good morning it is 11:00 a.m. at the pentagon and 11:00 a.m. on wall street. "squawk alley" is live. ♪ ♪ good tuesday morning welcome to "squawk alley."

i am jon fortt with melissa lee and contessa brewer. carl is on assignment. so is morgan brennan she's at the pentagon ahead of her interview with the u.s. army secretary taking place the bottom of the hour more from morgan in a minutes. we begin with boeing as the uk joins a lit of other countries in grounding its 737 max jets. phil lebeau joins us from chicago. what's the latest? >> it is a morning we heard from more aeriairlines and countries. there's a report from german tv the transportation minister in germany says german air space is shut to 737 max-8s that's some of what we're seeing today. when you look at the cascading number of announcements today, let me bring you up to speed in terms of how many airlines said they'll ground the max 8 and

what percentage of the global fleet it represents. you're looking at 27 airlines around the world that's out of 46, 47 airlines that have the max 8. 48% of the global fleet. that's how many of the planes are now grounded, uk, malaysia, singapore, australia all saying they'll no longer allow the max 8 to be flown in those countries, so it brings up the question what about the united states we heard from boeing earlier today as the announcements were coming out, boeing said we believe this is a safe aircraft, not only that, the federal aviation administration believes it is safe now and therefore we are not issuing any other orders to our operators in other words, boeing is not going to voluntarily shut down this plane, so at this point, guys, we're looking at a situation where you have a number of airlines and countries around the world saying they don't have confidence in the 737

max airplanes, they're not flying them. the largest number of planes are located for the max planes, southwest is the largest operator, american the second or third largest. you have huge contingent of planes, they continue to fly >> has boeing voluntarily grounded a particular model airplane i'm wondering, it seems like calls amongst regulators for department of transportation and or the faa to step in is growing louder we spoke to ray lahood, he said he would ground. >> it is an easier call for somebody not in that job to make whether or not boeing has done that voluntarily on its own i don't have enough background in terms of going way back in their history. generally speaking they're working closely with the faa, they'll follow the lead, obviously they have to follow

the lead of the faa. at this point you saw the statement from the faa yesterday where it said we believe in the air worthiness of the airplane that said, it is also expecting boeing to have software update for the flight control systems that, working on this a couple of months, that they'll be finished and an air worthiness directive for the software to go into the existing fleet of 737 maxes and ones built in the future. >> in part because there was a lot of scrutiny after the lion air crash, they underwent inspections and were declared safe, at this point the real safety factor for passengers might be what's on the black box. are you getting any indication when we're going to learn what the data shows us? >> no, no indication contessa, it could be as soon as 48, 72 hours, it could also take several days, might even take a

week, week and a half. it depends on a number of things one, how much damage did the blacks boxes suffer during the crash, two, how quickly can they analyze the data and say do we see anything here that's an anomaly or similar to what we saw with the lion air black boxes. that's going to take a little time it is not that they're dragging their feet the faa and ntsb are moving quickly, they realize the imperative of figuring out what happened with the two accidents, which we should point out while there are suspicions with the lion air accident, there's no definitive cause yet or suggested or known yet for the ethiopian airlines crash. >> phil, it seems to me like boeing has a different burden here here than the faa or ntsb, transportation secretary on the government side why not say the planes should be grounded

sure, there's an economic impact there, but not like they have legal jeopardy why wouldn't they do that? >> the argument against doing this just because everybody else is doing it that you have the faa looking at reams of data, already looked at reams of data and made this determination, so if you come back say hypothetically the secretary of transition comes back and says everybody else is shutting it down, we're not sure around the world, let's shut it down as well how do you go to the faa and say what do you see, and the faa says we don't see anything to justify not flying the plane now you're going against the data in the eyes of the faa and boeing and eyes of american and southwest, emphatic saying the plane is functioning as they expect it to function, they've got data to back up their belief it is an air worthy plane. >> it is interesting that the norwegian airways has 18 max 8 planes, probably got a lot of

data, they decided to ground their fleet of max 8 data can tell you one thing, there could still be a decision based on safety. >> it brings up the question and we haven't heard exactly what the airlines are hearing from customers, it may be that some airlines or transportation ministries around the world are hearing back from fliers in those countries. i'm not comfortable, i'm not safe it is easy to say they're going to shut down use of the max 8, it was in their backyard, their own people were killed in the accident it is tougher to understand why the decision was made with the norwegians, why the uk said we don't want the max 8 flying in our air space. we need to learn about the calculus. >> indeed, phil. quite a bit of economic impact on the heels of the human

