you see the futures have been sharply higher all morning long. right now douw futures up by triple digits. this comes after a relatively flat day for the markets yesterday. that does it for us today. have a great weekend, everybody. make sure you join us back here next monday. right now, it is time for "squawk on the street. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with sara eisen, mike santoli and cramer and faber are off today. quadruple witching today, and we'll watch for developments in the mosque attack in new zealand overnight. at least 49 killed europe trading higher. empire manufacturing, ten year yield just below 6.1 trade optimism, new signs of

progress in china u.s. talks and stocks pointing to a rally at the open, shaking off worries about slowing global growth. >> musk bets on the midsize suv. shares falling premarket >> and big tech driving the market to new 2019 highs what is behind the resurgent faang rally this year? >> stocks on track to open high we are the tech sector on pace for the best week of the year heading into today's session the dow and the s&p 4% away from the all time closing highs the nasdaq almost 6% away. week to date, guys, the dow is up 260 points, despite a 334 point drag from boeing >> yeah. boeing, what we looked it up, worst week in about two years. down 11% but the strength continues and, you know there is no major explanation or catalyst given for this week's big move, the tech trade is back but generally the 2019 comeback story for the market has been pinned on a few key factors,

which continue to drive this market the fed's major policy pivot toward a pause, stimulus from other central banks including europe and china, the fact that there is increasing momentum toward a u.s./china trade deal and that there is low expectations for earnings and economic growth. >> yeah, bond yields remain pretty much at the lows of their range for the year so that's not about a -- you haven't really changed the economic story at all this week. it is not about we're looking for signs of a pickup or anything like that it is basically we're still getting back a lot of that kind of downside panic move i think that people are still kind of cautious about the rally, they're not necessarily jumping right in and that has enabled the market through the big tech stocks and growth stocks to essentially just kind of grind higher in the absence of any change of economic story. i don't know how long that can go but we obviously have equity valuation supported by very low bond yields in the credit market saying, okay, fine. >> there has been some --

deutsche has a chart out of baltic dry starting to perk up, the container shipping index, right? >> you're going really wonky today. >> torsten. >> and recommitment to policy support out of the premier saying we're not going toing to let the economy slip out of a reasonable range. >> there is debate about the fact that ten year bond yield is near 2019 lows and the stock market is near 2019 highs. and, yes, that's kind of typical of what we have seen over the bull market over the last few years, but that's sending different signals about where u.s. economic growth is headed. >> that is an obvious question i don't think those things are incompatible right now talking about a stock market that is still essentially clawed back two months of losses not like the market is barreling higher to heights never seen before or valuations never seen before so i do think as you mentioned, patient fed underwrites both

those things, strong stocks and bonds. and i do think that market is giving companies credit for having earnings bottom out in advance of seeing those earnings growth coming through in the second half of the year. >> there is a lot of chatter about quadruple witching, the end of a number of options expirations, all sorts of fun at the new york stock exchange. not sure what the impact is, besides increased pickup in volatility. >> volume is flush at the end of the day and rebalancing. this week heading into this particular march expiration tends to be net positive, but it is not a strong effect. >> yeah. meantime, tesla shares are falling in premarket this after elon musk unveiled the automaker's model y suv last night. phil lebeau joins us with more deta details. what were the highlights >> the highlight is actually seeing the model y i have to say, having seen a number of these events, covering a number of them, this had less energy than we have seen in the past whenever elon musk unveiled

a new vehicle, the model y was unveiled at tesla's design studio in hawthorne, california, last night the deliveries of the vehicle, well, the first ones come out late next year those are the longer range, performance versions, starting at 47,000 going up to 60,000 as for the standard range models, those deliveries don't start until the spring of 2021 those start at $39,000 the range between 230 and 300 miles. >> i'm confident that it will be the -- of any midsize suv, the one you want and i think it will probably sell -- i think probably do more modelwise than x and 3 combined most likely, yeah. >> as always, the people who were at the event, they love what they hear from elon musk, did wall street love what they heard? mixed reactions this morning deutsche bank out with a note saying overall we found the

event underwhelming with no major surprises. the vehicle isn't available for nearly two years and consumers may realize putting money early for the model 3 didn't yield any benefits, he's talking about the fact that you can order a model y now, it will cost you $2500, unlike with the model 3, look at shares of tesla, remember, with the model 3, they said, thousand dollars, you can reserve one right now. i think they got like 440,000 people who immediately did that. that was a big story line, the day after the model 3. there is no story line about that with the model y. they are going to take reservations at $2500 a pop. but they are not giving us any indication how many people have already said yes i want one of these. >> phil, a lot of speculation about how musk would characterize production scheduling going into this would you argue that he was shy on information bullish, bearish >> yes. >> on production abilitys?

>> well, not changing their abilities. he said, look, we'll be building this, not only in fremont, california, the model y, but also going to build it at the new plant in china he talked about how they expect to have the plant in china up and running by the end of this year relative to what i think people would like to hear in terms of concrete numbers, he didn't share any of that last night i'm not sure that was really the venue where elon musk would get into specifics in terms of how many vehicles that tesla plans to build this year so if you're an investor, you're hoping to hear that, you certainly didn't get that last night. you got sort of the vintage elon musk manufacturing on a mass level is oh, so hard, ridiculously hard. a lot of the stuff we heard in past presentations from him. >> all right phil we'll monitor price action today. interesting na ing night for te. thank you. futures around triple digits on the heels of the u.s./china trade hopes. let's bring in tom lee, co-founder and head of research.

you've been busy this morning, filling clients in on a trip you made to boston to meet with some institutions the phrase you had was battle scarred and wary. >> yes that's right i think investors are still recovering from that collapse in markets from the december fomc meeting through december 23rd. many got very defensive and so this rally since the start of the year caught people missing most of that move actually. >> and we're seeing that evident in things like fund flows and things like sentiment survey it seems as if there has been a participation in the rally, maybe grudging what are you looking for as a signal when finally people say, okay, now it is safe to get back in >> i think people need to make a shift, because right now the focus is on earnings recession and e is going down. we have written that pe really determines the outcome for markets in any year. and, you know if you think inflation is tame, fed is dovish, massive rally in high

yield, potential catalyst in the second half as we get better comps and a trade deal, that's all pe expanding i think, you know, 16 pe on next year gets you to 3,000 on the s&p. that's not demanding >> what if we don't get better comps and earnings in the end of the year the economic data coming in is far from certain did you see the new york fed manufacturing number there are mixed signals on the economy. i think without more clarity, it is hard to figure out where earnings are going. >> yeah. i would say if you look at long lead indicators like the yield curve, the 1030 steepened dramatically the steepest in more than two years. that's going to lead the ism by 30 months. the ism should maybe break 50 this year because of the oil decline last year. isms turn up when pmis turn up, people start to say, oh, forget about what next two quarters e looks like, let's think about next year. >> you have a list of what you call grannie shots. >> yes >> low risk, high reward names, and they're all, like, very

liquid, google, netflix, tesla, what else? >> garmin. >> roku. >> what do they have in common >> initially powered by our gqm model, a factor-based fundamental model and working really well, managed by our quantity guy our clients are wanting to use longer time frames, thematic investing, whether it is millennials or ai robotics, these are sort of things you can bet 24 months adds to positions and that's how people are going to generate alpha. that's what the grannie shot is. >> it is pulling you into the direction where the market seems to be, which is growth stocks, right? some reliable long-term earnings streams in the absence of certainty about exactly when we have this cycle inflect. is that your call, we're back to that kind of 2017 market, for example, where it was faang-ish. >> i think the market until august of last year was normal

and got fed driven bear market essentially. one thing i keep hearing people say is we're late cycle in the u.s. if you lock at gross fixed investment to gdp, the u.s. ranks 159th in the world today the same level as afghanistan and venezuela. we have never been late cycle when our spending is this low. europe, japan, are about 500 basis points higher. that's a trillion dollars of capex in the u.s. coming i think we're midcycle in the u.s. >> i don't mean to tease you, but bitcoin. >> i think bitcoin is a very resilient and it is becoming an asset class. had a really rough fourth quarter like the risk markets did. i think this is the start of a bull market this year. i think it is bouncing off its 200 week it has done that four times. it recovered from every 80% drawdown and that means new highs maybe in the next 24 months people should keep the faith.

