good morning. it's 8:00 a.m. at twitter headquarters in san francisco, it's 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ good tuesday morning. welcome to "squawk alley." i'm carl quintanilla with morgan brennan at the post nine at the new york stock exchange. jon fortt has the morning off. we'll begin with shares of lyft trading higher. you got jpmorgan and others all

with buy ratings on the stocks as investors await uber's ipo next month. good to see you, guys. good morning. >> good morning. >> good to be here. >> steve, i wonder what you make of the initiations obviously, big contingent on social media sninkering at banks they say want a piece at the investment banking business. >> this is unsurprising. they had to wait their 25 days and i think everyone was expecting this to happen the targets you think are up for grabs where this really lands. i think there are bigger questions for the long-term for lyft and i'm sure we'll get into that. none of these new analysts coverage is all that surprising today. >> what's your take on their growth potential >> as i look at both lyft and also, you know, the latest out

of the s1 from uber, i think what's clear is the growth at any cost strategy which got them both to where we are today has to be meetered and measured by profitability. we're all talking about that i think. i do think it was surprising for me as i looked at uber's s1 how much the growth had slowed and when you think of growth expectations for lyft going forward is basically 50% after doubling and triple. we have to accept slow growth but we have to get to profitability. that's a big question certainly for lyft, more so than it is for uber. i think the growth is definitely slowing for both companies which i think is concerning. >> the fact that you do have a flurry of analysts coming out and initiating coverage on lyft as a buy or outperform, et cetera, and given the fact that the story hasn't actually changed around the path to profitability, there are still so many question marks. does this really speak to the fact that this is a valuation

story right now for this stock specifically >> you think that's right. i think there's a lot of optimism around the potential of ride sharing over the long-term but it's also the case that these companies are losing a ton of money. uber is the leader in this space and they're losing $2 billion a year. it just remains to be seen how they'll meet their valuations over the long-term. >> casey, how do you characterize longer term, the threat out of waymo which today announces a deal to begin some manufacturing regarding the day when all of these players try to jump into autonomous full bore >> i think that's going to be a really exciting moment when we can all order a self-driving car from our phones and i think, you know -- lyft and uber have obviously been exploring autonomy on their own. everyone i talk to says it's further away than you think, but at the same time we already see some of these cars on the roads. the faster that happens, whether it's waymo or anyone else, i

think it is going to totally change this business. >> to be fair, though, this is way out. >> go ahead. >> we love -- we love the dream of this, of course, elon loves to talk about it as he did yesterday. when you really consider the corner cases and as an engineer i think about these a lot around, you know, nix driving and driven vehicles, it's just going to be a long time before that really becomes a reality. >> all right. before we can get to full autonomy, we got to get to phones that don't break. let's get to samsung delaying the launch of that $2,000 cell phone after several reviewers including us at cnbc told them there was a problem. we know what it's like when these problems happen and they're already in a ton of consumers' hands. >> that's right. we journalists are sometimes happy to beta test for these

companies and this was a time where we did that, you know. we at the verge also beta tested one of these units and ours broke as well. it is incredibly unusual, though, for any product to make it into reviewers' hands and then break so badly across the board. this was a wild one. >> to that point, steve, you just mentioned your engineering chops and the background there, i realize a phone is very different than a self-driving vehicle, are you surprised to see that so many of these phones that are touting this, you know, next generation foldable technology are essentially so flimsy right now when they're going out to media >> yeah, this reinforces an underlying point not to get too flip about it, hardware is extremely hard to bring to market. unlike software problems. you can't just move fast and break things. the iteration cycles are really long. tooling is expensive. and so it's a very different thing to by something like this

to market. the additional challenge here you have technology that's relatively new. it's been -- in this foreign factor is a new thing and you have the folding component. so you've stacked multiple risks on top of each other and that makes this extraordinarily hard. it also brings all of these other disciplines into bear. we're talking about electric chemistry and so this is a really hard thing to bring to market. the point is right that you'd rather break it in the harbor than out at sea. there's some embarrassment here. let's not forget guys, this happens to be the best of us. apple's butterfly keyboard is still an issue. tesla's falcon doors still not closing right. when they get the glitches out, this will be a pretty interesting phone. >> how much is riding on this specific model for samsung

