quick last check of the futures. dow futures up by 122. s&p up by 12 nasdaq up by 35. that does it for us today. make sure you join us back here tomorrow right now time for "squawk on the street." ♪ got to have faith got to have faith ♪ ♪ got to have faith good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange faber has the morning off. futures have pep this morning as the fed begins a two-day meeting of boeing ceo breaks his silence over the 737 max the dow is set to go green for the month despite the drag from boeing europe is trading well uk payroll data ahead of expectations oil, highest level since november 2012. facebook's flood of bad news, shares look to recover from

their worst day of the year. and netflix ceo reed hastings rules out putting content on apple's soon to be announced service. watching the markets with jim. good to have him back after a couple of crazy days, jim. wondering whether or not you feel, if you're part of this school that says that chase is on, and you can cut numbers on earnings, but valuations, multiples will rise. >> it is incredible. the battleground stock micron, fedex, here is ones where people say near term not that good but we should buy them anyway. this is very different from where we were three weeks ago, hey, listen, not that good, let's buy them that's the animal spirit that people say, wait a second, i don't trust animal spirits but it doesn't matter what you trust or not, it is working. and maybe why is boeing not -- say, hey, you know what, i'll boy boeing, it is a discount they upgrade nike ahead of nike reporting. these are all people who say i'm

willing to overlook near term and not see what the quarters are, let's get in. very optimistic. people say sign of the top how many times have we heard sign of a top. >> you're willing to look past, i'm thinking now, retail sales, industrial production, some pmis, empire fed below 10, third month in a row put that off to the side >> not fighting the fed. all the numbers give you the cover. you'll get a strong number the retailer, costco reports, ulta, then we have dsw reporting a bad number, burlington reporting a bad number. >> michael's. >> burlington. there is enough good and bad to make it so we don't think things are too hot. i think what really matters is we're getting these battleground stocks, we talk about amazon you look at amazon, the papers are filled with the personal life of this great ceo i'm thinking about lyft coming public i think there will be enough money for lyft, beginning of the

q. you see who powers lyft, lyft is powered by amazon. which means amazon web services. if you want to have a smaller corollary, lyft is supported by tullio i think the underlying theme that could defeat my analysis of what is good is the ipo flood. these deals have to work there is so much supply coming, supply can defeat my thesis. >> you said this for a while it is just two real names in the get-go here, right >> works out really well everybody else says let's get at the top of the q, get it in before the summer starts, get it in while there is still somebody coming into the market i think lyft is exciting for some people. >> yeah, yeah. you mentioned amazon here is the journal page one not that everybody raids the ha hard copy. if any company ceo got this real estate with a negative story on page one, we would pay attention to the price. >> we would. interesting because the substance of the story is whether they thought it would even play. it is playing.

it is playing out big. yeah i think normally you would expect that amazon be hurt, but this is a question of a man of great focus. i think people got the benefit of the doubt it is almost as if i had known he was going so hollywood, i would have never told people to get long at 1200 or 1300 where the president was attacking it maybe this man is a man of tremendous abilities without the musk-like abilities where you're constantly thumbing your nose at various institutions >> you've been focused on musk all morning long. >> more big issue for me, because there is a guy who -- a very powerful judge, judge nathan that he's in front of, we don't talk about it enough, i don't mean to be so -- >> we're talking about serious issues, talking about contempt. >> you want to have -- there is bezos and 200 gs that went to get bad pictures and then a guy who basically just said, you know what, i don't really care about the agreement that my company made with the s.e.c. i don't care about anything.

now, in a december, really incredible interview with "60 minutes," he said i cares about the judiciary. saying listen, my whole policy doesn't mean -- there is no policy that i agreed to or she has to put a special master in or say tweet gag order there is two people who feel like they cantweet all they want one of them is the commander in chief, harder to rein in this guy >> what precedent would that set if you told a ceo you cannot communicate on this platform >> i think she's stuck what is she going to do? nathan is a distinguished jurist the whole s.e.c., which people have not read, is 17 page brief, is about how it is no longer me versus the s.e.c. -- it is no longer musk versus the s.e.c it is musk versus you, your honor. your honor, you agreed to this

thing, it is your settlement, you tell us what to do his lawyers can't rein him in. nobody can rein him in you do something she can look the other way but, boy, they hate perjury and contempt those are the only things they have in their arsenal to be able to maintain order in our country. i think you got to look for something that could be a bolt of lightning here. the people aren't focused on they're focused on certain parts of bezos' anatomy. and then they should be focused on this contempt and what it means to be able to make it so it is nathan, judge nathan versus musk. not the s.e.c. the s.e.c. says, listen, you your honor, when do you step up? when do you do something what can you do? she can't fine him that didn't work they didn't ever call his lawyers, there is a 7:15 tweet, says, hey, we'll do 500,000. people have to recognize they pinned it on a deutsche bank piece. if he does 500,000, buy the stock.

that's what he was doing he was basically telling the court, hey, listen, my first amendment right. that's just no first amendment whatsoever he waived it with the contempt settlement >> sure, regarding the tweet that jim is referencing about production, the s.e.c. says, quote, musk's contention that the potential sides of a car company's production for the year could not reasonably be material borders on the ridiculous >> i love that that's basically legalese for this guy is a total clown, and you got to elevate it to criminal if you have to do get rid of this guy. >> there has been some discussion of how the stock traded lately, meaning it is no longer a stock where they set a benchmark, market doesn't care if it is reasonable, it trades up 300 is getting farther and farther away. >> i think it is because of this i think people are ignoring what is going on right now in front of that bench. >> you don't think it is about margins, deliveries, cancellations, deposits? >> musk has backed this judge

into a corner. this judge either has to get rid of him, or say that the s.e.c. is wrong she will not side with the s.e.c. because it is really her. musk made a fool of judge nathan judge nathan, who -- says she is a -- an obama appointee who stands for the bench and he's saying, you're a clown, your honor, we do whatever we want. one thing amazing, he's saying in his brief, hey, listen, i reserve the right to say whatever i want and if i get it wrong, i'll correct it the s.e.c. is saying there is 25 million followers taking action on this. more importantly, your honor, you told him he has to get preapproval. he doesn't care. the whole process is corrupt the board is a sham. his lawyers are a sham she should hold his lawyers in contempt. >> you're siding with the bench here >> i'm pro federal court i don't even know what to -- he really said, judge nathan, you

know what, you're just part of them, i don't like process, i'm above the law, if i want to tweet right now that it is fake news, what you're doing, i am as powerful as the president of the united states and i don't know, does he have more followers? >> no. he has half as many followers. >> okay. so only half as powerful i think this is -- people must recognize right now there is a judge trying to figure out right now do i kick this guy out of this company he's made a fool of me >> and would that make you want to own the stock less, more, indifferent? you've been agnostic on the stock. >> i thought he does 40,000 cars and doing better than ford but the problem is he can't keep his twitter mouth shut and i think that the s.e.c. has said, look, your honor, we can't control him. the board is a sham. he's running this company. he does whatever he wants. now he's said to you, your honor, i don't care what you say. you're just another one of them. there is a -- the institution

must be preserved. there is a process that stock -- people have to recognize that the reason why that stock is going down, there are smart people looking at the situation and saying, you see all the people up there, that may be some sort of class reunion of class of rich people. rich union high. they're irrelevant because he says i'll tweet what i want and then get back to you the lawyers, like, in the brief, it is, like, the lawyers, oh, my god, we're going to lose our jobs, we're going to be held in contempt it is funny. because he's basically saying, even ellison larry ellison? larry ellison is more powerful than anyone. i went to his island in hawaii there is like a million people there. guy owns like a million -- like the 51st state, that guy. >> we'll monitor tesla with facebook, shares trying to rebound from the worst day of the year stock fell more than 3% on monday hurt by news of the executive departures wall street downgrade out of needham.

