control half the internet and the u.s. is going to control the other half i think a more apt term is the splatter net you're going to have china infiltrating the internet all over the world we're seeing it start to happen in the u.s. with tick tok. i'm worried about the splatter net. it's very concerning. >> make sure you join us tomorrow big interview coming up on sidewalk on the street the guys from the big merger of the morning. ♪ good thursday morning. coming up in about an hour the ceos of b brbt and suntrust. the bank of england, the eu commission cutting some growth

forecasts. busy earnings this morning the dollar's tear continues now for a sixth consecutive day. bbt buying suntrust in an all stock deal to create the nation's sixth largest bank. >> plus, global growth fears return stocks returns to a sharply lower oath >> young brands down on the premarket. the fast food giant with an earnings miss. bbt and suntrust agreeing to combine what they're alling an all stock merger of equals valued at $66 billion. the deal will create the nation's sixth largest bank and serve more than 10 billion customers. ceos will join us in about an hour's time, kelly king and bill rogers

a lot of discussion on what it means for regionals and financials at large. >> it's really taken a long time for this to happen i know founding fathers never wanted any bank to have more than 10% >> 10% deposits. >> what's incredible here is you have huge overlap and huge tech costs. you cut the tech costs eye gag c gigantically >> i assume when we talk to them they'll be talking a lot about that bricks and mortar move to really it's about online technology, mobile banking >> bank of america >> that's where you want to increase your financial fire power, haveyour scale

it really is structured as a true merger of equals. both banks seem to benefit from the prospects of being together. >> it sounds like you're saying there's still enough fragmentation for a new chapter

of m & a to start? >> you could do goldman us bank, goldman american express us bank corp mirerging with fir horizon. these new banks are all this everybody banks like this. next thing you know what happens is you hook at this and you say why do i want to be with suntrust when bank of america is in my pocket right here? it's everything i need it's merge or die. >> merge or die. really. >> merge or die. >> okay. >> we're all familiar with the old chapter which was branches on every corner. >> when you see the overlap, it

is extraordinary >> i'm looking at slide 31 like in atlanta you've got suntrust number one at 47 billion in deposits. bbt is number four orlando, they've got some overlaps there too we'll see how many they've got to close or if they close them. >> these banks, they bring in a workday. they bring in a sales force. these banks are like, wow, are we ever behind we have got to catch up. these guys are making the most money when people have their money in a checking account. we're getting that money and investing it at 2% i think this is the way of the future i think that under this administration nobody's going to say we shouldn't let these deals happen because there's going to be too many

>> this could be a one off, jim. >> oh come on. >> when's the last time we saw a big bank merger? >> it was key first niagara. >> how big was that? >> do you think it means that financials might catch up to some of these industrials? >> no. goldman has to do something. solomon doesn't want to do a deal. >> goldman has to do something >> have you followed the goldman marcus situation they want to be the largest in retail they are offering unbelievable rates. >> they'll let you consolidate all of your credit card debt at a lower rate. >> that's a harbinger of

something big happening. will the regulators allow citi to do something? >> no. they're not going to let them do something. >> why are you killing my narrative? >> they were below the 250 billion asset threshold. now they're obviously going to be well above it. >> do you think first horizon could do nothing, coamerica? these things are selling at like minus three times earnings >> you may very well be right. >> i am right. >> the reaction of the market this morning is very positive. when you talk about this deal, they've be talking to each other forever. i believe they got started thinking about this late summer, early fall it's been a while. when you look at bbt and

suntrust -- >> that's why i'm saying -- >> you are not unhappy and others will look at it without a doubt and say is there an opportunity. >> you taught me when both stocks go up, that begins the wave all i am doing is being your pupil. >> i appreciate that that's not something i thought i'd hear you say. >> his pupil. >> you've done well, c rk, gras hopper >> this group is awful and this could change everything. >> we'll see stocks are set to open low eer concerns about global growth the eu slashes its growth forecast from 1.9 to 1.3 the bank of england doing something similar here you've got the fed, boe, the eu

all cutting their forecasts for the year so far. >> i think there's a grudging recognition that it really doesn't matter it's work rules. it's the difficulty of doing business, it's the notion that if i go there, i can't be a capitalist i think we have to start thinking about that. they need china to grow faster that's important we're not focused enough about what it's like to do business. it's a nightmare. >> in the u.k. >> in the eu i have a business in italy you lose money for the first 70 years and then the pay back happens and you're 100 it is impossible to do business in italy, hence a recession. it doesn't matter what rates they have. when you want to buy a house in italy, you know how you do it? there's no mortgages. >> cash, right >> there's no mortgage market. we see the rates in italy.

>> italy is one part of the eu i know you've had a particularly difficult time there. >> i was just surprised that you couldn't get a mortgage. i went to a big bank that is actually a little troubled, the oldest bank in the world i said i want a mortgage they said you can't get a mortgage i said look at what i have they said no we don't do mortgages. i said what bank does? there are no mortgages do you care what rate there is if there's no mortgages? >> the boe has some work to do we're 50 days away from the brexit deadline of march 29th if that holds >> i think that brexit is going to be great for the eu i think most banks are going to have to choose paris, some are saying milan >> you would indicate that may be a mistake given your view on doing business in italy. >> it's not a mistake from the point of these suits this is a very nice suit

it's not a point from sartorial aspects but it's very difficult. i don't think you're allowed to fire anyone. i think they have to commit arson to be fired. >> which is more difficult doing business in italy or trying to open a new headquarters in queens >> queens is a very special area because they don't want job creation i think we're only looking at the downside we have to recognize that -- i think berlin could do great. brexit we only focus on the negative i think there's negatives morally. i don't think what's happening i don't like the notion of what's really driving brexit i think eu gets a boost. >> speaking of things going independent, there's a lot of discussion this week about the fed's independence something jerome powell talked