tragedy, $25 billion in market cap wiped out that stock in the past two days. right now, trading today down almost 6%. thank you. turning to tech stocks, the sector leading all others led higher by the likes of apple, amazon, facebook in the green this morning the s&p and nasdaq coming off the best day in over five weeks. liz anne sanders joins us with more good morning >> hi, jon >> it seems to me one of the story lines here is that hope has become the midwife of despair from just a month ago. look at nvidia that had that warning, stock went down yesterday they announced a big acquisition ever, and the stock goes up. much smaller stock, stitch fix, was hammered in holiday season, sure has heavy short interest, after earnings today up 30% plus

at the open. what do you think is happening with sentiment with tech and the markets. >> i don't cover individual stocks, but sentiment is an interesting force, maybe different than one might have expected given the carnage into the christmas eve low and rally since then certain measures moved into optimism territory alongside the rally, but not to broad extremes like we saw in the september highs last year. you look at the so-called smart money behavior measures of sentiment, looking at what the cohorts of doing, they're hanging in there, betting that the rally has more legs. normally when you see more attitudinal measures of sentiment shoot to extreme optimism territory, smart money from a behavioral perspective tends to go the opposite direction, but that hasn't been the case maybe a little more cautious, but believe there's more to run with a focus back on higher

growth more cyclical areas that led the market into last september's high >> want to bring in dan ieves. apple was an important stock, given the way it went down on the warning in the past few weeks. and i wonder, they have an announcement coming up, a lot of people expect to hear streaming, tv announcer, what do you expect that to do for apple and for tech in general? is this a story of more competition or more opportunity across the board >> we think it is potential game changer, especially as this is rumored for many years, for apple to get into streaming content, it is significant from the services piece, and that's ultimately what the key with the valuation. i think it will have a ripple effect across the tech food chain with apple getting more into content

for tech to rise higher, we continue to think faang and apple. if they're successful, we thin 100 million subs, it is worth 15 to $20 of the stock. a shot across the bow of cook to hastings and others that apple is into streaming. >> you've written china is your friend and you want to stick with technology. in terms of what you're seeing that could hamper that story of up tick in earnings in q2 and q3, or seeing in the recent notnot note, low inflation, i wonder how you see that playing out in terms of rising pressure in terms of costs but their inability to pass price increases onto consumers how does that play out for positive earnings in q2 and q3 >> broadly on earnings, the consensus for first quarter is

down about 2%, and then only back up to positive 2% for second and third quarter i think because of the inflection point, courtesy of how the mass stops working from year to year relating to tax reform, i think it is an incredibly important earnings season to see if companies can hurdle the bar and what guidance looks like we have seen valuation expansion that came courtesy of looser financial conditions, the fed in pause mode i think you have to see better earnings growth for that to persist. as far as tightness in the labor market, that's extremely important. so far increases in wages haven't translated into the wage price spiral that brings on broader measures of inflation. we have a tame cpi report today, but if we continue to see that tightness, given that nominal gdp growth is now above the employment rate, that's an environment historically that kicked back in the phillips

curve, so we may be getting to a point where there's so much tightness in the labor market, it will translate into higher wage growth. if that filters into broader measures of inflation, i think it represents a risk for the market as relates to the fed >> can we talk a little about some of the tech companies moving more and more into the services business? at this point apple is anticipating this announcement about the streaming service. how important is this for tech companies to diversify beyond hardware or software that landed them in the successful positions they've become anyway? >> it is really at the epicenter. more growth is moving to software and services. you've seen microsoft looking at more services and apple. i think this shows that it is a changing the guard in technology, more traditional tech giants look at software and

streaming. in our opinion it will be influx of m and a i thinkit will be the tip of the iceberg for a massive m and a cycle with large tech players buying more streaming content players in the next two to three years, given where the spending is i think this is something where tech investors now are really looking to play the trends that's why apple, you've seen the stock rebound from early january. starting to see can you go after the installed base and finally cook is going to unveil it >> we'll see what they come out with and how it competes thanks for being with us >> thanks, jon and now u.s. army secretary mark esper set to sit down with our own morgan brennan at the bottom of the hour, following the president's release of his 2020 budget monday let's head back down to the pentagon and morgan for what to expect later this hour morgan

