said instead of asking millennials what they think about socialism, let's ask people who have lived in a socialist country what they think about socialism and get the real answer. inexorably, which isn't that hard to say, people who live in socialist countries understand the difference "squawk on the street" coming up right now. ♪ it's a beautiful day good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber will they announce a trade summit with the u.s. how might investors react? german factory orders plummet year on year jobless claims did hit a new cycle low.

tesla's rough ride elon musk getting ready for his day in federal court shares are down 10% free market. >> tea leaves. a muted open as u.s. and china talks get set. >> privacy and harmful content facebook as mark zuckerberg continues his tour shipping the model three to europe and china for the first time meantime, elon musk does go to manhattan. s.e.c. is asking a judge to hold musk accountable in court. it's great to have the three of us together at the desk. been a few weeks. >> where is that windex? >> public service announcement get your flu shot even when you hear it's only 38% effective.

>> you could have gone to walgreens and given them some business. >> i could have. >> i second that motion. >> i'm not contagious. >> that's good. >> back to tesla jp morgan says the figures, jim, out of the quarter actually undermine their defense on his commentary on twitter. >> jp morgan, what's with this guy telling the truth? what is that about how can he just go out there and tell the truth and guys said maybe he's honest. that was a devastating piece of research what's really incredible, too, is that this afternoon he's going to argue that when he tweeted about the delivery numbers, not material. there is nothing more material, as we see from today he's also going to say there was nothing new. the fact is that the guy down was 400,000. he said i'll be doing a 500,000

run rate remember, he clarified, clarified that right and now it turns out that they are shading down to 360 to 400,000. of course, could they resist no five times the demand of last year could they just for once say hey, we didn't deliver what we could? imagine ford motor saying hey, guys, we did substantially fewer cars let's say there's been a demand. i think you would say i'm resigning. i'm not going to do it i'm resigning. >> this is elon musk one of his great strengths -- >> he's not belichick. >> no, he has not won super bowls yet. >> how many rings has musk won >> i don't know what you count as a ring. he has had many companies. >> doesn't cramer know that he

produced more cars than any man and the cars are fabulous? jamie dimon says don't focus on the quarter. suddenly you're focused on the quarter. i'm focused on -- do you see the stock is down 30 points on a missed delivery. the bulls say ignore that. that's equal to up 30. >> we talk so often about how much emotion there is on both sides and how dug in everybody is whenever we talk about it any way or the other, whether it is negatively or positively, each side comes at you. i would offer that it's not just the three but the more profitable models that may be more of a concern. the fall-off in the x and the sx as well. >> yes. >> f, the s and the x, excuse me, are significant. how low they brought the price down on the 3. >> at the beginning of the run, the yield isn't as much money.

it's obvious that they have demand still in europe and china. doesn't that tell you that demand in the u.s. is soft >> the s and x down 50% sequentially, as david said. they don't know if it's model fatigue, fading tax credits, competitive models. >> porsche, jaguar is out. >> bentley. >> significantly high-end competitors. >> i think that this is the first time that you have a question about whether there is real competition the competition is from very high-end cars that people think are made well. >> audi makes a pretty good car. >> yes, they do. >> i've driven them. >> i was in a bmw electric it was fantastic. >> bernstein's other note this morning is that they should have raised money in the second half. now it's going to be hard to access capital you think that's true? >> yeah, i do. right now, look, you go to

goldman sachs. goldman did a deal this goldman piece this morning broadly disappointing. reiterates sell. >> they've been on sell for -- >> this one is so bad i would tell an investment banker don't do the deal. i would go over to investment banker and say guys, i don't want you to do this deal. >> you're not allowed to do that. >> no. no if you think that there is something that the books aren't right. >> i see. >> they have a right to be able to say i don't think you should do this deal. >> you go to a third party who tells them. >> i don't want to violate the chinese wall but there are moments where it's like if there's -- the research is saying that you can't buy it this isn't a you can't buy it. if you buy those bonds and they go down, i think i could sue goldman and say your own firm said don't buy it. >> point being made that carl mentioned, it will be a lot more difficult for them to raise capital in any form than it would have, at least at this

point. not to mention, remember earlier this year -- >> the payment they did make. >> i'm not disagreeing with david at all i'm saying this number and the possibility that the earnings are going to go whatever the numbers are going to be -- >> is there any impact on the stock later today when they get busy >> little bit of judge nathan says that he should become the chief something but not executive officer. >> this would be, at this price, would be the worst day for the share shares since early january 2025 bonds have reacted as well. >> i think judge nathan is a real wild card because he -- remember, musk keeps saying it's the runaway s.e.c. that's doing this but his company agreed to the settlement now the government is really amazing when it comes to the process. they tell you to trust the

process. and this is not the sixers this is federal court. to trust the process, there should have been some sort of procedure where he had to have a tweet vetted the idea that the tweet is not material is ludicrous, just ludicrous. >> it was inaccurate. >> it was also inaccurate. >> aspirational. it wasn't material. >> this stock trades every hour. anyone who read that tweet should have bought because that would mean there was a recision upward but the bulls say that is not true let me tell you something, it is sunny out and they would say there you go again there you go again, making yourself -- >> welcome back. >> missed that finger. missed that. >> you didn't do the arms. >> i was practicing while i was sitting in bed under the covers. >> the rolling of the eyes. >> is that what you did on vacation you sat in bed >> it was not vacation. >> meanwhile, facebook shares

continue to climb. they're up more than 30% saying usage trends continue to be solid despite concerns over privacy and harmful content. meanwhile, zuckerberg talking about regulation. >> you can say any regulation around what someone says online is protected the current laws around what is political advertising don't consider discussing issues to be political. you know, it's not clear to me that we want a private company to be making that kind of a fundamental decision about what is political speech and how should that be regulated seems there should be a more democratic process over it. >> tuesday, jim, we talked about deutsche going over 200 and today guggenheim does the same. >> despite the endless drill down, it says this company is finished and they're a bunch of

liars, this and that, the customers just weren't eating it the advertisers never went away. the advertisers actually stepped up their spend, bought instagram, which you joked the other day. now, uh-oh, this guy is coming on tv and saying listen, we haven't gone far enough. we're going to go further. we let the government come n now they have nothing to stand on. what they were really standing on was headline risk s yesterday there was a story that was bizar bizarre. what happened was the analysts were thinking that the cloroxes of the world would pull back, consumer packages. they didn't. they increased spend because they can't find -- dave and busters, which david you missed -- david faber and busters. typically google but google does

the spamming everywhere. you know what i mean >> yes, i do. >> right. >> confusing term so no one gets what that means. tsz a fact of life on instagram. you go through people's feeds. oh, there's the dog. there's the cat. oh, there's the ad the ads are very compelling. and you start to grade for advertising and no one left. they put more money into advertising. they can't reach these people. they can't. >> i'm totally with you. as we were getting ready to mike up, jeep is creating a 4x4 day on instagram. >> instagram photos of your jeep. >> you can reinvent yourself on instagram, brand yourself on instagram, if you want to sell things, spotify, instagram

