it is 8:00 a.m. in cupertino and 11:00 a.m. on wall street. "squawk alley" is live.

♪ ♪ good tuesday morning welcome to "squawk alley." i am jon fortt at the post 9 with morgan brennan and david faber. where's carl >> carl is off the averages are rallying, shrugging off concerns of slowing global growth. apple and boeing are leading the dow higher the s&p having the best start since 2012 joining us onset, bob pisani >> 8 to 1 advancing declining stocks at the open one of the strongest opens in a while. it hasn't dropped at all stock traders get obsessed with different themes for the past week it has been a two note beat. global growth concerns and treasury yields and they're related. the dividing line is among those that think 2020 recession fears are real and those that think they're overblown. that's what matters. why are we rallying today? stock traders have been obsessed with lower rates with the

inversion of three month and ten year treasury especially important to them, so we are being helped by higher yields. the big note overnight that everybody is talking about was goldman, sachs which noted a good part of the inversion could be explained by international investors coming into the u.s. bond market. that ownership of treasuries shifted to more global investors, and their buying of our treasury speaks to global growth concerns. goldman concluded from their note curve in version signal could be less powerful for recession than in the past since long dated yields across regions are more correlated. notably, credit spreads that react to recession risk early did not increase materially last week finally on the big question, the recession question, goldman included in their note the risk remains fairly low you can see what moves up in yields, even modest, two or three basis points for the market, you have the semiconductors doing well, banks

made a little come back. you know as well as i do, market gets obsessed. two years ago was oil. today it is on the treasury yields >> oil has been moving up. i realize it has been trading a tight range in recent days, up something like 30% since the start of the year. should we be talking more about that, too? >> commodities in general are doing better overall it goes to argument of global growth concerns. if you can change the narrative, that changes the earnings picture. 40% of earnings for the s&p outside the united states, europe and china what matters. if you change that low or zero growth narrative on europe and china, you can change everything so right now everybody is saying the earnings situation in europe will bottom. when you had the manufacturing numbers friday, and they were horrible, they said maybe the narrative is wrong for the bulls. so where are you on the

narrative, that will effect our earnings you'll hear about the strong dollar out there in earnings numbers that come out the next few weeks and where europe is. tell me where that is and i can tell you where the earnings recession story will be. right now i think it is positive for the s&p first quarter. a lot of people said it would be negative i think it will be positive. i think numbers aren't going to be as bad as people thought they were that's my story. i'm sticking to it meantime, have you seen the apple story? >> no, we haven't seen it! >> i think it is unbelievable. everybody said who cares, it doesn't matter, it is not going to move the dial i have a dozen magazine subscriptions, every one of them is in this for $9.99 a month, atlantic, new yorker, i was impressed with the service. i know "the wall street journal," it looks like a fairly full service >> we were discussing that this morning. jim was telling me as well pretty much full service

there were things that weren't clear, we'll have more about that thanks >> pleasure. >> thanks, bob we have a jam packed hour. we will focus more on apple. speaking of in terms of the event yesterday, apple unveiling a series of new things, josh lipton tells us what to take away from the launch >> reporter: morgan, celebrities can often be seen at apple events, drake, kevin durant, naomi campbell this was a parade of hollywood heavy weights on stage steven spielberg, reese witherspoon, jennifer aniston, all there presenting shows for apple's new streaming video service. >> we partnered with the most thoughtful, accomplished, award winning group of creative visionaries that have ever come together in one place to create a new service, unlike anything that's been done before.

apple tv plus. >> original programming was just one of the new services announced. also unveiled as you mention, new offerings for news, video games, financial services. still for all of the sizzle, there are a lot of questions for investors, too for example, we don't know what apple is going to charge for the new video and gaming products. morgan stanley katie huberty says it makes it hard to quantify financial impact of the services exactly she still thinks apple ultimately bundles services generating as much as $37 billion in revenue by 2025 all these services arrive, you know apple's core iphone franchise is under pressure with iphone revenue falling 15% in the holiday quarter. analysts don't expect that 2019

