okay as we close out the show here down about 152 points now on the dow. interesting that the nasdaq and the s&p are both higher because a lot of that, at least 250, 300 points just in boeing stock. join us tomorrow, "squawk on the street" is next. ♪ good monday morning. i'm carl quintanilla with david faber, rick santelli at the stock exchange boeing set to erase about 340 points from the dow as the stock is down 12% on china's grounding of the 737 max 8 europe in the green. china up 19 overnight. ten year 264, you saw the retail sales stabilize although the

weak december number was reset lower. the boeing 737, max 8, set to shave points off the dow >> the fed chair saying no reason to change policy. >> 3% gdp growth for the next five years that's the projection from the trump administration's newest budget proposal >> s&p and the nasdaq set to open higher but boeing shaving more than 300 points off the dow index following the fatal crash over the weekend of the ethiopian airlines the black box has been recovered, boeing gapping down 12 hasn't happened in at least 11 years, as far as i can see. we know what a powerful force it is on the index. >> huge force on the index

catches boeing, it's had this pull back but it's been on such a streak i think that's one of the reasons you have this move, plus the uncertainty whether you have countries grounding the plane. one of the things that's driving boeing is the sense of certainty about the transparency and the visibility of this order for years to come and the free cash flow so obviously this complicates that picture a lot >> goes without saying, but i'll say it a $250 billion market cap country, that's roughly what it was coming in today, is widely held, although i am hearing in hedge fund circles more widely held than you may think. so we'll look at that given this down draft we've watched the market cap dramatically over the last five years. there was a point not that long ago when it was smaller than ge

for example and it's well more than double in size. today is obviously going to be suffering. >> this is a -- obviously this is one of the starkest examples of the index effect we're going to see. >> as of last week it was responsible for a third of the dow's year to date gain. for more on the crash, let's get to phil lebo who's been covering this all morning. >> how quickly do investigators get data from the black boxes that have been recovered in ethiopia and how quickly are they able to make a decision in terms of what happens with the 737 max 8, do they ground it or work withboeing to fix it quickly? all of that remains to be seen they have recovered the two black boxes. they'll do an analysis there in ethiopia or fly the black boxes maybe to europe, maybe back to washington d.c. but they're going to move as quickly as possible to get that information. both the ntsb and the faa are

investigating what's taking place. in terms of boeing, it is saying let's wait and see what the investigators find the company with a statement this morning saying the investigation is in its early stages but at this point based on the information available, we do not have any basis to issue new guidance to operators. while boeing is not telling operators to change how they operate the 737 max 8, a number of airlines and countries are not waiting. they've decided they're going to ground the new airplanes, ethiopia airlines have grounded them, all chinese airlines and indonesia are crowded and the cayman airways have grounded them southwest, which has the largest number of max 8s of any airline in the world, 34 of them, they fly those planes, they are continuing to fly them and american airlines says it's

monitoring the 737 max 8 investigation, but both airlines continue to fly them if you go on twitter, go on social media, it's not hard to find there are customers saying is it safe to get on this plane? that's not the kind of question an airline wants to answer and some of the pressure that's going to be applied to boeing in terms of guidance and answers as quickly as possible. >> phil, the response after the lion air crash and what boeing did in terms of dealing with potentially the software change, i need you to explain it what has taken place or was about to take place with regard to any responses to what they found after that crash >> so the one thing that did happen after that crash is there was an airworthiness directive from the faa where boeing had to more clearly explain the procedures for all flight crews when operating a 737 max 8 airplane, in other words they

went back to their customers, the airlines and said, look, you have to be very clear in terms of if this situation is encountered while the airplane is in flight, this is what the procedures are for the pilots to override the system that might be pushing the nose of the aircraft down in certain situations where faulty data is fed into the airplane. that's the only requirement out there. there is the expectation, and there have been reports and boeing said look we're working on potentially a software improvement, if you will, with the 737 max 8, but they have not -- they have not come out and said we're going to have a software update so we can correct any potential problems that might pop up if faulty data is fed into the airplanes in certain situations the expectation is there will be an update but so far that has not taken place. >> as we're talking routers with

headlines, witnesses saying the plane was trailing smoke and debris, and then a second headline saying the plane tried to climb but failed. we know it was a young pilot but we're going to have to deal with this period where we know very little and eyewitness accounts are often not entirely credible. >> what you'll see is now once they have these two black boxes they are now able to compare the data from these black boxes with the black boxes in the lion air crash. that makes it not easier but you can bet investigators are going to say where are the similarities in terms of how this airplane was operating in each case and can we draw some at least initial conclusion perhaps there was software not working properly, there was data incorrectly being fed into the airplane, was there a mechanical malfunction in some capacity that's what they're going to be doing, and i bet you they move

quickly at least in terms of coming up with an initial picture of what happened. >> just to remind people, phil the chinese are the largest purchaser of boeing airplanes right now? >> correct and the 737 max, about a third of those, in terms of the order backlog, they're headed to china. boeing just opened a finishing center in china, where they build the plane in washington and then fly it over to china and it's going to be finished in terms of interiors, the galle galleri galleries, how they're going to be set up. it's one way boeing is trying to strengthen its customer base in china. so it's important to boeing overall, 20% of sales, but in can china. a third of its market is in china. that's a big statement that the chinese did a grounding for at

least one day. >> although gordon bethune said he thought it was on limited information and speculative. but it's their call. phil, thanks, talk to you soon david rosenberg joins us this morning, and here dana peterson. good morning, guys the big story on your plate has got to be retail sales after getting that weak december number does this ratify that one or not? >> we did see a little bit of a bounce back, not the full recovery, but i think when you look at december, you had a lot of weakness going on there were concerns about recession, global growth fierce. the federal government was in a shutdown so probably was not the greatest time for consumers to run out and spend. >> of course, we're talking about january numbers here, almost halfway through march, overall, what can you tell us about the first quarter? >> looking at those january numbers, again we did see a little bit of a bounce back.

