our road map begins with a bunch of thing including the unicorn parade, pinterest, below expectations what it means for the country. >> lyft is new to the public market is threatening litigation against morgan stanley aclcusin that firm of short selling of investors. also what it means for a lot of the private company are on deck to go public >> warren buffett says its new ceo should not come from wall street we'll take a look at who this may exclude and who could potentially fit the bill we'll begin with the markets, dows clo dow is closing in on a new highs, being dragged entirely by boeing which says it will cut production of the 737 max jets s&p is not far behind either on all time level coming off the seventh day win streak we have not seen this much ton

sale side in terms of analyst activities for a while >> these guys all came in. the things were up too much. let's downgrade it ge, a punch bag and under waived >> 156 page. >> yeah. here is one that's typical there is a piece by loop capi l capitol. dollar tree is downgrading dollar tree is on fire, it is doing so well. how about clorox or jp morgan. boeing, the bear case, let's get serious. spirit air system for boeing >> the only upgrade that i saw, jim, were wells proctor and rbc

snap the proctor was like hey listen we are late. >> but they're still up some they hate things that we hate. i got to tell you. this is one of those mornings where i know it looks down but maybe it is just boeing. i think people really want to earn stocks. >> at this point given futures 100% of the lost would be boeing >> phil lebeau says last week, when you hear production cut, that's going to go down. when you have the best reporter on it, you can really say okay,

remember spirit was downgraded so he thinks he gave you tomorrow's paper is that what he does >> that is that's what you get from covering an industry very clo closely of aviation. what is the right value for boeing we talked a great deal about it. it was a dooppoly. >> great american company but this -- >> did not seemingly do enough or quickly enough to respond to something that was a fatal form. >> i wish dennis mulenburg would come out i remember there was a problem,

the ceo came on "mad money," he says this is obviously not working. will you fix it? yes. any more question squestions? >> he can't do it. until you promise it, you can't -- that's going to have all the answers. the journal has this article talking about hey we have declines from 3m and fedex ever since of their earnings, their stock have bes have been t

up walgreens is down because of management issues and amazon they have been really good stock is all the way up. eaton is okay. look at that stuff i worry that decision, that article could have been written a month ago and you would have missed every single move that's what i am worried about they went up it was a good guess going up but maybe at this point like procter & gamble, someone will come out and say i missed it and now it is the time to buy. >> we'll keep our eye on the analyst calls today. there is a ton of them that we have not gotten to >> pinterest kicking off its road show this week setting a conservative price ahead of its debut valuing the company below. the latest valuation sent in 17.

you have lyft of course threatening litigation over morgan stanley accusing the firm of selling ahead of ipo. morgan stanley denied those allegations. 15 to 17 with raising a little more than a billion. as we said lower than the valuation of 12. >> we are losing a lot of money. >> i have to tell you, the old days when you put out s-1. you should see management and the number and how much you are losing this is exciting it talks about what's going on with pinterest for that, i was thinking mother's day is made up of haul ma hallmark >> it is a fabulous document from pinterest you want to be a member of pinterest, you want to be a pinner so again you are not worried about negative earnings and losses >> my wife said it at one point, are you going to stop talking to

bankers about this why don't you just stop? why do you insist calling these people i don't believe morgan stanley drive the stock down >> you don't >> i don't i think the statement they gave cnbc was a good one. >> we are talking about a back and forth between lyft and morgan stanley which lyft wanted answers in terms of whether there is a product created to allow people to short lyft which would not be legal >> no, it would not be legal we are talking about a product i can tell you that when it became public, i was offered a similar pod. it was a 62. my counsel says that's against the law. the stock went to one. so, you know it is sub optimal

they have been very firm they did not do that and did not try to make jp morgan look bad the back and forth of the u.s. post article i standby cnbc report. >> as for pinterest itself, the fact there is losses in that company. >> two losses. >> their net loss was 62.9 million in 2019 >> it is moving in the right direction. >> lyft is not moving -- >> this is a company that's closer to profitability. i think that's fairly clear looking at the financial aspect. >> do you use it >> i do not. >> 90% of users are females. >> yes i know i want to be a pinner, it has good gifts

i would buy something from etsy. it is the third most known name in the business. i guess that means facebook, instagram or snap and them >> it is a well-known name it is global which is a key thing now. immediately upon starting to read -- >> you stole my thunder. >> christie in atlanta put so many recipes she found in pinterest >> mark and london >> this is an offering document. >> it used to be a serious place. jim on "squawk on the street" does not use it, all the worse for it >> this is not about sharing this is about your own info. you are not sharing any of these

things with anybody. this is diving deep. >> can i share that boeing stock is going down? >> that i don't think you want to pin >> they can be a great place to talk there was debate over lyft this weekend. someone hijacked on twitter that might have been mean to everyone i think it is me >> i think it was you. >> maybe it is time for you to switch to snap where everybody sm everybody -- >> people putting faces on me this weekend >> that's why share went to 17 fundamental inflection >> it is fundamental pinterest, i got to hand it to them they did this only because i don't know how much reaction is lyft but the deal may work you got good revenue growth and you got the losses coming down this is a company you may want to own >> we'll talk about the international being an important

conglomerate business. >> do you suspect because they are going to the market lower than last ground is a lower effect >> i think what happens is they realize that people may go on uber they lost so many on lyft. they switch to uber. you could not switch to myspace. they want people to like it who owns it. no controversy i am saying if they like tesla, they own it. if they like pinterest, they probably want to buy some. obviously the u.s. still represents we are trying to grow internationals >> there is a ceo that i know uses this and was embarrassed that i did not use it. >> really? >> she's like how can you not

use it you can put up all the stuff you want and it is really great. i don't know, i am busy playing with marco polo. that's a new one you guys use marco polo? that's where you can say hi to your daughter and she says hi at any given time >> i am an app overwhelmed app guy. pinterest is -- i am going to be a pinner after this. >> that's going to be interesting. get it quickly because it is going to go public very soon >> i urge everyone to read s1. ge shares is falling taking a look at the premarket dow being influenced by boeing future is down 1.30.