about. take a listen. >> we have precious independence from political concerns. as i mentioned, we do things on a nonpolitical basis we serve long terms and we're directed to carry out our work in a nonpolitical way. our accountability to the public runs through congress. >> has the messaging on this been good after that dinner with the president? >> i'll tell you what the message is good. he's not talking about policy. i think that he's becoming more statesman like he's not being as glib as he was. this is good t the. >> 2661. >> what is that? >> ten year yield. >> mortgage purchase still not

that good. there's two economies. auto, bad. housing still not coming back. we need this man talking about we're going to do what's great for the country. >> the dollar higher now before the fed meeting and if the rest of the world slows down enough that's going to bid it up even more >> i look at the quarters. the translation to quarters is now ridiculous >> at what point does this become a liability for stocks? >> for the international stocks their multiples have shrunk mightily only boeing is doing well. you've got to go by dollars first. >> oil and dallass. >> and sysco got to basis co-equipment in

doll dollars. this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. ♪ claims came down a little bit for the week and we got a lot of fed speak today rick >> good morning.

mid january charted tens start right outlooking at the parter end of the curve you can see it's deteriorated a bit. we're now sitting three basis points lower as are two. it's a parallel shift. no major curve implications which means the market isn't really differentiating on these weaker yields between central bank activity on the short end and economic activity on the long end what it's really focusing on is the long end of markets overseas let's look at a september 17 ten year chart we're now hovering at or slightly below 120 basis points. as you see on that chart it isn't the lowest since september 17, but it's awfully close you see all those bottom there is this is going to be a very important area if we look at bund, this chart goes all the way back to october 16th

we are trading 12 basis points that would be the lowest all the way back to the fall of 2016 those pressures are definitely showing up in how investors and capital behave and it's putting downward pressure on the yields. the pound versus the dollar, it's down a bit for sure but you could see it's still higher on the year finally here's an end of january start to the dollar index. today is the sixth session it is higher it really is on a nice streak solidly above the pivot line which traders contend is 96 even >> stay tuned for our exclusives with the ceos of suntrust and bb&t back in a minute

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got a mad dash it's thursday just to set the scene. >> there's the reason why we played carol king is a company

called tapestry. used to be called coach. this is a total surprise coach is okay. it's kate spade, minus 11 and a very big cut for 2019. they love to change their names in this group. it was a fabulous quarter. this is the company that a lot of people thought really had the model. no and so it is going to be jarring. >> what's the problem? >> kate spade bag company had really terrible comps. he said this performance fell short of our expectations in the face of an increasingly volatile macro economic and geopolitical

backdrop do you really change handbags in the geopolitical backdrop? the answer is no so we have to dig deeper i think that maybe there are some fashion issues. we've seen fashion issues. this is no longer the king the king will be capri >> got it. that's one of the names we'll keep an eye on this morning. of course talking about twitter. t-mobile earnings, grubhub and don't forget yum brands yce going to join us

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forecasts. some apparent reports of progress in border security as we're just over a week away from this shutdown deadline. >> that's good we sure don't need that again. you get another shutdown, it's going to start hurting the quarters that moment is just long enough they didn't get a lot of companies telling me it was very bad for their quarter. but i think when you hear somebody like tapestry saying geopolitical, i think some of that is malaise when you have this kind of angry shutdown. >> are you channelling jimmy carter here? >> that's exactly right except for i don't wear cardigans and i think there is a sense that it makes the company feel it's off the rails. >> it was the longest shutdown in history by a long shot. >> i'm just saying if you -- look, i just think it's just bad

for the country and i just feel like people -- when you see food banks for people who work for the government, it does make you feel like we're some sort of underdeveloped country >> the times argued that the usmca is headed for some choppy waters in congress. >> i think that's true when half the people -- look, you saw it at the state of the union, then you saw it with the president's tweet. he's talking again about how the base loved it. the base the base is back it's not the treble. it's the base. >> let's get to the opening bell here in a few seconds, get a look at the s&p. celebrating over $200 million raised for rare cancer research

at the nasdaq. jim mentions twitter that's a good place to start at the open revenue up 24. >> i think their transparency to some degree is hurting them. look, when you have the monetizable daily, q 418 126 i know that's a little bit of slowing. of course you have to spend. what the heck is that all about? i do feel that it's any part of any advertising mix. 30 out of 38 of the super bowl advertisers were on twitter. i think people feel the expenses are too high and the growth's not there. it is a relevant place for companies to spend so therefore

the stock will bounce back after the selloff. >> we've been waiting for a hard number on daus for a long time. >> yes. >> it's 126 million daily active users. fewer than snap. >> i know. >> does it make you think of twitter as a more niche product? >> i think what you have to do is say are those uniques more influenti influential, are those uniques more willing to buy things what audience is richer? what audience do you really want i think that's what they're going to have to start selling themselves as an ad buying when you want to do a rollout of something, you have to put it on twitter. i can understand how people would say, wait a second, this isn't as good as i thought. >> growing at 9% year on year is a lot better than snap's growing their user base. >> i actually liked the snap

quarter because i realized their balance sheet is solid ev evan speegle has grown a lot never mind >> i had not heard you be particularly positive about mr. speegle in the past. >> that's absolutely true. i recognize that he's so much better than when he started. i think twitter's giving more information. people are going to say, wait a sec, i see more information. maybe this thing isn't as good as i thought i think it's a must buy for companies rolling out new products i don't know about snap. i was worried about them being able to pay the hosting bills to the big data centers i'm taking that off the table. it's tight. >> had an incredible day yesterday.