again you still had the federal government shutdown going on you need to look to february where we had refunds coming in, when you look at data, it's come back both in terms of markets and businesses and consumers. >> i don't know if you had reaction to this, but i want to take you to the other side of the world. in south korea, exports fell 19.1%, imports down 15.4%. semiconductors down 29.7%. is that a tell what's going on in south korea in terms of economic growth or lack of it in the world? >> it's not just south korea, but, you know, most of southeast asia have been producing some very disappointing pmi data and cross border numbers as you suggested. south korea is important because it is a manufacturing hub for all of asia. and so it's telling you something about how the pronounced weakness we've seen

in china has spread throughout the region the one thing we have found out in the last couple recessions is there is no such thing as global decoupli decoupling the u.s. can hit the world with a lag of two quarters, and the rest of the world will hit us back you see that with the chinese slow down hitting a lot of these major centers in asia right now, and europe as well. >> how long is the lag typically, if you're correct, in terms of seeing it move region to region. >> the u.s. hit the rest of the world last cycle and a two and a three quarter lag. it takes longer for the rest of the world to impact the u.s., considering 90% of the u.s. economy is more domestic demand. but going back to the template of '97, '98 it took about a year

before the slow down hit u.s. shows. if you go back to the summer and fall of 1998, the manufacturing sector, industrial sector felt like it was in recession back then remember china felt the dull drums at this time in 2018 so the time would be right to start to hit the export sector at a time when the consumer is feeling fatigued, and housing is showing no signs of a turn around i think this is going to be a challenging year for the u.s. economy. the u.s. consumer was the last leg of strength, it's showing fatigue signs. so a good time for the fed to have done its pivot, as accomplished in the past couple months. speaking of the fed, powell last night talked about no reason to change policy, listen to that. >> we see the economy as in a good place we think the outlook is a favorable one. inflation is muted and our policy rate we think is an

appropriate rate so we said we'd be patient. >> what do you make of his comments in light of the slow down picture we painted previously with david just now. >> i think the first quarter is almost always slow, it's been that way the last four out of five years, and we shouldn't make strong judgments about the u.s. economy in the first quarter. it's right for the pfeds to wait if we have resolution on the u.s. china trade deal, those are all positives that are going to come up. and certainly june is a great time for the fed to come back, reassess >> seeing a focus on the wage numbers in friday's report and companies are going to have to be absorbing a cost push. is that going to bring a decision forward for the fed >> i think the fed is probably comfortable. >> the fed's been looking for

quote/unquote wage inflation for years now. even at 3.4%, i believe the figure was, we were not where we were precrisis i think as long as you don't see it seeping into consumer inflation too aggressively, the fed is fine with that. if it does, that's great for achieving the objective. >> and powell said he's fine to let it run for a while. >> yes >> what do you see right now as the most constructive and destructive argument >> i'll say it's interesting to listen to powell talk about how it's the global economy turning down that -- as the source of the weakness in the u.s. economy, of course, we're starting to see that in the trade data and i expect that's going to continue. why he didn't mention other things that are more domestic oryeo oriented like the trade policy for example having an influence on business confidence

why is it orders are down for the past five months, we can talk about the government shutdown but why are autosales down in february why is the housing market still in a recession, what does that have to do with europe or asia i think people are not recognizing, including powell is not saying it publically, they've hiked rates nine times it's the change in rates that influences growth, not the level. they raised rates nine times, that is having a lagged impact on credit sectors of the economy and through the gdp accounts that is having an impact on consumer spending. how you can say it's all foreign economy, nothing we've done? the fed hikes interest rates and then cut rates to boost the economy, what cycle has finished

in a tightening phase by the fed in an accelerating mode? no, it finishes in a decelerating mode. the fact he doesn't talk about his actions and the impact it has is very curious to me. >> good stuff to think about as we kick off a monday thank you guys good to see you both when we come back, the president releasing his latest budget proposal we'll get details on that straight ahead later we'll talk to jensen huang's deal to buy mellanox nasdaq hasn't had six days down since november of '16. don't go away.

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the white house set to release what it calls a budget for a better america, the top lines numbers are out and it's a familiar story we have the details. >> the president will be seeking some big increases in p defense spending and coupling that with big decreases across the rest of the federal government

the white house is planning to ask for $750 billion in defense spending for next fiscal year, allot of that increase is going to be coming in an off budget very controversial account and they're also going to be asking for $8.6 billion in funding for the border wall. the administration says that will allow it to build 722 miles of border along the u.s./mexico border toward the south. meanwhile, the white house is also eyeing other large cuts elsewhere. $2.7 trillion over the next decade that's going to come to cuts to discretionary spendings and changes to the rules in mandatory spending programs. even with some of these deep declines in spending with be the budget is not expected to balance until the year 2034. that is 15 years now and well outside the ten year window economists normally work within. the white house is going to also

project rosie economic figures 2.3% growth for gdp this year and level off to 3% for the rest of the decade. we know the cbo is only expecting less than 2% growth in the long run back to you. >> obviously you have to plug some figures in there, the administration deciding to go on the ie side. thank you very much appreciate that taking a legendary auction house into the digital age we'll talk with sotheby's ceo. you see a mixed picture here, the dow set to open down, boeing is going to have a big impact on that nasdaqutes u furp 31 at this hour hour more

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that opportunity to do what you do best, to come up with a great idea, to work your heart out to make it happen, to be able to compete on a level playing field is taken away by these platform giants. so my view is break those things apart and we will have a much more competitive robust market in america senator and presidential hopeful elizabeth warren talking at south by southwest over the weekend. despite the calls to break up big tech, fang names opening higher we'll get much more on those after a quick break.