>> reporter: guys, i am here at the pentagon, about to go inside for a rare live interview. later today, department of defense is rolling out details around its fiscal 2020 budget proposal 718 billion for department of defense. 165 billion for oversees contingency operations from the so-called war fund seen as controversial, the reason some lawmakers saying this request could be dead on arrival nonetheless, modernization that's the focus of the u.s. military right now as we enter this era of great power competition. basically the ability for the u.s. military to face off with another rival like china, like russell. we sit down with the army secretary mark esper to talk about his services plans and the budget they would like to see put in place

a lot of reforms and major pivot in terms of strategy for the army right now what secretary esper is referring to as an army renaissance. we're going to talk to him about that, get his take on the geopolitical landscape and talk about the role of technology, ai and other next gen innovations are playing in all of this stay tuned we're sitting down a little later in the power back over to you >> thank you very much, morgan coming up after the break, mike wirth sits down with us more "squawk alley" still ahead. stay with us

the 38th annual summit bringing together the biggest names in energy, brian sullivan is there with exclusive access from houston with another exclusive interview. brian? >> hey, thank you very much. pleased to be joined by mike wirth, ceo of chevron. i'm going to look around, we're in texas i'm going to be careful. the permanent ian basin is getting so much attention, i wonder does it sort of suck the air out of the room in some ways, people look at chevron, you got this great perfect me and spot, do they forget the

other assets you have? >> that can happen, it is the newest thing in the industry and it is terrific, a large position, attractive position and growing fast fastest growing asset in the portfolio, but far from the only thing in our portfolio we are a global company with positions around the world all of which are important the permean is, but may not be the only thing. >> melissa asked on fast money, what's the next one, they said ask about argentina and opportunity for sale there >> there's a basin there that's quite large. we are producing there in a joint venture with ypf, the argentine company, and it has many characteristics in common the geology looks similar. as we applied things we learned in texas down in argentina, we

have seen the productivity of this emerge in a way similar it is promising for argentina and there are other places in the wormd you could see similar things. >> where is the process referred to shale technology, also in saudi arabia, of all places, are there others out there >> there are other basins with unconventi unconventional geology there are so many layers of stacked resource it is prolific in terms of size argentina looks similar to this. we have a position in canada that's very attractive there are a number of other places in the world we could see similar things evolve. it is early days, but for us the economics and productivity look similar. >> canada was the hot thing, everything was about the oil sands, then the price of oil collapsed, it is very expensive. but there's something new happening in canada i understand with you guys.

is canada about ready to have a second act if you will >> we'll see what we are producing in canada in the duber anyway works with the heavy oil as opposed to upgrading it in an upgrader there. canada is a resource based economy, they have a theresa may and dominant natural resources of all types, we have a long history there. i think you're going to continue to see our industry be a great partner in canada. >> climate change getting more focus as it should, some members of congress calling for a green new deal there are people that would like to see a petroleum free world, last time i checked, you sold some petroleum is a green new deal possible >> i think the green new deal is an attempt to have a different conversation and if that leads to an honest conversation about how we balance energy supply for a growing world, economic development, and the environment, i think that's a good conversation to have. brian, there are 7.5 billion

people on the planet, a billion of whom have no electricity. 20 years from now, there will be 9 billion and a world growing from population and economic development. we need more energy, reliable, cleaner energy to support a growing population >> melissa >> michael, you announced $20 billion in cap ex, the first increase in four years after four years of declines we heard much the same from the exxonmobile ceo at investor day a week ago, two weeks ago, they want to lean in while others are pairing back is there a competition developing for assets and how you plan to use the 20 billion >> well, we've got a very strong portfolio which gives us the ability to have a balanced approach to investment in our business where we've got growing production, less risk, and discipline spending which leaves

plenty of free cash for shareholders distribution. we are able to balance distributions with growth in a way that's underpinned by the very strong and attractive portfolio. >> any deals on the horizon? exxon did a big deal a few years ago, bp, where's the chevron m and a? >> you're always looking because no matter how strong you feel business is, today we are in a depleting resource business. you want to add things to the portfolio and you're always looking to get better, so we're always looking but we've got a really strong position today, we don't need to do anything. you only look for things that make you better. >> do you think the assets are overpriced if you did poke around >> capital markets have begun to withdraw flow of funds into smaller companies which for a long time enabled them to pursue growth without delivering the financial results that the market was expecting, so we have seen a bit of a shift with some of the companies >> following up, would you have

