that does it for us today. make sure you join us today on "closing bell" at 3:00 3:00 to 5:00. >> i got to be there at 3:00 >> 3:00. >> now it's time for "squawk on the street." ♪ good tuesday morning welcome to squawk "squawk on the street." futures continue to add to gains after record closes monday for the s&p, russell, and nasdaq and trade a point of focus as canada heads to the bargaining

table. good retail numbers to get to, as well. europe is mixed. we'll get conference board members in an hour home numbers are down. futures pointing to another higher open. both the nasdaq and s&p at fresh all time highs >> plus the canada squeeze president trump announcing a new trade deal with mexico scrapping nafta. canada's foreign minister in washington today and tiffany and dsw surging on strong quarterly results. best buy with an earnings but q3 guidance a little soft and sending shares lower in the premarket. futures are pointing to a higher open following another set of record closing highs for the s&p, nasdaq, and russell stocks surge comes on the heel of the president's announcement of the u.s. and mexico struck a trade deal paving the way to replace nafta. one left out at the moment is

canada and secretary mnuchin addressed that moments ago on "squawkbox." >> the u.s. market and the canadian markets are intertwined. it's important for them to get this deal and it's important for us to get this deal. i think we'll be successful, again, if we don't we'll move forward with mexico and then we'll reach a separate agreement with canada. >> guys, cutting short the trip to europe to get to d.c. and get to the table mnuchin said he doesn't anticipate there are going to be a lot of sticking points between u.s. and canada. >> i guess pretty encouraging. it feels, in general, in market terms that the stakes have been lowered on the trade questions in the short term. it just seems if there's a process in place in terms of the nafta partners china leaves but without any add on aggression. they're talking about encouraging moves by the chinese to support their currency. i think right now the market is in the mode of the upside is the

path of no resistance. literally. we're at new highs it's upward drift because not much has changed along that front. >> jimmy path cue cass said the market it whenever the president moves away from the core populist believes. that's directionally what happened >> there's no doubt. yeah i mean, again it's a process i think the market wanted that the entire time. just give me some negotiating frame work that the market can handicap you can try to anticipate how it's going to look as opposed to this posture of aggression for the sake of aggression and looking tough for the sake of looking tough and tariffs without a process. >> i think the market is getting comfortable with the idea there will be no china deal, say, before the midterms? before the end of the year that it's going to be a long, drawn

out battle. >> i think it does look like that i've thought that the way the transmission mechanism works when we worry it seems like emerging market melt down, hard landing in china, capital flight from developing markets, dollar surging, all that stuff is what destabilizes markets it's not so much what is it going to do to the growth rate of china or here to import/export data that stuff has been kind of cooled off the dollar is off its highs. emerging markets are stabilized. so, you know, i think our markets look and say okay tell me when i have to worry again. >> yeah. the chinese currency, of course, gained more than it has in some time, i think, just today. the biggest one-day move since june, i believe. i don't think there are many people who expect there's going to be between now and the midterms i think that's part of the chinese strategy here to wait it out. potentially to keep pressure on in some way.

we probably will get the $200 billion. we'll see. you know, the focus certainly will shift to a certain extent more so even mexico and canada in terms of the biggest opportunity/risk. >> and if you look at the condition that the entire trade debate is left on markets, you know, yesterday you got a lot of bounce in the trade-affected stocks they're down a lot from the highs because of the anxiety they can bounce now from lower evaluations. if it doesn't seem if there's a disarray, you know, in the global trading system. i think that's where we are at i don't think wheat look -- wall street looked at the trade situation and said this is a problem that needs to be fixed so i think the whole thing is come off as a bit of a distractions and a war of choice they didn't love but we've been living with it so long the terms

are set. >> we'll find out what the next few days will be like. retail continues to move this morning starting with best buy beats the street but gives current quarter below estimate tiffany raises the full year earnings outlook and dsw beat comps up 9.7 beating a consensus number of 2.5. interesting here best buy they've guided lower on current quarter. they see the full year comps up 4.5 now. so the overall narrative that the consumers are coming to the stores -- >> yeah. >> i mean, it was one of those deals where you can't complain about the environment if you're a retailer it's all about the cadence it's about what the expectations were relative to what other, you know, peers did so far this earnings season. and how the stocks have been positioned best buy has been in a great

run. dsw is the most conspicuous outperformer here. the stock is up huge from the lows it seems like a desperate turn around situation at one point. it's well below the ties from a few years ago. so shoes, it seems like are extremely discretionary when you talk about especially kind of adding to another pair and i think that's what we saw in the recent kind of freeing up of the wallets is people are buying clothes and shoes again. >> not just women. i've been in one of those stores. >> yeah. me too. >> yeah. >> the day he's not here. >> i went somewhere. cramer would be shocked. it's easy. nobody has to help you try on a million things. >> you look at the painting on the outside of the building. >> i didn't notice. >> really? i've been by it many times i think i would have seen it best buy, i mentioned it last week, carl, you were out it's worth mentioning again. the stock is down this morning

but given this retail earnings period being so strong, for the most part, we aren't talking nearly as often about amazon outcompeting everybody and taking enormous share but best buy was the first company, really, when you go back it doesn't appear it was that long ago, it is years now, when there was rumors about could they pull off an lbo and the stock was in free fall and they're showrooming for amazon they were the first to really show the way in terms of competing effectively against them increasing, perhaps, the knowledge base of their employees and stores to help people with their decisions on what are typically still fairly expensive purchases. but despite what is apparently that lack of happiness with the guidance, it's worth noting how well the stock has done for some time now. >> also, international is a story that should be mentioned specifically with best buy international comps up 10.1.

it's not just domestic play or tax cuts benefitting pocketbooks. >> it doesn't seem like it's fleeting forcing that are driving it i think it's an interesting story. the bigger question when it comes to consumer and retail, if we're building up to an all-clear moment when the market thinks that, you know, going into holiday it's going to be nothing but momentum and then the stocks kind of already price it but right now we're building off the base of stocks having gotten so cheap they were in panic from the amazon threat. let's say a year or year and a half ago. >> yeah. >> they're still benefitting. >> tiffany alone is up 27% for the year that's 8% of the s&p and the other big story today involves social media and content regulation it's back on the front burner after the president goes after google this morning

it comes as twitter's jack dorsey and cheryl sandburg getting ready to testify before a house panel about algorithms and content monitoring the white house asked for comment about what it means. it will be addressed no answer yet. it's going to be interesting to see how these companies prove a negative. >> right yeah, i mean, how do you prove we're not doing something you say we are. >> sure. and it goes up against the ethos of a google or facebook or twitter. they started off with the idea we're going to be a neutral pass

through. i mean, especially google. this is search volume. this is basic they've engineered for 20 years exactly what keyword searches mean for what people want to see it's kind of the crowd story i think we need to -- >> it seemed like a very well-developed brief, in a way the way it was built up. 97%. where did that come from it seems there's something behind it. >> there's a strategy to completely to try to discredit the main stream media and that's part of the strategy of the white house. obviously, under a lot of pressure on a number of different fronts as president, in terms of at least legally, whether it's the mueller probe or what happened last week with michael cohen. so no surprise there that continues. i'm curious as to who the regulator is here.