>> it was amazing. >> today it's down a little bit. >> i think three days from now we'll look at twitter and say it's okay. people are looking at facebook >> germany basically says you can no longer collect data through whatsapp, through insta and use it for core facebook purposes. >> i thought that was surprising first time i agreed with facebook on some sort of policy issue. facebook was down about 50 cents. this is regarded as really bad. >> got a ton of news in food dunkin, yum, chipotle. >> i was a little surprised. i know we're going to have greg creed on they missed on a couple of lives. dunkin donuts did a big lowering and it wasn't good to circle back on yum, kate

rogers is with brian nickel. taco bell was up 6 and so was chipotle they did have good comp numbers. dunkin is surprising i didn't expect them to have a .6% comp >> then they're saying celestial getting far smaller today. after reported earnings there was a weaker revenue margins were significantly cut the guidance was cut as well eps now for this fiscal year of 60 to 70 cents one quote from management, we're creating a new strategic direction.

we're starting to see sequential improvement in our numbers and are working diligently to restore profitable growth in the u.s. while continuing our profit momentum in the united kingdom and europe. >> they expanded too fast. you know who else expanded i like them. grubhub, just a tough number i'm beginning to wonder if it's just gotten too competitive. that's a very well run company but the guidance not what i wanted i would surmise that if you put the entire mosaic together, it's bad. >> there's a lot of double digit decliners. >> yes >> from tapestry to grubhub to han to a number of others. i want to quickly hit t-mobile take a look. the numbers were fine, but there is a growing concern about the

deal earlier this week their offer to cap prices for three years john lodedger saying critics of our merger have argued we're going to raise rates i want to reiterate unequivocally prices will go down, customers will get more for less don't expect to see any real movement until the second quarter. and talking about how consumers will benefit from the 5g network. you've got a growing course here of concern, i think. we reserve judgment at this point on what's going to happen. >> he walks away, t-mobile goes higher. >> david mentions yum. of course, shares are lower this morning after falling short of earnings estimates the company announces that taco bell will now offer nationwide delivery through a partnership

with grubhub >> we are joined this morning by greg creed thank you for having us here today. >> welcome to dallas. >> congrats on the quarter, strong comps but you did have a negative impact on your eps due to the grubheads- grubhub partnership this year. why will that partnership pay off? >> we had a great quarter. it was our strongest quarter of the year we love the grub hub relationship it was up 3 cents for the year but in the quarter it was down if you deliver great operating profit, the rest of it take kars

care of itself we're very excited for taco bell really getting into the delivery business >> you're also looking to bring momentum back to pizza hut. >> yeah. >> you're just wrapped your first year as the official pizza sponsor of the nfl i'm curious if that brought in new customers. >> we love the nfl how can you not love pizza and football, right? we're in this for the long-term. obviously we're trying a lot of things now some of them work, some of them don't work our ability to tap into the love of football and the love of pizza, it's gone incredibly well we're really happy with our nfl relationship. >> jim >> congratulations on the numbers. when you guys split from yum china, everyone said, yum china's got the growth, regular yum no growth. you were putting up a huge number of stores you actually have great growth,

don't you? >> listen, we've got growth in same store sales, in systems sales. i think we opened well over 1700 net units. we're solidly in the 4%. we finished up 5% system sales for the year and 6 in the fourth quarter. taco bell knocking it out of the park it was a really good quarter and a great way to finish a solid year. >> i'm blown away by that taco bell number of 6%. it looks like wherever brian nickel goes you have 6%. what has happened that mexican food is on fire? >> i think the most important thing is, yes, we had a great year, but that was the seventh year of consistent same store sales growth this is not like a one hit wonder

the new president is doing an amazing job. we have the best marketing, we have great operations. our relationship with our franchisees atta taco bell is second to none there's no silver bullet i think that team is doing everything right >> greg, i'm curious what's your take on the state of the consumer where where you sit we've heard talk of a potential slowdown in 2019 >> as long as gas prices stay low and interest rates stay low, i'm not seeing the customer sort of walk away from what we do value will always remain important, but value is important no matter what you're in these days. but innovation sis important it's about truly understanding what drives the customer great brands with great franchisees always win >> value is everywhere. >> yeah. >> you talked about innovation

and distinctive marketing. how do you separate yourself taco bell obviously has done an amazing job. >> we call it red, relevant, easy and distinct. it i think the newest attribute is how do you make it easier. i think delivery is the next way to make it easier for customers to access what i think are relevant and distinctive brands. i think we've got all three of our brands focusing on being more relevant, more distinct and more easy. >> we've heard from other fast food companies that finding skilled workers, keeping them on the job can be a really big challenge. what are you hearing from them >> i think it is a challenge more importantly culture matters. if everyone's offering the same prize or everyone's offering the same wage then culture matters

i would say even in a tight labor market culture is more important to attracting people to come and work at one of the yum brands. >> quick question on delivery. starbucks says it's going to overheat their coffee so it's still hot when it arrives. how do you do that with taco bell >> we're delivering our pizzas 15 degrees hotter right now because of new technology. as long as you invest in technology, people want hot food hot and the cold food cold they don't want it overhot, they don't want it freezing >> thank you so much for having us here today. >> it was a real pleasure. >> back to you guys in new york. >> kate rogers with greg creed talking yum. the other issue is traffic which some big players like mcdonald's have not been able to juice.

