alley" is live ♪ burning down the house ♪ hold tight ♪ wait until the party's over ♪ hold tight ♪ burning down the house >> good wednesday morning. welcome to "squawk alley." i'm carl quintanilla with morgan brennan and jon fortt at post nine of the new york stock exchange and markets are lower again this morning, in the midst of their worse week in 2019 dow and s&p both lower for the sixth time in seven days, that despite the recent overall weakness, tech continuing to outperform the major averages, with names like roku leading the charge, higher again today already up more than 130%, since the start of the year. joining us now for a look at the tech names is eric hippo,

managing partner at larry hippo and michael morris, tech analyst at guggenheim securities, just raised his price target on roku. guys, good morning >> good morning. >> eric, i want to ask you about the impact of this coming wave of ipos in 2019. we were just talking about this yesterday. a float the size of which we've never seen what do you expect the impact to be on "a," the start-ups potential coming behind it, because there's questions about whether or not there's enough investment out there to absorb all of that. and then just other stocks that have gone public over the last two to three years, the likes of stitchfix, alasian, that might see some impact from the newcomers. >> as you know, there's been in incredible surge in particularly late-stage private investments and all of that money needs to kind of come out at some point or another so assuming that the market will sustain this wave of ipos that

you're talking about, this will have a celebratory effect on the private companies, through all the stages but particularly in the late stage. i think it will encourage companies to go public as you know, some of these issues will not be profitable. so in the instance of lyft, for instance, we saw massive losses in the past three years, $3.1 billion, last year they lost $900 million hard to see a path to profitability, but hopefully will be others that will show how they can become profitable >> and any of these companies that you think particularly is a litmus test for whether the market can absorb all of this? >> so lyft is the first one of size to go out it's in a massive sector, you know, the ride hailing and sharing segment. of course, uber is the goliath out there. and if lyft has a good coming out, then presumably, uber will do well. >> michael, you just raised your

price target on roku john just mentioned that stock and the fact it's up more than 1 hurrica100% since the start of year why do you think this is a buy right now? >> well, so far this year, we've seen great rebounds in a number of stocks that i think has to do with just a market-driven risk on type of trade, and i think roku has had high highs and low lows if we look at it just in that narrow frame, it looks like roku has had this great move. i think roku is still off its all-time highs, but importantly, now that i think this sort of beta trade is behind us, we're really looking for key themes that are going to be company specific, industry specific, that are going to drive the stoc stocks in case, it's really about this continuing shift to straeeaming video and monetizing streaming video. and increasingly, you're going to see advertising-based streaming video as a key theme and a key growth driver this year and roku is incredibly uniquely

positioned in bringing together content, bringing together consumers, and bringing together advertisers. and we think that value is underappreciated >> eric, i wonder what you, if we sort of take the ipo universe this year and put them in some buckets, there's going to be streaming names, there's going to be mobility names, delivery services are there ones that you have more interest in seeing succeed, publicly, than others? >> well, look, all three, really, there's so much investment in the delivery space that it would be good to see some of these really shine and show how you become a really great company in that space. obviously, ride hailing, you know, i don't know how much money has been invested. $100 billion, maybe more, and that's really important. and, you know, as your guest is saying, the streaming services, this is the year for streaming services at&t is going to launch there, disney, of course, is going to launch theirs. and we're going to have to see how consumers cope with all of

these different subscription services and to some degree, roku, as was pointed out, kind of is kind of like a portal to all of these >> switzerland, yeah >> exactly >> michael, being the discovery channel, kind of animal planet narrator for us in the streaming e ecosystem we're about to see you say netflix is still junior best bet, your favorite in this, but how are the others likely to survive the rokus, which you say still has a good place and entrance like disney and the traditional players? >> sure. well, i think, somewhat core to your question is just the implication and the fragmentation in this space that we talk about. and so, when we look at who we think the winners are going to be and how we advise investors, we're looking for some pretty solid frameworks and one of the key things we look at is how much content is a consumer receiving for every $1 that they are spending, okay and this is really important in the case of both netflix and roku in the case of netflix, the amount of content that a

consumer gets per dollar spent is much higher at netflix than it is for any legacy media company at this point. and that's why we've been very positive about the continued growth in both subscriptions and engagement to netflix. in the case of roku, if you look at the traditional ecosystem, you you've had to only buy the bundle, get a set-top box that you've paid a premium for, et cetera roku provides an operating system at a low cost that people can use to access a vast amount of content so, the consumer is getting a better deal by using roku to access video content than they are a traditional set-top box, and that's why we continue to think that both volume and usage will shift further to roku in the future in fact, you're seeing cable companies even push people away from set-top boxes to bring your own device for their own streaming services >> eric, i'm wondering what you think about this pending merger between t-mobile and sprint.