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market why is the street raising price targets when they are busy cutting numbers on free cash flows? >> first of all, i have been saying this is all about mob moby dick. this report i was covering a story where the judge says pick your five best page. i feel like you should pick your five best. the notion of discretionary cash flow, that's allocations, i would say that i think larry cult has been so transparent that's not what i am going to hit him on i will defend my account >> we spend a lot of time on the

show phrasing tusa for good reasons because he did a lot and almost forensic bases in terms of trying to understand where or where cash flow was not actually coming from. he does more of it in terms of talking about one point free billion dollars tax pension and key accounting consistency overlooked i will have to say he gotten stuff wrong over the last six months at least. he never had a buy anywhere near it i think he went from 6 to 5. it has been a $10 stock recently while it is true that many of the investors, if you were to measure the company on free cash flow, it would come up short i think a lot of them are just looking at some of the parts at this point they believe it is a real business with real market share and they believe there culp is

going to get those businesses running well particularly power. it will be interesting to see whether tusa's argument should be about a multiple, cash flow, therefore it is not there because there is no cash flow or some of the parts continue to grab investors who are positive and keep them there. >> that's a great summary. i think there are a lot of people who say look, i can buy the stock for 2020 the reset is not this year it is maybe next year. it is a very harsh piece because of what david said i felt like this was, let's knock it down. let's get real here. i think the point you made is really correct that's time for upgrade. >> if you are lucky enough to

have bought it at 6. >> and not have it own it previously >> i want to get larry's comment and if this comes out on monday morning, i will probably take a podcast. the insurance is still an issue here i thought we put it to rest. >> it sounds you are resistance to tusa's argument >> i want to buy coal. i think the deal he did with dan herne is really great. i think culp is going to read this i am going to do some of the things he says and i am going to try to accelerate these power. this is more, if you worked at ge and you presented this, okay, let's study this and let's see what we can correct. that's who larry culp is

this is not anything other than okay here are some things we will work on >> i got a final four. i can get up to 2:30 and go to bed at the game. >> tip offi is at 9:20. >> you got some time he would have been there and we could ask him about the healthcare piece >> we'll get cramer's mad dash opening bell is just about 9.5 minutes. measure up?

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another week of trading here for new york stock exchange about 7 minutes from now >> on the "mad dash," you like to feature micron. >> it is a bout a battleground. this is where the company is diving down. here it signals there is going to be a cut. they're going to cut back the number to get the inventory down the question is, is samsung

going to play ball it is a bit of a monopoly. that's something that i post with micron and micron was pretty much don't worry about it so far you have not had to worry about it there is multiple downgrades if you bought all the downgrades here and here, you did quite well this is a well reason done grade, 2020 is going to cause another downturn because there is a lot of equipment being bought i don't want to leave micron because i think it is too cheap. >> it can withstand of whatever that's coming its way. the fact that i think there is pick up in business. >> david, 5-g. >> 5-g is creating a lot of demands. >> yes, for everything you don't know which phone is going to have micron or samsung i tried so hard.

there is an etf, 5-g is what we'll be talking about for some time now >> yes, for r yeayears to come. >> very early. >> for our phones and cable and internet of things, cisco has got the best 5-g >> overtime and years to come, autonomous network including automobile >> i am going out west and the trip is about 5-g. >> when? >> in may. >> we got an opening bell coming your way in about five minutes from now stay with us, "squawk on the street" is coming right back heading into retirement you want to follow your passions

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it reminds me of peace over the weekend -- you can only imagine when they hold hearing in congress, how great would it be? i had nothing to do -- i think that what this piece is basically saying let's get a tete technologist that would be radical. >> it would be culturallculturay do you think it will be a good fit. >> it is a huge organization >> great question. we are in weird time with wells happening. very good work >> that's another way to go.

let's get to the opening bell here at the big board is ipaa and trex speaking of oil and gas, 63 and 68 takes you back to november. gas prices up two cents in two weeks and 40 cents since january. the notion of no inflation is misguiding >> i go back to janet yellen i will tell what's happening that's interesting premiums is going to go up

again. they got a lot of pipelines right now. the wells seem to be getting maxed and coming down quickly than anticipated and producing a lot of natural gas, something you talk about the idea of how much gas is being flared and the carbon footprint. 6.9 million automobiles, just being flared it produces so much gas. >> you know from space you can see where their flare is you are out there and you s see -- what are you nodding? they're sensitive for this it proves a monster amount emissions. our president is prohibition

>> he wants you to flare everywhe everywhere >> right here if there is an opportunity he would get on it >> i don't know. >> but, production actually, numbers are coming down. they're almost at 12 million >> i think we have to take into account with - that's a big component. triple e is always in place. i don't know how high it can go with our economy slowing down. i think our economy is not slowing down i think one of the things we have to remember our cars don't use as much as gasoline as they used it even though the fleet is older it is good for visas >> you can say transition to

suv. it is hard to know >> it is i just think that the old days when we sold this creek up, i would have said look out the advance, believe it or not is more than nasdaq. as oil goes up, nasdaq goes up you if figure that. >> as we are talking, guys, southwest with a notice on the website here all max 8 to remove now until june 7th american did extend it until june and boeing cut it by 7% >> all the companies that d do -- they all have a backup they were all going full app because demand was so great. these are great companies southwest in america i think they can figure out what to do. they're not going to be able to grow roots that's for sure

i wonder prices is going to go up >> there is one mma deal to talk about this morning >> i saw versum is up. >> back in january, they were combining merging vehicles, versum is one of the suppliers, sending special materials to global semiconductor and merck >> the german merck. came to the $48 all cap proposals. across board or hostile to try to break up an existing deal not easy they go to 53. they were ejected at 48. they go to 53. what do you know they won at 53 merck's board says yeah, this is a proposal

we are not planning to propose or advising more offer what they could have done, well, it is unclear, maybe more stocks or dividends of some kind. it is hard to make an moe and make it to the point where it competes with the $53 cash offer. you do have a deal here for versum for mark zuckerberg erck3 you can see it is trading below $53 price. >> versum is a spin-off of their products very interesting >> yeah. about 5.6, $6 billion. >> what do yyou tell me becausee been the one disappointed with

dow duponte. i think they lower the numbers for all of dow duponte to a point where it is not expensive. it is really is a much more stock base and you gate traet ae deal >> larry kudlow talking over the weekend positive about trading smo >> when you talk about agriculture, i think of the buyer's deal for that. talk about the worst deal. it is starting to compete with worst deals ever with all judgments piling up. >> i think they are lose ing th case >> my gosh, that thing took forever to close >> they're losing over the lawsuits that's brutal.

