. a check to the future. dow futures is down. 3.2% for the first quarter for the first read have a great weekend everybody, we'll see you back here next week, right now it is "squawk on the street." ♪ good morning and welcome to "squawk on the street," i am david faber along with jim cramer we are live at the new york stock exchange carl is on an assignment this morning. this hour, we got the president's economic adviser, larry kudlow, his gdp report for the quarter. plus, starbucks' ceo is going to join us, kevin johnson

first a look at the future this morning as we set up for an open 30 minutes from now. you can see generally i guess what you call that, jim? >> mix >> good word >> mix our road map starts with full steam ahead, the u.s. economy growing at a stronger pace than expected we'll get the first white house reaction to that gdp report with larry kudlow plus, uber is expected to debut the market cap shy of $85 billion or so. that would be below of eye popping valuations expected recently amazon smashes earnings expectations, profits more than doubles. as sales grow, not quite as fun as it was. >> it was interesting. it was 4% verses a much higher number >> it is as concluded.

>> we got to talk a lot more about amazon let's get to this new data that was up a few moments ago from the government economic growth accelerated in the first quarter of this year 3.2% was the annual growth that was up from a 2.2% number in the first quarter and what economists had been expecting. results coming head winds and slower global growth we had the government shutdown as well and a slow down there. stay tuned for an interview with larry kudlow that'll occur later this hour. >> your first reaction >> i see the numbers january hurt by a couple of shutdowns and february hurt by weather, march a dramatic bounce back a lot of companies have pulled through to be able to bring in a lot of good ahead of the tax i don't want amazon tariffs too much when you have this kind of

hiring, it is eventually going to rip down. there is a lot good in the economy. not enough bad, i think there is core inflation that people are missing. you get a company like amazon, it is unbelievable >> yeah, now you meant for the idea of inventory building the fourth quarter, you were talking about it again can it be expected >> no, inventories that were bolt up in the earlier part of the event. >> maybe supply chain and how great it is in the country we'll have a recession because we have an inverted yield curve. february was not that good because of the weather march is really good big bounce back it levelled off to be 3 instead of 2

where are the other ones where were the other quarters? the district was 3 you thought the others would be stronger this was a good number for the u.s. >> what's your friend jay powell thinking this morning? >> i think he thinks i did my job and we got quote with little inflation. maybe that my fourth quarter was not done by october explanation of what i am going to do done right. if i said one and done, i would be looking much smarter. you should have said one and done in october or instead of one and three. it is about october hang over. that's what i think. >> well, we'll see how the market reacts. not much of a reaction >> when you buy interest rate, it was not down. the market must be smarter than we think >> moving on people are saying rear-view

mirror >> if it is so positive then why was it right for the february race i think it was the positioning of the way the fed gave in >> we'll talk to mr. kudlow joining us in 20 or 30 minutes >> good day for larry. let's get to amazon. the share s appear to be up in the mark it got a boost from cloud computing and advertising business jim and i have talked about that for quite some time. it announced plan to bring one day delivery to its prime members, that would be instead of two days. that'll cost about $800 million. the cfo keeps on talking about it they did it last quarter, we'll spend more they did not do it that much in this reported quarter. you have a profit that beats estimates but they talk about the 800 million apart of that. i can remember when i did the documentary back in 2012, thanks

to the 30 year stuff going around i saw the date on that they were talking about same day then and now they're getting so, so close to same day at the time i was like are you kidding me >> the pressure on walmart and target this morning must be incredible they are all doing the right thing. we have brian nichols on yesterday, he was playing offense on the omnivo channel when you have walmart, suddenly they have to say you know what, we have to do even more but you see unlike the fly wheel of amazon because you got prime, they don't have prime. by the way, prime, talking about how they added and raise the price. the conference call, people are threatening us people are selling the stock on