>> i think samsung's reputation as an innovator is on the line. samsung is desperate to be ahead of apple whenever it can and it saw an opportunity to get out first way folding phone and make some headlines. unfortunately, for them the headlines have been all bad. i'm sure that they wish this had gone a lot differently, but looking at some of the ways in which this broke, it seemed like there was some obvious things they could have done to make it go less badly when it got into reviews' hands. >> that's for sure. finally, shares of kohl's are surging today after announcing it will begin accepting amazon returns in all of its stores beginning in july. steve, i wonder if you think being able to take in returns is the new weapon that amazon has to leverage their position against retailers and drive traffic? >> amazon is just a monster every time i think about, you know, another aws launch or

event. it's just another head that pops out of this beast. i think it is just supporting what is obviously one of their, you know, king pin businesses. i think it's an interesting thing, but again just another piece of the puzzle that is this massive beast. >> casey, we had the ceo of levis on recently and i asked whether he considered amazon a friend or a foe and he said both essentially. it seems like the more and more retailers you speak to, the more and more they see amazon as essentially a fren amy. it's almost a company you have to do business with because it's gotten so big and it's been able to roll out so many different services. >> that seems true. i still wonder if kohl's won't wind up regretting this. if kohl's becomes a place where you can throw clothes you don't want any more, i have a hard

time seeing it in practice. this is just one more sign that the retail apocalypse is coming. >> i think directionally if they're in the building, there's a chance they might buy. if they're not in the building at all, maybe that's less. >> that's right. that's right. >> sure. i get that you need traffic, but to me this is just a real indicator of how desperate kohl's must be for traffic if they're willing to turn themselves into an amazon fulfillment, basically. this is bad news for kohl's. >> target, i don't want to speak for them, they would have to like something like this, no >> it's hard to say. target has a brand that they are very protective of to casey's point. this notion of becoming a return center probably doesn't fit with a more premium end of the retail spectrum which is where they see

themselves. i think this is one that's going to be -- we'll be watched closely. if kohl's feels like it's not working and creating those collateral sales they'll pull out of this thing quickly. i think there are just too many businesses where the lizard part of their brain starts to inner advocate when they think about amazon getting close to them and getting close to their business. there's a lot of companies that depend on aws and that's a fascinating thing as well. >> casey, steve, thank you guys. good to see you both. still to come, twitter earnings, that stock moving sharply. plus what will wall street or -- what is wall street making of elon musk's plans of self-driving cars. dow's up 90 points. back in just a moment. en i wear,

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welcome back to "squawk alley." elon musk unveiling his plan for self-driving cars at tesla's autonomy investor day on monday saying owning any other car in three years will be like owning a horse. phil lebeau is back in chicago on what we heard from elon last night. >> that was one of the many comments that made me say, hum,

i'm not sure i agree with that but when it comes to elon he'll say what he wants you to believe of the one of those is his claim that he'll have robo taxis, a fleet of 1 million on the road. that means 1 million robo fleet capable vehicles. it doesn't mean they'll all be driving around and picking people up. when the rideshare service that tesla is unveiling when it begins, it has to be on the tesla network, it cannot be through uber or lyft or some other rideshare service. here's elon musk on the question of whether he's promising more than he can deliver. >> we're going to do the robo taxi thing too. only criticism and it's a fair one and sometimes i'm not on time. but i get it done. >> he does get it done, although, again, admittedly not in the time frame that he has said usually in the past with projects the robo taxi race looks like

this. waymo has limited operations in the phoenix area, basically in a small geo fenced area. cruise launches in california later inth year and you have tesla saying that it's going to have it's robo taxi ride sharing service beginning next year although a definitive timeline remains to be seen. tesla reports earnings after the bell tomorrow. you can bet there will be more questions about this robo taxi fleet, autonomous technology and most importantly, first quarter deliveries and the cash position of the company. that's all tomorrow after the bell. >> and you'll be bringing all of it to us, phil. looking forward to it. thanks. two tesla analysts join us here at post nine. we got an old-fashioned bull/bear debate with you too. you got an underperform on tesla, you've got a buy. did you hear anything from this event yesterday that would change your thesis >> not really. the technology's compelling but