i don't know if you have been following how johnson and johnson's can win it in some child case that drove the stock down from 148. i am looking at for monsanto there was a movie about it >> one of our favorites. >> it is the idea that they have a company that's chronic >> a great movie makes my top ten >> i do find montano bad deer last week -- deere hits it ti all-time high. >> as is proctor today they say urgency and accountability has been infused

in the organization. as you said earlier, yim, jim, r late but there are still upside. >> we were not saying words like accountability and urgency >> i do feel that proctor, nelson came in there they got a longhand for us proctor is on fire >> david when we came on "mad money," i was impressed. i had to open. this weekend i had a blade and the plastic, it defeated me. i try not to get cut

>> you need a nuclear weapon >> you could not go to cvs or walgreens. >> i bought it at cost goco >> they got the change it. there is more plastic. that whale, how much of that is gillette >> i complain about plastic and people rightly point it out. >> we have to have an analogy bottle i am going to get that done, too. >> i got to walk the walk or whatever >> i got the big water at home rather than you press it and the water comes out. it is like high school i am part of the generation, i

am not part of the problem for the solution, okay >> before we get to bob, guys, roku is down 7%. >> everybody has been under estimating that company. >> you are going into a busy year disney will know more of their plan later in the week a tough time to go into key here with a premium multiple. >> everyone is trying to short that thing a whole way and it has not worked i often on mad money punt. i felt in the '30s was done. i thought amazon is going to come into something. hats off to roku the reason i point it out is almost as long as tusa's >> we got katy at 11:00 this morning. sorry, jim it is the way it goes. there will be another deal

>> i e-mailed her. >> we got bigger battles >> you just have her >> my desperate plea is going to go -- >> ask her about page 39, exhibit 34 >> medical records, when she comes out, i am not saying she stole the idea from me i think she stole the idea from me >> there is also a story about amazon, alexa getting into sort of healthcare related questions, things you can do with voices. >> alexa 2023. >> my wife says the word serious three times if my wife wanted her. no, you can't be serious >> did you call me i asked it whether auburn was going to win and had no answer

for me >> they almost did couple of bad calls. >> how about that game >> unfortunate end >> ge and boeing hurting not just the dow the worse but the s&p the worse. we are down 165. let's get down to bob pisani the s&p has been up seven days in a row vix closed on friday, the lowest of the year. bear in mind how calm things have been. take a look at the investors, boeing is 100 points of the dow. what are we down 13 points on boeing right now. you have united technology and 3m is moving to the downside right now. caterpillar, 16 points in terms of sector, oil is $63 that's going to push energy

stocks up. we are near of some new highs. consumer staples were defensive and doing better jets, the airline, etf, that's down on the boeing side. this is not a big day of leadership today a lot of ipo news out of the weekend. i think it is future caantastic let's take 17 and let's take the high end the market cap is $9 billion the findings was 12 billion. they lower the price a little bit. pinterest got the message from lyft those people buying pinterest may buy it at a lower price. i think it is further evidence that the private markets a little more frosty thatten the

public market. pinterest is an interesting company. they still lose money. they made $756 million last year in revenue they lost 63 that's a narrow lost and they did make money in the fourth quarter. there is some path to profitability here the pricing now, maybe you will get a littleless drama with pinterest than with lyft eight companies have gone public since the levi strauss levi strauss is still up 28% no drama of that one people thought it was regional priced it was famous. lyft is still struggling right around there that's the only one out there that has not done well as for lyft, prices at 72, went

all the way up to the high 80s it is above. that's the last price of $73 we'll get some big cyber security firms out here this week page duty and to be in technologies, we'll talk about them in a dictator two they're pretty big deal as well. a lot of cyber security. >> back to you >> before we go to break if you miss it this morning, ray del rio talks to joe and becky of the reforms and the unequal outcomes that we have been seeing lately. >> how has it been for income or equal opportunity? this has been something for a long, long time. is that deniable that it is producing those outcomes it is not only producing those outcome, this is not controversial. if it is producing those outcomes and the terrible split

in our country tch we are going to have more problems ahead in terms of technology if we don't step back and say how do we reform follows a series of recommendations that he wrote in on linked in on "60-minutes," he called for raising taxes on billionaires. >> this man is doing something terrific public schools need help this is where mark benioff is going to ask people doing this he says do you have a school near you go give them money they did not have enough books public schools >> he's focused on improving education is one of the keys citing it decline over the last 50 years really. it was one of the reasons why

our incarceration rates are extremely high >> it is an interesting year certainly as the political season becomes more heated in terms of this larger debate of capitalism or rhetoric working or how it is not working and how it needs to be change. i would say small businesses, there are people who have been under employed who are getting jobs with minimum wage, and by the way, people who were incarcerated and pays their dues on crime that is we all know or no longer crimes with marijuana and now cannabis they're getting jobs that's sensation >> that's a cycle. >> it is a cycle >> it is a total cycle and it is not a secular gain >> full interview is on our

website, you should listen to what dalio is saying worst performer, ge and boeing sending us down 165 and we are holding 28.81. treasuries this morning with some movement. 2.5. we'll be back in a moment.

boeing weighing down the dow with a major averages obviously in the red as they cut production and airlines extend their series of consolations related to the 737 max stock trading with jim in a minute the lexus es. every curve, every innovation, every feeling. a product of mastery. lease the 2019 es 350 for $389 a month for 36 months. experience amazing at your lexus dealer.