instagram is remarkable. it's such a great platform to sell things on it is. i think it's the best platform in the world. >> instagram >> easy. most accessible. i sound like sheryl sandberg, i know i sound like -- when you add zuckerberg, though, he's the churchill of the web jefferson. he has become jefferson, combination of jefferson and gandhi. >> what? >> zuckerberg. read the interview. >> churchill, gandhi >> and zuckerberg. >> when we come back, jamie dimon taking on topics in his annual letter to shareholders. s&p, nasdaq up five in a row dow is up four out of five

s&p is in the midst of its. president trump is slated to meet the vice premier later today. we'll see, jim, if they address

things like end game. >> there's a new theory, that china has momentum we just got good numbers china doesn't want to destroy the momentum china wants to come to the table because they like what's going on in their own economy. it's a whole new line of thought. maybe they're more likely to deal i've been saying over and over again the sticking point is that trump doesn't want to remove the tariffs. it's not trust and verified. it's distrust and verify. >> if you're china, why would you agree to any deal where the u.s. has unilateral ability to hike tariffs if they feel you're not behaving correctly, for example? >> i think maybe it's a situation where anything is better than nothing. we have a deal they'll still do different things there are things -- they are a little worried when they decided five days after -- five days after navarro said fentanyl is the biggest

problem, they are listening to the hardliners that's giving in to the hardest of hard liners. >> could you just say yes instead of nodding the camera is on me right now. so you're nodding. no, you were nodding in agreement but you agree, just say yes. >> you need people to know i was affirming with you >> yes you can go like this, or this. circus muskamus. i'm not allowed to do this phil, do you think musk is going to show? >> do i think he will show up in court today? >> yeah. >> that would be great drama i would love that. that would be great drama. >> like law & order. >> that would be fantastic. >> what are the two groups people who prosecute and then there's us. >> yeah. >> welcome, by the way. >> thank you it's good to be here. >> i have been listening to -- do you sleep, man? >> no.

>> he's on ethiopian pillow. >> i wake up and say who >> it's like, tesla, you let's see boeing you. it's an incredible time to be you. >> it's busy, no doubt about that. >> what was your take on deliveries >> terrible. not terrible like fall off the earth but we had gene musk on earlier today and said do you sense that they know and he said i don't believe so those close to the company they're not entirely sure what the underlying demand is do you buy into 360,000 to 400,000 for deliveries this year >> why wouldn't you, given their inability to seemingly predict it, not to mention back to the court case, his tweet, which indicated they would be higher than that? >> right. >> and for them to make 360, they now need to do 99,000 per quarter for the rest of this

year the best they did was the fourth quarter, 91,000. it's not impossible but it's going to be a challenge. >> will they really have a run rate going out of 500,000 like the first tweet? >> right at the heart of the question right there. >> who would you argue from a competitive model standpoint has the pole position? other evs? >> i want to see what porsche looks like, what kind of audience that drags in i think audi is intriguing i think what you're seeing from jaguar could be intriguing the question is, when do these -- you need somebody else to come in and to grab the attention and the love of the car-buying public. right now, you hear a lot of people say we've got great competitors coming spare me the song and dance on that give me something that makes my blood boil and go, wow, that's really good. >> so true we've got these tesla rallies in

london they want to go rally and show they own teslas. i'm not seeing that. >> no. the bolt is not a competitor to t the. >> they're down even more than the three. >> right. >> the competition is coming from well-known brands that would seem to be a potential threat. >> i'm interested in how the demand cuts into the three for the s. i have a friend who bought the 3. i said what do you think of the s? he said i thought about the s, decided to go with the 3 that's it. >> there you are. >> ford down 1.6. >> that's better than i think some people were expecting that really is i think some people thought it would be far lower than that, and i think that's reflective of a little bit of a bump there. >> from the navigator high margin we started expedition high

margin high margin things the court is putting out. >> the insatiable demand for pickup trucks and suvs right now. as bad as things are at ford, they've got a lot of things that are messed up, they are wisely leveraging the s series and their pickup truck business. that is it, and they know it they're trying to do everything they can with it and they're succeeding. >> are you going to stick around for a while? >> sure. >> great. >> we have to talk boeing. >> a million things we're talking about. ve cramer's bad dash fi days of gains we're back in a moment since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see

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is. six minutes before we get started with trading on a thursday. >> all right, i'm ready. >> you know? >> what? >> i was in tokyo not that long ago. i would say 10% of people walking around have that on. >> i'm one of the 10%, david. >> you can actually -- i may start to wear one myself. >> yeah. >> i'm going to tell carl he's going to boro mine after if we're working together. >> i am not contagious get that off. >> all right, all right. i'm sorry. i'm sorry. my mommy always told me be careful of the sick kids who come to school i had perfect attendance, perfect attendance. >> i had not a sick day in 15 years. >> all right, all right. david, do you mind if we talk substantive for a second downgrade by micron. rally drives to underweight. buy, sell, buy, sell, buy, sell.

you didn't touch the screen, did you? >> i did not. >> this thing has rallied from here all the way up to here. he said okay, it could go back down to here, which is the book value. it's not an unwise call. i disagree with it only because i think micron could rest here people love to trade other than amd. david, quiz for you, where is lisa suh from? >> a tiny little county not too far from here across the river called queens. >> that's true do you know what you missed? >> brooklyn's king's county. >> people like lisa suh and donald trump, both come from queens. >> mr. met was here when david was away the only thing -- i took him apart. >> you think i wasn't here but you don't really know who i am. >> how great is it to have phil

lebeau here? only stories that matter are covered by phil lebeau why is boeing not going down why is the boeing stock not going down >> one of our key topics around the bell other names, including jamie dimon's letter to shareholders jim and i have some thoughts on eng ll f opinbeour minutes away. >> time for zi cam

we see heating breakthroughs clearing the air for billions. at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved.

you're watchingcnbc squawk on the street. the opening bell in 60 seconds what a day, as we've covered china trade, tesla we covered dimon's annual letter we did get a report on the ethiopian crash. >> this boeing story, phil, all people tell me is shouldn't that stock be cut in half instead it keeps going higher since it bottomed. >> right. >> what the heck >> production drives revenue it then goes to the issue of revenue, et cetera we'll talk about production a little bit i got a chart that shows you

what it's all about. >> very good the preliminary report for what it's worth did indicate the pilots performed as recommended by boeing, repeatedly. >> but we don't know details. >> opening bell, s&p 500 the big board, defiance etf at nasdaq it's tradeweb, celebrating an ipo we'll talk to the company's ceo when the stock opens david, by the way, as they announced plans to roll out 5g in two cities. >> south korean companies are also rolling out there listen, it's going to be some time until, of course, these services become ubiqutous. it's very important.