it's not unique. i think it's very important to make a distinction between advanced driver assistant systems or level two advanced or level four, level five full self-driving vehicles. if you look at estimates, we're kind of forecasting about 35 million vehicles will have level two advanced by in the next three to four years. this type of capability is autonomous driving on the highway, exiting the freeway autonomously, lane merger. those types of capabilities will be offered by pretty much every auto oem. toyota will offer a level two advance system which is very similar to tesla's capability across all of its vehicles from lexus down to cor rolea starting in 2020. volvo is doing the same thing.

you have the issue of regulation which will prevent a lot of level four, level five vehicles going on to the road. >> pierre, more regulation, more competition, also those comments about being cash flow neutral. maybe some implied comments about the possibility of having to raise more funding. are you still a buy on tesla >> yes, absolutely. still a buyer. i like tesla as a sales car and i see this autopilot feature they've developed as a very strong, very strong supportive element of that business model. so the way i see autopilot today is that tesla has the most advanced service available in the market and yesterday what they've showed us is a unique -- ten times better than anything else available on the market. they have 425,000 cars running around and they've demonstrated

and they've explained how they've improved their system. last but not least, they have 100 person software defined technology. why other car manufacturers will have to introduce new hardware in order to step up the service, tesla is actually going to have software upgrades in order to keep improving the service and they're already starting off a massive base. nobody would have in the foreseeable future, they're already ahead of the curve. they would keep expanding their lead on that and i love that story. now the robo taxi of elon musk, that's a nice vision and keep it at vision stage for now probably. >> i just want to push back a little bit in terms of tesla's advantage in terms of the technology. if you look at -- i covered the semi-conductor industry and most of these autonomous vehicles are driven by semi-conductors.

nvidia, for instance, with this new pegasus chip is 320 trillion operations per second which is almost twice that of tesla's new chip. nvidia will be offering this chip across the entire oem market including mapping companies, including software companies. so i think it's an inaccurate statement to say that tesla has a lead in self-driving or advanced driver systems. as i just mentioned, toyota will deploy this across the mass market both in japan and the u.s. and in japan, they sell 5 million vehicles and in the u.s. they sell 2.5 million vehicles, not 400,000 on tesla. >> here's where i wonder, i don't know if you've been covering any of this, here's where i think maybe the technological innovations are getting overlooked and that's spacex. you want to talk about self-driving and autonomous vehicles, spacex has been doing

that which autonomously locked in at tens of thousands of kilometers per hour with the international space station. some of that technology could you see that transferred to self-driving and if so, is that something that's being overlooked by the street right now? >> no, it's not transferred. you have to make a distinction going back to the earlier point. self-driving vehicles, level four, level five in which the car will control all functions of the vehicle, that means the driver does not control any functions, it's going to take many, many years to happen. there are significant amount of regulation issues. there's no uniformed guidelines at the federal level. the state's are divided. that's a big problem. the second issue is liability. who's going to take liability if the car crashes? however, in the meantime, we'll have what's called advanced driver's license systems, level two, those types of applications can be run on nvidia chips or intel mobilized chips. you don't need to have a spacex

type of system. nvidia does offer a full computer solution for level four, level five. they have designs. my view that will take many years to happen. >> all right. >> pierre, i just got to ask you, your target 530 is almost $100 above the next target on the street. what gets youthere >> that's a 12 month target and here's the way i see things. i really value the core car business of tesla and the way i look at it, of course, is over more than one year, over five to seven years, where does tesla get? five to seven years, tesla will maintain a superior technology in terms of power train, tesla will maintain a fantastic brand

they have today, and tesla will have vastly superior autopilot feature compared to any other competitors, that's what road maps study today. with that they'll gain market share and five to seven years from now they'll be at the scale comparable and because they have a technology that is much richer in terms of software, they have significantly higher margins. i wind that back over to in a year from now, if the market values and recognized that outlook, what's a fair value for the stock and that's how i get to $530. i need to get all the market on board with that, of course. >> we'll leave it there for now. i'm sure more will be revealed with those earnings numbers tomorrow and we'll be talking about this a lot more beyond that. gentlemen, thanks for joining us here. another big mover today is twitter after posting a big beat on earnings on pace for the best

