guidance. >> wilf, thank you wilfred frost. >> thank you for hanging out, melissa. will you be he tomorrow? >> all week. >> you too >> me too. i'll be here too "squawk on the street" begins right now. good tuesday morning welcome to "squawk on the street." futures in a good mood, as both unitedhealth and j ann are answers j post a beat and a raise. europe is green, china is up as well we begin with the earnings boost for wall street. the stocks set to continue the multi,up in the open.

>> plus streaming strategies, at&t sells its stake in hulu back to hewletti netflix is set to report after the bell. pinterest the hidliner this week in what could be the biggest week for ipos so far this year. at&t as you know, selling its roughly 10% stake in hulu back to the streaming service for nearly 1.5 billion, values hulu at $15 billion. disney owns 60%, comcast 30, all ahead of netflix tonight out after the bell and pretty positive commentary, namely it's the one fang that's not overbought >> everyone feels so confident, but that happened last time and it was good. i think that netflix the story line is pretty simple.

netflix went down and it shouldn't have gone down there's more room for everyone, and we did think of it as zero-sum, and that may not have been the right way to look at it. >> but it continues to trait on its growth curve, and it's going to be competing in out years with dis nick's product, don't you think it could have the possibility of slowing their growth i keep coming back to that number they're spending, the worldwide nature of the content, how they view themselves, versus disney it is being good. i think that netflix supplanted movies worldwide it's hollywood netflix is hollywood deutsche argues that they're

winning with the talent even though they don't have the legacy vault. >> you know, it's a big question for those who invest in both companies or choose too, as to whether it will have an impact at all disney is not going to have to spend as much as netflix on content, because disney of course has brands with a far deeper connection do consumers i mean, my god, "star wars" or marvel, you just go through them all, and the library, and the fact you have a studio that is producing new content that will be on the platform they just don't need to spend as much to be able to conceivedably at a 6.99 price point bring in the numbers they're talking about. does that mean netflix will not have great success >> i was speaking to someone in

another company, add up jazz cable bill about $125, load up every service, and you're mill len yale, gen-x. they do tend to spend a lotless. it's a bargain is what i'm saying >> which >> the whole package they don't watch what we watch there's 500 channels we don't watch and pay for. >> but the kids will all wants disney plus. >> but i'm saying it's not to the exclusion. >> we had this discussion last week you said the price pointon disney plus is low enough you don't have to choose between one or the other my cappuccino is about the same as my netflix every day. >> over the weekend i tweeted

disney for a year is 70, right four tickets to "dumbo" this weekend in new york at the fancy theater, $91. >> there you go. that's the problem with movies i stopped going to movie. >> a lot of people have. >> my wife watching "game of thrones. she watched it already about four times what is that about >> the largest is the pressure off old ecosystem. the right of the virtuals, the like of directv has certainly helped some of the programmers, but that is slowing. i'm very interested toss what the numbers are like, given how bad they were last quarter of course at&t is raising a bit of money here, selling the stake back to hulu the interest parts about the hulu deal is the more about the valuation, which is quite

significant. >> you think this valuation is large for hulu >> it's got -- the demographic is great >> they're continuing to lose money. they have 25 million subs. >> but david continues to denigrate the notion that netflix is -- it's like a tower of babel since the umbrella -- i hated titles that came out in like 1961, except when you're on netflix, i think you watch it with -- >> i agree all your obsessions with "narcos". >> no, i was watching "fouled. >> you think that was a great opportunity to short netflix when did is any came into the market

>> when they were doing 4 billion. that was a great short remember that? and then michael pachter -- >> $60 targets i'm going to say one thing to michael pachter nice nice beating on the top and the bottom line, raising the guide for the year it's really only the -- and there was black rock on earnings beat, and he gave me thoughts on the market, too. >> i think we have a risk of a meltup, not a meltdown here. despite where the markets are in

equities, we not seen money being put to work. it's just because i think we're struggle in this time, especially with -- who are if anything are more dovish than ever they're not -- there is a shortage of good assets. >> he's talking fomo, jim, really >> he doesn't watch the show and totally parrot me, does he >> there's things going a. >> you know -- noah send guard i'm just kidle now, everyone is seizing the one line, when you have loan growth of 4%, that's darnell good, but it doesn't do anything

you know, people ahead individual stocks. like the -- or that you faced with apple >> you just went from deposits at bank of america to here >> there's no return >> that's not going into stocks. it's going into things that don't pay anything and don't pay any fees >> correct. >> that's tough. so you're on the fink train? >> yeah. i don't think it's totally fomo. you have hunt last night saying we missed things aren't better i'm going to say something i shouldn't say, but unitedhealth, someone will say they're detroited by the single-payer

system want, which is untrue neither one of them want that. >> you've got the six-month outlook out of empire is the weakest in a couple years. who is right >> i think one of the things about this moment is anybody could be right if you're a boar on the fed, if you think the economy is slowing down, that's one of moynihan's single biggest point are we supposed to make as much money when the gross domestic product is only growing at two i think it's terrific to have a bank franchise, if there's going to be a meltup, let it be there, david. >> in the banks? >> disney had a meltup. >> it did based on a significant shift in its business that is

being very well received by investors. why would the banks have a meltup >> six, seven% growth, david. >> others argue banks are a good buy when loan growth is soft and delinquencies are high neither of those are true. >> they're still paying the price from all the stock head to issue. when you look at citi -- >> just let me know when the guys at two sigma, their algorithm says to buy the banks. until then, forget it. >> you just decide to go against me on everything >> no. it's all the rocket scientists putting the stuff together. >> four central banks are putting the pedal to the metal. >> many i have anna today, runs

santander, it's the best bank in europe, the most solvent bank in europe europe is pathetic it's a pitiful helpless continent. given the forward guidance about europe yesterday, i certainly believe that, they have some issues. >> other than my wife's olive garden where we're planting trees, it's the only economic activity i see, and it's 100 trees. >> darden. >> yeah, olive garden, like the restaurant you and i love to go to. >> and sadly the notre dame fire just made things just awful. >> so terrible lyft in reverse. >> i admit, my fault. we'll break down what it signals about investor demand as a flood of ipos hits the market. later david will talk to jeff smith and ffje ubben more from the nyse when we come back 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. through the at&t network, edge-to-edge intelligence gives you the power to see every corne of your growing business. from managing inventory... to detecting and preventing threats.... to scalingup your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

i'd like to welcome you to the most significant programming effort nbc has ever undertaken outside of the network the consumer news and business channel, cnbc, we're well aware that cnbc can only succeed b you. all of you. how you live,

what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. welcome back breaking news, or march, on utilization hitting the wires. 78.8 78.8 it was down one tenth, about three tenths less than expected.