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-find your certified financiamno kidding.rd.essional but moving your internet and tv? that's easy. easy?! easy? easy. because now xfinity lets you transfer your service online in just about a minute with a few simple steps. really? really. that was easy. yup. plus, with two-hour appointment windows, it's all on your schedule. awesome. now all you have to do is move...that thing. [ sigh ] introducing an easier way to move with xfinity. it's just another way we're working to make your life simple, easy, awesome. go to xfinity.com/moving to get started. time for cramer and stock trading. >> needham says tesla is no longer an open ended growth story. they're talking about forecasting 320,000 deliveries in 2019, below the guidance. that would be bad for the stock. there was a deal they made where they're going to be creating credits, credits, i thought that was interesting. that's why it was up

i don't know if you've been following, follow musk, he's been very well behaved a lot of, like, at a boys. he's probably most excitinging ceo. >> exciting is one way to put it. >> if this piece is truth and they have to lower the production, that's like boeing it really -- the stock would come down. it does trade on production figures as the s.e.c. pointed out. but the judge says they got to put -- levi reports tomorrow what was it -- >> big boy pants. >> reasonable pants. >> that's levi's maybe she's signaling. >> chip berg has done a great job. >> what is on "mad" tonight. >> we have a company called dirty lemon, millennials, my daughter, how can you not know dirty lemon? i hear that about everything to you, the ceo used to be ceo of hooked on phonics

and that's coming to the deal today. it is a very interesting company because they do a lot of ways to make more money for colleges and graduate schools by doing these kind of extension courses. but they'll probably hate that word, but a lot of -- it is a very impressive company and i just one of the many companies that became public that we don't have a lot on. got to focus on. >> got a pick tonight? >> oh, boy you know, this -- i think this virginia defense is really solid. and i love the cinderella story. knocked out and come back to be first. that's a great story. >> there was a game this weekend where a team was losing 12-1, and i got to tell you, they came back, and you lost 12-9. >> yes, 12-9 that was the loss. >> i thought it was good they came back. >> thank you >> we won 2-1, but that's not nearly as important. >> no. >> we're 6-3.

>> we'll see you at 6:00. >> second place. >> "mad money," 6:00 p.m. eastern. mohamed el erian will join us and katyubty w dn 150. ern... i'm off to cole and i'm not gonna be around... i'm worried about my parents' retirement. oh, don't worry. voya helps them to and through retirement... ...dealing with today's expenses... ...like college... ...while helping plan, invest and protect for the future. so they'll be okay... without me? um... and when we knock out this wall imagine the closet space? yes! oh hey, son. yeah, i think they'll be fine. voya. helping you to and through retirement.

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♪ hello hello ♪ ♪ everything i wish i didn't know ♪ ♪ but you give me something welcome back to "squawk on the street." a series of high profile downgrades this morning, but it is the ones for boeing and ge that are hurting the dow the most we're down about half a percent. oil near 64. >> road map for the hour starts there. markets tumbling this morning. mohamed el-erian joins us with his outlook for the economy and where market goes from here. >> why the world's largest publicly traded tobacco company is calling for a smoke free future the ceo of philip morris international will explain. >> an ipo bonanza, pinterest kicking off the road show and

after a four year drought on restaurant listings, chuckie cheese preparing to enter the public markets as well we'll speak with that company's ceo. >> as carl mentioned, stocks opening lower this morning pressured by declines in boeing and ge in particular with us now is mohamed el-erian. i give you credit, you've been optimistic about the u.s. economy for a while, even when we were in the depths of that stock drawdown at the end of last year. do you still see the u.s. continuing to outgrow the world and fuelling this market >> very much so in terms of the u.s. continuing to outgrow the world. and this theme of divergence is the right one. not about a synchronized slowdown it is about divergence for the marketplace, remember how sensitive corporate revenues and profits are to the rest of the world. so the relationship with the market is not as strong as the relationship just in terms of the economics of it. >> in other words, we're bracing for an earnings season

you think that there is going to be some negative surprises, especially on the multinational front? >> yeah. i think we got -- i think we're going to hear a lot about a couple of things one is weakness abroad particularly in europe, europe is slowing much more than people expected secondly we'll hear about risk aversion how there is an extra element of risk aversion as consumers pulled back to the rest of the world. i think you're going to see the companies that are sensitive to the outside world being much more cautious about the outlook than they have been so far >> the barons cover this weekend, is the bull unstoppable? what does that mean to you is that an uh-oh sign, that's a contrarian indicator >> last week was significant because we saw somewhat better data in europe, but not that much better, but better data out of china you saw what the market did. it loved the fact that you could get a handoff on liquidity, central banks, to fundamentals

so if you are a bull because you assume that handoff is going to occur, i this i that handonk thl be more problematic. you see why people are optimistic they like the fact that china is stabilizing. >> mohamed, it feels like we have gotten a lot of recession false alarms how should we read the latest jobs report? another very solid number, some wage growth, unemployment rate stays near half a century low. what does that tell us about where we're going? >> it tells you the labor market remains very strong. the consumer will continue to power this economy about 2.5 to 3% that's what -- the disappointing part about the way about last week's employment report wasn't as much wage growth, which a lot of people focused on, the fall in the labor participation rate. what we really need is better demand and better supply

we get the demand side, the supply side is not responding as much so keep an eye on labor participation, that's going to be key going forward >> takes us to this conversation we have -- we don't usually get to on our air, mohamed, about immigration. president over the weekend says the president is full. and given our demographics others argue that you need to double, triple legal immigration at least to give us that labor force that we can't seem to find >> we had this same situation where vacancies, about a million above those who have registered to be unemployed if you can't bring people in, if you have a skill mismatch, legal immigration can be part of the solution so it should be discussed in terms of the economics as well as the social. but that issue is being obfuscated by what is happening on the border by issues about illegal immigration. there is no doubt that if you look around the world, legal

migration can help your growth potential. >> wanted to ask about the fed this is really big news. it has gone mainstream john oliver tackled this issue yesterday. herman cain, steven moore, potential nominees to be on the federal board of governors and getting a vote at every single meeting. herman cain had some experience, he ran a business. but i think what is most worrisome here to critics is that he had a pac whose goal was to carry out public relationship campaigning to facilitate and grow a movement to fight for the president's policies is that problematic? >> there is two issues here. i think it is important to focus on both and the market hasn't yet. and we can talk why people are so relaxed about it. one is this notion of political interference with the fed. that is not good news.

