good morning it's 8:00 a.m. at snapchat headquarters in santa monica, 11:00 a.m. on wall street and "squawk alley" is live ♪ makes me that much wiser ♪ thanks for making me wiser ♪ learn a little bit faster mad my skin a little bit thicker ♪ ♪ thanks for making me wiser ♪ oh, oh, the question is, will we add to yesterday's gains welcome to "squawk alley." i'm carl with morgan brennan at post nine, jon fortt has the morning off. >> we're going to start with techs charge higher. the s&p leading gains since the christmas eve low rising more than 35% as you can see right

there. also higher today amid the market strength is a rush of ipos with some very lofty valuations depending on the metrics. are things getting too frothy? joining us are two venture capitalists phil, co-founder of the ai focus ventures all turtles and senior adviser at general catalyst and paul holland also here at post nine bob pisani good morning to all of you bob, i will start with you after the record closes yesterday for the s&p and nasdaq, just to categorize where we're at in terms of markets and the role ipos have been playing >> i think the important thing is earnings are holding up they are not going down. they're getting better i think we're going to be flatish, not down. we have the fed behind the stock market essentially let's be honest about that and china is improving and europe at least is stabilizing there's your four factors. look at the ipo market lyft is now the outlier. the ipo rush since levi strauss

has been successful, all the big ones have been to the upside, zoom, pinterest, all up. lyft is not. you can debate is it because they have big losses, because the pricing was wrong? whatever, that's the outlier i think the big thing right now is we're talking about $100 billion year for ipos this year and this could be the record year we've been waiting for this since 1999 who knows if it will actually happen but so far the valuations are excellent and we may even be able to raise $700 billion, a market cap of $700 billion, $800 billion, we don't know i think this is a good shot right now at a record year. >> paul, how would you categorize ipos and how much is going to depend on the names that haven't gone public yet >> well, i think it's obviously a rush of excitement and activity that's going on i think you've got three underlyi underlying factors here. one, despite the rhetoric out of

washington the world is getting wealthier, china, india, russia, latin america, the united states, all these countries are getting wealthier. they're greater and greater pensions more and more money going into retirement that money has to seek a return, and so i think that's one of the things pushing the market along for some time. i definitely agree with bob, we have at the very minimum an skriblly accommodating fed if not a politicized fed. that's a different issue for a longer time. i think a third factor in this, bob mentioned 1999, i think people have short memories i remember what it was like in march of 2000 when, you know, the stocks that we're all in, just flipped upside down overnight and it took, you know, 15 years for them to come back you know, that's the situation that we're facing here, you know, on the downside. >> yeah. in terms of the fed, we've talked about the role a more dovish fed has been playing in

the market's move higher, public markets move higher, here in the u.s. since the start of the year, but also this quest for yield by investors has led to what has been a tidal wave of capital in the private markets as well as some of these names do go public this year, what do you think evaluations -- i guess how do you -- private market valuations get rectified with public market valuations >> well, i think it's a very good thing that the conditions are right for a lot of companies to go public because i think there's a, you know, a moral obligation for the -- especially tech companies the companies that are shaping our world to be public companies, to have the transparency, the accountability that that entails and to get companies to go public you need the right conditions that's a very good thing the flip side of it is, the time scales that public markets used to make decisions are completely incapable are the time scales which tech companies operate

when tech companies make plans it has to be years or sometimes a decade in the futures. public markets aren't responding to things years in the future, they're responding to things seconds in the future, maybe a quarter if you're lucky. it's the blessing and curse of ipos very much a good thing for society that more and more companies that are shaping our society are becoming public and more transparent and more accountable. on the other hand, now they have all this pressure to do things in real time which is not at all the way that a good tech company can plan or operate its business >> i think phil's point is well taken. the conditions are absolutely perfect right now. you had a guest 15 minutes ago, phil or paul, said so many ipos coming it could put pressure on the stock market there's no historical evidence that's mattered at all if you look at the numbers we're talking about, we're talking about raising $100 billion into the stock market the u.s. equities market is a $35 trillion market, 35 trillion we're talking $100 billion that's 2 or 3% the market can easily absorb