day since october of 2017, let's get to julia boorstin who sat down with the cfo earlier and have some highlights from that conversation. what a day >> what a day. we see that stock flying higher and it's on the big surprise that twitter users faster than it's expected. it's daily active users group by 11%. it's monthly user number actually returned to growth after declining for every single quarter over the past year. twitter cfo ned segal telling me that this points to twitter's work to improve the platform paying off which could continue to grow the company's user base going forward. >> it's our job to provide a great product experience for people so they find what they're looking for when they get there and they come back more frequently. we did a lot to improve relevance, we did a lot to improve relevance in the notifications that bring people back to twitter and we saw real benefit from that this quarter as well as the ongoing marketing we do. >> twitter did beat expectations

on both the bottom and the top line, though the company did guide that revenue growth will slow segal telling me that the company has plenty more room to both get consumers to spend more time on the platform and also to bring on more advertisers and to get them to spend more. >> when we look at the experience for the people wh use this service, we know there's a ton more we can do to make it easier to find the things you're looking for, to make you feel comfortable being apart of the conversation and we're just getting started with advertisers as well, where they really understand the benefits of launching new products and services on twitter, where they really understand the benefits of connecting with what's happening but there's so much more we can do to help them on the service as well. >> with growing expectations of regulation around the world, both data privacy as well as offensive content, segal says they're definitely open to sensible regulation and are working wregters around the world that they're prepared for more regulation. take a listen. >> there's been regulation already in certain places, gdpr

is a great example of it in europe where the new policies were rolled out in may of last year. we worked hard to be ready for the deadline, to be transparent in the changes we made and we're pleased it had no impact to the revenue or the income statement. >> speaking of regulation, just this morning, president trump tweeted, no wonder congress wants to get involved and they should speaking of twitter, he says he thinks the platform is biased. morgan, a topic to watch going forward. >> yeah. thanks for bringing us all of those key comments here with the stock surging, julia boorstin, in l.a. coming up, jeffries out with a buy rating on lyft as shares continue to climb higher this morning. analysts behind that call is going to join us next. take a look at the s&p 500 closing in on an all-time high 2927 as your level right the. re we'll be back after the break.

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markets about to close in the uk and across continental europe. stocks finishing mostly higher, but the banks capped gains. meantime, belgium materials giant seen its biggest one day drop since '89 after cutting its forecast for next year. the company which has invested heavily in batteries for ev cited weak demand in china. the company warned that the 11 day strike at its stop & shop chain here in the u.s. could shave off as much as $100 million in its underlying profits in 2019. dow's up 116 here. s&p 500's closing in on 2930. let's get a news update with courtney reagan. >> here's what's happening at this hour. iranian state tv reporting that lawmakers overwhelming approved a bill that labels all u.s.

military forces as terrorists. this is a day after washington ratcheted up pressure on tehran after no country would be exempt from u.s. sanctions if it continues to buy iran war. vladimir putin will meet with kim jong-un for a much anticipated summit on thursday according to the kremlin. preparations for the meeting are already under way. a huge fire broke out this morning at a lumber yard in stockton, california. the fire quickly spread sending flames towering into the air. 25 fire units were called to the scene. no injuries have been reported. and researchers are releasing a study on sitting. examining 15 years of survey answers from 51,000 people that total daily sitting time among teens and adults increased by nearly an hour most reporting they spend at least two hours watching tv per day. too much inactivity increases the risk of obesity, heart

disease and diabetes, so when you watch cnbc just stand up. that's your cnbc news update at this hour. let's get back over to "squawk alley." >> always good advice, court. we do that a lot at this desk. your data for sale. a cnbc special report on how your data is used and who's using it an all-time record close here is not out of the question. we're .2 of a percent away. "squawk alley" is back in a few minutes. announcer: the cnbc trend tracker live data book is brought to you by the cme group.