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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. a live shot of the boeing post here at the new york city stock exchange the shares look to open down nearly 12% following the

ethiopian air crash, 157 dead, including eight americans. the company said at this point there's no reason to issue new guidance to operators but a lot of market cap set to be wiped out today, to the dow to the tune of 300 plus point but southwest as well. >> been a weak group in the market, meaning the airlines the boeing impact pretty significant because of where the stock stood in terms of field position 20 out of 24 analysts have a buy rating on it, it's obviously very expensive for an industrial you had a lot of increase in the market that's why you're having the dramatic today then again apple gets an upgrade today and could with a few bucks take up a chunk of what boeing is going to drop. >> both apple and facebook get the surprise upgrades out of the

sell side. our piece on dot kcom says wall street is the most bearish on apple in years >> they're saying this is hard to say it's a permanent decline. the firm downgraded on november 2nd, i believe, when the stock was above 200. >> both calls are a reversal of earlier moves. >> and pretty much on the money in the existing call i think that's why it'll get a little bit of traction one other wrinkle in the apple, total actual profit for the company in the second quarter should inflect upward again and that historically has been a good tell on the stock it's not just about eps, stock buy backs -- >> curious to see how apple and boeing duke it out let's get to the exchange.

it's sotheby's celebrating its 235th anniversary. i'm told it's the oldest listed stock? >> the oldest listed company >> we'll talk with the ceo in the next hour, at the nasdaq investment management firm investco celebrating the anniversary. we're late getting video this morning as well. >> yeah. what you're referring to, an acquisition of mel knlanoxmellaa company that has been for sale, i think cnbc reporting in october that the company had hired advisers the premium about 89% to what we call the stock price, that being the price before the reports on the potential sale of mellanox seems to have been a well

attended auction, if you want to call it that, my reports had filings late into the process and nvidia coming away with the price, being mellanox. want to understand what they do? the simplest way to put it, they mavg data centers more productive, quicker faster, by connecting with their chip so you see how it fits in with nvidia's business, already selling it today data centers n their cpus and everything of that nature. the multiple, okay it's above where the group is trading but not necessarily above other deals done in the sector when you look back at micro chip or marvel, broad com, and brocade, that was below, but many above in terms of the value. given you had at least one if

not two other potential bidders here, perhaps some a little disappointed at the 125 price. that said, obviously shareholders themselves who held it for any period of time are most likely pleased, given where it ended up. israeli company, israeli eo, i was told throughout this process -- i didn't share much of this on air, people wondered whether he would be there in the end as a seller. clearly they are it's going to take a little while, they do need china approval, the anti-trust authorities in china so timing wise you can never tell when china is involved. >> specialized chip companies, not surprising i was surprised that the stock in 2012 traded to around 115 so a huge spike on the chart, then it fell apart and you got the bid 6.5, 7 years later,

above the high >> mellanox itself had been subject to some activism, star board got some board seats, they've been involved in this name for some time you did end up with a deal after what seemed to be a fairly robust auction process, guys and certainly encouraging for nvidia shareholders to see that stock is hanging in there. some say will it take away from the focus? i'm not hearing that it adds to their work in the data center. the two companies have been dealing with each other for quite a few years, partnered to what they said built many of the world's highest performance data centers previously so not a surprise there would be a transaction. >> we'll talk to jensen huang in the 11:00 hour for what it means for the business

so stay tuned for that we mentioned the facebook upgrade as well. price to buy, target 215 they say their concerns about engagement with dimming. they expect revisions to be positive through the course of the year as they argue operating margins are operating ahead of our prior model. >> a little bit of a call that sentiment will continue to improve on the stock as people refocus on the resilience of th business model that seems to be -- it's interesting if you look at the megacap former tech winners they have similar looking charts, this very dramatic top last year in the september, october period then a big decline and then they've only partially got it. so you have analyzsts saying can

we play a run in those >> another potential transaction we've been tracking here, results in a deal but not the deal perhaps many thought would happen i'm talking about barak and newmont. newmont had been trying to buy barrick for a while. they came with a deal that wasn't particularly well received by the marketplace. but if the intended effect was to get a deal done between the two companies in nevada where they both share significant properties divided by essentially a fence it worked and barrick is responding positive this morning. we talked to the ceo this morning he said this value was about nevada to unlock the value there. he is terming a win.

the joint venture will be 61.5% owned by barrick it will be managed and controlled by barrick. the rest owned and controlled by newmont. they're talking about savings of as much as $500 million a year from putting these two operations together in nevada. which i have not really realized basically -- produces more gold than any other country in the world, nevada, yes, it does. 48 million ounces of reserves. they see it as having a 20-year life saying, given the drop in costs here will allow them to spend more in terms of capital towards exploration and permitting which is an important part of this so that's where they end up. newmont expected to continue and

go forward with its deal to acquire gold corp., which was in process prior to receiving that unsolicited bid from barrick that bid no longer, apparently got together in about a week they had some management meetings and seemed to be able to ink a j.v. that has long been sought in a short time. >> pretty small industry. >> it is >> gold people tend know and it's all about cost. you can't control the price of your product. >> no. >> it's a little under $1,300 an ounce right now. the s&p up about .5% right now down about 3% from monday's high really the first dip of this run, rally we've had if you looked at what else was driving it, there wasn't a lot of flare-ups in credit, it wasn't like the volatility spiked that much it was a little bit of an easing back in the market we failed at this 2400 level

four times now so probably a net positive you bounced a little bit here. the second half of march is often more favorable seasonably if that matters. i think that's where we find ourselves, a little bit stuck. nothing new from powell, i don't know if people were bracing for anything last night on 60 minutes. >> he speaks tonight, i think after the market close, transports have been and continue to be problematic i think the phrase is trains before planes out of bay crest. >> if you want to look at what's performing, and arguably, what's better slightly economic, would be the rails, which have held up interesting we came into the weekend with the s&p almost exactly flat on a 12-month basis. think about it, we're where the s&p was a year ago the earnings base is higher so we look a little bit cheaper but not clear when the earnings forecast are going to bottom >> as for china trade, mkm brought up a point we got the