the capitalization rates, it definitely is both a miss and sequentially lowered it brings us back to levels we haven't and, of course, the story of the day is how though not in a very aggressive fashion. >> karl, jim, david, back to you. >> trading 22% below the offering price, as we are waiting a flood of new -- zoom expected this week jim, if you look at the intraday high, we're down 36% >> that was a win, obviously the bankers seemed to run out of firepower quickly. there's definitely -- the

makeup -- here's what i've been able to tell and how i was wrong and owned that >> it is really remarkable that these unicorns have been around long enough the last round the investors were not vcs they were hedge funds, and they figured out ways -- >> i can add to that, because i've also been working on it this were special-purpose vehicles for the purpose of late-stage investing here, and oftentimes they will be prevented in the contractual language from shorting the stock. that was not the case here. >> there it is they made a mistake in allowing some of these, and i believe, for example, the soros investment, and others that came late stage, special-purpose vehicle were not barred from shorting the stocks. so they were in there covering themselves. >> they stayed private for so

long, third that at different generation of quote/unquote early stage came in and changed the dynamics. >> and ball lawyering. >> sophisticated people who are able to do -- i ponder every minute how this could be so bad. the answer is the basis must be really low they figured out a way around. morgan assistantly didn't orchestrate there, but i thought this things would stop at 70 and i kept trying to figure out, okay, what happened. i've done a huge amount of digging and came up with the fact they can blast out. >> and a lot of them did flip when they said they wouldn't which is always typical. >> exactly i was wrong, because i've never seen it before i was locked up when i did the street, i was locked up from the run from 66 down to 2, and then around 2 i was free to trade

>> it was suboptimal. >> completely. is this a bad precedent for what's still to come >> now everyone will be scared we need people scared. pinterest, i was pondering, could ammo go after pinterest? amazon said this weird of going against spotify. i used to like spotify >> look, the way you have to do it is look at the ones nobody is looking about. how about tw, you follow that one? trade web? >> oh, yeah. >> you want the ones that no one has heard of >> yeah, even levis. >> lyft, 100% my fault, because i learned that on twitter. 100%, maybe 110% but people have

to understand, if there were not a sidable cohort of investors, because these he -- think figured out how to get around. until i see they're totally locked in and do not pass go, go right to jail, they're going to blast out all of these -- they probably want to cut their losses that's very interesting. no one thought about this. it's not supposed to happen. i was talking to people at all the firms. not one of them thought this would happen. >> no. they were confident. >> they were like, hey, guys, this can't happen. you were tied up 66 to 2 two, i was free to trade, just blast out. >> i remember those days. >> i forget entirely i don't remember any of that with my father, my sister just -- i've forgotten

on. well count down to the opening bell in a moment take a look at the futures continuing to hold up despite the fourth straight month. we're back in a minute this is huntsville, alabama. aka, rocket city, usa. this is a very difficult job. failure is not an option. more than half of employees across the country bring financial stress to work. if you're stressed out financially at home, you're going to be too worried to be able to do a good job. i want to be able to offer all of the benefits that keep them satisfied. it is the people that is really the only asset that you have. put your employees on a path to financial wellness with prudential. bring your challenges.

♪♪ ♪♪ ♪♪ tthis is where i trades. and manage my portfolio.

since i added futures, i have access to the oil markets. and gold markets. ok. i'm plugged into equities. trade confirmed. and i have global access 24/7. meaning, i can do what i need to do. then i can focus on what i want to do. visit your online broker today, to learn more. time to get to a mad dash on this tuesday, about 6 1/2 minutes or so before trading trucking not a typical mad --

>> if they were to be on the transports call, which he is, because he gets the notes from the 27-year-olds who are like interns, second largest trucker, david, february got hurt by weather, but when the service began to improve, we did not see snap bat, which was our biggest surprise how bad? get this january volume is down seven. they're very worried that everybody has fooch material get this, david, the driver shortage is over >> you're kidding. >> no, i'm not kidding. >> why would i kit you about

this >> you've been talking about the driver shortage for a year otherwise a plethora of drivers, and not only that, we're not even when uber-freight is going to start the costs, if you hear them say it's trucking, it's because they don't know what they're doing. this is a call that just set j-pal is right, man. >> what's first? >> thank a lot >> we'll find out when we come back we'll have the opening bell right after this

you're watching "squawk box," live from the financial capital of the world earnings season continues to

kick off pace. j & j, some of these former walls of worry might have been too pessimistic. >> the drug, the pharmacy business was exceptional it advance the even further also, i know no one --, because it had been weak another quarter good by gorski and when it controlled the stock from the 140s to the 120s was litigation this will not put to rest that there's still a very big vertebra in verdict in missouri, but -- >> overall sales about grow -- >> it's the largest one hit by.

>> nh and j & j will help out the indecent at the open we'll see how the market settles and the s&p 500 at the cnbc real-time exchange live on new york, a nonprofit overseeing organ donation and transplantation in new york state. all right. so i guess of the three big ones this morning, which is the most important to watch bank of america? >> i was going to say unightedhealth there's good comments really talking about, you know, nothing big is going to happen some of the things they're talking about would be bad for the quiter, but i caution people to think that there's going to be a wholesale change in health care there's a lot of entrenched

interests that tend to fight that you'll see, you know molina, all these guys do much better, and they've been awful that's been the weakest part of the market. >> absolutely. you mentioned deutsche's upgrade of netflix and upgrade of western dig. >> you've got to do that remember, they have flash memory, which is really still not a great thing to be in, and drives aren't that great, but it's a very cheap stock, and people are saying the flash is going to bottom. just like they say the d-rams will bottom. certainly possible, but it hasn't been the case yet. you mentioned paper. ip is now almost 5%.

>> this is a -- these stock exchange have been horrendous. west rock is a nightmare. >> and industrial production, by the way. >> i'm saying, look you can pick good stocks, but if you're economically sensitive, you better hope that china comes back they just have to take the whole panoply. they can't just listen to the kids they have to do some checking. these conference calls -- jay, jay, jay, listen to me, be on the conference calls, watch the west rock, the ip downgrade. these are important they suggest they are hearing all of this evans says he can see a rate cut if core goes to 15, and growth remains intact.

