26,000, seems like you should be long most of the time. >> you should. and the thing i tell younger people 20 somethings, 30 somethings, your 401(k), super long-term. >> thanks to rich bernstein. my gosh, the show is over. thank you, leslie. join us next week, "squawk on the street" is coming up right now. buffett on monday. >> time flies. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with scott wapner at the new york stock exchange, cramer and faber off today. stocks going to have to fight a bit to finish green for the week final day of u.s. china trade talks, president meets this afternoon, the kraft heinz meltdown, upgrades for intel, citi and more. europe overlooking a survey, and nine fed speakers on the docket today at multiple fed events road map begins with futures gaining amid renewed optimism

for a u.su.s./china trade deal. the president will meet china's top negotiator today. >> kraft heinz tanking, the company slashing its dividend and revealing it received an s.e.c. subpoena. >> way fair reporting a smaller loss, a 15% jump in active customers. and the shares are surging in the premarket. stocks are poised open higher a day after the nasdaq snapped that eight session win streak. u.s./china trade talks continuing today with the president planning to meet with the chinese vice premier, the country's top trade negotiator the dow and nasdaq on track to break eight week win streaks unless they get more ground here, scott. and some pockets of weakness might make that difficult. we'll see. >> unbelievable rally since i was last sitting here with you, carl, on december 24th, christmas eve. the market had gone so far down and we have come so far back and now we're not all that far away from all time highs. and i really feel like you're almost at an inflexion point

now, what you said with the headline of the trade talks, do you weigh an outcome there that is positive for the market versus what we got yesterday was a slew of more weak economic data it is a real push/pull for the market you have to decide which one is going to mean more in the weeks ahead for the direction of stocks. >> absolutely. after durables, pmis, industrial production retail sales f you believe all that is going to hinge upon a deal, whether or not -- however you characterize a deal, then maybe those things are short lived, short-term. >> the fed is a wild card in that conversation as well. weakness on the economic front keeps them on hold does a deal with china and improvement in earnings and more ramped stock market bring the fed back into the game all of those need to be considered just ahead of powell next week. >> that's right. powell tuesday, wednesday and then you got this fed policy meeting on quantitative tools on how to measure financial conditions, a separate fed event today about balance sheet alone. we have plenty to chew on.

>> it feels like the market trend feels like it still wants to go higher more. it is banking on almost a positive outcome with china. then you have voices like pimco this morning saying time to derisk, sugar high is almost over david rosenberg out as, you know, tweeted earlier today, all of these things flying in the face of the market these head winds and it doesn't seem to matter the market continues to go up as you said, we go up eight straight weeks, could be broken today. there is a positive bias in the market. >> for more on this and closer look at the markets, let's bring in mona mahajan. good morning happy friday good to see you. what do you make of scott's take, the market wants to bubble up to 2800 maybe and beyond? >> i think a few things have shifted since the downturn since december 24th lows the first and foremost is the

fed. we have seen a little bit of a 180 from them. not only the fed, though, it is global central banks, saw the bank of australia, the bank of india, the bank of england all in -- the australian and indian banks surprising on rate cuts. the ecb is probably on hold now. and chinese central banks are in stimulus mode. we're seeing this background now where really what is driven the markets over the last nine years has been low rates, has been central bank liquidity, perhaps the background we're in once again. the other couple shifts we have seen, you know, chinese economy had been almost falling in free fall format. they have stepped in an aggressive way and a bit of a lag in pack, so we're waiting to see real effectiveness of that but hopefully that comes through in the second half of the year and finally the china u.s. trade deal december 24th, a lot of uncertainty. as we get closer and closer, a lot more positive rhetoric i do see the background being a little bit more benign for equities that being said, stocks don't go up in a straight line forever.

>> how do you weigh it you've got the trade talks which could end up positively. and then you've got this weak economic data, how you to match it together? what does it mean for the direction of stocks? >> well, you know, the data i would say is in the overwhelmingly negative. we have seen pretty positive results. but what i would say is there is a tendency to look and say year to date, we're up, this is unsustainable for the year over the last 12 months, the last year, the market is not up 3% in terms of the s&p while things have looked incredible so far in 2019, when you take a little bit of a step back, all we have done is correct for some of those fears. so i think there is still some room on the positive side. now, yeah, we do have the march 1st deadline with the u.s./china talks which may or may not be a real deadline. we'll wait and see on that

>> finish the thought, sorry. >> i was just going to say, you know, barring a discovery that that is a real hard deadline, and that they don't get anywhere, which we would be surprised, i think we still have some room for positive returns for the rest of the year. >> how poetic would it be if we got a deal on china and then the eu comes along these reports on bloomberg this morning that they're preparing a retaliatory draft document targeting caterpillar which did slip in the premarket. trade one dispute for another? >> i think the overarching trade deal that the market is looking at is u.s. china keep in mind, china not only 15% in global gdp but a third of growth, similarly for the u.s., makes up 20%, 25%. >> you would rather have -- >> if i had to choose one, i would want the u.s./china trade deal to go well. it sets the tone for these two regions, but europe as well. i think that's first and foremost the europeans don't want their tariffs increased. clearly they're already in the

state of economic almost crisis. this would only exacerbate that. i think they are going to push back hard. on the other hand, president trump does not want to necessarily rock the boat too much he is starting to campaign for 2020 elections there is no need to create unnecessary volatility around the globe. >> lamar, does the market deserve to be where it is? i ask you that so we had this big rebound because of the fed pivot, you're still looking at a potential earnings recession and here we are, not all that far away from all time highs do we deserve that >> i think we do i think, you know, you're still seeing obviously the full benefit of the tax cuts baked into earnings. we're seeing -- we're at the full employment. we're seeing a lot of positive news out of our stocks now some of the economic indicators as you pointed out showing some weakness. but we're still seeing on the company level, we're still seeing positive results. so it is not -- the growth in the market hasn't been driven

over the last year by multiple expansion that would cause us a lot of concern, it is really driven by performance of the underlying stocks. so from here we feel comfortable where the market is. i don't think we're looking for the rest of the year to compound what it has done so far, that would be incredible and highly unlikely but, yeah, i think it is where it deserves to be and has more room for this year >> we have been asking people if we get a relatively comprehensive deal on china, would you rather own u.s. stocks, non-u.s. stocks, or copper and oil >> yeah. you know, it is funny. this year in u.s. markets we have seen industrials, energy and technology really drive this rally. those are all kind of levered to this u.s. china play if they -- if the deal goes well, they may be poised to do better perhaps we'll see a little bit of rotation after that little sell of the news and get into the health care and staples that have been lagging a bit from your global question, we

have been talking about a barbell approach on one hand, the barbell is the u.s., the best on the block from a developed market perspective on the other hand, china and selective vm poised to do well. >> they're outpacing us this year. >> completely outpacing us there is an interesting statistic the last three times since '05 when china is priced to book dropped below 1.4 times, which it did last year the next 12 months, you see a 50% plus rally maybe we're not going to get that but we're set up from historical perspective to do pretty well in that region. >> one interesting question is how much of a trade deal positive outcome is in the market given the rally we have had. and you had a good debate this week on many corners and jpmorgan and bank of america, merrill lynch, took opposite sides of that this week what do you think? >> we think -- certainly we have seen especially we own a couple of semiconductor stocks which we have seen really recover very nicely so far this year. but i think they still have a -- would still balance a good bit

if there was a satisfactory deal on the table i think, you know, yes, the market is expecting there say good chance that we see a resolution but if once one is announced, i still think you'll see a bounce. still some positive impact from that >> yeah. agreed i think, you know, a positive deal, especially if it is a little more comprehensive beyond a trade imbalance, i think the trade imbalance deal is priced into the market, getting more comprehensive maybe, a bit of an upside. >> we'll look -- try to read the tea leaves at 2:30 when the president and liu meet have a good weekend. >> thank you. >> whether we come back, kraft heinz plummeting 25% plus after disclosing the s.e.c. subpoena, missing on earnings, slashing the dividend we'll look at what the future holds for the food conglomerate, what it says about 3g. december 3rd the highest for the s&p. we'll see if we get close this morning. "squawk on the street" back in a minute

