points this morning, premarket the nasdaq solid up 46 just heard some of the companies that jim was talking about, and then the s&p, if it were to open right there, i think we would be back above 2800. and 273 on the ten-year. thank you, will. we'll see which andrew shows up next week. join us. "squawk on the street" is coming up next. ♪ good morning and welcome to "squawk on the street. i'm david faber along with jim cramer we are live from the new york stock exchange carl is on assignment this morning. let's give you a look at futures as we get ready to wrap up the week of trading. we are set up for a higher open on all the major averages. and now to our road map, it starts with, well, it is march, isn't it in like a lion, stocks set to

open higher on this trading day of the month as wall street builds on best start to a year in nearly 30 years. >> yes, incredible. >> yeah. i was a young reporter back then gap shares surging premarket the retailer says we're going to split the company into two separate public companies. old navy going on on its own tesla goes budget. unveiling the long promise, paired down model 3 sedan and in order to do that in part, it is not going to have any showrooms anymore. falling before the bell. the dow, the nasdaq are aiming for what would be a tenth consecutive week of gains, the best two-month start to a year for the s&p since 1991 and for the dow, since 1987. >> very bad year, and '87 ended not so good, so people will say what i just said, throw it out and there get ahead of everybody else i threw it out there to shoot it

down the fact is 1999, 1998 was good, 1997 the december market, that's what we're reacting to. >> of 2018 in february, by the way, the russell 2000 with a 5% gain outperformed the three major indices. i wanted to get that in there too. so, all right, there it is get a look at everything it has been a nice move. we talked a lot about it we got a gdp number yesterday, strong jobs number, powell sort of says we're in a good place. you feel like we're in a good place? >> he yeah, i do i think that -- >> for the economy, not for the market. >> january is good let's talk retail. january is good in retail, february soft on retail. but it is -- i'm calling it a bounce back from december. from last ten days of december, really bad those were the really bad days they coincide with the stock market, we know rich people in stocks, individual stocks, i'm sorry that's probably true. >> true but it is fallacy to say

is only -- 401(k)s everything else >> i think what happened is that we're looking at it a year where things are better than we thought, which is why a lot of money managers are really scrambling to try it catch up. supposed to be a bad year. not proving to be a bad year, boeing or workday. >> most people would take this year's percentage gains for the year and take it home and say thank you. >> i would literally shut down now. i would. i would just go to the movies. >> people never really shut down they don't pay you to shut down. >> eight months early one year >> what did you do >> how did i get it right? >> what did you do after that? >> i went to the movies constantly. >> oh, please. >> the idea of you not working constantly is impossible to imagine. >> i didn't kill my wife i don't care i watched that movie 30 times. >> could always watch the fugitive you watched it this weekend.

it it's been on >> all the stations with at&t -- remember the great american said that people always stop when they dial and they see the fugitive they always stop >> they do >> i miss jeff yucas. >> hbo misses him too. because, well now plepler leaving hbo , levy leaving turner, at&t making a significant move there to take control completely of the asset they own, time warner. >> they get good fiber-optic and copper guys in there it is a chance to get in like switching and the big switches that they use to be able to move data it is an internet of things play >> it is it is. and time warner is not unimportant in that set for them john steinke is charged with running that they're consolidating everybody in hudson yards, bringing everybody together from all the different disparate places over new york city. >> is that number seven? number seven you can go to

bonia, still played at bryce harper. >> still being paid by the wolf. let's get moving on here and move on to gap shares of the apparel retailer surging in the premarket old navy is now going to become a stand alone publicly traded company, separated from brands including gap and banana republic, athleta, old navy has consistently, by the way, outper formed the other two brands for several years. looking at it as of this news, the revenues of old navy and then everything else are roughly equivalent. >> it is incredible, isn't it? i think that, look, there is real -- i haven't seen cross currents and doubts versus loves among retail analysts in a long time i would say the prendominance do not believe, i'll tell you why this is going to allow art peck to get rid of the underperforming stores this giant smoke cloud he'll be

entering and their strategy has been to buy back stock what was the strategy of mickey drexler, grow sales. now, mickey doesn't get a lot of credit. >> mickey is with the company for quite some time, but was during its heyday and created the old navy brand. >> he took it up to 50, and never bought back a share. these guys under art peck brought 760 million shares from ten years ago, they only have 381 million shares what happened is the stock is up five bucks this is a chance to go to a 3% for old navy, which is still a very big power brand, by the way, foot locker, amazing numbers. and you get this other -- athleta is fantastic equivalent of a fast growing leisure company, lulu, gets that, closes the underperformers in gap. >> gap is an after thought these days

think about -- used to be one on every block and they already closed. >> i like that blazer. newco, they're trying to figure out what to name this. they will not name this thing gap. art, i like him, big data guy. i think what he ought to do is call it athleta. >> that's the growth name. >> they got this -- banana republic not doing well. gap minus five comps so if you can deep six all the bad gaps and break this thing out as a growth company again and art can do that -- >> gap got cannibalized by old navy it was similar stuff at a cheaper price. >> and they made their bed with denim. after spinning off the denim company, levis is coming public, three big denim companies, i don't want that. i would prefer capri, the old michael kors upgrade today, but the really great thing about capri, it is jimmy chu and versace. versace is great

all over milan when i was there for fashion week. >> okay. you know what's interesting here is you have not a control share, but there is not the prospect of an activist coming in, but they seem to be their own activist here. >> yes, art has been waiting and waiting and waiting to do something big. and i think he kind of just said, i'm not going to be able to do it in the structure i have and, you know, i look at -- i look at matthew boss as a guy for this, he does -- >> the analyst at jpmorgan >> i know he's not going to change his mind on gap i don't think he's going to -- >> stock is up 20% >> i'm saying he doesn't think gap is going to be that great. by the way, they're not coming to the conference which i think is a shame i know that america knows gap and they better get used to athleta because you won't be talking about gap. a year from now you won't be talking about gap. >> if you are a shareholder, you'll get a pro rata distribution and the same

proportion of old navy and newco, they haven't named it yet, not going to name it gap, you would expect something else and then -- and they don't expect to complete it by 2020. these separations do take some time. >> you have kids. >> i do. >> do you know what a certified b corp. is. >> what? >> certified b corp. >> no. >> i had to go to my daughter. it is sustainable clothing, it is -- that's important because a lot of people feel like gap is land fill clothing this is something mr. idol always worried about it is land fill versus -- they make it correctly, make it right, use the right fibers. john idol wants to make it out of recycled fibers younger people tell you, david, it is certified b versus land fill and the first thing that art peck talked about was to make it so that newco, gap, is

going to be certified like athleta is that's important to younger people we go shopping, david, we're only going to go certified b. >> i like it certified b. i'll remember that. >> you ought to. it is so important you didn't know about it i learned about it at fyre fest. >> thankfully i don't buy a lot of clothes at all. but when we come back, we're not going to talk clothes anymore. we're going to talk ebay we got so much to get to. >> we didn't cover jack. >> ebay. >> you got to balance purpose and profit certified b. would you know what purpose is >> i have a purpose. i'm trying to figure it out. ebay shares getting a lift after the company announced what it calls strategic initiatives to enhance performance, elliott playing a role in this we'll give you all the details, talk about it. by the way, futures up, open 20 minutes out, a lot more "squawk on the street" coming your way