those kinds of numbers remember, in 1998 and 1999 we had a bull market on the greatest ipo run of all time it ended in 2000 because we were going into a recession and everyone decided they didn't want money losing companies but it did not end because there were too many ipos out there i am not at all worried about the size of the ipo raise this year it's -- phil's right it's time for these companies to go public. there is an eager audience for them out there >> yeah. bob, thanks for joining us and giving us the market viewpoint here phil and paul, stay with us. we're going to dig into the next topic which president trump met with twitter ceo jack dorsey at the white house yesterday and the president tweeting, of course, great meeting this afternoon. lots of subjects discussed regarding twitter's platform and the world of social media. look forward to keeping an open dialog jack dorsey replaying and saying, quote, thank you for the time twitter is here to serve the entire public conversation and we intend to make it healthier and more civil

thanks for the discussion about that the meeting came just hours after president trump attacked twitter via tweets alleging bias against conservatives. paul, i'll start with you on this one given this meeting and mind you, you know, we don't have all the details around what was discussed per se, but coming into this -- coming into this meeting and given some of the debate, particularly from conservatives and folks on the right, have they had reason, has there been evidence for them to believe that there has been censorship on social media platforms like twitter >> i think by the very nature of an open platform like twitter, like facebook, like snapchat, any of the other things that are out there, there are always going to be concerns and accusations about censorship or bias or whatever might happen to be and there's probably going to be some truth in it on both sides. these are human-based organizations. they have more and more kind of a.i., more and more robots as part of what they do, but they're human-based

organizations. i know people that work in all those places are trying the best they can to create a fair platform for people and it's incredibly ironic for donald trump to complain about twitter as a platform because twitter made donald trump. i don't see it from that perspective. you know, if jack dorsey says you've got too many falsified accounts or fraudulent accounts or too many robots i'm going to trust jack dorsey's view on that the guy helped invent the platform and runs it pretty well to this day. >> yeah. i mean it certainly enables the president to be able to reach more people, more directly that's for sure. phil, to that point, the role that a.i. plays in all of this, i realize this is an evolving conversation, whether it is twitter or whether it is facebook or some of these other platforms, google, for example, but a.i. really, the algorithms are only as good as the humans that are inputting them, right >> well, hopefully the algorithms can get better than

the humans have been putting them a lot more effective at some point i think the problem with social media isn't so much the a.i., i think the problem is the business model these are companies, twitter and facebook, that basically make money when you get agitated. they need to get people into a heightened emotional state so you click on more stuff and stick around more and, you know, the easiest heightened emotional state of manufacturing at scale is agitation, on both sides. without intending to do any harm, a lot of the social media companies have pushed us into a pretty bad place i'm really happy that jack dorsey is talking about improving the health of the conversation i think executives at both twitter and facebook and other companies understand that the fundamental damage this is doing and are earnestly trying to improve it i'm looking forward to those results. but i think the real problem hasn't been the a.i. the problem has been these companies make money by making people angry that's not good for us

>> conflict drives movie, conflict drives television, conflict drives news conflict is sort of what makes human narratives interesting, i guess. paul, axios has a piece out about microsoft, arguing that they have somehow managed to avoid the worst of the big tech backlash by taking what they call a methodical approach to consumer data and a.i. and privacy. they report tonight. i wonder how nadella has handled all this >> yeah. i'm not sure i would be kind of patting myself on the back as much as that, if i were them they have a slightly different kind of marketplace at some level. i mean they're much more of an enterprise company, much more working with company data where their policies are associated with that data, and to compare themselves to organizations like a facebook or a twitter that others that are the vast majority of what they deal with are consumer data and consumer interactions protected by

different aspects of privacy and also different aspects of human opinion. i think it's a little bit of apples and oranges from that perspective but at the same time i think nadella and the team at microsoft are very professional managers who have done very high quality work with that company and they brought it back from a pretty -- state since they've taken it over. >> we get those earnings after the bell today as well as facebook, more tech numbers in the coming days and weeks as well thanks for breaking all of this down for us. paul and phil. >> thank you when we come back, fang stocks report this week. a lot of them. a look at what to expect from some of the biggest names in tech as we get facebook and microsoft tonight. shares of snap has been curious today. got a big hit today on earnings. what's dragging down that name after nice performance after the bell last night. pretty flat action overall, though dow up 3.3 "squawk alley" is back after "squawk alley" is back after this