they've been having to make this stuff up on price. >> i've been going over that quarter. what is the american consumer doing? i mean, it's so inconsistent, who's going out, who's not we hear from chipotle. you have to believe that the chipotle numbers are great maybe it's different kinds of food are doing well. i just think that there are areas of food that people are turning on i'm wondering whether burgers have gotten a little out of fashion. >> taking a look at shake shack lately >> chipotle digital up 66, prior quarter up 48. the number of deliveries out of chipotle year on year is 13 x. >> they're doing now a terrific drive-through. they're using loyalty. i think they can be like panera. they are doing so many things good they brought back like 4 million

shares when everyone had given up the on it it's exactly 18 months from their last food born illness story. their labor costs because of the leverage of sales is lower and they did not sit there and belly ache about how much it costs to get people to work i thought it was an extraordinary quarter. >> it's one of the few positive stories we have today. >> it's an ugly day. >> we didn't even get to a lot of them. >> i'm worried about this facebook, the european thing wow. that would be kind of the end of their model. >> they did issue a statement saying the german government underestimates the degree of competition they face in germany. >> i think the german government doesn't like them.

>> doesn't like facebook. >> remember they sell nobody's names. they didn't do anything wrong and all the critics are dead wrong, okay? and cheryl sandberg is the best except for zuk i've not been zuked. there. >> dow is down 178 led by apple and goldman at the bottom of the list. >> tough day the market has had a tremendous advance recently thank goodness we have a bank merger to talk about because really the banks are the only thing on the upside. semis have had an amazing run. what are they up, 15% last five weeks or so. a little bit of pause there. there's your bank rally. there's suntrust there's bb&t most of the big super regional banks, they're all trading up 4 or 5%. a lot of people said the premium is pretty modest why is it so modest? it's modest because there's no growth out here.

it's really tough. we have low rates. that limits the profit on interest that really limits your ability to grow with those two factors you've got low growth forces you sell or merge. you continue to cost cut you have more efficiency you cut out the overlap essentially. don't expect amazing premiums, though we haven't seen a lot of big mergers. in the last few years i was wracking my brains to figure t out -- before that you have to go back to 2008. jp morgan and bear stearns

merging. just on the markets, we've stalled out in the last several days there's a good reason we should be stalling out. the market's really pricey right now. here's the problem the crowd that keeps screaming 0% earnings growth in 2019 still has estimates that are very high if you think the market is going to have 0% earnings growth in 2019, right now the market is about 17 times forward earnings. that's really pricey for no earnings growth. if you have 5%, it's still pretty high, 16.2. the normal historic average varies, obviously, but you usually get 6 or 7% earnings growth the market at 17 times forward earnings this is really a lot to ask for the stock market right now. a lot of strategists still have their numbers way up there, 2800 to 3000.

morgan stanley is about 2750 we're there essentially already. barclays is 3,000. goldman is 3,000 these guys are all coalescing around here. 0% at 3,000, now you're talking about 8 times forward earnings it's very difficult to make an argument right now that if you really look at the market fairly and you think there's going to be 0% earnings growth, the stock market is very richly valued right now. still to come this morning, bb&t and suntrust rising on news of that $66 billion merger deal. we'll talk exclusively to the ceos of both companies we're down 173 alpha seems more elusive today.

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. markets being led by some regional banks and some consumer names. there's a look at the top performers on the s&p, including sun trust, hains brands and

chipotle dow is down almost 200 points though we'll talk with the sun trust ceo at the top of the hour

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trading. i suggest that you keep the regional banks, 4% yield, they have been inquisitive. beth mooney, in the final phase of her career there. i just think that this is one of those, cleveland bank down very cheap. that's the only one that i want to play that game with, but not a baby sense a bad day. let it come down. >> what about tonight? >> i've got two stocks up, iac, tonight do a lot of tv i really love those guys and then evolus, the company that's the threat to botox, botox from allergen it's horrible for allergen, what can i say. stock down again. >> you're being remarkably selective in the bank space. >> because i just think they are all up, and i wanted to let them cool off because today is a bad day, and everything is up, and everybody feels that every paining is going to do it. i think this is so jarring and new it's going to be good.

have you to figure out who really needs it, and u.s. bank, i did the goldman, u.s. bank dave is shaking his hit but key is an inquisitive bank, so, therefore, they are know how to do deals that's what i point out. >> all right, sir. we'll see you tonight. "mad money" at 6:00 p.m. eastern time on that note we'll talk to the ceos of bb&t and is up trust on that $66 billion deal. best day for the kbe since about january 18th or so dow is down 2175 ♪ driverless cars. all ground personnel please clear the hangar. trips to mars. $4.95. hydroponic farms. robotic arms. ♪ $4.95. delivery drones or the latest phones. no matter what you trade, at fidelity

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good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at new york stock exchange. plenty to watch today. dow down 16 is banks cutting earnings forecast and m & as and a ton of consumer companies. >> our road map today begins with the big bank merger bb&t buying sun trust in an all-stock deal creating the sixth largest bake in the u.s.

