st. general's lost "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick. no rate hikes for the rest of 2019 you'll hear what jay powell had to say let's take a look at the markets this morning yesterday you did see the dow down by about half a percent a loss of 141 points s&p was down by eight points the nasdaq ticked higher you'll see the dow was a decline of 83 points nasdaq is slightly higher. s&p is a little weaker too overnight in asia, the nikkei

was up by 2% hang seng down by over .8% the shanghai composite up by .3%. in europe this morning you are going to see at least in the early trading hours that, yeah, looks like a little bit of a mixed picture. germany is weaker. ftse is a little higher as our stocks in italy and then stocks in france are flat let's take a look at the ten-year 2.5 to 1%. increasing pressure on the yield. the expectation had been that they keep one potential rate hike >> the long is supposed to do what they're supposed to do. >> if they're throwing in the towel, then that means central banks everywhere sht going to have any pressure to raise rates. >> i just want to -- >> we've now -- the funds are low, and then we leave the ten-year up at three >> they are leaving it low

we've now got one to seven years inverted, which happened yesterday during the afternoon, which really road on the banks yesterday stocks at their low around 12 when president trump made his comment about tariffs perhaps staying on to china for longer we have a big rally off the back of the fed, but the rally abated because banks pull back so much. banks are the only real negative sector that meant we ended the day kind of flat the upset has been that data remains good it does its -- more to the point, the impact of what international yields have had. he said we can't manufacture here, because we haven't

structurally changed the labor in inequity between our country and everywhere else, and the bottom line is going to go where they can produce things the cheapest, and if we have a really strong dollar, it's just tough. much bigger shift and pivot than what the fed -- >> that's what i have been shocked with >> you got up to 114 >> when we talk about how we've seen strength or weakness in different currencies, i'm still shocked at the idea that you're at 114 on the euro where are we on the pound? the pound was down 0.8%

yesterday when the dollar was also down. >> historically, you look at all the headlines, the brexit and everything that comes out of that, if i was traveling over there, i would think, wow, that's expensive >> well, what -- >> the 12-month -- >> what's the average before brexit that was 1 55 then it went after the 120 or below. >> well, you know what, it never really settled fwloe 120 it kind of touched those if you look at the chart. realistically the low was in the high 120 rz. the 131 -- >> the fed making a dovish turn as we just mentioned indicating

it's unlikely they'll raise rates this year and may be close to ending the tightening cycle they began in 2015 the u.s. economy is slowing. the fed leaving its benchmark rate unchanged chairman jay powell suggests it could stay right where it is for the foreseeable future >> the federal funds rate is in the broad -- the rate that neither tends to stimulate nor to restrain the economy. as i noted my colleagues and i think that this setting is well suited to the current outlook. patient means we see no need to rush to judgment it may be some time before the outlook for jobs and inflation calls clearly for a change in policy >> we're going to talk much more about the fed's impact on the market and also dig into the financial stocks that have been impacted the most by the fed's action that's coming up in the next half hour. >> the dow is down 150 and then it came out at two, and it's like -- everybody is, like, oh, we went up

we were up, like, 30 points. then everybody went, wait a minute we're growing at -- they downgraded their growth to 2.1%. they're as clueless as the rest of us on whether it's good or bad. slower growth is not the reason to buy stocks when -- just because the fed will stay out. we thought how great it was, and they're not going to raise rates, and we realize the reason is the economies are slowing, and it's no reason to get more bullish. not necessarily. then we're down another -- we're down 150, another 80 today >> in the statements it was his reasoning for this pivot that started six months ago it was the same which was tightening financial decisions and the international yoet grout outlook. they've improved markedly since that particular set words was inserted in december.

>> if he wants to curbry favor zbloosh he doesn't want to curry favor. >> you don't want him to keep his job? >> there's one line in the middle where he did say something -- it wasn't just that he mentioned the word patient. he said now is actually a really good time to stay and be patient or something like that he didn't say okay you were right i was wrong. just admit it. >> the president probably made it so he couldn't do something if he wanted to early. >> that happens a lot. no one >> he doesn't miss it either way to that. >> who

he stopped because conditions warranted it >> maybe some saw that >> jim cramer saw it a lot earlier. >> he did. effects making money calls >> i think jay powell would listen to cramer because he is looking at market conditions that warrant it. the president did it because he always wants low rates cramer did it because -- >> because there's a problem with what he is -- >> the real estate >> the message is these are not temporary measures we thought the qe was going to be temporary >> he said autopilot, and we went down again.

>> i hope we didn't book any guests this lower. we've been talking a long time >> talking about lightheiser i just like saying it. u.s. representative -- >> that is so random >> what do you mean? >> light saber >> those are cool, aren't they wouldn't you like -- it's got a cool name. robert lightheiser steven mnuchin will visit china on march 28th and 29th for the next round of trade negotiations do we not want -- random is okay it's friday. oh or close. >> no, it's not. >> i'm feeling it, though. president trump warned the

united states may leave tariffs on the chinese goods >> we're not talking about removing them. we're talking about leaving them and for a substantial period because we have to make sure that if we do the deal with china that china lives by the deal because they've had a lot of problems living by certain deals, and we have to make sure we have our top representatives going there this weekend to further the deal. we're taking in millions and billions of dollars right now in tariff money and for a period of time that will stay. >> we're also going to talk more about the trade expectations later in the show. we're also going to talk about this that's the other reason. if you have 16 games to watch in one day where you have actually have a vested interest in each one, and they all end in the last five minutes of all of t m them -- >> are exciting. >> it's almost the polar

opposite of soccer of watching it's so exciting towards the end, and there's so much scoring and so much athleticism and all the stuff is going you have to check it out you just got to check it out you got to see what the other half is watching for entertainment in terms of sports have you done this have you filled out a bracket? lit rail my vertical jump is like this. have you guys tried? kyle, can you -- >> i can jump -- >> you can jump. >> even carrying a -- >> the athleticism that you watch and take for granted, it's -- the teams are evenly matched, too anybody can win. i finally did take -- i took some -- i switched away from

duke because i just couldn't do it >> i took liberty. >> i took liberty. >> you're going to change all your picks now >> your husband was telling my slt john's telling me they deserve. xavier didn't deserve to be there, but st. john's did. >> you didn't even know that -- >> i couldn't believe it i couldn't even believe it i didn't even think it was n.i.t. i thought they were division -- >> it's good for the program it really is if amazon can't sell those products at a profit, this won't pay them to promote the itunes it's seen as a way to squeeze it out of a low margin business they issued a statement to cnbc.com like all retailers alzblon decides which products

they promote in our stores based on a variety of factors, such as relevancy, profitability, and other factors. in terms of controlling the advertising. even if it doesn't run into problems with u.s. regulators, it could some other countries. >> the difference with the google one is i think the analysis that they said they had 85% market share of placing advertisements across everything in terms of controlling that you can do what you want >> you have to decide how big appear zblon is, and if you get crushed if you can't sell with them >> do you consider that as a fortune of on-line retail or a portion of all retail? that, again, changes things.

>> i guess it's no different than wal-mart who has always bullied its vendors to try to make sure. did you hear what i said yesterday? do you know what the equivalent of the fang stocks are in europe sf you know what it is none instead of fang. it's none. you talk about that. >> nyway, if you think that. think about that if you can't beat them in europe, fine them. that's whou your whole mantra. can't beat them, fine them >> do you wish you had any of them facebook apple? what do you got? >> you are going to continue this conversation. i'm going to take us to break. >> soccer and no competition

>> when we come back, blue jeans are hot. the ipo for levi strauss pricing above its range as the american icon returns to wall street. we have the denim details next right now, though, as we head to a break, here's a look at the biggest premarket winners and losers in the dow. ♪ it's the first day of school. yeah, he's so nervous. tom is letting him know it will be alright. i know, it's a big day. i'm so proud of him. gotta go. ♪

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appointment windows. click, call or visit a store today. a new ipo for one of the oldest brands in america leslie picker joins us with the details on levi. >> very appropriate this morning. >> i was i love that. >> it was very cheerful. >> you were on tune. >>. >> levi strauss finds itself in the midst of a gold rush with the initial public offering set to raise $623 million this morning. levi which invented the blue jeans has joe singing for the

mid 19th century gold miners can is set to make its debut after selling a larger ipo than expected by pricing above the marketed range this is levi's second ipo in its 170-year-old history the first was in 1971 it was followed by a series of family-led buy-outs. despite this being among the oldest companies to ipo this year, investors had greater than expected demand for the stock. i'm told it was more than ten times over subscribed, meaning investors asked for about ten times more stock than levi's was selling in the deal. one investor described it as a call option on nice growth jmp morgan listed on the nyse under the symbol levi. the shares will be available for trading in about four or five hours. guys >> leslie, stay here

let's talk more about this >> just going to say the stock exchange, which is unlikely the goldman sachs of this world very strik strict never allow jeans. always have to wear a jacket you can wear jeans have to be levi's, though. >> casual thursday >> from davos, always comes in in jeans he is one of the sons of anarchy. >> and he told us how you're not supposed to wash your jeans, which we all appreciated >> what? >> yeah, basically >> gross >> talked to him about it. >> dry clean >> all right you just want it to be authentic. fresh. given the challenges facing retail, why is there so much demand for the levi's ipo.