the guidance they don't work like that. you can't take their guidance. the company itself has now dated three moving parts you look at amazon web services, david, this is a business that's going 42%. it is $30 million business >> it is 48 and 49 and 46, 46. the analysts are kind of caught here they don't know how to model you got to take them away and look at this thing as if it is a company that has so much opportunity. david, they are almost giddy of the fact they spent so much. >> what happens is intel -- >> data center >> and chooina. >> you and i will talk about >> i wonder if alibaba is in the same situation did they spend so much they could have a gigantic

quarter. it could beg gigantic today. >> i want to talk about uber later on >> we'll talk about uber in a moe moment ford is reporting a better number than it has been. >> hold on >> let's finish on amazon. the stock is up a bit. in some way it was a non-dramatic quarter a better expected number and global effort to bring their deliveries within one day, it is not just north america but where they are going and being focused a first. aws continues to be. what will that business be valued at if it was broken down? 42% top line growth and 50 something percent margins, 9 billion in profits >> you know what they do every quarter? they cut the price of it and

they add an lit lalytics. can you imagine going up against them >> will google show up ibm is going to say once they close the deal with red hat, i challenge jeannie romety being able to stay up with it. if nadella is such a humble man, this is coca-cola and pepsi. >> we have talked about nadella. the ceo's main job is to guide the company to say this is where we are going >> totally >> and his decision how many years ago to say the cloud is where the focus. >> did you see the list of things it is truncated. i know they have to do that and they have a lot of money the number of new things, you

know what they left out that was interesting? they did not talk about the kohl's returns policy. the 1% warrant that got them doing. david, they are accelerating on all fronts i come back and i look at that letter and i think of the terrible discussion of his personal issues. this man gains focus how he did that is totall totally -- there is some people who are so excellent >> you know, it is one word, i told you the word before >> relentless. >> yes, relentless let's move onto uber new details regarding its upcoming initial offering, uber says it sets their price of 44 to 50 bucks a share. that would bring a value of $90 billion. at 50. that's still below many has been

anticipating nearly a month after lyft public debut. uber's main issue the best i can tell is while growth is still significant. it is decelerating it is this problem coming public later in your cycle then you may otherwise. you can stay private so long that you will get close to 90 or $100 billion >> we have to get through the offer. we have to get through it to see what the real io economy po eco. >> this is by far the biggest. >> it is $9 billion. >> it must be handled correctly. if you saw the after market after intel reported, in seven

minute minutes. >> sclhapp. >> we need money in this stock market >> the money must come into the stock market to handle what's about to occur >> zoom -- so much money talking about this i don't get it >> that's not going to happen. >> well, i think you have an aku acute of effect here you get the public to come in and pay too much look at lyft >> we'll have a broader impact on confidence. >> it is comp. >> you got gdp number bu but -- retail investors is just -- they have been brainwashing as if that's some sort of diverse case

but, i am not going to hide it >> let's get some details on slack actually s1 our deirdre bosa >> yes, as we have been reporting, it will be a direct listing. no lyft building or under writer the company can take it because it is well capitalized spotify was a high profile and had done it in the past. it is a club base messaging company. zoom has gained the viral adoption among companies looking at some of the numbers here, 10 million worldwide daily active users in more than 150 countries, 88,000 of them are paid customers they saw $4.5 million in revenue

last year. $139 million in net loss last year that's a small improvement but pretty much in line with the previous two years this is as company that is losing money, slack's last value at $1. billion we reported yesterday they have been trading at a range of 26 or $28 per share in recent weeks. that'll put the value at nearly $17 billion. guys, we'll continue to go through this and bringing more details as we have there are a lot of obviously numbers to go through here this is expected to be an exciting company and enterprise software company which has been doing a lot better the ticker symbol will be sk and it will list on the new york stock exchange >> deirdre, thank you. >> i do think slack is the kind of company that we don't want it to come public >> don't want to come public

why? >> because david, slack direct them, you will see a lot of selling of cloud in order to be able to buy some slack there is no money coming into these giant mutual funds that used to get money. what happens is -- index funds cannot buy >> you worry about that with lyft, didn't really happen, did it >> well, lyft is bad let's see. >> all right, all right. >> we got so much more to come here earnings and upbeat guidance from starbucks that's a key for us. kevin johnson is going to join us to talk about his plan for continued growth of the company. later on this morning, intel ceo, bob swan. shares of intel are lower. jim and i did not get a chance to hit it. a slow down in china >> that was a bad call i know that it is great.