where do you go in terms of actually having some sort of a regulator who does -- who actually says or investigates and perhaps somehow agrees that is the case? >> right. >> and what are the measures that will be taken it's not clear how that process would be undertaken unless it's directly from the white house in some sort of expectations move. >> it's not public bandwidth right. it's not necessarily the fcc but it should be in some way that would require legislation, i think, to mandate or/or expand they might be able to under different -- it's unclear to me. >> i loved the slight implicit irony that the president celebrating nasdaq 8,000 in a tweet today. that nasdaq 8,000 driven by amazon and jeff bezoss and alphabet which is a big percentage of the nasdaq

that's the industry that is getting you to nasdaq 8,000. >> and facebook, of course. >> yeah. not a big help this year but overall. >> yeah. and the other news in faang have news of their own. facebook banning the army chief in myanmar in what reports are saying is the first such ban for any military or political leader facebook has been direct about the situation in myanmar being unique but to ban a public military leader is something we haven't seen yet. >> just shows you it's judgment call upon judgment call. it's expensive and it's, you know, shades of grey and almost inevitably it's going to run up against somebody's thinking that you came down on the wrong side. >> yeah. we'll watch that speaking of tech powered by big tech the nasdaq did cross the historic 8,000 mark. we'll swatch to see further gais

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counting down to the opening bell this morning. futures point to a higher open once again let's bring in cashin who joins us here. interesting day yesterday, art at least from a news flow basis. we'll keep our eye on d.c. yet again. >> you have to it remains one of the couple of things that traders will be watching how fast does this canadian negotiation will belong it looks rick they -- you might be able to get something done in maybe week and a half. we'll keep a close eye on that another thing traders will be watching is the chinese currency the people came in and supported it the other day they wondered if that was to the president who said they were

taking a -- a weak currency to move things around so we'll be following that to see if there's any follow up there. and see what is happening with the chinese leadership and where things are going. >> art, we were talking about the general set up here. this kind of long period between getting to a new high and whether, in fact, investors will start to feel as if they're under exposed to the market, if it starts to lev tate like this. we're a little bit stretched in short term, perhaps. but how do you think the street is positioned? >> yeah, no, i think we haven't seenit's not people are lookin for the one company or whatever.

it's a group of stocks so they're somewhat underweighted. >> mira has a noted out today they suggest the market is starting to sniff out a 2019 rate hike pause. do you think that's legitimate point of view? >> i think that's worthy, you know, me. >> i know. that's why i'm asking. >> i'm bearish on rate hikes i think there's a hesitant si there. you saw mueller and powell looked a lot more disturbish than anybody thought yeah, i think that's a possibility. >> ting could be there right now we have to find out the market consolidated their big gains from yesterday went nowhere. we'll see if we can ride the

pony a little further and see where it goes. when we come back, jay timmons is going to join us. weigh in on the current state of trade. we'll talk about what affects we might see of this new nafta is passed more "squawk on the street" in a minute 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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fuels that go further so drivers pump less. improving efficiency is what we do best. energy lives here. the nasdaq hitting a new record as it passes the 8,000 mark. courtney reagan is at the nasdaq market site with more for us. >> good morning to you, david. market watchers, of course, are waiting to see what is going to happen when the opening bell sounds in less than ten minutes to see if we can continue the gains from yesterday but it does look like we're indicated that way

yesterday the nasdaq composite crossed the 8,000 mark for the first time gaining just shy of a percent to get there. frankly, you know, it's the faang names that drove us there yesterday and so far year to date and also president trump calling out the record at the nasdaq on twitter. marking that 8,000 mark. also, pointing to one of those faang names, in particular, alphabet, google, but not so happy of light president trump tweeting at least in part google's search results for trump news shows the viewing reporting of fake new media. shares of google are under a bit of pressure so far this morning. we'll see what happens when the opening bell sounds. premarket we should note that the specialty chip maker got an upgrade to outperform from neutral at rb baird saying they like the recent contract wins that the specialty chip maker

has been able to score on the flip side, bank of america and merrill lynch downgrading to neutral applied materials and lam research so we're going to want to watch the semiconductor index. they've had a pretty good week up about 3.5%. we'll see if that continues with a push/pull of the upgrade/downgrade in the sector today. back over to you guys. >> okay. courtney, thank you. the opening bell six minutes away stay with us

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because the changes we make today... can you hear me? ...shape the possibilities of tomorrow. u.s. bank the power of possible. you're watching cnbc "squawk on the street" live from the financial capital in the world the opening bell set to ring in just under flee -- three minutes. the futures look pretty good at the moment europe we mentioned was mixed. uk having a little bit of trouble here as may is in africa on a five-day tour and managed to say a no-deal brexit is not the end of the world

which sort of runs afoul of what some others in her administration -- >> yeah, i know. those markets and the recoveries have been halting. it hasn't seemed like it had a lot behind them except for, you know, bouncing because they get oversold now people have been looking this week at the kind of global economic surprise indexes where the u.s. was outperforming the rest of the world. the rest of the world come back a little bit it looks like things stabilized. it doesn't seem if it's that strong the dollar weakening now is kind of helping our markets more than anything. >> yeah mnuchin talking about currencies on squawk some wondered whether he was trying to say regarding the chinese if they don't keep it from weakening, does that define market currency manipulation not entirely clear that's what he meant. >> if you parsed all the things he said, it made it seem as if the chinese currency goes down,

we consider it manipulation. whether it's intentional or because they decided not to stand in the way of it a lot of semantics involved in deciding who is doing what if it was a gesture or their priorities or not, the fact that the currency firmed out, i think, has been taken a decent sentiment cue. >> right did say after the president's criticism of rate hikes, at least, that powell has been a phenomenal leader and added he's not really concerned about the yield curve. that was interesting, too. you know, basically he said we're a big issuer of debt all things being equal seeing longer term rates remain muted here and the evidence of the yield curve when it gets to this level, which is, you know, less than .2% less than 20 basispoints

[ applause ] we get to the opening bell on this tuesday [ opening bell ] so i guess retail is good sector as any to keep your eye on in terms of whether or not the gains hold it's a 20% gain in the case of dsw. >> yeah. >> and best buy is, obviously, down out of the gate after having a good run. interestingly the traditional retailers are, you know, are in the sweet spot at the same time amazon goes up every day, too.