>> it's exciting the valuation made sense it's a good entry point. >> the household name part, does that mean this over subscription is retail investors? >> that i don't know it's mostly the institutional money managers especially when you have the founding family doing most of the selling. that is kind of a caution flag is that an issue they own about 80% of the voting power and much smaller amount of the economic interest in this country. >> that's another red flag they are trying to make the bull case and making the bear case. you do have a controlling family through the dual class of shares, and that's not that unusual, especially in a lot of family-controlled founder-like businesses they do like to maintain control with it.

i think investors need to be buyer beware you don't have much control. you can still ride on the economics. >> as a brand, where is it in the value scale? for what type of consumer does levi's target? >> it's much more value conscious driven, and that's been the speel and the attraction >> it strikes me that fashion comes and goes, and levi has been on an upswing for quite a while. i think he knows how to really make the most of the brand and find the right places. do you worry about just how efficient -- fickel fashion can be >> fashion is fickel the management team is very well

rltd respected and it's a well run company. they have to get the fashion right, and that's tricky thing to do. >> this is obviously much more a mature company with clear earnings, clear multiples, clear comps than some of the other ipo's we've got coming out >> you have levi strauss that's -- columbia sports wear, nike will be a few names that go into that mix. lift, you are waiting for uber lift will set the anchor for uber you can only use a revenue multiple, and the company stated they don't expect to be cash positive for the forever seeable future >> is lift smart to go before a consumer >> you kind of set the markets as opposed to hitching your wagon to the back of someone else

>> is lift subscribed as well. >> there have been reports that it was oversubscribed, but it's unclear at this time how over subscribed it is if the deal is not oversubscribed, you're not going out, and so, you know, i heard -- i've heard mixed things at this stage of the game, but it is still very early in their road show process. they have their new york lunch today. we should learn more there >> leslie, scott, thank you. >> coming up, a list of stocks to keep an eye on today. "squawk box" returns in just a moment

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similar stocks to watch this morning. micron technology reported quarterly profit of $1.71 a share. $1.71. that's four cents ahead of expectations are it's executing well despite market challenges. william sonoma earned $2 .10 a share beating the consensus estimate, which was $1.96. revenue also above the house retail went to 48 cents a share. dovishness which financial th'somg up in th next half hour.

welcome back you're watching "squawk box" live from the nasdaq market site

in times square. good morning among the stories front and center levi strauss goes public today after its initial offering was priced at $17 a share. that was above the expected range, which was $14 to $16. it values the company at $6.6 million. it will be fun to see if it's a strong open. that could be the case the "wall street journal" will be part of apple's planned subscription news service, but the "new york times" and the washington post will not, and that is according to the times it says that apple has been asking publishers for about half the subscription revenue that the service generates. treasury secretary steven mnuchin will visit china next week they're going to lead a trade delegation in the next round of trade negotiations. a light saber sound.

those will be the -- those will be the first face-to-face talks since president trump delayed a march 1st deadline and postponed a planned hike in the rate >> the fbi has joined the investigation into the certification process for boeing's 737 max jets following their involvement in two fatal crashes. the transportation department has already been looking into that process in the meantime, a senate panel has set march 27th as the date for a hearing on aviation safety officials from the faa, the transportation department, and the ntsb that will hear at that hearing. the subcommittee on aviation and space also wants to hold a future hearing where boeing and other aviation manufacturers would appear this news when it first came out yesterday, the niez about the fbi did put a little pressure on the stock, and this morning it looks like it is indicated down by $1.62 yesterday captain sully who landed the plane at the hudson came out and said he has concerns about this.

he thinks it need to be taken very seriously because it does bring into question the soft power that the faa has around the world, whether or not other countries will actually trust it he wants to see this taken very seriously as well as a number of other voices there are a couple of others they say they do a lot of the due diligence themselves, but most of them if, if it's been approved by the faa, they've -- >> time for the squawk panel the markets will have some economic data to continue every contend with this morning. weekly jobless claims will be released today we'll have the numbers and the instant reaction when that happens. on the earnings front darling restaurants, the name behind capital grill, london stake hose will release quarterly numbers this morning nike on deck we'll talk to an analyst about the expectations for the dow component coming up in the next

hour the fed abandoned apparently its plans to raise rates this year and that dragged yields on benchmark treasuries lower >> joining us now to discuss the equity and bond market ryan deitrick, senior market strategist at lpl financial research here on set is matt, chief investment officer of fixed incomei'm not surprised the market sold off. why is it not a good thing that they need to reengage? >> ultimately the global growth needs to push along to allow the u.s. to continue u.s. looks strong, so the feds say that they're not going to move this year most likely doesn't mean the next move isn't up the bond market is taking this

as an all career clear the bond market wants more certainty that the fed can possibly provide >> they don't know >> we don't know the market might be stepping a little bit too far down the path >> so assuming they won't -- why isn't it a good thing that we might be under estimating the resurgence of growth or the growth that's going to persist that would seem to be positive for stocks >> growth needs to persist this is positive for risk assets don't -- it is positive for risk assets it's positive for long corporate bonds as well. the trade news that came out yesterday was important as well. the markets want the trade uncertainty to clear, and that's weighing on the market as much as anything. we saw financials trade lower on the fed. i think that's clearly one impact the big change was in the balance sheet. the bond market wants to know that the fed is going to continue to reinvest a, they are. b, they're going to continue to reinvest out the curve that's a big change. what you buy is as important as how many of it you buy

$3.8 trillion. that matters a ton more than cash >> what does this mean >> what did the fed say? they're apause they lower gdp inflation is loy look back at history when you have those three things in play. stocks tend to do pretty well. we need to listen to that. what is the one thing that caught my eye in the fed reaction the u.s. dollar. u.s. dollar sold off pretty hard yields drop and the dollar went lower. there's two ways we're playing that and investing that for our advisors here. with the lower dollar. large caps and emerging markets. large caps need to do better when the u.s. dollar is lower. also, large caps do better than small caps and you are late in the economic cycle emerging markets kind of simple.

that's two ways we're playing with what the fed did. lower u.s. dollar should benefit those two areas. what gets dicey when there is interest rate hikes, you worry about emerging markets, and they got crushed at the end of last year that takes some of the fear out of, i guess, a -- some type of contagion from some currency we barely talked about. >> joe, you know, building on that, i mean, emerging markets were down the third quarter. fourth quarter emerging markets did pretty well. one of the few areas that didn't break the early october lows there was relative strength that we saw we still think it's a place to find outperformance the rest of the year >> piling on to that, the relatively lower growth expectation and developed markets makes the relatively higher structural growth in em all that more valuable the lower growth world, central banks are allowing you to go

there. >> you mentioned the banks they sold off sharply yesterday. give us your take on that. is that a temporary move, or -- >> it feels sustained. certainly internationally. european banking is a tough business right now one unintended consequence of eternal qe is spread and gets difficult. the long-term outcome really you want is rates higher for the near term that had to persist. >> let's never fight again, markets. we love you. we know that's not true forever. for now skewed towards inflation is higher. no one expects it. it's a relatively low cost way to protect your portfolio against inflation coming out around the corner. >> thanks. looking at deitrick. you went to xu

>> i'm a xavier boy. that's correct we won in the n.i.t. last night, i guess, joe, but we're not in the big dance today. >> it's sad to see some of the other -- st. john's. i don't know >> i got problems picking which north carolina team. harwood is from duke that makes it hard for me. i went north carolina. you think they got a chance with zion or no can they beat him? i don't know we'll see. anyway, we got to go when we come back, we are going to have much more on the markets you can on the fed, and on trade with china. first, an update on business fashion. wall street is going casual. robert frank will tell us, is the suit and tie dead? not with you, robert >> i might be the last guy in

new york to be wearing this, becky. goldman sac maman sachs may hav the traditional power suit thul will wall street be wearing nee timate tale of the tape coming up after the break. imagine traveling hassle-free with your golf clubs.

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>> buy a decent suit go to morty, and tell him i sent you. >> that's the famous lunch scene in "wall street. it was at the twenty-one club. gordon geko always sharply dressed and giving bud fox some advice do you know, i think it was -- did churchill say only a cab would wear a -- he did look horrible, charlie sheen, and gecco looked -- he was not a good person. >> no. >> i don't know if that's who we want to emulate. >> clothes don't make the man. >> wall street is going casual, and robert frank, i said -- he is going to tell us about the deathnell. you need to wear a suit and keep it buttoned up i told it's because of the superman outfit underneath the suit that you need to -- >> right >> don't you >> got to keep it all together,

joe. >> the phone booth >> how do you find a phone booth these days >> there are no phone booths left joe, morty, who you just mentioned from that wall street scene, he was a real guy who was one of the top tailors in new york in the 1980s and 1990s, and he dressed carl icahn and teddy forsman. sadly, he passed away in 2001 and many feel the suit could go the same direction it marks the end of an era for all the suit makers and has beenerdashers who dressed the masters of universe. suit sales falling to 1 1 million last year nationwide that's down from 13 million in 2011 they're expected to fall even more to ten million in the next few years. >> we have said for a while if goldman goes casual, there's going to be a problem. goldman is such a bellweather for the market, and in such a trend setter among other firms

i think once a firm is -- that's kind of the last domino. i think we'll see a lot of the other hold-outs begin to adopt >> so the future of suit making probably looks a lot like this we are at michael andrews in downtown manhattan they had dozens of goldman clients, but they are still one of the fastest growing in the industry they've got a three-part strategy the first is they are consolidating. a lot of these guys are going out of business or being sold toers on michael andrews just bought the oldest suit maker in new york called poseman and sons. they are going kaz well. this, guys, is the new power suit on wall street. it's a sport coat, often patterned with jeans michael andrews doing custom jeans and sport coats and also, they're doing a lot have events. you've got weddings and millen enales love to dress up for going out. they paid just buying a suit a lot more fun you used to go into new york city and some of the tailors are

very cramp and drab. some guy would tell you what you are going to wear and how much you are going to pay this is like a club. they've got these big plush dressing rooms they've got couches. they've got a bar. can you stit and drink your whiskey and order your $1,800 sport coat back to you. >> well, i have to say, and i've said this before, i think the goeltdman announcement doesn't mark the start of a turn to a new trend. it's really them just updating with a public announcement where things already were, and i don't think we'll suddenly see all these investment bankers change what they're wearing they already kind of come in semi-casual but they pat on the suit and tie when they meet a client >> it's grate point. i would say goldman was the last hold-out on wall street before the suit they still had a dress code

where goldman sachs executives felt like they needed to come here and to other tailors to buy the suit what's happening now is goldman executives are coming here they're not getting the suits, but they are getting the sport coats and the new look yes, the trend has been happening, but goldman was kind of the last bastion of the suit, and that's now going away. >> you know, we have ceos and really well heeled guys. when they come on, a lot of them do it because they can that's kind of annoying. right? they get into a position where they don't have anyone that any authority over them, but it's never going to go away when you go in to meet a client, it's one guys -- there's a time and place for a suit still >> that's what i'm saying. >> if you go to any of the big investment banks where people are walking in before they're meeting the client, they're not wearing their jacket or tie. those are hanging up nothing has changed on that note and if you look at the data on the announcement, still very much said when we're meeting our clients, you got to dress

suitably i really think the announcement was catching up to what has already happened >> your turn >> my turn >> still to come, banks sold off yesterday after the fed meeting. is now the time to buy the sector we'll discuss. ♪ it's my guitar, but you could -- sthoe ♪ at&t provides edge-to-edge intelligence, covering virtually every part of your finance business. and so if someone tries to breach your firewall in london & you start to panic... don't. because your cto says we've got allies on the outside... ...& security algorithms on the inside... ...& that way you can focus on expanding into eastern europe... ...& that makes the branch managers happy & yes, that's the branch managers happy. at&t provides edge-to-edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when this happens you'll know how to quickly react... will it feel like the wheend of a journey?p working,