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see that there is not a happiness with this based on the chart. they should be moving higher, so what's the rub look at a three day chart of 10-year note we are not under 250 we have not closed under 250 since april 11th we are looking at two-week yield close on the wrong end of the market why is that? think about it from the standpoint of what makes the number looks good? we build a lot of widgets. do we build these and create inventories in a setting where there is going to be a demand or consumption through it that's all the questions begin there will be ongoing debate the rtreasuries are clear it is a friday and they're acting really soft all week and some of that was

from the next chart. look at the bund yield, they did not fall before our yield fail or our data was out. they're just easy to push off, easy to push down a couple of stairs at this point finally, let's look at a month to date 10-year, we have not closed under 2.5 for a while the failure of 260 was significant. most traders believe we are going to go into the 240 and improve. dollar index is down a smidge today. it is still holding the 98 handle david and jim, it is back to you. >> rick, gdp, we are below 2.5 i know you were trying to explain it but can you really? >> oh, i think so. think this is a big deal for me, why it is important and maybe people are trying to behaving differently on the

export of side at the end of the day, our poll position is a much better poll position tha analysts anticipated >> thank you, rick >> larry kudlow is joining us. if you are were watching the show on monday, here is jim talking about ford autos remain i am going to go on record saying ford is good. >> there you go. not bad. ford is up on the 7% after earnings were better than expected we'll get to that or at least we'll try. we got a lot more "squawk on the street" straight ahead could you hand me those files? yeah, of course. what is going on guys? oh hey, servicenow frees us up to do the work we want to do. so we're digging out from all the work we don't want to do. ugh, getting rid of so much paperwork. oh, doug.

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all right, six minutes before the opening bell. let's get our "mad dash. what you mentioned for ford, the company comes out with results that are graded positively given a lot of suvs, north america. >> well, it is not just that david, this is the new ford. when we go to ford, they want to be the number one sedan company in the world >> they did not say it a lot of people are going to say, they did it all with

credit oh please, they make money on credit, that's true. they're not going to make as many cars and they're going for probable cause we are getting out of the car business here or there david, what they are doing is saying we make, we want to gain share, f150. i was blown away from the conference call because it all came together. this company is a profitable company that's not going to lose money and make cars everywhere anymore. i guess the family is saying go ahead, don't screw it up >> heck, it had a great call this was a truly great conference call. >> something else the family likes. dividends and there had been some questions as to whether they may be able to maintain it. >> cash flow fabulous. >> you have had what's been a 6.4% yield

>> this is without a doubt this is beginning of a different kind of ford china is there for everybody >> they're creating different models for the chinese market and the largest car market in the world. >> think about this. >> this is a sedan company they own this trucking franchise is the best in the world you know what's funny, david but, ford has come back, we are a new ford and we'll make money where and when and how we can make money this is no longer about being the world's car. this is an amazing change and done at 18 months, i salute this company for taking the toughest action imaginable, shrinking and not to grow let's move on thinking to make money or not

intel comes in with last night of course -- it is also removed in their guidance and their stock. take a look. it is going to be down the center potentially in buying the chip they mentioned china significantly, some what reminiscence of nvidia months ago. that seems to disappear or dissipate. there could be a pause there with alibaba david, china had been increased. committed never again to be a constraint on our customers' growth that is before you sell amd. it was a lack of supply. >> the execution may have been terrible here. >> the data center have come

down we have one of those from rebel yen conference call. china chip maker and auto industrial, you see it there. it could stabilize there are a lot of people who felt intel was a great buy after they got out of the modem business with apple. the stock did right. pcu not so great either. volume felt 7%, in part use of shortages. it was a bad call. >> as good as i like ford's call >> mr. swan -- >> they're forecasting four years eps now, that's down 5% and 25 cents lower than their pre previous guidance. >> arguably you can say it should have prenounsed and the drop off, it was swan,