reports that xi cancelled his trip to florida later in the month. the minis didn't really respond to that whatsoever. >> the sensitivity has gone down to every wiggle of the negotiations it's just kind of a look, we'll assume something is going to happen, but let's not chase our tal tails every day. >> cesars, we've been travfollo that name. what's interesting is tpg and apollo, the large holders, the one that had taken the company private a long time ago. they're sellers. 39 million shares, it's there. icon expected to step up for a bit of it, 15 million of those shares but overall 39 million shares being sold by apollo and tpg they're getting out. they're done whatever follows here and is

orstraited by icon is unclear. but did want to note that block of stock is -- i don't believe it's been transacted as of yet but it's being shopped this morning, not a secret, heard from a number of people it's out there. apple with that upgrade is up 12% of the year, outpacing the gains of the s&p >> only with today's move out performing but yes, further below its highs than the rest of the market because it had a dramatic drop. >> and facebook, too up 32% for the year versus s&p 10 >> with a 375, that's the price increase in apple here, that's a $15 billion increase in market cap. >> one other touch on boeing by the way, which is obviously having its worst day, sixth worst day on record for boeing

and the worst since september 17th of 2001, which was i'm guessing -- >> the market reopened -- >> -- yeah, after 9/11 shares of delta doing better than you might expect given the news delta uses a large air bus fleet. i don't think they have any 737 max 8s, that's in contrast to southwest, which is entirely a 737 fleet. so we'll watch the fallout in aviation today. >> let me come back on cesars because i'm told the block did trade. i saw his 13d refiling in terms of his increase in his position. quick update there that block i was talking about has traded this morning. >> one last note on disney, "captain marvel" estimated to be the third big e march debut ever in a year where the domestic box

office hasn't set a fire -- >> not at all. i feel like they held any big releases stock budging a little bit on this obviously i think it's a great year for the studio was kind of pencilled in people's heads but an upside prize in terms of this one. >> one month away from their investor day at disney. >> 40% of the industry now >> it is it's incredible. but their direct to consumer offerings where we're going to be getting more information, that's one moraway and that's what a lot of shareholders are focussed on. >> dow down 135, off the initial low. >> good morning, nice start boeing notwithstanding remember, boeing is 11% of the weighting in the dow jones industrial average put up the boeing related stocks here

suppliers to boeing are low as well spirit, triumph group is down about 4% all the suppliers to boeing on the weak side. look at the sector, it's a much needed bounce. we had 7 or 8 days of essentially straight down here china bounced today, doing a little bit better. there's reports about exports doing better in march, semis are bouncing, industrial is still down, transport is still down, i think this is the 12th day in a row transports are down, the longest since 1969 we're oversold -- we're down 2% in the s&p since the early part of march banks are down 4%. the russell is weak as well. transports we've covered that extensively. even the health care group, since people started talking about medicare for all, health

care has been straight down. we're due for a bounce unless something more serious is going on forget about trade even the trade deal, slower global growth is killing s&p 500 earnings this was the most passed around note i saw over the weekend. first quarter earnings down 3% down a little bit, 1%. if more than 50% of your sales are inside the u.s. you're more u.s. centric, earnings are up 1% for the first quarter. more than 50% of the sales outside the u.s., you're international and earnings are down 11% it's the slower global growth story not just china but in europe also that is weighing on things if you get a trade deal, china has made it clear, they have other issues, even with the

trade deal, europe has other issues, other than the trade deal happy anniversary to the qqq, that's the nasdaq 100 it's largely a large cap growth index. it's become a proxy for the tech market it's the sixth largest etf out there. the second most traded $67 billion in assets. if you wanted to own fang a few years ago, you couldn't have done better. it's largely fang holders at the top, microsoft question of the day, alphabet, they're together more than 50% assets under management are there it's outperformed that's because the fang stocks. you're about in the s&q. nice performance there there's the triple q on the white line let's head out to rick

santelli in chicago. good morning, rick. >> good morning, mike. it's an interesting day, most maturities are closed on change, two and third year, the shortest and longest maturity on the curve, they're each up a point the middles are unchanged. let's look at three-day charts in the middle is friday, the soft jobs report in some ways and other ways a pretty robust information in there on wages, participation rates, looking at three day of tens as we bounce along with what has been established as the lower end of the rains. no matter what you country you look at, the pat heterns are th same the gilt in uk is down the italian bonds higher in yield, closer to what u.s. yields are, hovering at 2.55

similar patterns there is a global slow down and many of the sovereign bond markets are capturing that, but they're also capturing a lot else, much policy keeping them depressed as well. here's a three day index that looks different. we had a huge day last week even though we've given some back we're still holding up well. look at the euro versus the dollar beginning june of '17, small bounce but still in the low zip code carl, back to you. >> thank you, very much rick santelli you'll hear what the soft bank ceo says is improving a million metis with the s&p is up 16 val, vern... i'm off to college and i'm not gonna be around... i'm worried about my parents' retirement.

