the desert >> "squawk on the street" begins right now. congratulations to virginia for winning their basketball championship good morning, i am carl quintanilla with david faber and jim cramer s&p is shooting straight up. europe is mostly red oil is 64 or 67 earlier. the imf cutting is global growth those banners at the bottom of your screen. the road map this morning we'll begin a melt up in stock

s&p coming up with a nine-day win. apple is nine in a robach in the 200. boeing is back in the spotlight. this time is over tariffs centering around air bus and boeing google and executives are back in congress today. facebook stock continues to climb back s&p is in the win streak since october 2017 the tech sector closed at a record yesterday for the first time in seven months s&p were ten bases points from an all time high >> jesus, i got to tell you that yesterday if it were not for boeing dow would have had a nice run and nasdaq doing quite well. there was an article in bloomberg yesterday of how the faang, the faang made it back. i have been watching the action

for apple. i think apple is very telling. your last five points was when they preannounced. you got to wait a couple of months we got a bunch of positive notes for apple. the way i measure this moment is that there are people cutting numbers and raising rates. >> raising what? >> raising ratings telling you to buy that tells you multiple expansion period that the pros tell us. when you start paying more money for earnings that are down be very careful. that's a 3m situation. i come back with okay we are very bought. people left the market so do they then come back in that had been the case when people feel embolden and better. >> apple was extraordinary, it

was early this year that they warned -- >> to the tube of $9 billion everyone during the course of that day it made up some ground. >> jim, did you ever expect for it to be a 20% this year of the s&p. we gotten what they already warned on. >> i lead a solitary life. what do you do when you have too i am to kill gough you go to the apple store. i just watch and people are buying i go in and -- do you have the ear? >> i do have it. >> do you have the new ones? the next generation. >> no, he does not have the next generation >> the wireless ear buds >> is there another generation of that?

>> i missed it >> i go in and i want to get two pairs, one for my wife and one for me >> it was with you that tim cook says he thought apple legacy should be healthcare >> how about katy huberty following up >> if there is any technology company today that's well positioned to pull this off and build the trust of healthcare institutions and consumers, it is apple >> wow this is so important two companies that dominate medical records, there is the company that's public, listen we'll never sell

if you can somehow make it so on your watch or all your medical records, apple does not have them you are incapacitated. it is crazy. everybody knows that the medical record system in the country is broken if katy huberty, if her vision is true then you would pay $10 a month. by the way many people getting in the hospital are incapacit e incapacitated. it is like an insurance plan i would love to have it if i had all my records on this and i can trust apple and pleasantly some others it has not happens yet but she says it is going to happen >> they differentiate themselves from everybody else. >> they care a lot about

privacy. >> easy when facebook is trying so hard the walk back what kind of actors they were. i think this is the main reason it is going up and huge numbers they put up in services. there is a glitch in the stock on 160 or 170. that changed there is a piece this morning. we read about how maybe there is an issue with china but that's going to be solved this is where they take their prices to 225, talking about smartphones doing better so this has become the leader of the faang. >> amazing what a term. >> faang >> along with facebook as well >> morgan stanley talking about instagram modernization, talking about facebook just a few weeks ago. >> today is the seventh anniversary of the purchase of instagram. had 30 million users then.

billion users today. >> they paid a billion dollars >> at the time i remember how zuckerberg was for paying so much never ever was -- you don't shop very much. that was a moment in the sense that it looked like it got the best of facebook >> well, that turns out not the case facebook is doing that acquisition and google having done the youtube acquisition, it equally created an asset with the same way you were to break out instagram. >> right >> what's the numbers jim? >> youtube can be worth of hundreds of millions of dollars.

>> suboptimal. i can go through many acquisitions that are quite strong >> you know all i can tell you is that zuckerberg has done things right look at the narrative. ever since they started spreading the word that maybe we have the get ahead or done some thing that is were not right, stocks have been up and away >> it has been a year since zuckerberg made that initial promise on capitol hill. he'll be back on the hill today. we'll talk about how they let go of our band of nationalism and hate speech from that and also a rep from google as well. >> who'll receive better on capitol hill the titans of silicon valley or the titans of banking tomorrow >> or the drugs? >> let's bring everybody down and teach them a lesson.

>> what would that lesson be >> that you made a lot of money. >> that's not really a lesson. >> well, when you take that with dalio, you kind of get this image of society is broken that these people make much more than regular people >> well, that's true >> so your an economist, too >> oh yeah, that's me. >> it is funny, there is a difference between observation and ideology observation is ceos make far more money elizabeth warren said that on "mad money" verses 1980. people just immediately said well, she's a radical house of fire she was quoting reagan's view. it highly changed. >> although bank of america, moynihan raising their minimum

wage to 20 an hour in two years it will go to 17 in may. they got a couple hundred thousand employees if you work at bank of america, you will make 41 grand >> you kind of have to do it to get people we are paying $18 an hour for dishwasher >> my wife has been doing dishes >> you don't have your own restaurant >> i got a dog puts it back in. i look at the minimum wage and where it is going. i look at the food prices last night, cordova price hav prices up there is some inflation. then i look at walmart verses amazon and i keep thinking these guys make me feel like wow i love this country. they just kill each other to have better prices they kill each other

>> big piece in the journal about robots walmart is rolling out robots to manage inventories and clean floors >> every single line in that story was -- it will just allow the janitorial staff to do higher value tasks which -- >> what is that? dirty lemon. >> sure know it well >> i had dirty lemon last night. they had this store. in sit, we used to have these openings on friday night and people come in and drink white wine they got a store in there it is an honor system, you go in and you will get ten bucks for a can of -- there is no even cannabis in it. this is the honor system, crazy

millennials of what they pay i look at it and there is no cashiers i don't even know what we are talking about. >> we are talking about a cashierless store called dirty lemon where they sell drug cans? >> maybe we can do this during the break. >> i find that it is disturbing. he acts like he's in his 50s >> when we come back, boeing and air bus, where do they fit in the picture today. the future is negative, s&p is looking for a ninth day high we are back in the moment. your healthcare business. ng vif hat if she has a heart problem & the staff needs to know, they will & they'll drop everything can you take a look at her vitals? & share the data with other specialists yeah, i'm looking at them now. & they'll drop everything hey. & take care of this baby