a better deal buying overseas? does international assets look more attractive than u.s. assets from a return on invested capital basis? >> you know it all comes back to the rocks and underlying geology. what we do is we go where the resource is good and the economics and fiscal terms look good and we have to manage risk, there's risk everywhere we do business a big part of the business is understanding and mitigating risk those are things that drive us there's a more complex situation than simply the price. >> we appreciate the time. thank you very much. back to contessa brewer. >> nice to hear from mike. thank you for that, brian. fascinating. getting breaking news out of washington u.s. trade representative robert lighthizer, ylan mui is on capitol hill what have you learned? >> reporter: well, ambassador lighthizer said he did speak with china last night over the phone along with the treasury secretary steven mnuchin, they

discussed very complicated issues lighthizer plans to speak to china tomorrow over the phone, so talks do appear to be moving along. he said any agreement if reached would be between 110 to 120 pages. but he said he would not commit to a specific time frame for getting this done, he would not say it would be done by the end of the month he said it would be up to president trump and the president on the chinese side would let him know if this was a done deal. >> thank you for that. as we head to break, take a look at the worst performing stocks in the dow so far in today's session. dow down now 104 points. you can see it, caterpillar, nike, boeing the laggards. more "squawk alley" still ahead. don't go anywhere. 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. and everyone i've ever opioloved away from me.thing everything. i blew my ankle out and i got prescribed pain pills by my doctor. if making my detox public is gonna help somebody i'm all for it. i just wish i would've had a warning.

whooo! want to take your next vacation to new heights? tripadvisor now lets you book over a hundred thousand tours, attractions, and experiences in destinations around the world! like new york! from bus tours, to breathtaking adventures, tripadvisor makes it easy to find and book amazing things to do. and you can cancel most bookings up to 24 hours in advance for a full refund. so you can make your next trip... monumental! read reviews check hotel prices book things to do tripadvisor

hello, everyone. i am sue herera. here's your cnbc news update at this hour. court documents unsealed reveal at least 40 people charged in a large scale college entrance exam cheating scam. the scheme tried to get students admitted to elite schools as recruited athletes, even if they did notpractice the sport. the plan allegedly helped potential students cheat on college entrance exams the japanese aerospace agency has chosen toyota fo drive a rover about the size of two mini buses it will have 140 square feet of habitable space, astronauts can remove suits on board. verizon customers on the east coast experiencing a texting outage this morning. messages blocked from going through, all service returned by 10:45 a.m. on a lighter note, i hop offering the annual free pancake

day as part of national pancake day. anyone that shows up between 7:00 a.m. and 7:00 p.m. gets a free stack of pancakes one per customer and you can't take to go but hey, it is free. you're up to date. following that college entrance scandal closely. it is a lot of money involved. melissa, back downtown to you. >> a star studded scandal apparently >> high ranking people. when we return, morgan's sit down with mark esper live from the pentagon we'll be back after a quick break. imagine traveling hassle-free with your golf clubs. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines.

sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call, we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks. shipsticks.com saves you time and money. mimini was born extraordinary, with more power for more fun. mini was born to do the only thing we ever wanted to do.

drive. to hit start and just go. fast and far. around town and around hairpins. to leave everyone in the dust, and leave rubber on the road. because mini was born to drive. drive for yourself at the mini born to drive sales event. special offers at your local mini dealer.

welcome back to "squawk alley. i'm morgan brennan live from inside the pentagon on what is a busy day for the department of defense as it unveils details around the fiscal 2020 budget request, $718 billion. that's what the administration is asking for. i'm sitting inside the office of the secretary of the army. secretary mark esper of the u.s. army is joining us exclusively thanks for sitting down. >> thank you for inviting me.

>> big day president trump is really proposing across the board cuts for most of the federal government big notable exception, the department of defense. we're drawing down troops, looking to draw down troops in key conflict zones what do taxpayers need to know about the increase in the budget >> this is a big day for the army we are presenting a very bold budget that reflects the shift for the army into the national defense strategy that calls us to be prepared for high intensity conflict against countries like russia and china. at the same time, underscores this renaissance that the army is in with regard to how we man, organize, train, equip the force. it is a very big budget for us. >> in terms of that army renaissance, what are the budget numbers, can you share those with us? >> we have a top line request around $182 billion. that will allow us to continue to grow the force. that will allow us to begin the shift of over $30 billion over five years to modernize the

force, to move away from the legacy of the last three or four decades into the future in terms of building semi autonomous vehicles, robotics, artificial intelligence, all the things we know that we need to fight and win on future battle fields. >> i want to dig into all that technology, but first, some of the experts i have spoken to said as we draw down troops in afghanistan and syria it could become more challenging for the army to request more funding what would you say to that >> it allows us to prepare, be more ready we can spend more time training our forces to fight the big fights, whether russia, china, or someone else, so that's been our focus. how do we prepare the forces, how do we retrain, equip them. one of the things we're doing is rewriting the doctrine for future workers all of that plays out as we implement the vision that the army chief of staff and i wrote