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♪ speaking of waking up, we woke up to news this morning from ebay and elliott as well. the large activist shareholder that not very long ago in fact,

what was it, back on the 22nd of january, little over a month ago, came with a long letter to the board of directors saying, hey, we think you should be taking a close look at the potential sale of stub hub, and your classified business, sort of doubling down on the market place business and after what i am told from all sides was relatively constructive talks from the start involving elliott and the board and, of course, ceo devin wetting, they come to a settlement, this had been reported on late last week as a possibility by a number of different outlets, two new board members including jesse cohen who runs the activist practice at elliott or certainly is one of their key people in so many of these deals, there is a look at winnic, and one of starboard's favorite guys, matt murphy, the language that is

used is they initiated a strategic review of the asset portfolio include iing but not limited to stub hub and the ebay classifieds group. for their part, ebay feels like we had three amazing years two bad quarters, we caught this activist, dealt with it very quickly and straightforwardly and now moving on to focus on the marketplace. >> just salute winnic, here's what he did, winnic was open minded, no scorched earth, not like alcoa where claus kline feld, this was nice from the beginning. former journalist, great guy here is what jesse cohen, juniper network, a great list of companies he has shaken up and succeeded in doing i think if they get -- stub hub is worth a great deal more

they don't agree with how much it is worth. pay pal is one of the big swings ever. >> i think the question will be do they actually proceed with after the review, a sale, you know, i think they had a lot of incoming for those businesses. no, no, no of stub hub and classifieds. elliott would embrace the idea these are likely sale candidates i'm not certain that is still the case when management is looking at them. they're going to undertake the review they're going to see, i think it is interesting that they chose to include that language in the release that says including but not limited to, which does at least leave the possibility as unlikely as it may be that the marketplace business will also be reviewed at the very least. >> look, this is an undervalued company, it has been chronically undervalued, people don't understand it, they had weak quarters as you mentioned. i think it is -- >> low teens i talked to one of the top five holders this morning and low teens multiple

expects them to trade higher multiples. wants to see what happens with the strategic review growth has been somewhat limited but believes the marketplace of business as you say has been highly undervalued, payments back in there, and overall is a real fan still of this management team. even their willingness to engage really quickly with the activist, not send a great deal of time fighting which as we know is also -- can contribute to management being focused on the wrong things. >> we have seen a lot of these internal breakups in the activism mat skou exploring a spin-off. these are viewed as cyclical ebay is less cyclical than people realize a lot of companies are tired of where their stocks are. >> interesting we talk so often about elliott, they figured -- they had a mixed year too arconic didn't get sold. athena, they ended up buying but

nowhere near -- for them, maybe a benefit, nowhere near the 160 price that indicated we know what happened in nxp it has been a mixed bag when it comes to some of the -- >> it has. ben wrote a -- we did this great ebay take. and they used our plan >> they did? >> pure arrogance and hubris. >> i think they would admit that, though. >> it is nice. >> you got it right. >> i had andy jasse on, i hope we get to talk about amazon. there is very distinguished people very distinguished people who signed an open letter. >> we'll talk about amazon, jasse, aws on the show last night, this letter today, fascinating. new york times just this attempt to try to get amazon to reconsider and come back to long island city >> this is signed by -- >> including a lot of unions, not a lot, but a number of them.

>> it is really fascinating. >> it is not just big corporations there >> where were they >> wide ranging -- >> it took the -- >> we'll do it later we'll talk about it later. you got to get ready for -- >> mad dash. >> mad dash. >> you're wearing a sport coat on friday rather than a suit >> sure. >> okay, good. >> gray slacks on. you got a mad dash to get ready for. we're counting down to the opening bell 11 minutes before we get started with trading here at the new york stock exchange. as you can see, we are are getting ready for a higher open for this first day of march. the future of technology investing lies beyond the tech sector. it's about technology transforming every sector.

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♪ welcome back to "squawk on the street." now is the time when we stand. and why do we do that? honor of the mad dash that is going to be foot locker. >> this is amazing when you see a company, this is not a -- not hard theoretically to discern how well foot locker is doing, it got a critical downgrade right here ill advised. there you go what happened, interesting, i think people got shorted on the downgrade, betting that the number that came out today would be bad they did 9.7 comps, the best

i've seen for retail people are looking for 4.6 this is an obvious with nike nike is the greater story of this era mark barker, ceo, quietly one of the greats, you buy nike off this, 90, and should go much higher, just because this fellow, richard johnson, he's one of the great retailers, i got to tell you this is a remarkable story look at how much is year to date this is key. it is in the -- >> it is a good old brick and mortar in the mall, walk in. i get plenty of shoes coming to my house via amazon. >> do you? i always try them on it is interesting. >> i don't like to -- >> people like to --

>> you should go to the nike store in midtown. >> i have been for a gift for somebody and then it didn't work out for me, i didn't like the way that they didn't have cashiers >> no, it is all very -- very wholistic. >> are they certified b? this one is shocking because it has got something that -- i can't come up with another in mall store that worked, that had this. >> we got a lot more to get to we got to get back to the chairs quickly. going to talk about at&t, going to talk more about the fight about bristol-myers and other earnings this morning as well. we're coming back on "squawk on the street." [leaf blower]

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♪ ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible. you're watching cnbc's "squawk on the street," we're live from the financial capital of the world, the opening bell it will ring in two and a half minutes. we'll get started with the last trading day of the week. first of the month of march, by the way, jim, let me give you

quick stats here what do we got month to date, the russell was up 5%. s&p midcap 400, up 4%, that was last month not bad. transports 4%. year to date, man, the russell up 16.8%. >> supposed to be a bad year, david. turned out to not be a bad year. really one of the most exciting periods i've seen in the market. >> if you were running the hedge fund, would you be saying, okay, i got a lot more opportunity i see a lot more coming into the spring would you be going to the movies >> i think this is one of those markets where there is still a lot of upside. unfortunately, it is not from the stocks that people necessarily want to buy because they're very hard to understand. which brings me, david, something you and i like to talk about, usually right about now >> which is. >> keat to tthe key to the mark. >> yes what is the key today >> this is why i'm saying a lot

of people have missed this move. key is the company called splunk. >> splunk? >> splunk is the key to the market work with me here. >> i will. >> splunk is a $20 billion company. >> okay. >> significant market cap. >> run by doug merit and splunk is the kind of company, what it does is it analyzes big data probably one of the best and it reported a number last night that was so extraordinary that it made you think, big data is the theme for this year and, by the way, you know how you would have known that, if you looked at this spend, what was the big spend on that we got yesterday in gdp software you hire splunk, you hire workday, another great quarter, vm ware, another great quarter last night, lots of fabulous quarters and a lot of it is analyzing what amazon web services did. >> i know. we're going to talk about andy jasse and amazon last night. there is only going to be so much more data, jim. as we move into 5g and the

internet of things and everybody has a chip and is sending data, it is going to explode. >> cisco has been talking, the new cisco, he's talked about the amount of data marc benioff, they said, listen we want to get to 10 billion like marc did. >> the opening bell. heard it, the opening bell here, of course, the s&p 500 real time exchange back at our headquarters, largely green, given the indications for the open by the way, ringing the bell here, eros international, indian entertainment company celebrating the launch of new digital comedy series metro park at the nasdaq, hennessey capital acquisition corp its fourth special purpose acquisition company celebrating an ipo. >> look, ipos are the key to the next month if there really is this much supply hitting the market, and