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get more into what you're into. just say "watchathon" into your x1 voice remote, or download the xfinity stream app. xfinity watchathon week, free. now through april 14. boeing rival air bus sees no legal bases for a u.s. threat to impose new trade sanctions, that comes after the white house issued a proposed list on e.u. products on which it may impose tariffs. this morning the president tweets "the world trade organization finds that the

european union subsidies to air bus has adverse ri impacted the united states. >> $11 billion how much is that a shot across the ballot we got so many trade things in motion right now, mexico and europe remember when we thought that europe was solved and china is not solved this market is amazing to me there is so much up in the air it is still ticking. you know even three months, i got to wait to see something happens. >> china is still up in the air. >> it is funny six months ago, the market may have a different feel for it it is going to get done. >> right >> i obviously, we all talk to people from both sides i think there is a sense that

everybody does want a deal right now. >> why >> why would china want a deal >> the chinese like the momentum and because they think they can fool us. >> well, today the south china morning post, the fruit is not yet ripe that's their language. >> adam and eve? >> that side may have to pay an extra price. >> what is this? i am not talking about dirty lemons here. >> they're waiting out the clock. >> this is like 1947 it is a go does anyone even know it anymore? oh god, i am so old. >> of course they were the organs for the communist party >> my great, great uncle proof-read that. >> everything is in oregon poo y putin made me vote, putin had

me go the wrong way. >> back to china and trade >> yeah, okay. >> the market is failing to discount the risk of continued trade impasse. >> so then you are listening to larry kudlow this weekend, he's basically telling you listen we are getting closer he's not saying it is a done deal we keep on getting closer. obviously there is a moment where we will have some tariffs going higher that chinese don't want it to happen. the stocks that are doing the best of this market are the ones that say there is a deal we have industrials and it is a funnel industrial that's doing well have nothing to do with boeing are the strongest performers other than the semis we got semithat is are so linked to china they are doing so well

look at sky works for heaven sakes. that thing comes all the way back >> but, people say 5-g >> you reference 3m and fedex last night >> yes >> fedex is down 19% in a year >> but its stock is well up from when they had that so-called disaster quarter when fred smith came on mad money. listen, we are doing okay but we need a little china resolution >> europe has been tougher this pays a lot more money on planes you would not predict it is going to happen. >> imf just cut their forecast this morning to the lowest growth, financial crisis i assume that means ecb is going to air on the dovish side tomorrow and the fed >> that's what it is all about >> i think so.

i have been thinking a lot, we put through so many hikes, no one else put through hikes >> what do we have >> nine. >> the last one -- a lot of people talking about that one needing to be rolled back. we are so far ahead when it comes to raising rates i am just saying we are too much of a magnet, the dollar is still too strong i am not making a case for a cut. >> i am saying if we got a 50 bases cut and you are a bear and everyday you come in, inverted yield curve and then suddenly it is not inverted, what do you say? oh, oil 70 >> point cut would scare a lot of people? >> oh, who if they have not been scared already no one is scared by our president's actions. >> really? >> remember when we used to be scared of the president doing something. >> i think there is still a fair amount of -- investors think of

that >> we have akicting heads of virtually everything >> secret service, what's that about? >> mar-a-lago, i don't know. >> it is like the year that i judge melissa rivers and she had to go. it is exactly like that year trade atkins, what do you think? is it like the dennis rodney year i am referring to -- >> "the apprentice." >> thank you, you know something. >> we'll get cramer's "mad dash," we'll be back in a moment

let's get to our "mad dash" on this tuesday. a.m.s amazon >> this is a great piece margin expansion led by aws in the ad business. we can't emphasize enough that aws is the driver behind so many ipos you raise the money in order to pay amazon web services. i think that amazon can break out. not because of primes but amazon services a services there was a good story last week that we noted in the journal about the growing market share and search >> yes >> people go to the platform, we know it is an advertised

typically motivated to buy something. that top line growth continues to be what above 40, right >> yes >> the margins were business revenues were still retail largely. the margin was so much in aws and growing. >> they didn't cut the price constantly that's what people don't realize. amazon putting downward pressure and they keep oncoming retailers are directly being in vis rated by amazon. they tend to go to azure, microsoft. >> we got opening bell coming up we'll talk about disney, the big meeting on thursday. a lot of notes out from analysts this morning anticipating what will be id asand how to arrange their numbers accordingly. we'll be back after this

breaking news on wynn.

wynn resorts terminated all transactions there is a deal for $7.1 billion for the resorts. >> you feel that china got a hope of -- i find this one can be having discussions given all the turmoil at wynn. >> and a massachusettat massachs they certainly put in some questions of capital return which there may have been some expectations but now it is back to plan a. >> i continue to hear lvs is really attractive and something happening there, too >> this market is influx i got to tell you also let's not forget that lvs has exposure to

macao. very exciting time until casino business >> let's get to the opening bell with our cnbc realtime exchange. at the big board is alcon and limoneira at the nasdaq. >> jim, since boeing been the one moving the dow and s&p is on the street i guess we'll watch that chi china aircraft denying that report yesterday hauling for 137 maxes. >> there is an article in the new york times that everybody should read today that talks about what boeing did with the old planes and remodel it to the

new. it is very negative for boeing i think there will be continual sense it is going to get tougher to get this behind them. i don't think it is a buy. technicians were telling me, jim, you better get on board this thing will not crack support. i think the analysts are kind of saying hey, listen, this can take longer. i thought the myril lynch downgrade yesterday -- that's most importantly a down year you know how analysts say when they are down -- >> goldman cuts to 393 it has ramifications on american guidance today as they trim the top of their range let's go to phil lebeau for that

