"squawk box" begins right now. >> we're life in sometimes square i'm andrew ross sorkin, along with joe kernan. melissa lee. becky kick off today also hanging out, ed lee with us for the next hour. lots to talk to him about. a lot of tech names. >> the s&p 3500 looking to open about six points higher. europe european equities green across the ground with the exception of the ftse 100 it's down just marginally. finally, treasury yields at 6:00

in the morning 42 seconds to go treasury yields 2.607. choin report its economy dwru at an annual pace of 6.4% in the first quarter. they put that kind of in quotation marks. >> quotation marks because it's not real >> we think it might be -- they look on the bright side. that was roughly in line with beijing's official target in growth suggesting that efforts to stem a slowdown may be working. however, it's still the weakest growth in a decade matching the previous quarter here's what the lead story in the journal was looking at >> this is the big story of the morning. we want to get to everyone's yield on this.

it was quite a surprise for everybody. shares of qualcomm surging right now after it reached a deal with apple to settle their year's old dispute over royalties and paten patents. the deal includes payments from apple to qualcomm for an undisclosed amount as well as a multi-year flooi supply agreement. apple will buy qualcomm chips for future iphones shares of qualcomm rallying yesterday. over 20% on that news. the stock ready to add to those gains again. no i thought they were so dug in and hated each other so much even when you read the release in apple saying that there was

value that, they were -- i thought how are they even bringing themselves to write these sentences when they thought that these people on the other side -- >> a value quote was something for sure >> what happened here? who is really win skbg whoos losing >> it's my quick read on this that apple caved qualcomm won stock is showing that for sure it came down to the value of what you have, right apple is basically saying you owe us money back. >> i think within an hour after this intel announces it's no longer going to make the five chip that is people expected them to because they couldn't do it on a profitable path. there is a bit of a chicken egg

around that. was it an intel pullback because they knew they were going to settle with qualcomm, or did they -- spers say between intel and qualcomm, they had the better chips it's entirely possible that apple said, you know what, we just need to go with qualcomm. the value is this clearing the path to 35g phones >> i think that could be -- >> just -- >> just that we need to lead the world in 5g. here >> these are two -- these chip suppliers -- >> i know. i want us to to be preeminent. why shouldn't we have the best -- >> >> the prices of the phones

are going to have to go up to pay for whatever margin qualcomm is going to cap fewer as part of this transaction >> the larger strategy that apple and -- has always employed is diversifying its supply chain. they don't rely on any one source for any one thing because of the patents that they own, they couldn't diversify, right? that was always a sticking point. they want another point of leverage intel was that point of leverage, but guess what, no longer >> play the domino's out i'm thinking to myself tim cook is somebody who plays the chess board. he is thinking many moves ahead.

>> now you have to really invest hard i think that's the play. just because we're charging more for the phone, doesn't mean -- >> guess which stock is going to trade at a new high today. >> of what >> either apple or -- qualcomm oh, intel.

think about the marnlin differential >> keep your head against the wall >> it's 40%. the margins for the overall business is 60%. think of what that does to the overall margin for the company that's definitely a benefit. that's where -- that's the split. you know, what's noteworthy is apple didn't take that much of a hit after this >> i like that we're talking about at that time patented. >> you ho do you say that?

>> patent. >> patent. >> margarita >> they end certain ones in r, and things that end in r, they don't. it's weird it's a new york thing. >> new york thing. >> also adding more paid subscribers than they were expecting but at a slower clip than last year paid subads just over $1.7 million compared though $2.27 million. flet fliks says earnings should come in closer to 55% kpartd to the 99 cents analysts were expecting. ceo reed hastings weighed in on new competition from apple and

disney. >> it's great for consumers and exciting for us. >> we should note that the subscriber outlook also fell short of what many analysts were expecting. the question here, granted, second quarter is seasonally weak quarter typically for netflix. how much do you pay? what kind of multiple do you pay for a growth company where the growth seems to be sputtering in the second quarter. >> it's been sputtering for a while. at least domestically we've seen the subgrowth moderate >> that's expected >> on the international, i think it's always been harder to read because they're entering new markets all the time, and they're trying different pricing schemes and different markets.

>> a lot of people say don't worry about netflix? they're going to be just fine. by the time these -- disney ever even gets near 90 million, these guys will be at 250 million, and the amount of money that they're going to bring in is so much that they're going to be able to continue to outspend everybody and they'll create such neigh new content we won't even think of everybody >> their content only gags and what they plan to spend and what they say they'll spend that's starting to level off as well, and they also said from this call that starting next year or by next year they want to be more of a self-funding company. that means they're going to stop borrowing capital markets to fuel all their content growth.

>> there is no moat around netflix. i'll never cut my cord, but i'll get darn good at streaming lately i have had to go to hulu to watch something i think it was killing eve or something. i had to go to amazon prime to watch "the americans" for free it doesn't matter -- >> you are a streaming expert. >> expert. i don't care if it's netflix i really don't skbro that's a great point, actually you're a genius, and if i up with just a crumb of insight, it makes me so happy.

>> so it's it's so easy. you could buy it for the month in you want to watch >> in a place like india, that option is not as easy, right international -- the problem with india, though, is that on the call they did abud lewd to the idea of having a system, and they need india to have a lower price point. >> it's free and hugely popular. even if you charge $1, why would i pay for something i get free over here? notably, in the u.s. athletes i think hulu is something that's presenting a real challenge for netflix, largely because it's entry level tier, the $6 air month which is advertised, that's doing really well.

>> that's when the whole thing changes. >> not saving $6 a month or something. >> guess what, there's a lot of american families especially if we move into a tough time, that would be an income inequality. >> i'm not -- >> people look at their bills and say, you know what -- >> that's $120 year tax on my life i'm turning it off or turmg it

on. >> that's 5 cents above estimates. revenue also beating forecast. pepsi's stronger sales of its snacks as well as low calorie befz organic sales up 5.2%. that's the highest in more than three years. revenue cut by foreign exchange. 2% of the impact there they also seek long-term organic growth up 4% did hits within the range of what they had goided to. up 1.9% on the back of the

stronger than expected earnings. >> yub ietd continental reporting that shares are rising this company reported phil lebeau is going to join us now with some insight into these numbers. phil. >> ip aa half a percent. the previous guidance was for it to be flat up 2% in addition, the 2019 eps, full year ips between $10 and $12, that's reit railing rating what the company had previously given.

>> 14 not being sloeb. they're scheduled previously the schedule was for them to get more maxes in the second half of this year. we hope to get some goidance today on the earnings call about whether or not they fully dpp to get all of those maxes probably not by the end of the year that's the reason, guys, why the capacity growth will be up 4% to 5% as opposed to 4% to 6%, and that's encouraging to analysts who have been tracking the gret of capacity at united. one of the key metrics they've been focused on. guys, back to you. >> all right phil, thanks we'll be looking forward to talking to you in a few minutes. with the first on cnbc interview at the ceo of electric carmaker live from the new york auto show we're going to get trade deficit

numbers for february that's at 8:30 eastern then wholesale inventories at 10:00 a.m. eastern one of my personal favorites that i mark on the calendar. on the earnings front, morgan stanley abbott labs. las vegas sands reports after the closing bell >> just wanted to mention they're guiding to 4 periods i think you were suggesting maybe 4% to 6% >> that was what they had talked about in the prior quarter >> what do investors think in the wake of where lyft is trading? we'll talk about that and so much more when squawk rurnds in just a moment. so with xfinity mobile

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pinterest pricing after the cloudsing bell today leslie picker has more as the decor marathon continues >> it's not going to end any time soon, and that's why it's a marathon the "wall street journal" out with some new reporting just moments ago saying that pinterest will actually price above the range it had been marketing to investors, which implies at least $18 a share, which does bring it ever more closer to its latest private valuation. that's of $12 billion that it raised in 2017. >> selecting an ipo price is from a range is far more of an art than a science, and no one is ever happy. pick a price that's too high, shares will drop investors will lose money. pick a price that's too los, the

company will have foregone money it will have otherwise raised and flung back into its busines business ishers have left $63 billion on the table by allowing their stock prices to soar in their debuts that represents 13% of the total amount of proceeds raised between 2001 and 2018. does it actually matter in the long run if a company stock price gains or falls in the -- actually, it doesn't on a market adjusted basis, a study at the university of florida found that first day returns have it is predictability for long-run returns post-ipo.

they are looking more at the first day. >> that's the pop that everyone was looking at up or down, right? >> exactly >> facebook cut their valuation in half in the six months after they went public >> before they -- >> then before -- >> it was down, like, 22% in the first weeks of trading >> on the first day, they -- they were basically flat >> just because we talk about it, beer hiking it, when actually we were raising some of the concerns that investors have raised >> people that aren't in the market or are short, yesterday they met about larry fink. they're mad that he said, you know, this is crooked. it's a melt -- what's he talking

about a melt-up? you are carnival barkers >> you have a different audience >> what? they're short? >> spotify, when it went, it didn't do sort of a traditional ipo. >> yes >> it did a direct listing it seems to have worked out fine for them none of them have gone that route. >> that process -- the one of the biggest down sides is that you don't raise any money as a traditional ipo, but from a pricing standpoint, it's essentially an auction there is none of this debate over whether you can price too high or too low because it's all basically

decided by the market. you don't have to have this whole dance of do we give investors a little bit of leverage here and give them some juice on the first day or do we get more money back to the company and have demand invested in their oust business. >> it's dynamic as posed to the other thing where you are putting your thumb on the scale and trying to figure out a way to get the investors some of their money and give the companies some money. >> you see it as a way to get your stock public and get your employees liquidity and be a public company >> leslie picker, thank you. >> stocks to watch straight ahead.