s&p 2929 is going to take you to session highs so far. dow's up 130 but it's the s&p we're watching because that's about .2 from a record close. obviously nasdaq has that eight handle. got a record high already. the russell is one standout today. people taking noticely that small caps are having a good day. >> absolutely. what's really driving the market here is earnings, better than expected numbers from a wide variety of names today. organic sales really in focus especially for some of those big names, for example, some of the big multi-national industrials that i keep a close eye on, united tech which is one of the biggest contributors to the dow's gains today, for example.

twitter, hasbro, a few of the other names that are really leading the s&p higher as well. >> big question, of course, will be at what point people start to include oil as things on their worry list as we are at 66 1/2, obviously oil is up 40 plus percent for the year so far. bond yields not playing along. 257 is the other thing that people are just waiting to ratify this greater growth narrative, but for the time being, who really minds, right >> exactly. >> if global yields stay low and equities outpace and earnings outpace, that's what they'll call goldilocks. >> some of which, like microsoft are seeing fresh highs in today. >> gold, by the way, 1270, down seven bucks and the vix almost back to 12, about 1236.

meantime, it's something we do every day shop in some form or another and nearly every time you make a transaction you are creating a data point which can then be packaged and sold. our leslie picker is here now with a closer look at who is buying that data and what they're doing with it. >> that's right. the end user of your data is hedge funds. they're spending a billion dollars a year on this data with the hopes it will give them a trading edge. we took a look at what happens when a simple act like buying a pair of pants unleashes a whole lot of information. you park your car at the store, satellites from the commercial space industry see you pull up. they sell data about that parking lot and thousands of others to a firm called orbital incite. they analyze these pictures to see where and when people are shopping. they say consumer traffic can give them an early sense of same store sales and revenue ahead of earnings. it doesn't end there. there are at least 100 apps including weather and traffic

apps that are selling geo location data, a firm called thasos sells the data to investors. when you purchase those pants, companies are tracking that too. consumer apps to some of the nation's largest banks and gets access to their customers' transaction histories. your email receipt for those pants is also valuable. that data is pulled through services like these companies. this software rids your inbox of junk but it can gather information about purchasing habits to sell to hedge funds. their technology can automatically recognize commercial emails and doesn't look at or share personal ones. if you post about your new pants on social media, you better believe a whole host of firms are scraping through instagram, facebook and twitter to gather

sentiment data about the top retail brands. there are more than 400 firms collecting these types of data sets and selling them to investors. some are more helpful to hedge funds than others, but as the industry continues to underperform the market, they're becoming more and more inclined to spend money on anything that can help them outperform, guys. >> got to get the edge. >> exactly. >> leslie, stick around with the growth and alternative data, just what are the legal and privacy issues. tim cook made the case in new york just in the last hour. >> we all have to be intellectually honest and we have to admit that what we're doing isn't working, that in the technology needs to be regulated. there are -- there are now too many examples where the no rails

had resulted in a great damage to society. >> joining us at post nine this morning, former fbi special agent in charge of the cyberdivision in new york now chief information security officer at six terra. good to see you. >> thank you. >> how damaging is this and what steps should consumers take to try to limit their footprint >> we all know it's almost impossible to limit your footprint if you're participating in the modern e-commerce economy. you'll leave some data behind that's used by investors and retailers to better market towards you, the question is what can you control when we've seen legislators in europe and in california push for more control for the consumer, for example, consumers are entitled to know what type of data is collected on them, what it's used for and they also have the right in some jurisdictions to limit the use of that data. we're seeing a trends towards more consumers rights but as we saw from the segment, when it's used in a way that's

supposedly -- consumers may not have the right to know how it's used or may not have the right to limits use. the question is whether it's monetized. >> usually often on your phone it'll say will you allow your location i always say no, but does that do any good? >> it limits the known location for that particular moment, but there are geo locaters on your phone that are active and you may not know it. for example, you could activate and application and it's persistent, meaning the geo location apart of that location stays active even though you're no longer on the app. so you have to turn on and off your geo location actively to make sure it's not working when you don't know it. >> i just think about the movie like the fugitive. you couldn't go off the grid today even if you tried given the fact that we are so interconnected and there is so much data being collected. 400 companies, leslie, how much

