media, is it wrapped up in the debate do you think that's the expectation? >> i think the expectation is twofold. one is coming back to consumer behavior right now, the chinese consumer wants apple phones, it sits in

this interesting world where it is a utility and luxury. if i'm a member of the chinese elite, i don't want to carry a zte phone, i want an apple phone. we don't know, and what i don't claim to be expert on is the extent to which the chinese consumer starts to buy into some nationalist propaganda, decide you know what, i'm going to buy local. >> scott, what's a bigger risk to apple, $1200 iphone x in the u.s. which i guess would sell a lot less, or a slower roll out of iphones in china which has become a lower volume market in a way, the tariff risk is the price of iphones in the u.s. more than the distribution of iphones in china >> that's an interesting question, john i would think likely it is slowing of growth in china investors, looking at shareholders as stakeholders, the growth in china is a number

that analysts look at pretty carefully. if your growth in the u.s. slows because prices go up, it's bad but if your growth in the epi pen of consumers in china, at the end of the day, if you're out of something to say, say china. if business in china slows, that's worse than if business slows in the u.s. >> stephanie, i imagine what would happen if you were to see iphones with tariffs on them, explosion in the secondary market for iphones we already know we're paying a lot if we are buying an iphone product from apple i wonder if the consumer would be even more sensitive if they thought there's a tax on top of that i'm not even going to buy an iphone 8. >> i think that two parts to the question the secondary market is an interesting one, and i do think it is a huge opportunity

on the question of consumer behavior in the u.s. and people being dissuaded by tariffs, you know again, we have this bifurcated economy there are elites that are price insensitive, the economy is growing, people are feeling more flush. if your kid is telling you they need an iphone 8, you're part of the 1%, you get them that. but apple is vulnerable. we've seen companies like samsung and even zte which i referenced earlier, not a hot brand, but people are looking at the phones and saying i can get the same functionality, some of the same capabilities if you are price sensitive, absolutely, there's a risk. >> from apple to tesla we talked a lot about tesla asking suppliers for cash back to cover costs for the 3 company responds in a statement that negotiation is a standard part of its procurement process, with a now stronger position with preproduction ramping, it is a good time to improve

competitive advantage. shares are down in a pretty good take, tesla below 300, awfully close to six week low today, below both the 50 and 200 average. >> i am conflicted i own a tesla model x, love it, think it is a transformative vehicle, think elon musk will change the world i think this company and stockholders are in for a world of hurt. there's a potential cash crunch at the end of the year, and have the ceo and chairman, seems literally unstable some comments he has made on twitter are not fitting of the ceo. i think it is bad news when you look at potential capital crunch and ceo who has gone off the reservation in terms of some of his public communications. >> and how bad are your relationships with suppliers, i'm guessing this was a supplier that leaked the story to "the wall street journal. that's not an accident some guy doesn't get this e-mail, go rogue and leak it

clearly this went up the chain at one of the suppliers, they were mad enough and had a bad enough relationship, again, imspeculating with tesla, that they decided to go public with this i am not an auto industry reporter, i don't know how frequently this stuff happens, but from covering business, you don't besmerj a partner if the relationship is good. >> tesla is not a big company, but elon must i ck. what does it say about the leverage he has or thinks he has if they're making this ask >> i think that he clearly thinks that he has the upper hand in these relationships, and he fancies himself a negotiator. >> him too. >> like another famous person that tweets. big negotiator, thinks he can potentially make a deal here again, i come back to the idea

that you've frustrated your partners, now you're coming to them with your hand out, asking them to give back what's owed, and i think it is a bad look. >> reports today that head of sales in north america, been there for three years, is leaving the automaker. we continue to watch the turn of senior executives. but there's still on-going debate regardless of what happens with the 3 and regardless what happens with the cash burn, what he has delivered already in space and getting entrenched automakers to take electric seriously, does he get kritd f credit, not that it matters to share price. >> is he the thomas edison of our generation and will change the world or a stock wildly overvalued i would argue the answer is yes. i think he changed the world can land rockets on mars inspired a race to electric which is great for humanity. should the company be trading seven times revenues when the