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you. some stocks to watch shares of ibm you should pressure first quarter earnings above forecast the company reported a bigger

than expected drop in revenue. third straight quarter down 4.7%. >> trying to refocus the company, obviously it's tough to do if you get out of certain businesses, revenue goes down when you get out of unprofitable businesses >> acquire red hat >> you always said you got to get rid of the empty calories. that's what she used to refer to as search portions of their revenue. >>. >> smaller portions and empty calories, get rid of it, where. >> shares of csx are trading higher it's reported better than expected first quarter erpgz and

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. >> about three hours away, but right now dow jones up 26z

points nasdaq looking to open up higher as well. s&p 500 up close to sir, points. want to talk about this story because it's got a lot of eyebrows raised. shares of sprint and t mobile down this morning on a report from the "wall street journal" that the proposed 26 billion merger has run into a new snag sources say that the justice department has concerns about the current structure of the deal it's bin taking a long time for this to get closed and hasn't for a reason it has been criticized by consumer groups and lawmakers. >> they've said this would be the leading enl of it. john responding on fwiter saying the promise -- or the premise of the story as summarized in the first paragraph is simply

untrue sources say he was in washington yesterday and has meetings with the s.e.c. later this week they struck their deal a year ago. they were hoping to closes that deal in july it's already been approved by shareholders it's received national security clearance. still needs the okay from the justice department and fcc reports say that no final decision has been made by the d.o.j. while the fcc expected to rule on the deal nooer the end of its review period, and that expires in june. there have been many times where the sfaf has had one view and the head of the department has had a different view. >> what good are two competitors that don't really have a chance alone to compete gebs -- >> before the mernler? >> do you don't you think if you

had a combined -- auto you need competition. put them together for competition that would be a better outcome >> i absolutely degree if you look at the mobile phone industry right now, the cell phone bills have gone down it's in the economy a little bit. it's a commodity business. you can switch i this i that's a good argument. >> sirius xm, spotify, and pandora. >> at the same time this whole narrative around getting into 5g, being able to combine to do that, there's some truth if you want to look at that landscape, the technology around 5g, huawei is a big supplier for that type of equipment, and that's a separate issue from the carriers themselves. i'm still waiting to see where all this innovation, tech innovation in the u.s. is going to come from we're going to compete with china to develop this.

zoo don't want someone jumping in the water to save someone who can't swim, who also can't swim. right? it would help that -- that's the old analogy. are either one of these going to survive? >> maybe >>. >> i think it's fair to say it's harder for them without it >> originally i was anxious about this was a good deal >> anxious or wary >> concerned, wary >> the more work i did on it, the more i felt that it was actually probably a good thing >> to the argument they'll go interrupt, i'm not sure that's true either. >> i'll write you a scripts for something. >> somebody would come up, buy it for next to nothing, many f

it went bankrupt, and they would reinvest that'ser on other flip side. >> there are millions of customers. >> we'll talk about the car behind, you which is the electric truck for rivian. the ceo of rivian. your company, as you know, front and center of the headlines are what will happen potentially with a partnering, whether it's with general motors or another automaker. what can you tell us about general motors discussions between rivian and general motors >> so we haven't discussed any partnership or strategic relationshi relationships. >> they said, look, we want to be a part of the future. that fuelled speculation that

amazon will be a significant part of your future. whether it's building vehicles or their fleet as they flush that out, or in some other capacity what do you see that relationship with amazon looking like >> we're extremely excited about amazon as a partner. as you said, you know, the part that we've talked about publicly, their investment, is one element of the relationship. there's many other aspects in the relationship. >> our technology can be applied in unique ways we have what we call a battery and drive system and controlled system that could be applied to very different types of businesses. >> that brings up the question when we look at the electric trup truck hire, this comes out in 2021. $65,000 base price do you believe that the market

is ready for an electric pickup truck? >> electricificathion. it's fun to drive and still great off road at the same time it has a lot of function >> whaks to make somebody say instead of buying a silver odd yes or ford ranger, whatever it is, i'm going to buy a rivian? >> the skrek has to give them a strong reason to switch from an existing brand, whether they're in a truck or whether they're in a land rover or bmw. it has to give them a strong reason the combination of 0 to 60 in three seconds, incredible ride dynamics, tons of storage, a front storage trunk. we have a gear tunnel that goes through the side of the vehicle.

sfwhoo coming up, goldman sachs ceo david solomon soubding off on the u.s. economy in an exclusive interview. what he said about his expectations for the rest of the year that's next. we are awaiting frults morgan stanley. the last of the big banks to report will it be able to keep up with jp morgan? up .8% stay tuned you're watching "squawk box" on cnbc there are people in the investment industry who hold themselves to a higher standard. they are called "cfa charterholders." demand the best. demand a cfa charterholder. cfa institute.

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>> goldman sachs ceo david solomon striking an optimistic tone he made those comments in an exclusive interview. time in china. >> i do think growth slowed around the world, and i do think the trajectory of growth slowed in the united states as we finished that 2018 it's clear to me that while the first quarter was sluggish, the second quarter is chugging along pretty well, and certainly we're at trend, and i think central banks around the world, including in the u.s. have become much more accommodative

that bodes well for continuing the expansion. >> and remember being back in january solomon told us in dave yoes that he saw a chance of a recession by the end of 2020 now he thinks that risk has decreased. >> coming up, netflix recovering some of its losses after a post-earnings drop yesterday we're talking about the company's forecast as we head to break, here's a quick check on what's happening in the european markets. not big moves either way not big moves either way we're coming right back. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet...

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welcome back to "squawk box" netflix posting an earnings beat after the closing bell yesterday. investors are looking at the company's outlook. we want to get your sense this morning of what to make of what's happening here and put it into context, obviously of disney everything else going on. >> netflix had a very good quarter. added a lot of sub, mostly internationally. the stock took a little hit last night because in q2 the subscriber growth will slow down first summer season is slow. they always have that during this time of the year. second one is they are pushing through some price increases and what they said last night of that they are not seeing any

impact on the gross ads. so new subscribers coming to the service but they are seeing a smaller amount of existing subscribers turning off the service when they see that price crease come. importantly and unlike past price increases they say they will be completely done with it by the end of this coming quarter. that means after q2 the subscriber outlook will be better >> what do you make that come next year they are not taking on -- they plan to use their own cash to operate this business and to invest in programming >> i mean, i think that they said that. whether or not they actually do it i think is another question it's definitely a full on arms race in terms of originally produced content between netflix and amazon and hbo and now disney and apple so, you know, the real winners are the content creators >> can they take their foot off

the gas on the content side, though >> i don't think they can and i don't think they well. that is clearly what's driving the subscriber momentum. >> are you sure about that everybody will always say they go through netflix, there's so much content there, that it's so hard to surface all of it in a meaningful way i know they are individually marketing specific program but if you cutback a little bit on it do you think it would change things meaningfully >> maybe in the u.s. and maybe for the typical u.s. subscriber there's sort of plenty of content in keeping that fresh from now on as a decent strategy but they are trying to do local content in these markets like india, brazil and so on. as they do that, that's a big investment they did talk last night, it was really interesting for the first time about how the do they go in markets like india and reach

the, you know, the less wealthy households it's a very premium price product in those markets they are making different plans. >> international has always been a pillar of the case is there a concern that it will be international expansion but at a cost because there's this acknowledgement they have to go lower in price for markets like india. >> when you think of key questions for the company over the next three years it's an important issue. they clearly need to figure out a way to reach more consumer households in places like india without repricing the existing base that's paying the full fare >> why couldn't they go in a cold streak. it's not possible any more i remember the book "desperate networks" where nbc "friends"

and "seinfeld. it can take ten years where you can be fourth or fifth place you think of movie studios, wow, paramount or universal they spend all this money and go on a cold streak >> it could happen but they are mitigating against that risk by the data they have against streaming. there are a couple of key things one they are using a lot of data from viewing habits. so they know what people like. then the other thing is that there's just diversifying their bets >> that's what i was wondering whether they have immunized themselves to the highs and loss of content general electric came in, oh, my god they run a business. >> clearly it's a risk but seem to be doing an excellent job and you have to be all in on that to make it work >> thank you

ed lee, thank you for a big hour >> any time. >> you're so good at 6:00. coming up, when we return earnings scorecard as we head into next week's busy slate of reports. we'll look at how companies have fared so far and what to expect for the rest of the earnings season >> and bearish call on lyft and snap has a new call on pintrest. "squawk" returns with two very big hours ahead.

