it is 8:00 a.m. at facebook headquarters and 11:00 here on wall street and "squawk alley" is live. ♪ good thursday morning and welcome to "squawk alley."

carl is on assignment. jon has the morning off and we'll start with facebook which is up big after posting record numbers on the top and bottom lines. julia boorstin is in los angeles with more on the quarter >> facebook shares big move higher today reflects that the company is starting to put its privacy crisis behind it and signs showing that that privacy crisis won't hurt its financial potential. the settlement seen as a valuable stop toward resolving a massive overhang and zuckerberg stressing that he is focused on reining in costs >> i care a lot about making the right investments in safety and innovation long term of course i get that in running a company, you don't want costs growing at a much faster rates than your revenue for a long

period of time and that is why i called it out last time because i care about making sure that we get that back more in line >> zuckerberg saying they now focused on building a privacy focused social network and they are also working on building out e-commerce as well as payments. wall street is largely bullish on these ruflts. ubs upgrading the stock on the moves to mitigate risks. a number of other analysts raising price targets praising facebook for its moves to capitalize on messaging. rbc pointing to facebook's growing revenue per user but there are more calls for a regulatory crackdown on facebook the irish privacy regulators just today announcing that they are looking into facebook's potential violations canada's privacy commissioner hosting a press conference about its investigation today into facebook, what it calls the company's major shortcomings when it comes to privacy reform.

the commissioner saying that regulators need stronger sanctioning power including the ability to levy meaningful fines on facebook. this comes as senator elizabeth warren tweeted about facebook saying fines like this won't stop them from breaking the law and violating our privacy again, it will take big structural change, #bringup big tech. zuckerberg has said he welcomes regulation and they are working with regulators all around the world, but worth noting he doesn't want anyone breaking up his company. back to you. >> julia, thank you. facebook of course key future this morning, certainly a positive response. let's stick with the name and bring in mark thand john thanks for being with us mark, i'll start with you. anything negative to say about the quarter? >> well, yeah, growth is slowing down in terms of users this is 8% high single digit year over year grower in terms of monthly and daily average

users. there is no question that they have the world on their network or most of the world that can continue to grow for a while, but you're not going to get dramatic premium growth out of users for a while and that is clear in the numbers most of the other takes i thought were positive. >> and same question to you, john more specifically, a lot of positions to grab a hold of. specific to the ftc actually, i'm curious, it is not the number that is scaring people at all clearly, but what about potential remedies if there is a consent of some kind is that still an overhanging concern on the stock price >> yeah, i think to a degree it kind of caps the multiple but i think based on the reaction today and them citing up the 3 billion accrual, investors are kind of looking past it. so we will have it see, but i think that the story this quarter was instragram stories instragram is driving the growth of the company at this point we estimate that it is about 20%

of facebook's total ad revenue, but it is growing four times faster than core facebook. so it will be a big driver in stories ramping. we're looking at that through the course of the year to drive the fundamentals >> mark, when you look at the earnings from facebook, you look at the earnings from twitter, obviously these are companies that over the past year have been spending more, implementing the strategies to essentially clean up their sites whether more options in terms of privacy and data use thiage or handlingf misinformation, has the narrative on wall street shifted in terms of the quality controls and those longer term being a good thing especially when you see advertising dollars up at facebook >> yeah, i think so. i think there where three points here the companies needed to clean up their act and i think they did and we're now well into the ad cleanup, whatever the expression is, so it makes the stocks easier they are better longs. i think what facebook did last

year when we look on it his ts c torically, averaging up the spend, i think it was the right idea and these other companies are getting rid of a lot of the trash that is on their site, the poor content that they have been usin editors and algorithms and i think wong of sone of the things is instagram is becoming incremental to revenue growth. advertisers are coming out more strongly on to the instagram platform and everyone though pricing is lower, it is increme incrementale growth and that is the bull lilish bullish call on. >> and further monetization and