the reason for it? >> no. >> acute deceleration happening in china >> that was again like amazon, they over built. he was very matter of fact about that of course, they over built we did not know and of course all we knew was this particular area, the cloud is built out, amazon, they built out too much. they did not need it let's go back to facebook. they cut the amount of money they have been using for the build down you have a pause but i don't think it is a secular trend down it did happen worldwide that erchls built out too much. let's just say that intel before you decide to give up, we have to hear what they say next week and nvidia

n listen for all the piece and there is a lot of questions and people don't have answers yet. your interview with mr. swan provides. > >> okay. >> there is the opening bell for friday the film festival celebration of at&t >> it is not the balance sheet >> no. >> oh boy. >> it is creativity. >> center state at the nasdaq did the honors the yield for at&t is 6.7% >> i look at that -- all about the wireless business, the

continuation of direct tv. what i argue is a worry on the part of investors of execution whether they'll be able to deliver ibita in order to make everybody feel happy about their bondholders. >> let me pause at this. >> comcast talks about cash flow at&t, the cash flow is better, david. no one paid attention, why why is good cash flow for comcast -- >> cash flow for comcast is thought to be more certain >> particularly given alliance, i am getting it right at time warner the challenge they may face there and you lost 544,000 sub and a quarter direct tv. >> i am ot is very optimal. >> microsoft is up it is building upper cloud >> yep

>> i am telling you when we look at this, a lot of fingers pointing last night. >> yes >> we don't have answers people are not selling anything of the idea of a dramatic slow-down. >> intel execution is faulty that's why i keep on talking about amd. >> you don't think those should be sold. can you imagine the old intel having to apologize. what does hpq says >> understood. >> i don't know, david i had michael dell on. i believe in michael dell passionately i don't know if you saw his tweets yesterday at the age of 48 #, i think he gained - >> you got that going for you.

>> that's really great, dude >> thank god for you. >> keeping me young. >> let's talk oil, chevron is out with first quarter >> you know let's see where the stock is of course, the comment is you may expect from mike wirth, what's going to happen with anadarko occi we have told you and we heard from the company's ceo of 50% of that is in cash what did mike wirth say? the combination of anadarko's high quality assets and people with chevron's portfolio strengthens our leading position in permian >> you start to hear from holders there. you reje you rejected from occi

let me quickly share this and i want to move on. >> this is new >> this is new we are concerned, they are on 7 million shares, a big event. we are concerned for the reasons of anadarko's rejection. it may be inconsistent with fiduciary duty they go onto say listen, you may think that chevron's stock looks better than occi but we don't share the concerns of occi stock and we know chevron deal has a lot more stocks in it. >> some things that went on that were eye brows raising >> yes >> we'll go to what i regard as being a surprisingly great story that some analysts wanting to decide it is moving too much i am talking about starbucks raising its forecast and doing

so many thing that is were right. the shares have been on fire i think it is being penalized because the share is on fire 21 records high this year. i am so thrilled to bring on a man who has turn this thing, that's kevin johnson, the ceo of starbucks. >> kevin johnson, congratulations on the quarter you did a great job! i want to know how it happened >> you are talking about it at the top, okay, the enhanced in store experience kevin, that's a touchy feeling for me what does it mean? >> well, jim, you know we have been on a mission to really help simplify things for our starbucks partners by automating administrative tasks like inventory management and improving labor scheduleing so

our partner can spend more time with our customers we introduced a number of new beverages. we got nigel cold brew now and we introduced the cloud machiatto and the fact that we are able to spend more time with our customers led to the fact that our customer connection stores have increase to a near record for starbucks >> one of the things you pointed out of the 1.3% gain of china marks more the chinese companies that are trying to take your share. are they doing it in an unsustainable way and we should not be concerned about them and the growth that continues in china? >> certainly we have been in china for 20 years now there is a large and growing addressable market arnound coffe and china. some of those competitors are competing through heavy, heavy discounts that we don't believe