are hedge funds and other investors paying for this data and if you do see some of these regulations or some of these guard rails put in place, what does that do to what's become a flourishing cottage industry. >> hedge funds have been saying privately that they're worry ed abouta blowback of sorts especially with all that we're hearing in terms of privacy and awareness that consumers have with regard to how their data is being used. in terms of cost, different types of data sets cost different amounts and they are worth more to hedge funds. for example, we were told that geo location data sets as well as credit card transaction data sets are worth more than satellite imagery which hedge funds have found that are lumpier in terms of the insight they provide from a trading standpoint and these things can costs hundreds of thousands of dollars on the premium side. >> the thing i'm hearing from you, leo, is you can control some things, but it's an active choice. all the passive stuff is happening really without you even knowing it.

>> that's absolutely right. any purchase you make, any store you visit, any toll you go through, that type of data is readily available and it's marketed. >> how about the whole concept of shadow profiles i know there's been reports about facebook, for example, being able to glean and collect data on people that aren't even using the site. how do you mitigate for that >> the idea behind the shadow profile is that even though it may be anonymous or even though you don't opt in to sharing information, certain algorithms can identify you. there's really -- it's very difficult in today's modern society, whenever somebody you know posts a photo of you there's a potential for facial identification to recognize you. we had a real problem at the fbi with col vert identities. the teenagers growing up today posting images will be very difficult to deploy in a covert manner because those images are saved and searchable. >> running out of spies. >> can we come back and talk more about it down the road?

>> absolutely. we're continuing to watch the s&p close in on a new record. we are at session highs right now. the number we're watching 2930.75. right now we're at 2928. we got more "squawk alley" straight ahead.

here's what we're working on for the "the halftime report." we're debating the state of the rally as stocks close in on those new record highs.

morgan stanley's mike wilson back with us today after calling last year's selloff. is he ready to change his tune now? we'll find out and one well-known analyst goes all in on a stock you probably own. all that plus unusual activity straight up at noon. we're 15 away. look forward to seeing you guys then. >> thank you, scott. stocks are nearing history. s&p at session highs, the all-time closing high within just a few points h. we're looking for 2930.75. what happens if we do get it, art, what do you think >> that's going to be the critical thing here. they are right on the doorstep of breaking out. the question becomes, if you make a new high, will you get the people that are on the sidelines, will you get some of the people who are sceptical in short, will we get kind of a followthrough rally that pops up or will they just sink back? i'm in the camp that thinks they

may inspire a little bit of a follow-up rally. >> that's what larry fink said last week. the market is primed for more inflows. >> i think it is. i think people have been looking at the scepticism about the lack of confirmation in the volume and the variety of other things, but once they move across that line, you can't say anything any more. you could be on the verge of a double top, you could be on the verge of a lost things but when you move across that line all things are good. >> sanctions getting or the waivers on sanctions on iranian oil getting removed here. a lot of question marks about how much upward pressure there is on oil right now. is it this become a worry for the market or is there still a tailwind >> i think it's not much of a worry. what they believe is that, president trump is going to find

a way to get more production out of either saudi arabia or some where else. he doesn't want a summer of high priced gasoline and people complaining about that, so the feeling is they'll get -- i'm a bit of an interim term skeptic on oil because i think by any chance they got maduro out in venezuela, the u.s. would rush in there to try and get their economy moving by pumping out venezuelan oil. number two, next year we're about to sell a ton of electric vehicles and so the demand for oil and gasoline should go down, so but that's interim. right now on the short run, they're right up on the top. >> for months the bears have argued a couple things, one is we're headed for a profit recession. things might look dicier on that front. the central banks are all we had in the face of slowing global growth.