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best they've ever been by far. we have almost 160 million people working today in the united states. that's more than we've ever had working in our country before. we're doing well on trade. we're doing well with china. things are going good. i'm bringing the first lady right now, she's worked very hard on the opioid crisis. we're down about 17% from last year which is pretty amazing we're down 17% with the opioid problem. it's a big problem it's a big addiction and we're handling it. the doctors are working with us, the labs are working, the clinics are working, the pharmaceutical companies are working with us, and we've made a tremendous amount of progress. >> john, go ahead. >> that is the president he went on to say that the u.s. and china have ongoing trade talks and they are going well. eamon javers in washington watching developments after the

president spoke. >> that's right. you heard the president starting off there with the stock market. obviously he sees that as a piece of good news and an overall barometer for the economy under his leadership i asked the president how high he thinks the stock market can go and he didn't respond to that one, but clearly the president focused on the strength of the economy here as he goes into his re-election. also was asked a number of questions about the subpoenas from house democrats for materials relating to a wide variety of aspects of his presidency and pre-presidency and the president said simply, i say enough he said let's get back to legislating on some of the issues that matter and he ticked off a few including infrastructure and lowering prescription drug prices these are key priorities of the president. he would like to get back to not clear that members of the house of representatives would like to get back to those as quickly as he would. carl >> eamon, correct me if i'm wrong, are dem leaders and the president going to meet on infrastructure next tuesday? >> we believe that meeting is going to happen next week. what aides here are saying is

that it will be tough to have a meeting like that at a time when the democrats are demanding all sorts of documents and production, firing off subpoenas and potentially holding people in contempt here at the white house and around the white house. so whether that meeting comes off as planned is an open question, but clearly nancy pelosi, the speaker of the house and a democrat, ceasees politicl advantage to moving forward on legislation. she is among the democrats on capitol hill saying let's not rush to impeach this president and focus on our legislative agenda and show the voters what we can do here together. not clear in this political climate that they can come together and produce anything that's actually going to get passed in both chambers up on the hill and signed by this president. >> eamon javers at the white house, thank you for adding some color to that. while we're talking we did get a record intraday high for the nasdaq that's the first since august 30th got strong tech earnings helping fuel the gains index is up 25% since the christmas eve lows other high-flying tech names set

to report tonight, microsoft, facebook, tesla, along with visa joining us at post nine, oppenheimer strategist brian levet and mike san toely the president didn't mention record corporate debt, federal deficit, earnings growth from 20 plus to 0. >> sure. >> but we know he's a president comfortable dealing with leverage. >> without a doubt the markets are arguably kind of looking past those things as well, right. the market acted going into this earnings season as if companies were going to get a mulligan and expectations were low enough it's more or less gone that way. since the day before we started earnings season the banks reported a week ago friday market is up less than 2%. most of the gains this year to this new record level happened in anticipation of that and to me, what really happens during earnings season is, the good gets kind of punished -- i mean the good gets rewarded to some degree, bad punished, offsetting situation where volatility goes down at the index level and feels safe for people to stay in the market and buy more. the suppression of volatility is

almost, i think, one of the benefits once the trend has been hire i >> does that have implications for flows in the back half >> what we're experiencing now with earnings and the slowdown in u.s. activity is a lag effect of a policy mistake last year which was put multiple interest rate hikes. now we're accommodative and the fed is on hold we have an environment where earnings have slowed but there are a handful of companies beating pretty impressively and that's what investigators are bidding up that's likely to persist through this cycle inning investors are going to come back into this market this is a secular bull market. it's unlikely to end any time soon you don't have the warning signs flashing investors should be involved in this market. >> i would say short term warning signs, on a tactical basis, sentiment is getting comfortable, you look at some of the charts and leading nasdaq stocks, look at microsoft's chart. it's gone vertical heading into earnings you have 30 buy ratings out of