last summer. >> what's the biggest threat facing the u.s.? >> the biggest challenge is north korea. as we look in the out years between 2025 and 2035, russia, but the biggest challenge is clearly china, in the years 2035 and beyond, the size of the country, its economy, it is a big strategic competitor for the department of defense and country. >> interesting to hear you talk about china. obviously trade talks between the u.s. and china continue. if the administration does strike a trade deal how would that impact the strategy that is being put in place by you in terms of the army and defense department more broadly? >> i'm not sure it impacts the strategy at all really clearly we need a strong economy to build a strong military that comes first and foremost, but we will remain focused on preparing forces for high intensity conflict wherever it may be. >> i want to shift gears a moment unfortunately the news of the day is focused on that deadly

crash of a boeing aircraft and it seems by the moment more countries looking to ground those flights and the world is focused on that. i realize it is a commercial aircraft, i realize there are more details yet to come, boeing is a big contractor for the u.s. army, how closely are you tracking this, depending how this plays out, is it the type of thing that could cause you to reevaluate your relationship >> we closely track systems boeing builds for us and they're capable systems. that's my focus. it is something i look at every month, i look at the metrics for all major combat systems and platforms, boeing builds many and they're successful platforms. we have challenges here and there of course, but i focus on programs the army is running. >> in terms of some of the reforms you're putting in place, a bigger strategy and pivot for the u.s. army, this renaissance you're talking about, more technology, i imagine more outreach, more work with silicon valley and technology companies. how is that going?

>> it is going well. i try to get out and meet with ceos every week to talk about where the army is going, to assure them with regard to what the modernization priorities are and the fact they won't change business needs that predict ability so they can invest and help us move into the future every time i talk to a ceo, we also get good feedback what we can do differently and better. acquisition is important we do everything we can to get rid of unnecessary processes, get rid of regulation and partner with industry to achieve the technological advances we need >> have you had any resistance, we have been hearing about employee push back, whether at microsoft or google in terms of partnering with the military >> no, i haven't actually. in fact what the army is we started up army futures command. biggest organizational change in 45 years we set this up in austin, texas,

technological hub that's growing. we opened our doors and said to young entrepreneurs and innovators, come in, the army is open for business, we want to partner with you frankly we heard nothing but excitement and optimism and energy with regard to that outreach. >> how do you ensure new technologies are used responsibly? >> we have to think about that, particularly with ai in terms you how you employ it. my vision is there will always be the soldier in the loop with these systems, but clearly ai will enable a soldier to act and think more quickly if you can do that on the battlefield, whoever gets to ai first will have dominance many years afterwards we have to get there first and have to be conscious of the ethics so we maintain that person >> in light of that and the budget and details around this request that are being unveiled today, what does the army of the future look like and how will

those future battles be fought >> i think the army looks much more robotic, it has much more semi autonomy, fall autonomy building into the system now we're experimenting with semi autonomous vehicles. you'll see a lot of that, i think you'll see technology that leads to less injuries on the battlefield. >> thank you for joining us. as the army unveils the details around this $182 billion budget request, within the broader defense department request, big day. we appreciate you sitting down exclusively with us. >> thank you very much >> contessa, back over to you. >> thank you. still to come shares of stitch fix up 26%, surging after a big beat on earnings while raising full year outlook on revenue the ceo katra keinla joins us in a few minutes. stay with us

i am scott walker. morgan stanley's mike wilson called the december destruction in the market, he is back with us with a new call and more planes grounded what to do if you own that stock. and the call of the day, a hot tech stock can surge we debate that we'll do it at noon. melissa, see you in 15 >> look forward to it.

reigning in the algorithms, how artificial intelligence is running every aspect of our lives and how we can try to control it stay with us e you so good at th? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade.

