will be on with the company's ceo and jeffrey smith from starboard value. that's coming up a little bit later this morning on "squawk on the street." thank you for being here the last couple of days. we'll see you one day next week. >> i'll buy you a papa john's. >> have a great weekend, everybody. see you back here on monday. right now time for "squawk on the street." >> go bearkats ♪ this is how we do it this is how we do it ♪ good friday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange dow futures down 100 and change after the best one day gain for the index in more than a month pmi out of europe and japan. nike and tiffany not helping, down 5% on earnings. europe down a percent. yield curve in focus road map begins with global growth concerns, futures down, nike disappoints on north

american sales the ipo wave rolls on. the new york stock exchange reportedly winning both uber and pinterest listings and miller coors suing anheuser-busch over its controversial bud light super bowl ad. futures are falling as weaker german and eurozone pmi adds to global growth slowdown nike down on warning of the sales slowdown in the current quarter. with a fiscal q3 earnings beat, mike parker cited china as a bright spot on last night's earnings call. >> china earned the 19th consecutive quarter of high quality double digit growth as the chinese consumer increasingly making sport a part of their daily lives >> jim, let's break nike down. a lot of this is currency. >> and a timing issue. at one point, kind of throwaway, they said, look, basketball was not necessarily the right time and parker said that was a coaching question, which to me said, this does matter

i think that as matt boss put out this morning at jpmorgan, there was a lot of underpromise so they can overdeliver. i thought it was outstanding, outstanding. europe was amazing china was incredible a lot of new releases. great focus on apparel, a lot of focus on women next year's olympics, you sell the stock here, i think you sell it probably goes down maybe a little bit monday. but, wow they're doing a lot right. and to go to that high single digit and believe them when this company is so strong, this stock ran up after foot locker, it ran up, so many upgrades and i think you get a chance to get in again. i think parker -- tour de force call >> digital up 36 north america up 7 and china 19, down quarter on quarter. right? and when they talk low single digits, again, folding in currency, it is not like the numbers are going up. >> i'm saying -- look, i got to take them for what they're worth about basketball and the u.s basketball is so important to

them still a jordan story currency on china. you can say, listen, currency on china, but good in europe. the fact that the ministry of, like, phys ed sports is working hand and glove with nike, best relationship, even better than starbucks, with china. the number -- look, the numbers were good. and but the hype was too great >> interesting >> parker is so good converse very strong digitization amazing artificial intelligence really good one look at the store on fifth avenue, you know exactly what is on display parker is a rigorous guy i'm not worried at all i think you get a great opportunity. >> coupled with tiffany, by the way, comps have gone from 10 to 8 to 2 to 1. >> i'm waiting for -- they came out today and said softer demand by local customers and foreign tourists who else is there? local people and -- who is the strong demand from

i happen to think design is good, they have done a great refresh, millennial stuff. it is time to stop with the excuses, time to deliver and they're not delivering and it is disappointing. i really am disappointed every day we have a retailer who does not do it and we have a retailer who does do it. tiffany is in the no do it camp. i'm really starting to get discouraged there. they have a great franchise. they should -- they have a problem with foreign tourists, figure it out for heaven's sake. figure it out. >> so today, you got in the stew, you got nike, and tiffany. and you got the german manufacturing pmi at 44. >> can you believe that? >> and change. you got japan output three year low. i mean, does this add up to something? is it unquestionably soft around the world? >> it is unquestionably soft, but didn't jay powell give us that we were chiefly worried about is fighting the fed germany was shocking i was watching at 3:00 a.m

i was watching at 3:00 a.m. and the german pmi comes out minus 2 in the futures i have to ask, are we germany? the answer is no, we're not. germany is linked to china huge amount of export. the german -- the german government decided to lever up, which they could they got to get -- i guess it will take 100 years. >> president xi is in europe right now. >> in italy. >> in italy. will meet with macron. he'll try to warn the europeans against u.s. caution on huawei making friends. >> apparently there are -- there is some resistance to dropping -- to blocking huawei not easy italy is part of the belt and road initiative in the sense that they need great growth. he's not going to my olive farm. it is not my fault not because i called him the word in shaw shank that's untrue.

he's doing a great job the problem is there are people within the white house who are saying are you going there right now, trying to get this thing right? are you in our faces, going to italy, an ally of the united states, and taking it to us? that's how they feel i think president trump is being wi wi wily, he's being cunning. >> kayla did just report cleat williams leaving the -- treasury puts some new sank sanctions ot korea. do you see this breaking down in >> i think we're ratcheting up we're saying, look, guys, this is really far bigger in trade. and what is she doing? he's right there saying, yeah, you bet it is. now we're moving -- we're going right to the continent and that's -- next thing i know 500 lamborghinis, takes 100 days to

make, they make five per day remarkable car chinese love it. they like the -- >> yes i. >> i do find xi will play hard the president has to up it up. up his game. xi is just -- he is really saying you want to play that way? okay we're going to your wheel house and we're going to get the italian economy moving again you can't, draghi can't, we can. wow. wow. this isn't about going to milan for fashion week. >> not at all. we'll keep our eye on xi's trip obviously. a lot of news regarding ipos the day after the stellar return of the markets for levi strauss lyft slated for public debut next week. published reports say uber has chosen to list on the nyse and file for an ipo next month at a valuation that could hit 120 billion. the journal says pinterest speeding up plans to go public, listing shares on the big board

in april jim, i mean, two big wins potentially and uber, we're talking potentially a top five ipo. >> uber is the one that is going to break down the system they'll be here all night. there will be a level defend mand that is not going to be able to handle everybody who is -- has ridden an uber will want to go in uber. go to twilia >> you're not predicting a nasdaq fact opening day, are you? >> i think that they learned enough that they can avoid that. but you can imagine we're going to be pretty heated. lyft will work it is early on levi worked, pinterest okay. sliver deals i'm sure the chinese will sneak in some deals that will blow up, maybe they work take the chinese deal to -- in order to be able to get a lot of

uber this is how it will play out some syndicate work. what i think is the most challenging thing is what do you do with the market orders, because the individuals will not put limits on the order. they'll come in market so if -- let's say they price it at 27. the market orders drive it to 46 there will be a second layer of market orders and then a little breakdown and then to 48 the institutions will average between what they bought at 27 and what they bought at 48 and then you'll have a sell-off later today. >> what did you make of levi's performance? much smaller scale >> that was handled perfectly. chip berg had a great story, the ceo, remarkable, did a lot of tv yesterday. if i were chip i would be exhausted by now they priced it perfectly could have priced it at 20 wanted to keep it ten times oversubscribed they opened it very coherent opening and anybody who got -- who bought stock at 17, the institutions, were able to get stock at 22. get a really nice average.