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in the premarket, the company disclosing an s.e.c. subpoena into its accounting practices, cutting the dividend let's get reaction before the bell ken goldman joins us now on the cnbc news line thank you for joining us >> thank you for having me, guys >> so you did take your rating down this morning. what does that say about your overall reaction you didn't move it to a sell so you're still a believer >> well, i wouldn't say neutral rating is a believer we didn't have enough valuation downside to put sell rating on it i will say the entire strategy is under question here i think it is fair game to ask whether it works or not to be honest. >> yeah, what is the most concerning aspect of all of this is it the -- the earnings miss, the fact that tastes are changing, maybe their products aren't doing what the company expects them to do is it the accounting issue what is most concerning to you this morning >> least concerning is the accounting issue most concerning is that kraft,

like many companies, has, you know, to use the phrase blown up over the last year, think of all of the companies we cover that had very surprising disappointments. it is all due to the fact that when largely -- largely due to the fact that consumers aren't eating the same kind of food they used to eat that's at the root of all of these problems. >> yeah, it is interesting in your note, you question the company's overall strategy almost as though you expect the company to delever only to put itself in the position to lever back up and maybe get itself back into some similar problems. >> yeah, i wouldn't go further than that. i wouldn't say it is my expectation. i say they -- they said they want to delever in order to take advantage of industry consolidation, which is, you know, thinly veiled for buying something else, which i think is what the street does not want them to do. >> ken, you spare no words in

your report. you say it is fair to ask if there is any fundamental value created since the merger does it remind you of the conversation we had with peltz and p&g about the life span of things, in this case, like velveeta and planters and maxwell house? >> i'll pass on the p&g answer but i will say it is certainly an issue across food and across other industries too especially in the space that i cover where tastes are changing. and consumers have so many other options from organic and natural, eating away from home, to private label very difficult industry right now in a lot of ways. >> so what do you think the answer is? is there radical cost cutting model part of that equation? >> look, i think a lot of the companies are doing the right thing, have done the right thing by trying to rebase or rebase

the cost so they can get to a better margin. but doing it in a balanced way and i think they illustrated that most of the companies were looking back on some of the cost saving efforts over the last few years and maybe either overdone or done a little bit heavy handedly and you're getting companies to focus more on the top line now i don't think we're ever going to get back to a point where the food space will grow midsingle digits top line again. we get to low single digits and little bit of leverage on the operating line, little debt paid on every year, i think that's all anyone wants in staples companies now, consistent bottom line growth story with the dividend you can get there. >> you think buffett, who is going to be on monday, can shed any light on how he sees this case or the brazilians in general? >> i would hope so he's obviously, you know, forgotten more about business than i'll ever know. i'm sure he'll say something extremely intelligent and

thoughtful i wouldn't want to predict what he'll talk about. >> can you before we let you go give me more detail on why investors shouldn't take all of this in total and sell this stock today? >> very fair question. i think the answer is that there is still value here, right you have some very strong brands when it comes to the kraft plan, the heinz brand. you name it. and if you put even a slightly discounted multiple versus the group on a lot of the earnings that we have going forward, very limbed growth, i think it is creating close to fair value i wouldn't be upset, i think there is a reasonable case there. >> interesting thank you for joining us good to talk to you. >> thank you >> when we come back, hewlett pack art enterprise, a lift from earnings stocks up 25% for the year so far. we'll talk to the ceo. take another look at the premarket, we should mention oil

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no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade. later this morning, the fed is due to publish the semiannual monetary policy report to congress that's ahead of next week's capitol hill testimony from chairman powell. elon mui is where fed leaders were gathering, good morning >> good morning, carl. i am at the u.s. monetary policy forum here in new york, set to kick off in an hour. there are a ton of fed officials speaking today four of the ten members of the fomc are on the docket, also the reserve bank president of san

francisco and philadelphia as well so investors are really watching this conference closely not because of the sheer volume, but because of the structure of this conference this is expected to be off the cuff, unscripted discussions about monetary policy and so there is perhaps a little more opportunity to glean information and find out what is really on fed officials' minds while we are here now, i think investors are going to be focused on a couple of big themes here. one is the immediate very practical question of what is going to happen to the balance sheet? obviously the fed planned to flag the most recent minutes saying it is ending the runoff of the balance sheet will they drop any hints about what the end of that program is going to look like at the conference today investors watching closely for that on a broader sort of more macro level, the question of inflation and how it relates to unemployment the breakdown in the so-called

philips curve, the flattening, has been a problem that vexed the fed for years. they'll be watching close through see how the fed is thinking about how inflation because that is one of the reasons why the fed took that pause in january, and environment of low inflation that we are in currently could be one of the reasons that the fed is pivoting potentially to a new framework for the economy. now, officially we do know that fed vice chair richard clarida will speak at noon today ahead of that, the release of the semiannual monetary policy report to congress that is something that comes ahead of powell's testimony to capitol hill next week normally it does not make any news, but we're going to be scouring through that to see if there is any small details or small insights we can bring you and, of course, listening today to find out what is on fed officials' minds back over to you. >> interesting we had bullard on "squawk box" yesterday, about how he sees inflationary risks who are you most interested to

hear from other than, say, bullard and the chairman himself? >> so it is going to be the vice chair who will be speaking today, not chairman powell but i think that one person i'm interested to hear from will be mary daly out of san francisco i think earlier this week she was very clear in saying that she doesn't want the balance sheet to be working against interest rate policy so she is someone who seems to be advocating for perhaps a faster end to the program, more definitive end to the program. we'll see if she can shed any light on what she sees as the next steps going forward. >> quite a lineup today, ylan, we'll talk throughout the day, watching the fed for us on this very busy friday the opening bell about five and a half minutes away. don't go anywhere.

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half minutes bob pisani joining us. you look at oil and it is definitely keying off what we might hear on trade this afternoon. >> energy a little weaker this week i'll tell you something that worries me a little bit. for the first time in a while, our market is lower than the global markets on the week the s&p, up 18% since the bottom on december 24th we have been outperforming the world and yet this week germany has beaten us handily. the europe in general has beaten us, nikkei is stronger china has beaten us. all the global markets outperforming. maybe this is catch up i would note value has outperformed growth this week. when is the last time that happened the value guys are all getting excited for three days of outperformance, good luck on that story, you and i know -- >> it always happens >> they all get excited. three days and all of a sudden, my god, the consumer staples will outperform, it doesn't happen that way. but health care, remember last year, pfizer was a real monster. berk was a monster, lilly was a

monster. all lagging. humana has been lagging. cvs was not great this week. that's an issue. that's in the health care group. but health care is one of the reason s the s&p is flat this week i'm cautious, you've been doing this a long time, about making broad statements about market trends based on three days of activity you don't do that. but it is interesting that market leaders in 2018 have been underperforming. >> you look at the -- if you want confirmation of where we are, russell has done really well the transports have done really well and people are going to hang on those signs as confirmation that, you know, okay, maybe we do deserve to be where we are. vis-a-vis where we were at the end of december. >> yeah. i think the big issue is this whole earnings recession story it has been overplayed a little bit. i think concern -- everybody said is, oh, we dropped last

year and this means we'll have an earnings recession. there is no indication that if you get a market drop, you get an earnings recession, nor the opposite if you get an earnings recession, doesn't always mean the stock market goes down everybody seems to think they're correlated they're not necessarily correlated that's the important thing >> don't go anywhere the opening bell s&p at the cnbc real time exchange at the big board, wisdom tree, celebrating five years of the wisdom tree floating rate treasury fund. at the nasdaq, careers through cu culinary arts program. one thing is for sure about sectors, bob, staples will get smacked on this kraft heinz. >> it is messy i don't know if we can put up the food companies, because they're all going to be trading down general mills, of course, put up kellogg's, hersheys, won't matter what you're looking at, they're all opening down i'll tell you a couple of things that was amazing, you had a guest on to talk about this, but