>> very reasonable we have downshifted. liner board is industrial. you put it in a box. if your liner board is weak, there's fewer boxes being shipped. j.b. hunt is the second largest trucker, but when the second largest trucker says, listen, volumes are down big, you can't say -- we're not necessarily going into a recession they're alamentists, they're cerseis. >> you don't see -- on oil, labor later this year? any of that? >> ed chevron on last night. oil ain't going anywhere, it's not going up >> it's not going up

you sell the futures if you're an independent oil company can pioneer stay independent >> yesterday you indicated they might be next. >> he's the only executive in america older than i am. actually iger. did you get a new shot of that shirt. it's so unbecoming. >> what? >> the checked shirt can't they put him in a mock turtleneck like tiger? >> he was in a nice white shirt. >> nbc has a piece out looking at 4,000 documents, leaked documents that suggest the it is company, and punish their rivals we're going to talk to "wired" later on about the turmoil they've been under aoc says she's deleted her page, but goldman is out today saying

potential for up side. field checks suggest strengths across the board. >> heather bellini that was probably done before nbc i found shocking that zuckerberg violated your privacy -- oh, no, that's tim cook. there was a kind of unreal nature to this thing, which is basically facebook's business model to a large extent relied on selling data. everyone kind of knew it >> really, did anyone not know they were doing this stuff journalists love it, because zuckerberg just did the holier than thou op-ed. >> meanwhile, the advertisers don't go anywhere. >> that's what matters. >> they may be closing their facebook accounts, but instagram

is the engine of growth. >> it's -- when you -- they're like, listen, we love them, but they violated your privacy so what? unitedhealth down only up three. you can't avoid the talk about what the politicians are doing this is a tough year for health care. >> right with the year ahead in terms of the discussion of price to drugs, one would expect you're going to continue to see reaction >> i mean, i -- yesterday there was an amazing article, positive article. if you had health -- enough already with the selling give me a break. walk away. let the bids build, morons, but when you see the piece in "barron's" about cvs, you want to run to cvs and use the self-checkout machines, which i don't know how to use, but cvs is in the business of being

against amazon pill pack. anyone use pill pack i use good plus. >> do you? >> good rx i like to save money that's how you get rich. >> carefully. >> right now 66 to 2? >> no, you get rich by, you know, looking at the -- trying to get the coupons at bed bath, right? the alternative effort is you stay and play. what do you think? >> you have to stay and play. >> look, facebook, despite the fact that they have had that zuckerberg's a worthless running dog capitalist, the stock is barely down. looking at the semiconductor equipment stocks, they are doing quite well

you have to see apple break out of that $200 ranges for too long salesforce.org, one of the most confusing transactions ever, but the stock is barely down i think there's still 5g to look forward to, david. there's health care. the stocks have gotten cheaper my point is stocks are cheap. tonight we get ibm as well as netflix he. >> microsoft is a juggernaut i want to hear whether jim watters is going to say and i want to talk about the masters app this weekend that was the best app i've ever seen you could watch every hole, every hole of the masters. >> the masters is a -- >> a golf tournament

you delete it on monday. that's the tradition like no others, deleting the masters app the day after. >> i love that david, they'll let you in the masters, right >> i don't think so. comcast about 42 is this about hulu valuation >> good question the stock has been moving higher for quite some time, up 23% as you well know. did not get hit at all after the disney presentation. there was some expectation that the pivot away from the old ecosystem, what would that mean? but it just keeps going higher, perhaps on continued belief the sky deal will prove to be a very strong deal and that the underlying trends are not too bad. >> isn't it amazing the last two deals, they were like, listen, if you just wait a bit, the stock is up 7% within a couple

months judging by that yardstick, this was the best deal. >> a parent company of this network. >> and what do they like about it >> about the deal itself >> yeah. what is the chatter? >> that there's more programming assets than people recognize you can compare it to the likes of a dtv or a dish, that is not a comparison typically it had been larnedlocked here in the u.s., and other reasons that there are? synergy that is will come to bear. >> well, it's working. people love the story line they really do >> yeah. >> i think it's i want, nothing. >> there's still a question whether 5g will represent an ultimate threat.

of course the link-up of spring and t-mobile, and how they're going to replace the wire, which doesn't exist there, you start to wonder whether it really become a true competitor to broadband in the home? >> i know that apple generally thinking that could happen their slogan is, where do you want it? i would say continuous -- it -- >> you can have it everywhere, yes. >> i like the idea that they seem to have some adapt if they want to spend. >> they do >> i'm sure you've seen these efforts at elon musk's space ix and amazon to launch these

low-level satellites to provide broadband in underserved areas around the world once you bring in broadband, you bring in everything else with it. >> this is a very exciting time for what you do. >> a lot of generational changes on the move, that's for sure. >> the whole disney episode was the recognition that whatever you thought the entertainment world was, it's ended. it's almost like the independence of the talkies. who was -- >> it's chaplin's birthday today? >> when is gloria swanson's birthday >> david was there tess formation of the talkies what was it like before they had just used, like charlie. >> as a young boy he went to see the silent cards. >> i did i did. dow is up 107, 26 points

from an all-time high. let's get to the bond pits with rick santelli. good morning, carl i would find it hard to believe we would be close to all-sometime highs of stocks without having captured at the attention of the fixed-income market maybe if rates continue to trade into the 230es instead of close to 260, maybe the stock market radiologically wouldn't have progressed so far. they're definitely reconnecting. look at a three-day of two-year. same could be said for the other end of the curve in the form of tens let's open it up to a make rho chart. remember 2017, all those tops on the left side there? see, there's a lot of wood down here for a variety of reasons that don't touch pound some of the more recent technicals like the january 3rd lows once we closed below and above, moves happened in both directions

the scales are different, the yields are different, but the patterns for the most part of the same more question marks up in the air, now let's look at the ten-year guilt it popped just like everybody else popped. as a matter of fact, let's keep that theme, one of the big themes is interest rates can't possibly go any higher than the states, not necessarily because our economy isn't doing better, but because everybody else's rates are so depressed it's been 50 basis points higher let's think about this theoretically, we had widen that spread again, and nothing could be -- and most likely many traders think that could be the potential outcome. carl, jim, david, back to you. >> rick, thank you let's get to bob pisani as well. >> good morning, guys. happy actuals. 3 to 1 advancing, and all the

right stuff is moving. smh, another leader as it has been all year. china is strong. we're right near new highs boeing is finally up so remember what's moving the markets, the three main things moving the markets number one, of course, the fed pivot. china policy stimulus, and the trade revolution here is the most important thing, earnings are beaing by a very wide margin, much wider than historical is average just take a look this is the percentage beats of companies -- comerica beat by 9% above expectations blackrock knee her eight johnson & johnson nearly three this is way above historic norms at the same time he something strange is happening the revenue beats are very rare.