might come in today to be able to finish the position the stock is a little more expensive than ralph lauren. i don't know if that's warranted. but they had a big breakout quarter. chip had an acceleration of growth that's the deal that works that's the deal that was so well handled, they'll bring everybody in and say i want the next one. the next one is not as good as levi. >> we talked to chip berg about not just the denim fashion cycles take a quick listen. >> it does come down to strong brands consumers at the end of the day love an emotional attachment with their brand and we re-created that, you know, that love for levi's we have built a very, very big platform on big data and we're mining the data we do collect and really turning it into revenue. >> i had to laugh because we had some guests call for the top in athleisure yesterday

and today cutting to neutral. >> talk about a buzz kill. in that -- they're doing some work saying that revenue will be mixed. i hear nothing but good things, lulu chip is -- art peck at gap also said he's using a lot of artificial intelligence. i think that chip was early on chip was early on, talking about something that i'm trying to pivot to having not being like gandhi 2 is hard for me there is a lot of purpose led, mission led infusion into the people that work it at levi's because of jeb they have this great combination of -- excuse me, mindfulness i learn things from my kids. and money. and they are -- they're doing well i think you go to 28 >> all right we're going to watch it. we talked about it yesterday >> great interview. >> yeah. quite good impressive guy when we come back, speaking of bay area companies, elon musk rallying the troops.

and the musk v. cramer tet atet kin continues. papa john's has a new board member, shaquille o'neal he'll join us with jeff smith and steve ritchie. look at the premarket as the nasdaq is up for five straight days, but the dow coming off its biggest gain since february 15th don't go away. this is loma linda, a place with one of the highest life expectancies in the country. you see so many people walking around here in their hundreds. so how do you stay financially well for all those extra years? well, you have to start planning as early as possible. we all need to plan, for 18 years or more, of retirement. i don't have a whole lot saved up, but i'm working on it now. i will do whatever i need to do. plan your financial life with prudential.

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all hands on deck at tesla that's the text of an urgent e-mail musk writing, for the last ten days of this quarter, please consider your primary priority to be helping with vehicle deliveries this applies to everyone musk says they have a massive wave of deliveries needed throughout europe, china and north america. this is the biggest wave in tesla's history. he says. mean time, jim had a bit of a back and forth with elon on twitter yesterday and one musk writes, you can't take the heat, to which jim says, sorry, boss, i was working on the show, my bad. you go make cars i will go make a show. and it went on from there. >> look, he's fun.

no doubt about it. he makes the game fun. if it is a game, i'm sure people say, wait a second, don't call it that. this dates back to a long time ago i was at dinner with him where i contradicted him about the fact there would be a solar field in northwest colorado that would provide all the electricity, maybe that's one day that's true. i was talking about american electric power and that won't happen and he did look at me and he did say that no doubt about it there was a 50% chance i was a simulation which stopped the banter and made me red faced. but then brian said, no, only 27% chance here's the problem there is a contempt case being brought against him with the s.e.c. is not his nemesis here it is the judge. the judge has given me another chance elon tweeted about 3:15 to me to start the repertoire

i gave him some advice, which is that, okay, let someone else handle your twitter account and throw yourself at the mercy of -- >> you said you got a new lease on life from the judge >> the lawyers are causing a problem. he'll say the lawyers didn't police you so just go, hair, suit, throw yourself at the mercy of judge nathan and say it is in the going to happen, i'm not going to tweet, i'm not going to tweet or have it run through whoever you tell me. then it is all over and we can go break bread he is -- i'm offering him -- i'm sure he hasn't said yet that is that from harvard that you learned that, because i did have to say people were talking about stanford, i said i'm so old, i rejected stanford for harvard. my backup school that's how old i am. i do think, look, he's under fire i want him to keep his job he's a great industrialist i really do -- dating back from jim stewart, amazing piece i want him to keep the job forget the stock

i think he's a great, great industrialist. >> well, i mean, a lot of people don't want to forget the stock how does this translate to any kind of directional call on the stock. >> look, i think that he -- the people who love him will continue to love him the vociferous nature. every single tape they didn't -- they didn't throw things that i did when i was a little boy where i led carl geisinger hit me on the head with the hammer, rather than fight back i did not mention that that was brutal. i had a -- >> sounds painful. >> one thing, i don't care sticks and stones may break my bones. i think that elon -- this is a great chance for him to redeem himself. all he has to do is go to judge nathan and say, listen, my lawyers, they weren't the ones, it is me, they should have protected me i am going to do it. judge, who should be my master and anyone other than me though she calls me, i will serve. she is from the pennsylvania area. >> interesting

meantime, you got the likes of ford announcing new initiatives this week to build electric stuff in michigan, right >> yeah. carnegie melon initiative and ford needs to build a machine that allows them to get to -- i am worried about ford. bob shank, he's been at it, nothing wrong for him to retire. i do -- that stock has been -- the autos have been bad. and gm and ford are to lyft and uber -- we have mary barra, the stock is not interesting the stock of lyft will ford and the stock of uber will be gm it is like how jpmorgan goes down every day and mastercard goes up. it is almost an algorithm. >> mentioned mary barra, we'll talk to her later on this morning. announcing $300 million investment in orien, assembly

plant in michigan. president has been berating her and the company for lordstown. >> yeah, lordstown she's got -- the president's tough. it is almost like you want to say, okay, what do you want? i'll -- and then he becomes salesman in chief. he'll go buy and he'll buy an escalade if she opens up the -- he won't buy five give them to his family and stuff. >> we'll get cramer's mad dash, count down to the opening bell as we see weakness in futures. don't go anywhere.

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seven minutes to the opening bell let's get cramer's mad dash. call on chipotle getting roundly ridiculed. >> i like to eat the chipotle bowl, okay this guy has to eat the chipotle crow this is web bush going from sell to hold. look at this he's using -- he's going 500 to 640 for price target i don't know i last look, algorithmically, he's talking about loyalty being better i love this one. no longer see risk to unit level margin expectation come on, the company has been -- they changed their management. jack hartung bought a ton of stock. the guy was in there buying it hand over fist he came on "mad money" and said it what a pro look at this now you got a company with loyalty program, they can -- if they catch up to where panera was when ron shake was running it,

thousand bucks is easy. >> thousand dollars. it is a remarkable read. >> isn't it great? >> there are lines like acceleration to the two-year stack is no longer theoretical theoretical. >> it has been this way. brian nichol, cate rokate roger fabulous interview with him. he basically laid it out he said, listen, we'll do this we're going to execute, we're going to get that other person in line. and have you seen how quickly he can get in and out now it is remarkable you're, like, boom, boom now they just need to get the delivery thing down all over the country. i do believe that this is a management thing and we all forget that people got sick there. just like we forgot about the -- a couple of -- i do believe that the american public was forgiving. the american public likes these guys and loyalty programs are incredibly important look at what mary dillon has done with her ulta, 31 million

people if you're a dimon person, if you spend more than a thousand dollars, you get a birthday present. >> that i did not know. >> no. ulta is great. this will be fantastic we're all loyal. friday is chipotle day at mad money. >> interesting. >> yeah. i can't have the burrito anymore. i'm going to miguel tonight. you can only eat so much fatty food opening bell in five minutes. don't go away.