34 analysts. what's it going to do to impress you at this point. if it continues higher it means we're doubling down on an already good bet. >> brings up the key point, you had folks point out we have new highs with s&p but nasdaq has been mediocre volume, how much is being powered by the big cat names, fang and microsoft and the like. >> a lot is being powered by those names and that's what you should expect at this point in the cycle. we've been in this environment for a while now where investors have been hoping that the more value oriented parts of the market, staples, utilities respond and take over. that's not likely to happen in an environment where the yield curve is generally flat, where growth is not accelerating it's actually slowing. so for this cycle, we've been on record saying this is going to go on far longer than most people suspect we put out a note that said five more years in that environment, unless you get a meaningful pick-up in u.s. growth, it's going to be a handful of names

it's going to be the big companies that are able to beat and surprise. >> so key question then when we know that there's been a lot of cash on the sidelines, a lot of investors on the sidelines, maybe spooked in the fourth quarter, they're looking at this market now going, i want to get back in. where do they do that? >> i think they should be investing in the growthier parts of the u.s. market still, and they can also be looking outside the united states, places like the emerging markets where chinese growth is stabilizing and valuations are very reasonable investors always come up with reasons to not be invested we heard the president say we're hitting all these new highs. the market hits a new high every 16 days, right, and we're in a secular bull market and we should expect it to continue to hit new highs. i would say throughout the whole cycle investors have come up with reasons why there was the european debt crisis or debt ceiling or the fiscal cliff or north korea or all these other reasons not to be investing. that's not what it's going to be about. so long as financial conditions are relatively easy, the economy

is growing at a stable clip, the fed sees no reason to kill this cycle, equities should likely go higher. >> we'll see if oil up 40% -- >> no. >> in three months >> a lot not yet we'll see. >> thanks, guys. >> thank you coming up, shares of boeing are higher this morning, up about half a percent despite pulling 2019 guidance we'll take a look at what this means fort company going forward, but first, take a look at the worst performing stocks in the dow so far in today's session. exxon, chevron and caterpillar after it, too, reported numbers this morning more "squawk alley" straight ahead. don't go anywhere.

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creating a better world isn't just a result, it's a responsibility. emerson. consider it solved. fda scrutiny of e-cigarette and tobacco companies is growing and some retailers are taking

the matter into their own hands raising the minimum age to buy tobacco products from 18 to 21 aditi roy joins us with more hi. >> hi there, carl. the tobacco companies and retailers are embracing tobacco 21 initiatives speaking out and some cases spending money on ads and testifying in support of those measures walgreens and rite aid will raise the minimum age required to sell tobacco products from 18 to 21 and those joining altria, british america tobacco in advocating for tobacco 21 laws after the cdc reported last fall in 2018 the number of high school students using tobacco products increased by about 38% and the use of e-cigarettes went up by nearly 78% just last week senate majority leader mitch mcconnell said he will introduce tobacco 21 legislation. initiatives have passed in a

dozen states nationwide. jule has spent millions of ads supporting t-21 and has provided testimony in 17 states altria has taken out ads in "the wall street journal" and "washington post" among other newspapers those company ceos are speaking out about raising the minimum age. british american tobacco said it supports mckunl's efforts to raise the national minimum purchase age to 21 as an effective means of keeping tobacco products out of middle and high schools where youth obtain the products. the fda issued draft guidelines putting restrictions on the sale of e-cigarette and vaping products to youth. back to you. >> thank you boeing meantime reporting earnings this morning pulling 2019 guidance after the fallout of the 737 max phil lebeau joins us with a full breakdown. >> morgan, we're about 45 poi s

minutes into the conference call there is nothing said that is giving investors reason to pause here the boeing ceo has reasserted what he has said in the past his confidence that they do have a fix in hand that they will ultimately submit to the faa for approval to get the plane cleared and flying again here's the impact on the production rate according to mr. mullenburg. >> we will continue to assess our production plans as to whether further adjustments are needed based on information at that time. the timing of the return to service for the max will continue to be paced by ongoing work with global regulators and our customers. >> there's no indication when that approval might come, whether it's in july, august, september, when it might be. two pieces of news today, boeing first of all has pulled its full year earnings guidance in part because it doesn't know when it will begin resumption of