a surprise settlement between apple and qualcomm has chip stocks on the move. what it means for is sector and next generation iphone >> morgan stanley numbers crossed a short time ago >> a lot of interest in pintrest "wall street journal report"ing the highly-anticipated ipo will price above its expected range we'll hear from the ceo of tritan research and whether you should be a buyer. this is the second hour of "squawk box" begins. >> announcer: live from the

beating heart of business, new york this is "squawk box" >> good morning welcome back to "squawk box" here on cnbc. i'm cancjoe kiernan along with andrew ross sorkin and melissa lee. we do have morgan stanley reporting as we speak. i thought i would never say those words but it's happening $1.39 was the number we're seeing versus $1.17. big beat first revenue quarter 934 was the revenue estimate first blush trading up about half a percent at 47 and change. what else are you interested in, sorkin investment banking revenue 1.24 billion. >> let me comp i'll tell use. i don't know if you saw what goldman sachs did in the last

quarter. one reason they could beat they took down the expectations on comp a lot of questions inside goldman sachs what that will mean to people individually or if that number will get raised later in the year. >> compensation expenses >> look what that was. >> in keeping expenses down >> it is in line with what people are expected at 4.7 billion. 45% compared to the total revenue number goldman sachs results esb was flattened because of cuts to compensation sustainability of the beat here from morgan stanley looks

stronger headline numbers, again, revenue 10.3 billion ahead of expectations 9.9 expectation but down 7% year-over-year each of the business lines essentially in line on the revenue number, the investment banking was 1.15 little bit behind, perhaps, expectation of 1.17. it's been strong for all the investment banks so maybe they would like to see a bigger beat. trading down 15% year-over-year. citi, jpmorgan did better. wealth management continues to be strong. that's the beat. 4.389 billion. expectation was 4.2 billion. pre-tax margin better than expected and that's a key number there. people were looking for 26.5% it came in ahead of 27% and a

decent little investment management beat as well although that's a smaller part of the business compensati compensation expense is a key part so pretty solid up 2%. >> six cents boosted by what they are calling an intermittent tax benefit. has that got anything to do with tax reform >> with morgan stanley numbers we trip them out >> but what is it exactly? >> they have those quarter on quarter and with analyst numbers from morgan stanley it's something we take back out again. so we're comparing like with like 117 was the consensus. >> got that. for more on morgan stanley results and the broader markets let's bring in senior market analyst and mike santoli is here

ryan, either one of you guys, actually, in terms of what we're seeing, we got everyone. goldman, morgan, mostly everyone >> all the big ones. >> what's the common theme >> it was a tough quarter year-over-year we get caught up did they beat the numbers. volatility is very low both stocks and bonds, that's banging over the group more than anything ebony williams. it makes sense morgan stanley has cost discipline. no blow ups in the quarter stock is up 2% but 15% higher 13 months ago their stocks are cheap expectations are low i think the good news is the big banks have not been a bellwether for this for a long time p.m. there's not a lot of flex in that comp number compared to goldman sachs. >> they have a pay out >> a fixed pay out it's really a big chunk of the

business that goldman -- >> much more retail than they used to be >> yes >> ryan? >> first off, guys thanks for having me. it's nice to be here in person financials, the last two weeks relative strength basis. asset managers started to outperform it started when that yield curve inverted three fridays ago the earnings seem good but they were low expectations. there were significant cuts in the fourth quarter and first quarter this year. that lower bar, the markets has topped earnings estimate 39 consecutive quarters bar very low once again positive reaction reaction in financials is a positive sign, we think here >> we talk about financials has if they are a monolith you broke out the big banks. yesterday we saw a pick up on performance of asset managers.

in terms of what is more to where we are in this market cycle where would that be? >> i think the melt up is more descriptive and observation than a prediction the reason the market has had these great rallies for years now. over scared of something you get relief and you're back not so much specific earning season people decide okay this is exactly what we're going seize upon the other thing about financials if you're talking about the overall, berkshire hathaway is more than 10% of that sector doesn't trade like a financial it's really not a financial. i do think more cyclical pieces of the market are picking up and it includes financials and asset managers and the yield lift has been a part of that. semis at an all time high.

it's hard to be too negative when that's the case >> you have more aggressive things, advancing decline highs are making all time highs. the s&p 500 as we know hasn't made an all time high since september. we go back to 1950 after the s&p makes an all time high, it's happened 18 times, a year later s&p was higher 17 of those times. so, yeah, we had a big rally this year. put it in context with the fourth quarter we haven't gone anywhere a new high can extend that bull market economic data keeps coming in better than expected china, really solid. we think this global market, it was a slow down and looks like it wants to continue >> then when it comes to the global growth trade, a survey came out short european equities if you believe global growth is picking up, china is picking up. you have to believe europe is

showing signs of life. >> that's what the respondents say. it's not objectively saying this is the most crowded. they are saying all my competitors are short europe but to your point, very interesting results on the macro in that survey because almost the very, very bearish on overall growth pace and inflation, yet only 6% see a recession. essentially they say soft landing, tweel threland i ilanding, we'll thread the needle big increase in equity exposure. >> when is the last time that morgan stanley has been bigger on a market cap basis than goldman sachs? i mean -- >> good question >> it's now over it wouldn't surprise me if they trade a little bit back and over >> have they over the years? i feel not in decades.

>> well, decades >> at least a decade or two. >> i mean different asset. they had much bigger retail. >> morgan stanley absorbs smith barney and becomes a bigger footprint. >> your value over growth. >> yeah, joe, obviously a rough trade over the past year but when you look at the valuation to value they are historically cheap relative to growth cyclical areas of growth are doing better it's about that yield curve. we think the yield curve will not invert we think the economic data will be better the second half of this year. if you get a steepening yield curve, financials, the best part of the value trade can continue to do well we see a lot of similarities what we saw in the mid-'80s and mid-'90s where feds hiked rates. then big rallies in '85 and '95,

sounds a lot more like now i've done a couple in new york with you guys before down at the nyse but never here. >> big day coming up for ryan. did you hear about this? >> tell me >> aren't you here to -- >> yes >> you're here for two days to practice it's not that hard >> lpl is ringing the bell today at the nasdaq. sorry. pretty sure my schedule said today. i live in south carolina >> this is charlotte >> charlotte is right on the border a little geography it's easier to say charlotte >> how is the weather? >> really nice >> i don't know why everyone is

so worried the weather would be perfect up there, i think >> answer to my own question 2007 -- >> morgan stanley. >> was bigger. it briefly was bigger than goldman in 2017. >> who always has been more profitable is the question because you're talking about market cap not profitability >> goldman historically had much higher returns >> i'm living ten years ago. you talk in the same sentence wrong way to do it i don't want to say they are different. >> very different. >> you're not nervous? you're not anxious are you ringing it >> stand and smile i'm not pushing the button >> you got to clap thank you. >> when we return we'll continue to clap and stocks to watch ahead of that opening bell and then we're going to go behind the wheel of ceo of porsche of

north america anthd e new york auto show. stay with us you're watching cnbc will it feel like the wheend of a journey?p working, or the beginning of something even better? when you prepare for retirement with pacific life, you can create a lifelong income... so you have the freedom to keep doing whatever is most meaningful to you. a reliable income that lets you retire, without retiring from life. that's the power of pacific. ask your financial professional about pacific life today.

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revenue also beating estimates organic growth of 5.2% that stock is up a little over 2% we're watching shares of netflix. it did beat wall street estimates. it gave weaker than expected forecast adding further worry to investors already concerned about intensifying competition from disney and others pintrest set to price today and beginning trading tomorrow that offering likely to price above its initially projected range according to sources quoted by the "wall street journal" zoom video communications expected to price today and begin trading tomorrow we'll have more on those initial public offerings later this hour but a good sign given some of the anxiety around the idea that pintrest would be down round we'll see whether it is or not

we have an update now on boeing faa releasing its initial review of the company's software for the anti-stall program it calls the data operational suitable and pilots take additional computer based training it's recommended shareholders vote for a proposal for boeing to have an independent chairman of the board computer trading is a big step forward if they had gone the route of flight simulators,s there not that many out there so hard to get everybody trained up with >> operational suitable? >> it's okay >> what do you guys look for they have -- operational suitable >> i never heard of operational suitable but i like it. >> we're in the aerospace

industry we're watching shares of qualcomm after they reached a deal with apple. the deal includes payment from apple to qualcomm. undisclosed amount as well as a multi-year supply agreement suggesting apple will buy chips from qualcomm. the stock is ready here to -- i don't know where it stacks up. this is a huge step forward. >> it was down quite a bit >> yeah. we got a lot of bullish analyst notes out. jpmorgan, all of them upgrading shares >> coming up we talk sales the auto market. and impact of tariffs with porsche. north america ceo klaus zellmer. what color is your for your

highlander there was a highlander in front of me while i was trying to get around it. it was a gray highlander >> he joins us -- >> what color is your porsche? >> a black one i had a red one. i had a virtually one. i lease them he joins us ahead of the new york auto show got a few questions in here. "squawk box" returns after a quick break. >> announcer: time now for today's aflac trivia question. which car debuted on this day at the 1964 flushing meadows world's fair the answer when cnbc "squawk box" continues 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?