so it's very much a pie is getting bigger it's momentum. you know, amazon ticking up toward $99 -- $9 50 billion market value. >> advertising has become an important profit line for the company. again, because the margins are strong there the key search words on the amazon platform, as you imagine, are valuable people go there for one reason, which is to buy something. they have become almost competitor to the likes of google and facebook, to some extent people are talking about the retail business as much any longer amazon is the kind of stuff that the bull market is still on but

big concern if you have one is how much we're going to fall off in terms of overall earnings growth and top line growth going into 2019. and by those lights, the faang type stocks, the big familiar glamour growth stocks almost by default people find their way to them they are going to have 15 or 20% top line growth. whether they want to or not. >> and given their market cap we've made the point but it's worth repeating for the s&p and the move this year just apple and amazon along. the increase of market value with apple up 30% this year and amazon up 65%. >> yeah. >> it's truly astonishing. >> yeah. in terms of aggregate chunks of value being accrued. >> it's a hundred different companies or whatever. it's amazing. >> yeah. >> nasdaq is at a record high. s&p record high. mike, i'm told that, you know, you were talking about the three nasdaq s&p on pace for their

best august in four years. in the case of the nasdaq, it's not far from exceeding 2014's august in which case, you have to go back to august of 2000 to find a better august for the nasdaq and august of 2000 was an interesting time for the nasdaq >>well, actually, august of 2000 was the bounce off the initial decline. so the march high was right above 5,000 for the nasdaq and you kind of got above 5,000 and it was almost all over the august 2000 experience is pretty interesting it wasn't exactly kind of a double top but you did have the sort of, you know, pretty decent recovery a lot of people thought, okay, that was a bad correction. it wasn't. >> right. >> obviously by the way, the 20 year return annualized for the nasdaq as it hi hit 8,000 is about 3%. obviously the last several. >> if you bought did in '09

march of '09 you're doing pretty well over the last nine years. >> yeah. nasdaq, for the month, is up 4.7. >> that's from the high. the 3% from the high is 3% of a year from nasdaq it's about 3%. >> okay. for the month nasdaq is up 4.7. >> allright. when the market has been below the high for six months and brings to a new 52-week high, it tends to be better odds off higher prices. >> yeah. >> so break outs, i guess, throughout history are better than not breaking out. >> data treks note today the

lead is never short a new high, which is an old saying on some trading floors the lodge sick basically about someone knows more than you. if that someone decide to bid a stock to a new high, you don't want to get in their way. >> there's many record highs along the way. it's a probability wise. >> speaking of new highs apple 219.55 as much as we talk about apple and services ancillary businesses, phone revenue is -- >> probably an upset surprise if, in fact, the actual volumes were better than anticipated right now. as you said, the story line is switched over not just to services but more of a steady

pace of upgrades because of the new way they sell phones this is entering this lull year for new releases. >> but it seems like the stock is just kind of moving they trimmed their target to 316. they trimmed their model 3 production target. they say that recent distractions will affect their outlook on the three they go on to say that the recent drama about going private is an example of why even a great company needs different leaders during its life cycle. sort of a i don't know failed comment about ten year.

the private scenario is that people will question mr. musk's leadership, to a certain extent. even frankly his stability given what seemed to be some emotional turmoil involved with his tweets and his thinking and that interview, of course, he gave to the new york times that seems to be seized on by some analysts and going to be by those who are short the stock which appears to be his initial focus for so much of what he was trying to combat in the first place by the initial tweets that were probably not well advised >> i wonder what the definition we can ask of solvency is. >> we'll talk to the analyster in hour. but, you know, the time is getting short of when they have to deliver on the financial model. on the business model as opposed to just look at the size. >> they also weigh in on the toyota/uber investment half a billion dollars,

according to the journal values over $72 billion. wondering if tesla should have been in the mix for those investments. the company's volatile image could leave it out of the discussion for future investments. if, in fact toyota have them in mind. >> yeah. >> which is interesting. and, you know, i'm picking up from people who were trying to get something to fruition here in terms of the go private the idea that perhaps after the report the next quarter, years old see this is -- i guess in the realm of speculation at some point. you could see an investment come in given the silver lake was certainly looking at it. and others you could see, perhaps, some sort of a private investment of public equity and maybe along with it increase the board members. i don't know where that goes, but that certainly has been part of the chatter of those who were at least involved in trying to get either hired or had been hired. and were working on it so don't rule out the

possibility of potential capital coming into some form of tesla after this next quarter. >> it'll be a big day. retail is helping lead the charts here. nike is leading the dow. we'll get to bob. >> hello, guys happy tuesday. dsw up 20% tiffany strong, as well. retail is strong here. take a look at the sectors again today when you get the dollar down, we have the dollar up and then down in the last two weeks. helped a lot for anything related to materials and anything related to metals and mining stocks. there's a group again. semis coming back here very strong retailers earned earlier doing a lot better the market advances continuing and it's broadening out. that's my theme late yesterday into today look at indexes that are simple and just track broad sectors of the market like the equal weight s&p 500. every stock the same wading in

the s&p. hit a historic high. it tells you the average stock is advancing other ones that people watch, the value line composite it goes back to the early 60s. designed to measure the median stock advance. equal weighted about 1600 stocks are in this index. historic high today that tells you it's not just faang names. the overall market is slowly advancing right now. so the rally is broadening out what do we have? major indexes hitting history u.k. highs most of them are market cap wading we have the advanced decline line which is the key to the whole market and the record high we have new highs breaking out that are fairly modest the average stock, as said earlier, also, at a historic high and the new high break out is a little problematic we're not seeing hundreds of stocks breaking out. take a look at the s&p 500 right now essentially at a historic high. i would say 20 to 25% of the s&p 500. i would say 20 or 25% are within

2% of historic highs you go up another 1 or 2%. you'll see hundreds of stocks hitting historic highs the important thing about the market the rally keeps advancing. it's not dead yet. all the things that people thought were going to kill the market have not. fed tightening not killed the market and the trade tensions all though it does move the markets on a daily basis hasn't killed the marketeither the strong u.s. economy, record earnings, buy backs of m & a activity and internals of the market have been strong. want to quibble about something, a lot of strategies are talking about the global economy those numbers are a less favorable. look at our numbers versus europe it's rather startling when you see we're talking about 23 or 24% growth in earnings in the united states. the european growth is considerably smaller than that

take a look at that. only 9%. you take out tax cuts. our u.s. growth would be 16% or so so we're still outperforming take out the tax cut we're outperforming. same situation with revenues 10% revenue growth that's why people are so impressed with our rally it's not just cuts revenues are stronger in the united states. and look at that it's one-fourth what it is in europe there's a little bit of a concern. on the issue of like a global recession with global central banks so accommodative look at the markets are telling you the u.s. is the place to be. 8% this year germany is down. japan is down. shanghai is down big market that is notedly outperforming is india this year it's up close to 12 or 13% there's exceptional reasons why india is doing well. overall, consensus u.s. still remains the place to be. two to one advancing the decline

stocks up 68 points. >> i'll take it, bob thank you. the s&p up 8.5% for the year we'll head to the bond pits and check in with rick santelli in chicago. good morning >> reporter: good morning, david. all yields are up and they in part, has been fuelled by what is going on in equities and, of course, we're in somewhat of a perfect storm. we have tight employment, wages. we might not see the pressure because of entry-level distortions but everything seems to be clipping along pretty good look at a one week of tens once again, i can't underscore we hold the low 280. now we moved closer within three basis points of 290. if you open the chart up to mid may, you can clearly see lots of activities in 280. we can see we held that slightly below 280 end of may low yield close around 278 tens minus twos is a little steeper today.