deliveries of the 737 max and it's also suspending its share repurchase program and that's partially to conserve cash as they continue to see cash flow slow down with 737 max deliveries not taking place. one other reminder, guys, coming up on the exchange this afternoon, you don't want to miss this interview. first on cnbc we will be talking with united airlines ceo oscar munoz. we're going to talk to him about the 737 max. remember they've got 14 of these that are parked and unable to fly. we'll get his sense of the impact it's having on his airline and talk about a couple other pieces of news as well and morgan, i'm going to jump back on to this boeing call and bring any other headlines that come to you if they merit news back to you. >> thank you, phil before i do let you jump back on to that earnings call i did want to get your thoughts on the commercial piece of boeing's business which is by far its largest and which 737 max falls under is getting the most attention, has the most impact on earnings, i get all of that when you look at the other

businesses that still manage to have pretty strong results, for example, defense space and security with earnings up 12%, is there reason to believe that helps cushion of the blow and part of the reason that the stock is still up 16% year to date >> sure. yeah they definitely cushion the blow the 12% earnings growth on the defense business, that's crucial for boeing and they just talked about the fact that during the conference call that nothing is changing with regard to that aspect of boeing's business. the other reason that stock is not falling off more, we've talked about this before this is what many people view as a delay event. eventually they'll get the max fixed and resume deliveries and when the cash flow will increase again. it will cost about $1 billion but they can account for that over the life of the program 3,000 airplanes will be extended way out into the future. two reasons why the stock is not getting hit harder. >> thank you go get back on that earnings call now

we appreciate you breaking down the headlines. european markets are closing and dominic chu joins us with a look at today's action. >> major averages closing lower a mixed session as you can see behind me, green and red germany and dax the lone bright spots. following a strong move from the payments giant wire card shares jumping more than 6% after the company landed a $1 billion investment from japan's softbank group. economic worries remain front and center for a lot of europe's largest economies right there with germany a survey shows confidence among german business leaders weakened unexpectedly in april. the e-fo fell in april in the seventh month in the past eight hitting the lowest levels since 2016 turning to the stock markets overall, european autos down by about more than 1% or so at this stage after nissan slashed its 2019 forecast to the lowest level in nearly a decade

the japanese automaker expects profits for the year to drop about 4 to 5%, versus earlier than expected over the same time remember that's carrying through. fiat, chrysler, slipped more than 1% on the news, while renault traded down 4% as well cred credit suisse, posting an increase in first-quarter profits beating expectations, more earnings on deck later this week with the financials, barclay's set to report tomorrow and deutsch bank and rbs on friday back over to you >> thanks so much. let's get to courtney regan and a news update. good morning. >> good to see you, carl here's what's happening at this hour president trump making a new threat to send armed soldiers to the u.s./mexico border and tweeted that mexico's soldiers recently pulled guns on our national guards and better not he again and he's sending armed soldiers to the border. afghanistan and international forces were responsible for more civilian deaths in first three months of 2019 than the taliban and other

militants. this according to a new united nations report it marks the first time in recent years that civilian deaths attributed to government forces exceeded those blamed on insurgents. >> the fighting in libya's capital has reached a detention center holding migrants and refugees the world health organization says the fighting has killed more than 270 people, wounding near 1300 more and an italian artist has marked the 500th anniversary of the death of leonardo da vinci by using a tractor to create an image of him in a field. it took him eight hours that measured ten square miles across an open field. that's pretty cool quite an artist himself. that's your cnbc news update for this hour. back over to "squawk alley." >> that is awesome >> very cool. >> courtney regan, thank you. as we head to break, semis hitting new highs today. meanwhile, samsung announcing a major investment into chip

processors much more on what this all means for the sector and in his first broadcast interview since named ceo lululemon's calvin mcdonald will join us tomorrow morning at 10:00 a.m. eastern more "squawk alley" after this more "squawk alley" after this break.r investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