only half the companies are beat on the revenues. united only 1% above these are revenues, so something is happening between the top and the bottom line. partly there are definitely additional cost pressures and some margin precious occurring jim walk talking about the higher costs associated with j.b. hunt, but don't kit yourself, there's some issues there for them that's definitely an issue overall. take a look at the china data. we'll get this overnight gdp for china has been declining for five years sitting at the highest level since october. the important thing is passive versus active, folks passive is still winning by a very big margin. the dow up 104 points now. meantime you're looking at a

live shot of notre dame in paris where firefighters battled and saved the iconic cathedral new details this morning, some of the france's richest citizens have pledged millions to help rebuild the cathedral henry cravis and his wife have donated. so much of paris, jim, is about the architecture it's what the french have poured their hearts and souls into. >> one of the most magnificent -- i spent about five hours there just in awe. it is just incredible, and i wish everybody good luck to fix it i know that it doesn't matter

what religion, it's a stirring place, and just a reminder the incredible culture they have i know we all think the french are odd or whatever. >> and they have their opinions about us, too. >> you go to the louvre and that, and you say city of brilliance, city of brilliant people it's fantastic. >> our best wishes are there, and obviously with the civil service as they have a big mission ahead. david sits down with ceos live from the active-passive investor summit. hanging on to 100-point gain don't go away. really? [horn honks] man this is what i feel like when i wear regular shoes, cramped and uncomfortable. we can arrange a little upgrade. which is why i wear skechers... wide fit shoes.

they have extra room throughout. they're like a luxury ride for my feet. try skechers wide fit shoes. they're like a luxury ride for my feet. onmillionth order.r. ♪ there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah. ♪ we don't bake. ♪ opportunity. what we deliver by delivering.

if you have a garden you know, weeds are lowdown little scoundrels. don't stoop to their level. draw the line with the roundup sure shot wand. it extends with a protective shield and targets weeds more precisely. it lets you kill what's bad right down to the root while guarding the good. roundup sure shot wand. got weeds in your grass too? try roundup for lawns. kills weeds, not the lawn. roundup brand. trusted for over 40 years. dear tech, let's talk. you blaze trails... but you have the power to do so much more. let's not just develop apps, let's develop apps that help save lives. let's make open source software the standard. let's create new plastics that are highly recyclable. it's going to take input from everyone. so let's do it all, together. ♪ ♪ let's expect more from technology.

let's put smart to work. ♪ ♪ unh, 373, revenue was ahead, but as jim lamented a few moments ago, it's getting banged at the open we'll get stock trading with jim in a moment. the rhythm of the world.

but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade. no matter what you trade, at fidelity internet that puts alright boys, time to eat. that handles anything. [ crowd cheering ] that protects what's important. and reaches everywhere. this is beyond wifi. this is xfi.

xfinity watchathon week has sadly come to an end. what, what, what! no! but don't let that stop you from watching the best shows and movies from showtime, hbo, epix... jesus, what happened? ...and more. it's just the tip of the iceberg. upgrade now to get more into what you're into. thanks! just say "watchathon" into your x1 voice remote to upgrade and keep getting more of what you love. ♪ time for cramer and "stop

trading. gw, bruce wynton, the ceo of canopy growth came out and said we're sticking by the billion dollar number they can make. what's interesting is he's using canadian which is not as good. be careful if you're being aggressive that's probably a mistake. it's not united health which is now down five. that's a machete through manners. >> not so much about the print as longer term policy worries. >> this is not the year to be in health care until someone says, listen, we're not going to get anything done. health care is bad >> what's tonight? >> i've got just a fascinating person anna botin, the executive director of santander, the strong estebaning in europe.

>> that's going to be one to watch. europe is the whole banana, the whole enchilada. >> if i worked at deutsche bank right now, i would be like, what's going on here we're the most powerful bank in europe, aren't we? no >> jim, we'll see you at 6:00. when we return, two interviews you don't want to mitt favor will set down with starboard's jeff smith and value x jeff lubin mr. the summit. 'rup1.

through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from using feedback to innovate... to introducing products faster... to managing website inventory... and network bandwidth. giving you a nice big edge over your competition.

that's the power of edge-to-edge intelligence. when yowhat do you see?itical issues facing our world, we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility.

emerson. consider it solved. good tuesday morning welcome back to "squawk on the street." i'm carl quinn nia with sara eisen. faber will join us from the 13d passive investors summit he'll sit down with starboard ceo jeff smith in the meantime, markets hanging on to gains. dow opened strong, up 63 points,

s&p 2,911. stocks losing some steam earnings the main story. will the optimism last. at&t selling its hulu stake. what that means for the streaming wars later who is winning the ipo boom we'll look with pinterest getting ready for its debut. markets rallying this morning, good results from unh and j&j. b of a, the other big name and moynihan did talk about challenging capital markets. again, lower guidance on that interest income we heard from wells last week. >> now inching toward a record high the health care beats in particular are interesting because the bar was particularly low for that sector. it had only been up about 4%, the worst performing sector in the market it doesn't take much but you've got the beats out of unh, j&j we get ibm and netflix after the

bell today seems like it's lower expectations as long as these companies can continue to beat and even if it's not just necessarily on revenue beegts which are harder to come by, it will give investors something to care about, a patient fed and optimism around the trade deal and the other catalysts we've talked about >> vixx dips below 12, even though a weak read on industrial production some of the empire outlook last week not strong either for the time being, it's more about the fed's pivot. >> i was going to say, even the bad data doesn't seem bad enough that it would disrupt the goldilocks idea that the fed can be patient and wait to see how if data comes in and it's not too hot and not too cold it's just right on the economy netflix is the biggie after the bell today as we mentioned that stock up 30% so far this year this, of course, as disney enters the streaming market with the platform disney plus revealed last week

now hul lie u buying back the minority stake, valuing hulu at $15 billion. joining us market asset management president morris mark along with our own julia boorstin how high is the pressure, julia, on netflix tonight after the disney announcement was so well received and now we have this new hulu ownership >> i think the pressure is on for netflix ceo reid hastings, not only to deliver the number of subscribers he'd add this this quarter which is 8.9 million, but also give guidance on what to expect for the rest of the year. i also think it's worth noting that reid hastings usually is very direct about talking about competition. we'll see what he says about disney plus, also apple plus and the other services such as nbc universal service and the at&t services in the works. i think we'll really see this quarter whether or not the price hikes announced in january are

hurting consumers or whether they're willing to spend more and netflix has more room to run. >> so morris, what do you think about the hulu deal? it goes from four owners at one time to now two, majority disney and our parent company comcast >> i think it makes a lot of sense. it's good for growth, disney comcast and at&t because at&t needs the money. i think it will be interesting to see how brian and bob eiger work it out from here. i think it makes sense for them to work together and i think there's a great deal of potential for hulu. >> what's a good sub forecast five years out on hulu >> i think we have to see before we can make that any more definitive and grinded, how they work this out. i think if they work together, both of these are great content generators, disney more than comcast just based on size you put those things together and then you take into account the fact that there's a way to mix this with disney plus, and