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each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible. you're watching "squawk on the street" live from the financial capital of the world the opening bell in under two minutes. pretty busy friday morning, we pay close attention to the eurozone pmis. we mentioned nike and tiffany. boeing, as we tried to touch on it, at least once a day, reports of maybe the first 737 max cancellation out of the flag ship carrier in indonesia. >> i don't think -- i think that we're at a moment we have very

emotional ralph nader presentations. look, i think that there is going to be a thorough investigation, boeing will cooperate, do everything i know that i thought the new york times article did make it sound like they were mercenary my experience with boeing and the long-term, done a lot of work on it, is that safety first. i really believe that. but, you know what, we got to -- we need an investigation at all ends to be sure that everything was good and i know that there are a lot of pilots who are upset. a lot of pilots. >> yeah. your thesis on the stock itself changed at all >> i think it is fine. i they will we'ink we'll get ths it is a honest company i am not betting that the catastrophic bear case boeing will come true >> all right we'll keep our eye on it huge impact on the dow on a point basis. >> always. >> even some reports today that

should we be on the lookout to any production -- >> durable goods have been heavily influenced gdp a little bit less. but, yes, look at -- it is an asterisk >> opening bell, at the big board it is star tech, a provider of business process outsourcing and technology services at the nasdaq, women creating change, focused on women's civic engagement in underserved communities. >> right >> a fair amount of sell side stuff today as we look at breadth there. we mentioned the lulu call chipotle call. but oppenheimer takes best buy -- >> i think that's an important call. >> one thing we have seen this earnings period is who has been able to deal with amazon and who hasn't i directly address that with larry murlo.

amazon, everyone says you're being eviscerated. they come up with a model that got rid of the whole showroom implication. very important i think it is an inexpensive stock. one of the ways, if you're on the nike call last night, if you were on the call for ulta, it is about personalization, personalization, personalization, about service, about individuals, and that's what you get when you go to best buy. nike is not that bad people who read these -- mark parker did everything right and all he did was be conservative i don't mean to be too -- i do think that best buy has made it so when you go there, and you don't know what you're doing, you're my age and go there, they treat you with -- i remember i was trying to get information on a mac and i went to a guy and said, i'm a hewlett-packard guy, i'll get you the mac guy, and the mac guy made me understand why i should buy the higher

resolution, and anybody that -- i've been back and back and back at best buy, ever since then i've been to best buys all over the country. i think you have to go i need help, i need it installed. they're the guys so what they have done is make it so what amazon can't do, they do and that's why i applaud them. fabulous article about what is happening with walmart, versus amazon how walmart is taking on amazon, right in their faces, be careful, walmart amazon hates you more than you hate them. >> that's one rival -- that puts pepsi and coke, airbus, boeing to shame. >> it does they bought whole foods. so you think, that's against walmart. the heck with -- with whole foods. we're going to open a whole other chain. it will compete with whole foods. i've been working on this behind the scenes it is remarkable how much they want to beat walmart it is -- it is hard to find a

situation where -- airbus and boeing, maybe. i remember jim mcnerney, a very good hockey play, this is like harvard yale he goes, no. oracle is interesting. that is a bunch of -- they have -- oracle, mark hurd hates a neil bush reed that may be from previous -- but on every conference call he says, i don't know. they say they have a client that really is somebody else. but i like the feisty nature of the oracle call. and we have a lot of guys who aren't -- not everyone can be elon musk. >> on with us yesterday. stock behaved pretty well despite some negative sentiment. by the way, as for best buy, best s&p gainer. goldman, 192 and change now. as this yield curve is getting pretty flat. >> i've been doing work at

goldman. i grow less concerned by the day. i do think goldman has fired a lot of people and really gotten the deployment down. a lot of ipos, you want to buy them this is a tangible -- >> more broadly, jpm hasn't been below 100, gosh, pretty much all year long. got to go back to mid-january. >> yeah. i weighed in with them yesterday. i kind of look for something really good to say and it is a fortress the problem is, people want to own fin tech look, the best trade of the world has been to go long square or mastercard or visa and short the big banks. and it is just painful because the big banks are doing well, but people just think all they have going for them is the yield curve and so they're avoided you got some regional banks that yield -- >> who don't have -- bigger yield, but no trading operations. >> i know.

i just think that -- to say they're buys is a mistake. i look at a company like morgan stanley, which has a tremendous franchise, they bought a company that is going to make it so they're in the bows of these companies that become public after millennials, they're doing everything right and you can't look at stock because it is too painful. goldman sachs, if it closed goldman, today, tangible book. they would have 192 bucks. >> we have been saying this for three months, four months. >> it dipped to 160. i think they have a compelling story if we get a lot of underwritings. they can make it so that malaysia narrative -- there were people committed fraud there they have tremendous compliance. anyone who says their compliance isn't any good is wrong. it is hard to detect fraud i've been defrauded twice. i had the best accounts. i had the best lawyers and i couldn't spot it and i just couldn't spot it. one was a long con and it was rather -- it was in the papers i just couldn't spot it.

no matter what i did it was just a wave, a web. >> you mentioned morgan stanley, reminds me of katy huberty's call, she tries to give a sense of what we might hear from apple on monday. the big debate, i think, internally is whether or not they bundle music, video and news and whether they silo out a couple of things either way, she thinks it could add a full bundle could add 200 basis points. >> right ca katy is one of those people who recognize the -- maybe china will not be a problem. when i read that, i said, i don't think katie knows more than anybody else. >> she probably might not argue. the note reads like we got to wait >> i think she's so good but the options that she said, what it could be and the idea that do they have a movie slate, no one seems to know -- i was digging around hollywood, my

hollywood sources, and i can't find anyone who is doing anything for them. i can't. do they have -- where is their fyre fest? >> it sounds like original content is not enough. they're going to have to have nonoriginal, big diet of nonoriginal. >> i would love to have one package. one package where i have a logon, i can go, rather than the app store things and i would like that. but i think the problem with what they do now is that the expectation is to great that this is my problem, this is what i've been saying, they need cold fusion car that would take you to mars faster than elon what is he doing today he must be making cars

what the heck? i got up at 3:00 where is he? elon's lazy today. no, he's lazy today. >> still trying to break 270 facebook, jim, two blog posts yesterday, one about the unencrypted passwords that employees could read for years the other about the christchurch massacre video, in which no one reported -- no one flagged the entire duration of the live feed and yet 166 today. >> i always -- look, there is a -- i watch all the consumer package goods companies. what do they say over and over again? we are putting our ads on facebook that gets response i do feel that the ethics -- look, they need a grown-up -- these are all bad stories. if it was apple, you might even think about going to samsung but this is the only game in town and they keep coming back. the customers love it.