these are not $400 million company, these are $40 billion companies, where is all that stock going to go? >> i knew you would keep saying that there is going to be -- there is going to be money for the ip oxs. >> money coming out of this market every week, during this incredible run, ten weeks up, this is the least -- this is the least anticipated bull market of my life. >> that's saying something >> well, david, if it is double digit, that's a true bull. >> it has been a very strong move as we head into the last month of the first quarter. >> if your stock doesn't move, someone knocks on the door >> activision still a very important part here. that doesn't mean as a strategy it is any more rewarding than any other. for a while, activision was accruing assets that has stopped. and now everybody is sort of getting in on the act. in fact, you know, we should get to this, because we talked about it yesterday, and i think it is

a story that is going to be one we hit a number of times, we speak about large institutional shareholders, activision and what not, i'm talking about wellington and that decision to put out a press release in opposition to bristol-myers acquisition of celgene this happened the other afternoon and wellington has been unwilling to talk to me and i don't think talk to anybody else they have simply shut up when it comes to saying anything more than the company of paragraphs they shared. but that was an important couple of paragraphs, sent celgene shares tumbling, sent the spread of the deal exploding. and, of course, raised the specter that bristol-myers might on april 12th, shareholders face a no vote. is that likely, probably less likely, but certainly -- i'm sorry, probably less than a 50% chance, but it is hard to put any numbers on it. what will i assess recommend the very powerful, whether you

like it or not, proxy advisory service. what will vanguard, black rock do, vanguard shares are held at wellington for advisory purposes but vote the shares. so much of the 8% wellington own s. but it raises a larger issue and when we talk about a lot here. which is what do you do when you're an active manager and charging real fees and competing against the etfs and the index funds of the world you have to show that you're actually doing something and so even though wellington hasn't talked to me, i talked to a number of different people and as you might expect in governance and who might advise on these things, they expect this will be more of the norm. newburger did it, wellington has done it, the large institutions are going to get more active in a way which is going to make it harder to get m&a done. >> i like to choose my index fund by lowest fee that's what john vogel taught me if i have an index fund that has to analyze bristol-myers celgene, i have to pay people.

i can't just do robo. >> or rely on iss. >> you got to do your own work what happens, my fees, they go up and do i really want that? >> fees are not going up because it is so incredibly competitive. and really where the pressure is being felt is by the active managers who are trying to show their worth, their value they fight off the etf/low fee manager. >> what is the plan for bristol without celgene? >> that's the question i have for you. what happens there been a feature in the market place because we don't typically see the kinds of battles there is a lot of money at stake in the event area. also yesterday there was somebody buying a lot of stock from goldman sachs, maybe 13 million, maybe more, 20 million shares, t plus one, you wanted to get the quickest settlement you could because the record date is monday so you had to get in under the record date. don't know who it was, whether they're buying it to vote against or in favor. i've been trying to figure out

who it was >> you got the skinny on that. don't know if we can get on the fly, call up to our fabulous team bristol-myers versus merck this is something that was supposed to be a titanic battle between keytruda and optiva and it's not bristol has to buy someone i'm a huge believer that celgene is developing a lot away from revlimid look at that you see why merck is the winner. look at that plus 51. that's where bristol has to do it i think bristol is right to have the game plan. >> that goes beyond the hope that is more of a prayer that somebody will come along and buy bristol. >> yes, a wing and a prayer. >> let's move on, number of other movers, tesla, hit it briefly, jim the stock is down over 5%. it has been an interesting week.

got into march 11th to figure out what he wants to do with the s.e.c., which was unhappy with his tweets saying they violated the earlier agreement with them. judge is going to rule and that. but the company announced it is going to sell $35,000 version of the model three midsized sedan and going to move all sales online >> yeah. >> a cost saving move. >> i feel that what is happening here, maybe we have to get gerber on because there was a conference call that i wasn't able to get on which is odd, right? there is -- i think there is a genuine belief that everything this man says is contradictory to what he said before, but in the meantime, the buyers don't stop there was an article this morning talking about maybe the halo is going to be diminished by a lower cheaper car this is something that happened to maserati, something lamborghini fights, how do you keep your price point if you develop a cheaper car? that is my worry about tesla i think that we're beginning to

worry like they're a real car company. >> those are all used and they had the issue with the state laws that you -- >> yes i've never seen a battleground like this in my lifetime stock, it is either going to zero, to a thousand. and when you say it is going to a thousand, people think you're not rigorous you say it is going to zero, people think you're un-american. >> you're right. it is a very heated battle has been for a long time stocks down 9% this year in the market pointed out it is up almost 12% right now at the s&p gain of roughly three-quarters of a percent this morning the convertible did not hit -- >> they're okay. >> yeah. they can meet the payment, tesla. they can they got the cash to do it >> general counsel, how do they rein this guy in in the meantime, the cloud kings

do not stop. it is just a cloud look at sales force, they report next week. >> is there an etf for the cloud? >> i created the cloud king. the jokers who make a lot of fees, packaged them as cloud kings. they're shameless. >> let's talk about the king of cloud, which is still amazon web services single profitable part of amazon's business, not the biggest revenue generator but margins on it are quite large, certainly far larger than the retail andy jasse joined you last night on "mad money. i would love to listen to what he had to say in terms of where their focus is and talk more about that >> sure. >> we're much more focused on the long-term than most companies. we're trying to build a business, a set of customer relationships that outlast all of us. we think if we help our customers get more done in success on their own, even if

means lower margin percentages, over time will drive more absolute margin dollars and they'll be more successful and we'll be more relevant >> david, you know how they do it by cutting price constantly and boosting service it is a henry ford model from when he took over the -- the auto world this man jassy is one of most impressive people i've interviewed in 14 years. what he's done quietly is build a company that is growing still at 47% with a $30 billion run rate that's the fastest large cap company i've ever heard. >> 47% with $30 billion in revenues so fortnite starts and boom, everyone is taken by surprise by fortnite they run on amazon web services. doesn't cost them anything to run it they charge a little, not a lot. they make fortunes and this is the reason why you want to own amazon this is. not the prime.

because people feel prime has peaked i do like the actual classified, the ad business. it is jassy's business that is so exciting. 52% market share. >> they have to continue to invest in data centers. >> constantly, constantly. >> and the way to power them all given -- >> it is the great american growth story they haven't even scratched the surface of europe yet. europe had bad numbers in terms of growth. but when you -- people who are selling amazon, i think are selling it off the fact that, you know what, what is really going on here is that prime has got 100 million, it peaked, give me a break amazon web services is the number one, two, three, four cloud company and then you have azure. which is pretty good right? azure is good. all the way down you got google. even though i have a guy that people call lebron, they got oracle, to try to jump start google. >> then jennie rometty and ibm

they bought red at >> then you have all of the providers of software that goes on top of the cloud that lets you go everything. >> that's why you look at -- he said, look, you got they have a great relationship at sales force. think about it, everybody sits on it, workday sits on it, they reported last night, remarkable executive, you look at what, as i mentioned, the key to the market, splunk what they're doing, over and over again i come back to the same thing, amazon web services and digitization is in its infancy if you were on the nordstrom call last night, they have the data to figure out what their inventory should be. art peck, gap stores, they have the data they have the data to control inventory which didn't matter much with nordstrom, they had a rough patch in december and they are still not delivering the way i thought they would >> we mentioned earlier, jim, this letter that has been signed