>> this is a second time that we heard the airline flying the 737 max. i should say flew the 737 max. it has been grounded since the middle of march. its expectations for total revenue, that's the meth trick the airlines used. it was flat up to 2%, now they're changing that guidance, because they stripped out those 737 maxes from the schedule along with some other 737 800s they flew a substantial number of flights than anticipated. they're bringing their guidance in total of revenues for available seat miles they cancelled 940 flights in the first quarter because of those issues look at shares of southwest, there was a call yesterday from ramon james, we think this is an airline that does very well long-term but we are concerned of the issues relative to the

737 max. they said back in late march they'll take $150 million hit due to the grounding of the maxes in the first quarter remember when you look at united, it is the third airline here in the u.s. that also flew the max that's not flying the max right now. osc osc osc oscar munos will be talking about that we'll get feedback how much this is hurting them in terms of the revenue side unable to fly those planes >> phil, thank you, helping us with the airlines today. >> americans may be the one you want to think about. they have less exposure. they also mentioned united you got to go someone using airbus entirely, this plane is

pervasive. it is the one when you fly you all the felt like you are sitting next to too close to people >> oh, is it that one? >> not the 380 the emirates plane to milan that we took at 10:00 p.m that's the one with the bar. >> it is better upstairs than downstairs upstairs, they got so many boutique gins. >> guys, the dow components that are green, apple which you cover and i know you guys want to talk about disney >> it is funny i am looking through my colors this year. you are probably seeing some others, too. as analysts get prepares for presenting the future. the future for this company. it is direct consumer offerings,

not just presenting them, also important of the app itself and showing the world what it is going to look like or the interphase is going to look like there is an expectation that disney is going to be forthcoming and good amount of transparencies that'll be embraced for analysts. what are the costs going to be of this service? not just rolling it out but the license fees as well and so their response to a disruption that we all know is permanent. it is going to change the complexion of this company forever. it is going to be extremely important. so many of these analysts -- you feel like, okay, they want the input so they can plug it in and come up with a number. it is not about the earnings number or expectations they're going to give us a number at disney what they'll give us how many subsidies do you expect to have

after yoear one or two or three. what is it going to cost you and i follow it closely. they see them losing $3.8 billion in fiscal year 19 half of that from hulu, disney controls hulu after the fox deal then they expect improvements there and think disney will lose 1.7 or $1.8 billion annually through fiscal year 2003 another 400 million for espn plus that's a big number. let's look past ths them into t future to what they believe is a successful platform that's going to power this company into the years ahead. >> the new narrative that i keep getting is what choice do they have can you let it go away >> no. >> we got no choice. the question i hear is they would move sooner.

certainly those who say they should have. could they have is a question. so much you have to deal with culturally and the fox deal propelling them into that. but, there are very few people who say no, you are better off following the old model. >> you will hear some saying the license fee business is going to be amazing.ninamazing. netflix will pay you an enormous amount of money to feed your base >> i think it is bold. you can buy little ahead a number of cut, there are still so many portfolios who spend days after number cut, number cut equal sale there is very few that say number cut equals buy.

that's what bob iger says. >> hours and hours of presentations that disney will be doing >> give me some red bull and sit down with them >> i think you are under estimating when you say one of the biggest analysts disney meetings ever had. you are at the cusp of this is it, are you going to appeal directly are you going to be able -- how important with all these companies wanting programming? >> yes >> what a gesture. >> by the way, this is not just about disney this will have implications without a doubt across the board, netflix is very important. >> yes >> no longer overtime having access to the disney library what does it mean in terms of their ability to produce the originals. how much more they have to do.

on netflix, it is a lot of library that's viewed most often. they still rely on those old just like hbo still relies on the movies, despite all the shows they have. and so there are those who wonder can netflix continue to grow quickly when disney is out there with a robust in the marketplace. >> it is supposed to be a gem and the number people talk about. the losses this is what a gem is. what if something that's si sir - sirconian. >> you have to spend they believe will exceed their guests on disney these are all purely guesses

hulu seems like it is going to make money, jim, it takes awhile it is expensive to produce all this stuff and to market it. >> the take is not unique. we did not like the fox deal, it is expensive shorter term they're going to make 3 billion in the studio this year with "frozen ii" and "aladdin" and "lion king ii. >> disney is dominant. >> 38 weeks. >> that sounds like the right time or they go every weekend >> 40% of the box office now >> remember how the stock got hammered when they announced that deal? >> sky deal. >> if you come out and say and look a few months later, what happens to the stock

>> can e hawe hand it to the pat company network that is what happened >> today there is an upgrade what kind of criminal would sell on a day there is an upgrade >> well, ge was not an up glagr but it is down again, it is closing in 9 and a quarter here. >> i am almost done. i am listening on the podcast >> does tusa have his own podcast? >> there is little gems everywhere of what can go wrong here in the end, it was a justification. i think it is going back to five i did appreciate, i thought it is the aircraft accounting was not right. ge needs, he's at this line and if you think there is a recession, i don't think there should be a recession. there is still plenty of people say well, the inverted yield

curve predicts it. you do not want to own the stock. >> how are the businesses in honey well and utx is doing? >> extraordinary well. >> technology is more related. united technology has a lot of much more china. when honeywell is doing well i any honeywell made a major push of the robotics inside of amaz amazon warehouse >>. >> they sold it. nothing like what utx is moving towards. that company is in the midst of

splitting stuff up >> china, china. >> david, third point and sony you have not commented >> we did a little bit yesterday, it is true, the story of dan loeb's third point earning a stake. it is about a special purpose vehicle allowing investors to promote one potential name the question is what is it he visited with these guys six years ago. he didn't get anywhere in terms of trieying to get them to and really address what is a discount of the nav of this company and doing it in any number of different ways it is not necessarily figuring something out here in the states or doing something on the studio figuring out a way to address that significant discount he feels or other investors do that the stock trades at no its nav >> stocks have been at a good

performer. i am sure he does not want to tangle with george clooney again. george clooney came at him we'll see. it is very much unclear to me that in japan where the decisions really are made, there is as desire to do something significant. >> okay. >> but, that can change. >> would there be interests from a netflix or amazon or having the production of capacity of sewnny he sony in the state. i got to revisit a lot of reporting on this. >> why do people not want cbs programming? cbs has great program. some sort of written product why does cbs never mentioned in the mix? >> well, i think the overall