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>> announcer: now the answer to today's aflac trivia question. which car debuted on this day at the 1964 flushing meadows world's fair the answer, the ford mustang the big new york auto show kicks off in a couple of hours phil lebeau has a special guest. >> reporter: one i know you're interested to hearing from

klaus zellmer. he runs porsche north america. we'll talk about the auto show overall. are you comfortable with what you're seeing for the luxury market in the united states? there was some concern things might be softening up. >> i think things are softening up we can't complain. we had our second consecutive year of record we're ahead of the previous year by 7.7%. so we're in a pretty good spot at the moment. >> reporter: what's driving that softening of the market, if you will >> we've seen a saturation of new car sales in the united states then, you know, the market gets tighter and you have to be better than your competitors >> reporter: you bring the 911 speedster. you believe the 911 is the flagship when you mention porsche to

people immediately someone says 911. it still has areas where it can grow >> absolutely. if you look at our die -- in ne york our first import max hoffman said i need an open top car that people can take to the racetrack. it has to be fast, it has to be superior but yet less horsepower something different for the market that's how the speedster came about. >> reporter: let's talk about the ticon. that's a chance for you guys, for us to say to you guys, do you have the vehicle that could give the tesla model s or tesla vehicles a run for their money what's your sense in terms of demand for that? >> the market is now ready for battery electric vehicles. actually we can thank tesla for

preparing the market for that kind of interest, curiosity. we'll be in the market with the battery vehicle. it will drive like a porsche the real sports car in the market the demand in terms of depositors is staggering >> joe, do you have a question >> about last year, there were dealers complaining they couldn't get 911s on the east coast. i mean they were complaining that it was not a demand, it was a supply problem what was it? it had something to do with emissions or something are you familiar with what i'm talking about? it was v-very difficult for them to get product to satisfy the customers thatted them >> supply is actually one of our biggest challenges right now because certification is, has

become more complex and more stringent from authorities we'reed we'reed ed working hard with th authorities. >> how worried are you about potential for a 20 or 25% tariff on vehicles imported from europe all of yours come from germany how much would that hurt sales >> it would hurt us definitely it would hurt the industry it would hurt us as a manufacturer other manufacturers importing cars from europe it would hurt here in the united states so, yes, we have been hit hard i think europe and the united states have to talk. we have to find a solution for that >> when you say hit hard are you looking at 10%, 20% when you say this is how much in sales we would lose >> we would lose, definitely more than 20%. if we would get 25% on top, on

our pricing which is already quite ambitious. >> klaus zellmer who runs porsche north america. he has all your questions answered about supply of porsches in the u.s. >> unfortunate day, i think, phil i hate to complain about government regulation but that's what it was, getting the car certified to come over here. six months year longer than normal it's good there's demand, i guess, but too bad because there's plenty of demand for these even in the face of that model 3. anyway, thank you. >> reporter: tyou're not the onl person that brought that up. coming up pintrest expected to price it's ipo tonight. we'll hear from the ceo rett wallace about this as we head to a break. take a look at u.s. equities fure tus.

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. still to come on "squawk box," a golden opportunity fortisers during the olympics. we'll hear from the chairman of ad sales for cnbc's parent company after the break. ipo rush continues pintrest expected to price tonight after the bell we'll talk expectations. at the top of the hour trade, tags, senator rick scott of florida will join us "squawk box" will be right back. ♪

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and reaches everywhere. this is beyond wifi. this is xfi. nbc universal and l.a. 28 the arranging committee behind the 2020 summer olympics is announcing a new venture in a way advertisers can access the olympic games for the next decade joining us is linda yaccarino chairman of nbc universal advertising and client partnerships and one of our big bosses, big major player, big boss, and a friend, and a friend, of course, chairman of los angeles 2028 casey wasserman. >> up early for us >> successful people are up early i think typically.

yeah, this is tantamount how long will it take to explain what we're talking about here because it seems like a long way off but never too soon to start, i guess. >> first of all thank you for having us here today i think i can simply describe it as the most unique partnership particularly in the world of sports that brings together media and sponsorship like never before i think it's important to talk about that we can all agree that the olympics is the singular, most galvanizing event in the world that captures the hearts and minds of consumers and also brings in opportunity for brands that far exist long after the games while we're in live for the games. when you think about the massive transformation that's going on in advertising today, where consumers are demanding massive amounts of media on their own

terms, and brands, when i sit down with ceos and cmos every single day they are in search of scale with purpose the olympics and this partnership are the perfect answer to those needs that's going on today >> we may be saying l.a. 2028 but it starts earlier. >> we are about 400 and change days out of the tokyo games. >> that's definitely time to start working on this. >> it's go time. >> kasey, for viewers so they understand the distinction about how this used to work before this joint venture was put together, just explain how sponsorship was set up >> so before the olympics came back to the united states in los angeles in 2028, there was a basket of rights it owned, sponsorship rights for team usa, the u.s. olympic team and u.s.

paralympic team. the ioc regulates that they have to make a commercial arrangement with their national olympic committee because they don't want those two entities competing with each other. we made the u.s. olympic committee a guarantee and bought out their rights on sponsorship and hospitality. that created a subsidiary of l.a. 28. that laid down the foundation for us to begin these conversations with nbcu. we're bringing together sponsorship and media so we can answer questions that advertisers have in a simple and straightforward way with the biggest property in the world. >> how does this change the experience that i might have as a viewer of the olympics >> that's a really good question if you rewind the last time the olympics were in the united states, in atlanta, there was

only 171 hours of television programming for the olympics fast forward, what we'll bring you for tokyo across every screen, every screen will have over 7,000 hours most importantly, this new partnership in conjunction with l.a. 2028 unlocks the access for i.p., for local activation, so you as a consumer will be able to experience the brands, the screens, the sports, every medal, every match, every competition completely for 17 days across the olympics so you'll get more on your own terms. >> flip i want around. if i'm an advertising, if i'm a coca-cola, how does this change the dynamic in terms of how i'm buying and interacting with these various different properties >> easy to explain one front door so like kasey mentioned, never before in any sport have you been able to bring together

media and sponsorship simultaneously so as a brand that experiences long term benefits by being an olympic partner you'll be able to unlock access to every piece of media sponsor opportunity as a singular brand with one conversation and one partnership. >> the deal that brian and steve and mark have arrived at a few years ago, at the time we all thought it didn't cost that much more than what it was costing currently. in terms of advertising revenue do you have an idea how lucrative it will be versus what we paid back then? is it going to go up a lot more than what the value, the overall value? >> i think the partnership itself really does expand and amplify the opportunity for brands so it's logical to imagine why both l.a. 2028 and nbcu is so

bullish about the opportunity. so if we can amplify value to the brands and bring more content to viewers, we obviously believe that it's a great business proposition for brands themselves when you associate with the olympics. there's incredible economic bacteria because of the brand halo of associating with the olympics but also today what they are in search for social impact and cultural impact we're pretty bullish on the economics long term. >> in terms of how this all came together give us the back story. historically how much did a city ultimately compete for sponsorship against some of the entertainment properties before this >> well, it came together from my day job i do this for a living i think about what advertisers want and need and how the changing landscape will create both challenges and opportunities for their business our ability to bring together

these reits and have a partner in nbc universal who clearly we don't need to convince on the power and opportunity along the olympic games created an opportunity for us to have this conversation in started in pyeongchang and with linda's leadership it's been a fun and exciting journey that led us to today in the past, obviously i wasn't running the olympics before. but i imagine if there were games in the u.s., the u.s. olympic committee might show up as an advertiser that's not productive for the advertisers because it fors them to think about their dollars in different buckets and what an advertiser wants is a simple solution to this very complicated landscape and for the first time ever in any sports property as linda said, the olympics is going to provide that in the american market. >> kasey, are are you planning this out for 2028? it seems like a ways off were you living in l.a. in '84