by a lot of luminaries in the new york area to amazon, impl e imploring the company to reconsider here is a look at it can't see all the names at the bottom >> did you look at it the way i did? >> we try to get a couple of people on. >> kevin ryan is -- >> it is a list of - >> a high tech sector in new york given all the startups he's been behind. >> david solomon, goldman. >> reflective of the vast majority of new yorkers who wanted to welcome amazon here, the importance of having amazon be a part of the economy here. not that they don't have jobs, but another 25,000 jobs. >> i'm neutral, but i wish they would have called me >> we can't do that. >> is this any hope this can

happen jassy has nothing to do with this. >> no idea interesting effort by the city of new york. >> 9:42. >> anything else you want to hit before we get to bob pisani? >> 100 different things but i thought dell reported a good quarter. michael dell has got a -- just -- this is such an inexpensive stock. i said it was worth 70 when i did my -- at that point in the 40s. michael dell, by the way, a nonpromotional guy >> he is there were a lot of shareholders of the tracker, original tracker vm ware this was exchanged for actual stock of dell publicly traded dell, controlled though by mr. dell himself. and his partner. >> and does a great job. circle back to tesla before we go to bob. some people feel that he selectively disclosed material

yesterday. got to stay on that. there were some people, some bulls who were on a call this guy does not -- >> no. the s.e.c. -- he's got the s.e.c. all over him. the last thing you want to do is come anywhere near the line in terms of -- >> do you want to practice in front of the s.e.c. and say i tried to rein him in that's not the way you want to be. >> no. let's get to mr. pisani on the floor, more on what's moving this morning >> good morning. happy friday, everybody. four to one advancing to declining stock. great start to the day take a look at the sectors retail doing well. gap moving things, foot locker as well. semis, kind of stuff you want to see moving banks, energy, and reits, tough time for interest rate sensitive. ten year yields moving up this week so utilities were down home builders were down. they're up this morning. but keep an eye on that ten year yield. retail stocks, good week overall, foot locker had decent numbers, we all know about gap

splitting up old navy there. elle brands follow through, express is up. even though data hasn't been great, personal spending down, retail sales numbers are not great. still getting decent numbers from most of the companies you heard about gap. one thing i note about gap, it is one of the big buyback monsters i've been talking about buybacks a lot recently gap is one of the all time champions, since 2010, it brought back -- it retuesdduced share count. gap's numbers are 42% higher than in 20 10. without changing any numbers at all, any fundamentals, autozone, lowe's, best buy, see how much stock they had been buying, how much they had been reducing their shares, more accurate way of describing what is going on here still the retailers are having problems we're back over 2800 we tried twice this week to get over 2800 close. we haven't yet we'll see. it has been an amazing couple of months

up 8% in january essentially, 3% in february. rarely get these -- these are way outside of standard deviation numbers here we'll likely be up in the fourth quarter. look at historic highs, getting close, look at this prior to the open, look where -- close to 2% from the dow the s&p 500, that doesn't include the open today nasdaq 6.5%. russell is further back. that's been a slight laggard so far this year. so the important thing is we're getting close to those old historic highs that we saw a while ago. if you look overseas good day, germany had a good couple of months as well it is up i want to concentrate on shanghai and the shenzhen composite. those stocks have been moving -- those sectors have been moving on a number of factors number one here, shanghai overall had a great year, up about 20% so far this year originally, remember, 2018, the mainland china market was very

much hurt by the trade war market plummeted there that is dominated by a small retail investors that freak out to be blunt about it very easily. 2019, the trade wars have been a little less of a concern out there. on top of that, yesterday we got word of msci, a big index, reweighting their china mainland indices, waiting for china and as a result, we see foreign investors come back into the market as well and a fairly big way this is what the emerging market index looks like right now hong kong is 23% of that mainland china, you see south korea and taiwan that china number, mainland, 1%, that's going up. it will go up to 3% and then eventually 16% mainland china, you see what i'm saying? these index companies control the world essentially now and when those indexes change, what you own in a foreign fund, a foreign mutual fund that is

index or foreign etf is going to change the point, china will become a bigger part of the world. 212 points up in the dow near the highs. back to you guys >> thank you, bob. let's get a check now on the bond pits, rick santelli joins us from the cme group in chicago. good morning, rick >> good morning, happy friday, david. you know, the rate structure has changed rather dramatically in the last handful of days and mostly long end has led the way. we have seen a widening in the spread, a favorite down here 30s minus 10s. the long and short of it is is it really is giving confirmation in many ways to the move that it is witnessing with regard to the equity markets there is a lot of questions out there as to how much legs are left with the expansion and the stock move and questions about earnings but at the end of the day, when i look at markets, the long end and all rates in general telling me things aren't that bad. we're up if you move to the long end, 30

year bonds up 2 on the day, up 6 on the week. year to date of 10s, two things to point out, first of all, they're up almost ten basis points on the week so that's what the long end driving really looks like. on the year to date chart, right now only 4 basis points away from challenging the high yield of 2019. right around 278 things have changed rather dramatically bund yields, one week of bunds, they're at 20. you know where they were last week cut it in half minus one nine basis points, more than doubled in a week. don't look at percentage, but some of the pressures alleviating and allowing the rates to flow higher dow index down a half a cent or so on the week still holding 96 back to you. >> okay. thank you, mr. santelli. and as we head to break, look at this morning's top performing stock on the s&p gap, given that plan to split is the number one performer,

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all right. time for "stop trading" with jim. what have you got? >> actually, i'm going to switch directions >> okay. >> i'm looking at a company called tndm, stock up 76%. it's the hottest one of all, and i have him on tonight for the first time david, whether it's dexcom or abbott or tandem diabetes, this is what people are focused on, this area, diabetes, terrible illness, worldwide epidemic, whether it be an bot or the dexcom people. i was actually hoping that apple

would buy these guys one time for the service stream i can't wait to have him on. there's companies, shopify, etsy, tandem diabetes. these companies are up 70%. >> it is an interesting story. with the s&p up year to date we'll bring you more on the year's rally >> this was a great show have a great weekend, man. >> i will try my best. >> got anything big? >> going to relax. >> going to pickp uour dog out of disobedience school. >> love that dog we've got to go. >> yeah.

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= welcome back to "squawk on the street." some breaking news our february read on ism manufacturing, our last look, was 55.8, 55.8 right now we're looking at a number of 54.2 54.2, so that sequentially is lower than 50.6 and definitely weaker than we were anticipating what's really sad about it is it's actually the weakest number since the end of last year when we were at 54.3. that number took us back all the

way to the end of 2016 now let's look at some of the internals. the employment index moved down from 55.5 to 52.3. prices paid, pretty much lateral, 49.6 versus 49.4. new orders also dipped not good news. so a bit soft. university of michigan also soft 93.8 that replaces mid-month 95.5 so another weak number let's go through inflation expectations 2.6 on the one-year. that's .1 hotter, kind of surprising there 2.3 on five to ten that's a lateral move, and that really represents some softness, so unlike chicago yesterday, a little bit disappointing on both the market though, firm on rates. firm on stocks, but not on the highs. david, back to you >> okay. thank you, rick santelli good morning to everybody. welcome back to "squawk on the street." i'm david faber along with melissa lee and mike santoli

we are live from post nine at the new york stock exchange. carl is on assignment this morning, and sara is off let's give you a look at the markets. we've about hanging in there from right around the level of what was a strong open half an hour ago with the s&ps, up as much as .75%, but right now up a little less than that. >> our road map starts with the market meltup, stocks surging continuing their best yearly start in nearly 30 years. >> plus, first new york and now virginia a new pushback against amazon's hq2 in northern virginia after new york city abandoned its plan for their location. >> gap shares surge. what this signals for the retail sector as a whole. >> the s&p is seeing its best year since 199 is. the best start since 1982. joining us here are the chief u.s. equity vat gist at credit