view that controlling shareholders there have one path in mind >> okay. >> that's a lot of content there. >> yes that's for sure. >> guys, it is the worst day of the month for stocks that's across the board it is not all boeing's fault this time. let'sget to bob pisani >> you can see that? t in the way the sector is reacting let's take a look at some of the big names there. this is trade and tariff stuff here bmw and all of them are weak and mortar riffs for the u.s also it is a thing to use motorcycles proposing on tariffs here the sector of the united states. they are leading to the

downside, semiconductor and banks and utilities a, they're defensive names and they are less down. in terms of movers, you see industrial and united technology and caterpillar as well and 3m alcon is trading right behind me today. this is novartis spinning off their eye care unit. novartis will focus on medicines. they are a traded switzerland as well here and down fractionally. that does not happen very often thanks to my friend jeff hersch over almanac generally the markets had been

up, twelve months after the streak ended this is a positive momentum indicator for r tthe market the reason we are on this win streak, we have been talking about for weeks now of semiconductor and tech when apple and cisco are of 28% in the year. that's going to move the market forward. even ibm has had a remarkable year you throw these four together, this is less than 10% of the s&p 500. certainly 9% when that happens, you move the whole market up. semiconductor, xlinx is not apple. it is way below apple. you put them all together, all of the major semiconductors are up 20% to 50% of the year. let's not kid ourselves, this is the earnings outlook for semis

and tech in general is not particularly great in this quarter. right now we are up on the lows. carpal, back to you. carly fiorina, we'll get her take we'll take a look at treasury in a few minutes. don't go away.

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time for cramer and stock trading. >> i have to tell you tomorrow is the most important analyst meeting, not just disney coming up, but jpmorgan retail conference which historically has told you a very different kind of story line from what we've gotten i think we hear a lot of robust stories. a preview of that was something not from jpmorgan, but morgan stanley, manny chir rico, that's calvin klein saying good things. i wouldn't be surprised if we come in here tomorrow and we start hearing some things out of this conference which says, you know what? the spring has sprung and it's good i don't know whether people are ready for that kind of good news it will be very interesting. >> interesting >> remember, we've had a lot of people feeling we could be headed into recession. how about the idea that things are maybe accelerating that wouldn't be thinking with what people are thinking. >> off of december base?

>> yeah. it's the same thing. once again it was the bear market they call it the pal bear market now. >> is that what they call it or is that what you call it >> that's what they call it. >> i thought you called it the judy woodward market. >> alan didn't want them in he said no? >> tomorrow we'll have the brexit summit, ecb, that -- >> we have us, though. we've got bankers -- did you notice that you're not going to see tim sloan. >> no. tim sloan will not be there. >> a benefit of resigning ahead of difficult -- i don't think tomorrow is going to be one of those days where they're going to just try to find good things to say about any bank. i liked your stuff you're from a family of nine, i think you're terrific.

i understand you were a lawyer beforehand i understand you played for harvard. these are things that will not be said tomorrow. >> tonight >> i'm on a kick called sustainability younger people care about sustainability old people care about sustainability and how much money you make this is different. >> thanks, jim dow down 209, s&p holding on to 2,880. don't go away. folio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

♪ good tuesday morning welcome back to "squawk on the street." sarah has the morning off. three big hearings on the hill today. senate finance holding a hearing on drug pricing. treasury secretary steve mnuchin testifying facebook and google testifying before house judiciary we'll bring you any updates as they happen in realtime. the dow down 210, worst day since march 22 for the dow and the s&p as the imf cuts the

growth forecast once again. >> our roadmap begins with stocks tumbling. as the president threatens $11 billion of tariffs on the eu. nearly one year since mark zuckerberg testified on capitol hill has he followed through on the changes he promised? >> former hbc ce carly fee rin know the u.s. threatening to impose tariffs kayla has the latest out of washington. >> the list published last night focuses on $11 billion in european goods like wine, olive oil and 40 types of cheese as well as aircraft and helicopters from the four biggest eu countries. we don't know how high the tariffs would be or when they would be implemented president trump says it's in response to world trade organization finding on subsidies for boeing competitive airbus

it underscores the trade conflict with europe that's been on hold since august, according to three white house aides who say they're hoping the resolve the china trade situation. the may 18th deadline to announce next steps on auto tariffs is viewed as a new unofficial goal to wrap up china talks so they can pivot to europe that's why trump on friday cited this four-week time frame for a china deal china suggesting it's not a real date a state sponsored editorial say, quote, the fruit is not yet ripe if either side makes a hasty move to pick it, that side may have to pay an extra price or it may have to force the other side to pay an extra price. it will incur serious problems down the road. the chinese premier is in europe for an annual eu-china summit, but likely to discuss strategy related to the white house on trade and two conflicts that could be going on at the same time. >> kayla, any sense as to how

the chinese are reacting to our threats and our tariffs on such a key ally i would imagine that the sense there would be that if we're going to do that with allies like countries in europe, then maybe the line is much tougher for somebody like china, for a country like china >> the administration has been doing this for the last year, morgan, when we initially rolled out steel tariffs against all the countries that have long been considered core american allies that was seen as the first sign that the u.s. was not really differentiating when it came to trade. this has been a policy that even though certain of those countries have been granted exemptions, the u.s. has shown it's willing to call out these practices and levy tariffs on not just adversaries, but allies as well. >> kayla tausche in washington for us.