>> all right >> tom, thanks so much. >> thank you >> tom lee >> when we come back this morning, the ceo of adobe, weaker than expected guidance overshadowing the earnings beat. stocks down on the premarket though futures looking pretty good here, the s&p is on pace for the sixth week, up in seven. don't go away. alpha seems more elusive today. is it because so many go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. partner with pgim. the global investment management businesses of prudential financial, inc.

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nks bre . breaking news on industrial production to rick santelli. >> a number somewhat in the area of 1%. we did gain a couple of tenths last month from minus .6 to minus .4 a bit of a miss there. maybe the more important number, utilization. utilization at 78.2, also a disappointment we did gain a tenth last look from 78.2 to 78.3.

that made it subsequentily a bit lower. what is really fascinating is we finished up last year, november's read was the best since december of 2014 so another number like empire where it is not bad, but doesn't look as good as it did and that's evident, we're seeing more deterioration now, under 2.60 in ten-year note yields and our yield closed back to january 2018. this is around 255 so within striking distance. carl, back to you. >> rick, thank you very much a lot of data on the way as well including preliminary march consumer sentiment and jolts in about 45 minutes as well. >> the numbers are coming in at least this morning and we have seen this, a little bit light on the economy. i think the question is a, how much is factored into the market given the slump we saw at the end of the year and how much do we need the dust to clear after shutdown and some of the seasonal issues, q1 we know will

be weak. first quarter is always weak we had the longest shutdown in history. >> also a bit of a contrast between manufacturing and industrial parts of the economy which have been consistently soft and services and general consumer behavior that looks better i think that's been tiding us over the yields have gone down even a little bit further. >> ten-year, 2.59 now. the big board and nasdaq will observe a moment of silence for the new zealand shooting victims in a moment. if you have a garden you know, weeds are lowdown little scoundrels. draw the line with roundup. the sure shot wand extends with a protective shield to target weeds precisely and kill them right down to the root. roundup brand.

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the nyse and nasdaq about to observe a moment of silence remembering the victims of the terror attacks in the new

zealand mosques. if you haven't heard already, it is being called unprecedented in some ways. 49 killed. at least 20 seriously injured in the new zealand city of christchurch a man in his late 20s charged with murder. here is that moment of silence.

♪ ♪ ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals.

u.s. bank -- the power of possible. you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in about six minutes on a busy friday quad witching as we talked about already. we talked about tesla's announcement last night. and maybe put boeing into some perspective as they do now halt deliveries, though they maintain production and some discussion today about really where are they going to put the planes since they can't fly them anywhere parking space is kind of limited as malaysian reportedly considering some -- >> it is interesting the story with boeing has been that they're running flat out, it is the year's long order book and now they have to race to

meet it. i think the street is going to try to reassess. we can figure out financial impacts, knowing what we know now, not braced for another incident i wonder if the stock will settle down a little bit here, looking open flat. >> even with that question about liability and what they're on the hook for with airlines and the victims. >> i think at this point we can't handicap how the investigation is going to go it is still obviously been a very strong stock even after this loss. a lot of people have profit in it, going back to two years ago, i'd say. i don't think it is -- the whole story. >> it is down 12% since friday before the news of the ethiopia air crash, about 27.5 billion loss of market cap. >> yesterday, had some comments from a top pentagon official about the tanker and the degree to which the pentagon is going to reaffirm their trust and quality control. we know what dreamliner went through. now this it has been resilient in the face of some quality control issues over the last two or

three years. >> i say certainly the way the market views is not lost that benefit of the doubt these are the questions now. >> by the way, citi does cut numbers on southwest, arguing that essentially you got some carriers that are 737 heavy, that are now facing a shortage of new aircraft with essentially zero notice. >> southwest has 34 of the 72 u.s.-based max planes in operation. i guess it is the most exposed though other airlines like united and american have had to deal with this there were some reports of cancellations and shifting of routes yesterday but overall, you know, we talked to a lot of experts in the field including the former northwest ceo yesterday who said the airlines can manage this it is not that significant, a portion of the fleet, and they're used to disruptions like this >> as for tech earnings, i would say net negative as oracle disappoints on the top line, adobe obviously had issues as well facebook today, chris cox

departure, chief product officer, 13-year vet with the company, he ran hr, he ran the core app, he ran the family of apps, the argument is maybe this shift of privacy is for real if he's leaving. >> the gut reaction for investors was to sell on the news because when you have the guy who is in charge of product, one of the most important executives there, there are questions as to why he's leaving after a decade and as i mentioned this morning on morning joe, last year called cox facebook's most important not named mark zuckerberg, rumors if he was a ceo successor. you wonder what is happening inside the company as it tries to pivot and deal with many more negative headlines under criminal investigation by prosecutors according to the new york times in the eastern district of new york on data sharing practices. and then, of course, this very dark angle of the terrible attack in new zealand where some of it was actually streamed on social media platforms like

facebook a reminder that they still have a lot of work to do to combat this violence and vitriol on their platforms. >> nothing changes the sense in all that this is a company playing defense and will probably be playing defense for a long time. the executive departures, that raises the question, is there buy-in at the upper ranks of the company to whatever this remaking process is going to be for zuckerberg it is interesting. with it all, i think in the last year or so, we have gotten used to this idea it is a company under siege and the platform itself performs really well for what it is designed to, which is deliver results to advertisers for everything else, it is all in question. >> as far as the other tech names you mentioned, the initial reaction we were watching on closing bell yesterday, to adobe and oracle, both positive and then it looked like a little bit of turn around, especially for oracle got a downgrade this morning from bmo some questions on the outlooks

guidance on companies, a bit disappointing. >> oracle it had a very good run, it was trading near its highs. i think there will be skepticism if they're downgrading their outlook, their guidance because nobody is quite convinced that they have the momentum and the fast growing areas so with adobe, it is a profit taking move. this company is really expensive. one of the anointed darlings of software so we'll see if it settles out after this little dip we're headed for this morning. >> oracle, it did beat on the top and bottom line, current quarter revenue guidance bmo in their note today cuts to market perform and says -- actually couple of notes argued this, that buybacks are not going to get you very far for long and bmo cites ibm as an example of how buybacks and div didends don't make up for topline growth. >> they won't make up for outright declines in sales cisco, that's been a strong stock. >> did get a dividend hike out