there is some news today on instagram. announcing a program in beta, closed beta, buy directly in the app from nike, prada, warby parker without having to be redirected to the ebsite. >> i know there is a lot of people -- these are high profile departures the system departure, we don't know what's going on facebook plays it by the way they want. when you read zuckerberg's note, we miss you, how do you know he didn't say here's your hat and don't let the door hit you on the way out. i continue to think facebook is doing well there are people who want to say facebook is actually finally taking privacy seriously, they could hurt the numbers there is no indication only three channels, amazon web services, google and facebook. none of the other channels including twitter are working as well as people like. >> the downgrade's point was news feed, more monetizable than

things that are in privacy centric. long-term revenue growth is called into question. >> i think that if they can keep the expense structure down, i'm in the going to deny that. you want -- facebook wants unfettered capitalism, that didn't work. isn't that way the stock -- people say now that they're playing by the rules, how much is it now that they're playing by the rules, the earnings could get cut. it is very jarring to see departures, because the departures were people regarded as being -- anyone who worked with them, i know a lot of people work with them, say hey, those guys were legit. we don't want to see the legit guys leave i was at dinner with -- instagram is the company i don't know anyone who thinks facebook is that good. >> again, we mentioned 300 on tesla, 170 on facebook what happens when you start to sink from those battlegrounds in. >> i think facebook was up a lot. facebook had a great beginning

of the year. now it is being -- look who is having a great middle of the year is amazon apple. apple keeps going up people don't think the watch is -- no one is dismissing the watch has any false positives. people like apple, the watch, the service, like amazon, the web. and they put on facebook, limited amount of money going into these i think facebook is fine i think that it jarred people yesterday that it was down so much downgrade. haven't seen a downgrade in facebook for a long time met real resistance. faang is doing okay. netflix says disney -- >> we're going to get to netflix after the break. >> hey, disney has ufc plus -- i watch disney now espn, there is a 20 minute block that promotes whatever disney has. >> when we come back, netflix did say that it will not take part in apple's new video service. get more details on what reed hastings told reporters on monday another look at the premarket. coming off our first four day win in a couple of months.

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some news involving two of the faang names. netflix ceo reed hastings saying the company will not make its movies or tv shows available on the new video offering apple is expected to announce next monday at a media event in los angeles yesterday, he told reporters, quote, we prefer to let our customers watch our content on our service. we have chosen not to integrate with their service couple other headlines, expects to be blocked out of china for the foreseeable future and talked a ton about india, jim. >> yeah. it is really amazing, we saw -- i remember "catching tiger, hidden dragon 2" is the way they were going to unveil i do think that what is happening here is that no one expected them to do the deal with disney. i do think that apple is run up in part because a lot of people are expecting this will be a breakthrough video that they'll be able to charge $10 a month and' the service stream. if not, the stock will sell off.

they're not doing anything to monetize so far the health the stanford trial, not making any money off of it. the video has got to be the next revenue stream if they don't do any service revenue stream, what is the value? >> you mean quantity here? reporting it sketchy reporting at this stage. appears to be more of an hbo-like diet than a netflix-like diet. limited number of programs, original shows >> i think that a lot of the bulls are hoping that they don't know and that there is something dazzling in the works here i don't know i know that tim cook likes to binge. i do feel that what has happened is there is a lot of hype involved with what their program is nobody wants to be in any part of apple's bundle, right apparently but does apple have some sort of cache with filmmakers that nobody knows about do they have something special lined up or is it going to be a thud and the stock goes back to 180

>> is that where we are now? no longer about the cycles and supplier leaks out of nikkei and -- >> that's a great point. the last thing was katy huberty saying we think china has gotten stronger maybe a little more price earnings multiple. there is a lot of hype now >> you think the stock is going in hot into monday >> thank you that's the best way to put it. going in too hot they haven't solved india. no one solved india. we haven't seen anything that is -- i'm watching verizon 5g ads which are saturated, that is not apple. we haven't gotten a resolution to qualcomm situation. we haven't seen an uptick we can point to in orders for parts we got some mac news we didn't get the watch information that i wanted, which is a full court press on health. stock is just going up on ether. it has been a big leader in this rally. it has got to show us something. it became show me when it got to

this level. >> interesting you think -- i assume you think it is no coincidence the ipad minis are coming out ahead of the streaming announcement >> no. that makes me feel they have something. i don't want to be caught up in the hope or hype but i do think there is some belief that this thing is not going to be a weak alexis, a home pod >> monday will be big. >> it is going to be -- monday is huge. we got -- next week will be very exciting we're going to get back into the -- we'll find out about preannouncements i find other than preannouncement yesterday from nucor, pretty sanguine. >> fedex tonight >> fedex and micron. there is two that people think -- people think the next disasters, people think micron is too high, those hold the key in the next 48 hours the fed has nothing to do other than watch cnbc. >> we'll get cramer's mad dash,

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♪ go on take the money and run ♪ ♪ go on take the money and run ♪ ♪ go on take the money and run ♪ 6 1/2minutes to the openin bell cramer's mad dash. watching the big earnings we're getting this week. >> nike, steve miller not being taken to heart not only are the analysts not taking the money and run, they're saying press the bet he says listen, i'm raising my

price target this is one of the few big dow stocks this is taking over boeing's role they have completely broken out. this could go to 100 if everybody is right very easily a couple of things at play here. china is strong. united states, but there is this kind of, like, personalization market and nike and ulta are the leaders in personalization they know more about you they want you to have your own shoe these are all working. resonating worldwide i don't know if you've been following the way that the nba is driving a lot, whether disney, more importantly driving china and nba2k, take two. china is huge in nike. and they buy expensive nikes there is a -- this thing is hitting on more cylinders than i can believe. mark parker, so nonpromotional, you never see him. but they're doing it these sneaker exchanges that are going on fire, you buy vintage nikes, you trade them, dan gilbert behind one of the major

ones, dan gilbert, legendary, he's rocking, he's quick, he'scs this has so much momentum. don't take the money and run incredible. >> how is it happeninged to chi slowing global economy, exposed to the consumer. >> isn't it amazing. that's why -- that's what's incredible this seems -- there is no natural competitor to nike in china. unlike huawei, unlike huawei has got one, there is liukin and starbucks. adidas taking share from them. these guys are the ultimate in trying to figure out the next generation of what you like. they are probably the best customer relations management retail/apparel company in the world right now. >> technology company. >> oh, my god. so good. remember what they did to under armour there isn't anybody they didn't take apart when under armour woke them up,

they have been unstoppable >> that's right. we'll watch that on thursday opening bell, 4 1/2 minutes away