we've hat comments overnight from department of justice that they're not impressed with some of the features of the deal right now. i mean, everybody is focused on 5g and moving forwards 5g infrastructure businesses and consumers increasingly doing more and more on their phones, and in terms of the digitalization of everything, how do you see this sector, i guess evolving in the coming years, and who are the winners and losers in all of that >> if you forget the politics of it for a second. >> yeah. >> economically, it makes perfect sense for t-mobile and sprint to merge. they will have the wherewithal, the capacity to invest in the 5g network, which is incredibly expensive. and this is a market that's really dominated by verizon and by at&t. and very few countries, particularly large countries, very few countries have more than two or three networks, because of the cost of running them and investing you're constantly investing in the new generation of technology so rationally speaking, it makes

perfect sense. once you get the politics involved, then all bets are off. >> all right well, it's certainly going to be one of the key battles and ongoing stories we'll be watching this year eric, michael, thanks. >> a pleasure. >> thank you well, after the break, the return of walt mossberg. what he's saying about tech's recent troubles and how silicon valley can turn that around. and later, an update on that fire-resistant house we just showed you you can see the embers now, those are hitting the house. we've goa vet li hit on all of that next, stay with us. td ame. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price.

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xfinity, the future of awesome. it's been almost two years since our next guest's last column and quite a whirlwind for tech, facing backlash among washington the public sentiment of silicon valley may have reached a new low. so what better time to bring back a legend and diagnose their problems, is a turnaround in sight? walt mossberg, the cofounder of recode is back with us on "squawk alley" this morning. what a treat to have you back. walt, did we just badger you enough and you finally gave in and decided to come defeated me. i couldn't stay away >> so much has happened since we last spoke on air, at least. what do you see as being different now, since the last time we spoke regularly on tv? >> i think the main thing is -- there are two main things. one is a product thing, which you've talked about, i'm sure,

many times, which you could see happening when i wrote that last column of mine, which was the kind of plateauing of the smartphone and the tech industry's need to come up with something as big, at least they hope that would be as big. and the second thing is this sort of tech lash, this kind of reaction, political and social reaction to the power of the tech companies, which was also visible then, but i think has become much bigger now and has finally penetrated washington in a serious way. and i think, i think both of thoe those things have huge consequences >> hey, walt, great to see you so it strikes me that maybe we need a new type of tech voice. and i wonder what you think about that it seems to me when you first started your column, the tech landscape was dominated by devices with interfaces, and you

tried to hold companies accountable for how they interacted with consumers, what consumers could expect from that interface and that software. now it's about platforms, it's about data we don't have as many author at a time i have voices, which might be good, because there are a lot more voices, but i wonder if there's a way to hold these platform companies more accountable for how they treat us >> yeah, it's great to see you too, john. i think -- well, first of all, i think tech journalism has been stepping up and needs to step up more it was -- there was certainly less tech journalism around when i started in 1991. but, you know, there's great journalists out there. i think we just need to -- everybody needs to focus more on this stuff but i also think it's time for regulation, it's time for a statute. we have no federal statute in the united states of america

where the internet was invented, where the web was commercialized we have no federal law that is really a true internet law, for privacy, for security, for generally setting up guardrails on how consumers can be treated. and i think we're just way overdue. and there are finally some members of congress working on this, in a serious way >> walt, morgan brennan here a lot has changed since you were on the show, including me joining it, so it's good to catch up with you. i'm curious, you've had a lot to say about facebook and if i'm correct, you've actually deleted your facebook account. you're still on twitter. why? >> yep that's true. hi left facebook at the end of last year because -- and i had been on there for 12 years, because i just could not square