suisse and jpmorgan's global market asset strategist. david, i'll start with you it almost sounds according to your note like you're a reluctant bull here. >> i think that it's just northern to temper expectations. you know, what led us down into december was really a decline in valuations and what's led us back up is a re-rating of valuations during this period of time we've seen earnings estimates come upped pressure it's not that i'm not enthusiastic and i don't think that this rally has more legs, but i think we need to think about how the underlying drivers of the rally could shift and frankly the onus will really be much more on earnings going forward than it is on the multiple to drive additional upside from here so we're having a lot of conversations about preparing for volatility, not putting the cart before the horse and not expecting this pace of gain to continue throughout course of the year. >> we have significantly though ratcheted down earnings expectations for the year, jonathan if we have upside there's no telling what stimulus in china could lead to, a trade deal in china can lead to and then

knock-on effects when it comes to europe to a chinese lift in the economy and then back here to the united states. >> right. >> so, first, i'm not looking for a magic bullet coming out of china. what we are seeing is right now market expectation is that the fed is entirely done we can have a debate on that, but the futures market is saying it's over. the futures market is saying that longer-term interest rates will edge up a tiny bit but nothing that's going to be destabilizing, so the yield curve becomes healthier in six, 12, 18 months but not in a way that squeezes the housing market or anything else the china situation in terms of a trade deal looks, you know, not done, but the -- the rhetoric has been taken down a bit, and -- and these numbers, you know, listen, we still have a weaker ism number but here's the reality. we were running on an awful lot of stimulus over the last year or two that stimulus is going to be coming off the ism is at 53 or 54 for the next year.

this is not a surprise, it's part of the story. >> this picture is one of a bit of a sweet spot here where the fed isn't a threat and expectations aren't very high for growth right now and -- and, you know, yields have stayed low. you're actually kind of getting a dividend push again in stocks so what can disturb that picture? >> so i think, you know, when we think about what could disturb the picture i think there's a decent amount in the price right now in terms of resolution with trade on china i think if that were to take a turn for the worse you would likely see markets re-rate to an extent also to your point about dividends, we're trying to anticipate that type of less than optimal outcome perhaps materializing and focusing more on sectors like financials, energy, right where you get a little bit of incremental yield pickup above and beyond. we think of that as bubble wrapping portfolios trying to prepare for the unexpected volatility bounces that we think we could occur over the course of this year. >> that's largely what's led us higher so far this year. jonathan, would you stick with what is working, especially when it comes to cyclicals?

they have been industrials, specifically the poster child of the trade war, and if the trade war is not going to be much, you know, what other catalyst is there? >> i think there's kind of a next two, three-month story and then the rest of the year. the market, it looks very cyclical right now i think that that's going to probably work for a little while longer, but ultimately if i'm right and the economy is going to get weaker, it's going to be in countercyclicals. it's interesting if you look at only one sector that is ahead of what its recent highs are and the consumer staples which everyone thought was a pig. >> doing this at an all-time high. >> and real estate. >> so i -- i don't think this thing will be as cyclical. healthcare does probably fine. technology that's not very cyclical, so away from hardware and semis so have you to kind of pick your spots on it. >> yeah. >> are you concerned about financials at all? >> you know, the interesting thing to me about financials is i think the thesis over the past couple of years has really been one of oh, rates are headed

higher and banks should do well in that environment, right net interest margins ride and profitability improves, but you've seen a pretty significant decoupling between the behave yorvit ten-year yield and the performance of financials so from where we sit we're much more focused on the shareholder yield story and increased buybacks, continued increases in dividends and the fact that a lot of these names are trading at one times tangible book value. you're basically paying for the assets and getting any services businesses associated with the businesses for free. i think there's both a short-term and long-term case to be made for the banks, and the dividend on top of that, again, provides insulation against volatility >> jonathan, you talk about had a slowdown, and i guess the market can be built for that at these levels if it's just a slowdown, a soft patch or goldilocks backdrop. have we been freed from the end-of-cycle panic gripping us six months ago >> yes first of all, we know that trees don't grow to the sky and cycles don't run forever, but the inflation data we saw with ism

below 50 means we're seeing less inflation risk core cpi has come down all prices are off rents are softening up a little bit which means that the pressure on the fed and the pressure on the cycle is less, and i think if there's a win here, it's not because the economy is good. i disagree it's not about what could go right or what it is, it's simply if the cycle lasts longer and it's boring and tepid and uninspiring you get a bigger market without there being anything that appears to be driving it. >> even with a 12% move in two months >> on average, we're 4% to 5% below those peak levels so, yeah, it's a big move, but right now we have a 16.5 multiple on the market expectations for earnings, a whole lot has been made about a first quarter earnings recession which i think we'll just miss but it will be weak. but rest of the year the earnings will come back a little bit, so, yeah, i'm not worried about the bounce in the stock market. >> but i think that that's a good point i think that the softness at the

end of last year was driven by expectations of a slowdown at the beginning of this year some of this rebound, obviously part has been technical and part has been pricing in a bit of a bounce in the economy after this soft patch that we seem to be going through so the big question to me in terms of back to your initial question of kind of what could go wrong is what does the market start to look at next right, when we begin to hone in on the end of this year, 2020, consensus thinks a recession is coming in 2020 i agree with jonathan that this could be kind of a tepid, boring expansion but if you see the recession fears bubble up again, that's probably going to make the market ride a little uncomfortable. >> thanks, gentlemen. when we come back, shares of tesla are down, you can see it there, over 7% right there after a number of announcements from elon musk including a warning not to expect profit in 2019 new york's governor, his name is andrew cuomo he's pleading for amazon to come back after it pulled out of plans to locate its second headquarters in queens, new

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stez la ceo elon musk announced the company won't be turning a prest in the first quarter of 2019. the news came amid a series of changes, including the

availability of the cheaper model three and the elimination of more stores let's get to phil lebeau there was mystery surrounding there. >> yes. >> any payoff in the actual news >> well, there was news. i think that for those who were skeptical of tesla's business plan it was the kind of news that made them say, yeah, see, we're not so sure about the model 3 and that's why shares are under pressure a couple of pieces of news starting first off with what elon musk had to say about the first quarter. the company won't turn a profit. why? he's talked about this in previous call. one-time charges expected in the first quarter, also the challenges of exporting cars to china and europe the other piece of news that got even more attention last night is that tesla is now going to start selling a $35,000 version of the model 3 previously the lowest price was $45,000 with a range of 260 miles. this will have a range of 220 miles, and that model 3, they say they can start delivering those within two to four weeks they are also going to be closing most, probably almost all of their stores and galleries here in the united states they plan to do only online

sales. elon musk says people are ready to do only online sales. quick reminder us a take a look at shares of tesla they have a $920 million bond payment. a convertible note that payment is due today. we've not heard yet that tesla has made that payment. remember, they ended the year with about $3.7 billion in cash on hand, so even though they are going into this period here in the first and second quarter of a bit of a cash crunch, they do have the money on hand to make that payment >> phil, thank you phil lebeau covering all things tesla as we will continue to moving on despite today's rally, energy is the only sector remaining in corrections territory. dom chu is going to take a closer look for us in our etf spotlight this morning dom? >> reporter: so david, the bulls are looking to try to extend the best start to a yore in nearly three decade the huge rally for markets means every single sector within the s&p 500 is up on the year, including energy, which is the third best performing sector in