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you're watching cnbc's "squawk on the street. the opening bell set to ring in over a minute's time as this two-day fed meeting begins you mentioned before the break, not clear what they're going to talk about since the argument to cut or hike now seems a little small. >> he says, hey, listen, we're not supposed to pay attention to the market we paid attention to what is going down, we should pay attention to what is going up. there is enough to make it so their patience is warranted view is right we haven't talked about brexit yet, a disaster at this point, right? they're talking about rebukes. wilhelm, a dignitary. >> some try to argue may is doing a really good rope-a-dope. >> she is not goat 2, greatest

of all time, i am concerned that europe can't come back as long as this thing continues. it just has taken -- >> opening bell here, s&p 500 at the cnbc real time exchange, the big board, the u.s. secretary of agriculture sonny perdue at the nasdaq, henry schein. >> decent stock. i think the agriculture, they have their hands full with what is going on in nebraska and iowa should stay focused on that. the only thing we have seen is union pacific gets hurt. i think it is far bigger than that interesting things going on with china nobody is talking about. semiconductors say we don't want you in there we got boeing, maybe saying we're not buying any 737 max and now the possibility of a

shortage in harvest. what is china going to do to get to $300 billion buyback. by the way, the administration right now pushing for -- intellectual property, a rollback of the belton road initiative we're not happy anymore with getting money. larry kudlow more optimistic the hard-liners -- >> front page of the times is about weather in the midwest and farmers really taking it hard. and then, but, purdue saying that china may triple their ag purchases over the next three to five years >> that's what i'm concerned about. >> or natural gas. >> natural gas, so sold out. >> chennier can't supply it. >> you got a couple of natural gas projects, we keep thinking it is the great geopolitical ability. we send it to -- we cut off gazprom in europe. the south koreans buy all of our nat gas. the contracts are not refunded you can't break them and start shifting stuff to europe and

china. what are they going to buy what are they going to buy from us the steel companies aren't making the numbers because the tariffs are slowing down the country. >> until this bloomberg headline, you would think boeing planes would be a big piece. but if bloomberg is right -- >> that is the story i'm referring to bloomberg story, very good story, well sourced, saying they could pull their -- 737 max that they want, everybody wants 737 max. i think what is interesting is why is boeing stock still going up mu muilenburg with an impassioned defense. incredible safety record i think we're going to see a safety patch that will be produced rather quickly. i think the worry is what are the potential damages that boeing suffered? but china is running out of options. they can't buy their way out of this jam they have to change the way they do business out of the jam they have been reluctant to

admit they're doing anything wrong. a lot of people going back to the time when president obama said we'll keep the military out. their military out of the taiwan straits and violated that once obama left there is the setup among the people at the hard-liners in the white house which says it is not about trade, it is about you rolling back your policies and we're not -- we want -- they talk about state, state-owned -- >> taiwan straits analog holds, why can't they wait this out as well until there is a shift? >> i think that the china economy -- >> can't survive that long. >> it is faltering. >> jim mentions muilenburg out of boeing, we heard from the ceo about the company's response to the two crashes and the update on a software fix. take a listen. >> the investigation is moving forward with work under way to understand the information from the airplane's cockpit voice and flight data recorders. our team is on site with investigators to share technical

expertise. soon we'll release a software update for the 737 max that will address concerns discovered in the aftermath of the lion air flight 610 accident. >> that comes amid headlines that the canadians now reportedly re-examining their own 737 max approvals. >> listen, i'm sure people say they know something. i don't think they did again, i think boeing has tried to do this thing perfectly right. look, was the faa overly influenced by -- boeing is the best in the world? what are they going to do? boeing set out to try to scam people for a shortage? no but the problem is that obviously there was something wrong with the software, they wouldn't be working on the patch. there is the liability issue it is interesting and i know that the wrap against china that they pulled out -- it would be that other countries would fill

in the gap this is obviously something that if not resolved quickly would be takenaway from boeing. stock is saying don't worry about it stock has been pretty ripe >> yeah. you might be a little bit thrown by 21st century fox shares going to start trading today under new and reassigned ticker symbols and names. on paper, it looks like 36%. as rupert murdoch is the second largest disney shareholder. >> isn't that something? why did bob iger stay on he staid on as promised, his second largest shareholder i do believe this will be the most difficult i can recall. i do know that anyone who is following march madness or the nfl draft knows that on your cell phone, sn plus espn plus ig a tremendous amount of content

in the end, if you were fighting to watch nba because you told your spouse you only have to pick one sport at a time, espn plus is the only way to go i think they're going to blow away the numbers they did expand the relationship i don't think they realize how big it is. it is a millennial thing they're doing a much younger audience and also real aficionados. next should be gambling. if they can find a way to integrate more gambling stuff it would be remarkable. there is game handling. >> millions of dollars, like, okay, who is going to come out -- >> of course very important. >> jim, goldman 205. and jpmorgan not far behind on the dow. what is up with the financials >> working on goldman. and so first is market being undervalued? this is the internal loan business that goldman now has a

lot of customers for and goldman is being able to get a lot of deposits because they're giving you a big rate. that's one but then broader and this is the one i'm keen on. people feel -- we talked about it not nearly enough, commerzbank, deutsche bank if you get that off the table, you get the big city doing the negotiations there, if you get rid of deutsche bank as a problem and not just talking about the incredible reporting today about trump and deutsche bank you get that out of the way, morgan stanley moving into fin tech it has gotten so hyped that if you have any sort of -- fin tech operation within a bank, people will love it people haven't talked about malaysia much lately and goldman. notice -- >> that's a good point >> i'm looking at goldman's market cap, saying, we're seeing the 50, 60 this is a great insult to

goldman sachs. square is 31 billion coming out of nowhere. yesterday, couple of outlets got merged and nobody heard of them. here is goldman, 78 billion. something is awry in the valuation. if they put more money toward marcus and get malaysia off the front page. >> interesting to watch. tilray, 31 cent loss, wider than expected revenue up 110%, it was a beat ceo did talk about cannabis drinks last night on closing bell >> i think we'll see them first sometime in canada sometime in october. it islooking like around october of this year we'll see products come to market. right now that relationship, that partnership with abi has been focused on formulations for time to peak effect and flavor form factors and that's progressing well >> so what do we do here >> pretender. >> poser

poser. >> $500 million to buy a little less joint venture with anheuser-busch i want the $4 billion that consolation gave to canopy the 1.8 billion. those are not posers i think that the dropping of the name of anheuser-busch with -- were ways to get the stock going. that revenue gain was from manitoba for heaven's sake i don't know if you had any of their stuff, it makes you sleepy or high or something thc is the issue when you look at what consolation is doing now, consolation has the liquid and they're all trying to figure out how do you engage thc. is 10% thc 60 proof? is it 90 proof until they figure out thc,

nobody can make any money in this when you meet them and talk about -- >> we tried. >> you're looking at keurig, doing the mixed drink story. people don't see that keurig is really -- that stock has been very good cronos was at 11. they're not posers tilray got to be very careful of because is anheuser-busch taking na joint venture to be a stockholder, we know beer sales have been soft everywhere. one reason why i thought tilray's story was flawed was he just dumped on cannabis. that's not got great margin pressures. he believes cannabis price would draw dramatically. that revenue gain, you got to be suspicious of revenue. i don't -- i don't -- i think tilray is the $7 billion company

that is overvalued, and i think constellation -- canopy is the $50 billion company that is undervalued as legitimate way to play this and cronos is good too. >> good we're separating weed from chafe. >> if you believe -- some feel if you believe in cannabis, go buy constellation and wait for canopy to cross. the number that kennedy was using $150 billion, noetz uhe'st using the right number he's got to work on the story. i feel the story was -- i thought it was a very poor -- >> interesting >> sort of related, in terms of restaurants and food and cannabis, people get hungry, jpm does up dominos to overweight. they say 8 to 12 in sales growth is in tact >> one thing i happened to like is the ceo, but that stock peaked when pat doyle left. >> and downgrade yum as well.