majority of the auto psychiatrist is below 5, look out below. >> what do you do if you're an investor, are you saying sell it or -- people had these concerns about tesla's valuation a long time >> and you're right. i have been saying it, i thought it was overvalued awhile if amazon hit $2 trillion, go from 850 billion to 2 trillion, we would go that makes sense i also think if tesla went from seven times revenues to six times what the industry has at two or three, stock cut in half, i think we would all go yeah, that makes sense >> jpmorgan price is 180 they reiterated that last week that would be almost 50% cut in share price. >> tesla is unusual. whenever i do anything on this program or in my blog or video, when you mention certain companies, people come out and two companies that invokes the most incendiary response,

one, apple, two, tesla there's some devotion to the brand and company. >> and you like yours? >> it is a fantastic car by the way, i am selling it. the reason i am selling it, you do not call someone who risked their lives to save someone a pedophile. that's off the reservation and two, there are alternatives. porsche and mercedes are coming out with electric cars we're going to have a choice, we do not need to put up with ceos that make disparaging comments. >> you're selling your tesla because of his tweet >> i am saying here on cnbc i don't need to own a car that's run by a guy who will say such slanderous things, twitter following that's the population of australia and make slanderous statements i, the consumer, have a choice to buy an amazing electric car from someone else. you heard it here. i am selling my model x. and i love it. >> scared of the backlash you

get? >> it's coming it's coming. scott, you always light up the phone lines. thank you. >> when you sell your tesla, let us know. >> i don't drive a tesla. getting a news alert on agriculture, the white house may have hate for farmers. kayla tausche has more. >> reporter: we learned that announcement is coming this afternoon. a source familiar confirming an aid package targeted at farm country will be unveiled this afternoon. remember, the president back in early april instructed department of agriculture to study ways to basically mitigate effects of potential retaliation against farmers. and we've seen prices come down for many crops like corn, soybeans and pork. we'll see what is announced this afternoon. "the washington post" reports the package will be $12 billion, and i learned from industry sources that that could

potentially utilize the existing programs within the usda to mitigate certain risks and price coverage in markets like dairy, like pork, like soybeans we'll see what is announced this afternoon, whether that aid will be distributed directly to certain districts, farmers, certain businesses, or whether it will be potentially targeted at certain markets to lift prices of certain crops that have fallen in months since retaliation has taken place. we expect that this afternoon. we'll let you know as soon as we have more details. back to you. >> big political implications for red states thank you. and jon, deere and caterpillar up not as big as deere, but it is popping. coming up, general motors

car showing plan unveiling a new peer to peer program. and president trump weighing in on trade, tweeting tariffs are the greatest we'll take a closer look at the paf tariffs on big tech. "squawk alley" will be right back don't go away. goooooooaaaaaaaallllllll! that...was...magic. willingham tucks it in and puts the championship to bed. sweet dreams, nighty night. as long as soccer players celebrate with a slide, you can count on geico saving folks money. fifteen minutes could save you fifteen percent or more on car insurance. pressure, what pressure? the players on the...

pressure, what pressure? are you ready to take your then you need xfinity xfi.? a more powerful way to stay connected. it gives you super fast speeds for all your devices, provides the most wifi coverage for your home, and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome. welcome back to "squawk alley. general motors is making a big play in the car sharing market phil lebeau joins us with the details. phil, you'll be able to sublet

your car >> essentially, jon. gm has been doing car sharing through its maven subsidiary, but those were vehicles owned by general motors this is a case where if you own a car, a gm car, then you can rent it out to another person. peer to peer car rentals it is open now for gm owners and lessees. 2015 vehicles and newer. can't take an old gm model, has to be relatively new revenue split is like other rentals, 60% to the vehicle owner, 40% to the company, to maven. here is julia stein talking about how they came up with the revenue split of 60, 40. >> i believe it is market standard today we might revisit it later on, but we also provide 150,000 people who are willing to rent your vehicle, so we'll see how