2019 as those oil prices have rebounded and global economic worries start to get tempered a little bit, but sector still remains, like you said, 16% below its recent highs now exchange-traded funds focused on the energy sector have been a focus for traders for that rebound since the christmas eve lows the spdr, s&p, energy etf ticker tle up around 25% and the ticker iye up a similar percentage amount the momentum in the energy sector driven by names like hess, devon energy and apache, every stock within the sector is up on the year, so we'll see if that momentum continues for the energy sector and oil prices back over to you. >> thanks investment quite linked with the stock market, as you know when we come back, big-name new yorkers signing a letter calling on jeff bezos to bring back amazon's hq2 to new york we'll break down the very latest

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stocks seeing their best two-month start to a year in nearly 30 years, and a rally to kick off march today joining us now is our own bob pisani here at post nine bob, you know, going back to 1991, right, the last time we had such a good two-month start to a year. >> yeah. >> also was coming off, you know, a 20% drop the year before. >> yeah. >> so i guess some things are right. >> very remarkable up 7.9% in january and 3% in february these are like two standard deviations away from like the normal moves that we've seen so it's a little unusual. the good news is that there's also the people crunching numbers, and when you get these kinds of moves up generally the next couple of months are positive historically. these are outside moves. obviously the third quarter is going to be up i don't know if march, is and generally things look pretty good right now the thing that i'm worried about now, we're over 2800, mike, talking about that this morning in the meeting haven't been able to close over

2800, but just at this number, the market is really expensive, so remember all these guys who are out. i don't know if gollow is at zero. >> 16.5 times, it's not expensive. >> i think that's extremely expensive on a historical perspective, wouldn't you agree? >> earnings have been growing for the past five years. what's interesting is -- >> no earnings growth and flat global economy, how can you argue for a higher multiple? i think that's a stretch at this point. >> the way people do argue for it, right or wrong, rates are have stayed low, yields have stayed low, kind of relative valuations get you to something around here. corporate credit has hung in there. a lot is hinge on the back half of the year though for the earnings to come through. >> how many times have we done this, melissa? weighted the fourth quarter, always we're in the first quarter and it's the fourth quarter that's going to save the country here because we're up, you know, 9%, 11%. now, here's what has to happen the trade talk numbers, the trade deal has got to be made, and that's got to stabilize the

economic situation in china and maybe help out with our economic numbers, and then they stop dropping the earnings estimates, and then you get -- i think gollow is at 4%, 5%, and that's what will save things. the consensus range right now at 5% for the year and it doesn't go to really zero and the fourth quarter doesn't go to zero, then i think you can stabilize the market because at 5% earnings, yeah, you're about 16.5. at zero it's not it's 17.3 right now. at 0 percent earnings the multiple is at three. >> how does that compare historically >> between 15 and 16 let's not quibble. >> trailing? >> yeah. >> is a or 16 trailing that's about where we are anyway if it's flat. >> the when you have a flat economy and 0% earnings growth it's hard to say there's an expanding multiple how do you get it up to 3,000? all these analysts and strategists out there. >> and they have revised lower

their targets, many of them. >> that's the biggest quandary how do you argue to get further ahead, so your argument is, okay, you're all wrong, guys the trade talk deal when it's done it, will help china stabilize. we've already seen shanghai is up 22% this year, but they have already moved. it's the biggest performer of the year. >> wow. >> shenzhen is up 25% this year. so they have already moved. >> in the near term people say, look, market is up a lot people seem like they were defensively positioned they are not yet fully all in. kind of have to chase. >> the money on the shrinidelins argument. >> coming off the really bad washout low in 2016, rough earnings picture and you were at this level of valuation. >> meantime, while we're sitting here, 3% from an historic high on the dow i looked this morning, it's got to be like 4.3%, 4.4% from an historic high on the s&p 500 this could creep up. all of a sudden a week and a

half from now we could be talking historic highs potentially. >> one of this morning's biggest movers, in fact it is on the s&p, gap after the company announced news to split into two pubically traded companies old navy will be separated and it will include gap, at letta mix and banana republic. may not be named the gap and they will shutter 230 stores in the next two years current cap ceo art peck will lead the new company again which doesn't have a name. interesting move here, bob i made this point earlier with jim. i mean, you've got not family control but significant votes there, so the like hooved an activist coming in and really yelling and screaming not that high, but they are their own activists here and are moving what you would expect to be a ploosk somebody who would come in and say try and create value. >> all of this, i keep reminding everyone, but i watched the whole shares outstanding in the buyback bills.

gap is one of the biggest buyback monsters in the world. they have reduced their share count 42% since 20 so. 42%, and i keep reminding everyone if all the other numbers are equal, it means their numbers, their earnings are 42% with no change in the fundamentals at all and still, still we're having all of these problems. >> there it is. >> one other thinchings right up there with auto zone and kohl's. >> these are companies that have reduced their shares more than 25% since 20 some of the that's how i define a buyback month the other problem, remember when we do these mergers. this is your area, david. >> yes. >> we always talk about the synergies that happen when the mergers occur and when the reverse happens how come we don't talk about dissynergy? >> is that a word. >> doesn't that exist here >> that is a word. >> what about splitting the corporate headquarters and the credit cards. >> like ebay and paypal. everybody said the same thing, very intertwined and abercrombie & fitch used to be part of

limited. they have kind of telescoped out. >> at least in the paypal and ebay you have two distinct set of shareholder basis and one is paying for a lot of growth that's worked out extremely well here you're talking about the same shareholder thing. >> gap trades at ten times earnings, basically priced for zero growth forever, high cash, high dividend, high buyback and zero growth and old navy growing in, never would get credit in terms of the valuation. >> not to mention it's can balancizing it. >> how do you factor -- we all know that old navy has got the growth part. okay that makes sense, but how do you factor in the separate headquarters, the credit card splitting and the real estate splitting? >> charge, don't worry about it. just a charge. you won't even notice it. >> you mention the new synergies unleashed based on this break-up, so to that point, bob -- >> when we have mergers we have synergies and when we have un-mergers we have synergies. >> you get focus when you split, focus. >> we haven't been focus

we're all over the place. >> now we can focus. the question for investors is would you want to hold on to newco? >> it's got some growth components i guess. >> i've spin the spinoffs, yum and yum china, you see the spins and you theoretically want to own the higher growth stock and that doesn't necessarily turn out. >> cbs/viacom was an example for the first ten years. >> remember what that happened. >> dividend payer for a different shareholder base, yeah. >> when that happened, they made the deal of course, the big thing for sumner redstone, and then when they split, sumner came down on the floor. we did an interview and we said, well, a few years ago you made the deal and put them together and had all these synergies and now you're splitting it apart. sumner looked at me and said that was then, this is now, and that was -- that was an honest answer on his part well, things are different now, bob. >> by the way, they changed again which is why they are probably end up back together. i've got to make some calls on that b bob. >> pleasure. >> thanks for stopping by.