what it means for the stock. what about whatsapp, what is the strategy for that application and is facebook disclosing a lot of details about that? >> yeah, it is a good question really i think that they are de-emphasizide em fa s deemphasi deemphasizeing monetization on messenger and whatsapp for the time being they are going to focus on the private communication platform and rolling that out in the coming years that kind of one to one or one to many group communication and the principals will be around prior and encryption where facebook cannot see or others cannot see what is being communicated, safety, et cetera. and i think that they are looking at the signals from whatsapp and the data this they see, engagement with group messaging. and so i actually think this is going to be the big topic next we week and also maybe give us a sense

of how they might monetize it whenever they kind of introduce it >> mark, finally, as they shift the ad load from news feed to stories, the inventory conceivably then in news feed goes down. do they benefit on the pricing side from that >> probably. at the end of the day, what really will determine pricing is perceived roi by advertisers if the roi is good, advertisers will keep spending or be willing to bid at this level or higher levels we do these pretty exhaustive surveys every month and there are two roi kings on the internet today one is google and one is facebook and advertisers see just as good a return on their dollars as they do on facebook as they do on google. and if that is true, people will be willing to bid these prices or higher because the returns are so much better than that they can get in other areas. so you will probably see this for a while. >> and larger concerns about privacy don't seem to really affect people's behavior, do

they >> no, i don't think so. but -- sorry, one other negative here facebook did say more and more people are opting out of targeting. i'm not sure why people would want to get more junk mail rather than directed mail. i think that is the right analogy. but yeah, there are limits here to targeting and if you do that, it could negatively impact roi. haven't seen it in the survey yet. >> david, the other thing is they did call out mobile operating systems like ios potentially reducing are targeting capability for facebook in the back half of the year that is something that we'll be looking for. >> okay. good guys, thanks to you both >> thank you another big earnings mover this morning is dow component microsoft crossing over the $1 trillion market cap earlier after an earnings beat and revenue beat josh lipton is in san francisco with more on those numbers

>> morgan, firing on all cylinders. that is how analysts are talking about microsoft's results this morning as the software giant beat the street's estimates. one highlight of the quarter, azure cloud compute division growing 73% without disclosing a dollar figure but rbc estimates $3.2 billion and their ceo saying the company is accelerating innovation >> today i take and analytics is the foundation and we're investing to make azure the best cloud for data from data warehousing to real time stream analytics. daimler chose azure as its new platform and third party analysts confirm our price performance lead in this fast growing space. >> no surprise that analysts see azure slowly but surely closing the gap now with aws

and they are going head to head for the monster cloud computing contract with the pentagon, worth $10 billion. the team at web bush saying that bakeoff is now a toss-up amazon reports results after the close. commercial sales of office 365 jumping 30%. linkedin, 27%. dynamics 365 up 43%. patrick morehead saying that ugt is suggests to him that they are picking off customers fromacleoe morgan, back to you. >> and i'm watching that jedi pentagon cloud contract closely as you are quick question for you the bounce back on window sales this past quarter, a lot of that decline, that earlier decline had been tied to manufacturing delays at intel. we get those results after the bell today is there a read-through here >> so it is interesting because

invest are informations might not focus on windows as much as they used to, but it is still an important revenue driver for this company the team at burnsteen would estimate 20% of last time they said that it had fallen, but now up 9% on the improved chip supply amy hood says she feels pretty good about the supply at least when it comes to the premium consumer segment and commercial segment. so we'll see what intel's bob swan and his team have to say after the close today. >> we know you'll bring us those numbers as well. thank you. when we return, shares of u.p.s. are trading lower this morning down 8%. profit and revenue coming up short on expectations with some bad weather factoring in u.p.s. ceo and chairman david

abney will join us your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

you need decision tech. the latest inisn't just a store.ty it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome. welcome back shares of u.p.s. falling after seeing profit and revenue miss forecasts. bad weather playing a part in the company's results. joining us exclusive on the quarter is david abney david, xwrats great to speak wu >> thank you >> so in terms of the quarter, as i mentioned, a big weather impact, but also the stock seems to be trading lower in part