we're joined by sean matthews, former ceo of canter fitzgerald we've got equities and debt covered here, not that you both can't talk about either one. christian, let me start with you. you're fairly positive on the market i would assume this latest trade skirmish isn't scaring you. >> no, it's not. i think the trump administration is being very smart. that is, instead of spraying everybody with tariff issues, they focused on china. if they solve it, i think they'll be successful, especially because european economies and pressure they need to arrive at the deal and not let this be a driver of their economic growth. >> the big one continues to be china. are you concerned the market is no longer discounting the possibility of failure >> i think the market is not therefore, the likelihood that the markets go meaningfully higher because of a china deal

is relatively modest the idea that the markets go significantly lower if we don't have anything today is much higher today than it was in the past. >> sean, should we be enacting better trade terms with a key ally like europe now it seems to be pressuring markets today. longer term it seems like it could be another positive. >> tariffs are isolationism in a different word we lad an open market for an extended period of time. now everyone is thinking of themselves as a country. all those things chip away at global growth and global trade that's going to be significant over time. right now it's not that bad. as everyone moves towards having more tariffs and issue, that's a problem. >> you don't seem particularly positive right now, saying the ri risk-reward, especially with the move we saw in the first quarter is not good. >> i think the move was amazing. if you look at the high yield sector up 700%

>> all come back off the lows we saw at the end of the year >> absolutely. but you're really now priced to perfection you have $2 trillion of debt that has to roll for the next couple years that's significant there's going to be pressure from the standpoint of people rolling their debt too many countries that shouldn't have received capital received it over the last five years. that's going to be the concern because those people shouldn't get the capital going forward which is going to be a problem. >> i've heard that so many times. it always seems to resolve -- oftentimes seems to resolve itself i remember coming out of the crisis, the concern of so many companies, there they are, the debt markets opened up once again generously with companies with balance sheets that couldn't point to getting the terms they got. >> the markets were open because everyone knew it was going to stay at zero forever we had a long run where coordinated central banks were at zero interest rates which allowed more risk.

i think they've moved back to that thought process you have a world that's not at zero anymore that's going to take a little pressure into the high yield market it's about high yield and triples. that's the fulcrum point of credit those companies that received capital that won't receive it going forward are going to put real pressure on the other bbbs who should receive capital. >> even jay had comments about leverage finance yesterday he said it's not systemic. it might influence some illiquid markets. >> i think credit growth has been substantial in some parts of the market. that's something that needs monitoring, private credit is one area i think the key driver in all of this, and if you go back to 2008 it wasn't credit growth as much as it was leveraging of the global financial system. that is not the case therefore, any significant event in one part of the market is definitely not going to be

systemic having said that, let me differ a little bit with -- >> going to be a key component of the world capital that's going to flow in there people will look for higher returns. it's going to be in china

because they're going to have to pay at least in the beginning because of their accounting system that's another place where capital has to go to all of a sudden, the debt economy is going to get bigger at a time when you think about governments, they should be taking or deficits and our debt down, they're actually going the wrong way. >> i think shawn's point on that is a good one. that is, having deficit-financed growth path when the economy was growing at a rapid pace and up until 2017 and 2018 was somewhat replaced however, recognizing a slow-growing world if we don't have credit growth, we won't have growth. that's what the bottom line is credit is going to grow and that is a good thing rather than a bad thing. we can talk about the magnitude, but we don't think we're at a problematic point just yet. >> what does that mean for central bank policy? i'm looking at your notes here you think central bank is uber

dubbish. >> the economy is growing at a rapid enough clip or at least get back to that in the second half of the year the fed did not have to do all the things it did. they were a little premature and markets rallied, treasury plarkts rallied. the risk we had is in the second half when growth gets back to 2% or slightly higher than 2%, maybe treasury plarkts sell off and there is repercussions in the market. >> do you think growth reignites? >> i think marge jinal growth wl go up a little bit the equity markets are clearly pricing in a bounce. a perfect deal with china. there's lots of things that have to happen for the equity markets to continue to move like they move so i think we're priced to perfection and now it's a question of, you may get close to perfection, but the markets are going to react negatively if you don't get anywhere near that. >> guys, we'll see we appreciate the conversation always good to get a little bit of the debt markets in there

shawn and krishna, thank you both about one year since facebook ceo mark zuckerberg testified on capitol hill promising lots of change for the social media platform. what progress has been made and what's still left to tackle? >> julia boorstin has all of that. >> some of the changes yielded better results than others let's take a look. first and most importantly, zuckerberg promised to protect facebook users' privacy. >> in response to these issues, we've changed a lot of the way that our platform works so that way developers can't get access to as much information >> reporter: in addition to limiting developers' access to data, facebook extended most of privacy law protectiontion worldwide, introduced a tool called clear users history and making all messages encrypted. this hasn't stopped leaked

15 million user accounts were exposed in a september breach. last week it was revealed over 500 million users had some information exposed on amazon cloud servers. second, zuckerberg promised to tackle offensive content >> we need to rely on and build sophisticated ai tools that can help us flag certain content we're getting good in certain areas. >> reporter: these ai tools fail to stopped live streamed new zealand mosque shooting. zuckerberg promising to do more. third, zuckerberg committed to preventing election manipulation take a listen. >> what i can commit is we're going to invest significantly because this is a top priority, to make sure people aren't spreading misinformation or trying to interfere in elections on facebook. >> reporter: facebook created a war room, removing accounts and pages to get through the u.s. midterms and brazilian elections unscathed. the next big test will come with india's elections this week and

then with the eu elections in may. other key issues do watch next year -- in the next year is how facebook handles its new privacy controls and will also see whether facebook takes big steps to limit who can live stream to prevent other streamed atrocities back over to you. >> julia, we'll be listening closely to the hill. when we return, growth concerns hitting stocks. worst day for the month. dow down 183 imf cuts its outlook again we'll talk to the new chief economist. later former hb ceo and presidential candidate carly fiorina as executives from ognd facebook are on the hill don't go away.