>> yum is doing incredibly well. no downgrade has stuck to that stock. that stock gets hit more than 2 bucks, go buy it the oneverybody is mesmerized by is chipotle. what if they do international expansion, previous to when brian nickel came in, everything they tried failed. brian nickel, he's good. i like his style how has the stock done >> 657, that's a new high. remember when we were -- we lost 400, we thought that was -- >> people forgot, people are saying, what did they do what was the problem what i think was smart, people forget, is that jack har tongtue shrunk the flow from 31 million five years ago to 27 million

not a lot of stock out there don't forget, let's give it some props to pershing. >> bill ackman. >> a lot of stock, it was lower. >> now i look at this thing, i'm blown away by what nickel has done they were poorly managed they didn't have the right through put. they did not have the right loyalty program, did not have the right mobile app and they still got to -- still got high this thing is just smoking. >> i don't know if you've been lately, you're in and out of there in 30 seconds. it is incredible. >> lickety-split during the days when there were issues with food quality, you couldn't get in and out as fast as you can now that's very smart. nobody gets in and out as fast as ulta. great website if you want to get something for mother's day really interesting prices. >> still the best s&p since the bull market began. >> as it should be mary dillon is brilliant, not promotional. has done remarkable personalization. and that stock could go higher without any problem because they

literally have figured out the channel better than anybody else i've seen. >> incredible story. financials, oil, semis, all working today as we're up to 2842 bob pisani on the floor. >> happy tuesday he's right cyclicals. i want to show you the s&p 500 we're up 6 out of the last 7 trading sessions and we're getting awfully close there. that old historic high, 2930, that was back in the end of september, september 30th, i think, we're less than 3% perhaps from an historic high, let's not quibble a few points six of the last seven days and what you want. cyclicals that have moved us up, that is what is moving us up today. take a look at the charts here, semiconductors, material stocks, energy stocks. you'll see very nicely, you see banks and utilities and reits are lagging, finally look at the vix. 12 handle on the vix this is a new low for the year lowest level since going back to

october here i love looking at merrill lynch's fund manager report. i love playing against these guys they survey every month about 200 global fund managers, very useful to see what the thinking is for the big guys, the fund managers here. particularly the long and short positions. so they're long cash, look how defensive everybody is they're long cash, long reits, utilities and health care, emerging markets, right on that. and they're short equities in general, short the uk, short the euro, and short industrial so the story here is you want to play against them. the contrarian signal is high cash level means a buy signal for equities long stock, versus cash, you are long the european union. and would go long industrials versus reits top risks, china slowdown and the trade war, these are the top risks for the whole year you notice what is is not on there? the fed making a policy mistake or ecb these guys believe central banks have their backs and i completely agree with them that's the primary mover of this

rally that we have seen recently the most crowded trade they have got, short european equities that's a screaming buy europe signal right now these are generally used as contrarian plays we'll see if that plays out. they were long faang, remember, that was the big trade, most crowded trade a while ago, that eventually blew up in the fourth quarter. fedex after the close, we want to figure out the global economic slowdown, fedex 30% of the revenue outside the united states look, here's the bad news. we -- endless talk about weak global air freight trends. we know all about this, we know all about the post chinese new year trends still being weak we heard all about it. that's why i think there is a positive here about low expectations take a look at the stock, folks. it got killed in the fourth quarter, exactly on what we see here down 30% in the fourth quarter you see a very modest recovery here that's why i think you can see exact comments there about weak global air freight trends, no surprise, and the stock may not

react. again, this will be a matter of degree, but a lot of stuff is already very well priced into fedex. that's why i'm somewhat hopeful. finally, today, the market is up and today is the day before the federal reserve and we have the very famous now infamous fed drift day. this is the tendency for stocks to rise in the 24 hours leading up to the fed announcement it is the day before and going into the announcement at 2:30. this phenomenon was first noted in a very famous 2011 report done by some federal reserve researchers, they said it was a puzzle, but it was statistically significant. they studied fed days. the average rise is about 0.5% and here is the basic conclusion since 1994, more than 80% of the equity premium on u.s. stocks has been earned over the 24 hours preceding schedule fomc announcement this is a startling statement when it came out in 2011 but it since has been discussed,

b bisecreta bisected widely discussed on the street still on the upside. back to you. >> bob, thank you. bob pisani to the bond pits as well and rick santelli in chicago good morning, rick >> good morning, carl. you know, i guess i would have to say that treasury yields and even global yields are firming a bit off recent low ranges. but the firming is very small, look at one week of two year, they're currently up a basis point at 246 to the other end of the curve, 30-year bonds up two basis points 304. but, part of the rise, obviously, is getting ready for the first of two days of fed meetings and, of course, tomorrow most likely a no action, but everybody will be reading the statement. but the eu is considering offering the uk an extension there will be a lot of back and forth brexit news, but this did seem to firm up our treasuries, but also if you look at what is going on in the two-day of gilts

firmed up there as well, two-day of bunds firmed up a bit, trading 11 basis points, doesn't sound like a lot but two percentages as we move from 6 or 7 basis points we do know that high yield leverage loans, all these are making big stories as to are we going to have another big mogul in the credit markets. i would say barclays high yield investment grade, hyg, lqd, all those etfs look really well behaved. hard to get too excited there. and finally, let's look at a november start to the dollar index. not a lot of features, the glide path continues to be down. this bigger view does show us how much time we spend around 96 when we stabilize and how much we back away from 97 when we firm up. carl, back to you. >> rick santelli coming up, chris almon will talk about the investment in facebook shares of the social network coming off their worst day of the year yesterday dow up 130 s&p 2844

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time for cramer and "stop trading. >> going to talk about how great velanox is doing but there's this belief that data center and gaming could come back more -- data center 2019, gaming 2020 that's also moving advanced micro. those two are trading in tandem. they both have the same multiple, which is highly unusual. nvidia screwed up on crypto and nvidia had a big gaming hiccup >> is that a china regstory or -- >> yes, china reg. and their model is a little too advanced i think nvidia is out of the dog house. i've been liking it. just didn't think it would go up this much. i've got norwegian cruise which has been a remarkable stock and

new tanis. and i'm watching fedex it's really front and center fedex and micron they will hold the key these were stocks that had been really beat up and if they come back, we're going to say, wait a second. >> fedex guidance is historically pretty cautious wouldn't you argue on a macro level? >> i don't see any reason they couldn't say anything good but maybe that's exactly what surprises because that's why it's been down u.p.s. doing better than fedex >> nice to have you back >> great to be here. >> see you tonight, 6:00 p.m. "mad money." wall street gearing up for an ipo surge as lyft, uber and levi strauss all get rdyea to go public dow up 97.