because the second quarter guidance is below expectations walk us through what you're seeing so far this year in terms of business activity and your expectations as the rest of 2019 unfolds. >> i certainly will. and first quarter, it was a dynamic environment. weather of course did play a big part we called out weather as 7 cent per share negative effect. and there were also trade pressures. i think what is important to look at is our performance for that first quarter we offset almost entire effect of weather through good execution. if you look at our air volume in the u.s., it was 7% increase over the year before if you look at our ground yield, it was up 2.7% and even with the weather, we were actually able to bend the cost curve down. and then in our international

business with the trade pressures that you see whether brex brexit or u.s./china, we were still able to have a record first quarter. and revenue was affected more by currency so if you make it currency mutual, we had good top line performance, we had good about the line but what gives me confidence is first you can tell we maintained our guidance for the year. and our transformation initiatives and our strategy and and to execute and we're not going to have winter storms the rest of the year so we feel much more comfortable about that but we'll continue to execute and be fine for the rest of the year >> and in terms of the global economy, given the fact that u.p.s. moves so many different types of goods across the globe, a lot of focus on global economic growth particularly in places like china and europe

right now. just look at 3 m's results this morning and some of the comments out of that other industrial bellwether how would you cat riegorize it internationally and in the u.s.? >> on any given day, we you've 3% of the world's economy and about 6% of the u.s. and what we're seeing, i'll start with the u.s., is still good growth. it is not quite as high as what we've seen in the past year. but it is still driven by the consumer, still driven by inventory replenishment. at the same time, we do see that manufacturing has slowed down a little bit and industrial protection is forecast second half of the year to slow up. so a little mix. from the global side, still growth, just not as high as what we've seen before. europe is being slowed a little bit by manufacturing decreasing. and of course by brexit

concerns and china, even though it is not growing quite as fast as maybe previous years, it is still showing solid growth maybe not quite as high to the u.s., but certainly higher in other parts. world. so we're still bullish on our international business and our ability to compete >> interesting prognosis there i would imagine you're planning the business based on trade flows for the rest of the year do you expect that we're going to see a trade agreement between the u.s. and china >> where he encouraged by what we're seeing so far, what we're hearing. we really believe that both countries need to find a way to resolve the issues we do believe that the u.s. exporters need to have greater access to the chinese market so we're hopeful, but the signs we're hearing, we think that

there is a deal to be made we would just encourage the leaders to find a deal >> david, you mentioned your maintaining guidance for the year and yet wall street seems to be taking a wait and see approach what gives you the confidence that you can meet that guidance again given that the stock price has shaved about 8% off your market cap >> the confidence that i have is based on our strategic comparatives we know that we will focus on smbs, on global growth markets, on health care and on e-commerce we saw good solid gains the first quarter. we came very close to offsetting some of the challenges that we saw. and we see momentum. we are accelerating our implementation of technology this year for the second quarter, we'll implement 30% of

our new capacity for the year. last year we didn't implement any the first six months of the year and we will get the benefits of that increased productivity. we're adding more technology, we're focusing on the small business owner and we feel comfortable that we will maintain and reinforce that guidance >> david, on the call you were also -- and this happens every quarter, but you were also asked about the impact of amazon building out its own transportation and logistics, whether volumes had been impacted at u.p.s. and you said you haven't seen that. but you mentioned the growth and focus on small and medium businesses the tech platforms you are building out there, some of the physical fulfillment centers i can't help but think that the focus there on diversifying into this revenue stream beyond some of your largest maybe lower margin customers like amazon is

exactly for that point, to move beyond some of the more traditional bigger e-commerce customers. am i right to think that >> yes, morgan in fact we called out last quarter that we will improve the revenue quality and that we were going to focus more on smaller customers and less so maybe some of the largest e-commerce providers. so really owhat or customers ar telling us is that they want alternatives and they want to be able to compete with the larger companies. so we are helping them by building platforms to really punch further than their weight. and to give you a couple examples, e-fulfillment which the small business customers can connect to 20 2 1 different marketplaces and u.p.s. will take care of all of the logistics, all the warehousing