$15 billion in goodwill impairment, they dramatically overstated the value of the balance sheet. that's a little odd to me they wrote down so much of it there is an awful lot of goodwill on the balance sheet of american corporations. my question is, is this really a specific story to kraft heinz? i'd like to do a little look at the balance sheet of particularly other food companies and see what is going on my point is maybe this is a bigger story than just -- >> people have been pointing to c campbell's and dr. pepper as highly leveraged, highly leveraged and funded a lot of acquisitions in the past. >> the other thing i would bring up is this reduction in the dividend kraft heinz, the highest dividend of any food company i know of. screen on this it was over 5% there is an awful lot of food companies at the 4% level. general mills, campbell soup, kellogg's is essentially at 4% right now. i'm wondering if they're under any scrutiny or effect there is a bunch of these, l

brands, a lot of companies out there that are in the 4%, kraft heinz was cut, you know they cut it by a third, that's significant. the final shot, i think it is interesting about all of this, warren buffett popularized the idea of economic moats do you have some competitive advantage, low cost, amazing product? >> these guys have no moat. >> exactly it is odd that warren is so involved in the whole thing. i wish he was here today. >> will be there monday. >> i hope we ask him that question. >> i'm sure it will be asked. >> you were pointing this out early, this company has been cutting costs for years to keep the margins up maybe they shouldn't have done that, spent more time investing in the company overall it is not just the people are changing their food habits, it is the way things are managed too on top of that got to invest in these products to make it more. i know your private guest was saying, food habits are changing, what do you expect it is a little more complicated than that. >> carl tweeted out earlier if

you look at these div cutters, big name dividend cutters you go down the list, it is kraft heinz, bud, ge, that's interesting in and of itself these legacy companies that have gotten in a pickle for a variety of reasons that have now been forced to cut their dividends. let me highlight a couple of stocks while you're here you talk about value some of these sort of old line legacy tech companies that are getting a little bit of a -- intel gets an upgrade today. yesterday it was microsoft named as a top software pick and those are the ones that seem to be highlighted to your point, bob, over the higher growth tech names. at least for this point and time who knows whether, you know, what the future trajectory of some of the big high flying faang names is going to be relative to the intels and the ciscos and the microsofts that are seemingly now back in favor. >> what is interesting too, we're still getting earnings in, if you get a decent outlook, your stock is going up

upside movers here, but roku and wayfair, a very good example roku came in ahead and gave revenues above forecast, that is trading up nicely, up 8%. >> wayfair is up 23%. >> wayfair does online home furnishings, their numbers were pretty good. smaller loss than expected >> their customers were up, the purchase per customers were up. >> year to date, up 60%. >> what it says to me too at a time really this month, look, we have been sort of debating what the strength of the consumer is after that dreadful retail number walmart and weiayfair suggest i you have what people want at the price at which they're willing to pay, you're going to do fine. customer -- consumers are still flush. they still feel from a confidence level pretty well and if you got what they want, and you got the price that they're going to pay, and willing to pay, you're going to do fine. >> you're managing the company

properly. >> yes, of course. manage it well. >> just some -- want to note on the upside movers, reports out of australia that newmont may consider a bid for barrick that's a big merger in the precious metal space and keep an eye on that. on downside movers, autonation, if you miss or you give estimates short of forecast, you're going to move to the downside autonation reported revenue below forecast that's down. baidu there, they spent very heavily on content and promotion in their commentary. they're down a little bit. dropbox forecast a drop in operating margins, see that's down 9%. and this is not a typo on stamps.com, talk about losing your key customer here, they gave a weaker than expected forecast and announced they ended their exclusive partnership with the u.s. postal service. you think that matters to stamps.com i think so that's not -- that's not a typo there. the other thing i would just note, i don't know if we can put

up the global markets, i mentioned this earlier, i do think it is important because a lot of people have been trying to target with the awful year that he had in europe, trying to pick out value in europe i think it is pretty hard. as you know, the economic numbers, just awful out of europe but see this week, here, this is the first time we have seen this in a little while. so we'll keep an eye on that >> want to take a stab at the citi upgrade over at jeffries? better revenue growth? stock is up 1% this morning. >> i didn't read that one, no. >> for a financials conversation at large, right, you got, okay, a fairly bullish call on a name like citi, for a group that seemingly can't get out of its own way for a variety of reasons whether it is parts of the business, and then obviously what has been going on with rates. >> yeah. the banks had been doing better recently even the big money center banks have been doing a little bit better recently. >> you better be if the market is doing what it has been doing. >> i have a hard time with it because of the flat rate

situation and the loan growth so modest overall we had 1% to 2% loan growth for the money center banks that is pretty modest overall. this whole pinterest thing yesterday we talked about, lyft now, so we got companies now that are nine or ten years old, finally unicorns, finally something is starting to happen. >> pinterest is nine years old. >> the first round of funding was 2010, wasn't it? >> yeah. >> so we got uber sitting out there, ge, health care, enormous potential ipo, we work sitting up there, palantir, airbnb so they're all sitting out there. these are the big names. there are 120 unicorns that could potentially go this year with value over revenues over a billion dollars and 220 general companies that are out there,

half of them unicorns. so it is -- the big debate we talked about this yesterday is how -- is there really an appetite for all of the companies. i am very encouraged, just the fact that they're finally getting pushed out and let's bring them public, we all know, you talked about this before, we had 8,000 companies public 20 years ago there is 3600 companies in the wilshire 5,000 >> half. >> had half the companies we had 20 years ago and the market cap values are much higher because the power is concentrated in very, very small hands now s&p 100 controls the world now i would like to see that change. >> all right good stuff >> we'll stare at each other we agree >> i think it is important my argument this morning is we need an acronym for pinterest, uber, lyft, postmates. pulp >> pinterest, uber, lyft --

>> postmates. >> pulp. we have to -- they're not public so we don't -- >> not yet >> put the date down, let it be said >> got to get in early >> pulp is an acronym, like faang for very, very high growth tech,pulp is an acronym for -- a stand-in for companies that had been around for a while, that had a lot of buzz about them, and been waiting to go public. >> you got to hope the market conditions don't change in a more meaningful way too as these companies are lining up to go public and then, you know, maybe all bets are off, right? you had this big run, now you have a lot of unanswered questions over the next many months as the companies try to get out the door. >> right you want to get in when the sentiment is still really strong in the market. i think that's why they move very fast here lyft and pinterest on everybody's list not like, oh, my god, what a shock. but i'm glad, two weeks after the government shut down ends

in -- after five weeks, where we didn't get any action from the s.e.c. at all, because they were shut down, immediately they're moving this is very quick for the market to move on this i'm just hopeful that the market holds up and we can get the companies public i want to see more information about them i want the public to invest in them >> after ten years. >> yeah. >> very small audience of investors have been able to. thanks intel is helping the dow out. up 90 points followed by oil names and verizon as well. to the bond pits, rick santelli at the cme in chicago. good morning. >> good morning, carl. if you look at inter of 10s, we're falling away and we are on the session all maturities are down a bit. 2s are down one. 10s are down three on the week, 2s are down one and 10s are unchanged f you op eunc. if you open up that ten year, yesterday we popped up, giving some of it back. all things considered, we're idling in treasuries, recovering a range from the low 260s.