both ceos join us exclusively in a moment. >> a lot of things to dig through including twitter. we'll hear from the cfo. >> and former whole foods ceo walter robb will join us as a handful of consumer names report results as well this morning. >> let's kick it off with the selloff this morning fears of slowing global growth hitting the major averages as the european union cuts its growth forecast. next week a new round of trade talks begin between the u.s. and china in beijing with us now to discuss all of this is wells fargo senior global market strategist and kevin caron, washington crossings adviser senior portfolio manager. thanks for joining us. you know, kevin, sort of a double whammy this morning on global growth. worries about germany, the e ur taking down the growth forecast there, and then the bank of england really sharply cutting the uk growth forecast to the worst level since the financial crisis i mean, how big of a concern is global growth versus whether the market expects it in. >> yeah. it's a real concern, and it's

been a concern for last year or so, and this is just yet another round of it. we've seen -- we've seen things like soft commodity prices we've seen weakness in orders coming out of china. we've seen a slowdown in europe, so all of this is consistent with the story that has been in place for the last year which is the united states remains the strongest economy globally as far as the developed markets are concerned, and there's still weaknesses that are emerging outside our country, so you've got the two different narratives and that's creating some of the volatility that we've seen building up over the last year or so. >> so douse that mean, samir, that the money should continue to flow into u.s. stocks and out of others? >> you know, again, we would take a little bit of a contrarian approach. we still like the emerging markets. we think if a lot of these issues resolve themselves, the trade, fed patience, if there's fiscal stimulus in europe, we think a lot would benefit in the emerging markets when we were talking about europe itself and the uk, we probably would be more cautious

there, maybe more of a neutral stance we really think emerging markets are the play u.s. will also do well, but if we were to rank, em first, u.s. markets and developed markets three. >> clearly the markets like this with a lot going in regional banks. do you think it says anything about where we are in the economic cycle, in the credit cycle? >> you know, i think what it says more than anything that banks are realizing growth opportunities will continue to be limited and so for them probably consolidation is one of those levers that they can pull to try to generate a few more earnings out of the kind of the existing framework in the infrastructure, and so, you know, by consolidating and getting the synergies, that's probably going to be a real good catalyst for the financials and that's why we remain overweight. >> kevin, what about you where do you think it puts us in the cycle? >> well, the global -- the global credit cycle clearly has been led by emerging markets over the last number of years. the vast majority of global credit has been created outside our border so that's why it's so

curious that now you're seeing a pickup in concerns outside of our borders which is consistent with past credit cycles where they have ebbed and then flowed and then ebbed so our concern is that the global credit cycle is easing, and here in the united states we don't see much change in terms of credit creation though it's slowed a little bit. so overall we're a little bit cautious about the global credit cycle, not as concerned about the united states, but it's still worth watching. >> sameer, can you help viewers understand what's happened with the dollar since the fed pivoted to this more dovish position, and -- and what point does this truly become a liability for at least companies that receive a lot of revenue from overseas >> no, a great question, carl, and a lot of what has happened is the fed has basically acknowledged that there's some slowness in the broader world and that they can afford to be patient and inflation pressures aren't a big issue and a lot of that has to do with the international side being as unique as it is.

unfortunately, you've had the growth expectations outside the u.s. they have been dialed down even faster, right. the ecb was going to raise interest rates this year and now they are talking about possibly another round of bank loans so it's not so much what the fed has done when you take it as a whole it's that europe has rushed it down even faster and the dollar continues to have this upward bid to it. we do think it will depreciate and that there will be stimulus outside the u.s. and we think the global picture does improve on a relative basis as the year goes on which puts downward pressure on the dollar and to the extend that it doesn't the question about yours about u.s. companies, they will face a real headwind when they bring those revenues home in euros and translate them back in. >> central banks are up, we're seeing it in china, the uk, the fed is patient, but that might prove to be the tightest policy in the world with global growth slowing. >> yeah, that's right, because

it's all about what we look like relative to the rest of the world in terms of growth and in terms of our interest rates, and ultimately -- ultimately we seem to continue to be relatively better than the rest of the world. one of the things i would caution about though as far as our own interest rates here in the united states is that the market has already taken off the table the much more hawkish posture the fed was expressing six months ago and the market began doing that back in october and november as this equity market became more volatile, so a lot of the -- a lot of the derating i guess of the expected rate increases this year has already happened, so then it leaves you with the question, well, if the economy suddenly gets much better, does that bring back on to the table the potential for ma more aggressive fed or the opposite would be if things get worse, we certainly don't want to see that because that would mean negative things for equities and the economy have you to look at where the

economy has already priced we're already priced out significant tightening. >> so where, sameer, does that leave you as far as sectors in the u.s. market? i know it's not your favorite. you like emerging markets, but in the u.s. what is works? >> we still think cyclicals, right, so looking at parts of the economy that are jen rate healthy earnings growth. we think he can hear does well, industrials, financials, consumer discretionary the consumer remains in pretty good shape and on the selloff we added tech over time we think that will continue to pervade a lot of the different parts of our lives we've liked tech more recently. >> all right thank you both for joining us. >> thank you. >> thank you >> all right it is the biggest bank merger we've seen in a decade, bb&t and sun trust announcing a $66 billion merger of equals this morning. the new company will bick the sixth largest bank in the u.s. bb&t ceo billy king and sun

trust's ceo join us from north carolina thanks to you both for being with us this morning mr. king, let me begin with you. both you and mr. rogers have certainly fairly recently outlined your views of going it alone and the strength of boast your franchises, and why is now the right time, and how did this actually come to fruition given, of course, that both of you certainly have seen a very strong path ahead for both of your companies as independent? >> well, we've both been very laser focused on organic growth because frankly that is the best way for any company to growth itself from a quality and a profitability perspective. and to be honest that's the only thing you can really control but at the same time bill and i have talked for a long time from an industry perspective about the changes in our industry, and

the tremendous increase in the need for technological investment to be able to provide the level of digital capabilities that our clients now demand our clients now demand what i call realtime satisfaction they want what they want when they want it right here right now, and so we are all facing an increasing set of complex economic realities where we have to invest more and more in technology, so while each one of us are doing fine today, we both recognize that to go forward, move forward with the best premiere financial institution, we need additional scale so that we can make the technological investments necessary to provide the digital platform and other technological support features, and so as we talked over the last few weeks, we recognize that we had two great companies that were doing fine but working together we could do even better >> yeah, i think the key of the