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welcome back check out the ten-year yield towards the bottom of the 2.5 handle, if we're going to get it, falling to the lowest level since january on the heads of

the fed's stance, 2.25% and that weighed on the financials. yesterday we did see the regional banks down about 4%, the big banks down about 1.5%, weighed on the s&p ryan payne joins from us payne capital management thanks for joining us. >> good to see you.. >> let's start with the regionals, given the biggest sell-off yesterday was that sell-off overdone, and what would be your top picks >> i like regent financial they're growing in the south i think lending growth will offset interest rates are lower. they look at net interest margin as a big part of their bottom line i think looking at the fact that lending growth should be strong this year, i think the banks in general should be a good buy, even with rates lower. >> volume is going to offset pricing for these guys >> exactly they are getting more efficient. they were a lot fatter post recession and they're bringing down their costs and continuing to do that there's more move within that as

well >> in those regional names in general is there more con consolidati consolidation? >> right now they're trading at a big discount to the market that, trades at a little under ten times forward earnings so i don't think a merger is priced in there but definitely you'll see consolidation along the way, so that's another play to own the regional banks >> do you avoid the big banks? >> no, jpmorgan is the creme de la creme it's up a lot less than the other banks this year. that's also an excellent buy, it's a discount to the market right now. >> it is at a premium to the other big banks on an earnings multiple >> that's because jamie diamond is that good their management team has done so much better over the last desad deca decade, you'll pay a premium to have a better management team. >> what about the investment banks? goldman sachs had a tough session yesterday. the trading environment doesn't

look great ubs was talking about that yesterday. >> i think they're all buy here. anything financial related all at a discount to the market right now. i think all the economic expectations right now are a lot slower than we might see this year anywhere you're buying in the financial is a good buy. >> the fact they're at a discount to the market, historically over the last decade, banks have traded at about an 85% discount to the s&p 500 average, that in its own is not a reason to buy. >> true, you don't want to blindly buy but the context of the banks right now more than ever, we're projecting interest rates at the lowest point. the fed three months ago said they're going to raise interest rates twice and now not at all who says by the end of the year they're not going to look to raise rates again. >> thanks for joining us good to see you. when we return, while the markets are waiting on levi's so go public later this morning, another iconic american brand is getting ready to roll out quarterly results. we'll have a pre-game look at

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holding steady, the fed's message to the markets, and what it could mean for your fo portfolio, straight ahead. dow component nike the stock sitting near a new high. is it time to buy? we'll talk about what tonight's earnings could mean for the company. the blackout looming for spongebob fans >> make it stop, crabs, make it skop >> viacom and directv at odds over a deal. we'll break down what the battle is all about and talk mega media mergers as the second hour of "squawk box" begins right now. >> live from the beating heart of business, new york, this is "squawk box." >> good morning and welcome back to "squawk box" here on cnbc i i'mjoe kernan with becky quick,

and andrew is off. the dow is down 72 points. the s&p is off 3.5, and the nasdaq is actually diverging from both of those i want to check boeing quickly >> it was down earlier >> it was up nicely yesterday. it went back to 3.76, indicated 3.74 to 3.745 so that's part of the problems the dow is having in the red today here is what else is in the headlines, levi strauss begins trading today after its initial public offering priced at $17 ray share, that was above the expected range of $14 to $16 a share and values the jeansmaker at $6.6 billion. walmart is losing its chief technology officer, jeremy king, who led a revamp of walmart's e-commerce platform had been with the retail giant since 2011 king's last day will wth walmart

will be march 29th and nike is expected to earn 65 cents a share on revenue of just over $9.6 billion in the third quarter. we'll have much more in a few minutes. a few stocks on the move this morning boeing remains under pressure in the aftermath of the most recent 737 max crash, with nbc news confirming that the fbi has joined the investigation into the certification process for the jet. we'll have much more on that story in just a bit. it's down about 0.6% micron technology reported $1.71 per share, four cents above estimates beating forecasts. the revenue forecast for the current quarter a little below estimates. the company trimmed capital expenditures and idling production lines in what it calls challenging environments, up 4%. clorox is suing claiming its

lysol products are superior to those made by clorox no movement in the premarket jay powell pointing to weakening chinese and european economies as a deterrent to the u.s. growth which may force the fed to hold the line on interest rates next year. >> the rate that neither tends to stimulate more to restrain the economy. my colleagues and i think this setting is well suited to the current outlook and believe we should be patient in assessing the need for any change in the stance of policy patient means that we see no need to rush to judgment it may be some time before the outlook for jobs and inflation calls clearly for a change in policy >> joining us for what this means for the markets, eric knutson at new berger berman and jay barry, at jpmorgan gentlemen, welcome to both of you. jay, i want to start with you

first. interest rates looking at the ten-year 2.5 and change. how big of a surprise was it we knew they'd be dovish but to say we're throwing in the towel for the rest of the year >> we expected the dots for this year to go to zero but judging by that 11 of the 17 question members are down to no hikes was a bit of a shock to the markets and by the way the treasury market behaved rallying ten basis points, it was more dovish than anyone anticipated going in, even with the bar having been pretty high >> what does that mean >> from our perspective, we have the fed on hold and like the fed basically until the end of next year if rates are accommodative which the fund rate is at 2.40, if policy is accommodative, it sets the stage for better growth but rates are probably going to remain range bound firmly into the second half of the year. >> if you flip that and try to figure out wha equities, eric, maybe good times ahead unless they'rele ing there's a lot less growth to

come >> that's what happens what it was saying after it initially digested the news. this isn't necessarily the starting bell for the last late cycle big burst, that may come, but we've got to get through a quarter of pretty negative year over year earnings comparisons and a lot of concern around that, still some declining short term information out of china and europe and emerging markets. so we think that this is probably a better story on the fixed income, emfx side, in the short term than perhaps for u.s. equities we've seen a huge run we're at fair value on the u.s. equity markets. we're looking outside the u.s. for opportunity. >> when you have the ten-year sitting at 2.5%, and you look at that as a relative comparison for where you can make money, even if we are talking about an earnings slowdown in profits potentially negative which the

market had kind of factored a lot of that in you think there is no alternative, that tina trade is back on, too >> certainly equities and this could lead to multiple expansion. our view is we're basically going to see flat multiple, 4%ish earnings growth in the s&p this year. fed going this dovish sets the tone for perhaps a multiple expansion in the u.s. that could get to you high single digits for u.s. equity markets. when you consider the pressure this takes off the dollar, the loosening of global financial conditions, we think this is an opportunity to move to markets which are going to be more levered to improving global growth in the second half of the year >> i against the biggest reason for or question behind all this, i'll ask you this, jay, does the fed know something we don't? are they looking at growth are they looking at a slowdown in the economy or are they catching up where a lot of other people had already been last year >> that's the question we've been getting from a lot of

investors over the last 12 to 24 hours. i don't think they necessarily know something more than we see in the markets right now i think the other piece of the puzzle and the chair said this yesterday, it hasn't delivered on its inflation objectives in a symmetric fashion and sort of dealing from a position of strengths. it raised rates. if it can stay on hold and deliver on inflation objectives, being dovish is putting it in a position to do so. >> we think the fed's really shifting to a new framework, a new position after five to six years of kind of the exit of qe environment, which is what they started doing first with the temper tantrum and subsequent policies this is going from inflation targeting to flex targeting, et cetera, and legislate things overshoot, you could say they're trying to out-dove the bcb and boj but they shifted to a new framework and unspooled all of that more inclufsivinclusively.

>> if we never get back to balance sheet is that normal or does it show we've somehow built up some systemic risk that we still are paying forward and we didn't come to grips with it when it happened >> certainly there's risks corporate debt levels are rising frankly, in the last three to 12 months some of the corporate debt standards are improving the fed can live with a larger balance sheet. >> you see feldstein's piece "the debt crisis is coming soon." he's warned before he's not a new monetary theory, nmt guy. this is frightening to read, not new but he's well respected. we should have him on. >> when you look at the battery of excesses they monitor for end of cycle the only is aggregate

level corporate cycles our credit team would say that doesn't categorize it's some ways out and on the margin those levels have gotten or the aggregate credit quality has gotten a little bit better lately >> does the dollar strength stay capped now, jay? has the fed kind of matched the dovishness of elsewhere? >> we think it does. we are broadly long the dollar versus a couple other majors right now from a tactical perspective. if the fed is on hold, the ecb is on hold it takes the pressure off the dollar last year, the fed was tightening while the rest of the world was struggling and the re - >> could the global slowdown be worse than expected? does that hurt the u.s. economy or not so much >> i think it does the risk is that, yes, the decline in global growth is worse than what people are forecasting, and we're going to probably see some prints on

major economic indicators in the next couple months that would reinforce that notion, it's what the fed's responding to, trying to solve some problems perhaps outside the u.s. if that does become the case, then yes, that probably impacts u.s. at-risk assets. we think the administration has less incentive to sign a trade deal sooner rather than later that could put pressure on china and markets. there's plenty of short term risk to keep an eye on >> erik, jay, thank you. >> hours remain to do the brackets i'm going to ask you, should i look at it one more time >> yes >> i haven't done mine should i do one quickly? >> yes >> should i change anything? >> i may go back and change a couple >> i'm going to go look. i hate doing this and i always regret it. coming up, preview of nike's earnings, which are out today, after the bell speaking of everybody is going to be wearing new shoes, a lot of them anyway, hopefully no more explosions. we'll talk sales competition of

shoes and the company strategy, and viacom stock is sinking as the network disruption looms for at&t directv subscribers will an agreement be reached before tomorrow's deadline we'll discuss what's at stake and industry in general. stay tuned you're watching "squawk box" on cnbc we'll be right back. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.

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welcome back to "squawk box. earnings just out from darden restaurant, parent of the olive garden, longhorn steakhouse, other restaurant chains, $1.80 a share in the latest quarter, a nickel ahead of estimates. revenue and same restaurant sales were better than expected and darden also raised its full-year outlook and getting a nice pop today, up over 3.5% still to come, it's been quite a run for nike stocks, just below its 52-week high. we'll preview tonight's big earnings report. and later this morning, don't miss mark hurd on "squawk alley" at 11:00 a.m. eastern time time for today's aflac trivia question, how many adults did not go to a movie theater in the first two months of 2019 the answer, when cnbc's "squawk box" continues

so we're answering their questions. aflac is auto insurance, right? no. uh uh. is it homeowner's insurance? no... uhuhuhuh! is it duck insurance? nope. ahhh! do they pay me money directly when i get sick or injured? yeah. aflac! you got it. you know aflac! boom! get help with expenses health insurance doesn't cover. get to know us at... aflac dot com.

now the answer to today's aflac trivia question. how many adults did not go to a movie theater in the first two months of 2019 the answer, 46%.