did you go back then i did. we were petrified of the traffic that was going to happen and it went off without a hitch it was the greatest olympics ever i would be worrying -- i already would be worrying thinking about 2028 with all the congestion and everything but it can to be done. >> kit and it will to be done. look it's ten years away or nine and a half years away. i was a 10-year-old in 1984. it was a magical time los angeles. it was a bar set high. l.a. is a city that has changed dramatically since '84 in '84 we were still building highways now we have rail construction under way. i'm not worried how l.a. will receive the olympics we're a city that loves the olympics, that's passionate about hosting the olympic games. we poll at about 88% which our mayor says it's better than blue sky polls in los angeles

we're ready. nine and a half years, one thing we can't buy more of is time we're focused every day of doing our job. we're unique our olympics isn't about managing costs, it's about growing revenue because our costs because we literally are building no venues is pretty fixed so we're focused on creating a tremendous economic success here >> i love track and field. those are hard to come by. let's get our -- >> we'll make it happen. >> i want to know how both of you think we'll watch the olympics in 2028 meaning nbc is just about to embark on a new service. obviously the classic nbc properties, who knows what the future really holds. have you guys really talked or thought about what that even looks like >> i think it's hard to imagine and we probably none of us can imagine what the impact of technology will be ten years

from now but to my earlier comments about the amount of hours, and the commitment to broadcasting, no matter what device or screen lord knows will exist then but to go from 170 hours to 7,000 hours and that we're always on and that you will see everything live, whatever device you'll be able to consume it on ten years from now i'm quite confident that nbcu will be able to deliver that >> remember triple cast? >> we do cnbc is important. >> yeah. >> imagine the opportunity, you know, just if we rewind to the last time the olympics were in the u.s. in atlanta. you had to watch live and you had to watch -- we would tape segments and broadcast it during primetime. so you had to sit, gather in your living room, the good old days as we call them and watch them in your home. now you have access real-time to

everything so i suspect that will continue. how you will consume it that's what will change >> 70-inch and hi-def, it's unbelievable it gets better and better for the olympics >> you don't need tickets. you have your big tv >> i don't like leaving my house, you're right. anyway, kasey was certificateman thank you and you need to start working on it right after you leave right now the studio you got something to plan for 2028 >> first thing i have to do is put your name at the top of the list >> you said track and field being right? >> gymnastics. we like gymnastics a lot soccer in the l.a. coliseum the last time i saw the final game >> we'll make sure it happens again. >> basketball and ping pong. >> and golf. >> thanks, guys. kasey, thanks for waking up

early. great to see you coming up when we return pricing pintrest the next big ipo coming to market we'll speak to a research analyst about the appetite for pintrest and his big call on lyft before it went public meantime check out futures right now. the opening just a little over an hour and a half away. dow jones about 36 points higher s&p 500 up seven points. we're back in a moment yes! that's why i wear skechers slip-ons. they're effortless. just slip them right on and off. skechers slip-ons, with air-cooled memory foam. car vending machines and buying a car 100% online.vented now we've created a brand new way for you to sell your car. whether it's a year old or a few years old, we want to buy your car. so go to carvana and enter your license plate, answer a few questions, and our techno-wizardry calculates your car's value and gives you a real offer in seconds.

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>> pizza for breakfast hot or cold doesn't matter shares are up 2% for come dominos. we've been helped along by analyst at morgan stanley to an overweight rating with a $283 price. it factors in anticipated growth they like the product value proposition for consumers and the popularity of the company's mobile apps. those shares on the rise same team over at morgan stanley is downgrading shares of chipotle to an equal rate but raising the target price they cited among other things significant run up of the stock over the course of the past year if burritos and pizza has got you thinking who has the munchie, we're going to end on shares of aurora cannabis.

roughly 220,000 shares shares of it, cannabis company, all started with analysts coverage of bank of america with buy ratings. they cited for both to become leaders. they also started coverage of competitor kronos with an underperform rating citing the valuations at loftier ovals. back to you. we are on ipo countdown watch. we're waiting for pintrest expected to price after the bell today. ahead of lyft's ipo, we had this call right here on "squawk box". >> the average tech ipo score in the last five or six years has been about 6.3 snap was 5.91. that was very low. lyft is coming in at 5.47.

we think there are good reasons to be cautious >> so far that call has been on the money. we want to get his take on pintrest joining us right now is rett wallace. good morning what's your take >> i mean to back up on the scores a little bit, we've been scoring 14 aspects of tech companies as they go public for about six years. we scored 150 deals. the above average score does about twice as well as everyone else so the lyft score was interesting. we compared lyft to snap at that time because they were high-profile deals that were set up with very low scores to do poorly and that played out now pintrest coming and we can compare pintrest to snap although they are about identic identical, they do their businesses differently they sell to advertisers very tell way to think about it. these guys will argue all day long what is different is their

scores snap scored a 5.91 and pintrest scored 6.63. pintrest is well above average >> explain what goes into that scoring system so that viewers and those who are thinking about whether to buy pintrest understand the dynamics. >> there are 14 different aspects. there's the business, transparency, the investors, the syndicate. there are three things that tell the story about pintrest one of them is transparency. right? pintrest was a little bit more forthcoming how it works pintrest, obviously much more profitable than snap snap losing a fortune when they went public. pintrest closing in on break even the killer is valuation. pintrest priced sensibly in light of the lyft disaster and so forth

snap not priesd sceced sensibly so it's a 2.63 which is radically better >> your surprised what happened to lyft given where lyft is? did your score reflect how far lyft has fallen? >> it was a low score. 5.47 lyft score versus 5.91 for snap so we were expecting, you know, not good things out of lyft. look the more high-profile sirkts the more people look at it, i got to know. sometimes we'll see companies trade against their scores and usually what that means is it's sort of out of the way when people focus -- >> i don't want to front run what is uber doing >> uber is interesting the price is maybe a little bit trouble. they were more forth coming about their metrics. the loss profile is much more attractive in the sense they are only losing $3 billion on $11

million of revenue valuation will be the thing that moves it in one direction or another. >> it's interesting because we sound like subjective calls on these individual metrics but you come up with a very precise number >> sure. >> have you back tested this beyond -- >> back testing is interesting one score i think is pretty interesting. we look at something called founder power. the pieces of that score is more rigorous are the founders still there do they still have their jobs? are they operational are they on the board? how much of a vote do they have? for example, snap is a perfect ten founder power. >> you like founder power. >> founder power is the most highly correlated score to positive performance which is why snap disaster was so interesting like a ten founder power pintrest wean their super votes only get a six founder power these things, we spend a lot of time puttingry goirn >> uber will be lower but still

the founders have a lot of stock. travis is still on the board some companies are kind of post-founder, right. uber is in a tweenor spot. >> where does zoom land for you? >> zoom is through the roof. 7.94 one of our highest scores. zoom has something we almost never seen >> is this scoring system just so we understand is measuring how the ipo is going to trade in what period after the ipo? >> we track it for a year. right? usually you get to the lock ups and then sort of -- the reason we started doing this -- before the deal you have to decide how much of the deal you want. then after the deal there's no alternate model. we do models for this so our

customers can look, okay it's going to do $30 billion of revenue next year. how do we feel about that. no one else tears it apart and gives you a rigorous score the first 30 days we're pretty much alone >> rett wallace, we appreciate you being here coming up senator rick scott of florida is here to talk trade, taxes and much more he's here in studio. pepsi quarterly results out. we'll hear what the company is yi aut beverage and snack businesses "squawk box" will be right back. it's them, calling us. it's going to be a week before they can get through on these roads shhh, sorry, i didn't catch that. i said ask how soon they can be here not you. right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering?