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welcome back to "squawk alley. chips and semis are showing strength as the nasdaq trades at

record highs the smh on pace for its fourth straight positive day as it hits a new intraday all-time high intel, microsoft, all set to report earnings this week. joining us to discuss the sector's performance mkm partner managing director and analyst ruben roy along with bernstein analyst stacy rasgon thanks for joining us today. >> thank you >> ruben, we've got a bit of a debate on our hands as to whether or not we're at the bottom of the cycle. taiwan semi and broadcom saying yes, texan saying not yet. is there consensus there >> there isn't it certainly is a debate we sit on the bullish side of the debate texas instruments as you mentioned last night talked about these corrections lasting potentially five or six quarters of declining revenue on a year-over-year basis however, their guidance for the second quarter does imply a q1 bottom, albeit a modest growth off of that bottom the debate right now is about

the magnitude and the slope of their recovery we're thinking we are going to bounce around the bottom near term but starting to hear about improving et cetera and looking forward to a better second half of the year. >> stacy, is now a good buying time, given if you believe texan, the bottom of the cycle is a couple quarters out or not a good time because we know what the valuations have done so far this year? >> i'm leaning more toward the second i don't know if we will have a second half snapback or not, but it would certainly seem that emerged from the last quarter's earnings i will also say that regardless of what they suggest, no semiconductor company has any real visibility into where things are going over the next few quarters they're at the back of the supply chain they can be optimistic but they don't know when i look at the numbers across the space, there is a snapback that is already there, numbers are above seasonal for

q3 and q4 as we go in the second half valuations to your point have bounce backed massively from december they were something like a 20% discount to the s&p, now you're closer to parity it's the narrowest valuation discount to the sector we've seen in many years whether we get a snapback or not we might i don't know better than anybody else i think it's already in the numbers and i think if we don't get a snapback we're going to have -- >> how much does all of this rebound and i guess this move to, you know, continued new highs for the semi sector hinge everything that goes on with china and potential trade deal this year? >> certainly china is very important. a lot of the companies that we follow have a lot of exposure to china and markets there, and the communications infrastructure and the mobile handset market, et cetera. we need a snapback in the second half to support some of the valuations we've seen move higher as stacy mentioned.

i still think that our markets that are starting, the early stages, like 5g, a market that texas instruments talked about last night, and there are companies that we follow that play into those markets that are still attractively valued relative to the rest of the group, that's where we're focused here i would also say that semiconductors in general with all the consolidation that's happened in the space et cetera the pricing environment for semiconducto semiconductors hasn't improved which supports a rerating for the space. >> that's another question too ruben mentions, do you think investors are trying to play the cycle as we've known the cycle historically or actually getting in on secular stories like 5g will hold these names for the next three to five years >> i think it's a little of both i don't think -- even though you can argue the sector is less cyclical than it was, i do not think that means it is not cyclical and i don't think you can get away from the cyclical plays.

i do think that there are secular things that have emerged that investors are looking at. 5g is one. if you look across the end markets right now the one end market that is actually very, very strong is communication infrastructure on the back of that -- of those additional 5g holdouts we'll see how long that lasts. texas instruments last night gave a pretty clear indication which is true it is a lumpy market but for now it's strong investors looking at other things like artificial intelligence and high performance computing and obviously data center was a big thing last year as well. there are certainly secular themes within the cyclical that investors are trying to play >> so ruben, what are the names specifically that investors should be potentially putting their money into right now >> so attractively valued stocks that we like include companies that sell into both handset and the infrastructure 5g infrastructure markets which include cuervo and sky works and broadcom and then we also like marvel technology. it's a stock that we think is a little bit under the radar when