the consumer package good companies, the drive toward this is amazing you keep thinking someone will say, we can't put our money with facebook, because they did this or did that. no i have a -- food, beverage, supermarket, retail, it is all facebook and so you read the articles and you think that no one is going to go there and then on the phone to the guys and say, listen, i'm sorry, i have to get the consumer where the consumer does purchasing. which is google, which is amazon, which is facebook. all the articles in the world. unless you find out that he, like, is in your bedroom, which, by the way, you talk to your pc, they do hear you, but have to find out he's done something that is nothing like what he's done so far, to turn off the advertisers. they are not deterred. they like it >> if you're a home viewer, and you're -- do you blame people for selling something here at

key levels to make room for lyft >> no, i have a piece in real money.com from the street saying that lyft is going to -- i use this stock i like very much, sales force, benioff doing a great job. that's the kind of stock that gets sold. mastercard, pay pal will get sold there isn't enough money to buy -- >> to build some dry powder. >> yes it is not just lyft. it is pinterest. do people want pinterest i don't know uber is going to be retail these companies, these fund companies don't have enough money and they're not getting enough money in to buy all of these. so i think that that is something worth watching i do think that the apple move is extraordinary all the way down, the guy is cutting numbers, all the way up raising numbers. we still do not know what they're going to reveal. what happens, carl if they reveal nothing >> my question to you. >> what if -- seinfeld, it is a show about nothing

do i want the air pods yeah, i love my air pods do they feel like the air pods -- until everyone is wearing an air pod, they're not done with the ecosystem. they have to come with something better than poke mondmonpokemon remember you played -- >> the developers conference. >> maybe they have a skunk works where they're making -- they found humphrey bogart. they got to do something like that the treasurer's sierra madre 2 >> who is buying this -- is it buffet this thing just gets bought every day. where is tony saginagi he needs to come on and say the best days are behind him why is tony? scott wapner, you watch the show, call tony and get him to say negative of it things about apple because it is killing me he's probably waiting to say look, i saw all the products the immediate package is

nothing. i'm giving tony -- i'm free. >> we -- >> plus, he doesn't like any of the movies he'll say, listen, why isn't there a coen brother movies. >> monday will be big no matter what dow down 94. to bob pisani this morning. >> weaker open following on a really frankly crummy session over in europe still going on but generically europe is down 1% look at germany, france, everything is in the red over there. the manufacturing numbers were weak german manufacturing pmis were on the light side. so there is definitely some kind of slowdown. i don't know if it is a recession. draghi seemed to imply, that's not going to happen. there is some weakness going on over in europe the good news this week is we have some very good leadership from technology stocks, semiconductors have had an absolutely great week overall. if you look at some of the things going on here, amd,

google confirmed its gaming service, we use the chips there, that moved amd up. micron spun their earnings story forward and they're up nicely, nvidia dragged up. xilinx is up nice leadership there. what is a little disturbing is how lower rates are impacting the market so if you look at interest rate sensitive sectors today, utilities up, okay reits up, home builders, generally done pretty well this week, down a little bit. done well overall. and it is that regional banks that everybody keeps talking about, asking questions about, you see the big names again today. three days in a row, big names all day one, two, 3% you add it up, you get double digit declines we are at double digit declines. look at the regional banks this week fifth third, comerica, key corp., huntington, let's not quibble, they're all down essentially 10%. and people keep saying, why is this happening

must be the yield curve or something. a lot of these regional banks, if you look at this more closely it is not so much the yield curve or 210 spread, lower short-term rates generally hurt these banks. and it is a pretty simple equation here. if you look at where their books are, it is the short end of the curve that really moves them take a look. commercial industrial loans, for example, most of that commercial and industrial loans, their variable rate. that's tied to the shorter end of the curve when it goes down as it has, the two years, for example, that hurts them most fixed rate, take auto loan for example, they're also shorter durations. you get the ten-year getting really important here. you have a book of mortgages and then that becomes important. but if you look at most of these regional banks that i can see, most of them, less than 20% of the book value is mortgages, most of that is that autos and what we call cni, the commercial industrial loans, that's my

point here when you get that two-year dropping, that rapidly, this week, that's a sell to regional bank story that's what's going on here. no loan growth 2%, 3% we have been getting for the last several years don't get any move up because you can't charge anymore for the loans themselves so you're stuck. remember, the regional banks do not have big trading operations. i know we're obsessed with reporting the trading operations of the big money center banks. none of the regional banks have any of that. they have got to go on the interest rate scenario and they got to go on the loan rate scenario and right now neither one of them are particularly working for them carl, right now, we're near the lows for the day, down 170 -- excuse me, 128 points. back to you. >> thanks. see you in a little while. to the bond pits, rick santelli at the cme in chicago. happy friday, rick. >> happy friday, carl. it doesn't surprise me that equities are a bit softer. the treasury market, sovereign

rates in general, all rates in general, not domestically but globally as well, will have to find a way to get along with the stock market and vice versa. just consider, on the week, on the date, 2s down five on the day, eight on the week ten years down seven basis points on the day, even dozen on the week let's look at two year, by the way, now the entire treasury curve is guns hot. they all have taken out their third of january extreme, low yield closes, so now we're going back 30 year bond is toying with it you see may 16rst, 2018 that's in the rear view mirror if you look at ten-year, already done it continues to drip january of 18 last time we were here 30-year, fun to watch. see it trading around 290, 290.5 or so. it was a spike on the third. now it is comping back

and these are all based on closes should it close 290 or lower, feels like it might. here is the story of the day maybe in my opinion. ten-year bund yields, mario, are you watching they're negative first time negative since october of 2016. somewhere in the neighborhood of 10 plus trillion in negative securities it keeps on growing. i'm sure the transmission for business and investment, those things called banks in europe, are not enamored about this. we have a flat curve they're just flattened period. let's look at the dollar index, one week a stellar performer, it has been the surprise interest rates go down, fed doesn't look like it is in the game everything seems to be a little bit more shaky look at that dollar index, certainly hasn't regained 97, but it continues to be quite strong carl and jim, wild day going on here in the fixed income markets. back to you. >> you got that right. we'll talk to you soon as well

rick santelli. when we come back, the future for papa john's, we'll talk to the company's newest board member shaquille o'neal, with chairman jeff smith, ceo steve ritchie, the three-month to ten-year yield curve has now inverted something people have been watching for a long time dow is down 166.

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. some interesting levels here dow down 200, s&p down 20. vix almost back to 15 as the rseld curve inverts for the fit time since '07