it is sustainable. we grew our new store 17% year on year and same store comparable by 3% we also saw a significant uptake in the active award number we have in china, grew by 1 million additional active award member so the experience continues to grow and same store comp continues to grow and our digital relationship continue to grow in china. i think we set a very good strategic foundation and we are going to continue to drive against the things that differentiates starbucks in china and continue to grow that market >> all right, i have spent a lot of 2019 sole searching, about what is company is doing right to be able to control cause labor and also make it inside the work force is happy. why don't you talk about how many people you put into college and tight labor does not mean

anything to you when you treat the way people should be treated. >> jim, tightly market, people ask the question, are we able to attract the caliber of talent that helps create that greatness in our stores. the answer is we have. we company great benefits to take care of our partners, started with healthcare and equities in starbucks. a few years ago when we introduce the college achievement plan where we'll have a starbucks partner who works 20 hours or more week has the opportunity to go get an education and graduate, debt free, that has now attracte attracted -- we have 12,000 starbucks partners in the u.s. participated in that college achievement plan and atteniding classes at asu we have 3,000 of those students graduate we are bringing more and more people into starbucks who wants to be apart of a company that has a purpose and goes far

beyond a pursuit of profit a company that can be proud to wear the green apron and taking advantage of the benefit of getting a college degree >> i want to get back to china you talked off about per capita coffee of consumption there, the lack there of but the competitive nature of the ma marketplace. you said a lot of your competitors are doing heavy discounts that are not sustainable. that's just the capital. if it keeps up, it keeps on losing money, how long can it go on >> well, you know that's up to each competitor to determine how they want to enter the market. you know one of the things we think is important, we are deploying capital and we are building 600 new stores a year we brew the number of new stores by 17%, those new stores are performing best in class which means that we are not only driving the transaction growth and engaging in new customers, we are also generating the

return on invested capital that we believe it is sustainable to continue to build new stores at this rate for many, many years to come. it is the combination that allows you to continue to grow your customer base and grow transactions and can you do it in a way that's sustainable economically so you can continue to deploy capital and build a great store and create great customers. >> kevin, 18 months ago, people told me this is all about different brands and blue this and blue that and hill this and stone that, you were budweiser you were doigoing down the drain and people are burning you what happens was it nitro or the cold drinks? why don't i hear about these craft coffee brewers were supposed to wipe you out >> well, jim, i think a big part of that has to do with the fact

that we have significantly reach globally every one of those stores we have been driving beverages and crafts we have a starbucks reserve brand with the premium single lot, small lot coffees that we bring into many of our stores, i am hearing starbucks reserve store today that's all about the starbucks reserve brand. it is also we brought that to the broad experience of 30,000 stores kpac example would be the innovation around machiato. we just introduced these cloud machiatos. our shops can craft every single beverage to personalize for our customers of the world's finest coffee has helped us continue to create great experience and

differe differentiation for our coffee >> it is great to have you on our show >> if you are a stock player, everyone better. kevin johnson, congratulations on an amazing number and yes, let him sell it off. you and i both know you are in it for the long-term great to see you sir >> jim and david, thank you so much >> we'll hand it off to another guy. >> david, go ahead >> one big interview to another. the economy is growing at a strong base in the first quarter. gdp, 3 poi.2%. joining us now with what you may expect would be a positive reaction, i would assume, national economic counsel, larry kudlow, nice to see you this morning. >> morning david, how are you? and morning jim mmy

>> we are good >> some what surprising reaction this morning, maybe people are looking through these numbers. give me your take in terms of the bond market reaction and consumer banking was up 1.2% but maybe business investment is slow the market perhaps someone unexpectedly kind of taking this and moving oeing on >> well, it is a blow out number and i will just say president trump's policies are rebuilding the economy. the cycle we are in is gaining momentum, not momentum i think that's extremely positive let me add the inflation rate continues to slip lower and lower and actually by the fed's own measure, the pced for inflation has dropped from 2.2% last summer to 1.4% this winter.