of oracle earlier this morning as well. let's get to the opening bell and the s&p 500. the cnbc real time exchange, the big board, strine acquisition, and at nasdaq, the atlantic conference we were talking about bmo, replacing their top pick from netflix to -- sorry, from amazon to netflix in large part because of regulatory risk >> just enough doubt in there as to whether it is going to be an overhang on amazon this idea of breaking up the companies or trying to somehow limit their power. it still seems like net positive on both stocks, but netflix has been that one stock that really does not come under scrutiny for

these reasons, right what is interesting is last year, if you remember, faang diverged and it was facebook and amazon vastly outperformed facebook -- i'm sorry, netflix and amazon that fastly outperformed facebook and google and apple for a while. it was because they're not doing the advertising game, don't really is a lot of the sort of privacy concerns, people buy the product, they know they buy the product and it is a direct transparent transaction. amazon is -- just because it is so big and powerful, getting slid over into the shadow. >> the note was a good read. and they said that one of the most popular questions that they're getting from clients and investors now is elizabeth warren's proposal to break up big tech on that, they say they continue to wonder and seek out how the legal path might progress to actually do this but in the short-term, part of the reason they're moving to netflix over amazon in the large cap pecking order. as far as the early action,

consumer discretionary is the leading group in the market. you can thank ulta beauty for that the stock continues to be a rocket ship and the results back up, the strength in the stock. the stock had run 55% into earnings, gaining another 5% just better than your average retail numbers across the board. 9.4% comps, very strong, more than 9% sales growth, margins improved on this story a lot of the analysts out this morning saying guidance looks conservative the ceo is on "squawk box" earlier. to me, this is a story of picking the right brands and secular area of strength, within broader retail, which is a little more bumpy. kylie cosmetics, 40%, according to the company, of the comp store sales growth were new brands coming in that's one of them morph is another new brand that worked out really well. >> citi takes the target to 390.

>> strong category it is still underpin traited in terms of retail locations so they can still grow the store base and they're stealing a lot of market share from department zblorz a stores. >> and getting younger consumers. santoli knows ulta >> i know the insatiable appetite of younger teen girls for makeup content and constantly trying new things i do have firsthand experience on that. >> ulta and vans very strong. >> the only name better, a race between ulta and broadcom for the top s&p name broadcom questions estimates by 32 cents revenue was below on china slowdown but folks are using it as an argument that maybe the cycle has in fact bottomed chips up across the board today. western dig, amd and so forth.

>> the cheap one too that and qualcomm are the value options here, they're not the g assumptions about the cycle to make the case of why it goes higher upgrades, at&t, getting this call as an upgrade at raymond james to outperform, saying, what we have known for a long time, a whole lot cheaper than verizon based on pe, dividend yield, cash flow you had to make the case they were going to get debt down, handle the balance sheet and rationalize the media business and have strategy on that. stock up 1% now. still skepticism implicit in a dividend yield that it will come together. >> said that with the caveat they expect sub losses at directv to continue. 6.7 on the yield if i had to go back and make sure they were right and they

are. >> it is absolutely right. and they're focused on maintaining it obviously at the same time trying to pay down debt from the warner acquisition. >> overall, though, a pretty strong open. you got most s&p groups positive i mentioned consumer, technology doing well that's the best performing group on the week so far on the week where all of the major industry groups actually within the s&p are higher, tech, energy, health care, real estate banks had a good week as well despite what we have seen in yields with the ten-year yield falling again. >> yesterday more treading water, we'll see where we go from here. >> you mentioned privacy, a few moments ago. apple did unveil this ad that uses privacy sort of as a wedge against its rivals at the same time, they sort of snapped back at spotify, saying that spotify would not be in the business they're in without the app store ecosystem. a look at the ad that was dropped yesterday. a little more rambunctious.

>> little more of an edge to it. maybe a window on how they would portray this whole debate if it went beyond spotify. didn't seem like the spotify suit had any effect. apple was strong through it, obviously a localized case but stock up another third of a percent today. just seems like it is part of that, well, we got to buy something trade and apple looks cheap and well below the highs >> hasn't been above the 200 day since november and about 6 bucks to go. >> a lot of the big bellwether stocks have looked, which is you can buy them in here, but still a lot to prove before we say we're back to that kind of a market that we were enjoying last summer. >> we mentioned that ad, if you haven't seen it, a brief taste of what apple put on the air yesterday. >> . ♪

♪ >> let me see that ♪ >> by the way, the march 25th is a week from monday we'll watch for streaming announcements and they did announce a date for the developers conference later in the summer, which is usually a big story too. >> true. >> just to point out, ge is up again. adding to the gains. actually makes it one of the s&p 500's best performers year to date ge stock up 42%. and despite some warnings about the financials that we got yesterday, investors took it as

good news. they felt like they were getting transparency according to all the notes. and also larry culp talked to jim cramer on mad money about some of the issues and about what g ex-we was trying to say. >> we have a host of issues, no shortage of opportunities, but a number of problems we need to work through this year what reset means, jim, this is the year we share with the world what the issues are and the plan that we talked through today is to how we're going to address them it is going to take some time and we won't be finished come new year's eve, but if you give us a little bit of time, we'll, i think, make a lot of progress. >> i think it is interesting that investors are buying into the message. and the asset sales and the dividend cut and the fact that ge comes so far this year. it still lost two-thirds of its value over the last few years. but, you know, you bring in an outsider, first time ge has done that in more than 100 years and he's making moves, he's speaking

out. and investors are buying it. >> i think part of what he's promising is no more surprises as we go through this tough year, you'll hear about it we're going to benchmark ourselves to what we say we're going to do. but, i don't know that it is really overpromising, it is a messy situation to dig out a lot of these multiple business lines and balance sheet issues so, you know, where the stock is at 10.25, is it pricing in a lot because it is up 6 or already depressed because it is down from 20. >> we began the discussion talking about yields after industrial production disappointed, empire disappointed earlier in the morning. ten-year, 3.58 takes you back to january 4th, close to the lows of the year. even as the vix has a 12 handle and for that, you got to go back to october >> yes and bond volatility is also been very low so it seems as if everything is

trading on this premise that we have a transparent fed, inflation is not going to surprise, and a slow but still positively growing economy that's pacifbasically your thren explanation for why the markets are steady. >> or are we at a point where bad news on the economy while bonds rally off of that is a positive on the fed trajectory there has been a celebration of the fact that the fed paused, but it is still tightening is the fed going to have to make a move not just not to hike interest rates this year, but to cut rates? to go back to -- ecb is already there. >> it is not clear to me that the market in its head is saying cutting rates this year would be bullish because of what we have to see on the way to that in terms of the economy but there is a bit of a gulf going into a meeting next week between the stated policy of still consensus two rate cuts, remember, for 2019. >> though wall street firms day

by day are taken down -- >> two rate cuts >> hikes. >> this year, on paper, in terms of -- >> why jpmorgan yesterday throwing in the towel on their forecast. >> right >> got some notes. >> there will be news one way or the other whether it stays that way next week with the meeting or it doesn't. >> by the way, the marx ket is zero hikes >> with that, intel leading the dow, up 22 points. to bob pisani. good morning, bob. >> good morning, guys. we are trying to breakthrough decisively above 2800, 2813, that was the old lows that we -- the old highs we saw back in november look at the sectors. nice leadership from technology doing well, semiconductors up for the week, emerging markets having a good week lagging this week, industrials, part of that is boeing and the problem, and energy another market leadership group also a little bit lagging on the week and today overall. i want to show you the s&p 500,