>> just checking in on the futures. we saw a little bit of a leg low in the last 10 to 15 minutes for u.s. markets the dow is at a third of 1%, nothing too serious but towards the right-hand side of the chart, the turn southbound, 85 points in the premarket. ended yesterday essentially flat we did get a nice positive jump after the fed meeting. by the end of the session, back down to flat, logic is the bank's sell-off, oil is down 0.8% as well this morning. >> it's not excellent. i'm going through the dow components one by one. goldman sachs is a little weaker, boeing is a little weaker, but it doesn't look like there's any -- i'm still going through the list let me keep looking. >> 133 points american the 85 i mentioned, s&p is down about ten points, nasdaq down 16 we'll keep an eye on that throughout the morning nike reports its earnings after the bell

joining us to discuss what we can expect is matthew mcclintock, barclay's u.s. retail analyst good morning to you, matthew >> good morning. >> headline, what are you expecting? >> so we're expecting 70 cents, which is about five cents above consensu consensus. nike beat expectations last quarter by about seven cents we've seen a consistent track record to upsides and earnings on top line revenue driven by accelerating trends across their entire business. >> what have you seen from other retailers that reported and does that make you optimistic for nike >> that's a good point what we've seen from nike is number one global retail partner footlocker, the best same-store sales increase since the first quarter of 2014, a 10% same-store sales increase at the number one retail partner. how does that look relative to the rest of the retail industry? that puts footlocker in the top

five of all retailers in the united states. we're pretty optimistic that from footlocker strength, nike strength will continue >> what about on the margin expectation? >> yes, margin expectation is for roughly 60, 70 basis points of gross margin expansion, that's in line with what we've seen over the last couple of quarters could that be a little bit light relative to some of the more overly optimistic expectations yes, we think it could be, but what nike is doing is putting up that consistent solid increase, going forward, and they're reinvesting that potential upside that some people might be a little optimistic will back into their product, back into growth and that's why we've seen sustained growth, sustainable growth from nike over the last several honestly last year >> there have been a couple of product launches in recent months, matthew, what would you make of those and will we get updates on those later today >> yes, we're very excited about the air max 720 from our channel techs at footlocker and other

retail stores or chanins. that shoe is a hot commodity you see continued iteration on the airmax platform. they had the 270 last year, that was a solid launch, a strong product, before that the launch of the air vapor max again, all part of the max family we expect continued acceleration from this new product that launched i believe on february 1st. the other one is kind of interesting, i think you might want to be interested in this or talk about this is the adapt bb, which is the first scalable platform for nike's adaptive technology, where the shoe itself conforms to your foot you can control the shoe, the sizing of the shoe on your app and you can make it get tighter, thinner, whatever. they launched this with the all-star weekend, nba all-star weekend and we've seen a lot of hype around that and expect that to be a pretty hot seller as we progress throughout the year >> i tracked this on "closing bell" we had them. i didn't like them i've got kind of big feet anyway and they're a bit more clunky having all the tech in it. i felt i looked like a clown

>> that means you wear big socks. >> selfie stick. >> yes thinking about the tournament and everything, there's a lot going on with zion he may someday have a nike shoe, don't you think, but then you remember nike shoe exploded on him and took him out for a few games and those games weren't nearly as good when he was out and people paid a lot of money to see him and we're going to see how well duke, i mean there are some very high expectations for how far duke goes, whether they go all the way and for him and it could matter on whether he gets a huge deal from nike someday. might even call it duke-y, instead of nike. >> a couple points to make number one, he performed exceptionally well when he beat my florida state seminoles in the acc championship i think he's back to form in his nike shoes in order for another competitor

to take advantage, they'd have to make a good shoe and we haven't seen good basketball shoes from any brand in well over a decade. that's the reason why nike has 90% market share of the basketball shoe market, which is just crazy when you think about that in the context of other retailers and other brands and their market share when you think about that, how many shoes, how many nike shoes are on the court how often those players are playing in those shoes, one in a billion chance that something like that would happen, your odds are probably better to win the powerball last night, the $550 million so i honestly don't think it's going to be much of an issue there's probably some -- sorry g ahead. >> i guess air jordans and stuff and lebron obviously, but we do move forward, and the hot guy, shoe could be zion eventually, right? >> i think it could, and that could be, he's talked about like the greatest player to come from college basketball since k.d k.d. has a shoe. it's a hot shoe. this is likely going to be the next hot shoe and i would

suspect that he's likely going to sign with the people who have the dominant market share that can continue to iterate and put up -- >> crazy >> yep, everyone else has. >> duke-y, i thought that was doogie howser. us what' dooky mean, doo-doo >> yes >> anyway, are you more interested in the average analyst, in march madness, andrew i bet you are. >> i'm all over this i was watching the games last night, watching it this weekend. >> will you help me? >> i'll tell you, florida state university pick 'em to win it all. >> oh, come on i don't even have -- what about, so is tennessee still really good or is auburn any good were they just down after they lost, after they beat kentucky how far should i take tennessee? >> i tell you, auburn looks really good right now. >> they do >> auburn is on a streak

i think auburn could go pretty far. >> i just changed them this is bad. what about oregon? they're 12, i mean, someone said they're really hot but they're not going to beat wisconsin, are they >> that's a hot pick for upset everyone's favorite pick right now. that's happened before there was a 16 that beat a one last year. >> i know, don't remind me, about the ultimate bracket i'm afraid to pick virginia this year because of that >> i hear that and florida state beat them, too, so they're already on a losing streak >> did you go to florida state i want full disclosure here. >> yes >> oh, did you >> yes, sir. >> i'm not taking that advice. >> we'll disclose this later >> you're a homer. that's not objective i got to stop listening. what's that? >> you went pretty far last year >> i had xavier. i'm not going with my heart this year i'd like to take cincinnati.

did you see jeron cumberland, did you see the game >> no. i didn't see that one. >> it was big. he had 34 points he is the aac player of the year anyway, we digress sorry. >> it's unusual for us >> yeah, it is unusual >> by the way, that's a first. you apologized for saying something offensive. >> you know, there are other, there's one other person who never apologizes and it worked for him. >> who >> he's like the most powerful man in the world >> potus >> exactly has he ever? and he has said stuff that is just beyond the pail >> this is true. >> thank you, matthew. i guess we're going to leave it at that. he's an analyst who knew a lot, except he went to florida state. i'm crossing that out. matt, thanks coming up, the spotlight is shining on media stocks. disney closing its $71 billion deal for fox, and a blackout looming for viacom and directv

customers. we're going to dive into the media mega world, the merger world, and talk about the future of the industry and then later, american enterprise institut arthur brooks, this going to be a good segment he says love your political enemies and i've been thinking about that and i just can't. i can't. i can't. i can't. i thought of them, and each one of them individually, and i can't. we'll be right back. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. weveryone, looknk isn'tat your phones. the design thinking, the digital engineering,

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simple. easy. awesome. xfinity, the future of awesome. ♪ still to come on "squawk box" this morning, mega media mergers and your portfolio what's ahead for consumers and competition in a few minutes with the fed holding steady, we'll talk about the outlook for the u.s. economy, trade talks and more with aei's president arthur brooks. later, the fbi joining the investigation into boeing 737 max. we will have more on the ongoing investigation and what's next for boeing stock "squawk box" will be rhtacig bk.

holy moly. there's the futures, down quite a bit, 160 points. nasdaq is now sharply negative it was up earlier 18, now down 33 the s&p is also lower. just quickly want to mention a

mover, big cap biotech, biogen, look at that, just happened, and it is down 24%, which is weird for a company that size, with a market cap of that size. the company and its partner esai discontinuing phase three trials of an important alzheimer's treatment, and bad for the stock, and bad for all of us >> hoping on this. >> it's monoclonal antibody, called aducanamab. it was all the way to phase three. they ended phase three trials because the trials were unlikely to meet their primary end point not based on safety concerns, it says, but the phase two safety study andlong-term extension o the phase one study of the drug

also was discontinued because it doesn't work, and these plaques that people get, you don't know whether it's causing the alzheimer's or whether it's a result of the alzheimer's, and you know the causation and correlation aren't the same thing and there are those, everybody's heard of these things because you see in alzheimer's patients these plaques build up >> in the brain. >> it definitely has something to do what w what's going on >> here is a comment from the ceo, and this is the issue that's going to loom large for anybody who was hoping on this, for this leading to a cure this disappointing news confirms the complexity of treating alzheimer's disease and the need to further advance knowledge and neuroscience >> yep >> that's going to be the bigger takeaway from this. >> people talk about the eventual cost to society, as we all, everybody's living longer, and if you don't get alzheimer's, dementia is such a big, whether it's parkinson's, or whatever you want to call it, but alzheimer's, that can happen

to a 50-year-old person. >> right >> it's frightening. >> down 25%. >> that's unbelievable, for an $80 billion company. >> it was high hopes >> $80 billion company, that's really amazing >> weighed more broadly on the futures as well. >> i think it has. >> they were slipping already anyway >> the nasdaq was up >> down 150 points >> some of the dow components that were under pressure the last time i looked just a few minutes ago, merck and pfizer were under pressure, not that you could necessarily see this is a longer term issue >> right, expensive and tough, and we haven't got any of these big things, diabetes, that we're working on we have these add-on things for cholesterol, lipitor, we've had add- add-ons but with the basic science advances with genetics we've had but no big progress on this viacom shares dropping almost 4.5% yesterday after the

media giant warned that its programming which includes channels like mtv and nickelodeon could be taken off at&t's directv satellite service this friday, as a result of a contract dispute julia boorstin joins us with more good morning >> good morning to you viacom directed its 24.5 million customers they could see a blackout of its channel including comedy central and mtv if the two companies can't strike a new deal by friday night. at&t accusing viacom of being a serial bad actor in using these tactics of blacking out channels just to get higher prices. viacom accusing at&t of having a pattern of gouging their customers, charging higher prices for smaller bundles of channels viacom here was kind of alluding to the justice department's concern when it tried to block the time warner acquisition, saying that the company would unfairly leverage its size in this kind of negotiation, but yesterday, at&t's ceo randall stephenson saying the