the second is what set of experience and expertise do you want on the fed? and what are they missing most, i think, is what president trump called the feel for the market people who have a good feel for the market and neither of the nominees brings that these are the two issues i can tell you the market so far are really relaxed they shouldn't be, but really relaxed about this issue. >> why do you think that is? >> i think that relaxed for a couple of reasons. one is they don't think inflation is a problem so they don't think that interfering with central bank independence is an issue second, this sort of interference is good for them because the political process is asking the fed to put in more liquidity, cut interest rates by 50 basis points, restart qe. that's music in the short-term to the markets ears. they're not focusing on it, but they should because longer term this can be an issue. >> where would you expect to see that show up is that an issue for the bond

market >> it depends where we -- how the nominations proceed. but if they are successful, i think you're going to see the market place, over the longer term, profile of inflation over the consistency of two things that the fed minutes may help us this week. one is inflation targeting consistent with financial stability? and that's really important given that there are disinflationary forces on the economy. and, second, as important is how does the fed navigate domestic strength with international weakness that's not an easy thing to navigate and we have seen the flip-flop, the 180 degree turns of the fed in the last six months, that's not good for credibility. >> mohamed, you mentioned markets being relaxed. where is your head right now on leveraged finance. a piece today about the administration and lack of

apparent answers as to what we might respond, how they might respond to a crisis in leveraged loans. could it come up on wednesday with the fed and in general is it a huge liability for equities >> so the liability is that the risk that we used to, in the banking system has morphed and migrated to nonbanks and it is all over the place, but not at a critical mass you mentioned leverage loans i'll tell you, look at some etfs the industry has offered etfs, which promise instantaneous liquidity at reasonable bid offer. that's what it signals to the investor they have been offered on inherently inliquid assets they are outside what the regulators have been focusing on so far so the one thing to worry about for equities is that you get a critical mass in terms of a number of these. we haven't had that yet, i think we're not there yet.

but certainly something to keep an eye on. >> there is a little debate this morning, mohamed, about the trajectory for bond yields for the rest of the year, whether we'll see them head back south again or continue to shoot up from here and whether the worst it over in terms of low levels what do you think? >> it is all about europe. people are trying to explain this in terms of the u.s and because of that, i think they worry too much about the yield curve and inversions this is all about europe sara, the one relationship i always look at is the ten-year treasury versus the ten-year bund 250 basis points historically that's really elevated so the only way -- if you want to know where are yields going to be, beyond five years, look at europe. and if you think they're going to go up, it is because you think europe is going to recover. if you think they're going to go down, it is because you think europe is going to do even worse. it is all about europe and people should realize that when

you make a u.s. interstate call, you are making european economic call >> well, they are facing brexit and, you know, super easy monetary policy, negative interest rates for as far as the eye can see. what's your forecast there >> so i love the analogy when you go to europe would you bet on a team with a five main players, differencemakers, are all having problems you mention it, brexit in the uk, in france there are protests going on, in spain there san election that is likely to be inconclusive in italy, political issues and in germany, you have a major political transition would you bet on a team where the five main players are having issues and in addition to that, there is no team work to speak of. the eu is fragmenting in terms of decision-making so i really worry about europe and i'll stress again, the market should pay greater attention to the weakness in europe because it is not turning around in any way and because of

that, i do think that yields are going to stay where they are, if in the dip a little bit lower. >> mohamed el-erian, thank you very much. >> thank you >> from allianz. want to point out shares of sony this morning, they're up on a reuters story which indicates that a third point, of course, the large sometimes active hedge fund may be at stake happened to know the company and mr. lobe, both fairly well of course, want to reference some -- quite a few years ago, five plus years ago, mr. lobe's third point did own significant stake in sony. and at that time was calling for the company to spin off its entertainment assets, something to monetize or create value, particularly those in the u.s. my understanding, fairly recently, is that there continues to be resistance in

japan to doing anything involving the u.s. assets in a significant way. sony for its part has done quite well i think we can look overtime at the performance of the stock you may remember george clooney got involved back then in 2013, calling lobe a carpetbagger, telling him to mind his own business, essentially, at that point. again, no confirmation this is correct in terms of third point building a stake again to try to take another run at sony, but we'll update people if we have the original reporting to support the story. >> he's been in other parts of japan too over the years, abenomics, a hope that it would bring better corporate governance in places like japan. >> it continues to be. there have been a couple of value actives gotten involved in japan. lobe and another name. but it is rare, though sony for its part is certainly a well known company here in the united states as well >> when we come back, an ipo blitz, pinterest kicking off details on the price range and

valuation. it is not all about the unicorns and the ipo market make room for the mouse. chuckie cheese getting ready to go public. we'll talk to the ceo of its parent company and the year of the unsmoke. why the ceo of the world's largest publicly traded tobacco company is calling for a smoke free future. the ceo of philip morris international will join us in a bi t. what do you look for when you trade? t. i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums.

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road show today. leslie picker is in new york with all the latest. good morning, leslie >> reporter: good morning, carl. pinterest saying it will seek about $9 billion in terms of valuation for its ipo, which as you mentioned, kicks off today, the road show portion does that's about $3 billion shy of its latest funding round from 2017 where it was valued at upwards of $12 billion we are here currently at jpmorgan where executives including the ceo ben silbermann just finished a teach-in with the sales force here where they explained how they want to pitch this deal to investors according to the terms disclosed today, they're looking to sell about $1.2 billion worth of shares and i'm told by two sources close to the matter that the sales force has been taught to teach this to investors and to really differentiate it from traditional social media companies such as snap and facebook because of how people discover things on their

platform as opposed to really search for them and have connections with specific friends. i'm also told that they're really emphasizing the e-commerce portion of their business, which doesn't translate really into revenue per se, but it impacts the relationship between the merchants on their site. now, the way that pinterest business model works for those who aren't as familiar, they display various how tos like cooking and exercise that can help people make their lives a little better, and they also show inspiration like wedding decorations as well as home decorations that people can use to improve the aesthetics of special events and aesthetics in their home but they only recently started monetizing they actually released one q projects in today's filing which showed $202 million on the top line for the quarter through march 31st, which would imply about a 54% growth rate year over year. but the company still unprofitable though those losses do tend to