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♪ hold on, i'm comin' ♪ hold on ♪ don't you worry, i'm comin' ♪ here i come welcome to "squawk on the street." our january read on factory orders expected up around 0.3 to 0.4 is a little light, up 0.1, no revision. ex transportation it deteriorates down 0.2. durable good orders. these are january finals they'll replace the mid-month numbers. midmonth was 0.4 now 0.3. if you strip out transportation

it changes from down 0.1 to down 0.2. capital goods orders, aircraft, a proxy for capital spending stays the same as the midmonth read up 0.8. if you switch gears from what is orders to shipments, that now also stands at up 0.8. so not a lot of changes on some of the more important aspects of the data, although it was a bit light. response in the market place pre-equities -- excuse me, post equity openings and treasury yields idle bing but higher yie. ten-year note at 2.62 or seven basis points from the lowest yield close back to january of 2018 carl, back to you. >> rick, thank you good tuesday morning welcome back to "squawk on the street." i'm carl quintanilla live with sara eisen david faber has the morning off. markets up to multimonth highs on the s&p dow surpassing 26k as we watch

tesla, facebook, boeing and two-day fed meeting. >> and that's where our road map begins with the major averages rising as the fed kicks off its two-day meeting. they're looking for a dovish tone and no rate hike. in the s.e.c. firing back against tesla's ceo and his tweets >> and a bezos bombshell again how the national enquirer obtained the racy texts and photos from amazon's ceo we start with the latest cnbc fed survey. it's out senior economics reporter steve liesman joins us with the exclusive results. morning, steve >> as we do on this show, look at the outlook for stocks. we're seeing a partial rebound in optimism and i can show you that on the graphic. let's see where they were back in november 2018 looking for 3038 at the end of 2019 for this year our cup ran eths over back then. and then you can see we got real depressed when we came int december and our last survey

january. now you see some of that has come back but if you come over here, not all of it has come back we got back about 40% of what we were looking for for this year and a little bit for 2020. 29, 25 see if you can respect this. the next chart where we look at the outlook for rates. that's come way down you get this return of optimism or partial return but you do not get the return to where we thought the ten-year was going it was 3.5 so what's nice about this is you can see this doesn't mean it's right but in the mind of the market some 58 or 60 basis points of higher rates has come out of the market. that's true we can see also for the federal reserve which we'll get to in just a singled we asked people, what is the impact of strong wage growth only 10% say it ends up as higher inflation 27% say lower profits. more people think that companies take it on the chin rather than their ability to pass along prices

7% say both and 34% say neither in part because you could get the impact of stronger wages go away if companies boost productivity talk about those fed-spectations. not a single person thinks there's going to be a rate hike at this meeting now. but watch this change. 60% say a hike is coming this year still down from 78% 14% say a cut. that's about the same. but look at this rise here over one-third see a rate cut coming in 2020 scott wren senior global equities strategist writes in. stocks are at or near fair value for this point in time but need some combination of a good u.s./china trade deal and signs of stabilization in the european economy. we had a lot of folks talk about the impact of trade and the impact of global economic weakness on the outlook and thereby also the impact on the federal reserve. >> so what's your general take, steve, on whether this group

that you survey thinks the market can go higher is there not full participation yet? >> i think the idea is you keep hearing these commentary, sara we need some accelerant out there. why would we go higher is a u.s./china trade deal enough 80% of respondents think there's going to be a deal but they still have these lackluster outlook for the market that's not going to be enough. there's concern that the trump administration could pivot from a china -- u.s./china trade deal into more cross-talk or more fire with europe on the auto sector that may not go away the -- we keep hearing we need europe to stabilize, the global economy to stabilize and some clarity on these tariffs >> steve liesman, thank you very much the president meantime tweeting taking aim at google and big tech again facebook, google and twitter, not to mention the corrupt media, he says, are so on the side of the radical left democrats, but fear not, we will win anyway just like we did

before, #maga. and a story up on cnbc.com right now about the support from big tech companies for democratic presidential candidate beto o'rourke clearly candidates on both sides of the aisle making it an issue as the 2020 race takes shape maybe the president was referencing that article who knows. let's get back to the markets and the fed meeting. bring in brian belsky from bmo capital markets and david leibovitz from jpmorgan asset management what steve just ran down in terms of his survey, the fed survey of fund managers is sort of what we're hearing right now. and that's the risks are still on the horizon and not everyone is buying into this rally. we've seen so far in 2019. what's that telling you? >> that's a major point. good morning thanks for having us the results as steve talked about, as i heard that, excessively reactive excessively reactive they changed their forecast after the markets went down,

right? what about the forecast before, right? and i think the key thing is -- >> nothing changes sen s sentim like price action. >> we were so concentrated in a few positions and we're still in the early stages of diversifying our portfolios it's showing up in the market because we've seen broad participation. majority of sectors are doing very well. the cyclical errors of the market are leading the way a reinvestment in financials where people have been massively underweight that sector. for all intents and purposes, a diversification of the markets and through my travels around the world, people missed the move in december they missed it in january. now they're bitter and non-u.s. investors are looking at the u.s. as a home for stability, especially the big move in china. they don't think chinese stocks can hold these gains and europe is clearly going to become the next japan with no growth, horrible monetary policy,

horrible politics. we've got a problem there in terms of spending and growth and think that money comes back to the u.s. >> you agree, the u.s. is the place to be? u.s. stocks specifically >> u.s. equities are probably the safer bet right now. we are late cycle. let's not forget how many times the fed has pivoted here and what that's been donn madone to. emerging markets are looking much more attractive to your point of nothing changes price action like sentiment. the currencies still look washed out but growth is beginning to come back. we think there's long-term opportunity. what i'd say about the fed and that's key to what the market has done since the beginning of this year, the fed said they'll wait and see they'll stay on hold and be data dependent. when a kid asks their parents, can i have dessert and parents say, be patient. the parents don't say, yes, you can. no, you can't. be patient and we'll see when mealtime ends. markets may be ahead of themselves >> how is this any different

from the celebratory phase we all go into when they do pivot and we haven't yet taken into account the work they already did. that's the bear argument >> to david's point, we became a skidles-driven market. now the skittles market crash and we're coming back to reality. we have such a lack, meaning wall street has a lack of perspective. i was five years into my career in 1995 when the fed misstepped in late '94 and entered into a goldilocks period. a majority of investors have no idea what goldy locks is in 1995, foreign investors came back to the u.s. after a conundrum around the globe u.s. large cap stocks were the home for stability which david was talking about as well. this generation's -- this generation's 1995 is 2019. >> that's why it's so important to be focused on profitability earnings growth was 25% in 2018,

but trees don't grow to the sky, and we're seeing signals that wage pressure is rising. interest rates, right, they've come back down but those impact profitability with the lag so to me, valuations are what l led us down in december and what have led us back up this year. the profitability story needs to come through if this is going to continue to have legs in 2019. i think 5% to 6% earnings growth this year is coming. >> so we're undercounting? >> does that depend on a china trade deal >> it doesn't. that's the risk but our base case scenario is we'll not see further escalation essentially we're assuming the status quo gets us some midsingle digit earnings growth this year. the market will keep climbing this wall of worry which has been the case up to this point in 2019. >> to counter that, to add to that, we, through our work in terms of looking at earnings revisions. they bottomed in the first quarter. meaning it can't get worse than it is.