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time for jim and stop trading. so what i like out of an ipo, you want to look for one that comes tepid, goes down a little and then goes big. goes down to 12. jeffries says built for pros and joes i think yeti reminds me of a very good core company bought by rubbermaid and i have to tell you, i think it is a great american brand and i think people should recognize that they are expanding into all

sorts of different lines it is a real powerhouse. so if you want a consumer product company that is a growth company, i think you should consider yeti. >> i saw a chart yesterday that said i pmptchlmenip os, unprofi outperformed >> and it is a revenue game. they say look, it is an honor not to make money. yeti actually makes money. but we're in an environment where we don't have a lot of growth and that work even in a yield curve, the market is programmed to go down be careful, could go a little lower. >> worse day lear fhere for thew since january 22 >> the machines are at work. >> what is tonight >> i have planet fitness they give you pizza on tuesdays. this brings in a lot of people they have 12 million people. chris was a trainer. and matt desch, they do the

screening where we find out -- well, let's say how planes do. we'll find out more tonight. >> a busy week >> yeah, it was busy i just think that be careful here, the machines are set >> yield curve a lot of pent up angst. we'll see you tonight. when we come back, shaquille o'neal along with yef smitjeff dow down almost 300 and we're back to 2825

welcome back to "squawk on the street". a few moments from now at the bottom of your screen, wholesale trade and existing home sales will be crossing we'll get you those numbers shortly. but dow down almost 300. worst day since january 22, worst day for the s&p since early february as the yield curve in-ververtinverts. markets sliding after nike

reports results announcing winter growth. and boeing fallout continues as an order gets canceled. we'll get up to speed. and ta it is a huge intervi, papa john's announcing its new face of the brand and a new board member shaquille o'neal. steve ritchey, ceo and chairman jeffrey smith and shaq himself will all be joining us this hour as we mentioned though, existing home sales data crossing the tape let's get to diana olick >> huge number up 11.8% in february month to month that is one of the largest monthly jumps ever still down nearly 2% year over year realtors say it is about that big drop in mortgage rates we saw in december. back to you. we're getting breaking news out of general motors today and we'll go to phil lebeau for that >> they are about to start a

program here at the assembly plant just outside of detroit. general motors announcing a major investment not only for this plant, but in the u.s they will be adding 700 jobs, pumping $1.8 billion into this facility and others in the u.s and as part of that, they will be building a new electric vehicle here at this plant this is where they build chevy volt here is mary barra talking a few minutes ago about why this plant. >> when we look at the architecture of the vehicle coming off of and there has been significant enhancements, it makes sense because this is a great workforce. so there is capacity to be able to do that and there are synergies as well. >> as you take a look at plant efficiency for the big three in north america, you see general motors 73% trailing its competitors. this ev was originally scheduled to be built at a foreign plant

they have decided to move it here because of the new rules with the new trade agreements with mexico and canada but gm is still in the process of idling five plants in north america. that has been a source of consternation with president trump. in fact he's been blasting maryr barra saying reopen the lordstown plant. here's what she had to say >> we regularly brief the administration when we make announcements such as this, so that is where i'll leave it. and when we look at what general motors is committed to, we are committed to investing we see the growth in trucks and crossovers and so we'll be making those investments and i believe as we continue to go forward not only maintaining the employment that we have here and the good paying jobs, but creating more. >> as you take a look at shares, it is not a surprise that we did not see mary barra engage in some type of a commentary, public commentary, with the trump administration or with

president trump. she has not done that despite all the times that president trump has blasted he swrn mo general motors in spooed she says we will expand where we think it is prudent and in this case it is right outside of detroit. >> how much of this is truly new commitments and do we have a jobs number to go along with the dollar figure? >> we ran over that, it is 700 jobs, $1.8 billion that is all brand new commitment from general motors. of that, you have 400 jobs and about $350 million specifically put into this facility for the production of a new electric vehicle. but overall, this is $1.8 billion that general motors is now announcing that it will commit to its production facilities in the u.s. now, they haven't given a time frame, whether that is the next

year, two years, through he years, but that is additional commitment >> phil, do you think that the way they are doing this, the flashy announcement, a sitdown that you got with mary barra is in any way a response to president trump's criticism recently of the company for closing plants and getting rid of jobs? >> yeah, they claim no that this was planned for weeks. they were going to make this announcement and that they are not doing this because of the president's tweets but make no mistake, general motors wants to send out a very public message that it is investing in north america and in these plants, the ones that it is keeping open and that is why they are holding this event today so you will see mary barra not engage the president publicly. when she talks in a few minutes, she won't make any reference to the president. she will talk about gm spending more in north america. >> we'll keep an eye on the stage there. phil, thank you so much.

also joining us, former gm vice chair bob lutz. and from washington, deputy secretary of labor during the obama white house chris lu good to see you both >> good to be here >> bob, your take on the investment here and how is it fits with what the market is demanding. what consumers are demanding right now. >> that is the whole point you close old plants that are designed to produce products that are no longer in demand like compact cars and sub compact cars and you expand in areas of growth which is crossovers and in this particular case in the growing electrification of the fleet. so this has been going on forever that old plants are phased out and you create the employment in new plants in products that are more in demand it is a completely normal cycle. >> do you think the president understands that

>> no, you know, i have great admiration for the president, but in this particular case, i think he is naive. and when he is berating and automobile company and demanding that the plant stay open, he is in effect behaving in the same manner as political systems which he greatly dislikes like socialist regimes that won't permit plant closures, many european countries have tried that over time saying, no, no, we'll give you subsidies, we'll do this, that, but you can't shut the plant and get rid of employees. ultimately you have a hopelessly inefficient industry which can no longer compete. so i think that he must just sort of engage in random thought when he tweets and i think everybody has figured that out one of the reasons that mary barra didn't respond to him is

frankly i think everybody in the automobile industry and others has gotten used to his tweets and they just let the tweets fly around eith the media gets all excited about them, but frankly, business just doesn't care i don't think they pay any attention, they go about their business >> what he should do, the president, is tweet about this announcement, billions invested, hundreds of u.s. jobs creating it is indicative of the faskts th fact that we have seen manufacturing jobs come back in this country and that is a good story so chris, can that continue? >> unquestionably he will tweet about it and he will try to take credit but as your correspondent just said, this is completely disengaged from his tweets about lordstown earlier in the week. and i frankly cannot say it better than your previous guest how absurd it is for a president who himself has been railing against his political opponents

as socialists to try to pick in-ein winners and losers that is not the way business works. they will make dollar and cents decisions. they are shifting production to new lines that will be more productive for gm.s idea that t president trump himself through his social media account can create jobs, it might work at the margins and clearly gm is trying to play to that by making a big announcement, but earlier this week are or last week, they announced $2.7 billion of investments in brazil. so they are clearly trying to lift up those announcements and maybe not talk about the ones overseas that they don't like as much >> longer term though, anything negative in having companies capex decisions manipulated by how the president may respond, whether or not it actually

changes their ultimate decision or not >> it is absolutely destructive to the way companies need to operate. they need predictability and not knowing if the president is going to like or dislike your business practices, if he is genuinely the capitalist that he says, he should allow the free market to operate. that is not to say that we don't mitigate the negative impacts in terms of diselection of woloekc, but you have to let the companies make the best decisions they can and i say that as a democrat who believes that there is a lot of problems with capitalism but i think what the president is doing right now is just not con dues sif to a good business environment. >> so bob, let's talk about the state of auto manufacturing for this country right now sales are expected to slow, are they not, this year in the u.s. versus where they were last year and we have this big shift going on from sedans to suvs what is it going to all mean for broader manufacturing jobs and sales in this country in 2019?