be narrowing, guys. >> leslie, thank you we'll be watching closely, of course, as this week moves along. leslie picker for us. a familiar name is returning to the new york stock exchange this morning chuck e. cheese's company announcing it is ready to go public again, becoming first restaurant company to do so in four years joining us is the ceo of cec entertainment, tom leverton. tom, why don't you just first start off by explaining how it is you are coming back to the public markets through a special purpose acquisition corporation, but if you can, just sort of explain to viewers how you're getting here and why you're here >> sure, so this is the perfect time for chuck e. cheese to return to the public markets we took our time as a private company to invest heavily in the business we launched brand-new food, revitalized our entertainment, and our guests have rewarded us with that for -- with great sustained sales growth we are going to special purpose

acquisition corporation route, the back route, because chuck e. cheese is public market ready. we were publicly traded for many years. we have publicly traded debt today. and the process is faster and less disruptive for the business. >> let's talk about the business itself you said over the last number of years you sort of retooled things what has that meant, specific not just obviously to the food, but to the entertainment side, which is a larger portion of your revenues at your units. >> sure. so we focused on bringing the best possible entertainment to kids and families overall. whether that's the great game assort s using great titles like jurassic park or the classics like ski ball, making sure it is a great destination. our food with the new pizza that within national taste tests is making mom and dad happy to take the kids overall but one thing we're a great example is, we just launched a new product at the end of last year called all you can play and that is a time-based product. a change to the business model of chuck e. cheese mom can come in and ask for points and tokens, or they can

buy an hour block where their kid can play any and every game in the store it is wonderful for the kids and gift to the mom and dad because they have time certainty on the visit. >> you know if it is 45 minutes or an hour are you seeing a big takeup on that, or are people eyeing it warily as far as the pay for performance side >> it has been a fabulous reaction so far. we launched it as an option, buy tokens or time, and we saw about 50% of our guests are choosing time and what is more important is we use net promoter scores like a lot of businesses, over the past six months, we had an all time high in net promoter scores, largely because of this offering >> well, you've certainly showed some momentum in your same store sales numbers as recently ago as q 2 2018, up 1%. now up preliminarily 7.7%. do you believe you can continue to see those kinds of numbers?

>> we have some great things driving the growth going forward. in addition to all you can play, which i talked about, we have a remodel program. so far we have 32 of our 515 stores remodeled when we touch a store like that, it grows north of 12 percentage points better than their peers, which is terrific. internationally, we have been growing 25% and we have a lot of white space to open new locations. >> what is the new store story like and is -- are you thinking differently as to where the new stores are most efficiently placed >> so we only are focused on the handful of stores domestically we have explosive growth internationally in the middle east and south america but domestically we'll be using our capital dollars focused on remodels to bring excitement to moms and kids coming in. >> how different is it i grew up going to birthday parties at chuck e. cheeses. now you're appealing to a whole new generation of parents like me who have different tastes and difference preferences for their

kids how different does it feel >> it feels very different the great thing about chuck e. cheese is how popular we are with children. your average kid asks to come to chuck e. cheese nine times a year, they only get to come three because we need to make sure mom and dad are willing to drive them a lot of the investments have been to make it better for mom and dad. it feels more like a pizza rhea when you come into our reimaged stores with great food, sometimes open kitchens, and entertainment that is more pleasing to mom and dad. >> what is -- so entertainment such as what that is more pleasing than it was previously? >> in the past, you might think about the chuck e. cheese, the video games, but then in the past you had the animatronics, the robot chuck e. cheese that may be singing and dancing, some of the songs that may stick in your head. we still have chuck e. cheese and the band do songs to make the kids happy, but we break it up with katy perry, taylor swift, songs in there to give mom and dad a mental break and just make the atmosphere a little bit more adult without spoiling some of the magic that makes it the kid-focused

business that it is. >> as for your move to go public today, tom, we were talking about pinterest, lyft has been a big one, levi's did quite well uber is coming next. how much were you watching this kind of environment in order to make the decision to go public right now? >> well, we are public ready today. we had publicly traded stock, we have publicly traded debt today. and given the overall momentum for our business, we really thought this was the right time for us >> apollo will own 51%, not selling at least at this point is there an expectation over time given of course they're going to want to monetize their investment that they will be a seller and do you have anything to share with us on that >> eventually certainly private equity company will be a sell, but the great thing is, we're all aligned in the growth aspects we have today. they believe in the business as much as i do and that's why they're not selling a single share through this transaction >> tom, we appreciate you taking some time with us today. thank you. >> thank you so much >> tom leverton, ceo of cec,

which is -- we didn't get to talk about peter piper pizza, perhaps next time. >> next time >> they own that as well >> right as we head to break, getting a quick check on shares of boeing on the move, lower this morning, as bank of america merrill lynch cut the stock from neutral to buy saying the recent troubles areor t wsehan expected "squawk on the street" will be right back

time for our etf spotlight today we're looking at ticker symbol xli, down this morning because of general electric. the stock falling to underweight from neutral by jpmorgan stephen tusa who cut his price target down to $5 per share from $6 still, we should note, ge shares are up 28% this year when we come back, the ceo of philip morris international, the world's largest cigarettemake, will join us to explain why his company is pushing for a smoke free future. we're off the initial lows, dow is down 127. back in a minute

good morning, everyone i'm sue herera here is your cnbc news update at this hour. president trump urging uganda to find the kidnappers of an american tourist freed over the weekend. kim endicott arrived before being turned over to the u.s. ambassador a ugandan police spokesman says he does not believe the ransom had been paid. >> an implicit threat of the use of force by our l.teams we had the ground if there are any other arrangements of ransom by the family or account manager, that is something we need to explore. as the police and the government of uganda, we don't do ransom and we can never encourage that. >> nissan motor shares holders voting former chairman carlos ghosn out as director, severing his last ties with the automaker. ghosn was rearrested by tokyo prosecutors last week. and researchers at wichita

state and embry-riddle aeronautical university releasing a new airline ranking from 2018 data and they found that delta ranked first when it came to arrivals, mishandled baggage, bumping passengers and consumer complaints. jetblue was second followed by southwest. you're up to date. that's the news update this hour back downtown. sa sara, i'll send it to you. a new cnbc fed survey is showing opposition among some on wall street to the nominations or potential nominations of steven moore and herman cain to the federal reserve board. steve liesman joins us now with more on the findings good morning, steve. >> good morning. some on wall street blasting president trump's intentions to nominate steven moore and herman cain to the federal reserve board of governors some saying the senate should not confirm either man and many saying both are unqualified.