we try to focus people on the key differences, which is the lack of latency, what that is going to allow for, in so many different ways once 5g really does become something that is available everywhere and i'm not even talking about -- phil is here -- autonomous cars on a network, which would obviously need to be 5g, given the latency. >> right. >> connection between a robot in somebody's home and somebody who can operate that robot to assist a person, let's say an elderly person who needs help. because of the lack of latency, the ability to do this and move, when you're in china and have something move here in the united states. >> that's amazing. >> not today, not even tomorrow but eventually these are the kinds of things. ledger and marcell will be talking about just bringing cable tv wirelessly into your

living room for rural homes. these kind of issues, particularly when it comes to -- just let me finish. >> i wasn't saying anything. >> the internet of things and the uses that we will see. >> i've been hearing what it does to the edge, which would imply that you don't really need a powerful cell phone. >> that's right. >> what does that do to apple's margins? david, what does it do to cable margins, including comcast >> the idea that it's so quick between the edge of the network and the device, whatever it may be, the computing power doesn't need to be here anymore. >> it's big. >> or in the box, x-box, there's no boxes anymore. >> people are thinking about what does it do, how faster -- that's not the story. >> again this is the very beginning. there are a lot of debates about how quickly ultimately this will be rolled out. yes, they're moving at a pace.

at&t and verizon are spending money, not that much more than they normally spend. so you have to wait and sort of watch. >> we have to cover this earnings per share story in the 2022 timeframe, i cannot recommend certain stocks because the mobiles have to shrink. >> telecom because of 5g >> yeah, 5g will make it so -- how do you charge $800,000 for an apple phone >> randall stevens said what's a phone? after 5g you don't need memory in the phone. >> that's exactly the opponent. >> this is an existential question it really is. >> yes, it is. did he ask what about house of cards -- he knows house of cards. does he know game of thrones >> i'm sure he does. >> really?

>> was he at the premier in new york >> he has gotten into content in a big way. >> that's the plan. >> by the way, i watched a lot of hbo the last few days. >> there are really good things right now. >> i binged watched all the things. >> did you finally watch fire fest >> i watched that already. >> jim, you mentioned stories we're covering with phil we've done tesla we've done ford. we haven't done lift and now these reports out of the journal that icon getting out preipo at a pretty nice profit. >> you can see where the stock is once the shackles come off in six months. >> if you are locked up, are you waiting to get out >> i don't know. any time you have duopoly at 39%

and uber has 60, they wipe out all the yellow caps and then they raise price that's how they get to the positive that's my thinking people just dismiss the thinking any time there's a d uchuopoly, have the ability to raise price. that's why i don't hate lyft as much as anybody else does. >> trading below -- at which it was priced even though it was really well placed. >> too many retail guys. the syndicate did not support the stock. but if they're in there now and you're starting to get some traction, look out the short sellers, who shouldn't have been shorting to begin with because it's a new issue -- >> phil, something else i had an opportunity to do sitting in bed the last few days was read a lot. you read all the coverage of

boeing, you come away -- i haven't done original reporting. i know you have. it's very negative. >> absolutely. >> it seems. i wonder to the point we were raising earlier why the stock is still up 20% for the year. we understand it's a duopoly we understand the pipeline you were making that point. >> let's talk about production you look at the 737 max. remember -- we can show you how they've increased production over the last five or six years. it's been a steady cadence, back log of 5,000 that's the plan. some time this year, they're supposed to go up to 57 a month. you could say maybe it takes a couple of things to get resolved and everything is okay but you have to tell your suppliers. it takes a long lead in advance. spr, spirit aerosystems, my old stomping grounds of wichita, kansas it used to be boeing would build

a fuselage for the 737 there spin it off. get rid of it. they spun it off spirit aerosystems was developing spirit aerosystems is under pressure look at it more recently, within the last month. >> right. >> this is where you would see it first that's to answer your point, david, when the stock comes under pressure if they have to say we can't do 57 a month. >> up almost 2% as the journal is now saying we are going to get a date for a trump/xi summit today. >> we are going to get a date? look, chinese need it more than we do. they have momentum they don't want momentum to stop. >> do they announce as part of this trade agreement hey, we're going to buy 300 boeing planes. >> that's what i'm thinking. what a better way. then the president could say look at the faith they have in our airlines soy beans. would that not be unbelievable

it would be -- even navarro would recoil. >> this is how they do it. >> take another 300. here it is. >> yesterday i had dominion on they have 20-year contracts. so if the chinese say we're buying l & g, forget it. there's no nad gas it's got to be planes. we would love it if it's caterpillar. buy some earth movers. we never liked the japanese. we're going to switch. there's a lot of ways. they're all good for american industry. >> you're right. >> the fact is that despite boeing's reputation being tarnished substantially, some would say. >> correct. >> as a result of perhaps not doing all it could have, for

people didn't die in its airplanes, that it won't suffer because it's part of a duopoly >> ultimately that's the saving grace here if you're an airline -- i talked with leasing companies and ceos of leasing companies they say the same thing. we're not crazy about what's going on with the 737 max right now. what am i going to do, go to airbus and say give me 200 airplanes? they don't have them sitting around they're at max production. that ultimately is the saving grace for boeing f they cannot increase their production on the max, you're going to see that stock come under pressure. production is what's driving everything right now. >> it's so great i have been struggling myself. i have people in my family, why do you still like the stock of boeing that has to be cut in half and disappear. i say boeing is going to fix this. >> they will fix it. they will fix it and you will hear people say i'm

never going to fly a max again i heard the same thing with a dreamliner i didn't hear it a month after the dreamliner was back in the air. >> didn't mullenberg fly one yesterday? >> that was a test fly. >> they'll test fly it for a month, run it thousands of hours. >> you saw the announcement from the faa. they will not have egg on their face as they did when everybody was grounding it let's bring the europeans, chinese, bring everybody in and sign off on it together. you know what that means, it will take longer because it's not going to get rubber stamped. >> right. >> jim, we haven't mentioned dimon's letter it's almost 90 pages, market revenue expectations, cloud ai, gender parody. then he says about socialism and capitalism, he makes a distinction between the two. he calls social democracies combine market economies with social safety nets he says traditional socialism, though, would be as much a disaster for our country as it has been in other places it's

been tried. >> that's socialists who are running in the democratic party. if you go to page 41, the american dream is alive but fraying for many next ten pages, i shot a memo over there i said listen, i'll take afghanistan. meaning when he runs and wins for president i'm going to take that ambassador post this is the single most i am going to run for president ten pages i've ever seen this is everything we see in capitalist whatever we're supposed to call it this is an amazing agenda everyone would agree with. left, right, republican, democrat it's fantastic student lending, how do we deal with that? frustration immigration, caprecious and wasteful litigation these are precepts that would unite people he's not running for president

but these points that he makes i wish the republicans or democrats would say we read this letter we agree let's make changes i applaud it great pages about what needs to happen in our country to restore -- i'm not going to say greatness because that's political but i am so proud of him that this is what he did like when dominion had a whole day about educating people about diversity, equal pay they are so ahead of the politicians, light years ahead of the politicians. >> sounds like you wish he would run. >> i do but he won't because he's a banker. my daughter asked me why i was at that war criminal place. >> responsibility of a corporation which has changed, some would argue, substantially, over the last 50 years from originally what it had been, not necessarily having one main goal the world you and i grew up in

it's that change. >> i think it's changing. >> does he embrace that change it's not clear to me that he does. >> i think he's talking about many steak holders not saying we have to dismantle the bank of anything if every bank failed they could save the system. remember when jp morgan saved the system jamie dimon is jp morgan thought that corporations are what's great for society is coming true. because they're not political. they're just trying to do -- look, equal pay. has anyone come on and said i'm not in favor of it because women take this nine weeks off to raise a kid? my ex-wife, dare i call her that, she took three days off. not a great call ill advised. i pressured her to come back i was not a great guy.