my own personal ethics and values with the policies and actions of that company. and so i left facebook and i left instagram and i left facebook messenger i wasn't on whatsapp, so i didn't have to leave that. but i just decided to disassociate myself from the company. and it's just one of the wonderful things that you can do in a capitalist system, is you can make a decision on which businesses you want to patronize. and i made that decision with regard to facebook >> and i guess, just because we have been having such a bigger, broader conversation and debate about social media and about these issues around privacy, why twitter would still be a company you would patronize. what are they getting right? >> look, twitter is screwed up in its own ways. it has a lot of work to do but my judgment was that facebook has just never stopped having these endless cycles of,

you know, violating privacy or not owning up to what's going on, you know, deflecting and lying. on and on, for many years. and then apologizing and then the cycle starts again and when you get to something like helping to distort, you know, wittingly or unwittingly, helping to distort a national election, not only here, but in other countries, it -- and then not really doing enough about it, in my opinion, i think that -- i just thought, i couldn't stay there anymore. but more importantly, than whether i'm on there is what is is government going to do about it and i think the government is going to get serious about it. >> although, you talk about the government and politicians i mean, people are making efforts to improve just news literacy in this country, walt

and i know you're on top of that >> yeah, i'm actually spending a lot of time in my retirement focusing heavily on teaching kids in high school and middle school how to tell fake news from real news, how to understand what journalists do and what editors do and we have a -- there's an organization called the neuews literacy projt where i sit on the board, we have a digital curriculum that's being used in all 50 states, and the whole idea is to get these kids to have critical thinking about the things that are being served up to them. >> walt, so can we make this a regular thing? you'll be back >> depends how good your bookers are. you know -- >> they're pretty good >> it's hard to get a pensioner out of the house, but i love you guys, so, maybe i'll be back >> and we love -- and we you,

walt it's great to see you, even for a few minutes. walt mossberg, of course, joining us, talking some tech today, walt, thanks. >> take care and when we return, our diana olick is in richberg, south carolina, where she just set a house on fire. diana? >> reporter: carl, i didn't do it, the insurance industry for -- institute for business and home safety did it they have set this house on fire obviously, one side burning, one side is not. and it was all because of embers that were being blown at about 20 miles an hour by fans in front of the house and it's interesting to note that while we think of forest fires, wildfires happening with a wall of flame, really only 10% of the destruction happens because of that wall of flame. it is the burning embers -- ♪ burn, baby, burn

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♪ actually, we did we've teased this multiple times. now the story itself, diana olick is in south carolina where you can clearly see the difference between the two technologies being tested out on two different homes where a fire was recently started diana? >> reporter: that's right, morgan and we're really on the front lines in the fight against all of these rising risks to real estate from climate change what they have done here is built two houses one of them, on the left, is obviously a regular house. it has mulch, it has wood siding it has a -- so far, i have to say, not a flame has touched it burning embers are going up against the house. and that's because the vast majority -- >> yeah, looks like we're losing diana's audio, but we can clearly see there that the roof, the roof is on fire. and that technology in the houses is, indeed working.

fireproofing them. >> yeah, it's a key situation, especially given some of the blazes we've seen in california and the impacts that's actually having on the insurance market and homeowners as soon as we get those technical issues with diana figured out, we will bring you back to thatept. ror in the meantime, we've got more "squawk alley" after this break. what do you see? we see a billion more people breathing free. we see access to fresh food being the global norm, not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.

european markets set to close in just a few minutes. seema mody joins us now with today's action

seema? >> hey, jon fortt, here's a look at how european stocks are closing out. a mixed session for the major averages the german dax underperforming the major averages, you can see down just about a third of 1%. the autoparts maker scheffler said it would cut #00 jobs and reduce its product range following its weak results last year and that stock is down about 7.5% but on the flip side, tech is among the best-performing groups in european, following an upbeat outlook from uk chip maker, dialogue semiconductor that stock up about 2% there's still these economic warning signs out of europe that continue to escalate the oecd forecasting italy will see a 0.2% contraction in 2019, which would be the country's worst yearly performance since 2013 and that news sending italy's ten-year yield to its lowest level in over a month. it comes ahead of tomorrow's ebc policy meeting where rates are expected to be kept on hold. the question is whether the council will make changes to the