lineup will boast a lot of fancy bells and whistles either. tim cook is hunting for growth, moving into new markets which will prove competitive he has advantages, too, with strong brand, huge installed base, a mountain of cash and big focus on trust and privacy jon, back to you >> and a little help from his friends as we saw yesterday. thanks apple announcing a number of new partnerships along with the push, including with roku. joining us from palo alto in a cnbc exclusive, roku chairman anthony wood good morning >> good morning. >> so after all this time frolicking in the walled garden, anthony, why do you think apple wants to be on roku now? >> well, i mean obviously they're focusing more on services these days and as you mention, they announced tv plus, their streaming service. there were not a lot of details announced but i think they're

well positioned to be successful, they have a lot of experience with subscription services, they're investing a lot of money in content, they have a great brand, lots of loyal customers. but when you have a tv streaming service, obviously they're counting on jump starting that with their iphone, iphone, mac customers. actually smart tvs are the way most streaming services are viewed by customers. that's where they spend most of the hours. for any service like that to be successful, you want to be on the leading tv streaming platform and it is the leading streaming tv platform. we are the leading distributor of streaming content in the u.s. >> what's the impact on the digital content market overall you see youtube back away from the subscription model, though they're still investing in their own content. disney is coming out with more subscription services. how does apple's step into the

space effect the rest of the ecosystem? >> i think at a high level, the more content comes to streaming, that switches to streaming, more choices consumers have, and the more likely consumers are to cut the cord and i think it will accelerate that process over 3 million americans cancelled pay tv subscription last year, and more and more are cutting the cord, moving to streaming. it is a better way to watch tv customers, it is a better experience and customers get to pay for what they want to watch. with all of the new services being announced, everyone from disney to apple to others it's like the golden age of tv. there's so much money spent on producing originals, making great content, it makes tv great. and i think it will accelerate the switch to streaming which of course for roku is great, we're the leading streaming platform. >> anthony, we saw shares pop on the news, but today i would say

cautious commentary from wall street analysts, citi viewing the new apple offering as a slight negative for roku, laying out five reasons key bank saying they see video service benign to roku but near term uncertain lay it out for us. >> so i think again apple's service is just another example of the high quality content that's coming to streaming and so one of the issues with streaming is how do i get my content on a television, and roku is the leading streaming platform for televisions in the u.s. so the more content that's available streaming, the better it is for bringing in more customers to streaming which is what drives our growth, you know, with over one in four smart tvs sold ran the roku operating system and the number is growing as more customers select tvs based on quality of the streaming experience for me it is clear, big picture.

all of the new services coming to streaming are excellent the business model is to modify service, paid to distribute content, and it is also good for us from an economic point of view more services people combine on the platform, the more money we can make. >> analysts are wrong to think long term this could be a negative for roku or risk greater than the rewards >> yes i think analysts focus on the short term i haven't thought about the super short term implications of apple's services except to me it seems it is all excellent. there's more great content it is a new high quality service. it will bring more people into streaming. i'm not sure what the negatives are for a company like roku. >> you're agnostic as long as the market keeps growing do you have any views in terms of who will be the most

successful will netflix growth slow as a result of the new entrants from disney, coming from warner at some point in the not too distant future and do you care >> well, i mean, we don't -- we're not betting on any particular company being a winner, we work with everyone. that's one of the benefits that consumers like from an industry standpoint, for new entrants, main technology companies coming into streaming, it is a new business for them. there's no down side it is a question of how big is the up side. for legacy companies, for the incumbents, i think it is a big threat to their traditional business model and i think for them it is an innovator dilemma can they transition to streaming and will this be as big or bigger than legacy business. that's a hard question if you're successful in

streaming, it is a global business with global scale and much larger customer base. there's a lot of opportunity >> anthony, one piece of this, one of many, that i couldn't figure out yet is the show time and hbo up sell piece. on roku, you offer special packages for show time, hbo, starz, et cetera apple and tv plus is also going to offer that. what's the consumer experience on a roku tv going to be like when they want to upgrade to showtime, hbo or stars will it be through roku by default, will they have the option to go through roku or apple, is there a conflict there? >> one of the trends in streaming is slowly you're seeing fraying of the bundle you're seeing a lot of pay channels now offering their service a la carte