remember, this whole endless game about trying to get over 2800, five times we have failed here and we're just sitting there right now, if we can breakthrough, the old november 7th high was 2813. we're sitting just above that right now. the old historic high back in september was 2930 so we are even where we are now, we are less than 4% from an historic high in the s&p 500 you want to get above 2815, right where we are now, and i think that would be a rather significant breakout as for the earnings, very interested in today's numbers, because these are the first companies that have what you would call a february ending month. so they're sort of in first quarter, even if they're not always necessarily first quarter numbers. so broadcom here, we talked about a slowdown in china impacting them, they acknowledge that they maintain their full year guidance that's what the street wants to see. maintain or increase full year guidance oracle beat, they raised the dividend, second straight quarter revenue declines, guidance a little disappointing

on the revenue side, down. adobe, same thing, little bright light on the revenue there this is a little bit of a concern. the game here is stop the slide in earnings for the first quarter, second quarter, avoid so-called earnings recession, two consecutive quarters this is the early guidance from very important companies with the february end i would say this is very mixed today overall. still haven't resolved whether we have a negative quarter of earnings for the s&p 500 in the first quarter. this is the quadruple witching day, significant amount of volume right at the open and we'll see even more at the close. i think the important thing is we also are rebalancing for the s&p 500 overall. so many companies are buying back stock actively, reducing shares outstanding, here is some really big ones, they have their ratings reduced in the s&p 500 at the close today because they have been aggressively buying back stock pfizer is a huge buyback monster. they have reduced their shares outstanding by 30% in the last

seven or eight years wells fargo another one. broadcom, citigroup, they have share count reductions at the close. finally just want to note, big study out by s&p this week on how managers, active fund managers do against their -- they have been doing this for 16 years and the numbers indicate it is very difficult, almost impossible to beat the indexes over long periods of time. these are large cap fund managers in this particular case over one year, 64% did not beat the s&p 500. but go over long-term periods, ten years and the numbers are really big 85% do not beat on a ten year basis. 91% don't beat on a 15-year basis and the key here is it doesn't matter what you're looking at fixed income, small cap, big cap, midcap, you go over long periods, you get fund managers who beat one, two, three years long-term, almost nobody does. look, midcap, 88%, do not beat their bogeys after ten years 85% in small cap, the bottom

line is, and this adjusts for survivorship bias where a lot of funds that don't do well, they just throw them out. and this is just for all of that bottom line is, very, very difficult to beat the bogeys over long periods of time. this was jack vogel's central insight at vanguard. vanguard continues to have excellent active management firms but noted you have difficulty outperforming, also noted that those who do outperform often the fees they charge destroy the alpha that they create. vogel's advice is set for most people, staying at low cost index funds are the key way to go and if you're going to have an active management, keep it low cost as well that's vanguard's philosophy that they held to even now after jack vogel's passing right now, we're just off the highs for the day, sarah, up 25 points on the dow. >> bob, thank you. to the bond pits now, rick santelli at the cme group in

chicago. >> we have gone guns hot here on the long end of the treasury curve. intraday of 10s, see how it dipped down that way the fact we're under the 260 isn't necessarily magical. here is the magical part look at the two-week chart, the way it has been melting year to date that first spike there on january 3rd, that was 2.55 that's why this move is important. we're only several basis points away open it up farther back to january of 2018, and you can see that that's where we comp into let's isolate that particular date and look around the globe, just to get a glimpse of how other sovereigns in the ten-year maturity are doing gilts, news about brexit, more than friendly recently for the pound. it hasn't really hurt the ftse 100, counterintuitive as it may be on interest rates it hasn't been great. or has it? exactly the same pattern as our treasuries forgetting the scale for a

minute contrast that with bunds from the same period and it certainly looks different. euro dollar, of course, had to make up that deliverance in the interest rate adjustment, it has been an ugly year plus for these interest rates in europe we won't even show japan, the pattern is like a pancake, just low and they don't move at all finally, let's switch gears to foreign exchange we all know china's trade deal is big let's look at the dollar versus the yuan, year to date it is interesting here, this recent little area, the last couple of weeks, it is some of the first sideways trade that we have seen in this relationship and i think that's important to note carl, back to you. >> rick santelli, thank you very much still to come this morning, we're going to discuss the business of cannabis with the former speaker of the house, john boehner and ceo of acreage holdings, kevin murphy, that's later this morning dow with moderate gains here on the witching friday. don't go away.

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the tech sector on track for its best week of the year. let's go to bertha coombs at the

nasdaq good morning, bertha. >> good morning, sara, the nasdaq on track for its best week of the year, up for the 11th tomb in the last 12 weeks only down one week all quarter, rocketing higher, and tech has certainly played a big part of that take a look at what tech has done this week, really strong for the xlk. a lot of folks who follow that index for large-cap tech, it's up 4% this week. that's helping the large caps on the nasdaq for the year, it's up 17%. chip stocks have really been the standout here. chips up 22% year to date with the better than 5% gain this week, and biotech has had a rockier time of it compared to tech nonetheless, but still up very strong this week as well. up 18% year to date. chips have definitely been the winners, that blowout report from broadcom helping chips, broadcom among the best

performers on the week an nvidia is the best chip performer in the nasdaq 100 apple's rebounded this week certainly helping as well a number of positive analyst comments coming out about apple. some price targets moving back up above that $200 level cowan a notable one, apple having one of the best weeks it's seen so far facebook is the big loser among the momentum names and the faang names. it's down today and down for the week with the departure of two key executives, the head of whatsapp and the head of the facebook feed development, the look of facebook as well and finally taking a look at ulta, sara, noting they have had a fantastic run going into beauty and today looks as beautiful asone of the selfie filters, really a nice gain for ulta back to you. >> all right bertha, thank you very much, bertha coombs.

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good morning i'm carl quintanilla at post nine of the new york stock exchange david faber has the morning off. market hanging in there. just north of the flat line today. dow up some 15 points and s&p up 8 as we're seeing decent results in semiconductors for sure despite some disappointments in technology overnight. >> our road map for the hour will start with, quote, concrete progress the u.s. and china are hammering out the text of a possible deal. we've got the latest death tails pollution, welcoming the "y." elon musk unveiling tesla's latest model what it means for investors, the stock and the future of the company. >> and all in on the cannabis industry why former house industry john boehner is making a big play right now in pot he'll join us with the ceo of

cannabis company acreage holdings >> been a busy morning for data. if you missed it already, empire manufacturing did mess, up 37 is the worst in about almost two years and industrial production also was a bit of a disappointment up a tenth, looking for .3 and we'll get more data in a few seconds let's get to rick santelli for that. >> reporter: let's see what january jolts look like, a little late so we'll jump in with the university of michigan. march preliminary numbers, so it will get tossed out at the end when we get the final. 97.8 97.8, that's definitely a good number, carl we were looking for a number closer to 95 sequentially, of course, since this is march, the february final read was 93.8, so a nice jump there let's go through the internals very quickly, shall we the one-year inflation moved down from 2.6 to 2.4 now, that's fascinating, and when you look at the five ten-year it did the exact