basically up towards 270 can't quite crack 2.70, much less 2.75 which is what most traders are looking at as the big resistance in terms of support. well, let's open the bonds up a bit. actually let's turn to europe. something going on in europe interesting. look at three-day of bunds it is giving up even more ground now let's go to the ten. a month to date, one of the few sovereigns that actually is still a bit higher in yields than where entered the month of february but very tenuous now, if you look to italy, i think italy because it is 245 one economy, of course, about the third largest in the eurozone group, but they have political issues, they have debt issues, most of all they have paper, that's really been helped by the central bank with respect to what it yields and what it prices and there is many billions of dollars worth in the coffers of their central bank problem is they're losing control a little bit

did you see on the month to date, ten-year yields on the sovereign are the highest of all of the other countries because that is the weakest link we want to pay attention to that getting ever closer to 3%. mario draghi isn't talking about normalizing, he's talking about potentially ramping up stimulus or reasserting quantitative easing finally, on foreign exchange, dollar is virtually unchanged today, it is down just a bit on the week really is holding in one area that is especially interesting is if you look at it in the context of what is going on in china. the dollar versus the yuan it seems as though the dollar has lost something there but what we're gaining seems to be a positive outcome potentially for negotiations but that relationship is important. scott, back to you >> all right, rick, thanks so much rick santelli. for more on this morning's movers including kraft heinz, to

bertha coombs up at the nasdaq market site. hey, bertha. >> we're seeing chips lead the way higher today on that upgrade of intel this morning. it is the best performing chip, upgraded over at morgan stanley to overweight from equal weight. also nvidia initiated over at atlantic securities at overweight as well but when youlook at chip, they have been the leaders year to date it is really been a strong recovery so far here and for almost the first two months after that big loss back in the fourth quarter, they made up all of those gains. the chip sector now out of correction on the other side this morning, you do have kraft heinz. that is also bringing down mondelez as well kraft heinz had been up about 12% year to date, about as much as intel but giving up all of those gains and today it is a ten-point drag to the downside. we might have had better performance in the nasdaq 100 with the strength that we're seeing in technology technology has been the big

driver, but as you were talking about, it is some of the old names that this month have really provided the impact to the upside in terms of point impact gains on the nasdaq 100 it is the four dow components, microsoft, intel, apple and cisco that have made for about 60% of the gains on the nasdaq 100 to the upside. year to date, though, couple of faang players have been big performers facebook seeing a big move to the upside is the biggest point impact leader here on the nasdaq recovering after all of the troubles in the fourth quarter nonetheless, facebook not a big performer this month seems to be a shift out of faang to some of those old traditional big cap tech names back to you. >> something we were just talking about, thank you bertha coombs, still to come, taxing wealth, what share in taxes the richest americans are likely to pay this year. and then later, intuit, the maker of turbotax, lift on

earnings, stock is up a couple percent. w 7potshe to the ceo with t doup7 in obvious.

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some market history now. jeffrey skilling, one time ceo of enron who was sentenced to 24 years in prison, has been released from federal custody. that according to houston chronicle. mr. skilling was convicted of 12 counts of securities fraud, five counts of making false statements to auditors, one count of insider trading, and one count of conspiracy. all that back in 2006. and his sentence was shortened to 14 years. this is really sort of a last of the triumvirate, ken lay, andy fastow was released years ago, and now skilling >> hard to believe it has been -- not the full term, right? came out a little bit early. but all the ticker symbol ene came back to mind yesterday. chanos on twitter yesterday talking about it as well. >> makes me think of chanos who, of course, helped uncover the whole thing along with bethany maclane, makes me think of scott cohn, our own great reporter in

the thick of it from the get-go. and all of the reporting that went into it and sort of what they were all up against the intimidation of trying to report that story from the likes of skilling and just everything that went in, the deep reporting to help uncover one of the biggest frauds in history. >> why you got to encourage vigilance on the part of investors, respect the short side for various reasons, the press to try to protect investors from the misery that these -- many of them employees, they held so much personal stock. >> reminds me of theranos and the same sort of thing of up against this -- these walls that you have to knock down to get at the heart of the story. >> yeah. some investors might not be too familiar, too young to know, but really wasn't that long ago. >> yeah. >> as we go to break, look at this morning's worst performing names on the s&p kraft heinz not going to surprise you, biggest laggard by a very wide margin we're back in a moment

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as part of their tax plans, many democrats claim the wealthy get special breaks and pay lower rates than the rest of america, but what do the rates taxpayers actually pay tell us robert franks at hq with some answers to that question on a great week of tax coverage good morning, robert. >> reporter: thanks, carl. good morning they have become the two favorite words of democratic candidates fair share. the share of taxes paid by the wealthy are at an all-time high. the tax policy center projects that the top 1% will pay 43% of all federal income taxes this year that would be a record the bottom 60% of taxpayers pay only 4% of all federal income taxes. now, of course, the incomes of the wealthy and their share of total income is also rising. the top 1% will earn about 20% of the total adjusted gross income of the nation in 2016 that's double what it was in the 1980s, but basically about the same as it's been since 2005 now the real battle is over the rates paid by top earners

despite claims that the wealthy get special breaks and lower rates than the rest. the rates they actually pay known as the effective rates are still by far the highest the top 1% paid an average rate of 27% in 2016 the middle and upper middle income earners paid 11% while the bottom 50% paid a rate of less than 8% bottom line, we are funding government with an ever smaller ever richer group of taxpayers guys, back to you. >> this is going to be at the heart of the next couple of years in the presidential campaign as it's already bubbled up, as you know on the left, and that's not going away any time soon. >> yeah. robert, i mean, it is there any indication that the agency itself wants to see those numbers move one way or another? >> i think basically there's a sense even within the irs that we want to broaden the base, so, in other words, not just rely on the small group of people but also expand the number of

americans who have a stake, who do pay taxes even if the rates for the wealthy go up. you do want half of america right now does not pay any federal income taxes beyond their withholdings, so many people, including those within the irs works like to see expand. >> fascinating no better time to talk about it is a we continue to watch. by the way, robert do, we have an update on the degree to which the agency is receiving filings and issuing returns? >> well, so far all we know is that the number of refunds is down, was down in the first couple of weeks. that sort of expected because a lot of people, even though they have got a tax cut in total, have lower withholdings throughout the year, so they kind of got their tax cut throughout the year. they will get less refunds it's still early days. we don't know how much about the number of filings or total revenues yet, and so a lot of big questions of how this tax cut and how this now jobs act

will affect the tax code will it be up? will it be down? so far revenue last year was down slightly but yet to be seen what we're going see in april. >> yeah. absolutely the refund story can be a little misleading depending on how your withholdings changed. >> that's right. >> or your income changed during the year. >> sure. >> robert, thanks. it's been such good stuff as people pay more and more attention to taxes heading into the spring. >> when we come back, more reaction to the problems viscounting kraft-heinz. that stock losing a quarter of its value today hurting staples across the board down almost 27% as they issue not only the dividend cut, announce the s.e.c. subpoena and are $15 million impairment chge dow is up 95 though. we're back in a minute ♪ ♪hold on, i'm comin' ♪hold on, i'm comin'