have those two narratives sort of been discounted for now >> certainly the earnings have held up better. what happened was when we had that selloff going into christmas, i think the analysts got so petrified of that they ran ahead and downgraded their earnings estimates and they may have downgraded them too far. at least that's the way it looks so far in earnings season. so we'll see if that's going on. and there's no back-up among the central banks. they are all forced to be there. actually, you're seeing some signs of deflation up in northern europe and so i think the pressure will remain on to keep rates and policy as accommodative as possible. the thing the viewer should watch out for is in the recent meeting in china, they seem to be walking away from extra stimulus. so we'll keep an eye on china for the next two weeks and see

what happens. >> we're half a point away from that all-time closing high in the s&p right now. 2930 is where it's trading. earnings, so far, stronger than expected a lot of focus today, some of the names we got before the on organic sales growth and the fact that maybe things are a little bit more robust than had been anticipated you get this q1 gdp number at the end of the week as well. is there reason to believe that the economy, at least here in the u.s., is running stronger and if so, what does that mean for fed policy could there be a surprise to the upside >> i think in many ways, the economy is holding its strength better it's not that it's running ahead of itself. certainly carl knows i have been a skeptic about interest rates for quite some time and i remain that way i don't think that the central bank is going to be easily allowed to move things up and i still am in the camp that think

there's a better than 50% chance the next move is a cut >> a cut it's time for a cut? >> no. not now. but the next move will be a cut. >> it could be a year away >> couple of months, certainly you will see the economy may begin to look a bit more like it's slowing i think the market may hold up i think you will be surprised what impels the fed to move in the direction they're going to get going here >> as you're talking, that's it. that is a new closing high for the s&p 500. we surpassed 2930.75 we've waited a long time for this, art. >> certainly have. it's been a kind of slow, steady move and you know, they could taste it all the way but nobody was going to run for it. >> we're still almost 10 points away from the all-time intraday high as well is that the key level to watch after we get a close here today, especially if we do close at a

fresh high >> yeah, i think the interim high is the one they'll be watching the argument for the skeptics now would be, okay, morgan, you made a new closing high but we're not closed >> that's why i bring it up. >> right >> fascinating picture i guess, i mean, you got the president, obviously, ready to lean on the fed however he wants. you got europe playing along even if china backs off on their own stimulus, i mean, it's ostensibly because they feel like they sort of did their job coming out of december >> it was amazing this morning the gentleman who looks like he might be the logical successor to drahe backed up and said, well, i'm not sure that we need to get away from negative interest rates right now i actually think they should i think it would help their banking system a great deal more but if he's willing to say that, that's about as easy a statement as you can get and keep an eye

on italy i think, you know, we've been watching germany, that's slowed down but italy is showing some signs of fraying around the edges, so we'll keep an eye on that >> i want to ask you about sectors. the outperformer today is healthcare and we know that it underperformed over ten days by the biggest margin in a decade so why would you want to hang out in a defensive -- any defensive sector if you thought the world were really starting to find its sea legs >> well, i think what would -- you're seeing there is an overcompensation you're right healthcare has been inordinately weak, medicare for all and the fear they're going to attack the pharmaceutical industry, has probably damaged them too much so i think what you're getting is a little bit of a buyback here that's all >> i want to bring in bob pisani on the floor of the new york stock exchange and keeping a close eye on these moves in the market bob, what -- go ahead. >> i think the important thing

about what's been happening is the reason we're seeing this move up is two fielfold number one, there is no global economic meltdown as there was feared in december we are seeing europe more stable and european stocks more stable. europe's up 16% this year. that's in line with the s&p 500. that hasn't happened in a long time china, not only has stabilized, their stimulus program appears to be helping not only stabilized by improve china overall. shanghai is up 32% those are the two biggest causes of global worries that we had that are now less of an issue. the fed's still on our side or the side of the factors overall in terms of easing so those are two major issues, global slowdown and fed on your side that are helping now we have the earnings situation, they cut the earnings too much in december and you see what's happening today when you get united technologies and lockheed martin beating by double digits, those are very large beats, unusually large because the analysts cut too much and now everybody says,

okay, maybe we were wrong on that i think there's two or three things missing number one, we need a breakout on the major index, the s&p, we're sitting right near there number two, we need more individual stock breakouts it's actually pretty modest. there's not a lot of stock breakouts. yesterday microsoft was the only new high on the dow jones industrial average and finally, art and i go back and forth on this for months now. the volume it's been terrible volume has been very, very low for a while now and a lot of us are just saying forget the volume we should look at the dollar volume of trading rather than the volume of individual stocks because frankly, you've got companies that never split their stock right now so you've got thousand dollar stocks sitting around like some of the f.a.n.g. names and so the volume looks on the low side. i'm not sure that's as valid as it used to be, that we need some kind of volume breakout. we're certainly not getting it right now. >> bob, you did say going into earnings season that people were overly pessimistic and so far your call is playing out beautifully. dominic chu at hq.