and all of the shipping. and then where to go which is a new business that we started is really a broker that matches available warehousing throughout the country with the needs of our customers. and in both of these alternatives, we can give them two day service throughout the nation which is what many of the large e-tailors can do so helping them to be competitive to these larger concerns >> david abney, always great to get your thoughts on the global economy, on business at u.p.s. and of course on some of these technology innovations that you are rolling out including those drone deliveries that you know you've been doing in health care thanks for coming on with us >> thank you and we have another big earnings interview coming up that you will not want to miss tomorrow morning starbucks ceo kevin johnson will join us for a first on cnbc interview. "squawk on the street" 9:00 a.m.

>> yep, jim and i will take care of that one. and deidre spoke to the cfo of paypal >> we talked about venmo the big question for venmo, when will it finally start making money. here's what he told me >> it won't happen this year it is not something that we put a time frame on, but i think for us we're very fortunate in that we're able to invest for growth and still expand our operating margins through other means. we have a portfolio of products? are higher margin than others, but we're building a company for the long term and venmo is a key part of that and we want to make the appropriate investments right now to scale and grow that platform without being too focused on trying to get it to be profitable in 9 nethe next quarter or two >> so for now p to p payments

continue to cost the company and on a potential venmo credit card, he said there was nothing to announce but he didn't shut down the idea either saying it could be a natural progression i also asked about the payments processer for instragram shopping, that is still in early stages have a listen. >> to instragram specifically, it is where our future is. we want to continue to partner with these large and fast growing market places. if you look at the declining part of our business that is ebay and you contrast that to the top 20 merchants that we have, other than ebay, those top 20 merchants represent $90 billion in tpd, much more than ebay, but the important point is those are growing at 40% year on year so this is our future. >> and i thought that was interesting because it speaks to the ebay and instragram businesses as well as the broader e-commerce landscape back over to you >> deidre bosa, thank you. coming up, tesla shares are

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elon musk making some interesting comments on the quarterly conference call last night. phil lebeau is in chicago with more on those results and those comments hey, phil. >> hey, morgan this stock is slumping close to its 52 week low despite the fact that you still find bullish because of what tesla said about demand and its guidance for delivering vehicles in 2019. remember, a lot of people are concerned that this company will see a big dropoff in deliveries. and they are reaffirming their guidance to deliver between 360,000 and 34400,000 vehicles this year and yet they don't expect to post profit in the second quarter in fact they expect a loss elon musk was asked whether he would rather be leading a private company as opposed to a public company and he said, well, that ship has sailed

>> it does feel like the sort of price of the stock is being set in kind of an unpreexpressive wy and i think warren buffett's analogy is like having someone stand at the edge of your home and just randomly yell different prices for your house every day. still the same house >> those comments are interesting because today is the deadline, the latest deadline for elon musk's attorneys along with attorneys for the s.e.c. as well as for tesla to see if they can work out some kind of a deal in terms of what kind of restrictions will be placed on his communications via twitter, facebook, social media in general. and that deadline is today we'll see if there is another extension or if they say to the judge we can't work something out, we need to come back to court. >> phil, what do you think the likelihood is of them raising capital? >> pretty strong i think you listen to the tenor

of elon musk's answers yesterday. it may not be in the second quarter. most of the analysts are saying we think that it will probably be in the third quarter. but you saw a noticeable change in terms of elon musk saying i'm more open to the idea, i think that the company probably is in a position where it is better positioned to take on capital. >> all right quick programming note here, happy birthday to phil lebeau and to morgan brennan. they share a birthday. >> happy birthday, phil. >> happy birthday, morgan. >> thanks. >> european markets are just closing. seema mody has a breakdown of the action >> and it is a lower close for the european a markets after two mega mergers have been scraped the first one, uk regulators blocking a deal between the british grocery chain and the walmart owned company with concerns over higher prices. the combined company would have overtaken tesco as the largest