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welcome back, we have been talking about our artificial intelligence today when it comes to nid vidia. it was of course the focus of

the subject of the interview that i did soft bank, masa son last week in california. he talks about it is only the beginning of transforming the power of this technology >> last 30 years, the computing cu power and the size of memory and communication levels those three things have improved a million times, each of them. so, it is an impact in technology and lifestyle and society. from here on, what will be the speed of improvement another million times in computing power

and another million times in size of memory and communicat n communications it is not slowing down at all. >> which goes to his point that artificial intelligence, we are at the very beginning of what he believes to be a revolution that dwarves that even of internet in terms of what it is going to mean >> if he thinks we are going up a million times. >> there are others do that figure in some of the commentary today in the nvida deal masa believes it will happen a million times. >> going back 30 years, trying to figure out what it was like then >> they did own and sell at

nvidia he does not anymore. >> nothing linier. >> i can't wait to hear more from masa son. still to come, how the company is transforming itself to the digital age, we'll talk to ceo tad smith. the market and boeing on the downside and apple on the upside measure up? a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see. learn what a cfa charterholdr can do for you at therightquestion.org

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to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing. and around the world, you have a partner in that pursuit. pgim: the global investment management businesses of prudential. good morning, welcome back to "squawk on the street," i am david quintanilla with david faber and sara eisen is off today. boeing is down 9% but apple is up 2.5%.

our road map we'll begin the airline stock sinking after another crash involving boeing boeing shares on their worst day since '01. >> it is the oldest company on the new york stock eck change, sotheby turns 275. the ceo will join us let's get to rick santelli >> a final read on business inventory as we get ready to close out the first quarter of '19, right? that's our fourth up 6.10 read you can see we close rather firm that'll have some positive implications for any upside revisions to fourth quarter gdp as we all debate how soft first quarter gdp may be yields slipping just a little

bit at this point, i am not sure if the trigger of that is inventories. we want to pay close attention, 10-year note yield are getting in the low 60s investigators say the black box had been recovered from the fatal crash of the ethiopian jet. ethiopian airlines grounded all of those crafts. boeing shares down 9% this morning. our fipi phil lebeau joins us wh the latest >> you have to go back to 2001 where boeing shares dropped down as much as it is today faa and ntsb are investigating, they have invest dpigators therr on the weigh to the scene.

someairlines are not waiting, we are going ground this 737 max while this investigation is taken place. in terms of the 373 max. it is the primary model that's in production right now when you look at the 737 overall. it has been the work force of the airline industry they're supposed to go up to 57 per month later this year. they are approximately 350, 737 max airplanes worldwide. american says it has full confidence in the aircraft southwest has more max 8 planes than anyof the airlines in the world. it had 34 of them and it is telling customers who are flying on the max 8 we are not waiving the fees or changing reservations because you may have concerns of this aircraft we have confidence in that

aircraft united was asked by one customer on twitter of the safety of the plane. united does not fly the max 8. your safety is our first priority we completely understand we don't fly the 737 max-8 but we fly the max-9 if you prefer not to fly on one, we completely understand we'll do our best to find you alternative travel plans. that's some of the pressure, you can bet there are leaders in washington with the faa or ntsb who'll be hearing from others about the concerns of what's going on with this aircraft despite the fact that we have heard back from airlines, some airlines we see no problems with this plane at all. >> phil, don't go anywhere stay with us let's bring in our continental

airline ceo, contributor, gordon bethune. it is good to see you. >> morning >> do you see any similarity between ethiopian airline and linier >> the tape recorder will eliminate that and give us positive information >> given that, what do you make of the chinese move and the indonesia move to ground temporarily? >> well, i can understand why they would do that i suspect most of those countries, 8, the impact on commercial aviation and those countries would be a lot less. i understand and i think they're pretty mature, they're representatives of that country.

gordon, obviously we have no real determination on causes or similarities or anything like that put yourself back as ceo of an airline, what do you do today in terms of talking about training or protocols or communicating with the manufacture or anything like that? >> we have done that from the lion-air incident. there is a procedure for run away stabilizer which may have cause this accident. i am sure the u.s. carriers -- >> gordon, it is david what if your u.s. carrier given you, you are southwest and you have a lot as phil reported in your fleet and you are finding cancellations starting to mount. what's your communications strategy and how do you deal with that situation? >> we look at boeing to be the

leader in getting communications of what the airplane does and how we can prevent it. but i also stress the fact that we have hundreds of hours on these airplanes without incidents. everyday 350 as phil mentions that those planes fly without trouble. >> how common is it and what does it take for boeing to go ahead to issue some new guidance >> emergency guidance. after the initial investigation into the lion air crash. that air worthiness from boeing of how to handle these types of

situations if they encounter where faulty data is fed into the computer of the max airplane that would force the nose down in certain situations. it was threatening this is what you are supposed to do in this situation. that was done early december in theory, ethiopian as well as all other airlines got that notice and they're supposed to immediately convey that to their crew we don't know if what happened with lion air is the same thing that happened with ethiopian airlines nor did we know if there is a trend issue they'll issue a directive if they find there is something that needs to be corrected >> you broke down earlier how important china is for this model or boeing. it is conjecture at this point, does it seem like a quick move or a hasty decision by china we'll ground these flights right

here can we guess as to whether the ongoing trade negotiations had anything to do with that >> andrew was asked today on "squawk box. it is whhard to know by the chinese authorities to make these decisions. they have from time to time in the past when an issue pops up, they have been quick in saying we believe these steps to be taken with a particular aircraft was it quick yes. did it surprise me i have no way of knowing whether trade tensions factor into the decision >> gordon, are you a fan of the max-8 in general given the technical improvements and efficiencies >> absolutely, it is a great airplane

airplanes are years and years of flight service and most dependable airplane that boeing ever built as an under writer of the 737 program, i am 100% confident in their airplanes. i believe they'll get under the bottom of this it is going to all be censored through whatever reason, it may not have been done on the latest accident >> gordon, we always appreciate your expertise and your time, thanks so much gordon bethune and our phil lebeau. >> the white house is set to release what's it is calling a better budget for america and jim stewart will join us we'll look at the top performance name at the s&p, the dow narrow its losses to 24.