it was a little bit longer i talked about the alcoa quarter when my daughter was being -- >> you have redprets. >> serious regrets about the way i lived my life and that's why i wrote that book. jamie dimon, these people are saying enough. we're not going to sit here and let our plan be destroyed. we're going to talk about it now we have to move on. >> we do dow is up almost 100 lyft above 72. tesla off the initial lows bob pisani >> straight up, intel, boeing, caterpillar, industrial strong here semi conductors opened flat. that's been the big market leader, up fractionally, consumer discretionary, retails have been strong recently. energy opened flat it's also fractionally to the upside the battle right now is about people who are on one side or the other of the bottoming narrative. it's about europe and china and what's going on over there the basic idea here is 40% of

the s&p 500 earnings are outside the united states. china and europe, the growth decline we've been talking about for six months is bottoming. this is the bull argument right now. u.s.-based earnings are strong here earnings should stabilize in the low-single digits this year. this is the bull narrative there's a bit of a problem with the bull narrative supportive of this is the idea that trade talks are dissolving and we have had a little bit better economic china data the problem is the recent european economic data, some of the other stuff have been terrible they're not supportive of any kind of immediate bottom it's not clear if the bull narrative is correct here. even in the united states we have mixed data. this china narrative that's bottom i bottoming, that's why the semi conductors, which we've been talking about, jim mentioned today, has been so strong recently five companies with the biggest explosion to china they're all semi conductors. amd, nvidia, the usual suspects,

broadcom they get 40, 50, 60% of their revenues outside the united states and in china specifically as a result of that, because the china narrative has gotten more parallel about bottoming, these stocks have rallied this year. look at the moves up and percentage of revenues from china. if you plot the shanghai stock exchange against the semi conductor index, smh from the beginning of the year, guess what, it matches perfectly there it is. the semi conductor is the orange line, shanghai is the white line there's obviously a relationship between them overall here. let's move on and talk about ipos for a minute. we have a fairly large ipo on the nasdaq this is trade web. these are basically a play on electronic trading here. there's going to be three ipos today. you mixed them up there.

electronic trading platform, play on, electronic trading bond markets here up the terms up the price certainly very good sign overall. we've had three of them today. we'll have three big ones. put up the one we had before there. trade web pricing, silk road medical, medical devices for stroke tw victims and up wardly revised range, ngm bio, biotech company for diabetes also priced at the high end of the range numbers are coming in pretty good for the ipo market overall. finally, my favorite headlines and i can assure you this was the most passed around story on the trading desk this is as funny as it gets in the world of trading this is a reuters story about how all the algoes on the brexit headlines. they've been contradictory, they don't make any sense and the

al al algos are based on a system. they shut down, trade less so the volumes go down or they widen the bid spreads out because they don't know what to do not only are humans confused by what's going on with brexit, the algos are confused with what's going on with brexit you can't always program an algo for everything back to you. >> rick santelli at the cme in chicago after bringing us those jobless claims earlier this morning. good morning, rick. >> yeah, yeah. matter of fact, i'm glad you brought that up. to put a fine point on it, we haven't seen jobless claims since around thanksgiving 1969 probably all listening to beatles albums highly unchanged

twos all the way out to 30-year bonds. that's not a bad thing three-day chart of tens. pop on tuesday sideways, really consolidated range, 2.50 to 2.52. tomorrow is a big jobs report i constantly talk about january levels, 2.58 from tens, when we get there will tell us how we behave, if rates hang down here or was that an anomaly and we'll pop back into a higher range it's important to pay attention to this is the year-to-date chart third spike was 123.54 yesterday. they closed at 52. on the wrong side of it today but pay close attention. finally, let's look at what's going on in bunds. this chart goes back to when they went negative on the 22nd they slipped negative again but are moving sideways. i will bet you that they respond

pretty aggressively to which direction they move. one week of the euro versus the dollar, it spent time under 112, hasn't closed under there. back to the summer of 17 very quickly, chinese currency e mid-february we all know negotiations may be getting close. is that not as flat as a pancake or what? carl, david, jim, ba k to you. >> thank you very much, rick santelli dow is up 119. reuters saying the white house is not expected to announce a date for a summit, so conflicting headlines there. boeing near a one-month high adding at least 60 points to the dow. we're back in a minute plants capture co2. what if other kinds of plants captured it too? if these industrial plants had technology

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lockdown story wasn't true. >> jim, we'll see you tonight. good to have all of us back. when we return, former macy's ceo terry lundgren on the retail landscape and the state is the super as the dow hanging on the gains of about 119.

♪ good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla market hanging in there, up 127 on the dow as we get conflicting headlines on u.s. trade. we are watching 2080 takes you back to october 9th. >> we start with tesla, big miss, shares tumbling after disappointing delivery in production numbers elon musk's day in court this afternoon. mark zuckerberg says we need new rules after the backlash over the company's policies. plus, we're waiting for clarity on the potential of any

deal between china and the u.s. >> pretty good data out of jobless claims today 202,000, below the estimate of 215. that's going to be a new cycle low. you got to go back to 1969 as rick was saying earlier today. that plus optimism over china trade, we'll see if we can get past some of these october levels. >> that's the big question heading into the second quarter, can the strength in the first quarter continue with the fed already priced in, hopes of a china trade deal out there the data is coming in a little mixed. what's interesting is that treasury yields have stabilized or at least bottomed with the ten-year yield above 250 tomorrow's jobs report is going to be a key test because remember, last month we had a very weak jobs report. >> yes, we did. >> a lot of people said it was the shutdown, it was seasonal factors. i think there will be a lot of people looking for confirmation that the market bounced back in terms of employment and what that says about the fundamental underlying economy

q-1 is shaping up to be a little better than expected >> since that number the tenu ten-year has come down in yield. >> and back up. >> is it below where it was though a month ago >> not sure. it's probably low. >> one would think the rate obviously this focus on whether there will be a cut would increase if we get a number that's well below what's expected what's the number? >> 170 is the jobs number. adp of course came in 129 which is below estimates yesterday tesla meantime flirting with its worst day since mid january. it was town 10% premarket. the company reporting new vehicle deliveries, down in the first quarter, below analyst expectations elon musk appears before the federal court today. the sec says that musk's tweets about production levels violated his settlement agreement with regulators joining us to talk about that, "new york times" columnist jim