what we've shown through back testing in history is the market rewards those earnings by going up the market goes up after you see a massive drop in earnings revisions. the analysts dropped in way too much and companies have been way too defensive. >> are you sure about that we're getting mixed signals on the data factory orders. i'm not sure the outlook is clear enough to figure out where earnings expectations are going. >> they've been massively underrated they went down way too far and now we're under promising and overdelivering first quarter earnings are going to surprise to the up side and everyone is going to go, oh, i missed it again. >> it's important to recognize we're both of the -- i'm not trying to put words in your mouth that the slowdown in the first quarter is just a slowdown it's not the u.s. economy stalling you're seeing green chutes in europe should aid that dynamic further. if we see that bounce back and growth stabilize in the 2% range in the back half of the year, that makes midsingle digit earnings very achievable

the risks are difficult to quantify the risks exist in the policy realm and those are the risks that -- >> meaning a complete breakdown in trade talks >> could be a breakdown in trade talks. further escalation of tariffs. >> high risk >> let's not forget what's happening in politics around the world. brexit remains unresolved. europe still has its fair share of problems and a federal reserve which people may have overinterpreted what they said back in january and may be banking on the fed to come to the rescue when if inflation begins to -- >> i have powell's quote from january 4th. we're listening carefully with sensitivity to the message that the markets are sending, and we'll be taking those downside risks into account off to the races >> remember, asset mix is very, very skewed to bonds outflows from equities in 2017 outflows from equities in 2018 inflows to bonds both those years. we believe the majority of investors are still massively exposed to mixed income. we haven't seen what we've been trying to think about for ten years and talk about the great

rotation out of bonds and equities hasn't even started yet. it's coming. >> finally, just for tomorrow, david has a point. it does feel like there's a lot priced into this market as far as patience and pausing. does the fed have a potential to surprise in a bad way? >> not tomorrow, no. and i think the fed really wants to see stronger growth to do something on the up side weaker growth is already priced into the market and the markets have recovered because earnings went down too far. we're starting to see flows back to the united states the fed is not going to do anything tomorrow. and the fed wants to see what happens not only in terms of earnings but economic growth the second half of the year. >> you seem very defiant today almost angry are you okay >> i'm great >> brian and david, thank you. when we come back -- the ipo stampe stampede is about to commence. levi's, lyft, uber and a lot more what that means for the markets

overall. musk's s.e.c. problem is not going away 264 is going to take you back to october 23rd we'll talk about tesla's tra vails. you.

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supported the equity rally, although it has not really lead it and did not lead the market down in december either. this is the hyg etf. a ratio with the 7 to 10-year treasury etf why do i do it this way and make it a relative chart? this is a proxy for junk bond spreads. the premium investors are demanding to own high yield. when this is going down, investors are getting more nervous. less inclined to take risk and the spreads are widening out so that's what you see in december obviously, we kind of had this double bottom around december, january. what i would point out is we've kind of flattened out. the spreads have not really improved as the stock market has gone to new heights this year. that might be a minor divergence, a minor red flag and only back to about mid-november levels in terms of tightness of the junk spread. if you were bullish right now after this huge move in equities you'd want to see this line start moving up again.

it can move up again with treasury yields rising and junk bonds not rising as much when yields get low, they don't really always tighten up as much when it comes to high yields so something to keep in mind that junk bond is not screaming that the market -- the stock market is going to new highs yet. >> that's been one of the recessioni recessionista's hardest points to discussion. the junk bond mark set not confirming there's some dire economic outlook coming. >> that's true it's definitely not dire it's definitely back to levels we were at middle of -- late last year. but on the other hand, it's not as if it's been kind of leading the way for stocks to click to new highs. so i don't think the junk bond market is in any way saying recession is around the corner what it might be saying is the credit cycle has been running a long time and we don't see it as a reason to pay up as much as we did back in the middle of last year for junk debt >> i liked your tweet that we're in the phase where people on the floor ask you why we're up 100

points this morning. >> and there's no good answer except we've been going up it's the end of a quarter. people seem like the market may be lift away without them and they don't have as much exposure to it. >> what do you think of this whole idea and steve hit on this, that the market can't go up without another catalyst. is that true >> it can drift higher without a catalyst i don't know that we'd break into a new range without a catalyst but i'll be honest i think we in retrospect, if the market were to go up another 5% would decide what the catalyst will be. >> the market is not responding one bit to any trade we're pushing this out to june people thought we needed that. >> we're still hearing there's concrete process >> we worried 90 days was not going to be enough to get this done >> because there's not an escalation with higher tariff rates. >> i think the best time for a

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boeing ceo trying to do damage control following that second fatal plane crash in less than five months the grounding of his planes. phil lebeau joins us with more >> shares of boeing getting a bas bit of a bounce. it's the first time in a week and one day we've seen the shaurs move higher and they're moving higher as the investigation into what will happen with the 737 max in terms of what it will take to get it back in the air. as that moves forward, we're hearing from the only from regulators in europe this morning but canada late yesterday, both of them saying any potential fix, we'll scrutinize it. we want to make sure this is the right move in order to get the max back in the air. air canada out this morning saying it plans no flights of the 737 max airplanes before

july 1st so at least the anticipation up in canada is this plane is going to be grounded through june. as you mentioned yesterday, ceo dennis muilenburg out with a defense about where the company is at right now in its search for a solution to the 737 max problems >> the investigation is moving forward with work under way to understand the information from the airplane's cockpit voice and flight data recorders. our team is on site with investigators to share technical expertise. soon we'll release a software update for the 737 max that will address concerns discovered in the aftermath of the lion air flight 610 accident. >> as you take a look at shares of boeing, argis is out with a note cutting its rating of boeing to a hold, although long term, over the next three to four years it maintains a buy rating initially or in the near term argus is out saying we think there's likely going to be a cap

on the multiples due to the overhang from this investigation. and whether it takes a month, two months, however long it takes before they find a solution for the 737 max and get them back in the air guys, back to you. >> so, phil, what's next on that front? what are we waiting for? what we are watching for as far as updates from the faa and regulators >> you probably won't hear an update any time soon what usually happens as they are trying to find a solution for a fleet that's been grounded, and we can look back to the dreamliner as a blueprint for this, we know that boeing expects perhaps by next week to have a software patch in place for solving the problems with the mcas situation within the 737 max. we're not getting into details but this should allow the pilots to have better control of the planes in those situations where it might encounter issues with the anti-stall technology. once that goes in place, they'll

also work with the faa and ntsb to say, look, we believe that this is the solution that makes these planes safe to fly now how long it takes for the faa and ntsb and regulators in europe, china, elsewhere to sign off on this, that's open ended there's no way of putting a deadline there but i can tell you most analysts when they're looking at this, they're not expecting this to be a quick solution they aren't expecting us by april 1st to go, yeah, let's get them back in the air it's going to take time for regulators to sign off on this >> yeah. the days following the crash, we were seeing estimates of 3 to 6 months >> sure. >> we'll see if that ends up being the number boeing, for the first time in a while, is the leading dow point contributor. not the biggest percentage gainer, but adding the most -- >> that's a chain becaunge becas been the biggest drag. the ipo market has been slow for months but big names are ready to go public