opposite, it moved up from 2.3 to 2.5 on the shorter outlook it's down .2 and on the longer outlook it's actually up .2 and now here we go with jolts, 7.5 million jobs guess what, another record this series started in december of 2000, and for the last several months it just keeps building with a 7 million handle this is truly an amazing data series just think about it this way we never had a 7 million handle outside of the last few reerksds and at the end of last year, we only had a handful of 6 million handles and it closed at 5.6 million so this thing, you know, really continues to barrel ahead and the end of last year, of course, i'm talking '17 because the way we look at this january number in the rear view mirror, it's one of the stellar reports. now, does it mean anything for traders? i talked to traders all the time this number gives them a feeling there's underlying strength, and there's a lot more detail outside of just openings, but

it's hard for them to get the gps on how to apply this, especially considering the openings are more than the people available sara, back to you. >> but overall good news for america, record job openings rick, thank you. >> and we'll leave it at that, that's true. >> yes investors inside the data are monitoring progress on a path to a trade deal with china. a chinese news agency reporting that the u.s. and china have made, quote, concrete progress on the text of the agreement kayla tausche joins us with the latest good morning, kay [ laughter ] >> reporter: good morning. the treasury secretary cited progress in talks as well. the u.s. and china have held negotiating conference calls on tuesday, wednesday and thursday of this week, and last night at a reception here at the white house for st. patrick's day, president trump says he expects the conclusion one way or another by mid-april >> the china deal is going along incredibly well. we'll see what happens, but we're very deep and where is rob lighthizer, is he still around

i think he's just a big negotiating machine. i can't imagine -- i can't imagine that he's even here, but, bob, if you are here, you're doing a great job we'll have news on china probably one way or the other, we'll know over the next three to four weeks. >> and the expectation is that if there were a deal president trump and president xi would meet to finalize and sign that deal, so the question that the market has been asking is when will that meeting take place, if it takes place yesterday secretary mnuchin said there will not be a meeting in march at mar-a-lago as had been previously in the works, and we've learned from people who have been briefed on these trade talks that china is now pushing for an official state visit to accompany any sort of announcement if president xi has to make a stand-alone trip he was last received by a formal state visit with president obama, neo performed, mark zuckerberg, tim cook, he visited

seatl seattle and china wants the red carpet if he makes a stand-alone trip he could tack on that travel to existing travel to europe but with the date getting pushed out it's unclear when that will land we'll see how the talks progress and what more news we get from both sides and what that means for investors. guys >> kayla, also china's national legislature passed that foreign investment law by a wide margin meant to make a friendlier business environment for foreign companies. does it go far enough to appease the u.s. and u.s. negotiators in these trade talks? >> well, the language in that law is very broad, sara, and officials here in the u.s. see it as a symbolic gesture, a gesture of good faith that china is willing to try to change some of the dialogue around the way that it's been doing business for decades, ever since western companies have been able to do business there there's a question of how exactly that law will get enforced and whether it really

has any teeth. it was expected to pass. the national people's congress is essentially just a rubber stamp legislature. u.s. officials have been pointing to that as a positive sign, but companies who do business say it's unclear how exactly that will play out on the ground >> kayla tausche, thank you. for more on how the markets are reacting to all of these trade headlines, the latest data, let's bring in adviser investment ceo jim lowell and u.s. vice president of wealth management jim lacamp. jim, you said you were watching the 2815 level on the s&p. we're trading exactly at that level right now. why is it significant? >> because, first of all, in october, november and december, we stalled at that level so technicians are going to be looking at this level. what they are going to see, what they are going to look for is a close over that level. we have pushed -- a couple of days ago we pushed through that level, but we could not close above that level, so the longer

that level provides resistance, the more meaningful it becomes, now, today is also, sara, the quadruple witching day, and if you look at what happened to the market after quadruple witching day in september and in december, the market had a meaningful selloff after both of those days, so that's another pothole, land mine, speed bump that we're looking at. finally we're going to have is sheer buyback blackout period in front of us, and that's provided some challenges for the market the last two quarters as well, so in the very short term we've got some challenges. we've got some things that the market is going to have to deal with i think where the market gets the catalyst that it wants is when earnings period hits we should be okay, because we've lowered the bar so far that by the time these earnings come out we should be seeing a positive market response. history shows that if you raise the bar too much and the quarter comes out, the market doesn't respond very well, but if you lower the bar a lot, then had

the market responds pretty well once those earnings come out, so i think in the very short term we've got some challenges, but beyond that i think the market is going to be okay. inflation low and interest rates low and corporations profitable. >> i mean, jim lowell, we have -- we we are wrapping up another very strong week for the markets. the tech trade is back, and that appears to be one of the big debates as to whether it can continue whether earnings expectations have been lowered enough for the market to beat do you agree with jim lacamp that that's true >> well, it may or may not be true we'll see what earnings tell us. we definitely are core believers in fundamentals driving the market, and earnings is a key driver of them we think the tech sector clearly has room to run, not selectively so, maybe not as a whole basket of every technology name, and not just domestically but globally as well we continue to think that it would be a fool's error to bet against a fully employed u.s. consumer and our fed chair powell continues to weigh in and

effectively assuage concerns about any risk of near-term recession, any risk to our slow growth, not no-growth economy outside of event-driven news and their potential impacts, so we think this is a time where on market dips you want to add to your best ideas. you want to bolster your long-term bets, as opposed to looking for ways to exit this particular marketplace unless and until we see the fundamentals erode, interest rates, earnings, and economic data, we continue to think buying on the dip will make sense. >> jim lacamp, a number of issues are going to be with us for longer than maybe some investors thought. obviously brexit is facing more delays the president himself says probably we're facing a delay in getting some kind of china trade resolution north korea, also looks to be pushed back. what are the implications for the year at leasting are those overhangs with us for longer than we thought in. >> okay, here's the thing. that's a great question. here's the thing though. we were -- in the fall we were threatening to raise these tariffs from 10% to 25%.

now what we're saying is we're not only going to raise them to 25%, if we get a deal they are going to go away that puts businesses in a position to start making plans because now they know they are either going to be 10% or they are going to be 0. that's enough information for me to deal with that's a devil i know versus ones that i don't, so i -- i think the further we go on and the more it looks like we are going to get a deal, the more the business will start re-engineering growth, property plan, equipment, hiring, all of these things in terms of the brexit, you're not really seeing much of a market reaction. we had the no vote the market didn't react too much i don't think it's going to be a big driver for american stocks, and the bottom line is we've had so many people, carl and sara, calling for a recession next year if we get a recession next year, this is going to be the most perfectly predicted and well advertised recession in the history of the united states, so i don't think we're going to get one. the economy is slowing a bit,

but it should start to regain its traction as the concerns about these china trade issues start to ameliorate. >> i'm not sure we know for sure, jim lacamp, that the tariffs are going to disappear some people are still talking about whether some would remain in place so that the u.s. can have leverage over china to make sure they enforce some of these reforms. >> yeah, but 10% to 0 is a lot more information to deal with than 10% and we might go to 25 and we might put it on every product out there. at least we're setting a cap on it, and the reality is at 10% it hasn't disrupted american business as much as the uncertainty has disrupted american business. remember, back in the fall a lot of businesses front ran and they pre-ordered things thinking, my gosh, we might go to 10, we might go to 25 and then the front running left a hole so we saw the data start to -- start to soften after that