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pintrest countdown latest high-profile company to join the ipo rush now expected to price above its projected range. we got the details >> reviews are coming in for netflix. the streami ining giant reporti results. how worried should they be about competition. china raid, venezuela crisis, and taxes a couple of the hot topics we have on the agenda for florida senator rick scott. final hour of "squawk box" begins right now

good morning and welcome back to box here on cnbc live from the nasdaq market site in times square i'm joe kernen along with andrew ross sorkin and melissa lee. futures are positive once again on a little bit of a winning streak here. the dow is indicated up 36 points nasdaq strong up 31 points at this point qualcomm is helping. s&p 500 indicated up 7.3 points this morning treasuries are back above or were 10 year back above 2.60 after we tested that 2.40 level and yields have been kind of going up almost every day as, i guess, some fears about a slow down either here or in china

become less, less evident. i think it's good that rates go up a little bit. i don't take that necessarily as negative >> still low 2.6 is still low here are the stories we're watching for you morgan stanley shares are higher quarterly earnings coming in on an adjusted 1.33 a share. james gorman said the firm posted a solid quarter despite a tough start to 2019. shares are higher by 2.4%. pepsico reported quarterly profit of 99 cents above share pepsi's results helped by strong performance at its frito-lay snack division it was the strong evident in more than three years. and mortgage applications fell 3.5% last week according to new figures. new purchase applications rose during the week but refinancing

activity fell as mortgage rates edged higher the average 30 year mortgage rate is now 4.4% >> china reporting stronger than expected growth in the first quarter and that positive news for china's economy coming as the u.s. and beijing get closer to a trade deal. want to get over to kayla tausche with an update on those, like a long saga a soap opera >> reporter: a lot of deja vu. treasury secretary says they are hopefully on the final rounds of talks between the two countries with two more calls scheduled this week. china has offered to buy more u.s. pork as part of a purchase deal according to a senior administration official. china is considering a change to the mix of products on the list of $50 billion in goods that they are targeting for retaliatory tariffs. u.s. farmers are reeling from these trade disputes and droughts and flooding. it's not just what china will

do secretary mnuchkin said u.s. will offer china some things in return and that led lawmakers to quietly suggest if it's more akin to a bilateral investment treaty perhaps congress should get a vote bilateral talks with japan made headway. minister of economic revitalization is in d.c. meeting with ambassador robert lighthizer a joint statement between the u.s. and japan said they are working towards substantive results and those would continue in the near future president trump is expected to go to japan at the end of may to be the first foreign leader received by the country's new elm p emperor. unclear whether the u.s. will be open to that proposition u.s. officials are suggesting any summit would be here >> kay larks thanla, thanks for more let's welcome senator rick scott of florida. senator you're on set. great to see you thanks for joining us.

>> great to be here. making sure all the jobs move to florida. >> you come here you're in new york >> talk about florida. >> tweets about florida. >> yes >> steal our business. >> i send thank you notes to cuomo all the time, thank you for raising taxes. >> needling you. do you know anything about where the trade talks, anything that's not reported justin press? >> i talked to ambassador robert lighthizer he's very optimistic something will happen. knows we have to do a deal that makes sense for us we have to stop them stealing our technology china is not our friend. they are our competitor. they are trying to build a military superior to ours. we taught be very cautious buying anything chinese and let's see what comes out but we got to have a tough trade deal where they stop stealing

our technology, everything i was at a company in chicago yesterday, weather tech and talking to david mcneal. he said from china they put his name on his product and sell it here >> is there a so-called enforcement mechanism. president trump said he wants a mechanism where complaints can be dealt with quickly without using a body like wto. feasibly china will have the same ability to do that even we'll be letting china decide whether we're in compliance or not when it comes to retaliatory tariffs. >> america is pretty good about complying with things. countries like russia and china are pretty bad about complying with things. i'm worried about them stealing our technology and basically taking our product and selling it and using our keys name and telling and know how and just taking advantage of it it's wrong we taught be very cautious about buying anything from china they are not our friend.

>> i don't know if you saw one of the big pest of news yesterday, apple-qualcomm coming together we talk about 5g all the time and huawei underneath that is a big part of the debate when you think about huawei -- >> don't do any business with huawe huawei >> national security issue or is that a competition issue >> national security >> how do you separate the two because there are some that will say it's a national security issue and others say it's really -- in america first you want to be the dominant player we need to make sure that you had -- huawei doesn't accelerate its growth >> it's national security. i'm a business guy i'm fine with competing. we need a level playing field. we cannot let the chinese government in to have all the

information that you hhuwei has. china is our enemy not our friend >> senator, you're a huge advocate for lower taxes, obviously, coming from florida and private-sector solutions through a lot of things, whether you're talking about medical care or whatever so bernie sanders in the midwest now, apparently trying to appeal to a lot of the voters that voted trump in a few years ago will that appeal work? i don't know if you saw any of the town hall. actually went into what people are characterizing as hostile. enemy territory. and cnn thinks that fox might get some credibility for having bernie on, of all place, cnn >> i'm going the venezuelan bore next week. going to colombia, the venezuela

border if you like bernie sanders go ahead and move to caracas. >> democratic socialism is different than socialism >> i think the issue is that what's happened here -- no here's what happened i think the word socialism for some people and it's generational is connected really to communism socialism, communism >> it threads tyranny. >> in many ways it's a slur and a terrible, terrible thing i think what's happened there's a whole new generation ever people who look at the word socialism and don't have those connotations >> democratic socialism. thanks for explaining that we understand sweden we got it. is that going appeal to voters can bernie sanders be elected in this country could he be elected president of the united states? >> look i think he has a

legitimate shot of getting the democratic nomination. unbelievable to me i think president trump would win. you never know what happens. politics changes people make mistakes all sorts of things. it's a choice. do we want a free market where kids like me that grew up in public housing can build companies and run for office or do you want the government to dictate what you do, make all the decisions. >> that's the distinction. i'm not advocating on behalf of bernie sanders at all. the distinction a lot of things he's talking about is not a complete status every company is effectively owned by the government it's public option -- >> slippery slope. >> i accept that i'm making the distinction because this conversation only gets muddled >> do you see bernie, he likes some of the tax breaks he's getting from the tax law he's not paying pre-tax reform

tax. >> he's in the 1%. >> he'll take full advantage he thought it was ridiculous to even be asked the question >> write the check to government >> notice likes those tax breaks >> i have a question for the senator who long advocated lower tax, steals my job my question is if you were the governor of new york, okay, which i think is a very different kind of state than florida, i think the infrastructure here and the cost of that infrastructure is significant and completely in a different way than some of the challenges that florida faced that you succeeded by pursuing some of your policies. when you say okay, we don't want congestion pricing should have lower taxes. how would you pay for everything that's going on in this state if you were in charge >> i cut $10 billion in taxes and my revenue skyrocketed i increased tourism by 50% you come down, spend your money,

buy our homes and don't use our services >> much lower base to build from >> if you're the governor of new york what you start with, make it easier for people to do business speed up permitting. business is so frustrating in some of these states number, two get rid of regulation you don't need. go through it. i cut about 20% of regulations what you don't need get rid of it maybe it was good 20 years ago or 40 years ago. then you can start growing and then cut taxes permitting and regulations actually had a bigger impact on my state than the $10 billion in tax cuts i made it faster make a decision. you couldn't get a decision made >> when i talk about infrastructure there's public transportation here in this city, for example, that's a real issue. and real costs associated with that you got to figure out some way to pay for it. >> the only way you can pay for it is grow your economy. we grew our gdp in 30%

the federal government has to do it grow your economy way faster and pay for what you need. if you don't grow your economy you can pay for anything you have to grow the economy way faster >> you think there's that much space in this city to do that. >> people are creative oh, yeah new york has -- every state has the same punt. the four years before i got elected we lost 840,000 jobs in my years we added 1.7 million. >> at one point socialism or whatever you want to call it, democratic socialism, start slow, however you want is very popular with a large group of millennials. how do they eventually, i mean you turn 40 and suddenly you start understanding or how does it finally -- do you think it will be different this time and we don't come back to that and we end up as an entitlement

statement? -- state >> i believe the free market will win >> which americans that's clearly not true for a large segment of people who will eventually be the buyers and most attractive demo for contiguous and everything else you're a dinosaur. >> i live in a 50-50 state i won my elections by talking about free market, education reform, job creation it's a 50-50 state your senator here spent $60 billion trying to beat me. now he's mad because i did well with puerto ricans >> okay. all right. well i feel the country moving -- i think this notre dame thing broughtous closer we can all agree that was a horrible thing >> we should be optimistic we're going to go fast >> they have kids. they get jobs. start paying tax they start understanding what

life is really like. >> we have to sell the things. >> what reagan said every generation we have to resell it. >> right now florida is still a net receiver of funds from the federal government relative to new york right? when will that change? >> because of medicare >> that's a huge cost. >> we get 30% less what we pay in for transportation fees, right? we get half as much money for new york does. so, the only thing you're talking about is medicare. i mean what's happened people make their money here and figure out they can't afford to live up here and they move to florida and get medicare that's the difference. >> senator, thank you. >> move to florida >> we can visit. becky, i think is there. >> have her spend all her money. >> let's get to morgan stanley reporting results in the last hour wilfred frost just spoke to the

company's ceo. >> reporter: i just got off the phone with the ceo the capital market is very light. wealth management is strong. the encouraging thing from the call i just had with the cfo is that the guidance on capital markets which was a little light in the quarter was pretty strong so we're on the ipo pipeline he said they feel very good about that there was some dynamics in q1 that meant some got push back but pushed back rather than cancelled. they've already seen activities increase and they feel a lot more is coming soon. they feel very there encouraging on m and a which was across the board beat for most of the investment banks say ingredients certainly in place for another robust m and a year saying confidence is high. financing is cheap growth is challenged companies are doing some transactions to increase that. on wealth management which was the big beat felt very confident. margin up to 27% last quarter in

that challenged market dropped to 24.4% bounce back they feel very confident about that the call starts in about 15 minutes time >> thanks. coming up when we return, well joe and i love this company. bed, bath and beyond found itself in the middle of an activist battle. we'll take a look what's at stake. and the rise of activism in today's market joe maybe we should try. just us. >> we know how to run it >> big turn around for netflix turning positive in the last 30 minutes. ceo said he's not worried about the competition. should he be that's cominupg littler this hour you're watching "squawk" on cnbc so with xfinity mobile