>> let's get to julia boorstin who is in l.a. >> reporter: good morning, dave. amc shares soaring this morning. the stock is now up over 14% it was up over 17% earlier today. this is the stock's biggest move since it went public in 2013 this after amc beat wall street expectations on the top and bottom line. a key piece of news from the theater chain, the company's new amc's a-list subscription program which now has over 700,000 members drove global attendance to an a all-time high last year, up over 6% in u.s. markets. ceo adam aaron says amc will bolster results as subscribers bring friends and they also spend more on food and drifnlgt melissa, back over to you. >> julia, thank you. julia boorstin. elon musk's spacex taking a big step in the space program. we're looking alternate, a live shot of the spacex capsule as it gets prepared for a launch tomorrow before eventually sending a human crew up into space.

morgan brennan, by the way, is there and will join usatisor ler th mning "squawk on the street" will be right back each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

good morning, everyone i'm sue herera here's your cnbc news update at this hour. north korean leader kim jong-un was welcomed to the vietnamese presidential palace by vietnam's president. it is his first appearance since his failed summit with president trump. kim inspecting honor guards during a welcoming ceremony inside the palace grounds. saudi arabia has revoked the citizenship of osama bin laden's son hamza bin laden, this after the u.s. offered a $is million reward for help in tracking him down the state department announcement says hamza bin laden has emerged as a leader of the al qaeda terrorist group here at home, the water is quickly receding in northern california, but recovery might take months. residents began returning to their homes last night despite several roads that are still

unpassable and former nba legend kareem abdul-jabbar is auctioning off a huge chunk of his personal memorabilia, including four of his nba championship rings he says much of the proceeds will go to support his charity, the sky hook foundation, which helps kids learn about science, technology, engineering and math you are up to date that's the news update this hour guys, i'll send it back downtown to you melissa. >> sue, thank you. sue herera and welcome back to "squawk on the street. i'm melissa lee along with david fash and mike santoli live at post nine at the new york stock exchange we're about an hour into the trading session. let's get a check on where we stand in the markets off the session highs off the back of disappointing ism manufacturing as well as michigan consumer sentiment data the dow jones industrial average up by a third of a percent or 85 points the s&p up by 11.5 and the nasdaq is higher by 30 financials, the leadership group in today's group session of 1%. >> new york governor andrew cuomo confirms he's been trying

to win back amazon after the company ditched plans to build part of its hq2 project in queens, but is it worth the effort scott cohn joins us for more at an amazon facility in silicon valley with the latest hi, scott. >> reporter: hey, there. that effort is considerable, not just cuomo's personal appeal but this full-page ad in the "new york times" on the off chance that jeff beesos reads a print "new york times. it's signed by more than 75 leaders from business, labor, government, the clergy an open letter that says opinions are strong in new york, sometimes strident we consider it part of the new york charm, but when we commit to a project as important as this, we figure out how to get it done in a way that works for everyone >> i've had many conversations with amazon. i hope that they reconsider. up until now we haven't seen any change in their position

>> their position, the current plan, is to shift these purported $25,000 jobs that were going to queens to other amazon facilities like this research and development facility here in sunnyvale, california, but that is not a given in fact, none of amazon's expansion is a given the company confirms to cnbc that it's shelving plans to move into 700,000 square feet of new office space in downtown seattle as part of the company's ongoing evaluation of its need for space. the company declined to say how that pertains to hq2, and all is not perfect either in the other hq2 winner the big one, virginia, activist groups say they are emboldened by what happened in flork. protesters crashed a meeting yesterday between amazon and the executive development chief ant commanding they want a public hearing and pay to play is not okay amazon is not saying whether it will alter its plans for hq2 or

engaging with the public, an area that did not go so well in new york it still plans to hire 9,000 people in seattle, but that was the case before hq2. guys >> scott thank you. scott cohn in sunnyvale, california. taking a closer look at what's apparently this growing backlash against an amazon, virginia hq2 and whether or not it would suffer the same fate as queens, new york joining us from washington is arlington board chairman he says the county plans to move forward with the arlington headquarters for amazon. also with us, virginia state delegate lee carter, an outspoken critic of the amazon deal who was recently featured in the "new york times" with the headline how one socialist lawmaker is trying to change his state's pro-business policies. the state has also, of course, approved $550 million in incentives to amazon gentlemen, welcome to you both mr. carter, let me begin with

you. give me your sense of why or explain to me your opposition to this based on, of course, what i know proponents would say is the delivery of jobs, tax revenues, economic activity that would seem to be very beneficial to the area you represent >> sure. what we have here in northern virginia is an area with extraordinarily low unemployment already. we've got a situation where we already have more available positions than we have people to fill them. so what we have in northern virginia is not a crisis of joblessness. we have a crisis of affordability, and when you're cramming 25,000 new positions into an area like that, that means there's going to be a parade of uhauls coming down the highway. you've got 25,000 new families competing for the same housing stock. so you've got people who are working two and three jobs just to get by that have already seen a 20% increase in their rent, and that's before a single shovel has hit the ground, so there are a lot of people who

are already barely making ends meet who are not going to get any benefit from this amazon deal, who are in fact going to see their lives get worse. >> that was some of the argument that people in queens were making as well of course, the counter would be, well, listen, you rely on revenues from the state and the locality to pay for all of the services, conceivably those revenues will go up. not to mention, by the way, a shortage of jobs should lead to higher wages, shouldn't, it mr. carter i mean, one would expect that that would be a benefit to some of your constituents. >> well, in theory, but the problem is that, like i said, people have already seen an increase in their rent before a single shovel has hit the ground and all of theis those benefits are several years down the road if they materialize at all, and so forth people that are getting priced out of their homes right now, several years down the road is several years too late. >> mr. dorsey, i assume you're an advocate for this anything to share in terms of why you view it this way and perhaps rebudget some of the comments we just heard >> well, you know,

fundamentally, one, amazon is intending that many of the people that they are going to seek to work at hq2 are already existing in our area so those pressures on displacement we don't expect to materialize, and as delegate carter acknowledged, there are many people in our area who are cobbling together two and three jobs in order to make ends meet, and what we have here is a path for 25,000 jobs, many of which are not going to require specialized training or credentials it, that are going to maybe provide a secure middle class pathway for those people currently cobbling together multiple gigs in order to make ends meet. overall, this is going to improve our ability to make sure we deal with the consequences of a high-cost area while setting the stage for opportunities that benefit all. >> mr. carter, the agreement was that the 25,000 new jobs would have an average above $150,000 i mean, going back to this original -- it almost sounds like you don't want any big new

development to come in you don't want any of these new jobs to come in unless there is a solution to what you're saying is a housing crunch. i mean, how do you sort of reconcile the desire to grow the economy with the problems you're facing now i mean, don't you need that revenue to come in in order to -- to alleviate some of the problems >> it's important to remember as elected officials we don't represent a balance sheet, you know we don't represent a line item on a budget or a jobs figure we represent thousands of people with real lives, and if the way that we seek to make our balance sheet better is going to harm tens of thousands of real people who are just trying to, you know, put their kids through school and make the rent -- >> but it sounds like you're settling for stagnation. it sounds like you're settling for at status quo right now because you're making the argument that people will be displaced because there's not enough housing, et cetera, so don't let new jobs come in

don't let the big employer come in i mean, is that the way you want to runt county is that the people you represent really say let's keep it like this until our lives are better >> no. i'm an advocate for building employee-owned businesses. that way people actually get the full value of what they are producing rather than trying to chase after these projects that are handed down to us from billion airs, a billionaires, and frankly we shouldn't be handing 500 million in subsidies over a corporation that's operate by the wealthiest man who has ever lived, especially not doing it at the cost of kicking people out of their homes where they have lived for years. i think that's completely unconscionable. >> i would assume, mr. dorsey, it's structured the same way the deal in queens here that it would only apply to the tax revenues that were already paid in terms subsidy. it's not as though you're handing them a lot of money. >> absolutely. >> gratties. >> this is a performance-based