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southwest discussing her proposal to break up the technology giant such as facebook or alphabet or amazon our jim stewart, do you think that'll be a good idea >> i have been a proponent of aggressive and i trust in enforcement. we have a set of laws and decades of traditional opinions that have done a pretty good job in competition just come out and say let's break up the big tech companies, why? what law here had been broken? whatbehavior have they done to either suppress competition throu let's put the law aside for a moment, you see the ethiopian world would be a good idea

she says oh, we want to level plain field and people can't compete with these big platforms. well, who are these people >> we may not know, jim, they don't want to innovate to compete with them because they can't get the funding. i am not giving you any money. >> let's hear from some of these people i am trying to be objective here i like to understand a little bit better what is the problem that we are addressing what are the benefits we may be taking away by prabreaking themp these companies have succeeded because people love what they produce. there is been an amazon backlash recently you know people love using amazon it is convenient and it is cheaper. there is a benefit there google, people use a search engine because it produced the

information that we want if innovators did not have the incentive to introduce them. you don't want to penalize industry and innovation. >> right >> there is nothing illegal about becoming a monopolis because you are so good at what you do i think that's a stretch there are per cap natural monopolies in some of these areas. i don't know if we can say that. i don't know if facebook is going to trash forever it came up quickly there is a lot of turmoil in that world a lot of created disruption as the economists like to call it i don't know if this is a perpetual monopoly by any

stretch of the imagination >> utilities is in exchange to grant you some kind of exclusive domain whether it is territory or the spectrum or something like that. with amazon, there has been people saying look at how they deal with their third party sellers or are they competing fairly against them. when you went after microsoft, it was a bundling thing but it was not at the core of microsoft. >> i am not giving them a pass on their behavior. they should be held to account and scrutinize we have the tools for addressing that they should be investigated and hold accountable for that. if we look back at history when the u.s. government decides to step in and break something up, what's the track record there. it is not very good. >> well, they succeeded and break at&t it took a long time. >> and it all moved right back

together most people now feel that whole thing was a fiasco telecommunications, ultimately, change in competition. >> you don't pay for long distance anymore >> you can make an argument that the companies that resulted was not competitive in some way that gave rise to more innovations or price competitions could you? >> they all ended up being folded right back in at&t is bigger than ever >> it was not at&t >> and another issue here is breaking up the company as i understand it, warren h, has sad well, we'll not let them oconee oconee -- any of the companies that uses the platform

that's classic vertical integration and we have just in the at&t case -- >> at&t/time warner. >> reviewing vertical competition and what's the impact on competition? the remaining consensus both legally in the economic field that it is not competitive to have these vertical arrangeme s arrangements on the other hand should competitive behavior emerge in this vertical arena then by all means. let's look at it and address it. i don't see it yet how is google somehow preventing other people gaining access. >> part of her argument is that people with good ideas sell their company to google and amazon you don't hear arguments from people who are selling necessarily. >> finally, i want to say there is a whiz of all that. elizabeth warren is very smart

she understands all of this. is it plugging into this sort of broader trend which is -- let's go after people who are rich and successful there is a whiz of all of this beginning to emerge in the platform we are starting to see it show up in kmepcomments here and the, there is something about they're just too rich and too big. >> it is too powerful, too >> it does go to market power, jim, is it a central theme here even if there is an anti trust law. >> why is she not saying we should break up coca-cola or something. they have a basic monopoly with pepsi. they have some market power. is that bad? the same thing here if you have

market power, we have existing laws that constrain how that can be used. if you are using market power to suppress competition and enhance monopoly then you can be prosecuted for >> thankfully we have the laws it worked. we have a president conceivably wanted to apply the law in the case of at&t and time warner did not succeed. the law holds up again, do we want the government regulating these platforms do we feel more comfortable with the government having the power to do this as oppose to independent profit making companies who have to answer to shareholders and have to compete who do not have the power of the government backing them up i rather have the company making these decisions of how search results appear on google trump is complaining the conservative results don't come

up if he got control of it, would they all be right wing and oh populace message that comes up there. i don't think that's a good solution >> that's a topic for another day, too >> jim, thank you. >> when we come back, it is the oldest company on the new york stock exchange, sotheby celebrating 275 years. we'll arhe from the ceo the dow has gone green for a moment, s&p is up 22 points. don't go anywhere.

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the new york stock exchange this morning marking 275 years, sotheby's president is joining us congratulations on 275 years >> thank you, robert >> i want to talk about the future, some people perceive it is the same business as it was in 1774. online bidding and sales of your

6.4 billion in sales last year, what percent is online and where is that headed the next two or three years? >> 37% of things were sold were sold to online bidders it is growing at 24% a year. the future looks bright for us >> and what is the value of things that you are selling to online bids. are they buying 5 million or $10 million pictures >> we had million dollar lots sold online. a lot of people don't know a small percentage of our total lots are more than a million >> what's the average price of everything you sold last year? >> $75,000 range >> okay. >> there is a lot of talk about a.i. and block chain in the art space, how are you using a.i. and will you get into block

chain where they're talking about using it for a database and looking at the sources and providence >> a.i. helps us match people who likes certain things that they may like. second, it helps us triage things by the value. we want to focus on those that have values. >> you have things where people can sends you a picture of something they found in grandpa's attic and you use a.i. to figure out whether that's truly worth it and how many of those things do people send to you over the digital that you have sold? >> last year, we sold 1200 of them for $56 million that's extremely high business margins for us we are on track to double that

this calendar year >> what about the calendar market markets have come back when you look to may which is your big event coming up what do you see in terms of consignment or sales are the bidder os out there. >> macy consignment in new york is very strong for us. we have heavy bidding from asia. another leading indicator. >> tad, in talking about how much the business is now online, what are the functions i guess of the internet is to kind of reduce, what's your place in all that >> one of the things we do is we provide authenticity and assurance on title and make sure the buyer's money is good and