even according to the fed's own spoke people from the chairman on down, that could open the door to a target rate reduction in the months ahead, the fed is independent. i am just expressing my own view >> larry, larry, how can you be talking about a rate cut after 3.2% gdp for the first quarter >> well, because look, this is again by the fed's own light, david. they are now targeting inflation which is coming in way below their own benchmark. i am just saying look, here is the point. >> you have a dual mandate >> it is not growth that we worry about. >> as inflation is coming down, growth is actually improving or at least sustaining a 3% growth rate so i basically like that story >> look, tax cuts, deregulations

and opening energy sector and progrowth trade reform that's improving the supply side, the production and investment side of the economy one stack that's interesting from the durable goods yesterday from december through march. core capital goods spending. core cap ex is what is called, it is growing at a 10% annual groo great. at the same time, we saw huge retail sales number in april what i am saying is we are clicking on all cylinders. the federal reserve will be looking a lot that i know old analysis says fast growth means higher inflation, you know i have never bough into that i still do not buy in the that what you are getting now is more goods, and more production and mo more output, that is chasing

fuel,less money so the inflation rate is coming off that's very significant. >> larry, great to see you >> when you get great numbers, don't look through them. great numbers are great numbers, they put people to work. they make workers do much better they also do something else internationally that i need you to tell us where we stand. does it give us an upper hand against the chinese who's trying to tell us look, you need us more than we need you. is it a 3 plus gdp number at the end of that narrative? >> i agree, it is a key point. we are negotiating with china. as you know we made a lot of progress but the deal is not done secretary mnuchin and ambassador lighthizer are going over there next week. after that deal, the china stop trade negotiators are going here the following week i hope additional progress will be made. i am cautiously optimistic about

the outcome for a deal but, but, your point is well taken. china's economy is slumping and has been for quite some time the u.s. economy as i say is in this prosperity cycle with no end insight. so we believe that does give us some leverage if you will, we believe also that china may be open to a lot of good trader forms. we'll see, i don't want to make a clear forecast as i say, head wave looks pretty good but you know, i guess and i think the president would agree with this. they need a good deal even more than we need a good deal but, we would like a deal that works for both countries and increases economic growth for both countries and hence around the world. so let's keep an open mind, i think we are moving in the right direction on that one. >> larry -- >> larry made a point that's very valuable. there are a lot of lies being

told larry, you and i know it is both not true people are being put to work and there is a tremendous spending on capital equipment the company that you and i know are bankrupt is it not true, larry that a sizable portion of that money went to exactly where it was supposed to go >> yes, absolutely you are so spot on and the cap numbers are very important, that's your supply side push that gets you more investment, more productivity, productivity by the way last 12 months or so is rising 1.8% close to 2%. that's a big improvement from years past the jobs story is terrific the wave story is terrific all private wages are 4.5%

increase the non-supervisraries job reports are good >> capitals are being invested into the company it takes a while for these big companies to turn the ships around but they have shipping to a huge capital expansion that means better technology and plans and equipment and modernization and it also means better training and reskilling as my colleague ivanka trump would say, reskilling of the work force and the work force is come out of the wood work back in so they'll be counted and the unemployment rate will probably continue to fall i think this is a very ideal situation. >> larry, i want to come back to china for a minute it was interesting listening to you answering jim's question you seem to imply, when

lighthizer is in there and he got his checklist, he can go tougher on the chinese with this kind of win at the back of the u.s. economy, is that a fair statement? y >> yes, i agree. that's our position by the way, we'll see this, look, you've got sort of two areas here, again, i'm not forecasting an outcome, because deal is not done yet, has to be a great deal for the u.s. to your point, which i agree, really jimmy's point, first, on the structural issues, we are hanging very tough there must be enforcement, we have to shift the it theft, stop the forced transfer of technology, we have to open up the cloud there. so we can use it from our production here in the united states from the commodity standpoint, both farm and industrial, you've got to have lower tariffs and nontariff barriers, and that's an area where our team is going to be particularly tough