not much 21 basis points but do keep in mind twos are up one the middle of the curve is up two. and the 30-year bond is up three way sis points a slight steeping going on one would think you see investment grade in high yield charts and spreads getting tighter. not necessarily the case let's look at a month to date of the barclays investment grade. it's actually widened a bit. all the way out to 113 basis points that's historically very tight and if you look at the high yield, 350ish that's still very good for a high yield spread but sometimes when treasuries act a little bit slight to safetyish they did during the emerging market issues and we're slow to move up. that dynamic widens out the spread there's no credit issues here. it was just a treasury issue with rates pushed a little bit too low for an accurate

evaluation i was looking at the dollar versus the yaun the yaun is at the best level since july 26th. you can see the collar index which the yaun is not part of. it had a rough time. it gained back the gains in august the question is, after the shake out and the dust settles out, how much bullishness is going to be left outside of the nervousness that subsided, to some extent. back to you. >> all right, rick rick santelli. when we come back pat toome has reservations about the president's deal with mexico

♪ analysts are the latest in take down estimates on tesla following elon musk's decision to abandon plans to take the company private. they lowered their price target from 336 to 316. adding a great company may need different leaders during the life cycle joining us this morning is yesterday. good to have you with us. >> thank you for having me. >> it sounds like the whole go private saga had an affect on the three schedule, on musk's leadership, and maybe ten year and even potential investments in the future. is that overstating it >> well, i don't think anything good has come out of it. you know, if you look at what they've gained from going through this process, they've gained multiple class-action lawsuits, fcc investigation, and a share price that is lower than when the original tweet came out. so my point is that from a leadership perspective, i think

what is becoming clear is musk is a great visionary maybe not the right person to take tesla to the next level these distractions are certainly going to impact the company's y to grow. >> well, that would require to a certain extent a board of directors that's perhaps less compliant than the current one i think that's probably asking a lot, don't you >> sure, i do. but if you look at history here, i think -- i mean i have the utmost respect for elon. i think he is frankly one of the greats and if you look and go back in history, there's precedence here where some of the greatest visionaries, such as thomas edison were the best people to take general electric into the future. in fact, his own i had toshio

si id yoe sin krascys allowed jp morgan to take the business out from under him i hope it is not the case with musk what he's done is phenomenal in terms of business developing and bringing the transportation industry forward but as you see in our note we talked about the announcement by toyota motor corp, making the investment with uber for autonomous vehicles. what i wonder, is whether or not tesla's own distractions will limit their ability to get into the right deal and be well positioned financially to make the right transactions to ensure that they capture the industry that they are really pioneering. >> assuming there is no decisive change at the top over the next several months and they don't have any strategic investor come in there, you're left with the operating challenges and the financial challenges in front of tesla. you mentioned that you think to

remain financial call. what's the company's options on that front >> what we're speaking to in terms of cash position, 2.2 billion in cash, the burn rate has been on how successful they are on the model three, they are coming up again, given where the stock price is, if the stock price were to rise, then that gives them a lot of leeway because they have convertible notes that come due this fall in the spring time. they will have an ability to likely refinance that and based on where the metrics are, that provides some level of risk. >> you're not alone it would seem in suggesting this idea that he would benefit from a strong leader, a coo type or even a ceo and if he became

executive chairman, but i mean if history is any guide here, right, hasn't he lost a lot of people who are fairly senior over the last six months certainly the shorts like to point to that. but is it a significant risk as well >> yeah, we don't -- i think that he can still make the decision and make that change. >> jed, widely read note appreciate you coming on and talking more about it. we'll see you soon talking tesla. when we come back, the bright spots in retail, tiffany's and dsw on the move. the president and ceo of the national retail federation will join us, dow hanging on to moderate gains to start this esy,p 47

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♪ good tuesday morning, welcome back to "squawk on the street." i'm carl quintanilla sara eisen is off today. the dow moving a little bit

closer to a record high of its own within about 2% of that as trade and retail are in focus. getting a little bit of data here, board confidence for august we'll head over to rick sen telly in chicago. >> we're waiting for the confidence number for august, what's interesting is we've had 13 in a row with 120 handle or higher these are really lofty another lofty number, 133.4. big time lofty that usurps february which took us back to november of 2000 on a comp and i'm going to have to go back in the way back machine here at 133.4, that takes us back another month to october of 2000 when it was at 135.77. if you don't believe me, you go look at the chart going back to about the year 1990. anything above 120 other than this current run which now makes 14 that are above 120, two above

130, you have go to back to 1997 through 2000 to find that type of petty activity and if we look at the present situation it's at 172.2 versus last look at 165 and change and if we look at expectations, 107.6. that's up about six points from the last look. finally richmond fed move from 20 to 24 sequentially, another good data point. the administration really has boosted confidence no doubt about it morgan, back to you. >> rick, thank you rick santelli in chicago our road map starts with easing trade fears, boosting stocks the s&p and nasdaq hitting new highs as the record rally rolls on. >> canada is in the trade hot seat the trump white house vowing to ditch the three-nation nafta trade deal and go it alone with mexico if canada won't deal. >> some some congress say not so fast pat too mamy will join us to she his reservations on these talks.

>> we have new records, interday highs for both one day after the nasdaq ticked above 8,000 for first time ever. the dow trading above 26,000 for the first time since early february we've got a lot of talk around trade following yesterday's deal with mexico and investors now looking to canada. joining us at post nine, chief economist chan and chief market strategist jj kennihan thanks for joining us today. anthony, i'll start with you, do you think we get a deal with canada and you do i think markets are pricing that >> i think the markets are hopeful and it's in the incentive, great incentive for canada to do so. without being part of that deal they are certainly left out in the cold they have every economic incentive to do whatever they can to join in the deal, even though it's going to be challenging. >> and jj, we've seen the dollar come off against other major currencies amid this trade deal with mexico and the expectation we could start to see more such deals moving forward

have we seen a peak in the dollar for 2018? >> it's hard to say we've seen a peak in the dollar when we know we'll raise rates in the short term in september and there's a high probability we may do so again in december. but i think the good thing about this is that hopefully the dollar stays in an area for a while where it's not sort of a straight up. so even if we go up grad puallyt won't be as bad. it's interesting all of this tariff talk. in the last earning season we had a lot more ceos afraid of a strong dollar it seemed when they were of the tariff talk so again, that's going to be a fine balance for us as rates seem to go higher as the economy continues to improve and we'll have to see what happens in december because as i said, it's pretty much a surety next month. >> anthony, we had treasury secretary minuchin on squawk box and talked about the trade deal and yield curve. he said he's not concerned about it, he doesn't think it's a predictor of economic growth