you mentioned showtime, but those kinds of channels are available many places on roku, they're available inside roku channel, apple announced it would be available inside apple tv plus. they're available on probably all of the virtual services that are on roku, which there are many like sling tv, directv, youtube tv, they're available on apps in the roku channel store download that showtime anytime app, they're available on cable services that have authenticated channels on roku they're available everywhere and they're a la carte that's the big change. imagine five years ago signing up for showtime without a cable subscription, you couldn't do that one of the advantages of streaming on the roku platform, you have choices how you access content. you have a lot of choices as a

customer >> i'm wondering about the interface and usability. sometimes too many choices are not a great thing. i'm sure you're trying to figure it out >> that's right. that's the down side to choice, it can be confusing. that's why we're focused on the roku channel for us, a lot of that is about making it easier for consumers to find that content in one place. >> thank you, anthony wood, ceo of roku. >> thanks. when we come back, apple making a move with a new subscription service the owner of the los angeles times is with us on what the move is for the industry as we head to break, a check of the markets the s&p up 27 potsin more "squawk alley" after the

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plus for $10 a month, they get a news stand of subscriptions to "the wall street journal" and los angeles times. joining us exclusively to discuss the new digital strategy, the los angeles times owner and executive chairman, dr. patrick soon-shiong. nice to have you here. you have very aggressive targets for l.a. times in terms of your digital distribution how does this help >> i think the apple platform with its large global ability to distribute on the digital forum is beginning of our strategy to launch, you know, another digital exposure of the "l.a. times. >> if i can get it for paying 9.99 a month along with everything else, would i want to subscribe separately to the "l.a. times"

it would seem i wouldn't given you want i assume a direct to consumer relationship, aren't you potentially cannibalizing that >> no, i think it is basically different awudiences, right? the audience wants to see magazines and have a global view of content is also a different audience from the local regional viewers. and i think the opportunity to really spread our content and high quality journalism across, we're not concerned or think this is cannibalism concern to us >> patrick, how should this revenue share model work i mean, the spotify model is an aggregate over all viewers over all listeners the most popular artist, most popular content gets the most, biggest piece of the pie, whereas if the "l.a.

times" is the only publication i read inside apple news in a month, should you get the full $5 how should that work >> yeah. well, i'm not going into details, apple hasn't revealed the general details, but in essence that is a similar concept. all papers to provide content of interest to viewers. >> which is the model, more like spotify or more like the share of what i read goes to you >> no, again, i don't really want to go in to be honest with you, we haven't even figured out as we do the metric and we just started this, but it is more like the idea of if people are interested in our content, we get rewarded for that. >> i guess to that, doctor, the

question i would have is for the newspaper, is this a game of growth and a game of scale is the focus for you on more eyeballs and subscriptions or another way to make money? >> for us it is a way to attract an audience we wouldn't normally attract on this kind of platform look, i look on the "l.a. times" as a media brand in which our attention now is directed to the audience so the goal is to create high quality journalism for an audience that interests the audience we have to turn away from the old model of advertisers i think the platforms of google and facebook have taken on the scaled model for advertisers our audience now is the readers. this is a platform and especially apple that really values their privacy of readers.

it is not a model for merely making more money, it's a model for actually identifying an audience that will see value in subscribing to the "l.a. times." >> patrick, i understand you're not able to discuss specifics but listening to you, it appears some specifics haven't been fully negotiated is there still more to come in terms of you figuring it out with apple or is it set? >> no, terms have been negotiated the questions with regard to the analysis of the metrics, that is still new frankly both to us and to apple but i see them as a fantastic partner, as a partner using their device and their platform of global reach, a different platform from the digital platform we're about to launch interestingly, we self launched

today at san diego union-tribune a new web based platform we just went live today, coincidentally >> "the washington post" and "new york times" are not part of this they have thriving digital businesses, patrick. if you were at their scale or had that, would you still have chosen to be part of this service? >> you know, that's difficult to analyze. from our perspective, i'm not sure yes or no i see it is a different audience, right? i think when i spoke to norm pelstine with "time" magazine and put time into texture if you recall where there were multiple other magazines, they did not see cannibalizization. i think this is a different a d audience that wants everything conveniently in one place. provided we provide good high quality journalism and good