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good friday morning. welcome back to "squawk on the street." i'm carl quintanilla with morgan bren and and wilfred frost here at post nine of the new york stock exchange market looking past. macro data that's been week later. the final day of the u.s.-china

trade has the dow up 106 >> starts with high stakes >> china is meeting with the vice premier we'll take you there live. >> kraft-heinz is cratering. the company slashes and the dividends says it's been speendaed by the s.e.c. >> and celebrating a one-year anniversary with a beat and a raise. >> we'll start in washington high-level trade talks between the u.s. and china are wrapping up today, but there's an important meeting this afternoon. our kayla tausche has the latest good morning, kayla. >> the talks went into the evening and culminated with what i'm told was a lively dinner at the blair house here across the street into the evening. they kicked up again this morning just about an hour ago i saw the treasury secretary's chief of staff hurrying in a little bit later with a binder that says china meetings on it i know that doesn't give you much here's what we know from our sources about the state of play between these two countries as they stand right now first we know that china has made a substantial offer, an

increase to its earlier offer to reduce the u.s. trade deficit. this would include buying more agricultural products and energy products we know that there are memos being drafted on these six key issues that would provide structural changes to the chinese economy if in fact china does agree to them we saw president trump tweet yesterday in a statement that appeared to signal that he was willing to back off this potential ban of chinese companies from participating in u.s. 5g build-out. overall according to a senior administration official, talks are moving in a positive direction. we know that the chinese vice premier will be meeting with president trump at 2:30 p.m. today in the oval office he is carrying with him the title of special envoy which means that he is empowered to negotiate directly onbehalf of the chinese president to make any compromises that he sees fit in order to reach a deal what's unclear is whether in fact he's in the mood to comp his. a top usd a official speaking on

the sidelines of the forum who was present at talks, ted mckinney, he was in the room, he told reporters that china provided little clarity or no clarity on these intellectual property issues that are at the core of this current trade debate, so we'll see whether in fact this agreement, if we get one today, actually has that detail in it guys >> all right kayla tausche, thank you for that we'll keep an eye on this as it progresses today joining us for a closer look at the trade impact for stocks, ubs economist rob martin and tony fratto, founding partner at hamilton play strategies and former white house deputy press secretary. good morning to you both rob, i'll start with you you just heard kayla's report. in terms of the near term we're about a week out from this official deadline before tariffs increase expectation here that -- expect here that we get some sort of at least near-term deal, and if so

is it baked into the market? >> we don't think that they are actually going to finish everything up today. we think the march 2nd deadline will have to be pushed out they will need a few more days and a few more weeks of negotiations to kind of hammer out the details, but we're actually quite optimistic that at some point here, maybe early summer, we'll actually reach a resolution of the trade deal, trade war between the two countries. we'll see. we'll see exactly how that works out. one of the things that we're looking for in the near term is whether or not this trade deal comes to an end. this trade war comes to an end as we think we'll get a bounce of activity in the near term. >> that will help support confidence. >> tony, the same question to you. your expected near term and also long term. >> yeah, near term, i think rob is right i think they have shown enough progress, and they are talking about most of the right things with the six memorandum that we're talking about. those are the right issues, and there may be some sugar thrown in with some commitments to make

purchases that will show enough progress that we won't see an escalation on -- on tariffs or new tariffs, but i'm not optimistic and the near medium term of the existing tariffs coming down either these are really, really complex issues, and they are going to take a long time to negotiate and to get to, you know, variable solutions we could see in the short term things like purchases of buying soybeans and other products that shows good faith. >> tony, how united is the president's team on how the negotiations are shaping up and kind of finalizing is there a risk of any rupture, any resignations if they don't go in certain directions >> i would be surprised by that. i think they are going to go the direction that the president goes, and at the end of the day if -- if he says it's a good deal and -- and, you know, we're -- or the way he'll say it it's a luxurious and beautiful deal, i think they will go along with it. i don't see our former colleague

larry kudlow stepping down certainly or the others. i think they will stick together i think they have to have a recognition now after the talks that they have had that these -- that this is going to be a long road it's hard to come up with on the structural issues verifiable evidence in the short term that china is doing those things, and don't forget the chinese have some asks of the united states as well. >> yeah. what's that -- let's talk about that in a moment. >> sure. >> my other question for you though is does the market need to start living with the notion that tariffs could go up at any time based on the enforcement mechanisms we may be looking at? >> that's absolutely right whatever they do with these 301 tariffs, it's clear that tariffs are a policy of the administration and that they are going to use it going forward, so even if they resolve these, pulled these off, i think people still have to be alert to the fact that they could come back. >> how does confidence rebound in that environment, where you've got a hair trigger over your head all the time >> it's like any uncertainty there's lots of uncertainties in the world, and businesses will have to adjust around that

particular uncertainty with the knowledge though that when things got bad, when we started to see economic pain in the u.s., the administration did find some path forward and things eased up. remember, we talked in november, we were fearing escalation. >> i mean, usd a today, tony, says that we've paid $7.7 billion so far to farmers in -- in tariff basically aid. >> to compensate for the tariffs. >> yeah. that's right you can't do that forever. so, you know, there is -- there is harm on both sides right now with the existing tariffs, and it seems to be sufficient harm that they can sit down at the table and have substantive discussions on these big issues, but they are very thorne issues. you know, some of these things, you know, might take years to determine whether they are really doing a good job on forced technology transfer, you know jvs might be something that we quickly see, but there may be other none tariff barriers that get in the way, you know, of free activity from foreign firms

operating in china so it is going to take a lot of time. i think we'll be living, at least during this administration, we are going to be living with this, you know, sort of damocles over all of our trading relationships. don't forget we're talking about auto tariffs with respect to europe right now, too. >> rob, what does all of this mean for the fed and future fed policy obviously we've got those minutes this week? one of the big headlines that came out of that was maybe quantitative tightening will wind down and we've got more officials talking later today and then the fed chair powell talking in congress next week. >> so they take all of this on board, they won't make political statements they are not going to front run any damage from tariffs to try to ease that pain, but as they have always done with these things weighing on activity, which they seem to do, they will respond. the biggest response they have done so far is as you've said it looks like it will stop the roll-off of the balance sheet this year. >> rob, could they get any more dough dovish without the data

getting much worse which could be something that outweighs any incremental dovishness if you see what i mean? >> one of the reasons they might get more dovish in the near term is when you read the minutes, when you hear their speeches, they still think that u.s. data is strong, and so -- so they are going to be, in my view, very disappointed in the near term, and so we may see even a slightlyfurther dovish tilt sa at the march meeting >> rob, how closely should investors, especially as we come into next week, be watching situations that are unfolding in d.c. as well i mean, you're getting reports that this mueller report may actually happen as soon as next week is this something that investors will start to watch a little more closely because so far a lot of headlines we've seen have been shrugged off? >> that's right. >> tony, sorry. >> yeah. look, i think it's -- i think it has the potential to be disruptive, but you almost need to think of, you know, government right now operating on -- in two ways.

one is the actual business of government i don't think it's going to overturn trade talks i don't think it's going to cause the administration to take a different tack on regulations and -- and some other things that business and markets pay answer to. on the other hand, it's going to be an enormous distraction or has the potential to be an enormous distraction for the president and the white house and his family depending on the direction that the mueller -- the mueller report goes. >> rob, just back to it an issue that we mentioned very briefly on the eu relations on trade if that worsens, is that going to lead you to downgrade gdp expectations >> we still expect some work on car tariffs. we still think car tariffs are coming that was delivered to the white house on sunday. we're hopeful that doesn't happen but we're looking for that in our baseline so not getting that would be a boost. >> that's not consenseus, i'm not sure, is it? goldman is at 40% odds or something like that.