" "e" is that it has to be for something, and this is for the future and building for the future, and i look at it as we're doubling down on organic i mean, we're now creating the sixth largest bank in the country who is going to have significant organic growth opportunities. >> mr. king, i've followed mergers and acquisitions for a very long time i think it's fair to stay that merger of equals have a somewhat checkered history. some work, some don't. you said on the call you're going to make this the best merger of equals that has ever been done. how are you going to do that >> well, fortunately i've had some experience. as you may know we did a very successful merger of equals in 1995, and i recognize that that was a number of years ago, but it is a very important level of experience that we have had and

so, number up, we know what we're getting into, but the most important thing is that we have two companies here that are very culturally aligned we have the same kind of mission, same kind of purpose. we're focusing on helping our communities. we're focused on our clients and on our associates, and bill and i rex appearanc-- and i are expd and we're both thinking conceptually about how these companies will come together and importantly we've learned that you started immediately. we've already built our executive team, for example. we know already, we announced this morning who they are, what their functions are. we're now building the second level of senior leadership under them we will begin next week with the executive team leading the immigration process. we will be working together to pick the best systems, best

processes, the best people in all of the various areas, so it's a methodical and very difficult process, but it conceptually it there for what to do. do it fast, efficiently and keep a keen eye on your clients and associates and be very sensitive to your communities, and that's exactly what we're going to do. >> mr. rogers, actually, can i ask you a question, sir. >> sure. >> it is a true merger of equals no doubt although your shareholder base is only going to own 43% of the combined company versus 57% for bb&t merger. how is it that your shareholders will own a smaller percentage of the overall? >> because, and it's a testament to -- to our relationship. it started as an eday one. we started the conversation.

let's have board and management equal. we didn't talk about the other ownership. that wasn't the discussion it's what can we together, what's a complementary business do going forward, so i think it's just a testament to the partnership, to the mentality that we have, and as kelly said, i mean, we're confident we'll have the best m.o.e. possible because we're off to the best start possible. >> 12.5% of combined expenses are targeted in terms of cost savings, roughly 1.6 billion mr. rogers, why is that the right number >> well, we've -- we'll both take that. >> we of eve talked about it together we've done the numbers together. our financial people did most of the work, but we have tremendous overlap in our branches. we have about 750 branches that are within two miles of each other, and so it's relatively easy to get the kind of consolidations that we would like to have there as you would expect we have the very same kind of systems and

same loan systems, deposit systems, et cetera, and you pick the best and you destroy the other, so we've done actually a lot of math around coming up with that old number to be honest it's a fairly conservative number, and we believe in being conservative. we're both conservative institutions, and we would rather expect that there would probably be news of projections. >> i think as kelly said, and has said throughout. it wasn't about the cost saves, it's about what can we invest and creating the capacity to continue to invest in our company, and i think this level of cost saves gives us a significant running room in terms of investing for the future >> yeah. now, you mentioned, of course, 750 branches within two miles of each other orlando, atlanta you guys are, you know, number one and four and five in terms of deposits. can we expect and should your employees be braces for layoffs as a result of potential closure of branches and the consolidation and cost savings that you're talking about?

>> yes, so we announced this morning in our call and in our communication directly with our associates that bill and i are both saying to our respective associate groups that we are saying to our clients and associates, don't worry, you have a job we've learned in mergers in the past that it's very important that people dealing directly with clients, that they need to know right now immediately that they have a job, and i re-emphasize for those of our associates that are watching and listening now. if you're a client facing an associate and you do a good job, then your job is assured and here's why that is important when the client walks in. >> right. >> they don't care about me and bill they don't care about mergers and metrics and all that kind thing. they walk up to the associate and say are you going to be okay, and if the associate says, yes, i have a job, i'm going to be okay, then the client says that's cool and they move on, so

we will take care of our client facing associates. they are sure of a job, and we'll work with everyone else, not just the client facing associates, but we'll work very hard so that this is a good experience for everybody we're very compassionate organizations. we want to help everyone be successful more importantly we want them to be happy, so we'll be working very hard to make this a very good, pleasant, happy experience for everybody involved. >> i don't think you're going to find any -- any banks that care more about their teammates' associates than the two of us, and kelly and i are committed to making this work. >> hey, bill when viewers think about the competitive pressures you're under, particularly in the digital space, should they think first about the money centers, or is it more about non-banks? >> i think what -- kelly and i think about the competition is everybody, and the competition is for our clients and making sure that we're -- making sure that we're relevant, and the good news is we come in with really good strength

i mean, we've got great performance on our digital platforms. we've been making investments to date so what we get to do is double down on that, so we view the competitive environment that anybody who is trying to acquire clients, and we want to be the most relevant, the most competitive and the most innovative against all competition. >> and what we believe really focused on the fact that in today's world there really is something that i call key to the third power. it's about touch, technology resulting in trust so we have fantastic touch, always have. we have really good technology, but as bill said we'll double down on technology so that immigration of the touch and the technology meets the clients where they want us to meet them with the best service and quality of the delivery and that gives you the optimum client experience >> kelly, obviously the market likes the deal both stocks run. they like the cost saves, but there are some questions from folks i'm talking to about what