content that interests viewers, whether it is direct subscription or subscription through apple, i think it will allow us to grow. >> patrick, is the most important thing about the apple move and news plus announcement the death of that 20 year idea we have been living in that content wants to be free advertising was supposed to make up for everything eventually if you could just get to a big enough scale does this represent the death of that idea and rise of that idea? maybe you can give away too much personal information, maybe targeting can go too far, maybe the consumer is finally ready to pay for content again. >> that's exactly right. i think as i said my concern was the fair use act, how the fair use act is being used by the platform to take content, high quality journalistic content for free and use that. it enables the consumer to believe incorrectly that work of

journalists very much like scientists that do all of the hard work of reporting and discovering is free. so we need to provide a subject matter and information that is a value to the reader, of interest to the reader, and bring payment. apple is the first beginnings of the beginning i believe where the reader or audience believes it is worthwhile paying for the content. and this is the news plus, that's the beginning of that venture for us >> well, we appreciate you taking time to fill us in. thank you. dr. patrick soon-shiong for joining us uber purchasing careem for $3.1 billion, looking to expand the global footprint

hadley gamble joins us from dubai. >> reporter: it is difficult to state how big this is. it is the largest buy out in middle east history and largest acquisition for uber breakdown is $1.4 billion up front in cash and 1.7 billion in equities of uber big question surrounding what would happen to careem as the brands, they're keeping management in place and working as a subsidiary of uber. it will be interesting to see what it means for the tech. center and what happens with saudi arabia the breakdown investment is quite interesting. saudi arabia as you know with public investment, sovereign welfare fund, big investment in uber, and the telecom group and major investors in careem.

they're working both sides of the story. we heard in a statement from the ceo of uber about what this would mean for careem as a company. he said this acquisition is subject to regulatory approval in various countries which we don't expect before q12020 until then, nothing changes. since both companies will continue to largely operate separately after the acquisition, very little will change in either team's day-to-day operations post-close what it means for the sector in terms of investment and international companies and what it means particularly for saudi arabia, a lot of excitement. difficult to overstate what it means for the region, guys >> thank you hadley gamble reporting for us. time to get to sue herera back at hq for a news update. >> thank you very much, david. here's what's happening, everyone we begin with the fact that

prosecutors dropped charges in court against empire actor jussie smollett, he was facing disorderly conduct charges for allegedly staging a phony attack and saying he was a victim of a hate crime he was freon $100,000 and has previously denied charges. federal ban on semi automatic bump stocks into effect it is illegal to own, buy or sell a bump stock. failure to destroy or turn in a bump stock can result in felony charges. thousands of syrians took to the streets of cities around the country to protest president trump's signing of a declaration recognizing israel sovereignty over the golan heights syria called the decision a slap to the international community and new york state comptroller says the average bonus dipped by more than

$30,000,despite 11% increase i industry profits the average bonus dropping 17% to $154,000 from 184,000 back in 2017 and brief correction last hour we sard kol on mcgrer or destroyed a man's home, it was a fan's foam we apologize for that mistake. back to "squawk alley. morgan, back to you. >> property, nonetheless sue herera, thank you. >> you got it. shares of apple higher on the heels of a big service announcement, up 1 and a half percent. guy kawasaki weighs in on the content play more "squawk alley" after the break. i'm working to keep the fire going for another 150 years. ♪ to inspire confidence through style. ♪ i'm working to make connections of a different kind. ♪ i'm working for beauty that begins with nature.

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it was a decade ago steve jobs was trying to revolutionize television now apple made the move. ramping up a push to services, announcing an entry into video streaming. apple tv plus. but is apple too late when it comes to getting into the game joining us on all things apple, steven levy from wired and author of multiple books on apple, and guy kawasaki. steven, is it too little too late for apple >> there's always room for another streaming service if it's good but i don't think we

needed another streaming service. the problem that we have with our entertainment is choice and abundance and by introducing other streaming service, apple wasn't doing what we wanted it to do which is solve problems for us. >> guy, if you had to give apple's coming out party yesterday a grade, what would it be >> b plus. i echo some of steve's skeptical attitude i think a good analogy is when they went into retail stores at the time they announced retail stores, everybody poo pooed it, too late, how can one possibly support a high square footage rent and lease in malls, there's no way apple retail stores would stay. all the pundits were wrong