al cons spinning off from novartis it will be dual listed at the swiss and new york stock exchanges, accounting for nearly a third of eye care industry sales overall. joining us to discuss the spinoff, alcon ceo david endicott welcome. >> thank you nice to be here. >> i can understand alcon more focused on prescription drugs,

maybe can realize greater value. in the market what does the spinoff enable alcon to do. >> the big thing is focus. medical device businesses are different from the pharmaceutical business. what we've struggled with is the agility and speed we need to operate with with cycles that are three, four, five-year development cycles very vsus a g development cycle. specialty focus on ophthalmology, developing the breast stuff we can for helping people see better. >> financial performance under novartis had been disappointing, although the results have improved in recent quarters. where is the future growth going to come from >> first of all, we have strong underlying trends. we're swimming with the current. we've got really good aging population that help our cataract and surgical business,

a movement from monthly contact lenses into daily contact lenses which are healthier for your eyes i think to a large degree that's driving the fundamental business beyond that weave got new products like panoptics, a new lens you put in after cataract surgery. if you live long enough, you're going to get a cataract. we can fix that. there's a lot of new technology we think we can bring in this space that gives us growth at our above marked >> how -- i have a theory going right now -- by the way, i do use those daily contacts and i would be blind without them. i have a theory going right now as the world becomes more and more digital, more and more entrenched with computers and smart phones that eyesight is getting poorer and poorer. >> one of the important things that world health organization put out recently is this epidemic of myopia occurring all

over the world, but significantly in asia right now. there's going to be 5 billion near-si near-sighted folks due to hand-helds kids aren't looking and playing and exercising their eyes at distance you're looking here so the eye doesn't elongate treating that is a big issue thinking of how to prevent it is a big opportunity. a lot of correction is going to happen over the next ten, 20 years. >> las the lasic phenomenon been a tail wind? >> recently it's been a tail wind it came down quite a bit in the u.s. recently, the last couple years, double digit growth. smart part of our business, but an important one i think a real opportunity for correcting myopia, for nearsighted folks, a real opportunity. >> i can remember when this

company was part of nestle, i can remember when know varity purchased it >> what else do you benefit from from being an independent company for the first time in a long time? >> capital deployment is a big deal when we were part of the group, the group had its own needs. i think if you think about a $7 billion device company with rev lieu inside a $50 billion revenue pharma company, the choices made were really about the pharmaceutical business. it made sense for the group. it kept us from doing some things we would have done otherwise. >> such as >> vision care is a very capital-intensive business for us to really be aggressive in that area, if you have a stigma tim, shaped like a football, we didn't put the capital in to build the infrastructure to manufacture that lens until recently just coming into that opportunity now.

going forward, we do that on our own, make that decision sooner and gets it to patients faster. >> was there a sense you had to sort of fight for scraps that were ex-pharma >> i wouldn't say that it feels like that every now and again. they've got a great business, have done a terrific job with it they're trying to make billion dollar bets on big drugs when you look at some of the things we were doing and the scale we were doing didn't fit strategically. >> are there things you'd like to consolidate in the industry >> i don't think that's our main focus. what we'll start with is technologies applicable to the existing spaces we're in we do deals in the 50 to $300 million range. technology oriented, we've probably done 20 in the last 18, 24 months. we'll likely stay in that area big m anda isn't the plan. act one is to execute well, deliver products efficiently and buy what we need to get into adjacent white spaces.

>> in terms of executing, you put out those five-year targets. some of the analysts notes i've seen may be kept cal on whether you can do it. what would you say to those critics? >> we'll see i think the opportunity is there for us i think the places to look will be performance on pan optics coming out this year performance on prescription one as it comes out this year. those would be the markers people should look to. >> david endicott, thanks for joining us at post nine exclusively. as we go to break, getting a check on shares of american airlines down after cutting the top end of its guidance for the first quarter due to the grounding of the 737 max planes the airline fleet does include 24 of those jets hanging on to 2,881, dow down 184. just a couple of components in the green. don't go anywhere. the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity,

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time for our etf spotlight we'll take a look at energy stocks they're under pressure with the xle and the oih and xop. all those letters are moving lower. this as russia signals its wants

to boost out put in june pulling back from five-month highs just this morning. you can see it there wti crew still up. far larger than the equity markets. 40% so far this year meantime carlos ghosn says he's innocent. in a new message released by his lawyers, he was set to give a press conference on thursday but was rearrested last week his attorney says this new video message was recorded a day before his arrest. in the video he accuses nissan executives of a plot to take him down because they were afraid of a merger with the automaker's competitor renault. >> this is not about specific events this is not about greed. this is not about dictatorship this is about a plot, this is about conspiracy, about backstabbing

that's what we're talking about. we're talking about people who really played a very dirty game. >> nissan has said ghosn himself is solely responsible for his arrest prosecutors allege on several occasions between 2015 and '18 he arranged for a company he controlled to get part of the money nissan sent to an overseas distributor. of that $15 million, they suspect ghosn personally received $5 million. the story just gets stranger and stranger by the day. >> it really does. twists and turns when we come back, global growth worries the imf is cutting its forecast for the first time in six months we'll speak the new chief economist next carry fiorina on regulating big tech n'gonyers.wn 179 point dot awhe.

good morning i'm sue herera, here is your cnbc news update the u.s. military says three american service members were killed in roadside bombing mere the bagram air base in afghanistan on monday. three more american soldiers were injured in that explosion the military also saying today a contractor who was believed to have been killed is actually alive. the taliban claiming responsibility for that attack israeli prime minister benjamin netanyahu voting in jerusalem in an election that will decide whether he will remain in office he's seeking a fourth consecutive and fifth overall term in office which would make him israel's longest ever serving leader.