you have number three in a three-horse race long term for film entertainment. >> which stocks do you own in that group of streamers? >> of the streamers, we own a lot of disney. we added to it in anticipation of the meeting because we've known bob eiger for a long time. i just remember the first day i het him he was the heir apparent to michael eisner and there was a big controversy between steve jobs, pixar and michael. i asked bob what he thought of this and he was unproven he said pixar is great we have to make peace. this is an iconic asset. look at what he's done since then he got it. i saw he got it, and he still gets it. you can't forget, he sits on the board of apple. >> for now >> for now, but he's a learning machine, okay? he's a learning machine just as reid hastings is we own disney, we own netflix. we added to netflix recently

we were shaving it we approach it in a very disciplined way. on an accounting valuation basis, it's not cheap. if you look at it holistically, the business is probably on the record the single best managed entertainment technology company in the world reid hastings don't overstate, doesn't understate, respects his competition and defines it almost perfectly >> which, julia, leads us to a conversation we had with cramer this morning, and that is how can the disney presentation from last week not have a setmental effect on netflix sub growth a lot of the street believes it won't. >> the thing reid hastings has been stressing over the years as we talk about computation with various services including hbo which for a while was positioned as a big rival to netflix, hastings has always said there's room for many of these things and people will subscribe to many different of these services

just like they have many different cable channels the analogy i've been hearing from a lot of executives lately is the question of whether people will treat netflix like basic cable and treat disney like an add-on premium channel like they did hbo over many years. i think it's worth taking a look at hulu and how hulu may really help disney in its competition with netflix the reason why hulu is now worth $15 billion as of this sale of at&t's stake is because hulu has 25 million subscribers, and in the u.s. last year, hulu added more subscribers than netflix did. hulu has much more room to run, much more room to grow especially in the u.s. because its penetration is much smaller. the real question is what happens if hulu should expand internationally and try to go head-to-head more with netflix internationally or together with disney plus, have those rights be packaged for more international growth

i think the challenge is not specifically between disney plus and netflix, but more about all these other services including hulu, disney plus, espn, everything else in the works versus netflix and how hastings responds to that, especially now that it's more expensive netflix is almost twice as much as what disney plus is going to cost. >> she has a point, morris i have to watch "stranger things" on netflix, "killing eve," "jack ryan." the shows are driving the sub growth i'm a sucker that subscribes to all of them. is that the wall street view, that there are going to be many winners? >> you have to look at the entertainment market much more broadly defined. people probably in america spend $150 billion on the bundle we learn the bundle is not going to go away but it's going to shrink considerably. reid hastings in the last

netflix call put it really well. he said his biggest competitor was fortnite this is the entertainment business, maybe it's a trillion dollar market worldwide but it's a multihundred billion dollar market in this country if you look at it that way, disney plus is a drop in the both netflix is not a drop in the bucket it's not that big. yet they're the future of film entertainme entertainment. disney plus is going to be a bargain. for $6.00 a month you get all the new origination and you get the disney library i can't think of a family that has anybody under the age of 18 as a member of the household that wouldn't seriously consider subscribing to it. it's that simple. >> julia, it raises the question of how expensive this game is going to be, to get that original content and how much competition there's going to be for the actors and the writers and how that's going to upend the industry.

>> all of these different services, whether it's disney plus with the new original content or apple plus or netflix, they're all competing, not just for subscribers but also for content creators. we've seen netflix make huge high profile deals paying hundreds of millions of dollars to people like shonda rhimes and ryan murphy. as we see these particular runners get snapped up, there's not as many people out there as there used to be to create original content disney has the advantage of its brand. netflix locked in big name content creators in general there's so much competition and so much money out there looking for good premium content, it's going to help content creators in general. but it means that, if you're another player, even a hulu trying to get out there and get a new original show, there are more people trying to pay for it we haven't even mentioned amazon yet. they're also paying for original content. >> it's a really good point.

whether it's amazon and apple, they have the money. are the gates coming down for players that are not pedal to the metal on this front? >> i think money talks and some of the other competitors have realish use both in terms of scale and balance sheet. that's going to make a lot of difference you're going to need great judgment jeff bezos changed the management at amazon prime video and he made a constructive change you need good judgment the succession question at disney is a big question i have a lot of confidence in bob eiger, he has not in a broad sense disappointed us yet. >> morris mark, thank you very much julia boorstin, thanks to you, too. you'll hear from starboard's jeff smith get his thoughts on activism, papa john's, bristol-myers and a lot more if you missed it, he was on last time with david faber.

>> now time to talk about bristol-myers. do you own it? >> talking pizza >> do you own bristol-myers? 'm not going to discuss bristol-myers. >> you can't not discuss bristol-myers, jeff.

been talking all morning long about those contributing to the reconstruction of notre dame tim cook adding his name we are heartbroken for the french people and those around the world for whom notre dame is

a symbol of hope relieved everyone is safe. apple will be donating to the rebuilding efforts to help restore notre dame's precious heritage for future generations. followed by an emoji of the french flag. pinterest going public later this thursday in what could be the biggest week for ipos this year lesley picker and robert frank joining us we'll begin with you, leslie. >> pinterest will be a winner in the ipo, so, too, will be wall street the bigger the ipo, the more money the underwriters can make. after a u if sleepy years for tech bankers, 2019 should prove to be quite lucrative as the large u.s. banks report first quarter earnings this week, we took a look at how the battle for underwriting fees is shaping up currently jpmorgan ranks at the top of u.s. listed tech ipos much of the credit is from lyft.

lyft was the first large tech ipo that didn't involve either morgan stanley or goldman sachs. for years a duopoly in silicon valley deal making those two may be able to claw their way higher in the rankings over the next few years. we're seeing goldman sachs leading pinterest, the virtual bulletin board site. that's expected to generate more than a billion in proceeds morgan stanley is managing the zoom ipo, it provides video conferencing software boosted by 13%, meaning higher fees for the banks running the $700 million deal then there's uber, expected to raise a whopping $10 billion which would be a boone for morgan stanley and goldman which are leading the deal along with 27 other banks based on average underwriting fees, uber's ipo alone could generate $250 million.