it comes to 5g infrastructure. they did an acquisition last year and i think as we get into broader deployment of 5g equipment, marvel will emerge as a strong player into that market. >> stacy, we're going to get tesla tonight. i wonder are semi analysts are they debating the quality of this chip that elon musk touted earlier in the week? >> i think it was certainly some interesting claims that elon made and again, you know, to his own point, he's not always on time with the promises he makes. i think semiconductors and semi analysts are looking at that and drawing comparison you can throw the hammer out against nvidia and they snapped back with their view on what he said i think people are looking at. it i'll be honest, i wonder just given the budgets of the companies that he's going up against in those markets, how

true -- the capabilities and comparison to the competition he's mentioning. i would question that, but we'll see what happens as he brings it out. >> yeah. >> to your prior question, by the way, like you asked ruben in terms of stocks to focus on, i just want to get that out there, i would be looking at stocks that have less aggressive estimates into the second half because they are coupled with valuation support. also the other one that i would be looking at is nxp which i believe is an under appreciated story. i think the numbers are very unaggressive to them and it's one of the cheapest in the space. that is one i would be looking in >> all right we like that we like actionable stacy, ruben, a lot more to come on this space. unbelievable action. thanks so much >> thank you when we return, shares of snap having a very interesting day. they were trading well after earnings last night and got hit

after the bell why the stock is down more than 6% the dow, tight range, 4 points rick santelli, what you watching >> you know, i guess there's only one question to ask when i look into this pit is the price right are treasury prices really this high and yields this low treasury rates are breaking down, dollars breaking up. we're going to talk about all that after the break at carvana, no matter what car you buy from us,

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top the hour today, it's

record watch again for stocks as the s&p heads towards a new intraday high. following every tick and debating how far the rally can go plus getting set for big earnings reports after the bell including facebook, microsoft, chipotle and more, and about a call on a staple's stock one firm says is ready to surge, that and unusual activity when we see you at noon more than ten away looking forward to it. >> thanks. to the cme group and get the santelli exchange. >> good morning. how you doing, carl? when it comes to what's going on in the marketplace i guess the best way to describe it in the easy way is, breakdown, breakout breakdown is the treasuries in terms of yield which means price, of course, is going up and breakout is the dollar index extending the levels we haven't seen since may of 2017 now the reasons are quite complicated. many believe that what's going on with treasuries is a demand shift, meaning that we paid so

much attention to supply that and deficits that the other side, the demand side, has taken over a bit i'm sure that's true i don't know which of the truths is the biggest truth the other truth, of course, is the relative value truth and we had some confidence data weak around the globe we immediately saw that bund yields went from positive to negative again granted only lightly negative but it does show us that there's a lot going on around the globe that has a direct and distinct impact in treasuries look at deutsche bank trying to partner up or news of the day to create a zombie bank for all the bad non-performing toxic assets. when the banks aren't healthy that sends investor signals and all the signals end up in treasuries to my 20 year chart of u.s. ten year with talk about rates and where they're going to go i thought let's keep it simple the reason i picked this chart is several fold. first of all a nice elliott wave pattern forming from the 135

double bottoms in 12 and 16, so we have wave 1, 2, 3, 4. now the question is, if 4 goes much lower, it negates that. right now it's still augers that could be a fifth wave that would move higher. when we talk about rates we get excited about how high they've been consider something simple we haven't really spent a lot of time at the 3% range since the front half of 2011 we haven't spent time in the 4% range basically since 2008 or in the 5% range since before 2002 the point is that there's a lot going on one thing is for sure that double top at 3.25 gave you a great buy signal now let's quickly look at the dollar index this is key. now this chart goes to 2001 and the reason it's so important is because of the massive amount of consolidation we've had recently and i think that the most important thing is, that we -- there's a great trend line here

that i think we ought to do. this trend line goes back to 2001 it connects all the key tops and it gives us a nice line. and the important part of that line is, it lines up with 100. so the dollar index consolidation, some of these levels, i don't think we're going to ever see again but pay close attention to this huge trend line going back to 2001. morgan, back to you. >> rick santelli, thank you. coming up, shares of snap are moving lower, much more on that when we return. they're currently down 5%. teth baknguawk alley" continui afr isre afr isre the dow is flat.to just anybody. here you go. what's this? it's your piano. hold this for a sec! we don't have a piano. no. but the neighbors do. just ok is not ok. especially when it comes to you network. at&t is america's best wireless network