now i think you're smoothing things out you're either going to have 10% or 0 again, i think that's enough information for businesses to feel confident that they can start making plans again >> finally, jim lowell, on the data today, seems to be a divergence as far as the u.s. manufacturing sector and santoli mentioned this earlier the u.s. consumer holding none good shape. a record number of job openings and yet, industrial production, new york fed manufacturing, pretty disappointing what do you make of that divergence and where it takes us for growth this year >> month-to-month data is always going to be volume time. we think the manufacturing sector is actually strong, and the numbers bear it out even though today's number was marginally disappointing we think the focus ought to be on the driver of our economy, u.s. consumer. today's jolt report, job openings clearly indicative of a consumer that's very confident in near-term economic conditions, so confident they are leaving their current jobs to find a more interesting and/or better paying job in

droves we take that as a bullish indicator on the driving strength of our economy and for that matter a driver of the global economy as well. >> thank you both. >> thank you. when we come back, elon musk unveiling the "y." will it its new sufficient model lure consumers and give the stock a boost? not happening today. we're going to talk about that boehner's pot play the former house speaker will join us with the ceo of cannabis company acreage holdings the dow has gone red to the tune of 20 points a lot of that is boeing's fault which is amounting to a 30-point drag don't go away.

the "y" has arrived. elon musk taking center stage last night to unveil tesla's new model. our phil lebeau joins us this morning with more. hey, phil. >> reporter: hey, carl this is a stock that's under pressure today in large part because i think most analysts who are at the event or who watched the event, well, they were kind of underwhelmed by what they say. elon musk brought the "y" on stage along with the other existing vehicles in the tesla lineup and the "y" if you look at t.hard to see, the lighting wasn't the best. it will be built in the u.s. and china. looks a lot like the model 3 only in a small suv version with a range of 230 to 300 models now it's not going to be on the market for some time, and there will be more competition once it does come to starting deliveries that will be in the fall of next year the long-range version, and the

performance versions, those versions start at 47 and go up to $60,000 the mass market, the lower priced standard version, that will not go on sale until the spring of 2029 starting at $39,000, and while a lot of the discussion by elon musk last night was about the vehicletha he was showing, he also reflected upon the challenges he's been facing >> 2018 was probably -- felt like aging five years in one, honestly it was really intense so -- thank you for supporting tesla through this difficult period. thank you. [ applause ] >> reporter: and it's another tough day for elon musk and tesla shareholders, the stock under pressure again guys, it's trading at levels we've not seen since last october. that's when he reached at least an initial agreement with the sec regarding the charges that they were bringing against him

that's now all flared up again with them filing contempt of court charges, and in regards to why this was underwhelming, the one thing we're hearing from the analyst when we look at the notes, it's a commonality of parts this, model "y" has 75% of the same parts in content as the model 3, so there's a concern that it's going to be cannibalizing model 3 sales. >> phil, absolutely. that's a perfect segue to our next guest a new report out of bernstein today saying, quote, we remain concerned about the manufacturingline. let's bring in the author of that note, bernstein senior senior analyst tony saganaki who joins us on the phone. thanks for joining us. >> thanks for having me. >> phil is right, on an interim basis, not on a closing basis, at 227 in a while. are you still comfortable with 325? >> yes, we are the market is very nervous about a demand for the model 3 and recent actions that tesla has

taken, lowering the price and offering the $35,000 version and then eliminating the stores only to reinstate them shortly thereafter so the market is concerned about demand levels, and last night didn't do anything to alleviate that the model "y" is not coming for a while. it's been announced quite early so it could can innibalize thin, and it didn't provide any assurances around orderer trends for the model 3 right now and, hence, you're seeing short-term pressure on the stock. >> is it just worries, tony about the model 3 and the new model, or worried about demand for all tesla vehicles right now? has there really been a significant softening? >> certainly in the first couple months of the year there has been significant softening, and that's why i think we saw tesla reduce prices, and that was not only the model 3 but also model

"s" and "x," and obviously when you look -- when you reduce prices that makes it much more difficult to make money, and, therefore, the concerns around profitability and cash flow for tesla raise their heads again. the electric vehicle market continues to grow very strongly. there were 2 million units up about 60% or 70% globally last year tesla gained share, had about 14% market share of that electric vehicle market last year and so we think the evolution of electric vehicles is proceeding as planned the issue is, you know, they are still relatively expensive, and the model "s" and "x" are $100,000 and the model 3 prior to the price cuts were closer to $50,000, and so to ensure you have continued demand, you're going to need to lower prices, and tesla's got to find the

right balance between demand and profitability, and it appears to be struggling with that and the street is very nervous about that. >> right given what we know about tesla and how important scale is to them, what do you tell clients who ask, look, volkswagen says they are going to unleash 990 new evs over the next several years and the standard "y" isn't coming until 2021. when does competition really raise its head >> you know, i think competition really in earnest for the model 3 and model "y" begins in about 2021 that said, you know, competition is necessary to grow this market the electric vehicle market, as i mentioned, is 2 million units. we think it could be 60 million or 770 milli0 million units.

that is not going to happen with three ev markers so even if tesla shares go from 3% to 4% or 5% they will sell several million cars years from now so i don't view competition necessarily -- this isn't a zero sum game the market for evs is growing at 50% plus for year, and you're going to need more offerings at different price points for that market to evolve in the way that i think it will over time. >> so, toni, how do they get out of this mess they have appointed new executives we've got the new cfo. i mean, is there stability happening inside the company that gifts you confidence that they can sort of turn this trend around >> you know, to me i think the company needs to be clearer about what its aspirations are financially because nine months ago and a year ago it was all about producing the model 3 with little regard for profitability. in about the middle of last year, elon musk seemed to get

exasperated with wall street and said, you know, we're not going to raise any more capital. we're going to make money every quarter. we're going to generate cash every quarter, and that's very difficult for a growth company growing at 50% year. that's capital intensive to do, and tesla need to either say we're going to grow more slowly hand try and make money along the way, or it's going to have to say, look, we're going to be like a an netflix or amazon and really press to grow right now as fast as we can because we want to build our customer base, and we know once we have customers they are very loyal and they recommend the car, but they are trying to do both right now which is be profitable and grow quickly, and that's probably not the right solution. so when you ask me about management, for me one of the most important things it needs to figure out, and it can't keep vacillating on the whims of elon musk, it needs to figure out how

it's going to manage itself going forward. does it really want to grow and, therefore, will it go back and raise capital to be able to do that aggressively, or is it going to scale back its growth aspirations, grow more moderately and try and do so profitably that's the core issue in my mind. >> what would be your preference then would you prefer them to say, look, we're going to push back profitability benchmarks, and we're going to raise a ton of money and grow quickly, or would you rather them promise more positive cash flow profits quarter after quarter? >> i think it would be the former i mean, they have showed in the second half of last year, they earned $4 a share. sheshowed they can be they showed they can be a profitable company i think they do have a unique brand and unique products in the marketplace, and so it -- you know, technology investors historically have been very comfortable with companies pushing for growth at the extension of near term profitability. the thing about electric vehicles is battery costs fall,

you know, 10% per year you have a $9,000 battery in that car, that's going to go down 10% per year and there will be opportunities to become more profitable over time, and so, you know, it's not a binary decision, but right now they are really more focused on -- on profitability rp and trying to grow which is very difficult, and i -- i would probably be more forgiving on the profitability side if i could get more comfortable about growth and then a longer term plan >> great analysis, toni. good note today and appreciate the time we'll see you soon. >> thanks for having me. >> toni sacconaghi of bernstein. >> when we come back, big moves in ulta, oracle and adobe. we'll tell you why plus, getting a check on major averages the dow is lower it's being dragged down by boeing s&p and nasdaq still higher. s&p tracking for its best week of the last eight. "sawonhetrt"ilbe right back wl