those manage funds with equity stakes and exposure to convertible bonds that should make for lucrative returns in addition to those fee, guys. >> will fred said yesterday goldman sachs was bullish about the ipo pipeline and the continued activity is it the same for m ma? we saw blockbuster deals in the first deal >> clearly the investment banking division as a whole is excited about what they're seeing in 2019 that encompasses activism defense. you have m&a which is strong for the start of the year. the equity capital markets division which is the one that runs these ipos, they're excited about the prospects for 2019 they need the market to stay higher, relatively to stay lower to continue on this path for the second half of the year. >> they're getting it today. leslie, stay with us robert frank joins us with a look at how these ipos could generate billions in tax

revenues >> this will be the wig guest wealth creation event in years, probably over a decade, especially for the state of california, the upcoming ipos of uber along with lyft could create $180 to $200 billion. all basted in california they'll see huge gains on the stock and options. california taxes capital gains at the same rate as wages, the top of 13.3%, the highest in the country. the options holders, they don't have to pay taxes until they exercise the option and they sell so this could take months or even years to finally trickle down to the tax roles. wealth front estimates of that $180 billion in total, founders, employees and executives could own more than $60 billion. the eventual tax windfall for the state could be $8 billion or more over several years, not to

mention the taxes from the venture capitalists and angel investors who eventually sell. san francisco could get millions since its payroll tax now applies to stock options california already flush with cash projecting a surplus of over $20 billion this year which it plans to spend on education, housing and health care, all good things. >> absolutely. i think everybody would agree with that, robert. leslie, we had a discussion with faber and cramer this morning about the new character of late stage early round investing and that is including hedge funds and the degree to which that alters the ipo once it happens lift is one example. how do investors know if they're in play? >> that's a very good question, carl there's no way to know for certain. the timing we've been talking about with lyft's ipo is particularly interesting they went public on the last day of the quarter, meaning hedge funds and other investors could have gotten allocation in that deal, flipped it immediately and not have been punished by the underwriters in future deals

that's particularly important in lyft's case. but you're right, there's no way to really know as an average investor the size of the allocation of hedge funds which tend to be more prone to flipping and shorting as well which has become a much larger story with the lyft ipo in particular. >> robert, do we know where all the money is going in california, what governor knew so newsom is doing with it? >> not yet at this point it probably goes into the general fund. here is what's interesting for california in the past when they had big ipo waves in '99 and 2007, politicians spent it on recurring programming. they basically built it into the budget as if they would get it the next year. they learned their lesson. they have a big rainy day fund some of this money will go into that as well to help in the next recession. they've been planning their financials pretty well to know this is a one-time event and won't recur. >> robert frank, leslie picard,

thank you. when we come back, it is the worst s&p 500 sector so far this year we'll tell you which group it is, and the outlook for the rest of 2019. we've got a nice rally going on, dow components, unh, j&j, dow up 59 points. s&p 500 up 25% nasdaq up all most .5% thanks for joining us. "squawk on the street" will be right back you.

you inspired us to create internet

that puts you in charge. that handles anything. that protects what's important. and reaches everywhere. this is beyond wifi. this is xfi. simple, easy, awesome. welcome back to "squawk on the street." i'm david faber. at the annual active passive summit by 13d monitor and has become an annual rite of passage, i'm joined by jeff smith, not unfamiliar to our viewers. you've been on a couple of times about papa john's. today no pizza, or maybe a little bit let's talk about a new position you just firmed, kar, car options, not to be confused with cars.com why this position and why now?

>> we think kars is really interesting, one of the leaders in auto auctions they are used car auctions, cars you'll continue to drive and they have the salvage auction which are cars sold for scrap and parts. what's interesting and eventee about this right now is the iaa salvage business is going to get spun off they announced they received their private letter ruling i think last week or the week before that is going to move forward. it's misunderstood by the market if you compare the iaa salvage business to its closest competitor, a company you've talked about before which is co-part. >> co-part has done well. >> unbelievably well kar as a consolidated business has lagged you have an opportunity to spin off the iaa salvage business

the margin gap is ten times versus 18 times. if we can spin off or if kar can spin off the salvage and get anywhere near the 18 times multiple, you're creating a remain code that is incredibly cheap. >> you're supportive of management's current plan. >> we are. we've had an investment in the company. we've had conversations with the company. we believe what they're doing can make sense we believe there's an operational improvement opportunity on both the iaa salvage business because their margins are 30% versus copart which is 38% we believe they can get to 35% there's improvement opportunity. creating these as stand-alone businesses is going, good for their operations and good for value creation. >> you believe current management is capable of beating the task of addressing that margin discrepancy that you described? >> so far we've been very comfortable with our conversations with management. we believe they're moving forward with this. we believe it's been

misunderstood in the last earnings call. i think people were concerned the iaa business was not getting spun off or not spun off in the near term. we believe it is we believe it will be a near term event and will unlock significant value. >> i mentioned cars.com. there was at least the idea of a potential sale there that has seemingly been aband abandoned of that? >> unless you know something i don't know, i don't think it's been abandoned, at least not yet. >> what do you think >> our belief is there's a process on going and we believe there's a resolution there we are supportive to see if they can sell the business at an attractive price. >> not going to do any reporting here on air about that process, but would you be disappointed if, in fact, it did not meet their desired goals in terms of a potential deal >> of course, any shareholder would be disappointed if they didn't get the value they deserved we believe they should go forward and run a good process there's also operational

opportunities at the company we'll see. one way or the another whether value can be created. >> do you ever find yourself, jeff, spread too thin? i wonder the fact is, the headlines that come from starboard seem to be coming all the time, whether it's dollar tree, sirnir, not to mention pizza and papa john's. why are you so active in activism >> it's a great question no, i don't find myself spread too thin i love it when i'm busy. if i'm not as busy, i get sad and find things to do. i love it. i'm energized when i'm busy. we're able to do that for a few reasons. first of all, a lot of opportunities coming about after the volatility we saw in the fourth quarter we have market volatility. that's great for us. we're not only an activist firm, but we hedge on others we have available cash which we

usually keep and we're protecting our investments we can pounce on those opportunities. we've already announced now seven new positions so far this year normally that's the high end of what we announce in a whole year you're right we've been active. there's a couple of other things you have the market volatility in the fourth quarter. we have a great team there's something a little magical going on inside starboard right now in that the maturity of our team has reached a level where we're getting a lot of great operating leverage outside of the talent inside starboard. our people are able to perform at a very high level which gives me an ability to do a little less although still be actively involved and cover more names which is fantastic the third thing which i think you'd find interesting is the landscape for activist investors has changed a little bit many of our ideas come from other investors that call us there aren't quite as many people for them to call. we get a lot of phone calls. >> it's funny. activism has changed you haven't changed your approach

many of your competitors, in fact, whether they're under pressure in terms of assets or whatnot, seem to be going with this personal purpose vehicle group in terms of establishing a position, perhaps because their lps prefer it. you have not done that or done that too often what do you think of when you look at the changing landscape of activism, so many going down that spv route when it comes to their activist idea within their fund >> we have that also as an add-on sometimes when we make an investment in a company it has extra capacity, we will allow some of our investors to be able to co-invest and add to the position it's a little clunky the spv route is one where you have to have a lot of lead time. you to be able to come up with an idea and able to pre sell it to investors. >> make sure it doesn't leak. >> make sure it doesn't leak and make sure the stock stays opportunistic. from our standpoint, we love