>> that's right, that's right. it's not consensus, but these 232 tariffs are hard to back off. once the commerce department finds an area, they can say no action, but it's a difficult political move. >> rob, tony, thanks for joining us. shares of kraft-heinz sinking after it dramatically overstated the earnings of its portfolio brands, kraft and oscar mayer. joining us now on the phone is deutsche bank analyst robert dickerson who cut his price target on the stock to 40 from 52 and from buy to neutral rob, there was a lot in this leading to a big share price decline. which was the sort of worse aspect of the announcement for you? >> yeah, great, thank you. to be clear, we didn't -- we did not cut our rate

we did cut the rate earlier in the month. with respect to your question, i would say that really the most concerning or the least concerning is not -- is not the s.e.c. investigation that seems fairly immaterial at this point to their numbers. the most concerning was really just the fundamental shift of -- of ebitda and -- and what that means for the outlook of the company, so specifically kraft-heinz, you know, is run by a management team that likes to point to an elevated comparative margin wand that margin coming down to 2018 and coming down also in '19, we realize the investment level has to be heightened to drive growth, and, therefore, the algorithm has changed so that's why the stock is on the way down. >> rob, stock is down 27%. can they fight back. what levers can they pull that would make in six to 12 months time this massive share price

pullback look overdone >> well, what we saw in q4, we probably expect some in q1 is increased price investment, right, so if you're in categories that are feeling factors from the store brands that have leaned into price and your commodities have deflated, you tend to invest more in price. that said, you know, the company pointed to price increasing. likely late in q1 andinto q2, and as long as the price increases help -- help the margins for the company as they go through the year, and their cost net of savings are able to -- sorry, their savings, a net of cost are able to improve as they go through the year, could you see some stabilize in the ebitda which would make investors potentially more comfortable buying the stock. >> rob, clearly this was a kitchen sink quarter for kraft-heinz. i guess one. key questions investors are

probably asking right now is why the shares are down as much as they are is this just basically the company pulling the band-aid off and resetting expectations and maybe resetting them, you know, even cautiously lower, or could this potentially have the makings of a consumer packaged goods version of say general will be where it's the beginning of a much deeper slide >> well, that's the question, i would argue, you know. hopefully what we saw and heard from the company yesterday and expectations for '19 will hopefully be with a bottom that would hopefully help the stock reach a bottom and then from thereto hope again is that then they can, you know, continue to grow ebitda and eps in 2020 and therefore. that being said, you know, look. you know, kraft-heinz, you know,

is safe in a lot of pressure earlier from store brands and also emerging brands that quite frankly continue to emerge so, you know, will further price investment be necessary? possibly will certain brand investment be necessary? possibly it's tough to tell exactly what that level is until we start to see, you know, the -- the shared trend of their category for kraft-heinz relative to competition as they spend. >> now the company also talked about consolidation and this idea of trying to prepare itself for a potential merger what would that deal-making potentially look like? who could you see them depending in the future, depending on how everything plays out here the financially, actually team up with >> well, you know, frankly that's been the question since they bought kraft which is, you know -- so that's been a three-year running question. you know, at this point, you know, we haven't seen them partner with anyone and, you

know, so really, you know, the answer to the question was the same as it was three years ago which is naturally we can look at some. more pressured u.s.-based larger u.s. food companies, but given, you know, some of those companies are under somewhat similar pressures, maybe not as much as seam in the near term, somewhat similar industry pressure you know, we don't necessarily believe that a combination of kraft-heinz is another larger pressured u.s. food company may necessarily be very welcome within the market just given frankly, again, you know, the 3gy and berkshire hathaway first bought heinz and then kraft, and we haven't seen necessarily a lot of value come out of that. >> i guess, robert, a different way to frame it is, i mean, the position they are in is not unique who else in that position has managed it well? have managed to exit it somehow. >> well, you know, we're coming

off a very well attended cagney conference this week where where heard from a lot of other food companies. there are a number of companies right now that we believe are a little bit further in the cycle such that they went through a larger cost-savings period but then also are -- have been looking to, you know, attain more balanced growth essentially through increased investment and maybe a little bit less margin expansion, and -- and really, you know, to give credit where credit is due we -- we don't have a buy recommendation on general mills. we would say that general mills seems to be for the time being at least doing well. hershey's seems to be somewhat stable, so those -- those are a couple of companies so far that have done well, but in general, and you could see through, you know, the pressure of the entire industry on the day, is that some of their pressures that kraft, are you know, facing, are some of the same ones as

everybody else. >> rob, thanks very much for joining us. >> thank you >> rob dickerson from deutsche bank even though it wasn't the main reason for the share prices to decline in rob's eyes, we wanted to bring you the kraft-heinz statement on the subpoena. they say we continue to cooperate fully with the s.e.c., and at this time the company does not expect matters subject to the investigation to be material kraft-heinz has an annual procurement spend of more than $11 billion. that stock is down close to 30% this morning. >> when we come back, hp has results and raises the full-year outlook, a nice earnings beat. the ceo will join us exclusively as we celebrate one year on the job. that and more coming up. don't go away. it's absolute confidence in 30,000 precision parts. or it isn't. it's inspected by mercedes-benz factory-trained technicians.

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that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. shares of hewlett-packard enterprise rallying this morning. the company announces quarterly earnings that easily beat expectations and raises the fiscal year guidance does miss on the top line though joining us exclusively to talk about it, hp ceo and president antonio neri who just celebrated one year at the company's helm antonio, good to have you back good to see you. >> good morning. thanks for having me. >> walk us through the guide ambassador and how the revenue guidance also fits into that. >> well, first of all, i would like to correct that we had another strong quarter for the company. that's further evidence that our strategy is working to drive

profitable growth in the segment of the market called the hybrid i.t. because we are continuing to grow our portfolio and we see the demand steady, we're very confident to raise the guidance that we obviously beat in q1 so we see the rest of fiscal year '19 strong for us and gives us the confidence to raise the guidance driven by the portfolio innovation that we have and the feedback that we get from customers. >> have you seen any hesitation among customers to spend in the wake of shutdowns or tariff wars or just global slowdown uncertainties? >> well, we see the demand steady, you know we have not seen any evidence of that obviously we're continuing to monitor the uncertainties around the globe, but the reality is that customers are making critical investment to drive that acceleration of the digital transformation and that's all driven by the fact that the data around us is continuing to grow, and they need to extract the

value and data much faster than ever before. that's why we see growth in segments like high segment compute and softer refining infrastructure which grew 70% and also the connectivity at the edge which grew 20% in the wireless business, so we see that as a continuing trend are you know, where people ask me what's going on around the globe with brexit, for example, the uk and business group grew double digits when you think about it shutting down, one of the key products we saw in the government is high-performance computing which actually grew triple digits. it has not had the impact, but we'll obviously continue to monitor what's going on around the globe. >> antonio, it seems like every day there's some other hack, abusive data, privacy is obviously a big focus now. you've got increased regulatory scrutiny both here hand in the u.s. and abroad. as you begin to build out this intelligence edge platform and

this increasingly digitized world, how are you thinking about this >> well, you know, we believe the edge is the next one here. when we talk about the future, we talk about an eccentric clou agreement and that means that the cloud is moving closer to where the data is driven that's what we see around us, healthcare, transportation, everything is being connected to your point and starting with connectivity and soon after that is the security aspect, because one thing is connecting devices in apps and one thing is connecting things to the network so that's why our platform is such an important platform we want to bring that cloud computing closer towards actually where the data is creed so we think about it as an integrated solution. obviously, you know, we need to provide the customers a tool to be able to protect they will selves and be complaint with the new regulatory policies being put in place, gpi in europe and

others so we're really focused on that, and we actually believe we have one of the best solutions on the edge today >> antonio, i want to come back to what you were saying about that macro outlook the fact that you were able to grow so strongly even in the uk where there's an obvious brexit headwinds, because on the call as well you were fairly bullish about the global macro outlook are those growth opportunities for you in the year ahead structural, do you think, or indeed cyclical and you're getting an indication from your customers that the macro outlook is stronger than perhaps people have worried about in the market over the last couple of months >> so i think -- well, there's a couple of things one is that the data continued to outpace the compute capacity, and that data is actually 75% of that data is created at the edge, so to me that's a very exciting, and that's why i'm bullish about these h-compute capabilities that the customers need going forward so it's just physics. you know, two years from now