>>when i first watched the presentation, i thought it was a bad product announcement i thought they had all of these things coming out, ipads, macs, and then they do a thing where they hardly show content then i slept on it i thought it was a good manifesto. maybe they're trying to move expectations, effect culture, get people instead of being on targeted advertising model for digital content to really think about not giving up your privacy in order to use a credit card or to watch content, et cetera. is that what this is really about? because this isn't the problem with tv that steve jobs was trying to solve those many years to get it on roku. >> you're right. i think the privacy thing is a threat that can go through this. this is a services announcement. the only service they didn't mention was apple music, one of the most popular services, one people pay for

apple, iphones, sales are slowing down apple says we're already a big services company, let's double down and take on the big giants and video services like netflix. my problem with that is that i have been waiting for years for apple to solve the living room if apple is now going to both provide me like a little box and software to negotiate all my tv watching and then compete with companies like netflix at the same time, how can they really serve me totally i wanted apple to be squiwitzerd in this. >> guy, why haven't we gotten information on pricing only the news service did we get details in terms of pricing or potential bundle which i think a lot of investors and consumers would like to see in terms of services >> that's an interesting question obviously they didn't announce pricing it is because they can't

announce pricing they probably prefer to. until pricing is announced as steven said, we really don't know who's going to jump to it you can bet that apple is never going to be the cheapest solution in town, but again, counting a dead horse, never count apple out. steven and i have been following apple since 1983 it has been a long and interesting ride >> yeah, and it has been of course noted because of their great innovation guy, did you see a lot of innovation on the stage yesterday? >> you know, again, going back to the retail example, was there a lot of innovation there, no. from apple's perspective, they got all of the devices and information, they have all of the relationships, why not tap into it. i think four, five years from now we'll say that was a genius move apple went from a device company to device and services company, higher margins, genius of tim

cook or four or five years we'll say what was apple thinking. it is a device company, not a services company i don't think anybody can predict that >> i saw some innovation yesterday. they announced the credit card they said you know the little charges you see there, maybe an address or phone number, they're going to tell you what those things are, you're machine learning with it they're not going to charge user fees they rethought what a credit card is. they brought innovations from smart financial appsthat we have seen in the past, and we thought what a credit card can be that was apple at its best rethinking an experience, making it easier for customers. >> how does this play out. you have ww d.c. coming up in the summer, we expect an iphone announcement in the fall, these services, tv plus and arcade are supposed to launch in the fall was this sort of planting a flag

and we get detail at wwdc, more on how it will work, framework, and details and pricing in the fall >> i think the big question is how much are services going to be integrated in specifically the apple experience, the apple ecosystem. they're not putting netflix on the apple tv service right now that's not too great the question is what other things aren't going to be there because of apple's competitive situation with some of the players. >> well, more questions to be asked, more answers to be revuld, i'm sure, in the coming months thank you for breaking down what we do. guy's new book is out "wise guy" lessons from life. when we come back, the content space as we have been pointing out is getting somewhat crowded. how does apple stack up against

season the competition former directv president is with us first, rick santelli, what are you watching >> race are goites are going up and also stocks. at wt we're talking about after the break. relinking. -driverless cars... -all ground personnel... ...or trips to mars. $4.95. 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.

welcome back to "squawk alley. let's get to the cme and rick santelli for the santelli exchange hi, rick. >> good morning.

today is a big day after the big drop in rates what i have been looking for and many traders on the floor because the topic is always the same, markets, pricing, moves, patterns, technicals, fundamentals, we needed some sort of stabilization in the treasury complex with u.s. sovereign rates before the equity market would feel kind of comfortable aiming for all-time highs again. i kind of call it relinking. but it is even more than relinking. we're in the process of reliking, and that's from the perspective of the equity markets back to treasuries it is never equitable. imagine you hold a rope and start to slip, that's interest rates. they're slipping but we get a grip again and start to consolidate. the new level becomes something stocks can live with, as long as it stops slipping lower. let's go to the board. this chart starts september, 2018, and we had the big double