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good morning i'm sue herera here's your cnbc news update at this hour. the fbi began investigating president trump's former personal attorney michael cohen nearly a year before agents raided his home and office that's according to documents released this morning. the investigation going to since july of 2017 and that's far longer than had been previously known. new zealand's prime minister jacinda ardern telling parliament the day of the mosque shooting will be forever etched in her country's memories. she also said the country's gun laws will change calling the attacker a terrorist >> we are deeply grateful for all the messages of sympathy, support and solidarity that we are receiving from our friends all around the world and we are grateful to the global muslim community have stood with us and we stand with

them >> here at home, two people are dead and others injured after a charter bus overturned on interstate 95 in virginia while traveling from florida to new york there were 57 people on board. the bus turned onto an exit but then ran off the left-hand side of the road and overturned and the weather conditions were not good either that's the news update this hour guys, i'll send it back downtown to you sara >> sue, thank you. welcome back to "squawk on the street." i'm sara eisen with carl quintanilla live from post 9 at the new york stock exchange. david has the day off. we're an hour into the trading session. let's show you where we stand. strong again for the major averages dow up 120 points. has gone positive for march. the reason it was lagging behind was boeing, which as carl noted is contributing positively to the action today s&p on track again for highest close since october 9th, carl. >> meantime, the ipo market

heating up lyft and uber ready to go public along with jeanmaker levi strauss. courtney reagan is looking at the upcoming levi's ipo, what it means for retail courtney, good morning >> good morning. denim lovers can invest in more than just a pair of levi 501s when it goes public for the first time in more than three decades on thursday. levi goes public as big changes are under way with the next closest u.s. competitors and u.s. consumers have been swapping out jeans for yoga pants. levi strauss is the biggest denim seller vf corp's wrangler is second followed by old navy and american eagle and target. gap inc is spinning off its old navy into its own publicly traded company, too. these newly public entity comes as jean sales in the u.s. are forecast to improve, but slow

globally through 2023. research from bernstein analyst merryman shows at leisure market share has grown in the u.s. at the expense of den nim the last five years nike, adidas, lululemon, under armor and athleta have grown as have ralph lauren, gap, j. crew and ba manna republic have lost apparel share. but they see the trend turning as women may be looking to replace yoga pants with jeans once again this year and levi's women's business is less than 30%. it had saeles up 29% and 25% in the last two years american eagle global brand president tells me his brand is number one for women and growing rapidly. he also expects significant growth to continue in both men's and women's jeans this year. sara >> i love this story because

this is just a classic debate. and it's really gone to wall street as well and it's the stock that i cover like nike and adidas people are saying the athleisure bubble is bursting denim is going to make a comeback it's just not happening. i wonder if athleisure is slowly killing denim forever. >> it's hard to know how many pairs of yoga pants do you need how many pairs of denim do you need there has to be a delicate balance. we have to decide -- >> there's just one fact the fact is, though, that yoga pants are going to be more comfortable forever than jeans it's just once we figured that out and you can dress them up, why go back to jeans >> i guess that's a classic debate i'm a jeans girl, i have to say. i'd wear jeans every day if i could over yoga pants. >> jeans for special occasions i like that. >> carl, help us out >> i wish we were that lucky courtney, thanks it's going to be interesting keep it right here we'll have full coverage of the

levi's ipo thursday morning at 9:00 a.m. eastern time let's bring in leslie picker looking at a popular ipo trend and what that may signal about performance. >> carl, so levi's and lyft are currently on the road meet with investors asking them to contribute billions of dollars to their respective ipos now in exchange, the two companies are offering little control over the way the company is managed levi's and lyft each plan to debut with a dual class share structure. lyft's founders and levi's founders' descendants own a special class of shares with special voting rights meaning it outweighs their ownership. one in every three tech ipos last year had two classes of shares, about five times the average going back to 1980 nontech deals showed a little trend. proponents of dual class structure say they help the company invest for the long term which ultimately can benefit shareholders think about the returns of

google and facebook since their ipos but those two companies are seen as more of the exception than the rule by the investment community. several prominent investors have come out publicly against lyft's use of dual-class structures the latest one elliott management's paul singer writing over the weekend, those with the insight and daring to found a business deserve our respect, but once they sell the vast majority of the company to the public, they should not be allowed to run it forever without any shareholder input. public ownership must mean public accountability. that may also contribute to underperformance a recent s.e.c. study found companies that phased out their dual-class structures with a sunset provision were given a premium to book value when compared with those with perpetual dual-class structures. guys >> fascinating it sets us up beautifully. thank you. we'll follow all of the ipo action closely, obviously. levi strauss returns this week lyft and then uber, slack and

pinterest. joining us, deloitte's national services leader barrett daniels who has handled a number of public debuts, including tesla and vox. thanks for the time today. >> thanks for having me. >> you say there's basically a perfect storm of events and trends that are resulting in this rush to market. can you talk about that? >> yeah, well, you know, i think a lot of people forget that 2017 was supposed to be the year of the decacorn and a lot of these companies were sort of having a wait and see approach the ipo market can often be reactionary like that. and so they sat and waited to see what was going to happen 2018, in turn, ended up being quite a nice year which spurred a lot of these companies to get going. and it takes a little while to put that timeline together and so 2019 just kind of ends up

where they ended up. combine that with a bit of an acceleration of timelines from several companies that i'm aware of that were originally looking at 2020 and 2021 and decided the devil you know is better than the devil you don't and ended up here in 2019 >> what about this issue that leslie has brought up now a few times with regard to lyft but has certainly been an issue for others, the dual-class structure. do you think that the idea that investors won't get the full voting power will be a sway for demand with some of these ipos >> i would be prized it's certainlily controversial in certain circles, but it wasn't that long ago where this wasn't that controversial. so certainly there's evidence for and against it but it -- i'd be surprised if it ended up impacting the ipos that we're talking about here these decacorn ipos.

it feels like there's so much excitement around them that this is more noise than substance >> we know that the private equity venture capitals still have a ton of dry powder does that mean that the urgency is lessened as they come to market to blow it out of the gate >> it definitely is. and again, i think these companies will continue to be in a bit of wait and see approach to see what happens. we need the first couple to perform well when they come out of the gates or the others could very well sit on the bench there's no real pressure for them to come the traditional pressures for ipo of raising that significant round of capital to get you to that next level of the company's existence is no longer there they all have so much money. even if they don't, there's still an abundance of capital in the private markets to your point that they could very well just wait and see. >> the whole lyft/uber debut, it

marks a new era for public companies and ride sharing how do you expect it to go >> so these companies all have these sort of let's say key success factors. when it comes to generating buzz around an ipo. incredible revenue growth. massive brand recognition. wide consumer adoption so they're going to generate not only excitement from the wall street sophisticated investors but also they're going to get people from main street to -- that maybe don't normally invest in ipos to also get involved so it's going to be -- i think it's going to be a circus. i think both of these are going to generate excitement like we haven't seen in a long time. >> we've seen some reporting about the number of millionaires about to be minted, especially in the bay area. i wonder, what do you think happens to all the exit money for the people who have been in these names for years? where does that money go