>> i think 2019 is looking like maybe somewhat weaker than 2018 and '17. but let's face it, we've come off of an incredible peak and nobody expects a big slowdown. there may be some momentary plant idling or some short shifting, but this cyclicality and right now we have more than normal, but the cyclicality in the automobile business is something that the automobile business has lived with for well over 100 years and it always adjusts and it always survives. and despite all the hand wringing of what is going to happen, it will come and go and next year it will be stronger again. so nothing to get at all excited about. >> bob, we've talked about tesla over the years i think we both agree sceptical at best.

the argument we get from somebody as volkswagen and gm stem up competitive markets, that is good news for the market and tesla. what do you make of that >> well, it is like a doughnut shop where the competitor opens next door and they say it is good for business because we'll get a lot more people going in i have never ever believed that theory if you have a quasi monopoly and you're doing a certain volume, the fact that other people now get in and compete with you has never been good news for the original company and i expect that with the u ubiquitous nature of high quality high style electric vehicles over the next four, five, six years, tesla will have a rough time especially if they continue to demonstrate that they are losing their touch for aesthetics

because those of you who may have seen the model y, and i would say it is appropriately nam named why, ww-h-y, it is not a pretty car the original told because it was a george just car. the model x somewhat less so the model 3 looks like the model x, so that is okay but this mold y is exactnot exa designer's dream and it will not be net additional if they are planning 100,000 model ys, they are not going to be additive to model ss. a whole lot will be substitution al and that is also a problem. >> bob lutz, always candid chris, thanks to you as well as we pay attention to autos on multiple fronts.

>>w-h-y, that is pretty -- >> we'll remember that indonesia canceling a major order for the 737 max. they want to scrap a nearly $5 billion deal for 49 max 8 jets the first major airline to cancel a boeing order following two deadly plane crashes in the past five months and reuters is reporting that american airlines pilots are expected to test some software fixes on sim you uhe late tors this weekend the company has been working on a software upgrade for an anti stall system let's get back to diana olick and that big jump in existing home sales. >> absolutely huge jump. 11.8% month to month at the beginning of last year, we saw a big demand for housing which pushed prices up higher. prices really overheated into the summer mortgage rates went up, demand fell off as mortgage rates really spiked in november. and then rates dropped in

december and demand came back. so this is the first reading of that demand from december with lower rates, prices up only 3.6%, so that is actually the smallest growth we've seen in several years. so you are seeing better affordability, lower mortgage rate, you are still seeing high demand that is why we saw that monthly surge. but sales were still down 1.8% year over year because last year was so strong. the question is will this continue or is this a monthly aberration that depends on mortgage rates, affordability and fly. we have seen supply go up, so a good sign for spring but is it enough for all that demand back to you. up next, he's the new face of papa john's shaquille o'neal he is also joining their board and investing in locations he is here at the nyse and along with the ceo and pap johnjohn's

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welcome back papa john's announcing that nba hall of famer and restaurant investor shaquille o'neal will be joining papa john's board, will also be investing in nine restaurants in atlanta

shaq is also signing on as ambassador for the company joining us now, steve ritchey and jeffrey smith and new incoming board member shaquille o'neal good morning, gentlemen. so shaq, you have a lot going on i think this is your first time as a board member on a public company, is that right >> i met with jeff and steve and talked about diversifying the leadership role and they wanted me to become the first african-american on the board. and i thought it was great because everyone loves pizza and pizza loves everyone papa john's was created in '84 i started investing in 1989 in baton rouge, louisiana so it is a great opportunity we want to create a culture there now where people are loved, welcomed and accepted and listen, pizza is fun everyone knows shaquille o'neal, they know that i'm in the fun

business and we want to get this thing back on track. >> so you guys obviously are in need of a major brand refresh. is the face of papa john's now, will his face be on the pizza box instead of john schnatter? >> well, it is an exciting day first off. i had the opportunity to meet shaq a couple months ago and the initial idea was to become a franchisee, bring in somebody that has experience as an entrepreneur, as a franchisee. and that you those discussions, the aptitude and skill that he bring, he will be an ambassador for the brand. shaq brings the fun and the relevance and vibrance to the quality story. so i think this is a really comprehensive way that we'll be telling the brand story moving forward. >> a good chance to talk about the difference between the marketing up side and the operational up side. and you've been through those ringers before how does it fit here >> the pizza is great, the food

is great, the quality is fantastic. it is the best in the space. but you're right, it is both opportunities. so we have an opportunity to improve the operations and the marketing. shaquille is a great partner for both of those. he is a natural leader and a natural marketer i've been incredibly sxrepsexpr with his creativity, but he is also an owner and operator of restaurants. so i'm very excited about shaquille and we've added five new board members in the last few months and shaquille will be a great addition >> you've been in restaurants for a while. you have shaquille's, some others why? it is such a hard business what draws you to it >> it is very hard but something i've always wanted to do. i've been in the space for a long time. last year i started two new concepts big chicken and the shaquille fine dining. but it is something that i've always wanted do so when i met with these gentlemen, i contacted them by the way, let's just get that --

>> oh, really? >> yeah, because i always wanted to be a franchisee so for me, this is a triple threat board member, franchisee and ambassador because again, everyone loves pizza and pizza loves everyone >> and part of the scandal around the company's founder had to do with the fact that he used the "n" word on a conference call do you think that ultimately impacted the reputation of papa john's from the african-american community and the sales numbers? >> it probably did and let me be on the record saying that is not acceptable. but now we have new leadership and these two gentlemen, first thing when we met, first thing they talked about was diversifying leadership roles. and talking about helping the african-american community they just did a big deal with the boys and girls club. so they are really into the community. as i think about what went on, i worry about the franchise es because they did nothing wrong they are regular people and they

were very affected i want to help get even back on track. and this is the new hierarchy. >> so shaq contacted you guys and what did you think how did you come to the board decision >> this was a natural addition we were thrilled to speak with shaquille. we went out to dinner in atlanta, we talked a lot of things including how to improve the brand, how to empower the employees, how to help the franchise es we talked about creative marketing angles a lot of done. fun. the product is fun rebooting papa john's is something that we're all extremely excited about.productn rebooting papa john's is something that we're all extremely excited about. >> how much financial support do the franchisees need >> it was a difficult year last year and i think the brand made some really smart decisions, provided a level of support. this year we've guided sales in

north america negative one to negative five. obviously our goal is as to get back to positive sales the quicker we get back to positive, the less support franchisees will need and the addition of shaquille i think will highly what we need to do to get those sales moving. but it is a relationship collaboratively with the franchisees. >> and do you have valuation targets in mind once you implement some of these changes? >> substantially higher. >> yeah. what gets you there? >> really the focus is on same store sales and improving bottom line profitability they both go together. we have to improve the customer value proposition, the unit economics for our franchisees. if everybody does better and we sell more pizza, it will all go in the right direction so there is a lot of opportunity. i won't put out a target today >> obviously the branding and marketing is a big part of this. this is sort of a joke, but not really because on twitter everyone wants to know is it going to be papa shaq?