iranian lawmakers chanting death to america as they convene today for an open session of parliament, after the white house designated iran's revolutionary guard a foreign terrorist organization. back at home, what a difference a year make one year after losing to the number 16 seed, the virginia cavaliers beat texas tech in over time 85-77 to win their first national title in school history. they ended on an 11-0 run to put that game away a lot of bleary eyed people today after that over time that's the news update back downtown to you guys, carl. >> you got that right, sue thanks very much mnuchin is speaking on the hill. we'll get an update from ilan. steve mnuchin will meet with the biggest banks tomorrow on cyber security after they finish their

hearing before the house services committee he also said that trade is the administration's top priority, urged lawmakers to support the new usmca and said they are making progress with the talks with china however, when i asked him about the threat of new tariffs on eu products, he said he's not worried about running two trade wars potentially at the same time because these aren't trade wars back over to you >> all right, thank you very much tomorrow america's most prominent bank cisit ceos will e testifying in a hearing entitled holding mega banks accountable special live coverage beginning at 10:00 a.m. eastern. in the meantime, the imf cutting global economic growth outlook for 2019 citing u.s.-china trade tension, tighter monetary policy by the fed and the slowdown in europe and china joining us is chief economist of

the imf, gita gopinat. your blog starts out like this a year ago economic activity was accelerating in almost all regions of the world one year later, much has changed. what has changed the most? >> there were several factors that weighed negatively on growth, especially towards the second half of 2018. so we are projecting growth to slow from 3.6% in 2018 to 3.3% in 2019 and what's changed is the trade tensions that were high, especially towards the end of 2018. we needed credit tightening in china, the tighter monetary policy began in 2018 by major central banks, and there were country-specific shots, all the factors contributed to a significantly weakened outlook

for 2019. >> how much of a probability of resolution between the u.s. and china does your forecast incorporate? >> at this point, our focus has adjusted for the fact that the tariff increases that were supposed to come about on march 1st did not happen but we don't have anything further in there so if there were a resolution and it was a durable resolution that would be a plus. >> gita, your take on u.s. growth, i see that's been cut down to 2.3% for 2019. you've revised it slightly higher for next year why? >> the cut reflects the fact that the last quarter of 2018 nor the u.s. was weaker than we expected that plus some of the negative effects of the government shutdown, but that's very slight the positive revision for 2020 reflects the more and dative

monetary policy stance of the u.s. federal reserve >> in terms of that, how much is that factoring into the numbers you've put out today, and i guess would you expect, especially given some of the commentary we've seen from politicians here in the u.s., would you expect that to become even more dovish or more accommodative moving forward >> we've had significant accommodation by major central banks. we're talking u.s. federal reserve, bank of japan, bank of england. all of them have moved toward a more accommodative stance. that's impacted the focus. the revival we're expecting towards the second half of 2019 is supported to some extent by this monetary -- positive monetary stance in terms of softer interest rates. going forward what would happen is going to depend on what data

looks like coming in our projections are for the global economy to recover by 2020 to about 3.6% the u.s. will continue to slow, but that is more a reflection of the waning of the fiscal stimulus so the u.s. economy is growing above potential. again, depending upon the data, we'll start to see what will happen to interest rates >> you do say that, if the major risks materialize, that policymakers will need to adjust is it your view that the central banks around the world have more ammo in the cannon >> central banks have certainly benefited from an environment with low inflation pressures, despite the fact that output gaps have closed, which is why they've been able to take this more accommodative stance they'll have to also rely on unconventional monetary policy as other major central banks

would have to. what we flag in there was also the need for fiscal policy to play a role. if there were a more severe downturn there would be a good case to be made for a synchronized fiscal expansion. synchronization would help the global recovery if there were a more severe downturn >> you say over the median term climate change and political discord in the context of rising inequality could actually become a real threat to global potential output can you explain exactly how that would show itself? >> we are already seeing it play out. climate risks are playing out in many parts of the world, especially low income countries the threats are high most institutions around the world are paying close attention to it. taking into account resilience to climate shocks. this is ever near and present.

it's very important for countries to pay very close attention to these factors a point i want to make especially for the advanced world is we're heading towards low, moderate and low modest growth given low productivity growth and given the demographics we're seeing in terms of aging if we want to see a significant reversal in these numbers, we would have to see reforms that address this weekenning in productivity growth and addressing issues of aging >> does the imf believe that appointees to central banks either in the u.s. or maybe even india are increasingly becoming partisan and if you do, do you worry about markets doubting their commitment and ability to guard against inflation? >> it has always been our recommendation that central banks be operationally independent. that has served countries very

well it has to be data dependent. again, the word independence is crucial to central banks and we would hope that that would continue for all the major central banks, in fact all central banks in the world >> gita, in terms of biggest unknowns, because there do seem to be a lot of them right now, especially as all these trade dynamics play out across the globe, what are the biggest risks to your assessment that you put out today? and how should investors be thinking about that? >> we see an escalation of trade tensions an an important risk. though there has been improvement on the front between the u.s. and china and a possible agreement in the near future, we are worried about trade tensions escalating in other sectors, like the auto sector that will be particularly damaging given that it's a high integrated sector for the world with large global supply chains.

that's an important factor we have in mind the second is if some of these systemic economies that we're tracking actually grow much slower than we expect, it would include the euro area and china. the third is with respect to financial conditions financial conditions in many parts of the world are easy at this point, but they're building up both in government debt, corporate sector debt, private sector debt. in the event of heightening, that could have negative consequences. >> gita, the forecast gets a ton of attention all around the world. today is no exception. thank you for your time. gita gopinath. former hp ceo carly fiorina will join us it's been one year since facebook's ceo mark zuckerberg

testified before congress in the wake of the cambridge analytical standal. >> it was my mistake i'm sorry. >> i'm so sorry we let so many people down. >> this was a major breach of trust and i'm definitely sorry it happened. >> we definitely know we're late we said we're sorry. but that's not the point. >> we didn't take a broad enough view of our responsibility that was a mistake and i'm sorry for it. stese have acknowledged our miak we are listening, we are learning and we are making progress & you start to panic... don't. because your cto says we've got allies on the outside... ...& security algorithms on the inside... ...& that way you can focus on expanding into eastern europe... ...& that makes the branch managers happy & yes, that's the branch managers happy. at&t provides edge-to-edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when this happens you'll know how to quickly react...