it goes. we are excited we're offering this we believe we'll see high growth of gm owners putting the car on the platform. >> how many are using car sharing in the united states it is about 1.5 to 2 million people who are active car share users in the u.s., a good chunk are peer to peer in the peer to peer market, there are a lot of nonactive users, people signed up for a service, may use it once every couple of months rates vary depending on the vehicle, depending on the program. you essentially set what it will cost for people to rent your vehicle. turtle and get around are two other companies active in peer to peer car share market right now. for general motors, earnings come tomorrow morning, and one of the questions, guys, you can bet will likely be about not only car sharing and what's going on in that market as well as mobility systems but also tariffs and what impact that has had on the company

big day for earnings tomorrow with the big three all reporting q 2 numbers. back to you. >> what a week for news in the auto sector, phil. hasn't been this active in a long time. thanks. we breakdown, look at bitcoin, back up since mid may 20% jump in the past week, although the year has not been good overall snap is moving lower the company has seen a number of recent executive departures. stocks down a percent. back in a memont

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tripadvisor. we have an earnings rally this morning in stocks, though we are off the highs of the day. bob pisani is with us. >> earnings have been generally great, like first quarter, they're raising numbers overall for the second quarter and third quarter numbers look good. starting to see head winds

heard about higher rates, getting complaints about that, complaints about the rising dollar, for example, complaints about tariffs and higher costs did you see this the last couple days, kimberly-clark talked about higher commodities, weak foreign currency whirlpool came out, talked about stronger dollar, higher costs, weaker in europe and so you can see little market head winds going on here i think it is starting to effect things at the edges. overall, numbers are pretty good there's kimberly-clark, they talk about concerns overall. whirlpool is down big. they're seeing declines in europe, in addition to higher costs. united tech didn't say much about stronger dollar costs. avery dennison, it is a mixed bag of higher costs and dollar issues what's messing up people badly, and that's google.

google, alphabet, reported decent numbers overall take a look at the numbers 9.59, analysts are expecting, and reported this amazing top line number, it was $11.75 remember, they had this $5 billion charge so suddenly the actual number with the charge is $4.54 what's the actual number are we using 1.75 or 4.54? this company is so big that it actually materially effected the s & p earnings numbers now take a look. thompson reuters decided to go with the number with the charge, the $4.54. instead of roughly 21% earnings growth expected in the s&p 500, 20.8% today, we had 21.7 yesterday, 20.8 today. almost a full percentage point lower because google's number was so big

look at the impact on that here's a big question. remember, traditionally you use the gap numbers, generally accepted accounting principles pells say if they take a charge, that's part of the earnings. analysts are using adjusted numbers for years, they strip out the charges. so what is it? this is a debate wall street has been having. it is actually effecting our numbers. we followed this very carefully. i'm an old school guy. i say the company took the charge, it is in the earnings, they're taking it, that should be the bottom line other analysts say no, no, you take charges out because you get a cleaner picture of where the company is it goes to the debate about financial engineering in general. i don't know what the answer is. it is messing up people this morning. >> 20.8 still pretty good. >> but a full percentage point lower. remember the narrative, my narrative. it is messing with my narrative. the narrative is earnings are generally improving and looking better and the commentary in third quarter is generally

looking better that hasn't changed with google numbers, but the companies are so big, the googles and microsofts are so big that they can move whole markets. >> are they going to use actual euros to pay the fine or proforma euros >> here's what makes me absolutely nuts. analysts could change their mind a month from now could find out they use that original number, that $11.75 number and suddenly estimates for s&p 500 will go way up somebody will say why did that happen >> fascinating >> this is why people say wall street is trying to mess with our heads, they want to use the numbers they want to use >> bob, thanks. europe about to close in 30 seconds. get to seema mody. >> european stocks closing higher ahead of a much anticipated meeting between

trump and juncker. he was hopeful they could work something out on imports, but he doesn't plan to arrive in the u.s. with a specific trade offer. meantime, in the uk, british prime minister theresa may announcing she would leave the country in brexit negotiations does this shift the focus of the brexit department which will prepare for a possible no deal outcome with the european union. that announcement, in fact pushing the pound higher, extending gains against the dollar to a session high sticking with currency, the turkish lire is plunging after the turkish central bank decided to change, despite inflation rising to 15 year high and fears over the economy worsening following re-election of president erdogan.