34% say they should, 49% say herman cain will be approved by the senate only 40% say the senate should confirm herman cain. donald lusk at tread macro says it is entirely appropriate more than 70% say both with too political. more than 70% say both are not qualified. and moving on, the 48 respondents, they include fund managers, economists, strategists, who think the president's criticism of the fed with his nominations of moore and kai and cain are reducing

independence 56% s 65% say the president will have little effect on monetary policy 22% say they'll make rate hikes let likely up from 14% some think the president should not be commenting on monetary policy, that percentage is declining. maybe they're getting accustomed to this, 3883% thought it was inappropriate to 61% now. >> just to clear something up, a lot of people will say, steve, all the nominees and previous administrations to the fed are political. right? they're democrats, they're republicans, it is always presidential appointments. can you explain how different these two are? if so, and why they're creating so much controversy and why it would be a whole new level of puttinging political people on the fed. >> i think it is a question of where you wear your politics do you wear your politics, say, on your shoirt sleeve as a modet part of your credential for the

office or on your chest in a t-shirt that says i am a supporter of president trump, and his economic policies. big difference you can go back, by the way, it has been customary for presidents it renominate chairman from other parties. in other words, remember obama renominated bernanke who was a republican and that was true of clinton with greenspan it has been very, very common for the federal reserve not to be a place where people go in political or politics first. but maybe that was just something that went along with who they were. >> all right, steve, speaking of all of that, national economic council chairman larry kudlow defended the president's picks on cnn this weekend. take a listen. >> the president stands behind both of those gentlemen now. we have with open seats on the board. the president has every right in the world to nominate people who share his economic philosophy. >> joining us with some thoughts

on banks and rates, tom michaux is here. the different silos, net interest margin, loan growth, credit, trading, what is going to be the headline do you think? >> i think it is going to be weak revenue growth, the story of the quarter the whole market is looking like it is going to be a soggy earnings per share growth. i've seen someearnings per share. with regard to the biggest banks, the more of an investment bank you are, the tougher the quarter is going to be and i think that the line that jumps off at me is that we're forecasting a 40% decline in equity capital markets revenue year over year because of, one, the markets were difficult at the end of the year, but mainly because the government was shut down and it was hard to get offerings off through the s.e.c. >> will the street see it as a one off? >> i think the street will i think they will understand it.

i think of our own pipelines, i my the majority of what was planned for 2019 will still get done, it will just get done later in the year. >> all right if we're truly in a new rate environment, do they need to guide down lower on net interest >> i'll tell you what, here is the story, in june of last year, june 8th was the -- we were looking for 12% earnings per share growth for this year and for next third quarter loan growth disappointed cut estimates fourth quarter, take rate increases out, cut estimates we're now at 7% for this year and next, for earnings per share, and i think it is really all revenue dependent. i think the banks are doing a good job on expenses, and they're buying back a lot of stock. >> just wanted to ask you about something in the news today. on bank regulation the fed is proposing a new regulatory regime for foreign banks that are operating here. making it a little easier for them, lowering liquidity ratio is that the -- is that still the mood, is that still what's going on >> there are two things. i think we're still going to get

regulatory recalibration and i know there are some folks who say, my goodness, we're going back to where we were to '06, '07, no. the amount of regulation we have gotten is so extraordinary, we're just recalibrating, i believe, back to neutral on many one of the biggest -- i hadn't looked at that specifically, but one of the biggest changes of dodd frank was to enforce american bank holding company rules on foreign banks, and that was pretty tough medicine all coming at once so i haven't looked at the specifics but i wouldn't be surprised. but one other thing i would say in this is in the first quarter, investors should be talking about the widening gap between the european banks and the american banks the european banks move backwards in the quarter in my opinion. and negative interest rates are devastating to the banking business and you heard some of the regulators in europe talk about it the more negative interest rates you have, the worse in europe, the worse the european banks are going to do and many of them are earning 6% on equity where the

american banks have been able to recover and move onward. >> double digits let's move back to the capital markets here what about debt, last year, end of the year, things were dead. certainly in high yield. seemed to be a lot of resurgence in the first quarter of this year >> two things that happened. number one, i've been looking more year over year at debt capital markets and issuance it is about flat when i look at the individual estimates, which i reviewed, they're up and down 1% or 2% the trading is a different story on the marks the marks that happened in the fourth quarter for anybody who is an owner of that debt, debt, was extraordinary. and we have gotten a snap back, so i think anybody who is ma marking debt at the end of the year will show a nice markup, just like they showed a big markdown in december >> finally, is buffett right that wells should go outside the street >> i personally believe that the -- that wells has a great franchise and for a long period of time has done a great job

i think there is a very good company embedded in wells. i do think they need to take a big, bold step and think very carefully, it is more than just going outside of the company, i think they really need to spend time on picking the right person because i think if they can make some of these challenges, get fixed in the public's mind, there is a good story embedded at wells fargo >> got a huge deal nobody even talks about, the sun trust deal, funny, we finally got some of that consolidation people have been talking about for years, tom. surprised it came and went so quickly in terms of an investor consciousness? >> no, but i'll tell you, you're going to see more of it. and i think what is really interesting is this moe concept, low premium. you don't have a lot of bank stocks with high valuations who are buyers very hard to get the 30% premium that you might have gotten in the past you're going to -- and then the crapo bill that came last year, there are 88 banks between 10 and 50 billion have that embedded consolidation inside of them there is going to be more

consolidation, we believe, in that group, and i think these deals are likely to be less premium where it is going to be highly accretive to both sides, we have seen some examples of that we saw it in the sun trust deal. but i'll tell you, scale is working. that is what is new in the last 18 months. the big banks are on offense again. and scale is working in the bigger banks are more profitable and the smaller banks are going to have to decide what they're going to do about it. >> going to be fascinating to see. tom, thanks. >> thank you plimoisnte come back, the ceo ofhip rr iernational with us next the future of technology investing lies beyond the tech sector. it's about technology transforming every sector. ♪ at pgim,

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stocks are within striking distance of their highs. one strategiist says earnings could wreck the rally. find out on tradingnation.cnbc.com more "squawk on the street" coming up. obvious.