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welcome back to "squawk on the street." one year after mark zuckerberg,

the ceo of facebook went to capitol hill, the company is still facing pushback as calls for sufer regulation and some of silicon valley's largest tech companies grow with us for her take on regulating tech is carly fiorina, one-time presidential candidate and has a new book out called "find your way" about helping people to become better leaders based on her personal experiences in life. carly, good to have you back good morning. >> great to be with you, carl. >> a lot of books about leadership out there how does your differ from the pack >> i think we're really confused about leadership we think it's about position, title, power, fame, and there are leaders who have all those things but it's not what makes them a leader a leader changes the order of things for the better and solves the problems right in front of them what i know through experience is everyone has the potential to solve the problems that impact them it's just that we give so much of that power away

we expect someone else, someone higher up is going to do it for us this is about stopping feeling helpless and powerless in the face of frustrating problems and actually figuring out what it takes to do something about those problems and each of us finding our way. >> we'll talk about the tech companies in a few moments, but i wonder if the influence that tech and social media is having on all of us makes it harder to be a leader now than it ever has been >> it's so interesting because one of the pieces of advice i have in "find your way" especially to young people is put down your phone occasionally what happens to so many people is they believe that going for the likes, cure rating the perfect photo for instagram, that all that stuff actually matters, and most of it actually doesn't matter in terms of people really discovering the potential that they have for changing the order of things for the better in their own lives, in their own places of work, in

their own spheres of influence technology also focuses us on the immediate and the superficial. to solve a problem, to make things better requires people to think a little bit longer term and to focus on what's consequential, not what's superficial. >> carly let's dig in to tech regulation you have folks from facebook and google on the hill today obviously it's been a big focus for the better part of the year, given the cambridge analytical scandal and everything we've learned about data and privacy and potential violations around that in general. what do you expect here in the u.s. in terms of a regulatory framework? do you think lawmakers will come up with one, and if so, what would be the right path? >> i've been testifying on capitol hill for a long time about regulation, particularly around tech. what i've always advised is that while there is some regulation necessary to make sure we have a clean well-lighted marketplace,

it's also true that regulation should be focused on what's the floor, what's the minimum necessary, not the ceiling one of the problems with silicon valley culture -- there are a lot of really strong things, but one of the problems is too many people in silicon valley are convinced they're smarter than everyone else, so the rest of us should trust them, that good motivation, good intention is enough people don't trust unless there's transparency google and facebook have enormous power, concentrated power over our lives and over our information. so it is disingenuous of them to assume we're all just going to trust them we can't, we can't anymore so a higher degree of transparency absolutely is required on their part and so i do think that them asking people to just trust us and keep hands off is no longer a credible, tenable solution there will have to be some,

hopefully, floor, base level of regulation that focuses on transparency that is making sure that all of us actually know what are they doing, how do they have access to information, how do they decide what goes on and what goes off we don't know any of that fundamentally. it's why they have broken trust with too many consumers. >> carly, you seem to intimate the incredible influence these companies have in american lives. are you surprised -- and we still don't have any legislation even though the lengths you're discussing are you surprised it's taking this long to even get to the point where we're having the discussion about actually having specific laws that regulate these companies? >> in a way i am because they have enormous power. power concentrated is power abused that's true. these companies have far more power than the oil companies ever did when they were regulated. that's just a fact i think silicon valley has assumed that a lot of political

donations in the right places would keep government away i think many lawmakers are intimidated by technology. they think they don't understand it they don't want to look stupid when they talk about it and, therefore, they kind of say, whoa, let's just keep hands off. it's so often that people who are intimidated by technology end up giving too much over to technology. remember that happened in the wall street crash as well. we can't be intimidated by this. we need to understand how they use that power and we need to recognize when they abuse that power and yes we need to have transparency and accountability from these companies as we do with other companies and industries. >> carly, i want to shift gears a little bit because in many ways you embody the american dream, right, from secretary to first female ceo of a fortune 500 company, presidential candidate. when someone like ray dalio comes out and says capitalism is broken, you think what

>> it's such an easy slogan these days. i also always want to ask the question what's better. is government better giving more money to the u.s. government doesn't solve our problems. it makes some of those problems worse. part of the reason that i wrote find your w"find your way" is sy people are so tired of the vitriolic slogan-yearing that goes on between the parties and politicians and they feel not only tired of the vitriol but they feel increasingly helpless and powerless in their own lives, if only somebody up there would fix it for us. guess what washington isn't the answer. i've seen the political process up close at the highest levels possible and it's a little bit like george washington said in 1789, the trouble with political parties they come to care only about winning, not about problem solving. so find your w"find your way" s people that i know from experience that we all have more potential and therefore power than we realize.

i know from experience that people closest to the problem actually understand what would make it better, and i also know from experience that if we can work together, if we can collaborate and focus on those problems and find common goal and worthy purposes we can actually change the order of things for the better. washington's going to fight for a long time and the 2020 election apparently is going to be about -- between the which is better, capitalism or big government. there's some things about capitalism that are broken, but fundamentally there's a lot about big government that's broken as well. >> it does bring us, carly, to our question to you about your own interest in running for office again and if there's no interest, who's saying the right things right now >> i have learned in life never to say never and one of the purposes of this book is to tell people, don't get locked on a plan. instead follow a path. i never had a plan to be a ceo, i didn't have a plan to become a presidential candidate and i don't have a plan for five years

out, but i do hope that i'm on a path always to make a positive contribution and that's what i advise others as well. so we will see how 2020 plays out, but i think what i find sometimes, frankly, depressing about our politics is we seem to have the same arguments over and over and over, the same argument about immigration, the same argument about whether capitalism is broken and yet all the problems we argue about in politics don't seem to be getting much better. >> carly fiorina, carly, come back soon. >> thanks. >> congratulations on the new book, find your way is out today. let's send it over to jon fortt now. jon, always finds his way. "squawk alley" is coming up. >> i'm finding my way across the nyse floor right now and i'm finding that major indices are lower. apple's up about 1% about 200 bucks a share for the first time

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welcome back. stocks starting the day lower with industrials and energy among the worst performing sectors in the s&p 500, among the names dragging industrials to the downside are earn airlines, ge, deere and fasinol. when we come back, silicon valley takes the hill. executives from facebook and google testifying before the house judiciary committee. we'll discuss the state of big tech regulation when "squawk alley" starts in a moment.

good morning. it's 8:00 a.m. at facebook headquarters. it's 11:00 a.m. on wall street and "squawk alley" is live. ♪