subsidy arrangement where amazon has to deliver in the case of the state's incentive program, the actual jobs and in case of our community the actual investment in square footage and also the indirection jobs that that produces as well. if they don't perform, they don't get the incentive. and the very notion that saying no to amazon makes it better for potentially employee-owned businesses to thrive is factually incorrect. in fact, it's the investment that comes from the new business activity which will create new opportunities that currently don't exist for independent entrepreneurs, people who want to grow enterprises so that they can have their own economic security you don't get that from stagnation you get that from a broadly baized investment where the community makes sure that's shared equitably, hand that's what we're looking to do with the amazon project. >> mr. dorsey, in the wake of

amazon back away from new york there was some criticism that perhaps there was a way to get better terms from amazon i mean, does the fact that amon is no longer going to be placing that job and headquarters in new york and are going to rededicate to northern virginia, does it strengthen your hand in any way or is there a way perhaps to get some kind of a better deal out of the company >> you know, i felt our hand was strong as it was we've engaged with amazon a lot. they have taken the time to get to know what some of the needs are in our community, and they are working with us very thoughtfully and methodically to see what their place is in trying to meet those needs they are not going to be able to participate in everything that we might like them to participate in, but we're going to find that magic space where our interests align with their -- their values, with their potential path for growth, and we're going to find a way to make sure their investment primarily benefits the locality that they want to call home. fortunately, they have expressed an absolute willingness to see

that that is their path forward in arlington >> well, gentlemen, we appreciate boast you joining us to explore this interesting issue, of course, one we've been focused on for some time here since they pulled out of queens. christian dorsey, arlington county chairman and lee carter from the 50th district thank you both. >> thank you. >> thank you so much >> when we come back, take a look at this chart here. online luxury retailer farfetch announcing two new partnerships with harrod's as it is looks to expand its reach we'll speak with jose neves about this and where he expects to see his earnings. "squawk on the street" back after this

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working in retail. a big mover, farfetch, the online luxury retailer reporting strong revenue growth in the fourth quarter and announcing two big deals with department store harrod's and china's jd.com the stock is up 43% in the last week it's up 21% today. joining us on the cnbc exclusive is the ceo jose neves right here at post nine jose, welcome. what an eye-popping stock jump in the past week here. just briefly, if you can, explain your business model to the viewers, because i think maybe a lot of people don't understand what the model is. >> sure. farfetch is an online community where poem who love fashion from all around the world, they can discover and shop their favorite boutiques, their favorite designers. it's a very global company so we're in all continents, 50 languages and, yeah, that platform for the global luxury industry. >> basically i've used farfetch

and i was pleasantly surprised by it. you look for an item and you can get a place fulfilled from various places around the world or around the country. >> correct. >> so in terms of the deals with harrod's and jd.com, how does that improve your business >> i think they are very different deals obviously. i think with harrod's, one of the world's most iconic department stores, they are -- they have agreed to partner with us to relaunch the global e-commerce operations so harrod's.com and the global sites as well so that's a abob2

opportunity. we're elevating it and farfetch will be a button on the jd app which was is a million active users and that's a tremendous opportunity for the 1,000 brands and retailers that are on our platform and want to penetrate the chinese market. >> how are you going to keep costs down i mean, part of the models that you're shipping from all over the place, right, and it's one flat flee, the costs of revenue in the late effort quarter were up 61% year over year and your gross margins were down 51%, so what's the trajectory here >> so we're very, very happy with the economics of our business we grew our customer base 45%. retention is growing the frequency is growing as well so we grew the volume by 57% in q4, and -- and actually that is allowing us to gain scale and

gain leverage in both spaces so in terms of long-term profitability, we're moving as many shares as we were. >> how much business is relying on the chinese consumer who likes luxury goods you mentioned jd, of course, and the people they reach. is it an important component >> it is a key component to keep it in perspective, china is the second largest luxury market in the world, but it's representing 85% of the growth, so according to figures from 2018, 85% of the global growth from this industry came from chinese consumers so you can see that this will be the largest opportunity in luxury, and they are digital first. us a know, the chinese are very quick with that technology, and they will -- the expanding opportunity of online luxury in china is absolutely tremendous, so that's why we're laser focused and the partnership with

jd and hence our do you knowling down of investment in farfch china. >> great to speak with you >> thanks for visiting us. >> all right let's send it over to jon fortt for a look at what's coming on "squawk alley." >> good morning, david auto desk ceo, the company had some strong earnings last night actually, particularly across the board in geography, lots of interest in auto cad stock at all-time highs, it is down this morning after opening at all-time highs. find out from him how the economy is looking globally, what they're dng toio continue getting recurring revenue going, that's coming up on "squawk alley. we see homes staying cooler without the planet getting warmer.

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welcome back to "squawk on the street." i am dominic chu stocks are higher but losing a bit of steam as they have the ninth positive week out of ten you look at health care stocks, they're among the best performers today second best performing sector, hitting the highest level since mid december among names leading the group, milan, cigna, densefly

and finally, look at one of the most closely watched etfs in biotech. this is the spider to particular out the best week since january. watch those as well. i will send it back downtown to you at the stock exchange. >> dom, thank you. dom chu. let's get to the cme group in chicago with rick santelli and the santelli exchange. >> jim, we have to talk fast, we want to get this out there you noticed same thing i did, first day of capitol hill with jay powell, there wasn't much about monetary policy, it is about regulatory hat like mortgage issues, government wants to have more control over banks, in particular to maybe help fund policies didn't you think the questions were more in that regard >> yeah, they're coming right at the fed. >> the fed is the front door to the banks. >> they see them as a big pile of money they want to get their hands on, nothing epitomizes

that more than mmt the idea that if you borrow in your own currency, we don't need to borrow, just print it >> like ben bernanke's trillion dollar coin. he told japan to do td same. >> 2013 we said let's issue a trillion dollar coin he told them to do that in 2016. >> not commenting whether medicare fraud was good or bad, i understand, we're talking like we're accountants. over ten years, that program cost 30 trillion, it is more than government debt to me these issues now are over time going to be major market fundamentals. >> absolutely. if you look at qe, we probably blew it up to 25% of gdp which we could debate, you and i agree, wasn't a good idea. they're talking 3, 400% of gdp

we're going to print this money. this is hyperinflationary. >> you took physics. you ever see the optical illusions where it is stairs, looks like you're going up but you're not going up, that's what modern monetary policy is. it shows you something you think is obvious and should work but it is not going to >> rick, here's the thing. we can agree it doesn't work, we can agree on dangers. >> doesn't mean government can't implement the program. >> there's a chance after the 2020 election, we could see this >> the problem is the countries that have it have had a long process it evolved, you can't come in in the ninth inning and change everything. what would that do to the insurance company sector in the stock market >> they already said they want to do away with insurance. it would devalue the stock

market to a great degree >> if you do that, you ruin everybody's retirement, who ends up subsidizing that? the government add that to the cost listen, we have to go, jim this is a topic we're going to talk about for years thank you for joining me david faber, back to you >> all right i can't wait thanks, rick santelli. when we come back, more on new york's fight for and against ntvion, including an ierew with bill ford "squawk alley" is up next. don't go away.

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