the seller is good those are things that have a lot of value and we anticipate having more so going forward we like our role >> and i guess the other question is does anybody else, can anybody do that on their own? various to entries and the other thing that i think about y yes, you have a relationship, what's the value >> we are celebrating our 275 years anniversary today. it is not a new thing that someone can come in during that period of time jeff bezos had a collaboration with us 15 years ago ebay had collaborations with us. >> are you nervous of a shift in sediment especially at the high end and the u.s. regarding taxes? >> we spent a lot of time on

that a year or two ago with the tax reformat we have not seen a huge change in the -- >> no, not really. >> these calls to tax the wealthy coming from the democrats, you don't feel clients are worried about that when you have been around 275 years, we have experienced war and revolutions and not only talk about it but grow and thrive >> i don't mean as a threat but on the margin, a bid that may have happened otherwise does not happen because someone is a little tighter >> it is possible but then again we are global. where we may see a particular region since the united states is getting a little soft overseas we think can step in and compensate >> your competitor is private, many people think they have an advantage there because they can buy things in that did not do well or do all sorts of things that guarantees, should

sotheby's became public in new york in 1988, should it be private, do you think? >> listen, first of all, we do what's right for the shareholders and our clients and colleagues no, i don't have any point of view other than to say we are dpoe going to do the right thing by the shareholders >> all right, thank you. >> let's get over to sue he herrera. >> we begin with president trump's budget chief confirming on cnbc that the president will ask congress for $8.6 billion for his proposed wall as part of h is 2020 budget proposal. the act russell vougt spoke this morning on "squawk box,". >> this is billions of dollars we are securing through the

president of the declaration national emergency the border situation is deteriorating by the day benjamin netanyahu welcomes lindsey graham to his residence. david freedman were also present. graham has backed israel claim >> tesla is walking back its plan to close most of its showrooms worldwide. in order to pay for them, it will now raise prices of tesla vehicles up to 4% with the exception of the $30,000 model three. last month it says it would close its stores >> you with up to date, guys, i will send it back to you >> sue herrera, thank you. we'll get you caught up on the latest of the boeing investigation, stock is down 8.5% 22 bucks off the session we'll be back after this

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boeing is declining following its fatal crash. joining us now taking a closer look, carter, thank you for being with us today. how do you go about right here not knowing anything conclusive and trying to estimate a business impact on boeing? >> yeah, i think you got a situation where the only thing that you look at is history. we have very few examples but we do have some examples of situations like this 787 being the most recent one and they were called six years ago and we have the battery fire incident in that case, the delivery profile there stopped and the fleet was grounded for three months you can get a couple billion dollars worth of working capitol

on the 737 program if you were to provide alternative lifts or fees to customers. you can calculate that with aircraft lease rates and get another half billion tladollarsr so you will have to calculate some sort of legal settlement you can calculate if you want to start, you know, trying to find sources or news of funds you can get a few billion dollars in a hypothetical scenario you won't fundamentally calculate anything when the stock is down. that reflects the risk of the people need to price in and uncertain tragedies like this. >> where the stock was when all these came about you had the street bullish on and looks like they had free

cash flow. does that need adjustment now? >> yes, we got the stock back where it was, quarterly results were fantastic what you see is a multi year story of margin improvement and cash flow generation here that played out given where we were in the year, a lot of shareholders or potential shareholders were looking at the stock which makes a material portion of the index and saying do i have to own boeing here or not given its size now you deal with this level of uncertainty. it is unquestionable to say whether -- do i want to stay on the sideline as we wait for the information as it comes in days and weeks. >> your bottom line case on this, the stock at this point moves more as the fundamentals are likely change. >> our fundamental price target are based on a two-year

fundamental outlook that you know that's bigger than this i think if welook at history and say do tragedies like this provide buying opportunities for stocks, the answer has been historically yes what folks have to appreciate is you should expect a lot of volatility as the news slow around and helicoptecontinues tn and people speculate around what the reaction of boeing is. do we think the fundamental long-term story and secular growth and margin improvement, yes, all of that still exist this is something we have to work through we'll expect volatility in the newsroom >> i am sure we'll get that. the stock is down 8.25%. >> carter copeland, thank you for joining us today >> thanks a lot. there it is. time for our etf spotlight

saudi arabia plans to cut crude oil exports in april you can see the xlp and oih are all up this morning. each is up more than 20% so far for this year. speaking of that sector, the world's energy leader, government officials and experts all gathering in houston, texas, for cambridge energy associates annual, they're looking to address the issues impact in the sector our brian sullivan is there and he joins us speaking exclusive with the ceo thank you, brian >> david, thank you very much. in the years past, it has been about energy how much are we going to produce the boom of russia and opec.

this year, trade is a huge topic as well. the contracts are so big perhaps no company has a big of a contract with china and particular as cheniere energy. lng is what they ship. cheniere is about to sign a multi decade deal with china that can be worth as much as $18 billion. earlier we caught with the ceo of cheniere and i tried to pin them down on whether or not if they're going to sign that deal? >> i am not going to speak about our negotiations china has been a vocal point for the company. we are dedicated to that market. we have sent over 60 tankers to china so far we have got a strong relationship with the counter parties in china

we are expecting good things to happen there >> all right, so i pressed him a little bit more. i know you guys have been talking as well and back on camera, okay, you guys have done deals with china in the past you are going to do deals with china in the future. i asked him how the negotiations have change from pretariff to post tariff. >> at the lower levels, we don't see much change. we don't try to talk about terms in the transactions. at the upper levels, there are some tensions. until i think tensions get smooth out which we are trying to help with the two countries, it is going to be rocky. it is going ton lumpy and we just have to be patience >> yes, guys, can you imagine walking into a high level trade negotiations knowing what's

going on with the white house and you are a company and you have to make these deals you got to sort of review slight parts of your hands as well would not commit whether or not you will have the $18 billion contract certainly that's a big one and all one way, that'll all be one way. we'll be interviewing rick perry live here. trade is a huge topic and lng is a huge topic, trying to get into infrastructure and nuclear if we have time. that comes up in about one ho hour's time in houston >> they're already sold out. won't they have to put on large amount of new capacity to meet whatever new demands come from china? >> they got a new authorization for another train at the sebin pass when we hear train, you are

thinking of train on tracks, it is actually more of a pipeline think of it as a seventh pipeline that effectively opened up >> something we'll talk to rick perry. >> yeah, thank you brian sullivan >> when we come back, captain marvel, we'll check in with richard gelfond of the state of the industry and a lot more. major indices in the green s&p almost at 2 4. back in a moment imagine traveling hassle-free with your golf clubs.