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and since it comes with your internet, you can switch wireless carriers, and save hundreds of dollars a year. are you pullin' my leg? nope. you sure you're not pullin' my leg? i think it's your dog. oh it's him. good call. get the data options you need and still save hundreds of dollars... do you guys sell other dogs? now that's simple, easy, awesome. customize each line by paying for data by the gig or get unlimited. and now get $100 back when you buy a new lg. click, call, or visit a store today. welcome back to "squawk box" the elm battled home furniture issuing retailer bed, bath and beyond which we haven't been able to keep afor the just on our sunday visits has been feeling the heat from some hedge fund activists that to replace the ceo and entire board over poor management. it's not just hedge funds, traditional managers are on the rise is the uptick in activism a good thing for investors? that's the question.

for the answer is bruce goldfarb, founder and ceo of copy partners. let's weigh in on bed, bath first. then we can talk more broadly about the fact even though they've become activist investors and there's a debate about that what's going to happen here? >> so, it's a little early to tell what's going to happen with bed, bath and beyond remember when you had a proxy event, when shareholders have to vote on a campaign you first have to wait for all the material to be filed before you can get your card to vote. we're early in the stage what we're having right now is you have three activists out there, which is also unusual having the activists coming together and looking to take over the entire board of bed, bath and beyond. what i heard yesterday the company is a wild

underperformer any period that you measure the shareholder return has been terrible compared to its peers it's financial metrics have been bad. and they criticize even what the stores look like stoits classic kind of campaign for an activist which really is about, is there change need at a company and how are you going to do it? >> what are the fears right now? >> that's a good point >> i can't think of one at this point. do you do a blended comparison there's no strict peer group for bed, bath and beyond >> they do set a peer group because they have to make a big configuration how to pay their own executives so they have their own peer group in their proxy and then the activists will set out a peer group and it will be other retailers of different sizes and it will be probably not amazon, but that's really part of the issue is that you have a situation now where you have a company who is competing with,

you know, the world around them and not necessarily big box stores but i think you've hit the right point is that shareholders need to understand the message of the company. what they are doing, how they are doing it, what their plan will be. when we're in proxy season and when we advise companies going into proxy fights and when we talk to investors we find there's a disconnect between a company who has not performed well and what their shareholders expect >> let's talk about shareholders and the big broad institutional shareholders are they now activists or not? is this a real thing or is this just a lot of chatter? what's happening >> a little of both. you have investors who have always been active and have always been vocal with management investors like wellington and t. rowe and fidelity. those investors in some instances now are really putting

their mouth where their money is >> they vote against management in reality >> now they are voting against management for real issues for example they will come out an say we don't like a merger. or they will come out and say we're going to vote for an activist in an election campaign and very regularly -- >> does that crowd out the traditional classic activist >> it doesn't crowd them out it amplifies the work. >> bristol is a good example >> very good example there's been a number of situations that have been private where those same investors are the investors who in some instance who cheer on the activist and the activists were willing to take up and do the hard work. >> seems like it's gotten so much more polite in the past couple of years. where are these flame throwing karl icahn letters any more? >> they are still out there. in some ways they are more

sophisticated in that they know they have to reach a group of other investors. sophisticated investors who for many years didn't want that level of discourse and now they are just getting accustomed to it and i think we're accustomed to what's been active. what we tell our company clients is you really need to understand these investors. we help our clients with stock surveillance we help them know whose buying and selling shares of their company so they are not coming in to these situations as surprised as they were before. the activists are very sophisticated. >> i go in, i want your best bet. i want your finest bed we don't sell beds you're bed, bath and beyond. whose idea was that? don't we get frustrated. >> can only sell too many vaporizers w get rid of those 20% coupons. >>e can fix this immediately coming up, more "squawk" we got to go

coming up we have breaking news on trade. plus an update on pep sip's quarrel result latest on beeng big turn around on shares on netflix those stocks all active and trading in positive territory. as we head to break we're uioking at a higher opening on eqty futures stay tuned you're watching "squawk box" ♪ memories. what we deliver by delivering.

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♪ big morning for news we got our trading block assembled. phil lebeau is here. but we start with rick santelli with the latest trade deficit numbers. rick >> all right our february read on trade balance which, of course s-a deficit, minus 49.4 billion. so this definitely is smaller than the 53 and change we were expected smaller than 51.1 in the rear view mirror. it's actually the lightest trade deficit since june of last year when it was 46.9 billion so that is definitely good news. if we look up at the board i see a 2.60 we haven't closed above 2.60 we'll continue to monitor the run towards all time highs in

equities on one side and the fact that interest rates continue to firm while that process is ongoing melissa lee, back to you >> let's get to phil lebeau on the 737 maximum. phil, operationally okay >> reporter: operationally suitable that's the determination of the faa, an initial review of the plan to fix the 737 max software as well as provide additional pilot training so, again, this is the initial review of that the final submission has not yet come from boeing but what the faa said is look the plan for handling the runaway stabilizer trim operations is operational suitable pilots will be advised how to handle it. not a dramatically different approach than in the past. some additional training but importantly it will not require pilots to go into a simulator which would have been costlier and delayed planes

getting back in the air longer finally boeing will submit the final proposal also coming out yesterday the iss, institutional shareholder service are recommending that dennis bolenberg split up the two jobs this is the right move we've not heard a response from boeing i'm not sure that will carry a on the of weight boeing's annual meeting is at the end of april take a look at share of boeing, remember this company reports earnings next wednesday, guys and that's when we'll get the company's full year earnings guidance, the expectation is that they will be guiding everyone to expect lower earnings given everything going on back to you. >> phil, boeing made clear that it wanted international buy in on whether or not these planes would be safe to fly if the faa says operational suitable does that necessarily mean carriers in the united states can go ahead and -- if

the faa says okay? >> reporter: no. melissa, this is critical. this is an initial review from the flight standardization board which is part of the faa boeing still needs to formally submit this proposal to faa for approval and then after that faa considers the question separately of whether or not to lift the grounding of these airplanes. many steps still need to happen. in terms of that international buy in that will be the final proposal that boeing submits they have not yet done that. that's expected in the next couple of weeks. >> let's go to sara for the latest on pepsico. looks like a good report >> absolutely it was the star of the pepsi report 5.2% organic revenue growth. that's a pure look at sales stripping out extra noise like currency pressure. it's the best growth we've seen from pepsi in three years. what's behind it snacks

big time frito lay sales of 6%. actual frito lay chips not like doritos and cheetohs so what else is working with consumers right now? sparkling water. mountain dew game fuel pepsi zero sugar growing very fast what's not working in the portfolio? mountain dew sales still not where the company wants to be. and tea sales have been weak quake er oats is the laggard. besides having a new ceo, ramone laguarta took over back in october pepsi ramped up its business it's growing faster than sales right now. coke pursued the same strategy also i'm told inside pepsi the execution is sharper for instance what the industry

is calling feed on the street which is basically the sales force placing products in stores all getting more efficient now the stock has reflected the new growth prospects for pepsi up about 12% over the last three months while coca-cola has been flat that's a bit of a change coke had the growth reins in the market it reports snacks weak and guys it had gotten hit harder lately by currency pressure because coca-cola does have a bigger international business >> okay, sara eisen, thank you i love all the tos >> white cheddar is doing very well >> no orange fingers >> the little chetohs. i like the white ones better than the orange ones >> that's what i'm talking about those. >> i like all the tos. >> i like the puffs.

>> they don't own -- people eat that cheddar flavored packaging material >> what? >> pirates booty >> pirates booty >> it's like chewing air >> little kids like it >> thanks, sara. they do. do they want anyone not to split, the chairman -- does not the iss say that in general? >> they generally want a split from a governance perspective. >> what about this >> but here in this particular situation clearly we now have an issue. >> i know. what about beyond bed and bath beyond beds and bath >> do you want to start? >> move the bed. >> very little rebranding. beyond beds and bath that explains why they don't sell beds. >> or baths. >> beyond beds and bath.

so easy. they don't need an activist. stock starts going up. >> nope. why don't you add bitcoin or crypto currency. >> cannabis. >> there you go. >> is it possible. >> if you have enough of that you need a bed and a bath. >> and cede some doritos >> coming up, a run down of today's movers plus an earnings review for netflix i told the twitter guys i needed to borrow. a top analyst will tell us if the streaming giant needs to worry about the competition. we head to break check out futures. "squawk box" will return in just a moment every day, visionaries are creating the future.