it's a market condition. and that they actually think it's -- they are completely content with the fact you have a flat yield, yield curve given that the u.s. is issuing long term debt. what do you think? >> i think the yield curve is something you should not ignore. i realize people look at it to tell you whether recession is coming but the track record of the yield curve is not perfect either whenever the yield curve inverts it could be as early as nine months before the next recession and 33 months people use the average number one of the things i've dob ne i look at two indicators, not only inversion of the yield curve but leading economic indicators when that drops three consecutive months, that means a recession when you put both together, guess what, you get 100% track record in terms of forecasting a recession and it's 11 months into the future and so far the index of leading economic indicators doing very well and you saw in fact today the consumer confidence gang busters because of a very tight labor market i'm not worried at this

juncture. >> just to dig into that, you have the strong consumer confidence and strong retail numbers and strong consumer in general, strong economic growth and labor market in the u.s. is there anything that is bothering you right now or that you do see as a potential indicator looking forward? >> right now we all worry about the trade situation and of course geopolitical risks but those concerns have been melting or thawing away and that's the reason why the market is doing very well. when you look at investor sentiment, it hasn't been overly bullish in this bull market. these investors are climbing this wall of worry of and that is good. gives more longevity. >> home prices, kay shiller out today. function of rates or is it something else >> remember that supply is an issue and affordability is getting a little challenging but at 6.4%, year over year for the 20 city index it's still rising more than twice as fast as wages are so it is a concern for some people. home prices are not out of reach

but they are certainly not becoming cheaper and cheaper as time goes on. >> all right, gentlemen, thank you for joining us for this conversation, anthony chan from chase and jj kennhan. >> the president announced the new trade deal saying he intends to end the three nation nafta agreement, ramping pressure on canada to strike a deal. this is secretary minuchin on squawk box today. >> i don't anticipate there's going to be a lot of sticking points working on lots of details, we've made a lot of progress with canada, coming along on a lot of those and hopefully they'll come on board. if not we'll move forward with mexico this is a great move forward for trade. >> some some congress are saying not so fast, pat toomey joins us good to have you back, good morning. >> good morning, carol, how are you? >> good.

this development has implications for your state. what do you think of it so far >> it's mixed, right there's good news for sure, there's also some developments that i would consider counter productive i need to see the details that has not yet been released and it's determined on balance as this better than what we have today or not you know, it's certainly good that we've got better intellectual property protection than we had. we have longer protection on buy logic for instance then we had under tpp. that's good news, we're apparently the mexicans will not be able to use regulatory mechanisms to prevent a lot of our ag products from getting into mexico and dairy, won't be using the geographic, cheddar or munsters cheese, that's important in pennsylvania. i'm also concerned about this quasisunset, we've got to see

the details on that. this 16-year horizon and watering down, shrinking of the investor state dispute settlement mechanism is troubling. i want to see exactly how that's going to work and of course they've introduced country specific rules of origin and auto sector. it's only one sector it's the wrong direction but it's not the entire manufacturing sector so it's going to be a matter of weighing the good and bad. >> senator toomey, why is that the wrong direction? i'm looking at the statement from you as well where you say you raise serious concern around arbitrary wage mandate for the august sector as well. i see that and think for years we've seen offshoring and near shoring of american manufacturing jobs to places where there's cheaper labor. the idea we'll ensure more u.s. jobs in the auto manufacturing sector, i would think that would be a good thing, no? >> no, it's not a good thing for the government to dictate wage rates and not a good thing for

government to restrict trade america has had the freest trading investment in the world, our economy is more open than any other and we remain the world's number one manufacturer, manufacturing output in the united states is at an all time record high. so clearly, we can thrive our manufacturing sector can thrive in a free trading environment putting restrictions like this in my view counter productive, will raise the cost of automobiles for american consumers and create incentive to make cars somewhere else that's not subject to these rules. so i don't think this is constructive but again, it is spoke used on a single industry and i've got to see the details on this. i should point out, there's a big issue that is very much outstanding and that is whether or not the canadians choose to join into this i don't think that the president -- i don't think congress can pursue a buy lateral agreement just with mexico and the u.s. under the trade promotion authority that gives expedites procedures

so it's going to be really important to make this a tri lateral agreement if we're going to have that expedited process >> and if they don't get that expedited process, what does that mean then >> then i think it means a 60 vote threshold in the senate and potentially long delays in taking up the legislation. >> and when are you going to look at the details you've mentioned where some of your concerns are centered? how long is that going to be >> i don't know. i know they are working on it. i know -- i speak with bob lighthiser regularly he's very forthcoming about this, to the extent he can be. i don't think he's intentionally playing hide the ball here i think in some cases they are still drafting so we'll get a notification we're told from the administration this friday maybe that will have some more detail i wouldn't be surprised if it does not and we might be waiting for some period of time you know on the

order of even as much as 30 or 60 days before we start to see some specifics on some of these controversial issues >> as lighthiser in your conversations indicated the likelihood in their perspective of getting a deal done with canada >> i think it's fair to characterize bob as being generally optimistic that there will be an agreement with canada and in fairness, i think the big contentious issues were more between the u.s. and mexico than they were between the u.s. and canada so i think that's plausible. but it hasn't happened yesterday so we'll just have to see how that plays out >> senator toomey, i want to dig into the legality of a potential deal between the u.s. and mexico a little bit more. i realize if canada is not brought on board based on the fast track process right now that this probably couldn't go through that and would require 60 votes in the senate but it could actually get done and might just take longer and it would require more from

senators, correct? >> that's my impression. that's my understanding and in the absence of tpa, trade p promotion authority, you could still pass legislation enacting a new trade agreement but in the absence of tpa, it would be ordinary legislation and so it would be subject to all of the potential obstacles like a filibuster that ordinary legislation is subject to. >> do you think any developments regarding mexico or canada have any weight on how things will go with china as an add-on to that, have we warmed up to the notion of ag subsidies helping us weather a long trade war with them >> i haven't warmed up with that i think it's a bad idea to have the government subsidizing any industry it's a bad idea for the government to engage in a trade war which results in certain sectors being retaliated against. but it's a compounding of flawed policy when we start forcing taxpayers to subsidize some

sectors, there's the entire category of industries that utilize steel and aluminum, been put at a tremendous disadvantage are we going to write checks to all of those folks as well >> i don't know where it ends. i haven't warmed up to that at all. >> we'll have this discussion for a few more days, probably beyond that. we appreciate your time and guidance we'll see you soon. >> thanks for having me. >> senator pat toomey of pennsylvania when we come back, has traditional retail found a way to combat amazon pretty good earnings season. we'll look at the big movers including tiffany's and dsw. and the president of the national retail association jay timmons on the latest agreement between u.s. and mexico. s&p 2901 back in a moment this wi-fi is fast.