stewa stewart, and harvard professor bill george. let's do court before deliveries because do we think he's going to show? would you expect him to show personally >> well, i don't know how he can make this argument with a straight face. if i was the judge in this case, i would be lowering the boom on him which by the way would be doing both him and tesla shareholders a favor he only has to do one thing which is clear his tweets with an in-house lawyer that's not so burdensome t did he do that in this case, no. they've been arguing he isn't tweeting as much or he's trying to comply. that doesn't wash. >> a for effort doesn't work in federal court? >> by the way, this was an inaccurate tweet that he put out. he's been making some claim about it's curbing my freedom of speech that is preposterous the judge should not even listen to that. first of all, you don't have the right to issue misleading statements, false, misleading statements to investors. secondly, the reason his speech is impaired is because he signed an agreement and promised to do something about it and he's not

honoring the agreement and look, it's not helping the company. it's completely self-inflicted wounds as you see with the delivery they have other issues he should be dealing with. it is crazy to be sidetracked with this fight with the sec. >> interestingly, the numbers today could be related to what they're looking at in court. jpmorgan says the guidance that tesla put out undermines his entire case. he tweeted out saying tesla would build 500,000 cars in 2019 guess what, the company just reaffirmed guidance at a number below that so the fact that there was incon grew ens between what the ceo was putting out and the investors, what do you do with that >> i also feel -- this is only one data point we have to see longer term but at some point this fighting with the sec and this ridiculous behavior by the ceo is going to hurt consumer confidence and the company. a car is a long-term purchase.

you want to know the company is going to be there. you want it to be there to repair the car if you need it. if he keeps acting like this, i think buyers are going to wonder about it i'm not saying it's a delorean or anything like that but the track record on start-up auto companies is not great he's been defying all the odds so far what's so tragic about this is what a great job tesla was doing to then shoot themselves in the foot or specifically for musk to shoot himself in the foot is just tragic and unnecessary. >> as somebody who's served as ceo and on boards as well, i always come back to the board here and their role. it would seem there's got to be some sort of split on this board of those who want musk to be musk and others who are saying we've got to get control what's your sense? >> well, tesla does not have a normal public company board. they have a board of advisers. his brother is on the board. larry ellison is on the board. they don't have a normal public company board.

i think elon is arguably the greatest living inventor on the planet but he hasn't shown he can run a publicly-held owned automobile company he should have stepped up to chairman and brought in an auto ceo. he still ought to do that, somebody who can run the company on a day -to-day basis and let him design cars. to jim's point, he ought to stop tweeting all together. he's not an elected politician like the president of the united states he's got to run a company and he's overpromising i think the walls are closing in on him in a lot of areas, the courts on one side investors are going to get tired of him hyping his numbers. i mean, he said he could sell funding $420 million a share and he's down 36 from that but he's got to deliver and i think the consumers will worry i worry about the demand i think they're skimming the cream now, getting subsidies to do that. i wonder if they're really going

to have a sustainable ghademand i was going to buy a tesla i'm holding off to see if they're going to be around in ten years to service the car >> what do you think you would buy instead, bill? >> i'm going to wait and see what porsche comes out with. i don't know i might get an electric vehicle from somebody else i may wait a year. i can afford to hold off, but i think people are going to be looking at that, and let's face it, the battery costs are so high, even with this new factory, it's going to keep the prices up there or continue to lose money i'm very worried about his liquidity. he's probably -- this miss in forecast probably cost him another $1 billion loss. how long can the investors put up with those big losses before he actually shows he can make money. i'm very concerned it could be a great company. i hope it will be a great company, but he needs some experience he's lost 50 top executives in the last two to three years. he's got to bring in a sustainable team and have somebody run it other than elon musk so he can go off and do his

thing. >> why doesn't he hire a credible coo to actually, jim, run the operations >> well, that's a tall order he hasn't been able to keep an officer. he can't hold these people you think he's going to delegate and let somebody be a chief executive? i just don't think that's going to happen. how about as a baby step, i agree, just stop tweeting. let's go for six months without any tweets again, i think that's a good point that all the tweets, the false tweets, are consistently wrong in the same way. they overpromise they're overhyping they're exaggerating i always thought that you want to underpromise and overdeliver, especially at this stage. >> he did joke about going bankrupt but that was an april fools joke, right? probably equally unconstructive. >> unconstructive and also, frankly, inappropriate.

>> he's been at war with the shorts in his stock, very emotional about it on his side as well, trying to, some would argue, force him out of the stock in part by tweeting things like this. >> you can't fight the shorts by making false statements to the investment community. >> you can't beat the shorts >> okay, let's fight the shorts but let's don't fight the government and the regulators, the federal government that is crazy. get them on your side. everybody wants them to succeed. this is a great company. they've got a great product. it's got so much going for it. it's got a great story, but they are self-destructing >> final thoughts? >> i know how to fight the shorts we overdeliver, beat the numbers every quarter. by the way, then they go away. they don't go away when you underdeliver and the stock falls 10%. i think he should go out and hire mark fields who's sitting on the sidelines right now, who's a great executive. let him run the company and maybe make him ceo i wish elon would become board

chair but he ought to give him the power to run the company on a day-to-day basis so elon can do what he does bill. >> bill, jim, thanks very much we'll see what happens later this afternoon. facebook's mark zuckerberg speaking out today as his company continues to face a swirl of controversies over privacy, data, hateful content on the company's many platforms. despite it all, the stock is trading near a seven-month high. julia boreston join us with more. >> mark zuckerberg defended facebook's progress after so many scandals telling george stephanopoulos in an interview on abc that he's confident that they will be able to prevent manipulation of the 2020 election, saying, quote, we've learned a lot since 2016 when it comes to political ads, zuckerberg reiterated that he wants to be regulated. >> i think setting the rules around political advertising is not a company's job. there's been plenty of rules in the past it's just at this point they're not updated to the modern threats that we face

we need new rules. >> zuckerberg also doesn't want to write the rules about what kind of content is allowed on the platform he talked about how he's creating an oversight board of 40 experts on free speech and safety he was on the defensive about facebook's failure to stop the live streaming of the new zealand mosque shooting but said he wouldn't change the company's policies. >> one of the takeaways from that is we need to build our system to be able to identify live stream terror events more quickly as it's happening. >> would a delay help, any delay of live streaming? >> it might in this case but it would also fundamentally break what live streaming is for people we are not just broadcasting, you're communicating and people are commenting back. one of the things that this flagged for me was the extent to which bad actors are going to try to get around our systems. >> of course there's that news out yesterday about millions of users' data made publicly available by developmenters on

amazon cloud he said they're still looking into it and that they work with developers to make sure that they respect users' information, but carl, it seemed like no hard answers on that latest scandal that broke yesterday back over to you. >> definitely not hurting shares today though, julia. thank you. when we come back, a former's macy's chief, terry lundgren, is going to join us. some of the top performing names on the s&p dow is holding up, 133 the future of technology investing lies beyond the tech sector. it's about technology transforming every sector. ♪ at pgim, our bottom-up approach uses a technology lens to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing. and around the world, you have a partner in that pursuit. pgim: the global investment management businesses of prudential.