marrying the two together because we love to pounce. we follow a lot of companies where we believe we have a plan that we can do something different at those companies and we have a path where shareholders would support change at those companies. and then we're watching value. value changes every day. when you get a volatility event in the market or in a stock specifically and the stock comes down, we love to be able to pounce that's harder to do with those special purchase vehicles, you'd have to know which ones you're pre selling to wait for the pounces. i think the flexibility of being able to do both is helpful. i want to come back to bristol miles for a minute and we'll end on cerner. with bristol-myers there was a sense among some it was a departure for you, although you did a good amount of background work, but it wasn't obviously the long thesis we would see with a darden or with papa john's people said it was just you trying to be opportunistic and making a trade and they were

somewhat cynical about your approach which you eventually abandoned. the deal has gone forward in terms of the vote. how do you respond to those saying that in particular seemed to be a departure for starboard and seemed to taint activism >> i'm not sure why people would think that our job as an activist we've always said is to represent the best interest of the shareholders to try to prevent value at companies when we believe management is doing something the majority of shareholders don't want. this is right up that ali. we believe the pure shareholders didn't want to do this at bristol-myers. we were getting those phone calls. probably should have listened to you. you said it's hard to vote down a deal on the acquire side you were right from our standpoint, we looked at it and said we have an opportunity to do something for the best interest of the shareholders of bristol-myers. >> those saying it was a short-term trade, you were looking for a quick opportunity in terms of a bounce in the stock so you'd vote the deal down >> no.

from our standpoint it's about creating attractive reward opportunities that have lower risk that's what we always look for, companies that are good companies where we can improve the probability of success and the outcome with an operational improvement plan what we did as bristol-myers, we nominated directors and moved forward looking to vote down the transaction in looking to create an opportunity for the bristol-myers shareholders where, if the deal was voted down, we'd have a tremendous opportunity to improve bristol-myers. as it turns out, it was a tough call for iss and glass lewis in terms of the recommendation. we were actually getting a lot more support than we even expected the retail votes that were coming in were way more on our side than we expected them to be the final vote i believe was only 56% of the shares out standing 75% voted, only 56% outstanding. >> i do want to let you comment, cerner, which you mentioned in

your presentation. what happened there? did you reach a settlement >> we did. cerner is electronic medical records, one of the leaders, if not the leader in that business. highly sticky business, inside hospitals and doctors' offices we were able to reach a constructive agreement with them where we worked with them to put four new people on the board and importantly created new targets over the next 18 months. measured this coming fourth quarter and the fourth quarter thereafter the market is not giving them credit for those targets we believe those targets are achievable they represent 350-rough basis improvement. yes believe the gap to possible is over 900 basis points we think the 350 is possible if they were to hit those targets, there's a huge value opportunity at cerner. and then they also hired alex partners and created a strategy and finance committee to oversee

the operating margin target improvement. they are going to be returning 10% market cap in cash to shareholders through both dividend and increased buyback authorization. >> jeff, always appreciate you taking time here keeping that activism alive in america. >> it's fun. >> fun for us, too jeff smith from starboard. sara, back to you. >> looking forward to your next interview with jeffrey ubben, the founder of valueact capital. let's go to contessa brewer for a cnbc news update. >> here is what's happening right now. firefighters are inspecting the notre dame cathedral a day after the historic church caught fire. after eight hours, crews brought the flames under control, saving the bell towers and the outer walls. the public prosecutor says there was no sign of arson. environmental activists are camping outside london's marble

arch to force the government to do more to tackle climate change protests in 33 countries around the world are planned for the coming days. four ministers from arab league states are gathering in moscow for the russia-arab forum. russian foreign minister sergey lavrov greeted the delegates. aretha franklin received a pulitzer prize citation honor, the first individual would plan to receive such an award the pulitzer board said she won the award for her contribution to american music. she died in august from pancreatic cancer at age 76. that's our cnbc news update at this hour. back to you, carl. >> thank you, contessa time for our etf spotlight sant nelly is here on a bill day for the sector. >> kind of a high stakes moment for the sector the biggest lager in the s&p

seemed like people were playing defense, thought health care was good for this environment, caught wrong-footed coming into xlv. spdr well below the highs. not much of a lift from j&j. j&j is the largest component of the xlv at about 11% look at the components of health care, the ihf, this is health care service providers, basically the hardest hit part of health care unh is 22% of this etf that's been the major lag gerd the one that's been the standout is ihi this is medical devices. sure a part of it. that's where the money is going. not a lot of policy risk right

here not a lot of payment insurance middle man risk which i think is really a lot of what's been hanging over the unhs of the world. >> there's also politics you've got good news today on earnings and the fact these stocks are cheap, however, the 2020 race heating up democratic candidates are talking about ways to fix our health care system, and that's been a negative. >> democrats are talking about it and republicans agree it's broken it's not as if there's necessarily a friendly policy response at least in terms of the noise, the chatter that's going to surround this group for a little while. >> mike, thank you see you later. as we head to break, take a look at the markets right now. s&p 500 up .2% you have gains in certain sectors like technology, health care as mike just said, financials it's being offset by a bit of weakness in real estate, materials, utilities more "squawk on the street" when we come back

welcome back to "squawk on the street." i'd like to welcome my guest john sylvia, dynamic economic strategy john, thanks for joining me. let's get right into it. i hear so many very smart analysts and economists say, oh, my god, anybody who thinks the next move by the fed is going to be higher has to be crazy. first of all, we should all pray if we're long stocks for the fed to raise rates my question to you is we're basically coming out in a time with our head is filled with managed or administered rates. when can we trust more of the market rates we see, especially outside the short end most under the thumb of the federal reserve. >> the conventional thinking, of course, what you see in the marketplace is what you get.