turkish etf down 30% since start of the year among the worst performing global markets. guys, back to you. >> thank you. when we come back, battle for the cloud. google taking on microsoft and amazon as its cloud conference gets under way and they report big cloud growth and hiring. we take you there live when "squawk alley" returns ♪ hawaii is in the middle of the pacific ocean. we're the most isolated population on the planet. ♪ hawaii is the first state in the u.s. to have 100% renewable energy goal. we're a very small electric utility. but, if we don't make this move we're going to have changes in our environment, and have a negative impact to hawaii's economy. ♪ verizon provided us a solution

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hello, everyone, i am sue herera the democratic republic of congo declares end to ebola outbreak believed to have killed 33 people after 42 days with no new cases. quick international response and vaccinations were major factors containing that outbreak. chinese president xi in south africa for a summit. he was welcomed by the country's president where the two signed trade deals. china is south africa's biggest trading partner. israeli military says they shot down a syrian fighter jet that infiltrated its air space with a pair of patriot missiles.

marks the first such incident on the border in more than seven years of the syrian civil war. and the four time champion among riders whose eyes need treatment for tear gas when a farmer protest interrupted the 16th stage of tour de france it resumed after a 15 minute delay. you're up to date. that's the news update back to jon. >> thank you, sue. we are watching google, the stock hitting an all-time high after the earnings report. a big part of it was the cloud as it invests to compete with the likes of amazon and microsoft. josh lipton is live at the google conference. >> reporter: after that report, google has a big cloud conference diane green will take the stage, try to convince corporate

customers to use google cloud in addition to amazon and microsoft. that keynote is noon eastern eric schmidt is here later, too. alphabet told us the so-called other revenue which includes cloud, hardware is growing fast. $4.4 billion company doesn't break out cloud computing service specifically, but the conference call talked about the traction his cloud business is enjoying, and named some new cloud customers >> vertical strategy and customer centric approach was illustrated by key wins, including dominoes pizza target is migrating clear areas of the business to google cloud platform >> he has plenty of competition. they aren't apples to apples

comparisons, different companies offer different cloud services in the last report, amazon said its cloud business saw revenue jump to $5 billion but don't sleep on google. they have big name cloud customers, airbus, johnson and johnson, coca-cola roger kay of end point technologies says google strengths including rural class cloud technology and big existing footprint of data centers the company can leverage to provide that to customers around the world doesn't have to be one big winner either. this is a big market growing fast the global market will grow 23% this year. guys back to you >> interesting in the earnings call, alphabet pointed out that not only were the majority of overall new hires engineers and product managers but the most sizable head count increases

went to the cloud. you think diane green will talk about their investment in cloud, perhaps some ai since everybody else is talking ai when growing cloud platforms these days >> i think you're absolutely right, look at the earnings report, check out the cap ex number that came in stronger than we were looking for, in part because the company is spending to support cloud services. we'll see what diane green mentions in terms of partnerships i am interested in hard data they talked about traction and wins, we didn't get hard numbers. earlier, he did give hard numbers. said cloud was $1 billion per quarter business didn't get that kind of data on the call maybe they're saving those for traders and investors today, guys. >> love to get more numbers. thank you, josh. i know you'll be all over it when we come back, why senator elizabeth warren is

backing the eu on the $5 billion fine for alphabet. watching the market up almost 200 on the dow rick santelli, what are you watching >> i'm watching the fact we're getting closer to 3% will ten year note yields take elfo3%, take out the 311 high yid r 2018 we'll talk about that after the break. it's all yours. wow! record time. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital.