forward guidance and mention the use of trtlos. investors will also want to get a sense of who will run to replace ecb president, mario draghi remember, his term is coming up at the end of october. finally, a major geopolitical development, this time in italy, reportedly set to become the first major european country to formally endorse the one belt road. encompassing one third of the world's trade. it is an initiative that has received strong criticism from the u.s. administration. i want also comes at a time of increased scrutiny among china's investments with germany and france, recently worrying that the country could seek to divide the you'eurozone this is data we pulled from the world bank, which gives you a blueprint of china's one belt run road which kicked off five years ago. you can see, though, it is certainly making headway here and getting italy, a g-7

country, onboard would certainly help expand its reach into europe back to you. >> that's a good explainer of china's global kbigss. thank you, seema mody. let's get to sue herrera back at hq >> hello once again, carl. good morning, everyone here's what's happening at this hour michael cohen arriving for another closed-door meeting with the house intelligence committee. testimony could touch on russian election interference, foreign financial dealings, and obstruction of justice it is his fourth day of testimony on capitol hill. in afghanistan, militants set off a suicide bomb and stormed a construction company near the airport in jalalabad, killing at least 16 people nine more were injured the five attackers were killed envoys from the european union, russia, and china are meeting with iran to discuss how to press ahead with the iranian nuclear deal the conference held in vienna is the latest in a series of regular meetings between the parties to check on the state of that deal. and here in this country, the santa anita racetrack is

closed again following another horse death. the track will not be open this weekend and it's not clear when racing will resume earlier, the facility shut down for two and a half days after 19 horse deaths when it reopened, two more horses were injured and had to be put down. as you probably know, guys, it's been extremely rainy in california the speculation is that that's affected the track's surface and as a result, some of the horses have not been able to handle those conditions you are up to date that's the news update this hour i'll send it back downtown to you guys morgan >> yeah, sue herrera, thank for that the president set to hold the administration's inaugural american workforce policy meeting this afternoon hosting several ceos at the white house, including apple tease tim cook, walmart's doug mcmillan, and ibm's jimmy remete eamon javers is at the white house. >> reporter: this is something we haven't seen since the early days of the trump administration, you remember the president hosting a hole host of

roundtable discussions with ceos early on in the administration but that dropped off after the president's comments about the white supremacists in charlottesville, virginia. a number of ceos cropped odropph advisory board and ultimately they were disband. this is a new board and take a look at the membership here. this is on american workforce. the idea here that ceos like tim cook of apple and a whole host of others will be able to give the president some advice on job training and worker integration into the economy this is going to be an event where we're going to hear from the president. we're also going to hear from ivanka trump, as well. this is an area that's near and dear to her heart. she's been pushing since the beginning of this administration the idea of worker apprenticeships, getting workers hooked up with companies, even while they're still undergoing their education. the idea being that ultimately, that will be better for both the workers and for the companies. so this will be something to watch for, but a lot of focus will be on tim cook, what he has to say here today at the white house and also the body language of the ceos for the first big

ceo roundtable at this white house in quite some time, guys back over to you >> eamon, thank you. >> reporter: you bet >> for more on what we can expect from today's meeting, joining us now is barbara humpton, who is on the advisory board and will be attending today's sessions barbara, thanks for joining us today. >> thanks. >> reporter: what is the message that you are hoping to convey to the president and his administration >> reporter: yeah, we are clearly at an unprecedented time in our history with record unemployment and a transformation of the economy, as digital tools take over, more and more of the workforce that -- and the direction that we're setting. so the key thing we want to talk about today is strategies for ensuring that we do draw more people into the workforce, take advantage of work-based learning programs, like apprenticeships, and really open the doors and more pathways for good-paying

jobs for more americans. >> barbara, you walk on factory floors, and i know seemans has been on the forefront of this in terms of implementing these new technologies, robotics, et cetera, but you walk on factory floors and they're very different than they were 10 years ago, 20 years ago. in terms of maybe the folks who are watching this program and wondering, what kind of skill sets they need to have, what their children should expect, what do the manufacturing jobs of the future look like? >> well, manufacturing is at a really exciting turning point, because, you know, we always used to think of the manufacturing workplace as something that was dark and dirty, maybe even dangerous. but in the future, and especially as we're making this transformation now, manufacturing jobs are a really brilliant combination of the physical skills of actually building things and the new automation, the integration of automation and the ability to evaluate the role of people in the overall