>> no, it's not going to be papa shaq but i will be introducing shaq-aroni extra pepperoni, extra cheese, extra size >> you've been making a number of menu changes actually >> yeah, we're testing a lot of new things to bring more premium ingredients to the menu. looking at some single serve options that meet those quality standards. we've had some ideas around how to shaq-ify -- >> i like the word >> we know digital is such a big piece of this, right there must be ways to do that in a marketing sense. tracking your order, delivery time, all that stuff, right? that is where the rubber meets the road >> order delivery time is a key metric customer satisfaction is a key metric and again, product quality is the biggest metric we over index on product quality. our product is best in the

class. so we now have to take that and significantly improve the experience and marketing and we'll have a winning combination. >> is this your top priority right now? >> i'm spending most of my time on this. as compared to the other investments this, is where i'm spending a lot of time >> and how about you, shaq you've been in the fun business for a long time. >> we're already number one. i'm very happy about the nine stores that i will be obtaining in the atlanta market. very happy about partnering up with papa john's and also very happy about helping these guys create a culture where everybody is loved, welcomed and respected. >> jeff, you've done a lot of turnarounds and fixes. where does papa john's fit in n. terms of how challenging this one will be? >> it is a little different because we're used to getting involved in companies that need operational improvements that is the same so papa john's can improve operationally. this one is different because we also have to move past a marketing challenge, an image challenge.

but i think that we can handle that well and we'll break through that challenge and i think this is a big part of breaking through that challenge. so this actually in terms of the operations complexity is on the simpler side but i won't say it is easy, i won't say it will be a quick gik fix. but it is something 345 2that w get our arm ear arous around >> and a lot of the analysts notes are still skeptical. >> but i think we continue to do the right things in terms of the brand sentiment thesis so a lot of the culture challenges, internally working on diversifying the leadership team, a lot from the people side but the next big step is really talking about why people enjoy the brand and that is our products they are great products. having shaquille joining the board, new thinking, new ideas i really think this is a turning point year for the brand

but really first half of the year will be a challenge we did report our january numbers, they were down. but we think the back half of the year will create momentum to start getting back to growth >> shaq, you can open a lot of doors i would assume with officials in virtually every major sports league. should we look for new partnerships, new sponsorships >> that is something that we'll be talking about, a lot of innovative things. i just want people to understand that image is reality. and the reality is we have new leadership and i'm confident these guys will bring papa john's back to where it used to be and we just want to promote fun, promote great healthy ingredients like we've always been doing and i've been involved with papa john's since 1989 so happy to be here >> as a customer you mean? >> as a customer, yes. >> you've been in so many other restaurants. five guy, aunty anne's

what have you learned. >> being beingmanager, i never o managed my people. if the customer is not happy, they don't like the food, we're not doing something right. so i always try to focus on customer service, what the people like, what the people want and if you do that, and you still put out a great product, everything should go like you want to go >> can i ask, you are here at the new york stock exchange where thousands of companies trade. what do you own, do you trade any? >> i do, but i would get trouble if i start talking about what i trade. >> you bought into google, right? >> yeah, i was in google early i'm in a lot of companies, but i remember one time a long time ago i was doing this, doing that and my other didnmother didn't . >> mom said keep to yourself >> yeah, mom said keep to yourself because the way it was portrayed on tv, like i was showing off. so to answer your question, i'm in i'm always in.

whatever you got, i got. put it that way. >> and your gift of you dancing i think it was gold bond has to be the most gift of all time when you see that, does it make you laugh? >> it does because it is all about fun. i realize if you make people laugh, it releases endorphins and hopefully what that does is relieve stress when you think of shaquille o'neal, i want you to think of a nice guy, funny guy that makes me laugh as i look at everybody here, this is a real stressful job i want to be the one guy to make you laugh and make you forget about all your stressors so you can enjoy your day >> maybe one of those stocks you are in, maybe jeff has you into bristol-myers which we should talk about now last time you were on with david, you weren't able to you've been pretty public now. >> really? come on. >> knew it was coming. >> what makes you think that investors and shareholders here will side with you ahead of this vote against the deal?

>> we put out our investor deck which i'm sure you've read we met with -- >> 200 pages >> right we met with iss, glass lewis there is a couple key points here first, bristol-myers is a great company standalone it is a growing business it doesn't need to do anything there is some fear out there that if bristol-myers doesn't buy celgene what is next what is next is you have a great company with a lot of options to expand its business. it is a growing business standalone, extremely profitable business, it has no debt standalo standalone, about produce $37 billion of cash. there is a lot of fleflexibilit. they don't need to do any deal as it relates celgene deal, we just think it is too risky about 30 billion for the pipeline and in order to make that work based on our presentation, that means that celgene needs to be

successful with coming out with when ten new blockbuster drugs in the next eight years. that is just really difficult for us to imagine actually happening. drugs are very difficult to predict. yesterday we had one that didn't make it. but people are excited about drugs coming out people believe they will work. people are optimistic. we all are as individuals excited about drugs coming out and hope they work for the benefit of all of us but sometimes they don't and buying into celgene because you believe that ten blockbuster -- not just ten drugs, but ten blockbusters will come out in the eight years is a lot of risk. you start missing one or two even, you could be destroying billions of dollars in value and celgene over the last 15 years came out with three blockbuster drugs. >> have you ever been short celgene? >> we are not short celgene. i can't talk about years and

years. but we are bristol-myers shareholders aed and looking our bristol-myers. >> and on the whole they can stand on its own, you bought into the stock, right, after the deal or around the deal. so some are wondering whether you really believe and have the confidence that it has the pipeline to exist on its own >> we do, we did a lot of work yes, we bought in, but we bought this because of two things one, lots and lots of snufgs institutional shareholders because they hated the deal, they didn't want it, they were asking for help, asking for us to get involved. and two, we went in and did a lot of research because we didn't need to get involved. we got involved because we truly believe that the deal did not make sense if the deal made sense, we could have stayed away but after we dug in, it became pretty obvious to us that this deal may be being done for the wrong reasons and that it could destroy a lot of value without enough up side

so the reward is not worth the risk in our opinion as it relates to this transaction. so bristol-myers shareholders if they are worried about their investment and they want to make sure they are derisking their investment, they should stay with bristol-myers >> we'll see how the proxy advisors weigh in. i guess that is the next biggie. thanks for commenting on it. >> and i said restaurants are hard phrma is harder. >> phrma can be difficult, yes >> what about basketball, shaq sto zion williamson everybody says is the most physically dominant player since shaquille o'neal. is that true >> he is a greaeat young player very gifted. i wish him well. a lot of speculation that he may leave school after this to join the nba. my advice to him is take as much time as you want have fun especially in college. this will be the best years of you life once you become a professional, it is a different ball game. you have to learn words and

terms that you know nothing about like the first word to me was fica because i got a check for $1 million and fica took so much money i had to ask my guy like excuse me, brother, who is fica. so zion, watch out for fica. he's coming for your money >> did you ever blow out a shoe? >> no, never >> what did you think when you saw that you've been a long time reebok guy. >> i saw that and was saying to myself he's a very powerful guy. nike has always been at the top. i don't want to talk about the nike brand my thought is this guy is very powerful because he was using with all that force and when he stopped, he kept going and ripped the shoe. >> would he have given young shaq a run for his money >> never stop it. >> this was fun. thanks to you all.