it signals about the overall environment, whether this indicates some sort of peak for retail banking, a tougher outlook ahead. the end of rising net interest margins. how do you see it? >> i'm sorry, you were breaking up just a bit, but i think your question was how do i see retail banking going forward and the margins and pressures and all that we're facing in terms of competition, was that the question >> yeah, and whether this deal indicates some sort of inflection point in terms of a tougher road ahead for retail banking and net interest margins. >> yeah, yeah, yeah. very insightful question retail banking is getting much more difficult, you know the fintechs, the additional investments that are required, the fact that consumers and retail clients of all type, including small businesses, require realtime satisfaction demand it's a seachan change in the la

three or four years. it is much tougher to your point. that's why we have to do why we do it. that's why we have to combine the skill and the capacity, to make not just investments to follow but to lead we have to be out in front of our clients asking them what do you need what do you want and then we have to be on our toes figuring out how to deliver those solutions. we now have the capacity we have the initiative bill and i will co-lead focusing on our new innovation and technology center which will be in our new headquarters in charlotte because we think that that is the most important as we lean forward, it's not about looking backwards. it's about looking forward it's about how do we create the kinds of products and services and processes that not only meet the needs of our clients but exceed the needs of our clients. >> i would say the business has been change and will change. i'm not sure that there's a particular infliction point. as kelly said, this is just going to give us the opportunity to be the absolute most competitive bank in the country.

>> well, gentlemen, judging from the way you finish each other's sentences you're off to a good start but you'll be working together for a very long time as ceo and c.o.o. and chairman and ceo. can you assure people that you'll get along and are prepared to have that long relationship through, you know, what will certainly be -- sound like you're getting married here, both good times and bad? >> yeah. we're going to get along great we've known each other a long time you know, we're both north carolina boys i like to say even though bill has spent most of his experience in georgia which i have a great respect like. we're very much alike. grew up with very similar backgrounds and mostly we have a really deep passion for our people, for our associates, for our clients, for our communities. you know, bill nor i or the kind

of folks who get up in the morning who try to make a lot of money. we don't worry about the stock price. we get up in the morning trying to make the day a little better. we try to improve the financial well-being for our clients we try to make the world a better place to live we will get along perfectly. the challenges that we have will not be us working together >> you can see that. >> look, a couple of -- let me just end here with a quick follow-up. you seem to indicate that you're not going to lay anybody off is that correct, mr. rogers? >> no. i think what kelly said is what we're going do is we're going to be compassionate we're going to plan long term. if you think about the branch consolidation as an example, it really doesn't start until 2020. we have natural attrition in our business so it's not about -- it's about the fact that i think over time we'll be able to consolidate and do this in a way that has the least amount of impact for teammates and

associates as much as possible. >> finally, any ideas on a name, mr. king you guys getting close >> we haven't figured out the name yet you know what we're going to actually do. we'll use some outresearch schedules and we've got a lot of our associates to help us figure this out bill and i know one thing, we will not know the right name >> right. >>we need a name that our youn associates, our millenial associates, you know, our clients pick it's not about what may we like. it's a name that resonates with our clients. conceptually it's a name that's a forward pointing,exciting name that says this is a company that is moving forward yes, they have a really good opportunity to move forward and that's exciting to me. when we find that name, we'll know it. >> gentlemen, we'll stand by appreciate you joining us this morning. kelly king and bill rogers thanks to you both

>> thank you >> thank you >> when we come back, a ton of big earnings movers to dig through today. obviously tapestry, grubhub, chipotle, twitter among them twitter falling after its sales forecasts fall short on tepid user growth, and we'll talk to the cfo. sonos beat the street but investors are taking note of a departure at the top a cfo announcing he'll retire. we'll talk to ceo patrick spence in a few dow is down 130, off of its session lows in a minute of clean energy.ng the e we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.

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it's really about expanding our mission from being just about music and being the world's leading audio platt follow, and what we're seeing really is we've done it for two years, and our users who are listening to podcasts are listening to the platform almost twice as much, and -- and, of course, the growth in podcasts for us has just been phenomenal, and that's part of the reason why we're now making this move >> spotify's daniel ek yesterday talking about his acquisition of two podcast companies. another audio company with earnings today hardware maker sonos the stock is lower despite delivering the company's most profitable quarter the home audio-maker's stock is down 40% since the ipo last summer that ongoing tariff war with china hurting the company in an increasingly crowded market with speakers offered by amazon, google and apple joining us now for the first

time on cnbc, a fric spence. ebitda up to 4 reaffirmed for the year. talk about the trends that you're seeing in the quarter. >> yeah. it was a great start to the year, so we saw a really, really strong performance in home theater, so our new beam product, our home theater portfolio group grew 42% year over year. we're up to 8 million homes that we're filling with music like you said, the most profitable quarter ever in sonos history on record sales and increase efficiencies, so we're feeling good about the start to the year and we're having a whole bunch of exciting stuff planned for the rest of the year. >> axios this morning out with a story of quoting you that you're examining or they say re-examining your supply chains in china are they going to move >> i think they lifted that with a conversation we had around the ipo last suggest one of the things we've been doing given all the tariff noise is make sure we have a fully global supply chain and china is a great manufacturing base for

us, so as we think about the future, we definitely think about the global footprint, but that's something we've naturally been doing as far as growing globally, not something that we're doing on a knee jerk reaction. >> up with of the reasons your stock is down, patrick, it seems like investors are a little unnerved by the surprise announcement that your longtime cfo will be leaving. can you give us a little back story on that and when you're going to find someone to replace him? >> we started a search now mike's been a fantastic cfo. been in finance for years and been at sonos for seven and deserves the opportunity to retire something he's been thinking about for a while and i think the real story from this quarter is beating on both the top line and bottom line and showing that profitability that some investors had questions about when we went into the ipo so we're feeling good about the momentum and our business and the sustainable profit growth that sets us up well for the future. >> what about the softness that you saw in europe, i mean, really in stark contrast to what you saw in north america sales