creation of products and service services >> hey, barbara. it's jon fortt good to see you again. this group is tasked with creating a strategy to revamp the american workforce to better meet the challenges of the 21st century, as it's written up. and i'm wondering, from your perspective, what are the policies that you want the executive branch and congress to grapple with that will actually bring that about what needs to change >> well, you know, as the board gets started working on this, we see really four major branches of work that need to be done one is -- the first is just helping people understand the additional pathways to careers that exist you know, the past had said that college education is critical for everyone and where we're headed now is kind of a new approach that says there are multiple ways to enter the workforce. a second goal is to help make jobs more transparent so people can understand where their

current skills may apply in the future a third is helping to revamp the way companies do their interviewing so that they can recruit and actually interview in more effective ways to make sure that we're really getting talent deployed to the right place. and the fourth one, probably the one closest to my heart, is measuring and encouraging businesses to get involved in workforce training initiatives you know, if we could start to look at these investments in workforce as critical investments in business, and understand the return on that investment, we'll be able to really encourage more participation. >> yeah, it's interesting, it's hard to divorce any of this from education, it seems. "the washington post" has a story out today about workers at gm who are being laid off and they interviewed some guys who were saying, look, i'm 47 years old, i didn't expect to be laid off, and i'm too old to go back to school. and that's a mind-set you really have to break in this country, especially, right? >> oh, you're never too old to go back to school. in fact, at siemens, what we're

doing is we're really encouraging everyone tostart t think about their digital readiness. and recently, i took my own self-assessment using our digital readiness checklist, to find out how well prepared i am, according to our analysis. and i'm happy to say, i'm well prepared for the leadership role i have, but i even found some areas i can improve on and i plan to take some of our guided learning that we're making available to all employees. >> barbara, we've had really a mixed bag in terms of data recently here for the u.s. economy, including some softer than expected manufacturing data in the last couple of weeks. how would you assess the current business climate here in the u.s. and i guess, how would you compare that to the rest of the world? >> oh, you know, the business climate is still very strong and we have seen phenomenal growth in manufacturing for an unprecedented, something like a hundred straight months. i mean, this is -- this is an important time for us in the economy. i understand the last report yes, perhaps was a little lower in its growth figures.

but what's happening right now is a true transformation across many industries. everything from power to infrastructure to health care, et cetera, is going through change and what we need to be able to do, as a society, is support our workforce through that change. now, compare this in our approach to what goes on elsewhere in the world we are a federal government with very strong states and local communities. and so what's great about the board that's convening today is we have representatives from the state and local level participating in the dialogue, along with academia and business it's going to take all of us working together to achieve our goals. >> barbara, i want to go back to what you were saying about those four points, which was really interesting, and what government can do to support readiness along them are you suggesting that perhaps the way the government supports student loans or the kinds of tax breaks that it offers

business could be ways to move along further on those paths >> yeah, i think those are things we should look at and in addition to that, let's think about the way grants are provided to students what if pell grants could be provided for career technical education? these would be kind of landmark, you know, game-changing offers that would make it possible for people to pursue new goals >> barbara, we have a lot of trade talks afoot right now. obviously, everything going on between the u.s. and china, you've got, you know, tariffs that are in place. now we've got what looks like is going to be increased talks with india and turkey talks going on with the eu some of our asian allies how is that -- how are you planning for those talks to turn out and how is it affecting investments that siemens is making here in the u.s.? >> yeah, well, first of all, siemens in the u.s., we have about 50,000 people here we've been in the u.s. for 60 years. so we are a u.s. company serving the world.

we're actually what a lot of people don't know is we're actually a net exporter to the rest of the world. and we're huge proponents of hope and fair trade with enforceable rules. we absolutely are supporting the successful negotiations that we hope will be closing here shortly, because the kind of business we're in depends on certainty. we're a large infrastructure company and the kind of work we pursue has planning cycles of 10 to 20 years. and we find that our stakeholders really need that kind of certainty to be able to make the investments that they need for their future. so, frankly, we think that we're in good position and looking forward to actually enhancing and increasing the amount of exporting that we do here from the u.s., particularly in the area of power, because we have expertise in that arena. and frankfrankly, there's a neer additional power in several