we know with rates under the fed's position, that is not a market set rate. we saw this disconnect in december and january the challenge for investors is to recognize whatever the marketplace rate is today is not the underlying fundamental this is where a successful investor in equities, fixed income and currency really get their reward they recognize that disconnect and they see that the administered rates are not the true rates and they have to look forward to where the rates are going. the fed says they're going to allow interest rates to drift upwards, inflation to drift upwards. that's going to send a new set of signals through the marketplace. >> john, i guess the only logical question next is when you look up and see a 258

ten-year, what are you thinking about how the rates are filtering through the current economy, how much damage was done when they were too artificially low and what lies ahead knowing the rest of the world, these rates will almost always be more squeamish going up than ours. >> i think there are two questions that most investors have to ask. are risk instruments being properly priced knowing that long-term interest rates both in the u.s. and europe and as well as japan are being artificially held down because of the asset buying programs of these central banks. the second question, of course, comes up, when do we recognize the tensions in the marketplace are going to essentially raise themselves up and show us that the true value suggests that interest rates ought to be higher across the board. >> i guess the second final question i have to ask, considering everything you've

seen over the last quarter, do you think it's a 50/50 bet on the fed's next move whether it's up or down, or are you as convinced as many that it has to be lower your final thoughts. >> i think the next move will probably be up they're allowing the economy to run. we see the inflation numbers drifting up over the last three to six months. probably the fed is not going to do anything in the next six months or so over the next year or so we'll see these inflation numbers come up here is the trump card when will the fed react? that's going to set a brand new signal to the marketplace, the fed is reacting to the drifting up and inflation. >> i like being reactionary. i don't like when they put the finger in and try to pull the hook john, always a pleasure discussing fed and interest rates with you sara, back to you. >> rick santelli, back to you. over to brian sullivan live

in houston with a look at what's up next on squawk of the street. good morning, brian. >> good morning, morgan. we'll give you an exclusive look at one of the most devastating chemical fires and leaks in years. a month ago this started burning, leaking dangerous channels under the ship channel of houston and shutting down most of the channel that way coming up after the break, we'll talk about why there seem to be so many large-scale industrial accidents, how they end up costing billions of dollars, putting lives and jobs at risk as well, and why this could be the infrastructure crisis in america that nodoby but cnbc is talking about. that's coming up right after this

netflix reports earnings after the bell find out what to expect from the streaming giant on trading nation .cnbc.com more "squawk on the street" coming up. ♪

there are roadside attractions. and then there's our world-famous on-road attraction. if you've never seen yourself in a mercedes, you've never seen these offer. lease the 2019 glc 300 for just $479 a month at the mercedes-benz spring event. hurry in before april 30th. houston ship channel causing

environmental and economic damages. our brian sullivan joining us with the details. >> reporter: this is one of what has been a string of industrial accidents. there have been three industrial accidents in and around houston in just the last 30 days going back ten years, there have been many, many industrial accidents. we're here getting an exclusive look at the itc storage facility that one month ago began to burn the fire burned out of control caused the dam to melt and dangerous chemicals came into the ship channel, closing much of it for three days the backlog of ships a month later is still there here is the thing, guys, the president was in this calling fr gas and oil exchanges. here is the infrastructure crisis moeb is talking about it's all the stuff we never discuss, all the chemical infrastructure, the ways to get it from there to here. many of the facilities like this are decades old.

the safety regulations and storage containers are actually more than 50 years old when those things go, the firemen, like we've got on the boat with the port of houston fire department, hard working guys here, they have to come here and put their lives on the line, dangerous chemicals in the air, in the water. by the way, maybe not enough foam to put these fires out. so we look at these facilities, a number of big accidents over the last decade or so. in fact, a couple of years ago in west virginia, a similar facility to this, but in the mountains, not on the water, a storage leak, 300,000 people were without drinking water for an extended period of time as we focus on infrastructure in this country and building up oil and gas pipelines, well and good what you can't forget is the more industrial stuff, the stuff that most of us never see because we don't have the opportunity to come out on a boat like this and take an up close and personal look at the

facilities that keep all this running. if they aren't running, you get an economic backlog. one university of houston professor estimates this leak, this fire could end up costing more than a billion dollars. you have people that have to come out here and clean, air samples, come out here and clean, air samples, water samples. stranded for days, supply chains disrupted. it could be months before everything is back at work and let's hope there's not another accident just an idea on the top of infrastructure we don't talk about but maybe we should be. >> brian, no one covers energy infrastructure as well as you and as we start to speculate about what a bipartisan infrastructure plan might look like, are you hearing that there are solutions to problems like this one >> reporter: well, that's a great question, carl, because here's the thing, there's an obscure federal agency in d.c. called the chemical safety and hazardous inspection board.

you never heard of it. the president has been trying to eliminate that agency for three years. congress has kept it alive. they're probably in there right now. they're the ones that come in and investigate after the accidents, try to figure out what happened and make recommendations to solve the problems going forward. well, the investigators have been quitting because the agency has been under attack, so carl, if we don't figure out why these accidents occurred, and a lot of them could be human errors. humans are often apart of the problem as well. if we don't know why these problems are happening, will we know where to allocate money to fix the problems long-term i don't know. quick shout-out, these guys here on this boat, carl, you think we moan and grown about our hours, they worked 240 hours each in two weeks around the clock trying to put this fire out, occasionally the air quality would get so dangerous they would have to high tail it in this boat back up river.

they've got three boats. probably not enough. >> thanks for calling attention to it, brian. we'll see you later. brian sullivan in houston today. we'll go over to jon fortt with a look at what's up next for "squawk alley." >> good morning, sarah. a fresh take on facebook's efforts to get beyond its recent crisis. there's a potisive outlook on the company and all that coming up on "squawk alley." lac is au? no. uh uh. is it homeowner's insurance? no... uhuhuhuh! is it duck insurance? nope. ahhh! do they pay me money directly when i get sick or injured? yeah. aflac! you got it. you know aflac! boom! get help with expenses health insurance doesn't cover. get to know us at... aflac dot com.

welcome back to "squawk on the street" i'm dominic chu. stocks losing a little bit of steam here but just off their best levels of the day. a strong reversal after the s&p opened at its highest level in six months. if you take a look at one of the most out performing groups, we're talking about discretionary. a number of cruise liners pushing that sector up, carnival, royal caribbean, norwegian all up a percent or so trading at again the best levels since february of 2018 but the best performing stock in this sector expedia up nearly 2% after buying out liberty

holdings. keep an eye on those shares. back downtown to you guys at the exchange, carl. >> dom, thanks. between netflix and ibm you'll have your hands full this afternoon. >> we're kicking it into high gear for earnings coverage today of the not just netflix and ibm, we'll also hear from united airlines and csx. analysis to those numbers as soon as they cross and we're also watching the levels on the market because so far so good on earnings this morning. we got a 2% rally in shanghai overnight and it's fueling a mini rally here. we'll watch for record highs. closing high is -- >> 2941 almost, yeah. >> intraday. >> we did get an eight handle on the naz since we haven't done since october. >> it could be an exciting close. >> can't wait. "squawk alley" is coming up

next. we'll get a lot more from faber. we'll talk to jeff ubben in just a few moments.

good morning. it's 8:00 a.m. at facebook headquarters in california, 11:00 a.m. on wall street and "squawk alley" is live. ♪ good tuesday morning. welcome to "squawk alley." i'm carl quintanilla with morgan brennan, jon fortt is ba