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102 points part of that is boeing's slide downgrade from bank of america, merrill lynch, after cutting production of its 737 maxes. general electric also under pressure after a downgrade from jpmorgan stephen tusa on that stock, down 6.5% one pocket of strength is energy energy stocks and energy prices. crude oil back above $64 a barrel back to multimonth highs there on oil >> meantime, the world's largest publicly traded cigarettemaker is launching new ads today telling customers they should quit smoking at least quit smoking cigarettes philip morris, the maker of marlboro cigarettes, is rolling out that campaign telling the 1 billion smokers worldwide to quit as it launches what it is calling the year of the unsmoke. ceo andre calantzopoulos joins us now thank you for your time. viewers might be wondering why a company -- >> thank you for having me. >> -- tell their customers to stop using their product

>> well, we have set ourselves a new vision for the company, to create a world free of cigarette smoke. by convincing the 1.1 billion men and women who smoke around the world and that would not otherwise quit to switch to better alternatives. and for that we have developed a large portfolio of new products that all have the underlying factor that they do not -- more known in the u.s., we expand so far $6 billion in the development, the scientific assessment to quantify they're better than cigarettes as well as capital expenditure in the commercial expenditures. and these products are present in more than 45 markets around the world. so we're very serious about this

new vision but our efforts are not sufficient in our view we also need people in public health, governments, regulators, to also move in the same direction so we can accelerate the move of people out of cigarette smoke. and this is precisely in this context that this new initiative, the unsmoke your world campaign is going to run this year. and the world essentially in my view has a double meaning. the first is obviously talking to the people who smoke today, but also the people around them who care about them, their families, and also as i said talking to governments that somehow is slow in adopting regulatory regimes to help people quit or switch, and at the same time it also has the meaning of a little bit kind of smoke your mind, the double

meaning, because there are still a lot of opposition to this alternatives and that creates quite a lot of confusion among people who smoke in the u.s. there has been a lot of controversy where there are electronic cigarettes or vapor products and it is dangerous, cigarettes, and that has to be dissipated because that confuses peop people in a nut shell, that's the, you know, outline of the initiative. >> i got you the government response around the world has been varied. do you have projections what smoking rates might do if ecigarettes get a runway is there a moment you think the combustible cigarette is virtually extinct? >> well, there will be that day, and that's exactly all right we have tobacco products that are not yet approved in the u.s. because they're under fda review for the last two years

whole scientific file is there but also we have vapor products. the cigarette market will decline and that's the objective. and i think it makes sense because for us, it is the right thing to do for the people who smoke and the people around them is the right thing to do for our shareholders, because it is a much more sustainable long-term business and also because the products are not cigarettes, we have more favorable regime s in many countries around the world, so it comes together as something that makes business sense and public health sense. our ambition is to replace cigarettes as soon as possible and they will come and cigarettes are out. >> when we talked in davos about this push, one of the wild cards that was out there for you was whether you would get a a propp

to sell these products in the u.s. what makes you think that you're going to be able to sell these products here? >> well, first of all, as we discussed in davos, u.s. fda is the only agency in the world that has a full regulatory regime for premarket and postma postmarket survey. the file was submitted, i think it is unique in its content because it is probably the most comprehensive file ever submitted in the category to the u.s. fda and i find it is natural that the fda take some time to evaluate fully the product, which is the first time they go through the entire process themselves also in all fairness, as far as the modified risk tobacco product approval request is concerned, we submitted only at

the late, later end of 2018, the latest studies we had on long-term clinical so it takes some time. so i'm hopeful that now that all the files have been submitted, eventually we will get eventually we will get the approval either under the pmda, the product approval for commercialization without health benefit communication to consumers or even better, if possible, under the modified tobacco product regime. >> finally -- >> in the other markets around the world -- >> i'm just curious, there's a lot of public policy resistance to ecigarettes in particular is driven by researchers who believe that because so-called big tobacco is involved it must somehow be wrong and i wonder if you think legacy reputation is a bit of a factor here >> certainly there is, but i

think we should not forget that we have in front of us 14 million plus men and women who smoke in the united states and 1 billion plus around the world. so i understand sometimes ideology and emotion is there and is present, but we have to put the interest of the people who smoke squarely in the middle and start an adult conversation about how best and how fast we can bring this products to the people who smoke today while minimizing unintended use like youths which is a major concern for us and we pay a lot of attention to, that but we should not have a conversation whether better product should be made available. because in any other product category, better products are widely acceptable. electric cars are not zero

impact but they are better. i think we have to move out of this emotional debate, yes >> andre, thank you so much. we'll continue to watch that and you're marketing campaign. joining us today from philip morris international. thank you. >> fascinating actually the transitions going on in that business. talking about transitions, let's send it over to john for a look at what's happening on "squawk alley." >> reporter: good morning. top ranked apple analyst got a big report out about apple's potential in health care. we'll dig into tt thhawi her coming up on "squawk alley."

welcome back to "squawk on the street." stocks moving to the downside this morning with most sectors in the s&p 500 trading in red as you can see there. one notable outperformer though is energy led by big oil names including contra resources and conocophillip. those companies following the move higher in oil with west texas crude hitting its highest level since october, up 1.5% today so far. i'll send it back downtown to you guys at the new york stock exchange.

>> okay. thank you, eric. what's nice is we have five shows to go this week. it's only the beginning of the week. >> this is the first show of the last trading hour of the day. >> yes. >> it will be at 3:00, of course, when you bring us the "closing bell." so what is the highlight or highlights >> it's a very exciting show, thank you for mentioning that with no sarcasm. we'll check out the selloff on wall street because if we actually closed lower than we are in jeopardy of breaking that seven day win streak, pretty rare to have that. art laffer is with us. we need to get the other side. we need to get all the sides of this issue. a lot of people have been critical of the president's picks for lack of experience and political ties. we'll see if laffer agrees with these picks. a huge story.

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good morning. 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ good monday morning. i'm carl quintanilla with mookie betts and john brennan. busy monday morning. >>. >> reporter: that's right. pintrist kicking off its roa