chain. walmart now expected to consider either an ipo or a sale. and deutsche bank ending talks after six weeks of negotiations. the question now becomes could this open the door for foreign rivals to acquire cemmerze bank. pivoting to a theme that we've been watching, slowdown in china, two earnings reports offering a mixed picture first peugeot issuing a weak forecast citing weakness in the chinese auto market. on the flip side, hermes saying luxury being a market that is less sensitive to economic headwinds. and may remember last earnings season that was a big trend that we saw that despite the economic data telling us that china's economy is slowing down, luxury retail continued to cite

strength in china. stwe we'll see if that continues. >> all right thank you. let's get over to kell li evans for a news update. >> here is what is happening at this hour. the sri lankan prime minister says father of two of the suicide bombers has been arrested in the aftermath of the easter sunday bombings that killed 359 people. he says there are still suspects at large and they may have explosives wednesday police conducted further raids and arrests. officials say 31 people have been taken to hospitals after ammonia leaked from containers that tractor was pulling in northern illinois. the spill happened in beach park about 40 miles north of downtown chicago. and you can see it there the public defenders representing nikolas cruz have requested to withdraw from the case they say cruz will receive nearly half a million dollars from his late mother's life insurance policy and under florida law, public defenders can only work for people who

cannot afford a private attorney and at least two people are dead after a tornado touched down innorthern louisiana. there was widespread damage including downed trees and power lines. the city is home to louisiana tech university which also experienced quite a bit of damage and that is our cnbc news update for this hour morgan, back to you. >> thank you after the break, a record quarter for facebook why the stock is surging today it is up 6.5%. ayitus0 inow down 14pots st wh

welcome back record quarter for facebook surging today, now up more than 50% since just the start of the year regulatory headwinds and user data a concerns not slowing down the stock at least business insiders are joining us to break it all down gentlemen, good morning. henry, i'll start with you we talk about regulatory risks and overhang, so much about privacy concerns an data misuses. and yet it continues to power higher the stock at least >> it hasn't really affected the business earlier mark talked about what a juggernaut it is in terms of roi for advertisers. advertisers are still seeing that and you also have instragram which is largely untouched by all the facebook controversy they are still in the earlier stages of monetizing that. so i think investors are just looking at the business itself and by taking a colossal charge, and no other way to describe it, it won't hurt them, but a

colossal charge, the market says now we can go forward from a business perspective >> and nick, you published a cover story chronicling the inner turmoil at facebook speaking to dozens of folks on the record and on background when you look at numbers like this, when you look at advertising revenue continuing to climb, some of the user metrics continuing to grow, what do you think the sense is both inside the company and among folks that have spent a lot of time around it >> i think inside the company there is a lot of fear, just sort of reputational fear. it is less fun, you have less pride in working with facebook because there is so much heat directed at the company. but the people who work on the business side are very confident and very happy another really good thing in the numbers is they are making hormone off stories. the case against facebook has been all the reputational stuff

will catch up to you we're now a year past cambridge analytica and it hasn't. they won't be able to monetize stories and it looks like they are doing just fine with that. and the one remaining big obstacle is that zuckerberg's pivot to privacy will be harder to monetize, but they show that they can continue to monetize at all times. so it is a harder place to work, but they are still rolling in money. >> to that point, henry, the pivot to more privacy, encrypted messages, instragram is certainly a bright spot. but if they continue to move in that direction, what does it mean longer term >> i think with whatsapp, they are still early. it is not costing them that much money. it is not a huge drain you look in asia, a lot of the messaging services have turned out to be incredible businesses. and mark was talking about payments being able to pay directly out of apps whatsapp could play into that as well so i think it is too early to say well it will never be a