scott walker, here's what's coming up on the halftime report lee cooperman is with us live. talking stock picks and decision to stop managing other people's money. plus mashlgrkets, google insurgents toda we're about 15 minutes or so away see you in a bit let's get to cme group and the santelli exchange. hi, rick. >> hi, carl. you look at a chart starting in early 2013 of ten year note yields, there's a couple of important aspects to the chart you need to be familiar with first of all, double tops, double bottoms are something that government rates always seem to reverse on and you see mid 13, end of 13,

right around 3% slightly above, slightly below, double top, you see that now for 2018. we have 311 high yield close from may, around may 18th, i believe. the point of this is that we've had so many long periods of consolidation, whether in the 280s or 290s, they turn into very intense support below the market it will be a lot of wood to chop through to try to take the market down through those levels path of least resistance always is moving away from high volume, high consolidation areas which has begun this week. as we move higher with the notion that double tops seem to be the formation dejour, most likely the only thing between us and 311 yield is 3.03. i said that yield many times, that was the new year's eve close of 2013 and it represented the only close above 3% in a

four and a half, five year span. so this is critical. we've only had 8 closes with 3% handle in tens, and two of them were like 3.00025. the reason i am saying this is if we don't take out 3.03 and go back into the 2.80s, we could lock in the upper range for the year it is about momentum it has to happen an precise period of time second, bank of japan policy meeting may have been one of the reasons we've seen excited long ends, whether here or in europe. i think one thing we have to put in perspective is how possible is an exit for the bank of japan? consider that bank of japan is now a major shareholder, 40% of listed companies, their equity positions work more than a quarter to trillion dollars in a $5 trillion economy. 5% of gdp.

these are big deals. the bigger deal is the notion of underperformance of the stock markets relative to everybody else where would they be if they didn't have these positions? the most important question is where will they be if they try to exit those positions. carl, back to you. >> thank you very much, rick santelli massachusetts senator elizabeth warren applauding the eu for the recent fine on google in an interview with john harwood. john joins us with more on the interview which yielded quite a bit. hey, john. >> elizabeth warren says she's a capitalist, one that believes in appropriate regulation she believes antitrust regulation is an important part of that. take a listen to her reaction to the google eu fine >> european union fined google $5 billion you like that? >> look, they made their case and make a strong case what bothers me -- >> the president criticized it, said that shows europe is going

after american companies. >> no, what it shows is that europe is serious about antitrust laws, europe is serious about anti-competition laws and the united states is lagging. we were once the leaders in the world on this. and no more. >> so europe is serious about antitrust laws if elizabeth warren should become president of the united states and she's considered a leading democratic candidate or prospect for 2020 once she wins her re-election this year, you could expect that the united states will have a different attitude towards anti-trust than in recent years, guys. >> john, you mentioned in the last hit with us her comment about how the u.s. back in a more prosperous era had 50 plus. did she want a return to that or was that a history lesson? >> i was trying to get a sense

where she would want to take the rate i asked about rolling back corporate rates. i said would you roll it back to 35%. and she said no, that's a subject for negotiation. don't know where it would come out. i said what about the personal rate, what's too high? i remember that when george w. bush was president, his aides, part of the rationale for cutting the top rate was that in their view it was wrong to take more than a third of somebody's income, marginal income for the government i said what about 50%. do you feel that way about 50%, is that too high she said we had higher rates than that. i said we had 90%. she said well, 90% is too high, but all of that is subject to negotiation. hillary clinton in 2016 stopped just shy of 50%. don't know if elizabeth warren would feel bound by that same limit. >> fascinating sit down.

the whole thing on cnbc.com. john, thanks to you. john harwood in washington, d.c. and when we come back. the president sticking to his support for tariffs. we will breakdown what a trade war might mean for big players in tech. don't go awa see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