washington, d.c., economic club that competition with the streaming giant, not cable negotiations, is what drove that time warner deal >> all we were focused on was amazon, netflix, apple, these folks are moving fast, and the world of video consumption is moving to the streaming products >> now, this latest battle between viacom andatate comes as the other mega merger is complete disney's acquisition of fox. it was also arguably driven by new digital competition, so now, we'll have to see what disney's new negotiating power will mean in the negotiations or the impact on consumers. the combined company will have more than 40% of the box office that should yield some better terms when they're making their deals with theaters but we'll see what it means for consumers at the end of the day. >> let's continue this conversation joining us right now to talk about what all the consolidation means for investors and consumers is michael wolff, the ceo and co-founder of activate,

and the former president of mtv, also tuna amobi at cfra research let's go high level on this firstful a of all, michael as this consolidation comes, you might naturally think there's going to be less competition, and that's bad news, but i think what randall stephenson just said is an important point it's not the same old players who are involved with this there are newer, bigger, more powerful kids on the block >> the real competition is netflix, hulu, amazon prime now we're going to have disney plus. all of these technology companies plus now disney, and nbc has already announced it will have a service, they're fighting for the battleground is getting you, if you're going to drop cable, is using one of the services, or getting something in addition. so that's the real issue

viacom and at&t, they need to be together viacom needs at&t's distribution and at&t needs viacom's channels which are almost 20% of all of viewing. >> tuna, we talk about the 800 pound gorillas, the new kids who have this endless amount of funding but they haven't figured out how to make money on this stuff either they're giving it away or willing to take a loss on it how long do you think the market will continue to go along with that and say yeah, we believe in this, go fight doesn't matter if you make money right now. >> well, i think the good news, becky, is every year we're seeing incremental progress in terms of getting to that break even point if you rewind several years ago everyone was expanding with various business models trying to figure out how to get to profitability. i think what a lot of these companies have figured out is that it's going to take some time the technology seems to be in

place right now. i think really it's a question of getting the business models properly aligned, right, so i think the key here is to continue to experiment for example advanced advertising is one way some of these platforms are looking to monetize it and we're seeing progress on that front. to your question, investors understand that it's going to take some time while we're seeing secular declines in traditional pay tv, the good news is that the online subscribers are starting to partially offset and we think the next three to five years perhaps on an aggregate basis, you're going to get to that tipping point, where the increases in online subscribers are going to start to outweigh the declines in pay tv and investors will get more comfort when we get to that level >> michael, that would be my pint to this point i think it's been great for won sumers i have so much more content than i could imagine to watch but is there a point where it's not willing to -- wall street is not willing to give the funding,

some of the places shut down, and then all of a sudden this consolidation of power is bad for consumers. do you see that or is this a whole new world and we're never going back >> the consolidation of all of these companies has been going on for a long time as well as the shutdowns have been going on for a long time. there's nothing new in this. at&t tried then what is directv tried the same thing with viacom in 2012 and it didn't end well because direct to have lost a lot more subscribers not only do i think this will be over soon but the timing is fascinating. saturday night is nickelodeon's big event, which is the kids choice awards, so if the deal expires, then there's going to be a lot of consumers that are going to miss out, so this is going to get resolved. >> i want to start a different tack, tuna, in terms of the new initiatives that all of these different media companies are going on and it delivers slightly company to company but do you think at&t or apple or

disney will get an earnings multiple or be thought of in the same way as netflix by investors any time soon? >> it's an interesting question here right, i think investors kind of look at netflix in a very different mind-set from a valuation perspective, compared to some of these other giants to your question, i don't think the multiple will ever get that but the idea here is to understand the more exposure you have to streaming, for example, disney with the launch of that platform, the more you essentially are taking your own destiny into your own hands, and what that means is that that gives it the flexibility to monetize your own content across a lot of platforms, more so than when you have it kind of, you know, licensed all over the place. so the key here is for investors to understand that this pie is growing. the more that you invest in content, there's going to be short term pain, but over the long-term, the more that you

gain subscribers or advertising, these are essentially higher margin business. when you have a company like netflix, essentially the costs are fixed, where you can leverage the content costs as your subscriber base grows, a business model is inherently attractive the key is to continue to get a growing piece of the pie and all the companies you mentioned i would argue stand to benefit from this secular growth there's going to be potential winners and losers for sure but we think the formula will play >> it is a growing pie but the competitors fighting for a piece of that pie are growing in number just this coming monday, we're going to have apple announce their streaming service, disney has yet to launch disney plus, they already have espn plus and will have nbc universal as well as at&t launched their services, and i think the key question here is, how many of these services are consumers really going to pay for and at what point will we see people make hard choices and who is going to suffer is it the traditional tv bundle? the reason why this debate is

happening right now is because viacom does not have the negotiating power, because they're subscale compared to the other players. >> julia, gentlemen, thank you for coming in. tuna, michael, great to he so y see you. coming up, aei president arthur brooks discusses jobs and trade and watching shares of biogen and a quote on esaly, the partner here which also trades, a big company $23 billion. it was targeting beta amaloyd plaque i was reading an article the holy grail are cold fusion the company is tight-lipped about the phase three trials, weren't supposed to be released until 2020 now they pulled the plug the stock is under pressure. they licensed it from a company called neuramune we'll see if that trades scrapping an alzheimer's drug that had high hopes. we'll be right back.

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how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. amazon is blocking ads for unprofitable products. the e-commerce giant is telling vendors or wholesalers who sell their goods if amazon can't sell products at a profit it won't let them pay to sell the items "like all retailer, amazon

decides which products to market and promote in our stores based on a variety of factors such as relevancy, availability, profitability and other factors. it makes sense, the same way walmart decides what it's putting on its shelves, too. if it's not making a profit, it's not putting them on the shelves. shares of amazon are down but just barely by 0.1%. jooamie diamond said yestera on amazon leaving new york >> it would have been 100,000 jobs in total there. jobs across the whole spectrum and people the mistake people made about new york tax benefits new york has the highest individual rates and corporate rates, a reduction in the rates for a time period and so i think it would have been hugely beneficial for new york but if new york doesn't want them, so be it, they can go elsewhere >> joining us on the set, arthur brooks, president of aei, author of the new book "pretend to love

your enemies: how decent people can save america from the culture of contempt. we're old friends, and you're too young to be my mentor but the two books you wrote previous to this, everybody should read "the road to freedom instead of surfdom" and what was the other one? >> "the battle." >> about what we're facing and how present was that, we'll face socialism again in our life time and i paid andrew $1 a page to read "the road to freedom. he charged me for the back >> the index he charged you for the index >> yes >> that's capitalism i like that. >> maybe he learned something from it. it didn't really work, but this one, when you sat down, i said, and i'm not going to mention any names and what side of the aisle they're on, but there are people that i will never, ever, ever,

ever love. and there's nothing but disdain and contempt and i'm sorry i feel that way. >> you're kidding me i would never guess. >> i'm not going to mention any names. did you see the kavanaugh hearings maybe i'm talking about lindsey grah graham, bloomenle that, either one. who knows? nobody has any idea who i'm talking about but you said i don't have to, i need to pretend that i do? >> here is the deal, joe 70% of americans, actually 93% of americans hate how divided we've become as a country. one in six have stopped talking to a family member or close friend because of politics since the 2016 election. 175 speeches i do a year one question i ask, how many of you love somebody with whom you disagree politically every hand goes up the problem is not that you don't have disdain for certain people of course you do but the truth of the matter is that the country is being ripped apart because there's an outrage industrial complex and media and politics and on campuses and

entertainment saying we have to hate each other if we disagree >> thank you, arthur >> when are certain sectors going to start loving the duly elected president of the united states do you think you'll get cooperation from that side >> i don't >> you don't, you won't, you never will it will never happen >> here is the deal in the book, joe. this is a solutions book for individuals. here is the problem. when you hate somebody with whom you disagree politically, you're not separating their ideas from the person, and the result of that is you will never persuade the person, nobody in history has ever been persuaded with hatred so you will be more persuasive i have the solutions book one, two, three, four, five, you can be a happier person, which when somebody treats you with contempt >> how do you think the mainstream media felt about "w" about mccain running for president and romney running for president, and how do they feel about him now, which is classic.

>> yes >> you got to toughen up you got to fight fire with fire. you're not going to have any cooperation from the people that write all the newspapers and do all the, you know -- put all the twitter, facebook, how are you going to do it >> i have better than fire if you answer contempt with contempt, you'll never persuade anybody, nobody who is watching will be persuaded and you'll be less happy as a person than you need to be i got the data in this book, i show that when you answer contempt with greater respect, other people like it more, more persuaded by it. we have a fighting chance of winning the country. >> you bring a copy of the book, i'll read it can i read it? >> i will give you a copy of the book, absolutely >> i'm happy with everything except -- >> you could be happier. >> i'm happy with my life and family, i'm just not happy with the mainstream media >> i love, lochve, love his poit it's fantastic >> is the state today worse than

ever there's a lot of -- okay >> we're more polarized today than at any time since the civil war and it's completely unnecessary. we should be so grateful for living in this country it has to do with the fact social media we're siloing our news feeds people are only listening with whom they agree. the leaders firing us up for a living saying the people who disagree are stupid and evil we're right, they're stupid and evil which is unhelpful to us, making us less happy and less persuasive >> could we fight this with love is one thing and rather than hate is the same, could we fight it also with regulation of social media >> no. that will help we need to get rid of anonymity on social media. that is the enemy. what we can do personally is commit never to be anonymous and never interacting with anybody anonymous on social media. it is an existential crisis. >> you don't think one or the other side is more guilty than the other at intolerance or at,

i mean -- >> of course i think that. >> you realize what i'm alludin to her >> you and i always agreed on politics >> right >> but point of fact if joe kernen and arthur brooks, becky quick want to be more persuasive politically, the only way to do that is to answer contempt others without -- >> the guy who blew 100,000 jobs in new york city for pie-in-the-sky, unrealistic, i mean, policies that only lead to hell, the path to hell like venezuela. how can i love a person like that >> if you're saying they're stupid and evil it's going to happen again if you say you're stupid and evil, people who are watching are simply going to lock down on one side or the other and we'll be in a stalemate forever and this is going to happen again and again. >> he's right. you go after somebody with humor, they say they're sorry and say you're right >> i can't love these people because i think they provide a very good foil for -- glsh jo

>> joe, you deserve to be happy. >> i'm happy >> happier >> i can't be happier. >> given where we are in the state of play at the moment, can someone win in 2020 by taking this approach, or do they have to fight fire with fire? >> actually that's a good point. >> given how things are playing out. >> the question is i don't know that yet and part of the reason is because we're in early stages of having a backlash against the outraged industrial complex in this country you can't have a crummy product when 93% of americans don't like it after the civil war the whole idea of the self-improvement movement came about because people wanted to master themselves, wanted to be happier, better people but will it be 2020, will it be 2024? it's not going to start earlier than each one of us learning to master ourselves and living a better life. >> i don't know. >> come on, joe. >> i don't see it. i was around for reagan, too do you remember how they treated

that guy he was like stupid, he was an actor, biggest co-star was a chim pan zee >> why did he win an election? >> because he was charming. >> it was because he loved the people with whom he was -- look, i was from a left wing household. we heard that ronald reagan was going to kick granny out on the snow and get nuis a war. when i heard him in 1984, i said, he loves me. >> i love you, too >> you have to come back and guest coast. we'll be right back with biogen. >> i love you. >> i love you, too, joe. nlock os other advisers might not see. learn what a cfa charterholder can do for you, at therightquestion.org i switched to geico and saved hundreds. that's a win.