money maker for them and given what nick just talked about, so much room left in the core business, i think investors can take a call option on it >> i spent almost the last three hours hearing nothing but positives about facebook including sharing many from my own reporting. so give me something that should still be a concern to investors, users, employees, just something. >> i mean, it is not that hard the canadian government just said they are investigating facebook an hour or two hours ago. so they have regulatory risks everywhere the other big concern and this is the thing that they have sort of hidden at facebook, they haven't wanted to talk about and it caused a lot of tension at facebook is the continued migration of people off of the blue app, off of the core facebook proper duskt. and it was the sourz of a lot of the tension with instragram which led to the departure of the founders of instagram. and that is facebook worried that instragram was canal about a losing the blue app. they haven't fully sorted that

out. numbers show that the blue app is doing okay, but instragram is doing better so if you are looking really carefully at facebook and the trends down the line, where they have fewer users in the blue app which they are great at monetizing and more users in instragram which they are less good at monetizing is worrisome. so regulatory risk and core business risks absolutely. >> and they still have a big complex problem to solve reputationally they have built a powerful media platform and yet here they are still spreading gross misinformation to millions of people to the point where sri lanka shut the app down rather than have all this kran get ocrt there. they have to get on top of that and it will probably take more effort and tough decisions over the next few years >> quickly, do you think that the moves that they have made -- go ahead, nick >> if you look at trust metrics of the big tech companies and

the techlash, facebook's reputation has gone way down other tech companies namely stochb a amazon and microsoft are doing just fine. so facebook is being hit the hardest, another reason to be concerned. >> and yet shares now un20% over the past 12 months gentlemen, thank you we have another faang component set to report after the bell yeah, amazon deer dw deidre bosa has what analysts will be looking for. >> soc >> san warned thamazon warned t would be a year for spending and yet investors are brushing off concern sending shares up more than 5% this year but perhaps they may be looking beyond the market place to

advertising and sub be description services on to keep some of the momentum there is of course aws which continues to be a profit engine for the company. but i also think investors need to focus on the sbhinternationa business it is more important but also more challenging amazon shut its domestic market in china and that ups the move in india where amazon also faces tough government regulations and fierce competition guys >> yeah, still trying to figure india out. deidre, thank you. still to come, what to expect from cnbc's annual stock draft this afternoon pnc bank has technology to help make banking easier,

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here is what is coming up on the halftime report. is the strength in tech enough to keep the s&p on track we will debate that question as the rally takes a bit of a breather today and plus with 3 m weakness weighing on the market, the top industrial analyst on the street of jpmorgan will join us to discuss that company, general electric and other big industrial names and pete has our call of the day. delivers a big beatdown for one

of the market's most fought after names. all that and more at noon. see you then >> looking forward to it let's get over to the cme group. rick is an telly santelli is j us for the santelli exchange >> and trying to determine where the economy is, the momentum in the economy. the momentum in the markets. but basically the pole position of the u.s. economy for all you racing fans out there. and maybe tomorrow's first look at first quarter gdp is exactly the vehicle to get you there consider this. at the first quarter of the u.s. economy is always considered to be invalid to some extent. always underestimated. it gets a really bad reputation. as a matter of fact, some research almost exactly four years ago from april of 2015, i'll read just a portion of it a detailed review of 30 years of government gdp data, the most

followed measure of u.s. growth, suggests a long-standing problem of underreporting q1 expansion you know who wrote that? steve liesman for cnbc and he did a lot of research and it was really a well done job. and he is right. so now let's take that in the context in which we should interpret tomorrow's data. first of all, atlanta gdp now on the 12th of march was 0.17 they round up. so it was 0.2% for the first quarter. as of about an hour ago, it is now resting at 2.7 i'm not saying that it is be at 2.7, but i think that it is a pretty safe bet to say that it will be 2% maybe a little hider. so now let's think about it. if that is the worse scenario, we'll have a great pole