we'll create thetwice of amoun of data we've created in the entire human history that data needs to be stored, needs to be complaint and most importantly the outcome has to be ekrifd. that's why we need to see the need to bring cloud compute closer and we see a.i. as a big opportunity for us and all integrated connectivity. customers are telling us they are accelerating the digital transformation we have a say. the future belongs to the fast and those who can extract the data faster will continue to win. that's why we're very bullish about it because we have one of the best portfolios we've ever had, and that innovation is second to none. >> a lot of focus on 5g right now between president trump's tweets, mobil world congress next week from your standpoint, where would you say the u.s. is in terms of that rollout, and how does that compare to other key markets in the world? >> well, i think 5g is going to be an exciting opportunity for us i think the u.s. is ahead. i think the u.s. is going to be

one of the first countries if not the first country together with japan and others to go and roll out 5g. we already see evidence of that. our opportunity in 5g is to provide customers and need to integrate the experience because 5g is a type of connectivity is not the only type of connectivity, so you're talking about 5g and wire connectivity and wire network and wireless connectivity what customers are asking is give me one integrated experience with one security control play, and that's where aruba fits perfectly in that because we'll provide a cloud-based experience that creates 5g in that experience. >> that's a pretty stunning statistic about the amount of data we'll shove off in the next couple of years. antonio, looking forward to having you back. >> thank you. oil prices rising to their highest levels this year we'll tell you why plus, take a look at shares of wayfair surging this morning after reporting a quarterly loss

that was narrower than the street was expecting revenue also beat expectations the company's customer can't jump 50%rom fa year earlier we're back in a couple of minutes.

welcome back now for our etf spotlight. energy etfs in the green reacting positively to trade talks. xle outperforming, up is a% year to date. for more on what to expect on oil prices as the trade deadline nears, let'sbring in the cnbc contributor from rbc capital markets global head of research. arlene, thanks for joining us. >> thanks for having me. >> let's start with the venezuela situation which seemingly is worsening which clearly is very, very sad to see for a number of reasons. what does it all mean for the oil market and has the oil price already factored in their production removal >> i mean, the oil price i think factors in supplies not going to the united states. i don't think it factors in potentially what would happen if we have more confrontation in venezuela, potential lit u.s. getting more dragged into this situation so i think we have to watch very carefully what happens over the weekend with the aid convoys. the u.s. has airlifted supplies

down to columbia they have basically blocked them from coming in, but opposition is saying they are going to move these supplies it's going to be important to watch to see what happens. >> what will happen in terms of crude prices >> if we get into a situation where the u.s. has to potentially back words with action, we keep saying all options are on the table, and so if we have a situation where venezuelan forces come in to direct fighting over these aid convoys and the u.s. potentially gets dragged into it, that's bullish for oil prices and if the u.s. imposes more sanctions on venezuela, blocks countries like china and india from taking supplies, that's also more bullish. >> how much of is an offset are our own production numbers 12 million barrels >> this is an amazing story. >> u.s. production is not the great offset the venezuelan barrel is a heavier barrel and that's why we see a premium now on heavier bear the u.s. helps in terms of volume but not the specific type

of barrel that's needed. >> what's opec compliance looking like at the moment >> opec compliance looks good because saudi arabia is back in whatever it takes mode saudi arabia basically said we'll take production below so million. certain countries like nigeria not fulfilling their commitment but if saudi is willing to do it with nigeria faltering and the russians being slow you can get had a high compliance number. >> if we get a big hug and kiss between u.s. and china, how much is built into the bounce >> i think this is something that's been hanging over the market we saw it at the end of the year, the concerns about china, the concerns about global recession. if you have a positive story on the trade talks, that obviously is very helpful for crude. >> how helpful >> i mean, we see oil prices for brent averaging $68 this-year. if you get a resolution on the trade story and more problems out of venezuela, that's positive again, the u.s. story has to be watched in terms of production. >> you had that record u.s. production number in the eia data yesterday and also had a record export number who is buying our oil? >> i mean, these are now moving into asia.

i mean, that's been an incredible story about the u.s. is that you have u.s. barrels going into the asian market, and that's been something that i think the saudis and the other opec producers really will have to think about as we get into the next decision point, like how much are they going to continue to accommodate u.s. barrels entering what they saw their home turf for oil supplies. >> switch your focus to gold prices what's the outlook there for the rest of the year >> positive momentum on gold prices so we remain sort of bushel on goal again, we have to watch obviously the geopolitical developments that will obviously be important we remain constructive on oil prices >> oil has definitely been the better trade year to date. >> h ha lima, great to see you >> thank you. >> now let's send it over to leseley picker. >> here's your cnbc news update at this hour cardinals attending pope francis' sexual abuse summit have called for a new cule tour of accountability. on day two of the summit, the focus is shifting to show church leaders must acknowledge that

decades of their own cover-ups that only worsened the crisis. >> we are jointly responsible. all of us in this senate hall this morning are jointly responsible to tackle the problem of sexual abuse of minors of clerics all over the world. a magnitude 7.5 earthquake striking the peru/ecuador border region this morning. so far reports of two people injured. hospitals in the region were evacuated. there was no risk of a tsunami being triggered. back home spacex launched a falcon 9 rocket on thursday evening in what was the third successful mission for the company's rocket booster the main payload is a telecom satellite that will serve indonesia. the falcon 1 rocket is also carrying a privately funded israeli lunar lander morgan, that's right up your alley. that's your cnbc news update this hour. back over to you. >> oh, you know it is. that israeli spacecraft is going to take seven weeks, but if and

when it actually lands on the moon it will be the first time ever a privately funded spacecraft has done that. >> one small step. >> leseley picker. >> how long can the bull market hold on? we'll talk about some of the breadth that we've had in recent weeks. don't go away.

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stocks looking to extend their weekly win streak. it would be nine straight weeks of gains but the next guest says look for dips over the next couple of weeks. joining us is tom mcclellan, editor of the mcclellan market report who can be very specific when he wants to be about price action over the coming weeks tom, good morning. what are you looking for. >> good morning, carl? >> well, it's a bull market, and there's gones of breadth and

that's always a good thing when you have advanced decline statistics coming in as strongly as we've seen them coming in since the december 24th low. don't make any mistake of thinking this is not a bull market definitely is, and when you have a very strong advanced decline line, what that says is there's so much money banging on the door of the stock exchange all trying to get in that it's even flowing into the least deserting stocks, all the little tiny ones and that's what drives it up on the decline line that kind of position tends to persist for a long time only when you start to see the advanced decline line slow down and make divergences to the major averages >> you are looking for a bit of a slog here going into basically the first week of march. what leads you to that conclusion, and then why do you think we rebound from there? >> well, we've had a nice run. don't make any mistake about the nice run that we've had off of that december 24th row when you have a surge like that, everyone catches their breath

again. normal also in late february to the first week of march that you have a little seasonal soft spot i wouldn't even call it a decline. just a pause, a little ledge and then march, april and may we get back to the normal seasonal strength and the strong breadth numbers that we're seeing that is saying when we should expect another wave upward. it's going to last for a long time i'm seeing this uptrend from our long-term models lasting into 2021 and then a big long flat spot until 2024. the only risk of a real, you know, 2008 style bear market doesn't even come around again until 2024 got a long time to go to make money on the upside before then. >> so, tom, that's a three-year bull market then is that u.s. only or is that global are equities looking attractive everywhere >> the rest of the world is not looking as attractive as the u.s. we are leading the way and others are going to tag along. if you look at any major world stock market average compared to the u.s., they are going to

dance together like fred and ginger, but one may dance higher and faster than the other one but the dance steps will be the same i can't really extrapolate u.s. breadth numbers to any specific other country, but the changes that we've made in terms of taxes and regulations in the u.s. give us a big advantage that we didn't used to have a couple of years ago. >> tom, what i find so amazing about this forecast that you just laid out, that stretches five years, is we've got a presidential election in the middle of t.obviously lots of question marks and longer term about federal policy and other central bank policy and all of these trade talks that continue with different countries would any of that change that forecast >> well, sure. you know, an asteroid could hit and knock the earth off of its axis there's lots of things that we don't know about and that could happen that could disrupt the whole schedule and there's a lot of things that are put into the tape as it goes across the chart

already. one of the things that we've discovered is that for the last 120 years the price of crude oil will -- will lead the stock market to about ten years, and when you see the big bubble top and crude oil in 1920, ten years later you get a big bubble top in the stock market in late 1929 that's part of what the long-term forecast is that says, hey, look out in 2024. that will be the ten-year anniversary of the giant ten-year -- the giant oil price slide that we saw in 2014, but we don't have to worry about that for a while right now we're still riding the rebound of oil prices from 2009's low, and that should be lasting us for a while into 2021 >> tom, does not sound like you trust the move in gold why not? >> well, we've seen a big blowoff upward in gold and it's not been confirmed by other things that silver didn't make a higher high, and the japanese yen and the chinese yuan usually move in step with the price of gold, and they did not confirm by making a higher high.