i know! i know! i know! i know! when did brian move back in? brian's back?

he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. chinese tech companies have faltered etf dropping over 16% this year. is it a sign of things to come well, let's bring on tech investor founding partner dan niles. dan, should we be concerned about the weakness this the chinese internet sector? it would seem of course to be related primarily to the trade dispute between our two countries. >> i think that's exactly right. i think this is actually a pretty good opportunity to get involved in some of these

chinese names. obviously we've seen what's going on with the u.s. and mexico, trying to settle that trade dispute. and i think once we get to later this year that will also happen with china i think the fact that the ceq, the chinese equivalent to the nasdaq is down this year and qqqs are up 18%, this creates a good opportunity in these high quality names. >> and you know, any time you hit a milestone as we did yesterday in the nasdaq inhe have itably you'll get comparisons to our last highs or last milestones. you were there, you've been around a while, you were an analyst back then. anything in this market that is concerning from a valuation perspective and anything that puts you in mind of other tops as we've seen them in the nasdaq >> i think that's a great question i mean, i was an analyst as you rightly pointed out back in 2000 but valuations right now are incredibly reasonable. so when you look at that in the

u.s., it's really hard to get concerned. you've got to google the trade the 24 times earnings and it's growing the top line at 20%. you've got a facebook in the low 20 p/e ratio they are growing the top line over 30% it's really hard to say there's specific names that you can say wow, netflix still has a p/e ratio over 100 but in general when you look at u.s. tech companies, there's still growing incredibly fast and still have a lot of potential in front of them and you actually can buy them at somewhat reasonable valuations because the earnings are growing so fast. so i think that looks good you look at these chinese names, we have a basket of seven of them the top line is growing at 37% for the seven names put together and you've got a p/e ratio of 27 times. i'll take that all day long because if your pe is below your growth rate, that's a pretty good sign you're getting decent

value for your money so i actually feel pretty good about things and when you look at the economy, you've been talking about it all week, the economy is pretty strong and once we get some of these trade issues sorted out, should get even better once we have good trade relationships with countries like china >> dan, you were on in july with us we talked about china and you said the companies that are affected are in hardware, that's why you like names like google and facebook and say that's important because if you think it's going to get worse and i do think it's going to get worse. has your view changed and has the thesis changed >> no, it really hasn't. we own one semiconductor stock that's it. i'm a semiconductor analyst. >> which one >> for us, we stuck to that because as we've seen, this thing with china is dragging on longer than we think if you think about where technology, the number one pc market, china. number one smart phone market in the world.

china. automobiles where a lot of semiconductor components are going into, that's also china. for us, until we get that sorted out, we want to stay out of hardware the flip side is you look at google and amazon and facebook and the good news is they are locked out of china. they don't care what happens to china. the tariff situation isn't a big deal for them and likewise for the chinese internet companies, again, they are internet companies domestic to china. they don't care about the tariff situation really either other than how it's affecting the chinese economy or currency. that's why we're staying involved with the internet names and not in hardware and we're still like you pointed out, where we are back in july where we still remain negative >> dan, it's interesting to hear you talk about hardware because we've actually seen hardware teches outperforming recently. it's good to get your take on that other discussion we've had repeatedly on air, whether it

makes more sense for investors to continue playing the growth stocks or whether there's value to be had and to start seeing a rotation into some of those more value names. it sounds like you're in the growth camp. >> well, i mean, i'm in the camp of i want growth at the reasonable price when you look at it, the biggest name that we have outside of momentum for 3-d hardware, 40% earnings growth, 16 pe, we like that that's our favorite name but you look at a google, more well known obviously, you're talking about a 24 multiple on 23% sales growth, 20% earnings growth we like that a lot too netflix we were actually short that name in earnings. we look at 100 times pe on 5% revenue growth, to me that's not an interesting value so i'm definitely looking more defensively at the names that

are there. but i'm very concerned about valuations in some of these and i'd rather get paid with a low valuation and still the top line growth that's why we're getting a little bit more defensive around that. >> dan, finally you mentioned google or alphabet any concern on your part as a holder there given this tweet from the president criticizing the search results not reflecting enough of a conservative viewpoint for certain terms? >> no, i mean, that doesn't bother me. i think actually with google, this is probably the best i've felt on google in several years. because when you look at google, they've really had a problem with the fact that they paid out a lot of money for being the default search engine, for example on apple so that numbers has gone up quite a bit over the course of the last three years it was in fact up over 60% in terms of paid to other websites in march that's actually starting to come down so that got into the 40s. that should continue to come

down for the first time in a long time, if you look at last quarter, they beat revenues and earnings for the first time in three quarters i think you're going to see that be a trend going forward where the top line is now august meanted by the bottom line being strong as these expenses start to get smaller so that's one of the reasons we like that name quite a bit. >> got it. so-called tack or traffic acquisition cost. >> what's the seminame you own, can you tell us? >> i think i will avoid that but it's a -- the best way to put it and it's done quite well this year i'll leave it at that. >> all right >> must still be buying it i guess. dan, thank you as always, appreciate it. >> you're welcome. >> three big retailers moving starting with best buy beat the street but gave guidance below estimates which has the stock down tiffany ais higher and raises the full-year outlook and dsw, the comp store up 9.7, well

above the 2.5 we were looking for. doing very well today. as we said earlier in the last hour, the narrative that the consumer is showing up with money to spend on accessories in particular, maybe stronger now than it was earlier in the earnings season. >> i can't help but thing if you see the dollar coming off a little bit, that will help a company like tiffany's whacked by that in the last couple of years. >> the stock did start out much stronger today backed off a bit from the highs it's on. best buy as we pointed out guidance seems to have disappointed some investors and getting hit today. coming up -- there they are, all three of them. wow, look at designer shoe warehouse, must be because i went i guess. >> did you >> what did you buy? >> some stuff for my daughter actually it's good when you need a bunch of stuff for your kids keep trying them on. >> there's jack dorsey his beard and nice hair. washington executives from dwiter and facebook getting

ready to face congress as the eyesident turns his focus to how th handle content. "squawk on the street" will be right back

social media and tech giants under scrutiny as facebook and twitter and google are called to washington for hearings before congress next week the president accusing google and other companies of bias towards liberal leaning news outlets, julia boresten joins us. >> president trump lobbying another attack at google and its peers, tweeting google search results for trump news shows only viewing reporting of fake news media, in other words they have it rigged for me and others so almost all news and story is bad. fake cnn is prominent. illegal? 96% of results on trump news are from national left wing media, very dangerous google and others are suppressing voices of conservatives and hiding information and news that is good this is a very serious situation. will be addressed. google just issuing a statement in response, search is not used to set a political agenda and