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learn what a cfa charterholder can do for you, at therightquestion.org release the doves. >> hold! hold >> the fed turns dovish and holds interest rates steady but the market's initial reaction is negative >> buy joe gen bombshell, shares of the firm tumbling after a big announcement we have more on the developing story. and making dollars in denim, iconic jeansmaker levi strauss set to return to the public markets for the first time in more than three decades as the

final hour of "squawk box" begins right now ♪ >> live from the most powerful city in the world, new york, this is "squawk box. ♪ should i stay or should i go >> good morning and welcome back, to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm just like overflowing with love i think did you see, we have leland here today, thank you wilf, i could have you here every day and it would never be enough becky, i don't know if i tell you enough how much i love having you here. >> thank you >> and being part of my life >> thank you, i love you, too. >> steck, i don't know your name >> see t is happier. it's a happen per place to be. >> you're awesome. you always say good morning when i come in. i'm joe kernen along with becky s kind of frost. i miss this next person desperately, andrew, out today but he will be back eventually

and i'll give him a hug when he finally shows up futures right you are wilfred said it's a little unnerving. >> arthur brooks said you don't need to mean it. i do, though down 144 points now on the dow take a look at the nasdaq, down 30, s&p down 12. treasuries look at this. if you didn't, if you were just waking up or on the west coast or something, 2.50 on the ten-year, and anybody when we were at three said the next stop is 2.5 or 3.5, everybody would have said 3.5. >> absolutely. >> here we are back at 2.5 >> so some guy on twitter just sent in a bumper sticker, "i hug people lay it ha people i hate so i know how big to dig the hole in my backyard." >> think about that one. >> so i need to know how big to dig the hole it's like peta, people eating tasty animals.

biogen shares are tumbling after the drugmaker and eisai discontinued late stage trials of an alzheimer's treatment after a monitoring committee said the treatment is unlikely to meet its primary goal check out the shares this morning, biogen shares down by 27%, decline of $88. this is very bad news not just for shareholders in thisny but y who was really hoping on this, as a new way to try and treat alzheimer's. the company's ceo coming out and saying this is just proof of how difficult it is to try and tackle alzheimer's and how we really need to focus much more on neuroscience and ways to come at it. a lot of people will be waking up to some disappointing news this morning, and again, the shares are down by about $88 >> the antibody which they isolated from people that don't have alzheimer's, and also from people that have some type of dementia but slow-moving so they isolate it using this proprietary technology from

neuramune, isolated the antibodies and tried to work against the beta amyloid plaques, to attack the betaamyloid plagues that appear in people with alzheimer's it doesn't look like, there's something else that's more complex than just getting rid of those plaques. >> and back to your point, it's hard to say whether it's causal or not, the plaques themselves, but they are there in everyone who has alzheimer's. >> did we try to check this other stock is not trading yet, the partner, the symbol is esaly. that's not trading >> we have a biogen analyst coming up to join us in ten minutes' tame. cvs started selling cbd products in select states. the pharmacy chain says the products include creams, sprays, roll-ons and lotion, sold in eight states including california, illinois, colorado and alabama. cvs is not selling any cbd

containing supplements or food additives. shares of that stock is down 0.3 in the premarket check out shares of darden restaurants, the parent of olive garden, it reported a quarterly profit of $1.80 per share, five cents above estimates. darden increased its full year outlook up 4% in the premarket the chinese commerce ministry says a high-level u.s. trade delegation including steven mnuchin and robert li litelizer will visit china next week kayla tausche joins us with the latest details the president's comments yesterday threw the market into a little bit of a disarray >> that offers insight into how the administration is thinking of enforcing this deal the president said his toughest negotiators will be headed to china to continue to work toward a potential deal the negotiators led by mnuchin

and am bossor robert lighthizer. one dynamic that could change is the purchase portion of the deal president trump said he wants double or triple china's existing offer to buy $1.2 trillion in u.s. products over the next six years that goal could be tough to reach, considering the existing offer is comprised of agricultural, energy and aircraft products, and china may actually want to buy fewer aircraft after the boeing crash, not more especially without tariffs lifted, president trump yesterday saying that they're considering keeping them on for a substantial period of time we asked jpmorgan chase ceo jamie diamond about that and he said it would create more uncertainty. >> we all like to see a deal done and to the extent it's not done, it's not good for the global economy i'm not sure i say tip into a recession but certainly not good and you see that reflected in the market every time trade is

going well t goes up, every time it's going badly t goes down and i have faith at trying to get an del gent deal done and it may take ail litt take a little bit of time. >> they are talking mid to late april to conclude talks. a lot could happen in the space of a month back to you. more on the prospects, let's welcome china beige book ceo leland miller. i miss the fed sometimes because at least we used to say it's the fed and china. now the market is focused on the fed but seemed like they're out of it, but every sort of nuance we hear about china from whether it's positive or negative seems to impact stock prices now what are the prospects it's near term and what it's a decent deal >> well it's not going to be a decent deal. >> never >> you can't negotiate the deal they promised and the dealthey promised was structural change in the chinese economy that is not on the table

ip protection, that's on the table, market access on the table. they're going to have some ridiculously high number that's mathematically impossible to meet in terms of headline buys of imports and that's all part of the deal, but the idea they're going to get what they promised, it's not going to happen you can't negotiate structural change in the chinese economy in 90 days, 120 days, you can't do it in one year this is an ongoing battle. the markets keep reacting to every whiser er whisper trump y suggestion from asia the president wants a deal as long as the president wants a deal, we'll have a deal because they're going to fudge the remaining issues at the very end and we're at the stage in the last several weeks where they're going to start fudging the issue. it is saying here is my interpretation, here is your interpretation and we'll sell it to our own bases as being successful >> what is impossible, you say the ip might work. is there a way to make it where we don't have american companies that do business there don't have to give up quite as much to enter that market?

is it possible around the edges there can be some positive things there you're still pessimistic by 2025, there's nothing we can do, they'll be number one, by 2030 we'll be a second rate superpower at that point there's no stopping china? >> no. >> if they're not stopped, they don't take over the world? >> well the interesting thing about ip is that ten years ago, there was no motivation for the chinese to actually try to restrict ip theft, because that was their bread and butter now, they are a copycat economy but also an innovation economy there are reasons why the chinese find ip protection more attractive now than they did in the past and certainly some of the stuff they're doing is laying the groundwork for a much more robust ip protection system no question. the problem here is that, if u.s./china relations deteriorate in the future, in a society like china, where the party controls everything, could you simply turn off the enforcement either as leverage or as punishment, and so as long as you have that, your change isn't structural

it's transitory. you get some positives but things revert to the whole way after a period of time and that's the real risk with the teal what we're seeing you'll get a bump and great headlines in the early going but nothing has actually changed >> does it boost u.s. growth and for how long >>ing look i think this is a relatively de minimus issue in the grand scheme of things in terms of the u.s. economy. i think people want to see trade warheadwinds off the table they want to make sure this is not an issue for 2019. i don't think this is something that say major issue for the u.s. economy china different. they'd like the trade war off their lap. >> if trump decides, listens to people like you and other naysayers and critics, we're not getting anything, what if he decides i'm walking away, because china is not going to do it >> then i think you have some negative sentiment in the markets and one of the reasons he boxes himself in, it's hard to walk away, having walked away -- >> north korea

anyone that tries to figure out trump, hasn't tried before, i don't know leland, thank you. when we return, more on biogen shares there down big this morning, after the company and a japanese partner discontinued late stage trials of a potential alzheimer's treatment. the stock right now off by 28% and with uber and lyft making their way to the public marvegt markets, are we in an ipo? we'll talk vuaons altiand much more, when "squawk box" returns. . but is that enough? . i need tech that understands my business. i need tech that works at scale. dear tech... dear tech... dear tech... we're exploring quantum to develop next generation energy. we're using blockchain to help make sure food stays fresh. we're using ai to help create more accessible health care. we're using iot to create new kinds of digital wallets. let's see some more headlines about that. let's expect more from technology. let's put smart to work.

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welcome back to "squawk box. levi's goes public today after its initial public offering, priced at $17 per share, above the expected range of 14 to 16 per share. it values the company at $6.6 billion. you don't want to miss a first on cnbc interview with the ceo, chip bergh on "squawk alley" at 11:00 a.m. eastern time. tech unicorns like lyft, uber, slack are headed to the market as well we want to know if we are on the verge of an ipo bubble

joining is ajay choprah, thanks for being here >> great to be here. >> let's talk about that, the idea of a tech ipo bubble. for years we've been bemoaning the fact companies with major valuations that have not come public now they talk about public we're ready to jump in and say it's an ipo bubble which is the truth >> well, i don't know if there's an ipo bubble yet or not, but for sure, i know there's a pre-ipo bubble, the valuations and private markets are at an all-time high. last year a total amount of venture money that went into startups was about $130 billion and a full 49% of that was in round sizes greater than $100 million. so we are certainly seeing the bubble before the ipo. so far, we believe that the public markets have stayed rational in the way they are looking at multiple, as these unicorns go public it remains to be seen.