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department stores working to keep up with amazon. we're joined by courtney good morning, i'm here in beautiful tucson, arizona with terry lundgren, former ceo and chairman of the macy's we got a big day potentially here or several days for the united states as we talk about our relationship with china in trade. we know some high level meetings are going on what do you think the impact has been so far on the u.s. economy and the consumer from the tar f tariffs that have been levied so far and what does it mean going forward? >> you're in the right place, courtney, because this is the global retail conference, our 23rd at the university of arizona with the lend lundgren center you have many ceos all here and

talking about things like this in my opinion, the u.s.-china relations right now -- they're having conversations and it's loud and it's in the public but the reality is our economies are just two important to one another for us not to get a reasonable deal that both sides can live with. that's my definite full expectations with i think a pretty high level of confidence on that subject. i think you're going to see that happen over the next -- hopefully the next days as opposed to months. >> the president has been talking about closing the boarder with mexico and almost everyone believes that will have a strong economic negative impact on the united states. what do you think that means potentially for retailers located along the border >> once again, i hope it doesn't happen i think it would be -- again, my personal opinion, it would be a big mistake. we need to make sure that pricing is reasonable for -- particularly for produce but other products as well coming through mexico again, i'm hoping that we're going to get some resolution there. i'm less certain about that one in terms of timing but i

certainly hope it happens very, very soon. >> amazon lowered prices at whole foods this week on hundreds of items and when that deal was initially announced it sent shock waves really around the world in retail, grocery and other sectors as well but it doesn't seem that there's been a huge impact as far as market share with whole foods pulling in from other businesses like a walmart, like a kroger do you think there's still some cause for concern for what could happen with amazon in the food space, especially if they develop this new supermarket chain? >> look, here's the reality, amazon got into the brick and mortar business and they got into the brick and mortar business because they realize that as powerful as amazon is, only 10 or 10.5% of all retail sales are actually done online so they wanted to make sure that they got a piece of that other 90%. so that was their -- i thought it was a really good idea for them to get into brick and mortar and whole foods was a good start the reality is trying to compete

with walmart on food is a very difficult thing. they're in every location and every neighborhood and you can't deliver food as certain companies like fresh direct found out from a warehouse you have to deliver it from stores that are local. you want it fresh and very close by for logistics reasons i think they've got work to do but my guess is that there's got to be more acquisitions for scale if they want to compete at the highest levels against somebody like walmart or kroger. >> i believe sarah has a question back at the new york stock exchange. >> good morning, terry thank you for being on the show. i just wanted to ask you about department stores in general because if you look at some of the market action so far this year, the consumer looks pretty healthy. you've got retailers like pbh up 35% this year, tiffany, mattel, and then you've got macy's down 15%. why can't department stores turn it around? >> sarah, you're talking about stock price so the reality is

macy's did miss expectations but they're up four quarters in a row i think or maybe more on comp store sales so -- they have to get that right by the way i'm not making that argument but there's a lot of good news i saw that the saks numbers came out. many of the companies you talk about are luxury related i'm somewhat aware that blooming dale's business has been good so there is some demand there i think it comes back to supply and demand and in the luxury sector, many of the ones you talked about, they're already pretty much set. there's not an oversupply of louis vuitton handbags there's not an oversupply of high end retail stores, and that's not the case with retail in general where there is an oversupply and you're seeing that correction. i think signet was on your show yesterday talking about that in the jewelry sector that's all shaking itself out. that middle market has to rationalize itself and that's going to take a couple of years to do so

when it does, sarah, there's going to be lots of growth and opportunities for those retailers to get through this next couple of year period. >> you're saying there's actually good news on the department store front but investors are not giving the stocks the benefit of the doubt yet? >> last time i checked i think the price earnings ratio for macy's stock was about five. i think the s&p is about 20 or something like that. i think there's opportunity, but frankly, there has to be confidence that's it. there has to be confidence and there will be. i think this management team is solid. i think the team is excellent. the strategy is good it's just going to be a matter of putting points on the board on a consistent basis. i believe that will happen >> terry, target announced the next step up in their wages today, moving to $13 an hour next month on their path to $15 by the end of 2020 amazon we know is already paying $15 an hour for minimum wage do you think all realers are going to have to continue to move higher, and frankly, can they afford to do that

you have to offer incentives to get the right workers but when you've got margins that are crunched, can they do that >> i've always believed that gradual wage increase is a good thing not just for workers but for the economy. you're going to put more money, more cash back in the hands of more people. when that happens, consumption will rise. so i believe that over longer periods of time this is a very good thing what's a mistake is when you have certain politicians saying you need to jump everybody immediately, double the minimum wage and the like. you're going to put people out of business if you do that and you're going to lay people off when you do that it just doesn't make economic sense. there has to be some of the announcements that you just described at target, walmart made similar announcements, others as well, of this gradual increasing of the minimum wage i think that is exactly the right answer and good for everybody, the economy as well as the workers. >> there's a lot happening new york city when we're talking about retail we've got the hudson yards

complex, nordstroms opening their women's flag ship store, the men's is opening, a big makeovemak makeovers but you've got lord & taylor closing. >> a lot of holes in soho around the like. >> and international tourism is down so what's going on with retail in a very key city like new york where these companies frankly are spending millions and in some cases billions of dollars to build >> i think new york is pretty different and pretty unique. what has to be happening there is that they have to be recognizing that without tourism it's very complicated to make this model work with all this additional retail coming into play what's happening in new york is not happening around the rest of the country. it's a unique microcosm of all of these various factors of people from all over the world shopping and people from america shopping and coming in to shop honestly, you can't look at this and how things are working right now.

talk about hudson yard, the largest construction project in the united states, they're looking at what's happening in the next ten years that's the only way you can justify this expansion and frankly, in my opinion, in new york city. >> just to wrap things up, let's hone in on the u.s. consumer what are your expectations for the year going forward, still a lot of fears bubbling about if the good times are over. >> there are but i think i just saw that unemployment claims were the lowest since 1969 so there's a lot of good about this economy there's a lot of reasons to feel positive about the consumer. in my opinion, it's just going to be the shakeout that has to happen when we get supply and demand back in line, courtney, but i'm very bullish and very positive on those who have a strong balance sheet that once they get through this period there's a lot of opportunity ahead. >> all right, thank you very much, terry lundgren, former ceo of macy's. he's here at the global retailing conference for today and tomorrow back down to you at the new york stock exchange >> courtney, thank you looking forward to your interview later with walmart's

ceo, doug mcmillan coming up here, wall street coming a close eye on trade talks in washington today. some conflicting headlines on how close we are to a deal we are speak to byron wien on what this means for the market and get his take on jamie diamond's letter to shareholders and much more. "squawk on the street" will be right back ♪ ♪ memories. what we deliver by delivering. ♪ -it's all about the big picture. with miguel, our certified financial planner™ professional,