position in a way, a strong weak start will be really good for the markets. because in my opinion, the markets will not focus on the fact that it is old data, it is focus on the fact that there is more momentum and the second and third and fourth quarters will be at a starting position that is so much better than anybody anticipated. now, why am i bringing this up specifically with regard to the markets? because as i look at the board, you can still make a case we have double tops in the equities because it really hasn't sliced through like breakouts should. it probably needs an event, a big domestic or fundamental economic event tomorrow's gdp could be such an event. morgan, back to you. >> that definitely teases us up for the key data point tomorrow. rick santelli, thank you as million dollar houses meantime in greenwich, connecticut continue on go unsold, is the market a

precursor for other u.s. towns diana olick is there live and joins us with more >> look, this six bedroom, nine bathroom center hall colonial is indicative of everything going bathroom center hall colonial isty thick of everything going on in the greenwich market today. been on for over a year. dropped to $4.95 and now a new agent is putting in at $4.5. it's all about changes to the tax laws that are hitting this market hard. >> it can be significant you're looking at $5 million, $6 million,s 7 million that pay $125,000 a year in taxes and now you can only write off $10,000 it impacts values but takes a while for buyers and sellers to agree on what that value is. >> sales were down 25% to a year

ago. days on market, 214 and inventory up to a two-year supply for homes for sale. in other words -- >> it's a great buy right now. my buyers are getting awesome deals. i had a buyer who bought a house for $6.6 million that was on for $8.25 million. i had a buyer who bought a house for $750,000 that was originally on for $900,000. you get a deal in every price range right now. >> of course, not a great time to be a seller homeowners here bought this house over a decade ago for $4.99. if they sell it for what they're listing it now, they will take a loss this is a story happening in the suburbs of new york, parts of california, really any high-tax areas in the high-end part of the market because people are just not willing to pay that morgan >> it's so true, diana i live in nearby westchester county and similar dynamics playing out there as well.

thank you for bringing us this important story. when we return, 16 consecutive victories. we will break down the secret of the "jeopardy!" king yet d an3m is still the biggest drag down 10%. at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved.

let's give you a quick look at the markets dow under pressure as a result largely of the decline in 3m

s&p back in positive territory and, of course, technology led by the likes of facebook, service snap, pick your name, is up the mt isosth morning so far. "squawk alley" back after this

you would? look at you go that was our own david faber from his winning on "jeopardy!" back in 2012 little trip down memory lane meantime, professional sports gambler james holzhauer is on "jeopardy's!" hot streak lately, winning 15 straight game and closing in on the record $2.5 million winning total set by ken jennings we're breaking it down at hq with more on the strategies and secrets of success eric >> holzhauer is bringing an aggressive approach to "jeopardy!" aggressive strategy. a lot he learned from his career as a professional sports gambler. he loves in vegas. that's what he does every day. first thing you will notice he goes at the expensive clues at the bottom of the board, all of the $1,000 so he can generate as much money as possible before he

gets the dabl double when he does, that allows him to bet huge amounts on them and take a big leap. he takes that same approach in final "jeopardy!" putting down huge bets. $50,000 is not unusual for him in final "jeopardy!" he said his comfort as a gambler leaves him not stress taking the risks. but he said the biggest factor is reaction time all of the contestants on the show are preselected due to trivia knowledge but he's perfected buzzing in at exactly the right time this came from a lot of practice at home with a home made buzzer. he also said he spent a lot of time reading children's book to beef up on material he was weaker on. he said it was easier to digest new information in the children's book as opposed to reading a much more dense adult reference book now we need to get faber and holzhauer together in the same episode and see how much money faber could squeeze out. >> i probably couldn't even get

one right. >> oh, please! we saw that award in the opening sequence. >> a grand maybe. >> i did win 50. i only got one answer wrong. but the button thing is the hardest thing to get down, absolutely true. interesting. >> eric, thank you and david faber. with that we will send it over the half and scott wapner. i'm scott wapner the tech tear, is it enough to reach greater heights? surging against this hour, microsoft and facebook report blowout earnings it is 12:00 noon this this is "the halftime report." tech, back in the spotlight. key investor falling big top analyst jpmorgan's tusia is back to tell us where he thinks 3m, ge, honeywell and micro technologies are heading