>> is it rational for uber >> it replaimains to be seen in the private market i consider that a high valuation. i hope the public markets will be rational when the stock comes out. >> you're hoping the stock will not -- >>s did 20 billi $120 billion. >> $120 billion is not rational in the private markets >> i think that's the high side. >> you think $90 billion would be a fair valuation for uber in the producible markets >> i believe somewhere in that range is fair. >> you think the last of the unicorns have to take a haircut once it goes public? >> yes >> lyft valuating ten times sales that's not that aggressive facebook was 34 times sales when it listed. >> yes, so it's a possibility with some of these companies that the markets will accept the higher multiples based on the

growth but i think with some of the other companies, the growth may have slowed down >> it's not just the growth that matters or the sales that matter it's a path to profitability do you see a path to profitability? >> that's very elusive for most of these companies and that's the biggest issue with the public markets >> can you expand on that? >> well, i think unless there's a clear path to profitability over the next three to five years, the public markets are going to look at some of these ipos with concerns >> would you recommend that a retail investor buy in at the opening, if you see a discounted valuation from what's being bandied about today? >> i think there is going to be an interest in the retail market for some of these stocks, because these are some of the early ipos in the on demand sector, and i think there's a lot of customer connection to these companies, because they're using these services, so i would

think that there would be initial demand but it remains to be seen what happens in the longer term. >> ajoay, what is your take with the fact these are coming to market says about the value wa s valuations of the nasdaq and equity markets >> so i think the valuations as i mentioned in the private markets have been very, very high we don't see that bubble on the private side changing any time soon i think what's driving that is that a lot of the companies are actually creating value ahead of the ipo, much more so than before if you look at when amazon went public, it was only at a half billion dollar market cap. when google went public several years ago it was only about a $23 billion market cap the companies go out at high valuations the reason, is that a lot of the value creation has happened before the ipos. many of the rounds that i was talking about earlier are

effectively pre-ipo rounds and so you know, a lot more of the value is created before the ipo. it remains to be seen how much more value is created after the ipos. >> who do you think gets left holding the back in the past we see the high-flying ipos, a lot of times it's the initial investors, the retail investors who get lyft holding the bag but because these companies have been private for so much longer, the valuations have run up quite a bit. do you think there's the potential that the earlier investors, the pre-public investors get left holding the bag? >> it's a possibility. also it could be that a lot of the pre-public investors take liquidity fairly soon after the ipo when there's a rush to buy the initial equities >> ajay, thank you for joining us today we appreciate your time. >> great to be with you. thank you. coming up, the biogen bombshell, the biotech giant deciding to discontinue late stage trials of an alzheimer's treatment. that's a nice way of saying that

their drug didn't work, and people were excited about it and thought it might down 27%, market cap losses, that's like $20 billion. we're going talk to an analyst abt e outhfallout in the stock "squawk box" will return in just a moment this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay.

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biogen shares losing more than a quarter of their value this morning on news that research on its experimental drug for treating alzheimer's is going to be halted joining us to discuss, jeff borges managing director at leerink partners as recentry as january, geoff, analysts were not selling us, they were mum on the phase three trials and that might not be a great sign i also saw another analyst say this is either going to be cold

fusion or the holy grail and people saying they're more surprised anyone thought it might work than doesn't work what were you think being this drug for alzheimer's >> yes, this is a 30% probability of success, and we were particularly worried about the period from march to july. the street had become convinced there would be a so-called interim analysis and the interim analysis suffered the possibility of an early positive readout from the trials. they did what we expected and discussed with investors they'd do a futility analysis, which is a different annalysisnalysis. a futility analysis has downside, not upside interim analysis has upside. they had a futility analysis, study deemed futile by a group of experts monitoring the study and why they halted it and this is probably the final blow, final nail in the coffin, if you

like, for the beta amyloid hypothesis for alzheimer's >> really? that's what i was going to get to in a second is it worth $15 billion of market cap was the upside $15 billion in market captor biogen >> well, certainly, if this had worked, most people i would agree thought the stock would be well over $400 a share and probably $30 to $50 of value in the stock even with the discounted probability of success. naturally that's going to be an overreaction to this, a lot of investors will give up on this company. they're not in a very good position after this announcement, if you look at the rest of their business, they've got a mature ms business, they've got a rare disease of a drug called spinraza, coming under competitive pressure, a great royalty stream from roche, so it looks increasing like a value trap and the next few

months are going to be very telling. this company will probably have to be substantially restructured as a result of this. >> the entire pharmaceutical biotech industry has a maturity problem. what is the problem that we can't use our basic science discoveries to figure these horrific things out. and my other question, at least a couple years ago i had great doubts that dealing with the beta amyloid plaques would result in anything why were people still holding on to that notion that that was the key thing and it's got something to do with alzheimer's but is it a result of the disease or is it the cause of the disease, the plaques? >> well, it might just be saying that we're going to treat the scar in the injury which is part of the department's response to the -- >> you're treating the scar of the injury instead of the injury >> exactly right maybe we're treating not the

underlying infection it's difficult to know what is a bystander process and the cause process. it looked beta amyloid is a bystander process, it's there but not necessarily the key culprit. the question why people continue to believe, biogen had an intriguing phase one two study called the prime study, on the basis of that prime study which was a few hundred patients, they were like a poker player and put all their chips on the table at one time, made this huge bet on these two large trials they've recently added a third pivotal trial, they announced they were going to conduct in either early alzheimer's patients and all of that basically on hold if you like discontinued now it's a good example of how an entire organization can start to believe their own kool-aid you're right many of us in the investment community had become increasingly skeptical

you see lilly failed, pfizer failed, merck failed many companies stepped away from amyloid. b biogen and bayside were the last holdouts they're not holding out any longer. >> they went to people with a slow moving form of dementia and found this antibody that seemed to be involved but i guess not, right? anyway >> yes >> geoff, thank you. appreciate your quick response >> no problem. coming up, some important breaking economic data, the latest read on jobless clalims few minutes, we'll have the number when "squawk box" continues after this quick break.

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welcome back to become bcs it is time for weekly jobless claims and the latest philadelphia fed manufacturing data, rick santelli is here to join us. take it away >> the survey says on the initial claims side we have a drop of 9,000 from a slightly revised 230,000, which originally was released at 329,000 -- 229,000 last week, it now stands at 221,000. and continuing claims a week behind, week in arrears move from 1.77 million down to 1.75 million. our march read on philly fed expecting the number in the zip code of five, almost triple, 13.7 after the fed meeting, which

many deemed dovish, i deemed a good accounting of what's going on in the economy, it's a pretty good number, but it's being received by lower significantly in certain parts of the curve lower yields and a lower stock market you know, i remember, becky, when interest rates moving higher was the bain of all equity investors i think they're thinking twice about that at this point, especially when we now see 2.5% and closing in on the 235 mark with respect to the short and two-year notes joe, back to you >> rick, is that because of what it may be signaling from an economic perspective >> well, i know that's the common refrain, and i read it in "the yurnjournal" and all the op-eds i completely disagree. we were trying to buy insurance. the globe is slowing investors would rather see a more patient fed that they can feel confident, is monitoring the same data they see

i just think that the treasury complex is a tough call. how much of that is the fed and how they change their outlook with respect to how the market becomes a more real time signal. definitely took the steam out of selling treasuries, but in the time period since the end of last year, a lot of other numbers in the u.s. and especially globally have downsized, have shown smaller growth numbers, and i think that that is the issue. i do think the transmission line and the correlations between the soft interest rates is going to have a larger effect on equities we'll have to see how long it goes and what levels we find support, especially in the shape of the curve >> rick, thanks. joining us for more, jim murio managing director tjm institutional services and more importantly, feter in his c efep cnbc contributor where he makes

his real money jim, the 2800 on the s&p, did we get above that level to stay or is it another failure if we go down from here >> okay, one thing i would like to say is that we rallied 22% since december 24th. the rally was mostly fueled, in my opinion, by this notion that the fed was pivoting from hawkish to dovish. to see that's actually happened and we got what we wanted and have the market trade off, that happens all the time we have a phrase for it, buy the room or sell the factory it means everybody that anticipated got it what we rant want is a dovish fed, check, we got it but the belief the fed is slightly too dovish and the underlying economy is going okay, and could withstand slightly higher rates. that part is still unclear yet some of the data has been deteriorating. this number was good, remember that last nfp number the headline part of it was awful. i think this is a correction, i

think 2800 will probably give. i think 2750 on the downside and that's not that big compared to the huge move we've had since december 24th. >> it looks like another failure to get through 2800. what do you think, rick? are we near where we're going to end the year i know you're not a stock guy but do you think there's headway made with the backdrop of china and fed? >> well, you know what i think the back half of this year is going to show better numbers, but here is the problem i have, joe. we had that top as you pointed out, all right around 2200 in october, november, december. then we round it up to it, and we very meekly roseabove it. not the kind of breakout i'm used to. joe, you used to be a technician you used to sit at a desk. there's no such thing as anything beyond a double top what those are, are just coming along until we break through, but the breakout was lazy looking, and i think that, in my opinion, we don't know counter factuals if rates were moving up or

firmer and the curve was steeper, i think it would have popped through harder. i still have confidence in stocks and i agree with jim. i just think we're going to go through a period where it's not going to be as aggressive as it's been the first quarter thus far. >> rick, you mentioned the shape of the curve, which i think is fascinating, when you talk about the 22% of the world sovereign trading at negative levels the curve is inverted in some places and almost going to invert, that to me has lost its predictive power when you have the other two central banks who are absolutely flooding money into the system. do you agree with that >> oh, totally i don't care about the curve in terms of trying to forecast a recession. i'm looking at it like the long end is not grabbing enough to give me a positive cozy feeling to be long on this kind of rounded top that really kind of lost its mojo once it cleared the zone >> that's why i'm long the 123

calls because i think rates are going lower as well long end >> guys, we didn't go to 1800 on the s&p. just consolidating those gains since the election, i mean it takes time to do 40%, 45% and feel comfortable with what the levels of valuation are. rick, did you see arthur brooks will loving people you disagree with, did you see any of that interview? >> no, i didn't, joe i wish i had >> i'm going to send you that book i was thinking about you and steve, stuff like that, but you need to, don't get mad, listen to what they say and try to love them and bring them over to your side so i'm just for future debates >> that's easy to do, if people are receptive on both ends of the discussion >> that's what i said. >> when you meet that border wall, i'm sorry, you can only be so nice. your head can only bang against it so long, and there's nothing wrong with a little passion making sure your opponents can hear you