>> i mean, that's a good question and i'm not ready to necessarily, you know, start guaranteeing that we're going to have tons of millionaires out there just yet, right? ipo markets are fickle and you often seeipos not quite evolve the way you think they're going to be. but if they do end up happening, you got to imagine the housing market is going to get tricky like everybody is sort of talking about at the moment. that's a tough one hopefully what happens is we see a lot more start-ups and we see that next tranche of future unicorns and decacorn comes out of these companies that have the employees that have been, let's say, released from their handcuffs and can now get out there and start that new batch of exciting companies. >> and then there's levi's, which is not a start up. the 166-year-old jean company comes back to the public market. what do you think that says about this environment >> i think it's further evidence

that 2019 is set up to be this exceptional year when it comes to ipos. not only is the market seemingly receptive to your exciting hypergrowth start-ups, but it's also receptive to 160-year-old companies that maybe aren't growing like crazy but are generating pretty exciting profits. so it's not just about growth but also can have a lot of different ways to sort of set yourself up for a successful exit >> your best advice to ceos who have run a private company and are about to be launched into public life? >> well, i think it's always best to be ready because you never know how these windows are going to evolve. they can be quite fickle we've seen them slammed shut before it wasn't that long ago, i mean, we're talking only a little over a decade ago when the window slammed completely shut for everybody. now those kind of events are few and far between but they do happen, and i think a lot of us

around here back then still may carry some of those scars. so i think just being able to get out when the timing is right for you is key >> yeah. we're going to definitely watch the markets and see if they are being judicious in evaluating these companies as they come barrett daniels, we hope to talk to you again in the coming weeks and months thank you very much. >> thanks for having me. when we come back -- defying a court-approved deal? the s.e.c. blasting elon musk again. we'll fill you in. don't miss tomorrow, 1:30 p.m. eastern, jpmorgan chase ceo jamie dimon just ahead of the fed's interest rate decision will be on "the exchange." "squawk on the street" will be right back

there's one lagging sector this month that could be shaping up for a big breakout. to find out more head to

tradingnation.cnbc.com more "squawk on the street" is coming up.

time to get to the cme group in chicago and get the santelli exchange >> a special guest today i'd like to welcome professor john taylor who co-authored a book coming out in april "currencies, capital and central bank balances. i'll be anxious to read it because central banks have a lot of clout professor john, thank you for joining me let's get right into it. first day of a two-day fed meeting. we all suspect we'll hear a lot more about the balance sheet, not only the size, but maybe the composition. short, medium or long-term securities, why does it matter >> well, i think the size is very important they've been, as you know, gradually reducing the size in a pretty smooth way, actually. don't think it's been disruptive, but it looks like they're going to remove that reduction by the end of the year and the composition may move

more toward short-term treasuries i think -- but it's going well i think some clarity about where they're going is going to be really helpful, too. and hopefully we'll get that maybe not in this meeting. maybe the next meeting >> you know, many say that even though it's been subtle, that the fed is going through an inflation rethink. i know that friend of cnbc peter bookfarr says it's more of a cost of living adjustment than anything else. do you have any thoughts -- you know, one of the pillars, stable prices we could look at these prices and argue if they're lower, or just right one thing we can't argue about, they've been awfully stable. >> yes, i think that's right well, what they are trying to do is they use the word normalize all the time that's the right word to use and as the economy has looked a little weaker, they've held off with so-called patience. but they're still stressing data dependence i like to think data dependence

plus patience means policy, even a policy rule and it means they don't adjust too much, too erratically but are patient in how they make their adjustments. that's what's happening right now. >> to kind of dig in on what you just said, do you have a feeling that central bankers in general and ours specifically have gotten a lot more into the micro management business? especially after the crisis? the fire is out of the credit crisis but yet our central bank is still active in remodeling the economy, picking out the drapes and the rug do you think that this is too much, should they be more of a nudging organization, john >> i do. i think it's too much. especially as you mentioned if you go globally. the bank of japan buying private equity you have the ecb, until recently, buying private securities so that would be by most definitions a lot of micro management the negative interest rate in

other parts of the world, the same kind of thing i'd like to see getting -- the fed getting back to a more market-based approach to interest rate setting, et cetera like they were before. this book you mentioned, peter fisher used to run the trading desk in new york and has a lot of sensible things to say about this and it's quite consistent with what you said >> quickly, fallout from what i call ocp, other countries' policies and you sort of hinted at it to me, one of the biggest questions as to the longevity of this expansion is how europe and japan and the uk to some extent deal with their lack of it through monetary policy. your final thoughts. >> you are so right. this is a global situation at this point the european central bank, the bank of japan, bank of england, we're all in this together and the fed is a leader as it should be and needs to do this normalization in a good way that other banks will follow and we'll have a better situation.

let's cross our fingers that's how it works out >> excellent professor john taylor, thank you. good luck on the book coming out in april "currencies, capital and central bank balances. sara, back to you. >> sounds like a must-read rick, thanks news, the automaker tweeting it is delaying the planned price rise until tomorrow night due to unusually high volume of orders. meantime, the sec is blasting elon musk for a series of tweets he sent last month saying he is in blatant violation of a settlement agreement which he would have to have approval for all tesla related tweets they never saw approval since striking that deal, and hold musk in contempt of court. the sec asked if his tweets were pre-approved after more than two weeks, tesla responded with a simple no musk argued his tweets were

immaterial and the push to find him in contempt infringed on free speech. carl, i don't see how this isn't a risk factor for investors. last time the sec fined him $20 million, took away his chairmanship of the board, that was considered a slap on the wrist. what if they find him in contempt of court? what could they do to him? could they go after his role of ceo of a public company? i don't know clearly it is not a good thing to be in a very public contentious fight with your regulator. >> push and pull on the stock continues well off lows, you can see it has gone into the green they did tweet they were unable to fill some orders because of high demand. really depends what your focus is in terms of trade. >> there's the liability and issues around the elon musk drama and the vision and there's the issue of whether there's a demand problem at tesla. feels like those two things are weighing on the stock.

anyway, it is up today as carl mentioned. jon fortt has what's next on "squawk alley. >> good morning, sara. john rick a tell oh will join us, ceo of unity technology to talk about google's push in game streaming. they're not alone. amazon, microsoft pushing that direction as well. can it work, will it be disruptive that's coming up on "squawk alley.

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welcome back to "squawk on the street." stocks are higher off the bestish levels of the morning. utilities and real estate are the lone gripes trading in negative territory as you can see right there, but the consumer discretionary stocks are leading to the up side, the group is just about 5% from record highs set in september. a range of names pushing them higher, mgm, harley-davidson, but the best performing stock, ford motor on pace for the best day in more than two months, pledging to boost suv production and at jobs at the kentucky truck plant. certainly a stock to watch back downtown to you >> thank you. we are learning about the

battle between jeff bezos and the national anthem. michael sanchez, the brother of lauren sanchez sold the secrets to the enquirer for $200,000 that includes racy texts and photos he sent to his girlfriend there was a blow up between the publisher david pecker and his general counsel for media that led the lawyer to leave that company immediately. so far, the market has brushed it off as personal drama, despite that bezos says owns what, 16%, more than $130 billion stake in amazon. could be a matter of principle, so far doesn't seem to be a big head wind for the stock. >> near 1770 now meantime, big show coming up this afternoon >> besides fedex, we have mark

mobius, the emerging market guru, and president of brazil at the white house. it is the hottest stock market in the world, up almost 20%. find out whether it is a buy where else he sees opportunities. dsw shares getting smoked. worst day for that company in years. we talk to roger rawlins today so far, investors aren't happy >> see you thiteoos afrnn. dow has gains of 117 "squawk alley" starts in a few minutes.

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