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signet. you can't keep a good thing down we have the spotlight, looking at what is continuing to be a resurgent or surge ent. >> fang is the winner. when the market is up, f.a.a.n.g. is up more and that's been the rule pretty much in the last couple of months and last couple of years. look at the ets, of course we know there is no specific f.a.a.n.g. etf they have to have more stocks than just four or five however, fdn is the first trust dow jones internet it's close to being f.a.a.n.g. and acts like the f.a.a.n.g. stocks do on a given day amazon 10% alphabet 10%, facebook another 7

or 8%. it also has the paypals and other stocks that behave like those mega cap stock winners also, qqq is basically a lesser concentration. this is the scale basically. fdn is your most concentrated dose of f.a.a.n.g. stocks. then you have qqq, the analysis deck 100 xlc has only existed for less than a year, that's dominated really by facebook and alphabet. i guess the question is how much longer is this going to be as long as this is a bull market is it going to be led by these dominant stocks and as they get back toward their highs of last year obviously nobody knows that. it seems like it's stubborn. these things get recast as quality and stability even though they are expensive. >> any reason to think there's more interest in etfs? >> certainly more in the communication services previously it was telecon

basically so you had two stocks that mattered in that group. now it is much more of an integrated sector that people have more interest in. and we have this 5getf that is mostly chips it's not really verizon. >> we'll talk more about that in the years to come. >> good thing i looked that up. >> you know every etf. >> he does. a new proposal by two democratic senators looking to ask econocompanies to contribut minimum amount to employees. >> the idea here is that this would work like the minimum wage, a sort of minimum retirement if you will this proposal comes from senators chris coons of delaware and amy klobuchar. it would require employers to contribute 50 cents for every

hour you work. that's great for employees but could end up being expensive for businesses, especially small businesses so the program provides a tax credit to offset the cost for up to 30 workers. the price tag for the federal government for that credit is between 200 to $250 billion to pay for their plan, the senators want to raise the corporate tax rate from 21 to 23% and raise the rate on the wealth nest households from 37% back to 36% where it was before the tax cuts this is a good time to point out that klobuchar is running for president and she is not the only candidate with big plans to expand the social safety net or design a public works program. one of the common themes in these proposals is that they would be paid for through raising the corporate tax rate but the idea is not just pie in the sky. this idea of a minimum retirement has a lot of support both from progressives and centrist groups, as well as the

aarp and labor unions. guys, this one is not just campaign rhetoric. this one could actually become policy down the road back to you. >> thank you let's get to sue herera and get an update back at our headquarters. >> good morning, everyone. here's what's happening at this hour secretary of state mike pompeo speaking before nato foreign ministers in washington to celebrate the alliance's 70th anniversary. he appealed for unity to confront great power challenges from russia, china and iran. >> we must adapt to confront emerging threats too, whether that's russian aggression, uncontrolled migration, cyber threats to energy security, chinese strategic competition including technology and 5 dwlt g and many other issues. >> tokyo rearresting former chairman carlos ghosn for what they call aggravated breach of

test he had been out on bail following his first arrest in november. target is raising the minimum wage for the first time in two years and say they plan to raise the starting wage from $12 to $13 retailers are under pressure to find qualified workers you're up to date. that's the news update this hour sarah, back downtown to you. >> sue, thank you. when we come back, jamie diamond sending out his annual shareholder letter, talking about the rise of socialism, big business and regulation. "squawk t see" 'lbe ght backt,wel dow is up 10 points.

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welcome back to "squawk on the street." i'm sarah i eisen live as always from the new york stock exchange, take a look at

where we stand in the markets. the dow is getting helped out with strength in names like boeing s&p 500 is sort of around the break even level keep in mind we're coming off of five straight days of gains in the overall market there are some pockets of strength as we heard from mike, f.a.a.n.g. among them with communication services the best performing group ahead of tomorrow's job report off of better jobless claims data trade talks with china could be coming to an end as president trump is due to meet with the chinese premiere today. >> we're seeing a lot of coming and going over the ustr as delegates arrive across the street from the white house today. there are a number of media reports at this hour suggesting that the president is likely to announce a summit between himself and xi jinping

the white house not prepared to endorse those media reports just yet. here's what a white house official told me this morning, saying that we are not expecting an announcement of a date today for a trump-xi jinping summit. the reason for that is these negotiations are still i don't know -- ongoing. the president not likely to announce a summit until he and the rest of his team are convinced they have a deal we expect negotiations to continue throughout the day and tomorrow but the chinese vice premiere is going to be in the oval office later this afternoon with president trump so we'll watch that closely for any indication that they are getting close to a deal. of course things can change at a moment's notice so we'll watch closely for an announcement that a summit is coming it might be released by this white house. back over to you. >> a lot to watch out for today.

thank you. also out this morning, jpmorgan ceo jamie dimon's letter to shareholders, saying, quote, regulation needs to be stringent to prevent another crisis with particular focus on several areas including nonbank lenders, mortgage reform and liquidity levels joining us to discuss the market, dimon's comments, trade and a lot more, blackstock vice chairman byron wien. nice to see you. >> good to be here >> there's a lot of this sort of in the dimon letter preparing for the next downturn, risks piling up into 2020 and 2021 what do you think it's going to look like? >> i don't know exactly what the rule changes are going to be but i think jamie is talking about something that is serious, the meltdown of the banks in 2008 was one of the reasons that we

had the great recession at that point and the market downturn, so he wants to make sure that the banks are strong enough financially to weather the next weakness in the economy. >> do you think they are, and separately, are you a buyer of the banks at these valuations? they've had a nice bounce lately but have been under a lot of pressure lately with this field curve inversion. >> i'm not an enthusiast of the banks right now. i'm neutral on them. i'm not negative on them >> that a macro view or is it something specific >> it's a macro view all my views are -- i'm a macro strategist >> one of your surprises has really come true on this front, byron. i was going back to them and you said the fed is going to pause and that's going to help stocks and keep bond yields under pressure and that's been the story of 2019.