don't bias our results towards any political idealogy president trump lashed out at facebook and twitters saying social media giants are silen silencing millions of people all of this comes as google and facebook and twitter prepare to testify in election before the intelligence committee and twitter will testify before the house and energy and commerce committee about the algorithms and content monitoring hearings are set for next wednesday. twitter will be represented by jack dorsey, facebook by sheryl sand berg. google is offering kent walker and richard bur rejected but the company will still make him available. this comes after last november all three companies testified before congress about russian meddling in the election and drew criticism for not sending their top executives since then they've been investing heavily and cracking down on election interference, facebook and twitter and google

found coordinated activity coming from iran just yaesterday announcing they are suspending 500 additional ks back over to you >> julia, the fact that google is making a senior vice president available when you see the ceo of at which time are and coo of facebook. is there anything to be read into that as far as how seriously they are taking this >> it seems there's certainly a back and forth right now between the committee and google we've reached out multiple times to google with that very question they got back to us just this morning and said we're still making them available indicating that they are sticking with their plan for now we'll see if this escalates but for now that's who they are offering up. we'll see how it proceeds. >> thank you very much big story for that sector today. dominic chu looking at strength and energy this week hi, dom. >> the s&p and 2900 mark for the first time ever which translates

into a 8 to 9% gain for large cap indext over the course of the last week best performing, today's top performing sectors like tech and energy doing a lot of heavy lifting. these are the two best performing sectors in a one week span as well that spider technology etf, xlk is an outperformer on day as is the spdr energy etf, xle within the energy sector, it's the oil services companies outperforming the broader sector on the day, at least just today, the oil services etf, oih is doing better than the others xop. if you look on a year to date basis it is the xop following oil prices higher and that is the driving force behind the performance in the broader energy sector overall. today it's the oil services but over the course of the last year to date period it has been those explorers and producers drive ag

lot of the energy gains. back over to you. >> domesti, thank you. let's get to sue herera for a news update. >> good morning, morgan. here's what's happening at this hour we begin with russia's defense minister saying that the country will hold the biggest war games in nearly 40 years the exercise will involve almost 300,000 troops and 1,000 aircraft and two naval fleets. military units from china and mongolia will take part in the exercises. the kushner family real estate company has been fined $210,000 by new york city regulators for filing false documents with the city an investigation showed the company routinely claimed it had no rent regulated ten aents in his building when it actually had hundreds, allowing it to escape extra scrutiny during construction 42 of the false applications were submitted when jared kushner ran the business the company blamed the errors on third party consultants.

a california man was burned when his e cigarette exploded in his pants and whole thing caught on video measuring a television in the storage room of a tv warehouse when all of a sudden it looks like firecrackers went off in his pants. he said he doesn't think he's going to use e cigarettes anymore. >> and state fairs are of course known for creative and unusual food well, the winner of the most creative war at the texas state fair is that it is a cotton candy taco. yum. it starts with a graham cracker waffle cone moded into a tack show shape and glazed with marshmallow and topped with chocolate and cotton candy the state fair announcing the winner early because the fair doesn't actually begin until september 28th i don't know, i kind of like savory tacos versus sweet tacos, but that's mean. back to you. >> i would totally try it after my corn dog. >> there you go. >> before we head to break,

let's go to texas where leslie picker spoke to one texas based company feeling the pain from tariffs. leslie >> reporter: hey, morgan, we're standing in the pipe yard for one of the largest pipe line operators in the u.s take a look at this stamp right here it says made in greece this imported steel is creating a $40 million headache for the company thanks to the trade war. we'll tell you what they are g ouitomg aerft the break. it's absolute confidence in 30,000 precision parts,

or it isn't. it's inspected by mercedes-benz factory-trained technicians, or it isn't. it's backed by an unlimited mileage warranty, or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned, or it isn't. the mercedes-benz certified pre-owned sales event, now through august 31st. only at your authorized mercedes-benz dealer.

it's not a good thing to restrict trade america had the freest trading environment in the world our economy is more open than any other and we remain the world's number one manufacturer, manufacturing output is an all time record high clearly we can thrive. our manufacturing sector can

thrive in a free trading environment. putting restrictions like this in my view are counter productive, will raise the cost of automobiles for american consumers and create an incentive to make cars somewhere else that's not subject to these rules. >> that was senator toomey and the president tweeting i smile about senators saying -- they don't say how we lose on dumb trade deals and the same countries tariff us to death the u.s. former ambassador to mexico and former u.s. ambassador to can do da bruce heyman. >> good to be here. >> i'll begin with you just because we're curious to know how we think canada's conversations are going to go in washington this week you got any ideas? >> so i think this is a great opportunity as long as the u.s. trade representative is in the

compromised mode as opposed to the dictate mode if they are in the dictate mode and they force the prime minister into a deal that's a bad deal for canada, he won't do it i know him, know his team. they won't do a bad deal for canada that being said, i think we have a short window where we can come together and do a deal in principle and agreement in principle. can't do the whole thing but i think there's a way to get there over the next few days if compromise is in the heart of usdr. >> even with obviously few days to work against this self-imposed deadline, rebranding the agreement that seems to isolate them out of the deal you think you like canada's hand here >> well, i don't mind canada's hand as long as the u.s. plays in a fair way. doesn't mean we don't play strong but we need to play fair. i think that canada -- everybody needs to just take a deep breath here canada especially in light of the president's recent tweet, canada has a surplus with the

united states, $670 billion. we have a surplus in steel we have a surplus with the united states in dairy and we create millions of jobs, 35 states, the number one export is to canada so we need to make sure that if the next three days don't go well, that the united states doesn't start beating on canada and do all of the things the president was threatening on auto tariffs and the like or this market will turn around quickly. >> ambassador wayne, the thing we don't know as well, whether or not mexico is okay with the deal that doesn't include canada, right, even senators have been asked about that and say, ask the mexicans. >> i think the mexicans want canada to be involved in this. it makes a lot of sense. the real progress taken place over the 25 years has been the integration across north america. canada has been a big part of that canada is our number one trading partner, mexico number three for mexico it's really important that they have a predictable

future with the u.s. market. no question about that and that's why they were in negotiating so seriously and reached this preliminary agreement. it's important to note that it is a preliminary agreement in principle. so there's a lot of work still to do even with mexico but a key part is bringing in that northern partner to this negotiation now. >> investor heyman, we had former u.s. trade reps on our air in the last 24 hours that say it will be chapter 19 and dairy and argue those are two sticking points they don't believe the canadians will be willing to negotiate if we get to a point there's no deal with canada, that's still worse than some sort of deal with canada. do you think they would walk away and let that happen >> let's start with dairy. the reality is that canada provided additional dairy access when they did their negotiations

and provided it with tpp and i think that the canadians have shown some leeway without giving up supply management entirely i think that even the u.s. agricultural secretary did not ask for the elimination of supply management and dairy. i think there's a path there i think the dispute resolution may be the most difficult, chapter 19 that is when we have a disagreement with each other that we have an independent body put together to resolve that as opposed to hey just sue me in the u.s. courts which i think i can understand why any country would be concerned about that. but i do think there are paths to getting this deal done as long as there's compromise on all sides. >> and ambassador wayne, we had senator toomey on talking about not knowing a rlot of details you mentioned the agreement being preliminary. what should we be focused on as we learn about details in terms of areas where there could be open questions of importance