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there is something happening to apple stock that has not ndut oed in nearly 15 years. fi on trading nation more "squawk on the street" is coming up. when you look at the critical issues facing our world, what do you see? we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world

isn't just a result, it's a responsibility. emerson. consider it solved. disney "captain marvel" bringing in $455 million globally despite push back from some viewers movies one of the biggest-led blockbuster. i-max brought in $36 billion globally, making it the fifth biggest i-max opening of all time good to have you back, welcome >> great to be here, carl. >> let me get this right all times biggest opening for you in 12 international territories. >> the fifth biggest of all time and the first of origin story.

the other biggest were "star wars" and "jurassic world. >> do you think it is a female lead >> i think it leads into "avengers" which is a big deal that was the biggest marvel movie of all time. i think we were all surprised by how big it was and particularly globally im imax is a third revenue from china. we got the bulk on dhchina and h rest of the world. we are up box office 60% year over year in china that's killing it >> i guess that's an answer to the ongoing question of whether we kind of hit the comic book movie, there is more uptake for it or if there is something fresh about it

how leverage do you this i people want to go back to every chapter. >> it is really the end this time which people are going to want to see unless they come back from the dead again and i don't think so you got lion king this year and "spider-man. "star wars" is different there is no doubt the super hero movies are an important part of blockbuster which is our business >> why is business in china so good >> i think it is affordable luxuries, carl, the economy is c con stra contra contracting. people won't go on vacation or the rest of the world, doing something special with your family which does not cost that much more. that's proven true in the rest of the world and it is true in china. >> thoughts on disney's growing

influence over international box office, period >> well, there is no question their influence is growing you can't look at it in isolation. you have all the streaming services coming online i do think places like netflix are going to start to expand their windows. you have amazon coming on and apple and warner brothers. i think if you look at the movie business and isolation, yes, disney is going to have a lot of market shares. i think this other thing going around and we are right in the middle of it, i don't know how it is going to play out yet. >> can you imagine netflix releasing a picture for imax >> we talked to them and i believe for the irishma irishman -- that's the big thing though the directors themselves really want theatric al releases. i would not be surprised to see if they have windows for that.

whether the theater wants to play them, that remains to be seen >> what's a good enough window these days >> 12 weeks, what's good enough where they reach the middle, then we'll be happy there. >> you mention you're in the blockbuster business that's where theatrical viewing is headed. if it is not a blockbuster, it is not that that is that appealing? >> i agree my stock has been caught a bit people say the movie business is down in north america. we're not only in north america, china is up a lot, and guess what, we do documentaries like apollo 11. free solo, won oscar for best doc. i think the movie business is alive and well if you look at it on a narrow basis, there are more questions. >> speaking of oscars, does

spielberg have a point about the sang at this time of theatrical distribution >> he has a about about the s k sanctity whether the oscar's play it out, there will always be windows because of block busters he has a point we'll see how it plays out >> some directors say i was inspired as a kid by "grapes of wrath" i watched it on my parents' black and white television it worked out for me >> i think people have been social as long as we had civilization we went to pompeii, thousands of years ago people went to theaters there was vhs and dvd and there was television and radio, people still want to go to the theater. i think it is a blip i think it is a period of time in any event, i-max is the place where it is not like watching it on tv. >> fair enough

rich, good to see you. richard galfont. let's see what's coming up on "squawk alley." i think i know one of your highlights, jon. >> you got it. nvidia ceo on the biggest deal the company has done exclusive interview. $6.9 billion is it going to push nvidia ahead of all its competitors that's coming up on "squawk alley. welcome back to "squan

the street." seema mody stocks hovering near highs of the day, a rebound in tech stocks outweighed boeing sharp losses energy stocks are one of the biggest leaders in early trade, lifted by comments from the saudi oil minister that said an end to opec led supply cuts was unlikely before june among individual names moving higher in the energy space, valero, marathon petroleum, all up around 2% and look at the most closely watched etfs now up more than 13% this year guys, back down to you carl >> thank you very much, seema. impressive rebound from opening

bell >> yes you almost wonder how much it would have taken off about the boeing effect now, about 1% on the s&p 500, including banks, and of course apple, doesn't hurt to get that jupgrade stock up. >> that's a big move. >> yeah. kind of shows i think after i said 3% dip in one week in the s&p, people were maybe itching to buy it. >> boeing the only dow component in the red, down 7% versus 12 in premarket. "squawk alley" is next we talk to the head of nvidia as the company makes the largest acquisition ever the dow is up 60 cal: we saved our money and now, we get to spend it - our way.

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♪ good monday morning. welcome to "squawk alley." i am carly fiorina with morgan brennan, jon fortt at post 9 of the new york stock exchange. we have an awfully big show to get to the ceo of nvidia is with us in a few moments exclusively on the company's $7 billion acquisition. kara swisher, why mark zuckerberg is so interested in privacy all of a sudden, and bottom of the hour, secretary of energy rick perry sits down with brian sullivan we begin with another special guest. stocks are higher coming off the worst weeks of the year. we are joined in another cnbc exclusive by john rogers good morning good to see you. >> good morning. i wou >> i would love to get your temperature on sentiment s&p was denied