can we all just admit it, the machines in fact are the boss of us algorithms are running our daily lives from spotify to netflix and tinder what's tinder, i am a married woman. these companies drive decision making

a new book out today argues there's a way to regain control. a human's guide to machine intelligence, how algorithms are controlling our life nice to see you today, professor. joining us at post 9 first of all, let's talk about the book how are algorithms shaping our lives? >> they're driving so many decisions we make and others make for us. you mention product choices, media choices. a third of the products have algorithms >> to me, it is attention getting, this might drive voter turnout, algorithms. >> absolutely. facebook did a study, they tweet a new algorithm showing more

news like stories on the war in iraq and it did vest voter turnout. >> you jump to how we can stay in control do we need to stay in control? >> i think we're all becoming passive how we use technology. algorithms are making lots of decisions, even life and death in courtrooms, they're used to predict whether defendants are likely to re-offend doctors are asked to consult algorithms to diagnose diseases. now we see some of the algorithms you think of as rationale, infallible machines have bias. we have seen race, gender bias, race bias in courtrooms. >> is it the algorithm or coders designing. >> people tend to misunderstand. you think it is the coder that's feeding in bias. the coder is not modern algorithms learn to make decisions from data, it is

training data given to them. the data is decisions made in the past if judges were biased in the past, algorithm picks it up. if recruiters were, it picks it up. >> you transparent to give under the circumstances if we don't understand how to correct algorithms do we need a new study or school of thought around that >> i think we need certain set of consumer protections. it icalncludes transparency it includes control for consumers but also i argue for some legislation such as requirement that companies should order their al go rgorits

>> would that audit team live outside the company or be a government agency? >> i think it could be within the company but independent of the team that developed the model or a third party company that certifies it. there might be a government party that's looking through some of these reports ensuring that in important settings the algorithms go through some testing before they are deployed >> thank you so much for joining us good luck with the book. the ceo of stctih fix on the other side of the break. squawk alley returns in less than three minutes what do you s? 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.

welcome back stick fix soaring this morning opinion reven revenue beating expectations with us is stitch fix founder and ceo katrina lake good morning >> good morning.

>> so, results that clearly caught a lot of people's attention. i want to start off asking about your technology that helped to drive those. when i think of you guys, i tend to think of the artificial intelligence that helps on the styling side you talked about the algorithm helping with inventory can you explain how that led to some of the margin benefits in this quarter >> yeah, absolutely. one of the really exciting things that we were able to share this quarter is we had 6% higher net revenue per client than we did a year ago we have more valuable clients. clients who are spending more. client who is are more likely to find things they love from stitch fix there's some algorithms we use on the matching side when we used a thing called style shuffle where people say i like this, i don't like this it's kind of a fun game you play

in the app on the stitch fix app. that's a good example that clients can share to help give us the right data. we're applying that data backwards into the inventory we can anticipate there's going to be -- we're going to be styling john in a woeek and he has these types of preferences so let's make sure we have this inventory about him so we're likely to get him a stitch fix that he loves th that's a new algorithm that we were excite about. >> the narrative seems to be shifting about stitch fix. i followed you guys since the ipo and before even before the market fell apart at the end of december, after the last earnings, the stock took a dive. you were down below 17 bucks a share. now this big rebound

you've had more than six quarters of 20% plus revenue growth what mettrics are you managing to a lot of people not seeing a big q4, misunderstood the structure of the business. what are you really paying attention to >> our aspiration was to drive this 20, 25% year over year growth and revenue in a retail backdrop that's not all that exciting right now we think this was way we can drive consistent growth and value for our shareholders while at the same time taking advantage of a huge market opportunity ahead. growth rate is definitely something that we manage i think we've been really consistent in delivering that. >> you invest that in a brand cam papaign and uk launch. talk about what you expect that

investment to do how quickly should we see it play out and how necessary it is to main that i know that growth? >> it's a perfect time for us to do it now. we have our kids and our plus side business. it's really a great time for us to have kind of over arching something we expect to impact the business over a longer term. over the next year, next couple of years the reason you see the ad and had a lot of great positive feedback it's more of an emotional thought. what we're really hoping to do is when people are aware of stitch fix we are hoping they aware of full nature of the offering

we hope they have a better understanding we can do lots of different styles the metrics we'll be looking for will be around awareness and the brand. those are things we think will impact the conversion. how fast people move through it's a very different type of measureme measurement. >> all right katrina lake, ceo of stick fix seeing some analyst notes after this report. talking about being impressed with not only stability but potential growth in active clients as well. thanks for joining us. as we head toward noon, the dow is down but other ind i as we head toward noon, the dow is down but other ind indices higher

we're watching the impact on boeing and that story keeps developing >> thanks for being here that will do it for kwauk alley. let's send it over now to scott wapner and the half. we'll get to the latestme s developments the fan who called last year's fair market is back with us today. he says corrections is likely to continue he is here to tell you why let's begin wi