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the xfinity store is here. and it's simple, easy, awesome. snap shares are down after reporting earnings last night. julia joins us and what it was that caused it to fall after the bell it have snap may have beaten expectation for user growth and for top and bottom line results but today the stock is down over 5%, giving up some of its gains in the after hours yesterday as investors weigh the company's guidance, lighter than expected pointing to a longer path to break even for the company. ceo evan spiegel explaining how the snap's investments in a range of features including games and lenses will weigh on snap's bottom line though he says it's worth it over the long run. >> as we're looking at the growth opportunities in front of us, not only will increasing engagement translate to higher infrastructure costs but we also

see more opportunities to invest in our content business, our augmented reality business, and more so i think just as we look to the future we're of course going to do our best to balance our operating efficiency along with our long-term investments but we see a lot of opportunities right now. >> lot of comment on those long-term investments there. now, still, a number of analysts upgrading snap on its improvements with its ad platform, also its ability to adieuse add users faster than expected there should be more user growth going forward. also saying new ad buying tools are helping drive snap's margins. needham citing concerns they will need to raise cash with higher investments in marketing, content, engineering, and sales and now of course we're looking forward to facebook's earnings which are coming up after the bell, some big questions there we'll have to see whether facebook can report stronger

than expected user growth as both twitter and snap have in the past day, also watching to see how facebook's growing expenses also weigh on its bottom line going forward. back over to you >> yeah, it's going to be a key report to watch, we know you'll bring us all those numbers and headlines as we get them, julia. thank you. another big tech name reporting today, microsoft, out this afternoon as well with earnings and josh lipton is in san francisco with more on what to expect. hey, josh. >> so, morgan, here is what we expect when microsoft reports, eps of $1 on revenue of $29.8 billion. that would represent gains of 5% and 11%. investors have bet big, of course, that microsoft is a smart bet on that shift to cloud computing. that's going to be in focus today when the software giant reports. key bank's brett thinks the commercial cloud business will jump at least 43% this quarter to $9.7 billion. now if that's true, that would push the clouz md mix to a reco

37% of revenue and he sees azure growing. i checked in and he says azure is slowly but surely closing the gap with its big competitor, aws, that back in 2015, aws boasted more than five times the revenue of azure now at around $7 billion it's about two times larger so what are microsoft's strengths? he points to a few strong hybrid capabilities, big geographic presence, strong existing relationships within the enterprise too and the fact that certain retail and consumer products companies, he says, choose microsoft over amazon due to data sensitivity issues in other words, they don't want to share data and money with a rival. also pay attention to windows. we know investors don't focus on windows as much as they used to but it still accounts for 17% of revenue according to bernstein research remember last quarter, revenue from windows device makers did slip 5%. carl, back to you. >> heading into the print with a

record high today, josh. going to be interesting. josh lipton's going to watch microsoft for us tonight after the bell as morgan said, awfully flattish action today on the overall indexes as boeing and cat esseiay ncacntllcael eh other out. s&p down less than a point s&p down less than a point back in a moment that's why we would suggest the powerful, portable lenovo thinkpad t480. to let your people stay productive from anywhere. wow, i feel really great about this. [ sneeze ] it's probably nothing... or something, really bad. you need it orchestration by cdw and lenovo. featuring the intel 8th generation core processor.

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24 hours ago they said maybe the bulls can push us over the interday high. they didn't do it yesterday and so far not doing it today as that boeing suspension of guidance has some people holding their trading pretty tight but a big night tonight with tesla, microsoft, visa. let's get to the judge >> carl, thanks, i'm scott wapner how far can the record run for stocks really go if you haven't gone all in on the rally, is the market now too expensive to buy big questions. our investment committee has the answers. it's 12:00 noon, this is "the halftime report. >> record high watch, the s&p and nasdaq both flirting with all-time highs if they get there today, what pushes them higher plus a big wave of earnings comes in four hours, facebook, mickels microsoft, visa, chipotle, and more we'll trade them all and a big call on a key reason why the co