>> i think one of the important points is to get reaction from the auto sector. one of the big questions is what will these new rules do to competitiveness of north america and auto both the cost for american consumers but also we export about 20% of our production to the rest of the world. so it's very important to get those expert views, people who actually build the autos to comment on it. secondly, there have been a number of changes in the dispute settlement proposal. so companies and certain sectors will be concerned about that third, i think we'll want to see some of the details in the labor chapter. this has been a real point of interest for a number of democrats and unions so we're especially advivis avis mexico of course that's going to be important to get those details. it will be very important to see now these other comments of stake holders as this goes forward. and then the big issue vis a vis

canada and congress is that congress was asked to look at a tri lateral agreement. and number of congressmen have already spoken out saying it's really important that this final agreement be bilateral and we're not sure that we would approve it if it's not. >> right, that's going to add another layer of drama to all of this ambassador, anthony wayne, thanks for your time we'll watch it closely appreciate your help. >> pleasure. >> thanks. >> for a closer look at how president trump's tariffs and trade policies are affecting american companies we go to texas now where they are facing a $40 million tariff on pipes ordered from greece. in grand falls with more, leslie >> reporter: hey, morgan, they ordered these pipes from a steel mill in greece in december they are stored here in grand falls texas before the company puts them underground to transport crude from the perm

onbasis where we're standing down to corpus christi even though these pipes were ordered last december they reached u.s. shores after the trump administration impose the a 25% tariff on imported steel that added $40 million of new taxes onto the project now plains filed for an exemption and should not have to pay for steel that was purchased before the tariffs went into effect they also said this steel is specialized and cannot be manufactured domestically. plains heard last month the exemption request was denied the commerce department told cnbc that its policy does not allow for grandfathering of preexisting contracts, additionally the administration said that plains exclusion requests received five objections from domestic manufacturers who said they had the capacity to make this deal that plains needed plains says their story highlights the important flaws of the implementation of the tear i haves on steel imports and they believe there needs to

be imt proxts on the exclusion process like more transparency, better appeals process and grandfathering of previous orders they say fixing these issues could help prevent any unintended consequences that may come from the exclusions process that may come from the tariffs that could harm projects here in the oil and gas industry, guys >> leslie, we have steel production beginning to ramp up here in the u.s. again is there any indication from your conversations with plains all american that they believe the steel they need to be manufactured for those pipes is going to start to be done here >> so that's the big issue right now there are only five manufacturers that can produce the type of steel necessary to build these pipelines. that compares with about 60 major pipeline operators that are looking to source that steel. historically they've imported it because there isn't enough supply domestically to be able

to meet the demand, especially here in the permeon basin, where demand is bottlenecked because they are not able to move the oil quick enough despite all of the production that's taking place here so right now as it stands, a lot of oil and gas companies will say and pipeline companies will say the current domestic steel producers aren't able to meet their needs. now, in a year or two years or three years' time that remains to be seen but right now when all of the production is taking place and all of that oil is being extracted from the permeon, they need to move it somewhere and they just don't have the time. time is money here they don't have the time to really wait for u.s. steel manufacturers to catch up. >> leslie, thank you in grand falls, texas. >> we want to tell you to be sure to tune in thursday at 11:00 a.m. eastern when becky quick will be sitting down with warren buffett, that's ahead of his lunch with the winning bidder of all you'll glide foundation auction always an interesting coertinvsaon

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i get that voya is with me through retirement, i'm just surprised it means in my kitchen. oh. so, that means no breakfast? i said there might be breakfast. i was really looking forward to breakfast. i know... voya. helping you to and through retirement. welcome back to "squawk on the street." rick santelli with a special guest after we learn there's agreement with mexico. jay timmons, ceo and prfrs of the national association of manufacturers. thanks for joining me. >> good morning, rick. >> one issue that always bugged me, when we look at things like wages, wage disparity, income disparity, the issue is really a global issue generically, globalization tends to bring wages and compensation to the lowest levels many countries like china, vietnam, to some extent india where wages are low.

this agreement says 40 to 45% of auto content has to be made by $16 an hour minimum wage people. now that's not for the u.s that's for mexico. i think that's a great part of the deal your thoughts? >> i actually think it is good for the united states because we clearly do as you point out have a higher wage rate for manufacturing workers here in the united states. you have to really look at the entire competitiveness package we tackled tax rates, regulatory issues, and it has become much more easy to compete in the united states with other countries around the world so i'm not too concerned about this provision. i actually think we can do just fine. >> other aspects, intellectual property, unset provisions, bringing on -- sunset provisions, bringing on canada, what are some areas to pay

attention to as it moves forward? >> rick, i think that what was announced yesterday is definitely a step in the right direction and i think the administration needs to be con grat lated for coming to successful resolution with canada many recognize it needs modernization. there are a few issues we want taken on one of those is the issue of bringing canada back into the agreement. it is very important we have a tri lateral agreement. so many exports go to canada largest consumer of exports. about 43,000 manufacturers here in the united states, 94% of those small manufacturers are exporting to those two countries. nafta needs to include canada, and we're hopeful that will be the result of minister freeland's visit to the united states this week >> you know, we had the treasury secretary mnuchin on "squawk

box" with joe and the gang this morning, it sounded like he believes canada coming on board is a good possibility, whether part of a tri-lateral or new one on one bilateral agreement do you think negotiating style of this president and how he framed the issue, do you think that will happen >> he clearly likes bilateral agreements and he made that perfectly clear, but i think if we look at our region and importance of tri-lateral agreement in this case, it is because of movement of goods between our three countries and integration of operations and it is because the administration has done such fantastic work on reducing regulatory burden on manufacturers that the amount of paperwork and bureaucracy that would ensue from separate bilateral agreements would be a burden that i don't think the administration is going to want to impose on manufacturers and manufacturing workers in the united states. >> thank you, jay.

i think many agree we'll have to wait for a few days and see exactly what canada will do and when they will do it thank you for your time. carl, back to you. >> thanks, rick. rick santelli. as we go to break, take a look at the markets. dow has a 42 point game. lot of retail names on the list along with semis back in a moment the employee of the year, anna.

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good morning, it is 8:00 a.m. at google headquarters, 11:00 a.m. on wall street "squawk alley" is live ♪ ♪ ♪ good tuesday morning welcome to "squawk alley." i am carl quintanilla with morgan brennan at the new york stock exchange jon fortt is off we begin with the market dow is continuing to rally off the highest close since