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taking a look at the defense and aerospace group, ticker ita, on pace for its ninth negative session in the last ten and on track for its third straight negative week, first time we've seen that since june of last year the etf down around 5% in the last month alone the reason for the recent weakness here, the group's biggest holdings boeing, of course, makes up more than 11% of the group down again this morning. stocks down around 12% over the last week of trading as boeing grapples with the grounding of its 737 max jets carl, gives you a taste of the effect, big effect boeing has on certain etfs. >> so many ancillary industries affected a breakdown of some of some of this morning's big moves, ulta beauty beating on both the top and bottom line. comp sales up 9.5 on an increase in traffic all very impressive, and the shares up obviously almost 10 is about. oracle though moving in the opposite direction after forecasting current quarter revenue below estimates, blaming

the strength of the dollar for one thing. it did, however, both on both the top and bottom lines shares down a little more than 1% and adobe also falling, weaker than expected guidance overshadowing the earnings beat. the owners will join us exclusively in the next hour on "squawk alley. let's get over to kate rogers and get a news update. >> hey, carl here's your update at this hour. tragedy unfolding overnight in new zealand. at least 49 people have died after shootings at two mosques in the city of christ. officials say one man in his last 20s has been charged with murder the prime minister called friday one of new zealand's darkest days boeing announcing it is suspending deliveries of its 737 max aircraft, but will continue to build them at current rate of 52 per month those planes are expected to be grounded for weeks, pending an investigation. separately the american airlines pilots union told its members not to fly to venezuela. this comes after the state department issued a warning

about the country and suspended operations at the u.s. embassy in caracas american is the last major u.s. airline to offer flights into venezuela. and north korea is considering suspending talks with the united states and rethinking its ban on missile and nuclear tests unless washington makes concessions that's according to comments this morning from a north korean senior diplomat, and that's our cnbc news update for this hour carl, back over to you >> all right kate, thanks very much. when we come back, the booming business of cannabis you know it already. we'll talk to former house speaker john boehner and the ceo of acreage holdings to discuss that and a lot more. about an hour into the trading session on this quad witching friday, major averages close to the flat line on the dow, down 3, but s&p u8 27. p to81

shares of cannabis company ache rang holdings up 7% after reporting earlier this week that q4 revenue was up 380% full-year revenue up 173%. acreage also making its first move into california by acquiring oakland-based qana, inc. joining us by south by southwest and former speaker john boehner and ceo and founder of acreage kevin murphy good to have you back. >> thank you. >> kevin, a lot has happened since you were first on. california obviously but obviously big investments and various players in the likes of constellation brands have things moved as quickly as you thought they would when we spoke last and things felt a little more speculative? >> things are moving a lot faster than when we had last anticipated and was last on the show i think in 2019 is going to be a year of consolidation.

a lot of mergers are taking place, and we believe and others are starting to believe that bigger is better in this industry having 19 states and being the biggest in the u.s., it's no surprise that many are merging to try to catch us, but we have a number of mergers in the pipeline as well we hope to keep the pace along with everyone else. >> speaker boehner, reading this company's conference call is like getting a briefing state by state of all the different laws, local laws that are being passed and progress being made. how do you see progress happening at a state level, and what can we expect whether it will trickle through to the national level >> well, with 33 states approving the use of cannabis in some form, and of those 33 more and more are beginning to look at the recreational use in their states, it's clear that this market is going to expand, and as it does lawmakers in

washington have to look up and realize that the federal government is way out of step. it's time for the federal government to get out of the way, and so i'm hopeful that congress will soon act >> so we've seen steps towards, that right leader mcconnell supporting cbd. you had beto o'rouke yesterday suggesting that there should be a federal legalization of i think recreational and then maybe make other efforts to make it seem maybe less usable in the sense that we've done to big tobacco over the years, kevin. i wonder what kind of odds would you put on something at the federal level. >> we're very optimistic, and we're doing a lot of work in washington to have the states act pass we believe that the federal government should leave it to the states to govern their states, and this would enable each state that has either a

medical or a recreational state do business and really not be concerned about the feds coming in and interfering i'm optimistic i believe it's going to happen late this year, latest early next year. >> really. speaker boehner, that timeline work for you >> yeah, i think so. you know, listen, i was in the political recommend for 35 years, and -- and when the american people speak, the representatives listen and the american people are speaking, and i think congress is closer and closer to actually moving to get the federal government out of the way >> so kevin, how are you positioned in the u.s. market versus some of your competitors that we talk about on a more regular basis like a canopy or a tilray >> given we are in the u.s. and canopy and tilray are in canada, we see it as a really a two-part

business north america consists of canada and the u.s. we're the largest in the u.s., and we have a very significant and dominant position in the northeast, so with our collection of assets in the northeast and a seismic change this week with new jersey now agreeing to push forward very quickly to adult use, we believe that new york and connecticut and rhode island will follow states like massachusetts and maine. we have, again, the dominant footprint by a multiple in that region that region consists of roughly 43 million people, larger than california, but with a lot less competition given these are limited licenses that are given out with each state, so we couldn't be more optimistic. we've always said the way new jersey goes, the rest of the east coast goes, and we're

seeing that happen first steps last week agreeing to move forward. >> a lot of people expect new york to move the same way. speaker boehner, there's still some out there who look at test cases like oregon and california and say they are not pulling in the tax revenues that the state hoped for. it's hard to wipe out the black market entirely. the cost of production goes down, and it's very easy to get just huge surges in inventory. what do you say to those people? >> well, every state has their own regime for how they legalize the use of cannabis and how they are allowed to sell it in those states, and clearly, if you look at many of the states, they control the number of cultivators that are allowed to operate in their state that limit the number of dispensaries and don't seem to have the kind of problems that they have in california and oregon, and so i would look at the state regime

in terms of how it is functioning. secondly the point of the black market if you -- if states try to overtax this product, they are going to leave the black market wyatt op wide open, and i would also add if the states are going to legalized this use, they should also increase their enforcement on the black market and force the people into -- into the regulated business >> yeah. i was just going to ask, ketch, about california specifically becausea lot of the problems that speaker boehner references relate to california you guys recently announced you were going into that market. the "l.a. times" has a piece out today saying california's cannabis marketplace is a mess so what exactly is going on there, and where do you see opportunity? >> well, in california specifically given it's had a black market and gray market for so long, now that they are regulating that state, it's very, very difficult to put the genie back into the bottle, but they are doing i think a very

good job i think they are doing their best the reason why california is so important to us to be vertically integrated into that state is because we can now grow, process and now distribute in the state, and that really gives us a test case for brands that we look to capitalize on in the rest of the country. so it's really to some degree a petrie dish for us to understand what sells, what doesn't in california and really bring that east california clearly leads from a branding standpoint. it has been a first mover, so where it's more difficult to operate in that state for us specifically we have a real competitive edge there taking the ip and all the things we learned from that state nationwide >> finally, gentlemen, you know, speaker boehner, i know you don't come on to make news on politics but you know we're not