energy-hungry regions of the world. and our engagement in that will be a huge contributor to global security and global economic development. >> barbara, i'm glad you brought up power, because obviously some of the news of the day today centers around one of siemens rival, ge, and that they expect more pain in power to persist over the coming years. how are you thinking about the issues in that sector? when you see issues going on with a rival like that, is that something that siemens is benefitting from or is that something that creates pain for your company, as well, given the fact that it has led to things like an inventory glut >> well, there's no secret that the power market is going through a massive transformation right now. and all of the companies engaged in serving this market have had to refocus and adjust their strategies now, we began that adjustment five years ago so siemens has been a leader in large power and we continue to be, but we've also made real

investments in renewable power, small-scale distributed power, and in transmission and distribution so overall, we are performing well, but, you know, our hearts go out to all of our colleague miss this marketplace. it's very, very challenging. >> barbara humpton, thank you for joining us today ahead of this white house workforce advisory panel we're going to be watching that closely and we appreciate your time >> thank you >> thank you after the break, why ge's turnaround may still be years away we're back after a quick bak w'do 93.re

i'm scott wapner here's what's coming up, "halftime report" at the top of the hour does the worst week of the year for stocks mean anything about where they might go in the weeks ahead? we'll debate whether this is a rest and refresh or something else plus, is it time to get out of shares of vmware our call today is a big one on that stock so our investment committee has the trade there. jon najarian has unusual activity again it's a stock that could the about to move. it's all at noon morgan, we're a little more than 15 away. we'll see you at the top of the hour >> sounds good, scott. thank you. let's get over to the cme now and rick santelli for the santelli exchange. dpoorn hi, rick >> good morning. thank you. today was a very interesting day. i read a handful of stories about the budget deficit and the overall debt of the country and it's something to worry about.

we also had a trade deficit that is the largest in ten years, or at least until october of '08. reconciling these, to many is pretty easy pb defts are bad, and they are, but that's only part of the story. when it comes to the trade issues, we don't know what the agreement is, how verifiable it will be, or how much horsepower it will bring back to the global economy. nothing happens overnight. i'm talking a little bit longer runway but one thing's for sure, forgetting the president's notion of this being an issue he needs to deal, exaggerating the trade deficit as this horrible thing, part of it is a good thing. when you are the largest consumption economy in the world and the rest of the globe is slowing, this is almost an inevitable number. and i don't mean to disparage the president. i think trying to renegotiate trade is a good thing. it just shouldn't be painted

with a brush of trade deficits as the villain think about it ultimately, if we can get china to consume more and we can get a better deal to export more, why can't both pies grow and i think that's the goal. now, when it comes to the other deficit, it's not nearly as good as news as the trade deficit, okay because there's very little good news now, whether you're a democrat or a republican, there's a growing concern in course about what to do about it. that's what scares me. because i think that part of the deficit, as larry kudlow has been talking about the last day or so, is this notion that, yes, we are priming the pump on something that has a cost to it, there's no doubt about it. but in the grand scheme of things, it should generate and compensate for that deficit. it's not going to be immediate and maybe politicians exaggerated how soon that would occ occur. but for the rest of it, especially the national debt,

this is just unforgivable, because it's inevitable that we came to this intersection and it's inevitable that the cars are going to crash when you have generations of overspending in government and policies and programs getting larger and more government oriented, there's no other place to end up. the real issue, once again, isn't policy so much, it's the fact that we just outspend revenues and we need to do something about that morgan, back to you. >> rick santelli, thank you. take a look at shares of ge. they are down about 6% right now. bank of america, the latest to cut its price target on the stock, taking it down to $12 from $13 after ge ceo larry culp said yesterday the company's industrial free cash flow would be negative for 2019 on that news, the ceo said his $6 target looked generous. one of the big questions for

investors dpo s going forward, ge going to generate more cash, especially as the company exits some of its larger cash gener e generators and how ge capital is now a drain. something culp mentioned we've got more restructuring in power. the pain there continues expected to be a multi-year turnaround process, but culp did also say that he expects the pressure on industrial free cash flow to lessen meaningfully starting in 2020, 2021 but certainly, those comments yesterday throwing a lot of cold water on what had been a pretty significant rebound from those december lows with the stock rising more than 45% but we're going to get more details on all of this starting tomorrow we've got that insurance teach hunn the insurance business in ge capital has been one for investors to watch it's taken a lot of reserves, charges, tens of billions of