it was gold alone making that blowoff move and not confirmed and when you see divergences like that that's a sign of gold for the yen and yuan are usually right when they disagree with gold >> does copper move? >> it's going to be in a general uptrend later this year so i'm -- i'm a gold bull later this year but not this week. >> i see but copper and crude, do they not count as much? >> well, they operate on their own age daze, and sometimes they correlate with gold and we think the commodities complex is moving together and sometimes they don't, and trying to account on the correlation there across the commodities is not really a fruitful exercise because it's not at consistent enough correlation to say if one things does "x" then the other thing will do "y." you can't just make that correlation and when you count on that working, that's when it will let you down. >> tom, what about the dollar? it doesn't seem to stay above

97, the broad index for long if it does cross above it >> well, what we found is the dollar is generally correlated with consumer confidence in the u.s. we saw a big dip in consumer confidence in the january numbers from the university of michigan, and the question is would that was just a momentary anomaly because everybody was frustrated and worried about the government shutdown and it's going to bounce back we don't have february's number yet to see, but generally speaking they don't see big pressures on the dollar because the fed is finally normalizing rights to where they want to be. it's right at where the two-year yield target is and it's finally in the goldilocks moment where it's just the right spot if you see the two-year yield up or down that's a signal the fed needs to move their rates up or down and we're not seeing that yet. >> just from a chart standpoint, where do you seat biggest downside risk in the near term >> i see upside movement for bond yields which means that downside movement for bond prices over about the next three

weeks. what we found is that crude oil leads the stock market by ten years, but it leaves bond yields by about three weeks and i sent you a chart that shows that. we've seen a generallized uptrend in crude oil prices so that should mean an index that measures the bond yield. the forecast not only goes out three weeks. i don't know what happens four weeks out until crude oil tells us. >> almost. >> we'll keep an eye on that and look for any implications for equities always rich with material, tom our thanks as well tom mcclellan. >> great to see you. >> as we head to break, zillow announcing its co-founder has stepped down as ceo. another co-founder rich barton taking over again. he held that position prior to the company going public zillow shares soorg today after reporting stronger results up is a% we'll be back in just a couple of minutes

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welcome back let's get to the cme group in chicago and rick santelli with the santelli exchange. hey, rick. >> reporter: good morning and thank you. jim bianco is my guest today jim, welcome. >> thank you >> let's start right in. i don't mean to beat a dead horse here, but you have a take on balance sheet issues. that's a little bit different than everyone else's my contention is that we don't know if the balance sheet or stop drank off the balance sheet is going to make a huge difference with the markets or any signals, but yet it's become the poster child for that type of scenario, but your thought is >> that the market has a view of the balance sheet meaning it's a loss of liquidity and the equivalent of two rate hikes steve liesman cnbc survey had

that specific question in it and fed you is var, and that's exactly what it showed the federal reserve and most economists look at the balance sheet reduction and what it means for reserves and bank lending and don't think it means anything, so i'm not going to argue which card is right, but i'm just going to say the market thinks, a, about the balance sheet and the economist and fed thinks, b, that's the source of the problem. we don't know what it means. we've never done this before we've got different viewpoints on it right now, and that's where the mistake was led in december when he said we'll put the balance sheet on automatic pilot and it had took a giant dive down. >> this boils down to everything we've talk about off camera. it's psychology. it's all about psychology. this has dented the psyche of some invest o. brexit has dented the psyche of some investors the earnings recession has dented the psyche of some investors, but if you look at what's really changed in a tangible way, a lot of the trade issues could reverse some of that along with the notion that brexit might be the y2k this

milania. >> if you get the unknowns out of the way that would be a big help in trying to solve everything as we go forward from here, but bear in mind ben bernanke himself mind, ben bernd recessions are caused because somebody murders an economy. when the market perceives a mistake by the fed, it thinks you're going to murder the economy, those types of fears can come you can dent psychology, say it is only psychology,but it can have a very powerful effect on markets. >> since all stimulus is fungible through central banks, ben bernanke's comment shouldn't be reserved for central bank of just this country, should be for all of the lever pullers. >> it is fed is reducing the balance sheet but has been given an out that the ecb and bank of japan have eased to offset it.

if they were to change policy, i think you'd see big reaction here right now they're not. they're going to continue to ease. >> now we totally agree that we have done nine rate increases and the notion that oh my god, should we get in recession, we have to do quantitative easing, the other central banks don't have anything like that, they're negative i guess what i'm saying is in the end, bad news from europe and japan should they get more stimulative opens the door for the fed here to maybe grab a few more raises in an atmosphere that the markets would be able to take it better. >> the fear is if you try to sneak out a couple more raises, remember, recessions are caused because you murder the economy the biggest murderer is the fed. be careful. >> you're saying there are very few avenues for our central bank, given the position of other central banks, given the downturn in the economy. >> absolutely. i think they should be on hold

shouldn't talk future rates. >> 2.25 to 2.5 is neutral zone >> i think so. >> jim bianco, thank you >> thank you for that. let's send it to jon fortt with a look at what's coming on "squawk alley. >> get ready we have two big ceos in the hour intuit, new ceo, first broadcast interview. he is going to talk about their big tax quarter, the quarter we're currently in and got into in the earnings, and door dash ceo, $400 million round, $700 billion valuation. joins us at post 9, coming up on "squawk alley." brakes? we're ok. just ok? we got a saying here. if the brakes don't stop it, something will. that's not a real saying. it is around here. i wrote it. just ok is not ok.

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welcome back the s&p eyes the eighth week of gains. a broad based rally, 8 sectors trading positive, nine at this point. check out what's happening on one of the big sectors, technology as you look at this sector, several chip names are pushing it higher. intel on upgrade, nvidia,

western video. intuit, the turbo tax owner on pace for best day in nearly two years after post of profits and sales that beat analyst estimates. that's a stock to watch. back downtown to you at the new york stock exchange. >> especially as we get ready for "squawk alley" as we have the ceo on thank you. wilf, what's coming up? >> we have a ton of fed talk, between now and then hear from john williams, mary daly, and the fed vice chair we breakdown all of the comments that's at 1:30, talking about the balance sheet, how it is going to change and what it meenls f means for the economy. we'll discuss with tom porcelli, chief u.s. economist >> looking forward to it big end to the week.

>> 0.4% ofgains for the week a a whole, catch up to the rest of the world which was outperforming the weekly performance earlier today. >> exactly right see you later. when we come back, shares of intuit surging that's an all-time high. we talk to the ceo exclusively dow, 26 k. "squawk alley" starts in a minute so grant met his insurance: you are caller number 12. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me. a temporary address, temporary ivory, and help him get tickets to the mozart festival. excuse me, grant likes beethoven!

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good morning 11:00 a.m. at the fcc headquarters in washington and 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪ good friday morning. welcome to "squawk alley." i am carly fiorina with morgan brennan and jon fortt at the new york s