going toless let you leave without tossing a couple of questions. >> really. >> i'm sure something you haven't been asked in austin who get the dem nomination, and what are the president's chances of re-election >> well, on the democrat side you're going to have 20 or 25 candidates, and it's -- it's hard to imagine which of them will actually capture enough people's attention, but it looks pretty is obvious that it's going to be someone that i would describe on the more progressive side you know, what democrats are going through in 2016 and 2018 with the progressive movement, republicans went through in 2010 and 2012 with the tea party movement, and so it's their turn of the barrel and my guess is they will nominate someone that's very far left, and my view out of step with where the american people want to go, and thereby increasing the chances of donald trump being re-elected, assuming that he runs >> so you think this move towards socialism is actually

going to catch fire within the democratic party >> oh, i do. i do it's -- there's clearly a movement within the democrat party that's been growing. i expect it will grow, but i don't think that's where the american people are, and -- and, frankly, i think they will reject it. >> kevin, i wonder, i mean, does acreage and the cannabis industry's interest coincide with any of that progressive agenda, or do you see something similar coming from -- from the right in some way in 2020? >> we're hopeful that we can appeal to both the left and the right. our story has always been generated from this plant has medicinal value so whether you're republican or black or white or socially rich or frankly not terribly well off, everyone has a story around cannabis so we believe it's one of the very few bipartisan issues in washington

conservative republicans would like to implement the states act because they believe as conservative republicans leave it to the states on the left side you have people that are believing that choice should be left in their hands, and they are the best to make that choice, but take all the anecdotal stories about the medicinal value of cannabis, throw it out the window and at least give people a choice because 59% of this country would like to be using cannabis or believe it should be used for medical use, and with those types of numbers we think we appeal to both the right and the left, and from our vantage point it's just a matter of time so we're very optimistic about '19 and believe it takes place early next year. >> believe me, all of our viewers are watching the space unbelievably closely as are we. kevin, speaker boehner, appreciate the time. hope you come back soon. >> thanks for having us.

>> thank you >> as we head to break here, take a look at shares of facebook falling hard after the company's chief product officer and whatsapp division had both announces they are leaving the company. when we return, two of the largest sports apparel companies pushing for equality out at the world cup and what it means for investors. "squawk on the street" will be right back premium entertainment on the infinity screen! people have seven different premium entertainment options to choose from. 'cause people are different. like how you cut the crust off of your sandwiches, and i eat them. and i'm pretty laid back and casual, and you... iron your jeans. i'm actually very happy you noticed that. cool... that's cool. at&t has the only unlimited plan that gives you your choice of top-tier entertainment. buy a new galaxy s10 plus, and get one free. more for your thing. that's our thing.

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there's one group of stocks soaring this year, but some investors might be missing the rally. we'll shrine why on tradingnation.cnbc.com more "squawk on the street" is coming right up.

the college cleating scandal capturing the nation's attention this week. robert frank is back at hq with more on why the college consultant business has been booming. >> reporter: the college cheating scandal has cast a spotlight on one of the fastest growing industries in education, and that's college consultants there are now about 8,000

private educational consultants in the u.s that's quadruple the number of just five years ago. revenues estimated at about $400 million a year if you add in test prep and tutors the numbers are expected to be in the billions. college consultants say william rick singer, the guy at the center of the cheating ring was a bad apple in an otherwise important industry that helps guide students through their college process, and demand is soaring for kids and kids of younger ages. >> every other day i have a second grader or third grader's parent calling me asking what can we do as a second grader to help with the college admissions process and i say there's nothing we can do. the only thing for to you do is that your child do what he wants to do. if he's interested in art, ceramics, painting, music, let your child explore that's passions or talents and then take it from there >> many advisers charge around $15,000 a year while others

charge by the hour some over $1,000 per hour. the most expensive programs can run into the hundreds of thousands of dollars now some estimate that college consultants are used by one-quarter of the students at all private colleges the advisers say their focus is helping kids figure out what they want in a school steering them to the best fit and giving them a road map to get there now the bull market for consultants is expected to discontinue the acceptance rate for stanford just 20% in 1949. now it's under 5%. guys, back to you. >> what's driving it, robert is it just -- is it a gap growing between the have and the have knots and the rising i guess cost and how difficult it is to get into college >> i think it's how difficult it is to get into clem. looked at the acceptance rates under 5% it's the number of foreign students now coming to the u.s. so colleges just have fewer and fewer slots for u.s. students, and it's also that this is a very opaque process where it's

unclear what it takes to get into these top schools because they don't publish an annual guide to getting in or what it takes. it's very subjective, so there are haul these tort of sea leaf readers and people who used to be in the add mission office that can hang can hang out a shingle and say we know the secret even if they don't. and guidance counselors at public schools have a huge number of students to try to help to college, parents say look, my kid is not getting personalized attention they need in this competitive process so they're going private. >> crazy robert, thank you. let's send it to jon fortt with what's next on "squawk alley." good morning, jon. >> good morning. adobe shares down 5.5% after q2 guidance fell short of expectations, but they raised the expectation for annualized recurring vee.renu we have the ceo coming up on "squawk alley.

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ahead of the women's world cup in july, nike and adidas are jumping on the opportunity to put women front and center

both companies are making uniforms believe it or not this is the first time women's uniforms got their own design since nike started working with world cup in 1995, they have always been spinoffs of men's uniforms friend leer neck lines, more comfort and fit. emblematic of the broader push for equality in soccer all 28 players on the u.s. national soccer team filed a gender discrimination lawsuit against the united states soccer federation ledging they make less than their peers despite that they had more success men's team failed to qualify for world cup. then adidas announced any of their sponsored players will receive the same performance bonus payments as their male counter parts. question is why are nike and

adidas doing this, why should investors pay attention? the number of world cup jerseys and soccer are not a big chunk of business, but women overall are. and more importantly, a key source of growth now women's sport footwear grew 9% according to matt powell and last year women was 20% of nike's business versus men at 17 listen to this nike increased women's business 40% in the last five years versus men's, up 22% thanks to an analyst at nomora they're trying to play reputation, credibility in the women's audience because they're both such big companies, that any growth, especially in women's, is key. >> you think of footwear as a basketball, sneaker a guy will buy, you talk to any apparel ceo, they call the customer she, they never use the word he.

>> it is changing for sports look what under armour did they have a girls section for sneakers until a young fan wrote in to steph curry. that's a source of growth and not just a political statement the companies are making but it is a business decision you remember, nike had its own internal cultural scandal last year part of that was the culture they were building inside for women. clearly a big focus. they have work to do >> fascinating to watch. big afternoon, you finish the week in style. >> absolutely, kara swisher is joining us and she's opining strongly on facebook now what she's calling facebook's bib lickly bad week. talking about the dark side of the attack of new zealand, how companies are getting dragged into that. >> facebook below the 200 day, 165 a level to watch

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good morning, it is 8:00 a.m. at tesla headquarters in palo alto, 11:00 a.m. on wall street, "squawk alley" is live ♪ ♪ good friday morning. welcome to "squawk alley." i am carl quintanilla with jon fortt, contessa brewer is with us f