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the company is taking its autonomous vehicle projects and putting them into a new s subsidiary, ford autonomous vehicles llc why would investors be interested in it is being set up not only to house those policemprogram, but also set up to take on a third party investment that's important because at the end of may when general motors said soft bank would be investing, that moved the stock higher poeshly sets up the possibility for monotizing those programs. more coming up in st f ju aew

i think the number one thing you're going to see out of the trade war is the reorientation of the supply chain of the united states and southeast asia that l 80 o million people even before you get to india. around the freedom loving countries. i think the regime in china is in deep trouble. this is different than the chinese people they're some of the hardest working and best people in the world. it's this regime that has led

them down this path and it's this cult of personality around xi that's tried to get up in the united states' face. >> that's steve bannon, former white house chief strategist speaking to michelle caruso-cabrera after delivering alpha conference last week you can find the interview at cnbc.com with the president's tweeting this morning on trade and tariffs, the focus shifts back to industries like tech. caught in the cross fire with us now, larry havrty and ben, managing partner at msa capital, a beijing based d.c. firm. good morning to you. ben, you think that these tariffs are a sputnik moment but for china. that they're going to em bolden their stance toward wanting to do more domestic production. >> right when you squeeze people, they react quickly and in the case of china, we've seen when you squeeze industries, they look for self-sufficient s.

we're on the way, manufacturing smart, robotics. bgi a few years ago in the gene sequencing place squeezed went out and built their own sequences machine. we think this will galvanize local governments as well as ak deem area then the private sector to invest in these areas. >> critics would argue they haven't built as much they've stolen it. >> there are legitimate issues that have to be addressed. i don't think of the trade war to unilateral action to force this type of extreme pressure in china. we'll have a reaction from the chinese to bring them to the table to discuss these issues that need to go line by line >> larry, you agree or you think the trump administration's stance might work? >> well, i think that ben's upstream in the manufacturing area, carl and i'm more less

downstream in the consumer area. and i think looking at this from the point of view of u.s. investors, you can i think some of what ben says and you have to respect his opinion because he's on the ground, is going to be absolutely true and i think it has economic logic so what's a u.s. investor going to do and in china, my rule is in looking at china, you try to figure out what the government wants. and clearly, one of the policies of the government and it's nothing new with z, has been to encourage the consumption of goods by the chinese consumer. the chinese consumption is far less than in other economies the good news it's growing rapidly and how do you benefit from that? i think two ways in the stocks are telling you as a u.s. investor not to be worried ten cent, which is facilitating

entertainment and communications, which helps the consumption function then alibaba, which is on the transaction end of the business. so if you look at the chinese function, in addition to having these two basically what i would call investable national champions, you have and i don't think this is going to change and nobody talks about it. is that the industries are on the con sunlgs sumgts side, protecteded. facebook doesn't operate in china. ebay pulled out of china and google doesn't operate in china. so they have an open path, an encouraging government i think the numbers for both companies are going to be strong i can't wait to see the ten cent numbers because they're a 40% owner of fortnight to you can have all this political worry on one side and have the tremendous opportunity to invest on the other side and i think that's the bottom line for investors and that's what

the market is telling you. these stocks are very, very strong >> i like it to larry's point, stocks here have held up and shanghai has not. there's more reports today about them looking at more tax cuts. speeding up infrastructure spending we know what they've done with reserve requirement. you think they're scrambling or taking this at a pace? >> i don't think the directory action is at a trade war we're seeing a downward spiral on chinese stocks, so i think really the reaction is look iin at the u.s. stocks of chinese companies. the listed as we said, ten cent by alibaba still holding strong these types of businesses are built for the long-term and expanding at a pace by a lot of investors, so i think that the chinese stocks are indicative of the trade war. >> we'll have to see what those effects are, especially if we

get to the 500 billion plus level. thanks >> president has landed in kansas city. we're going to watch that as he makes his way to speak at the vfw annual national convention bring you headlines from that. over to scott wapner and the half. our top trade this how, the big breakout with the nasdaq surging. tech prime to lead stocks to new highs? here to debate, joe, jim, jon and also with us today from florida is leon cooperman, the chairman and ceo of omeg omega advisers we want to begin with the markets. all three of the major averages higher big stock story of the day lee, i want to begin with you. a perfect day to have you.