tops what i'm after is two-fold this low that was made 3rd of january was 2.55%. we consolidated. the interesting thing is the session that broke through there started out at 261 it was the first day of a two-day fed meeting, and it has just sliced through since. from a technical standpoint we kept referencing how important that point was, for 30s, 290 look how they traded when it went through there reliking is in the process now more so maybe the big question is what area down here is going to stabilize the market. that's a much more difficult question after we basically broke 87 basis points from close to inter day lows at 237 for that, i have to go back a long way on the chart. there's one point i can illustrate mid july of 2017 we had the last significant top before the

market progressed and never looked back. and remember, a year before this was the second of the two double bottoms, in 2012 and 2016 in july this point was 238 there's a lot of congestion afterwards a lot of congestion before somewhere right around yesterday's low yields we could start to consolidate what would guarantee there are no guarantees. what would give me confidence to hold it from the rest of the week and close above it for the week jon, back to you >> thank you, rick and up next, former directv president and ceo mike white joins us to discuss apple's video streaming app and content play "squawk alley" continues after a quick break.

we're calling your attention to what's happened with some managed care companies particularly the ones that have something to do with obama care. some of the names moving after the trump administration and the justice department have echoed a desire to make efforts to throw au out all the affordable care act. this is pending before the fifth circuit court of appeals that does it for right now keep it right here we'll be back after this break

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welcome back some headlines coming out of the wall street journal regarding lyft it's expected the price shares above the targeted range for

initial public offering ahead of the ride services debut which is expected on friday according to the journal, likely to price the stock above 62 and $68 per share according to sources familiar and unlikely to be as high as $80. we'll get more details around that when the shares price late on thursday. john is highly anticipated ipo on friday because it's expected to start what is going to be a tidal wave of these multibillion dollar tech coming to mark >> quite a few apple ceo, tim cook, unveiling apple's new tv plus product as it looks to open a chapt every chapter in the company's history. former directv ceo michael white. good morning >> good morning. >> you do have apple shares but you are also expressing some

skepticism about this crowded market that apple is diving into what would you think the metric for success is here. apple has around 50 millionubsc. is it a get of how long it takes them to get to >> apple is a terrific company it's bigger than directv was when we sold it. they've got a terrific traffic record they have a great list of content. this is a crowded space. consumers don't have much more time they are already spending 12.5 hours a day by most estimates on media and tech combined it all together you have a massive fragmentation going on of interest as well the days of 104 million people watching the finale of mash is

over you have a fragmented universe you have a ton of competition. you have more coming that's before you even talk about the non-traditional competition which i've been studying which is really fascinating. everything from youtube to social media to studio network.com. there's a ton of options on the web for streaming. >> what's the game for them? youtube seems to be moving away from the subscription model. maybe banking more on their advertising legacy for apple, what does success mean it can't be we're big so why not. >> i think they clearly understand they need to have really high quality content. i think cook said it well, we were be customer centric you're starting with very high quality producers. not everybody hits a home run

every time out of the box. i think that's one i think the second thing that they haven't yet talked about and i would presume they are looking at is ways to cross promote hardware in whatever content play they may do there's lots of plays that you can make within the huge business apple already is. when you ask about how big, they are look at it globally. i think that's the way you have to look at it. >> michael, give tennessn the f such a crowded field, what would you expect pricing to look like. do you think the up side will be a bigger, broader bundle in terms of the entire services for apple? >> everybody is trying to officer bundles. you have streaming bundles all over the place i don't think make money doing

it it's not a huge range. ifyou're talking about your ow original content, they don't have a broad enough portfolio of con te content. >> indeed. final thought for you on this. is this a significant business for apple or more of an enhan enhancement for everything else they can doing >> from what we've heard so far, it's an enhancement. for everybody it's difficult to make money with their installed base and relationships and size of their

cash reserves, i'd say their core capability, user interface, there's no doubt in my mind, i'd never underestimate what apple might be able to do. >> that's a safe bet don't underestimate them thank you. that will do it for squawk alley. let's send it over to the judge for the half >> all right thanks i'm scott wapnerks could be the one thing that matters the most whether the fed will cut interest rate. for the first time this year, the market is betting that it will it's 12:00 noon, this is the halftime report. the big switch from the fed rate hike environment to the possibility of a cut how will the markets take it if the feds start moving the other way. plus the apple debate. is this stock a buy at 191 the halftime investment committe