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welcome back to "squawk box" futures right now about where they were up 41 points on the dow and the s&p, adding another eight well above 2,500 nasdaq very strong this morning. up almost now it is up 42 points pintrest is set to price tonight begin trading tomorrow sources who spoke to the "wall street journal", they are

reporting the offering is likely to price above the initially projected range of 16 to 17 trading on pintrest will be watched closely especially after the uneven performance of lyft following its recent ipo looks like it could bounce a little today but it's down in the mid to high 50s which probably isn't making anyone too excited about the next offering. >> we got zoom coming up tomorrow will be a big day >> slack could that do well >> you have to remember slack is not a classic ipo. like spotify because it's a direct listing, raising capital and changes the entire dynamic in terms of how people think about the trading of that stock. want to check on some stocks to watch this morning our good friend dom chu is at cnbc headquarters and doing some math for us. >> a slew of these different

qualcomm analyst issues. that lawsuit resolution. understandably changing the ratings outlook for these analysts out there on wall street one of those analysts revisions comes from jpmorgan where the team says qualcomm was overweight target price gets up to 88 bucks. 54 before. they like the upside of qualcomm's leadership position also fewer down side litigation risks as well. those shares up 10%, 11% on over 11 million shares. following up on yesterday's massive stock surge. shares of bank of america are slightly higher. around 60,000 to 70,000. analysts are downgrading the stock to a hold. they cited incremental challenges for numerous revenue areas of this bank watching bank of america end on shares of paypal which are lower by just around .2 of 1% analysts at ubs are downgrading it to a neutral but raising the

target price to 120 from a prior 101. they cited among other things more limited capacity for growth in person to person payment unit over the next couple of years. those shares on the move as well >> you mentioned qualcomm there. i want to take a look at shares of intel and apple as well given that announcement, intel said it would leave the 5g smartphone market after that was announced until the ceo said there's no clear path to profitability and positive returns. lots of people trying to make sense of what, therefore led to apple's decision to broker a deal with qualcomm given the fact these guys were at each other's lost to in the worst possible way the way they felt about it personally on an emotional basis, i can't believea deal was made apple sharks by the way, not getting hit. you would have thought maybe given the cost something would have happened?

i don't know it's interesting whether they were forced into this because intel didn't want to do or intel is doing this >> maybe apple said we have to think about that 5g phone. we need to clear the decks what a difference a day makes. we were remarking about this during the commercial break. netflix sharps down as much as 7% right after reported earnings yesterday. a little light on the subscriber growth in the second quarter today up 3.5%. where it is heading next joining us now michael nathanson. great to have you with us. this is really -- we were talking about this swing, this massive swing. what do you think changed in perception all the news including the second quarter guidance that was out too. >> second quarter guidance was definitely light cash flow guidance was worse people are anchoring on the

second half has pretty good content slate. taking pricing up. still growth overall subs this year versus last year. so the story is pretty much let's look past q2, second half looks really strong and that has people back in the stock i was surprised by it as well. i thought there would be a pause. the stock has been flat since january. so people may come back into it. i thought it would pause for a bit as people start thinking about the change in landscape. >> they were talking about working through on their price increase it went from $11 to $13. you had new subscribers coming on >> their guide is this is all happening 2q higher elevated churn. they have have not talked about 3q and 4q. once prices come through it is back to normal their second half is strong.

street is saying look what they are bringing there's no way that they will have slowing growth. >> "stranger things" and "crown." >> we did a survey we looked at their new shoes orange is new black, "stranger things". so they have a new movie coming in >> we talk about spending long term one of the things they said we won't take on new debt we're going to be able to run this thing without extra money do you believe that? >> they will take on new debt this year. their point is longer term debt will slow. my big question as spotify is good business. apple is in the game disney is getting in the game. is this a good business or great business my view is there's constant spending i think it's a good business but

it's not like google search or facebook contiguous, it doesn't have this gigantic mode around it >> you think about an hbo today or you think about a showtime or think about some of these other brands and services clearly smaller brands and services, but they punch above their weight, if you will on a relative basis because they just don't spend nearly the same amount of money on content >> right >> so the question long term can netflix do the same? can netflix get better as selecting the right stuff? >> this is an interesting topic. i would argue moving movies from the theatrical window is a valuable thing you can pay 10 bucks to see a disney movie or see it in the window netflix has to spend more to create that value of hey there are movies toucht see that will

cost you 1020 bucks in a theater but available here so part of the thinking is, the studios control a ton of really great library content. netflix has to rebuild a library which is expensive when you get to that resting point that's the debate. >> what's the resting point? a decade worth of movies you have to make i don't know if you noticed, i don't know if you saw the announcement because we're across the street from bryant park hbo used to sponsor movie night at bryant park guess whose doing it, netflix. it's a transformation in how you think about that brand >> one of the questions, one of joe's favorite companies at&t. the question for at&t is how will hbo be run differently. hbo and warner have been separated for a while. warner has the best content library in the world do you take that library and dump it on hbo so far you haven't done that >> do you think that will happen

whatever the warner plus position is? >> they run it as two separate businesses hbo is the lead horse. hbo should be made stronger. running three more -- >> that's interesting there's a big debate inside of at&t and time warner, whatever this combination is now about hbo brand. is it a piece of a larger puzzle or is it the puzzle and you're going to put other pieces into it and whether that brand can actually extend beyond sort of this premium drama comedy to all sorts of other things. >> right my argument why are you selling friends to netflix >> it will be eventually >> two or three years you don't think it will be >> they have a chance to do it and they took a hundred million check to make a quarter. >> let's say they did that wouldn't that be a huge competitor for netflix wouldn't it strengthen >> one of the questions we'll talk about yes is the world going change to be more, you

know, companies will be more internally licensing to themselves everyone will have their own product. not everyone can do that time warner can do that. disney can do that comcast is not going in that direction. this is the beginnin >> did a great job in relating the case that set off alarm bells. >> what happens to hulu? disney owning this thing with comcast owning a piece what's the long-term play here >> comcast stays in to be irritant a pebble in the shoe of disney. >> and beneficiary given that disney is going to put muscle behind this thing. >> they'll probably have disney plus and hulu. >> but is the long-term play that you think disney buys out

comcast? long-term play that you spin out hulu comcast in the end tries to take hulu back? >> i think the long-term play if they had their choice would be let's get comcast out of this partnership. let's create hulu for adults, disney plus for kids and families put them together. bundle them together and create one service but you can't do that until you get comcast out of the relationship and they're not going anywhere right now that's what i think. you're in a pretty good position. >> there's no love lost between them and disney either. >> are you a believer that the hbo can compete with all of these new operations >> hbo with warner imbedded with

hbo is a competitor. >> the world also doesn't understand the brand associated with the content i think you don't think i love it. i'm going to have a platform. >> exactly. >> hbo when you look at consideration of consumers, hbo is a top three or four brand it has 40 or years of brand value. nobody knows what a warner movie is. >> what's the explanation you get on this. >> we haven't. time warner is a great asset. >> before we let you go, you have a great partner we have been talking about sprint and t-mobile.

we're really stand alone we would agree it has a terrible chance of survive. >> that's an interesting policy choice or do you say even if the company were to struggle into the future, if the company ever would have filed for bankruptcy, does that then allow somebody else to come in. by the way, could it be a comcast or charter or somebody else that would invest in a very low basis and does that create a fourth competitor? they want those competitors out there because prices would be lower for consumers.

>> probably will be even another m&a transaction from someone and sprint will have to go through a painful couplel of years heading to that point. i think we thought they would get this done. >> i wouldn't talk to you either i'd still be mad it was at 50/50. >> you know i was going to bring that up. really taking a stand there. oh, i think it's 50/50. >> thanks. do you get paid for that you did. you did but he covers that area but owe know more. >> i was seeing a year ago, i thought the disney-fox deal was a no brainer for fox. >> thank you. >> let's get down. i guess we can start with -- right? yeah jim are you there? >> yeah.

sure >> this thing is incredible, netflix, that's such a thing. >> there's no upside to talking about ipos and what's going to happen what about pinterest. >> it's below the last round if the hedge funds want to cut their losses, they'll find a way. that's what we learned with lyft i didn't know you were free to trade if you were a link to the shareholder. these unicorns have the wrong investors and that's it. they're just wrong. >> it's interesting. >> yeah. so that will be something to watch as well. do you have a -- do you remember saturday night live? coke or pepsi?

coke pepsi? >> pepsi is better because it's got snacks and snacks accelerated. i have to tell you, snacks are on fire. you made $15 if you just watch the show >> we used to do the qualcomm. over 30 years we've had great things. >> 30 years of making money for people people leave that out too much >> thank you. >> the other side didn't come

through. >> qualcomm. >> that's 20 years ago we used to do that >> we'll see you in a few. b what's a target date fund?

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