let's get over to sue herera for a news update. sue, good morning. >> good morning, guys. great conversation here is what is happening at this hour, everyone. president trump talking to reporters as he departs the white house for mar-a-lago in florida. he says he has no idea about the timing of the release of the mueller report but continued his criticism of it. >> it is just a continuation of the same witch hunt. they know it and behind closed doors, they laugh at it. it is just a continuation of the same nonsense. everybody knows. they ought to go to work, get infrastructure done and get a lot of other things done instead of wasting everybody's time. >> secretary of state mike pompeo meeting with lebanese prime minister in about a rou, p on the mideast tour. a mass funeral taking place in christchurch for 26 victims

of the new zealand mosque attacks. hundreds of mourners gathering at that city's cemetery to bid a final farewell they carried their coffins to a specially dug gravesite after attending an earlier prayer ceremony you are up-to-date "squawk on the street" owill be back in a minute no matter where you are in life or what your dreams entail,

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time for the etf spotlight taking a look at the renaissance ipo. uber and lyft have chosen the nyse valuation could hit as high as $120 billion and levi stwrarauss as well addg a couple more percentage points to 2286. again the initial range was 14 to 16. and they came to market at 17. two retail movers for you starting out wheith tiffany, revenue short of forecasts shares of nike taking a hit this

morning after reporting sales in north america came in maybe a bit weaker than expected the company seeing weaker in its converse brand but nike overall beat on earnings seeing strength abroad, sales in china up 19%. europe and affair carica, all sg the stock had an incredible run up to record high in earnings. between women's, china and digital, there is a lot of runway for growth going forward. we'll see what happens most analysts saying buy the dip. >> yeah, interesting stock be down 5% take a lk.oo dow down 210 s&p trying to hold 2830.

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markets lower this morning data and a more cautious federal

reserve outlook renewing concerns of slowing global growth join us this morning to talk about where we've been and where we're head, tobias, good to see you again. >> morning >> are you in the camp that is happy the fed is out of the way or in the camp that is worried about what they are worried about? >> i'd probably prefer to be talking about better growth than fed dovishness but that could change over the next few months as well. we're still kind of suffering from some weak trends associated with trade related issues. and we're seeing some of the falling off of that. in addition, some of the uncertainty in europe that has been prevailing par shaytially because of brexit. so those are reverb bratding ba reverb bratding back a bit >> is this yield curve thing the real deal? >> we haven't yet inverted in the traditional way, but when we

do, it is usually 12 to 15 month lead indicator for economic weakness so it wouldn't necessarily mean the markets would sell off today if we did do the inversion, although it is likely to have minute minute -- minimal impangt. people look at peak ppi numbers and it is kind of a two to three year lead factor on the economy. so that is not necessarily an immediate kind of phenomenon either but there is data that would suggest a bit of concern is appropriate. >> so now that we've reached five month highs and sort of wiped out a lot of the sharp losses of last year, you always have a good feel on sentiment and where people are positioned and where that takes us next what are you seeing right now? >> so we track something with

regards to our model being a pretty good sentiment indicator with regards to positioning more so than how people feel. and it dipped a little bit on this friday when we update it every friday it dipped a bit from last week despite the fact the markets were higher. so investors are still sceptical, they don't really believe that it is totally appropriate. and i would say even discussing with investors one-on-one meetings we keep hearing this kind of skepticism prevailing, this kind of it shouldn't have moved this quickly off the bottom and it suggests to me that it is somewhat higher. >> for how long? >> that is a good question our sense is that it is more of a first half rally and second half give back expectations have come in significantly with as great a visibility for management, so they will tend to try to underpromise and overdeliver

you have a better chance of being rewarded so from that perspective, i think some reactions they have seen, they have thrown in the kitchen sink and bringing the market up to as high as 2950 on the s&p and then year end target of 2850, we kind of drift lower as expectations for the second half are higher. and one last point on that, one thing we track really carefully is the commercial industrial lending standard survey. and it does suggest as a nine month lead indicator that we could be seeing margin pressures by the fourth quarter. and in that sense some of the expectations for the fourth quarter might be a bit too high. >> finally, not that it hits close to home, but citi down 4%. a lot of the financials are at the bottom of a three month range. jpm might break 100. do you buy financials here >> we've been wrong on the financials we thought it was a better place to be in the market. part of this is the yield curve

flattening that we are talking about. a lot of people looking at the interest margin. our sense is that business lending activity will be picking up as the year progresses and there is more spread in there. but th thus far we've been wrong and no comments on my employer because i want to stay employed. >> we want that too. thanks for the time. >> now over to jon fortt for a look at what is coming up on "squawk alley. >> amazon is among a bunch of stores that want to go cashless. amazon has these go stores a number of cities including philadelphia, nownew york, wan to outlaw potentially cashless stores we'll talk to ritchey retoz would wants to do, that is coming up. they have the investment expertise to unlock opportunities other advisers might not see. learn what a cfa charterholder can do for you, at therightquestion.org

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welcome back to "squawk on the street." rick santelli live on the floor of the cme group, a very active cme trading floor. i want to welcome john sylvia from dynamic economic strategies john, time is short, let's get right into it. i'm glad we're seeing the stock market pay attention to what's a rather precipitous drop in rates, if you think of the double top in the rearview mirror at3.75. how are the markets going to get along, we have 3 trillion in negative security. what do you think, john? >> the bond market has been more sensitive to economic events it is telling me the european economic growth is much weaker than what's generally expected

that feeds into foreign earnings in the stock market. as we know, over one-third of earnings in the s&p are earned abroad so there's a negative feedback going on we expect that to show up sometime in the future >> now, let's add in shaq was on today, he said something i love, that perception is basically reality in many cases. yield curve in version, threes to tens. twos to tens at the flattest back down at ten, toying with nine, going back to 2007 how much credence do you put into that, john? >> markets react to expectations if you expect or anticipate the yield curve inverting, you have to anticipate a higher probability of an economic slowdown that's going to make it more difficult for equities overall. bond markets, equity markets have to interact, you have to be focused on that. >> let's try to put all of this together we only have a half minute left.

do you see a possibility that the pressure of outside the u.s. and negative interest rates may be a stronger force pushing yields down than the domestic weakness because the answer to that tells you if you're supposed to consider buying equities as they fall in response your final thought >> again, what we have seen over the last month has not been a significant change in u.s. fundamentals it has been a significant change in foreign fundamentals on the economic front i think that's what's making the difference, rick >> excellent john sylvia, if you're right, we'll talk next to potentially the stock market ever closer to all-time highs. carl, back to you. >> rick, thank you very much as for sara, you might have your hands full this afternoon >> we're monitoring the selloff, action in the bond market, yield cur curve inversions

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11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ good friday morning. welcome to "squawk alley." i am carly fiorina with contessa brewer and jon fortt at post 9 morgan has the morning off obviously a selloff on our hands, dow down 300 plus, session lows shares of apple on a tear, rallying enough to reclaim title of the world's motion valuable publicly traded company, trying to hang onto the flat line sending out an invitation earlier this week with the tease it's