what's dragging that is that an economic story or something unique to that market? >> we saw soft across the board in november and the good news is we saw that bounce back in january. had a strong january which is why we've reaffirmed guidance for the year we feel good about the year, but we did see some softness at end of december and we wanted to let people know that and be transparent. we ended the quarter with a little more inventory than we like, and we've been burning that in january and feel good about where we are now, both in north america and europe europe is in a bit of a different stage. we've started to see europe started to adopt a voice north america is ahead there, so that's also part of the trend that we see. >> patrick, you mentioned the high end of the market and that you're prime to expand your reach in that area is that a reflection of the belief that consumers are -- have some excess cash or are flush with cash that they are will to spend on their home audio? >> you know, i think this is all -- you had daniel ek on

yesterday as you mentioned this is the golden age of audio. we're seeing the streaming music exploding and we're seeing with audio podcast and people are spending more and more time and we saw listening hours up 38% year over year on sonos so people are listening to a lot more audio and it's natural that we wanted to spend a little bit more and beautiful design which is really what we do the efforts that a lot of companies have been putting inexpensive speakers in the market give people a taste for the market and then consumers look at it and say we want something better and that's when they turn to sonos we think that will definitely continue as a trend. >> even at the higher end, the marketplace seems to be getting more crowded i wonder how confident you feel that your, maing and promotional expenses and how promotion awl need to be as this year goes forward, patrick, and why you're confident as where you are in terms of your guidance. >> yeah, definitely. so, david, we saw, you know, probably the most promotional

period ever in the holiday season, and you can see we had record sales that delivered the kind of record profitability, and so we feel good having seen a really noisy holiday season, but these consumers are going to continue to step up, and there's really nothing like the products that we create in the premium space, so as you start to look about products above $200, our beam, sound bar was the number one performing sound bar in north america, and in western europe and so that's a premium price project, but consumers are flocking to it because it's an amazing experience, right, and they can listen to everything on their television through that product. they can use voice and use anything they want they can listen to music, so it's really something that consumers will pay for, and we're big believers that over time people will pay for great experiences an products and you're seeing that in our business. >> everyone wants to know what is in your innovation pipeline what are you working on? whatare the biggest opportunities in and out of the home >> one of the most things i'm excited about is our work with

ikea we have a partnership with ikea, and we've teased about, that new products, new foreign factors, into new countries for us, so we're really, you know, today only in a few countries this gets us into many, many new countries and new price points, and it will all use the sonos software behind the scenes we've worked really closely with ikea to bring new products out that i'm very excited about for this week. we also this week announced new architectural speakers so for the first time we're going in ceiling and in wall speakers and also outdoor speakers and we're very excited about that and we're working with google on google assistant to bring that to the platform this year. plus, we have a couple other things up our sleeves that we're pretty excited about, too. >> that's a lot of boiling pots, patrick. really appreciate you coming on and talking about it as usual. we'll see you soon. >> thanks, carl. >> patrick sence of sonos. mean time, leslie picker has news on herbalife back at hq. >> some explosive allegations about former ceo richard gudas

from dow joins remaining he made comments about skirting internal accounting rules caught on tape by an employ, and that recording is reportedly now in the hands justice department which is investigating whether herbalife violated foreign rivalry laws, the dow jones says gudas resigned as ceo last month and people familiar with the matter in this report and herbalife has been called and we're efforting a call to gudas as well. back over to you. >> the drama never ends for herbalife. leslie, thank you. let's send it over to sue herera back at headquarters for a cnbc news update good morning, sue. >> good morning, sara, good morning, everyone. here's what's happening at this hour european commission president jean-claude junker telling the british prime minister theresa may the eu will not reopen negotiations on the brexit withdrawal agreement this from the chief commission spokesperson >> president junker underlines that the eu will not reopen the

withdrawal agreement which represents a carefully balanced compromise between the european union and the united kingdom in which both sides have made significant concessions to arrive at the deal >> opponents of venezuela president nicolas maduro are teaming up with u.s. officials to open a humanitarian corridor to deliver aid to venezuelan citizens the military blocking a bridge connecting venezuela and clammia with shipping containers. delta and coke are apologizing for in-flight napkins that feature a line for people to write down their name and number and then pass on to fellow passengers that they have a, quote, airline crush on that move was immediately slammed on social media. delta says it will remove the napkins. you are up to date that's the news update this hour sara, i'll send it back downtown to you. >> that was a little creepy. >> thanks. >> come up, the former ceo of

whole foods walter robb is with his. he'll give ussous take on the coverage sumer industry on a day when several are reporting results. take a look at celestial, reopening after being halted the company reported very disappointing second quarter results and forecasting more weakness ahead the stock disown more than 12%. "squawk on the street" will be right back hey there people eligible for medicare. gimme two minutes. and i'll tell you some important things to know about medicare. first, it doesn't pay for everything. say this pizza... is your part b medical expenses. this much - about 80 percent... medicare will pay for. what's left... this slice here... well... you have to pay for that. and that's where an

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welcome back toes on the street i'm dominic chu. we're getting results from luxury brands, a lot over the last couple of days and our etf spotlight. we'll talk about tapestry. capri holdings and reasons why the underperformance in the s&p 500 consumer discretionary sector is in play today and that sector and by relation to the spdr consumer discretionary tick ticker slf, neither is the a member of the spdr which unlike the discretionary cousin is equal weight and doesn't give enough weight to those stocks.

and stocks that are more cap-weighted is ticker hrt with