some people are wondering how much more fuel there is in that trade. >> well, i said i expected the market to rise 15% that witness staas one of the mt ambitious forecasts on wall street at the time but now we're up practically 15% on the s&p 500. i don't think we're going to make similar progress in the remaining three quarters in one quarter we almost got to my goal. i think the market will make -- i'm not worried about a bear market but i think we could have some corrections along the way, and my view is the market will make limited progress between now and year end >> byron, we got some signals in the past couple of weeks about what you might argue is a reaction sell rags in global growth, good pmis out of china,

in europe and somewhat in the states how much faith do you put in that >> a lot i never thought, you know, at the end of the year everybody was thinking we might even have a recession in 2019 because of a slowdown in worldwide growth my view was that you just needed a couple of things to go right you needed china to improve and i thought they were going to provide the stimulus to enable that to happen you needed housing to improve in the united states, and you needed a brexit deal i think you're going to get all those things housing will improve there will be a soft brexit deal, and china will regain strength in the second half. so i think the worldwide economy will improve and grow somewhere close to 3% on a world basis for europe, between 1 and 2, and for the united states between 2

and 3. >> given that, what do you say to those who worry that or argue that a resolution on china trade with the u.s. is the mother of all sell on the news events? >> i don't agree with that i don't think we're going to have another recession until 2021 at the earliest and continued improvement or continued stability and strength in the world economy is the reason for that optimism >> byron, it's david does the bond market have it wrong? is 251 not enough in terms of the yield for the ten-year or if it is conversely, why won't the market continue higher in the second half of the year? >> i think interest rates have come down because there's a tremendous amount of liquidity out there looking for a place to hide because there was some apprehension that we were going to have a recession some time

this year or next, i think that's wrong i think it's the liquidity that's keeping interest rates low, not the pace of the economy. >> you also focus a lot on your surprises, byron, on politics, the mueller report i think you had some predictions about, the dems and what policies are going to get done. how much do you think over the next year heading into election and as we start to hear from these presidential hopefuls on the left it's going to matter to invest sners >> i think the market is driven by earnings and interest rates i think those are the two key factors. i think the election will buffer the market from time to time right now i think there are too many candidates on the democratic side, and i think that confuses voters and i think trump has a lot going for him. he's cut taxes, dismantled

regulation we're not going to war with north korea. it looks like we're going to have a china deal. he has a lot to campaign on, and he's going to be tough to beat >> finally, byron, it doesn't sound like you're worried about a global downturn any time soon, but those that are worried that central banks have expended a whole lot of ammo, there's not a lot left when it does come and we'll rely on fiscal initiatives, especially in europe, do you worry about that? >> i do. i think the european central bank will shift. i am worried that there will be a reluctance to engage in fiscal stimulus in the u.s. i think the economy is going to pick up on its own in the second half and that will relieve the pressure to provide the fiscal stimulus that people are craving for. >> byron wien, thank you very much >> thank you for having me

>> always good stuff from byron. when we come back, walmart ceo doug mcmillan will sit down for an exclusive on "power lunch. s&p and analyze deck dnasdaq die don't go away. ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it.

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rick santelli joins us with the santelli exchange. good morning, rick >> good morning, and thank you i'd like to welcome my guest, michael hanson, td securities. michael, good morning, welcome, and let's get right to it. you just had a big fixed income conference which is great because i'd like to talk about what the investors and the

attendees there were thinking about, especially when it comes to my topics i am most concerned with and that of course is the business cycle, what's going on with risks in the market and of course the big players and potential policy errors from china, europe and japan. tell us what investors were thinking about. >> yeah, thanks. i think it was really interesting because in the end there was quite a lot of sentiment in favor of what you might call a goldie locks scenario a number of investors suggest that banks around the world have turned more dovish and that's extended the cycle, particularly in the case of the u.s you've had really no investors looking for a recession in the foreseeable future that obviously favored risk assets on the other hand people really thought that bond yields were capped in the current environment. >> you know, that makes sense, michael, and to some extent they were obviously correct look at 235 in november. look at the fact that we were trading last week under 235 briefly. what is the rationale though

that in the end, don't these investors care about debt, deficits and supply? >> i think they do but i don't think they see it as a concern for the foreseeable future it's a combination of dove central banks, being that the fed is on the sidelines for the foreseeable future, the idea that inflation remains very low and then another interesting topic that came up was a shortage of fixed income assets. people are looking to employ cash and they can't find good places to do it. >> that last point is very salient because it has been a topic for a while, that good, high quality paper, especially on the sovereign side, competing with central banks, competing with insurance and pension funds, there is high demand, but on the other hand, my issue is complacency. so, investors think it's goldie locks, risk on, but does their behavior match their opinions? >> i guess what i'm saying is i

see a potential also for chasing the equity markets should they jump ahead here? your final thoughts. >> i think that's fair and i think if you've got a world where everything looks really good and you've got really strong risk assets, that is a world where a world where central banks may think they can continue to actually move a little closer towards where they think neutral is him not to sure the fed is on the sidelines if the economy is as strong as some of these views seem to apply. >> excellent michael hanson thank you for joining us david faber, back to you as we head to break let's give you a quick check on the markets. positives on all the major averages s&p 500 drifting back into positive territory the dow benefiting from boeing significant move 2.7% higher 'rba aerning wee ckft this.

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got a heated moment and some news out of the wynn testimony >> reporter: hi there, ceo matt maddox is getting grilled inside this hearing today about actions he took as ceo.

so this is after the news came out. after steve wynn left the company when he took over as successor. one he didn't meet with employees individually, a group of employees who were most affected by steve wynn's actions. he kept wynn las vegas in place. then he authorized the undercover surveillance of a former employee who was the named source in a "wall street journal" article listing out these allegations. then the commissioner asked matt maddox did you know that the company was surveilling employees thought to be team elaine that is steve wynn's ex-wife. he said no then the next yeexchange >> would you be surprised to hear that your security department surveilled elaine wynn >> i would be surprised to hear that >> i'm just -- i guess i'm

struggling with a pattern of information that comes forward to that you're just not aware of >> i'm not sure what to tell you. >> reporter: he's making excuses. those are her words. this license hangs in the balance. as you can see, the wynn stock continues to climb in spite of this ongoing hearing, guys >> thank you watching it closely. very, very important for wynn. sara, as our viewers note i've been out sick for a number of days but the one thing in my day that i look forward to was 3:00 i watched you and will everything went better >> i missed that >> i didn't miss you now i'm back what do you have coming back >> great to have the enthusiasm

back scott minerd is here he was talking about a fed cut at the end of last year when the markets were tanking guess what now he's saying that the fed might hike in 2019 we'll figure out what he's looking at because the bond market is pricing in more odds of a cut i couldn't leave you without sharing the most important story of the day adidas is announcing a partnership with beyonce she will be creative director for the brand, deliver a new signature footwear line, apparel and relaunch her own brand underneath the adidas umbrella we talked about the importance of celebrities to some of these consumer brands. what adidas is doing here is distinguishing itself from nike. nike went after and had most of the big athletes that sell clothing and footwear. now adidas has kanye and beyonce. that's a power duo right there

when it comes to selling >> it's as plain as nike going after athletes and adidas going after celebrities. >> adidas says it's going after athletes but they had such tremendous success with kanye west and they are taking it more mainstream. the you hit the right celebrity with the right creative vision it can be successful >> hard to miss. we'll see you this afternoon when we come back a lot more on tesla. shares are down on 8% after a big miss on deliveries and production "squawk alley" is up next. risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.

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