dollars worth over the coming years. what are they going to say tomorrow and next week, we get more in terms of that 2019 outlook for the company. >> yeah. lots of concerns i imagine about what this means for the future of ge a lot of people hoping to see those eventually up. >> yeah, and i think the company has said that eventually they would want to get to a place where they have a dividend that is in line with their peers. the other thing i would just note, part of the reason you did see this sizable rally, especially in the past month or so, is because they did strike that biopharma deal for $21 billion to sell that to danaher. so they have been raising cash to pay down their debts. which certainly buys culp a little more time but in general, you're talking about a company that has been hard hit in major turnaround mode, really feeling the pressure to change things. and for investors, you're looking at something like a multi-year timeline to see something like free cash flow to begin to turn positive again >> yeah.

tough situation, morgan, thanks. and up next, why las vegas is boring. not that kind of boring. what elon musk is doing to bring the hyperltooop vegas "squawk alley" is back after a "squawk alley" is back after a quick break. i lo servicenow works for you.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. welcome back stocks at session lows with the dow down 146 points and the s&p down 16. it's about to get a little more boring in the sin city elon musk company may get up and

running in las vegas we got the scoop on this proposal and joins us with more. >> in a couple of hours the las vegas convention authorities will announce a recommendation that the company design, build and operate an express tunnel on its convention center campus the lvca has planned this massive $1.4 billion renovation and expansion. this is 200 acres two miles corner to corner it needs way to move attendees across all of this space the company is proposing a high speed underground loop the number of stops to be determined here. the project comes in with price tag a fraction of its above ground competitor. convention leaders see this as a crucial draw to help keep las vegas competitive in landing

megaconferences. they are already thinking beyond the convention center. >> we see this as a real opportunity in the city as a whole. connecting the entire strip, connecting the airport to the strip. allowing all of our visitors who come easy access to everything that las vegas has to order. >> las vegas is likely to be the site of its first fully functional project the projects in los angeles has been cistymied. in las vegas, lvca is the single owner. it needs approval only from clark county steve davis told me that lvca is moving quickly and decisively. boring is hopeful that riders

will try it, like it and that will spore expansion the board meet next week to hear the recommendation a contract could be approved by june and hopes to unveil the loop at the end of 2020, guys. >> that's a really fast time line it's interesting to hear about what the regulatory hurdles would be there versus some other cities that we are seeing projects be proposed a company like boring, part of the way they are able to drive the costs down is because they are bringing so much of the actual tunnelling process. the materials making process in house. is this something, do you know they would hire locally for or would this be the company coming in and doing everything for themselves >> they said they would plan to open up shop there in las vegas. what does that mean for attracting the high skill talent you would need to make this come to life. the view in las vegas is already very optimistic beyond the

borders of the convention center you heard the ceo talking there. this is four miles if you look at circus circus on one end of the strip to mandalay bay that's four miles. here is where they are building raider stadium they're talking about the potential to connect this, if it happened would save people half an hour even on flights. >> that approval will be a little more complicated. >> there you're going across district >> fascinating to see if vegas will be a true test case >> they would have a competitor there. >> bring it. >> thanks. mo we're back to 27.73 on the s&p back in three minutes.

talk about what you have seen this morning, diana.

>> reporter: you can see that one side burned. they put the other out the other side did not it's because of technology, design and landscaping in instead of mulch, they had rock they had a six inch gap. they used concrete fiberboard. you can get that to look like wood they had a different kind of gutter on the house. that's metal instead of vinyl. vinyl drops andignites the house. flying embers cause 90% of fire destruction. not that ball of flame it's the damaging embers you want to protect against. the side on the right that would met shu melt shut so the embers would not fly into the home. you can put these design components intoa house and sav a house. you can't make a house entirely fireproof but you can make it fire resistant the most destructive on record

for wildfires in california, 19 billion dollar in residential and commercial damage. back the you guys. >> major implications for home builders and consumers and the planet great work let's get over to the halftime and the judge >> thanks. it's the worst week of the year for stocks a sign of things to come or is the rally simply resting and getting ready for another burst. it's 12:00 noon. this is the halftime report. >> what is wall street waiting for? the fed, clie thhina, increased corporate confidence the fed weighs in as two big names speak in this hour plus, a new note from jpmorgan ceo stephen tusa.