>> yes >> we're italian we don't know what you're talking about, joe, when you say treat them with less emotion and love we scream. it's what we do. we can't go against our dna i don't think. >> i was just talking about that, i want to be joe kerneno i'm rewatching i want to be -- >> joe, people are not telling us how to behave, how to deal with our passions. >> right >> what kind of hats we can wear >> let it go >> what we can say in the privacy of our own home. i'm lucky they still let me look at my charts >> i know, it's a close call with you a lot of days rick, jim, thank you and rick santelli, lots of love joe kerneni? >> dekerneni >> it might work the fbi is joining a criminal investigation into how the boeing 737 max jets were

certified for flight seth, it's probably not a surprise to see the fbi getting involved at this point, but the bigger question is, was it a flawed process in terms of how the certification came about what do you think? >> becky, that's the question and the question was, what would have caused that flawed process. was it something nefarious, that's praobably what the fbi is looking into or a series of innocent things went wrong and nonetheless caused this tragedy. the fbi clearly relied a lot on boeing, that's what we're learning here. boeing, look, competes in the same -- >> faa, not the fbi. >> yes clearly relied on boeing. part of the issue could just be a resources issue, but then here you have this giant champion of american industry the biggest exporter and questions about whether too much was done to help boeing stay even with airbus, airbus its giant

european competitor was ahead of boeing and coming out with its new re-engined aircraft, the a320 boeing wanted to catch up and boeing had some engineering challenges that were more difficult than those airbus was facing. >> seth, let's slow down i want to break this down for people not following quite as closely. it may not have been anything nefarious on boeing's part it looks like a situation where maybe, it's too soon to know on any issues but questions are raised whether there were corners that were cut. "the journal" last year brought up the issue of pilots not needing to be retrained on those 737 max, and that was a huge advantage, because airlines that are buying these planes don't want to take the time and the money to retrain their entire staff how to fly the new plane the plane was different than the ones that had gone before as you just mentioned the airline body changed enough they needed to move the placement of those engines. that was not something that had happened with the boeing competitor, but by moving the engines, they had to do other

things to change the plane and the way it's flown, including adding the mcas system, the automatic anti-stall system that would kick in if there was too much lift at the beginning t would bring the nose back down towards the ground what concerned me the most is hearing the reuters story that the pilots on that ethiopia airline were flipping through the manual as the plane was bucking just after impact. if that is true, that tells you based on the voices that they heard in the cockpit at that point if that was the case, that it was an issue of not being trained properly if that's the case, how would you go back through and kind of ferret out what happened there >> flipping through the manual and also the ethiopian pilot perhaps hadn't been trained on the simulator since the updates. that if anything helps boeing's case a little bit, they put out these updates and the captain on ethiopia didn't get the proper training boeing's pitch was look airlines, could you have the best of both worlds. a new airplane in all the right

ways, more fuel efficiency, greater range, but on the other hand, just kind of drop it into your fleet and the same pilots could fly it we are seeing here the plane in important ways seems to have flown differently than the older models, different from airbus in the sense that airbus kind of lucky because of technical quirks these airplanes were designed the airframes decades earlier. nobody was thinking about the engines. airbus was able to put the new engines on the old airframe. boeing wasn't and the modifications having to change the airframe a little bit, change the placement of the engines partly at least led to mcas the mcas system was designed to prevent something that had caused previous crashes, pilots in a panic doing the opposite of what they should have been doing, trying to climb too soon rather than tilt the nose down, regain air speed but here we see that partly caused the crash the question clearly a flaw product cess, what led to that flawed process we'll be learning more here in

the coming weeks and months >> thank you for your time, seth we appreciate it >> thank you, becky. the fed's latest language on interest rates was exactly what many on wall street wanted to hear, and yet stocks faded into the close yesterday with the dow and s&p posting their biggest declines in two weeks. so when we come back, we'll discuss what a patient fed really means for investors, morgan stanley's chief u.s. equity strategist mike wilson joins us our investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

welcome back to "squawk box. ford's financial chief, cfo, bob shanks is retiring, stepping down as cfo june 1st and tim stone, the former chief financial officer of snap and also spent 20 years at amazon is going to success him shanks worked at ford for 42 years. >> wow >> and we're watching the shares of biogen this morning, down big after the company, and a japanese partner discontinued phase three late stage trials of an alzheimer's treatment that was, there was quite a bit of optimism about and the only reason you discontinue something or the reason they said they discontinued it, it's not meeting its primary end point or in english, doesn't work >> doesn't work. under an hour until the opening bell on wall street. dom chu joins us with some of the big e movers >> biogen analysts are coming

out, markets are lower but apple shares are bucking the trend on a relative basis, up by just about a percent or so, a little less 300,000 shares of premarket volume, analysts at needham upgrate an toll a strong buy and upped their price target to 225 bucks. they had it at 180 before, they cited, among other things, underappreciated value in the apple ecosystem and the anticipated announcement of a new streaming content service sometime next week on the oil and gas front we're watching shares of oil exploration and production company conoco phillips, higher premarket. analysts upgraded shares to overweight, at neutral before. cited the underperformance of the shares and the ability for the company to generate strong, free cash flows even at lower oil prices, shares up 0.6% we'll end on the media side of things with fox, aka new fox, the fox assets weren't bought by

disney, shares up a half a percent premarket. analysts at credit suisse started coverage of the company at fox news, fox sports with an outperform and slapped a $46 price target, they expect fox to post the fastest sales and profit growth in the media landscape in the next few years an well positioned for its contract renewal with the nfl. back over to you >> dom, thank you for that at the conclusion of the fed's two-day policy meeting yesterday, jay powell delivered another dovish surprise to the market and reiterated his optimistic views about the economy. >> the data are not currently sending a signal that we need to move in one direction or another, in my view. in our sep projections committee members participants generally see growth of around 2%, they see unemployment remaining below 4% they see inflation remaining close to target, and they see growth as i said around 2% so that's a positive outlook, it's a favorable outlook

>> markets lost a little bit of ground at the end of the day, largely due to the banks trading lower, and our next guest says evidence is building for more downside ahead mike wilson, chief equity strategist and chief investment officer of morgan stanley securities and wealth management thanks for joining us. >> thank you >> talk us through the view in terms of the reaction to yesterday being perhaps not as bullish as some might interpret. >> go back to the last three months, the market sold off the end of last year because the fed was tight anyoening more than pe realiz realized, pivoted dramatically in january leaking out every other meeting or every other time they get on the press conference about how they're going to incrementally be more dovish and surprising us every time they've spoken, chair powell gotten incrementally more do dovish yesterday was the full capitulation, they're going to end the balance sheet reduction by september, something our rate

strategist predicted last summer that's really good news. the problem is, not a problem but the market has been discounting this for three months we've gone straight up, it will be the best first quarter we've seen in a while, going back to 1998 this is not necessarily new news to the market. i would throw something else into the cocktail, why are they acting so aggressively i think there are reasons to be a bit concerned about growth that was the other concern we had last year, was that growth was decelerating, because fiscal stimulus was wearing off, corporate margins were starting to see pressure. the payroll was weak last month, the output gap is well into restrictive territory and the fed is saying we don't know how this will play off confidence took a hit in the fourth quarter and we want to take out extra insurance i think the thing the market will focus on the most in the near term is earnings. fourth quarter earnings were disappointing, relative to what people were thinking six months ago. it was in line with our view margins would disappoint stocks looked through that because the fed was dovish, but now i think if they miss another

quarter, if earnings are weak again this quarter, which is our view, i don't think stocks are going to look through that this time >> do lower rates allow a little bit more multiple expansion? >> we've gotten that, right? 13.5 times is what we got in december we were aggressive leading on such a dovish message from the fed. >> you like proctor and gamble talk us through that. >> we're overweight two defensive areas utilities and staples which they upgraded last

june they're still well up against the market since then. we think that's going to revert back to these defensive areas. with bond yields the way they are, particularly utilities, they should do well. earnings stability i think will be paid for. >> in terms of exposure u.s. versus rest of the world, despite slowing growth fears from the rest of the world, china you think has turned a corner a little bit? >> yeah. our call was that china would bottom in q 1. we think we're seeing evidence of that now. that's one of the reasons we put lbs on our list as well. sort of a book door play on the china recovery we think there are still opportunity there is we're overweight china, we're overweight e.m. >> the growth stocks have been the darling.

the rolling bear market from last year turned into a rolling bottom that's morphed since the january 29th fed meeting to back to the growth stocks. there's doubt now about whether or not growth can recover to something above 2% if that's the case and we don't go into recession, the growth stocks should do better. our beef with that is they're now overpriced >> in terms of the dollar, do you think that upside is capped. does that move you toward exporters? >> we think yesterday's message is a move in that direction. however, if the economy weakens again, there could be a safe haven bid into the dollar. >> thanks for joining us >> growthy is a word

it's been used for types of livestock. >> a growthier strain. >> for you that's such a stickler, you're like a walking oxfordenglish dictionary. >> i don't know that i am really >> it's the accent >> emma thompson >> let's get down to the new york stock exchange. jim cramer is standing by. what do you think after hearing from the fed yesterday do they know something the rest of us don't? >> i think they just figured out what i've been talking about they asked is it safe and they realized it's not safe i think they're doing the right thing. economy is slowing

earnings are down shifting there is a question about the world. every country in the world with the exception of maybe brazil is slowing down so i mean, why not wait. i don't know what they had to say. all they really had to say was things are fine. they continue to try to raise a flag i think this flag is the right one. i thought the j was great yesterday. it's not easy to start he's a great guy anyone that knows him knows he course corrected he listened. he changed his mind. i think it's fantastic. >> i agree 100%. my question is, anybody who's looking into this thinking oh my gosh this is terrible news, i think it's not so terrible maybe the market already knew this >> exactly we don't want the fed to be against us this market is going down because the president is trying to tell the chinese you've got to live with the tris ariffs that's why the market is doing

bad. we have to watch apple this is all about china and about military in china too. people have to start focusing on what the president's real stance is here as opposed to the stance we hear from the media. >> what do you mean by military in china >> they feel completely betrayed by what happened when china projected power in all the waters around it mattis felt this too president obama was had by them. when it came to the military, they totally lied. they did exactly the opposite of what they told obama that's what the president is thinking about, south china sea. that's where he is it's not about soybeans. >> i was a little stunned with the 60 minutes report over the weekend, that issue in cuba where people were looking at brain injury from what was happening, the idea that was

happening in china too, wow. >> people don't get it the president's really upset and he knows what's going on and he knows you can't trust the chinese. in the meantime we keep thinking the chinese saying we'll buy semiconductors or we won't buy boeing planes. are they that obtuse they're like the warden in shawshank. >> way to wrap it all up, jim. we will see you in just a few minutes. don't miss chip bergh the ceo of levi strauss stn me0 m.view at 11:0a. eaerti istinguishable muttering) that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches?

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final check. there's not a person in the world that would anyway, we are down 128. the s&p is indicated down 12 the nasdaq is down 28. we can't share everything. wish we could. not only that, it's not for air,

but we don't have time. >> even if we did have time, probably wouldn't share with you. what happens in the commercial break stays in the commercial break. >> join us tomorrow. "squawk on the street" is next ♪ welcome to squawk on the street we're live from the new york stock exchange, an historic location where jeans are strictly forbidden but not today. levi strauss returns to the public markets for the first time since the '80s. we're going to bring you the open and the ceo futures are weak after the fed's dovish turn on wednesday although got some price target upgrades for apple europe is red. the te