not sure what you're focusing on >> this idea right now, we talked about the sectors that have been leading the way higher, it's always a little comforting for the bulls out there when technology is helping to lead the way higher no surprise that healthcare after being an outperformer given the market melees was the best performing sector that it's underperforming now. what's curious is the move in treasuries, what's curious is how it's playing out with regard to small cap stocks overall. if you take a look at the treasuries across the curvewe are still a little bit lower in terms of yield so despice the fact that we make this run towards at least record highs, closing highs right now towards record intraday highs, the treasury complex still appears to have a little bit of a bid underneath it and that's pushing yields just slightly lower the also -- the key part that we're watching as well is what's happening with small cap stocks. they had been an underperformer since the real ratchet back up towards highs here since the december 24th lows but on a year to date basis we are seeing a

little bit of activity now returning to small caps. they are not at record highs like the s&p 500 they are not making runs towards it as much like the dow or the nasdaq and pos it but still as you start to see a little bit of outperformance there, that might be a little bit of fuel for the bulls today as well. in today's trading we are seeing the small caps up by about 1.5% for the russell 2000 so that bodes well but as we look at the overall picture for the markets and the set-up it is comforting that we are back towards these record highs but it hasn't been like there's this massive breakout to it remember for so long we were focused on the s&p 500, 2,800 to 2,815 levels and earnings season should be helping but it's not propelling things at least as far as some would like to see given the bullish feel that we have at record highs, guys >> dom, don't go too far, and bob and art as well. brent, we were going to have you on to talk about lyft, but you're also joining us on the

heels of this record closing high and a day before we really start to pivot from the financials and the industrials into tech earnings, so is there any reason to think that this pace might be interrupted? >> doesn't feel like it. i mean, twitter had fantastic results again this morning we continue to believe valuations are pretty reasonable, and right now, there are other sectors of tech that seem a little overheated we talked about software having some pretty big multiples so we still think overall the broader internet sector looks relatively attractive and the fundamentals continue to shine through. so, no concern from our side other than the big run-up but again, you still have valuation support for some of the big mega cap names that have not extended to what we consider overvalued status yet >> in terms of where you do see those opportunities in tech, when you do have names like, for example, microsoft hitting a new all-time high today, where are

they >> you know, we continue to liken large cap, amazon, google, facebook, and mid cap, we talked a lot about mig, match, ise, and go daddy we launched a coverage today of lyft, we think the multiple of lyft effectively has caved because of the concern around uber and we believe this is a duopoly. lyft looks very attractive it's a massive discount to its peer group and we believe for long-term shareholders, lyft's going to be a great investment here. >> brent, we apologize for keeping it short today obviously got interrupted by some of the price action in the overall markets. one last word from you, art. what do the bulls need to do after lunch? >> get to a new intraday high and remove all doubt and then see if they can break out from there. >> and i would imagine this makes the close that much more closely watched today. >> it certainly will be.

we'll -- if we don't make the intraday high, a clearly higher intraday high, then the close will be all important. >> we'll watch for snap tonight. of course the morning's going to bring us some big names, including caterpillar, at&t, and boeing what a morning let's get over to the judge and "the half. >> carl, thanks. i'm scott wapner we begin with breaking news. stocks breaking above their record closing high from last september, the catalyst today, strong earnings from several big companies on the busiest day yet of earnings season welcome to "the halftime report," good to have you with us on this tuesday we're also joined by joe, jim, stephanie, and john najarian we're going to begin where else? the markets. green across the board stro stocks higher on the back of those earnings p&g, united tech, lockheed, new highs today, disney, mcdonald's, hershey, m