we love exports. and in fact, in today's report, net exports was a driver of the 3.2% gdp that's terrific. that's a trump policy that continues. but, because of our strength and because i think china needs to open their economy to better growth outlook, we will be strong, this number helps that a lot. we will be very aggressive in these trade talks. very aggressive. >> and, larry, finally on the subject of trade, there are those who look at the report and say, well, listen, there was an inventory build. people were trying to get ahead of higher tariffs. is there a concern or question at least that trade and inventoriy ies drove higher gro but won't be there in future quarters >> well, look, inventory swing around as you know, i think i've got two-thirds of the inventory build came from the auto sector, which was sluggish in recent months now, let me make this point to

the -- i don't think it is particularly a trade-related thing, david, though you may be right, there may be some of that in there it looks to us like mostly autos. here is my point on this, consumer spending soared in march, okay. you have big job growth which means wages and incomes give consumers a lot of power so looking forward to the second quarter and the third quarter, i think you'll see a pickup in car sales, because of the resources consumers have i also think you're going to see a steady increase in housing, housing is starting to rebound again. i think that's a big positive for the economy. so i think that the gdp report will continue. we will stay with our 3% growth rate estimate. that's been our view all along i know some people disagree. i respect that disagreement. but frankly, i think the prosperity cycle is in tact and frankly i think the trump policies are working to rebuild

america and people are getting happier and happier, david i'm sure you're happy about this i know jimmy is happy about this people like prosperity. >> everybody who knows me knows i'm mr. happiness. >> you are you and i -- look, i love happiness, i want america to be optimistic again that's where we are going. you know, numbers are numbers and gdp is gdp i think the morale of the country is picking up. but i do love these numbers. i just think they're beating what everybody else thinks is happening. >> well, larry, we appreciate your sharing some time with us this morning >> congratulations. >> my pleasure thank you. >> thank you. >> coming up, some more big interviews, bob swan of intel on the challenges facing that company. >> not afraid to -- not shirking, coming on. internet that puts you in charge.

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welcome back to "squawk on the street." rick santelli with the last breaking news of the week, the april final read on university of michigan sentiment, which means that the previous number, the midmonth, 96.9 gets tossed, replaced with 97.2 97.2, .3 better than the midread and a couple of tenths better than we were expecting it is a little bit weaker

subsequentially, takes us back to the month of february when it was 93.8 it follows march's final at 98.4 and that's now in the books. let's go through some of the internals, shall we. one year inflation, 2.5. that's a tenth hotter than our final last month and if we look at five to ten year, 2.3 lateral move exactly the same sara, back to you. >> rick santelli, thank you. and good morning, everyone welcome back to "squawk on the street." i'm sara eisen with david faber live at post nine at the new york stock exchange. carl is on assignment today. look at the markets, not exactly a warm enthusiastic embrace of the much better than expected headline number on first quarter gdp. s&p 500 down .2%, though nothing major in terms of the sell-off dow pulls back 35. many earnings to get to including chevron, exxon and more our road map for the hour is going to start with that gdp blowout. the u.s. economy expanding faster than expected pace in q1. what it means for investors, the

fed and your money >> and it is an earnings blitz, we'll break down results from the oil giants as well as amazon, ford, intel, and so many more >> the ipo wave, uber launching the ipo road show setting the price range, messaging company slack filing to go public. we have the details on all of it for you. before we get to big earnings movers though, let's get to kayla in washington. the president making comments on the economy. >> he took questions twice from reporters this morning on his way to an nra event in indiana when he was leaving the white house, he expressed some of his trademark optimism about a potential trade deal with china ahead of a u.s. delegation heading to beijing next week listen >> china is helping us because i think they want to, they don't need nuclear weapons right next to their country but i also think they're helping us because of the fact that we're in a trade deal, which, by the way, is going very well. >> when he was leaving the white house, he said he couldn't

comment on gdp because of some of the time restrictions, that's a little bit out of character for president trump, but later in the month rning, he said gdps incredible and said that the u.s. economy is knocking it out of the park. interestingly, he also said that he made a call to opec and suggested to bring oil prices down what we don't know is how the energy minister from qatar, who is currently the president of opec, responded to that demand guys >> all right, kayla, thank you we will begin with two big movers to tell you about ford delivering better than expected quarterly results the carmaker says strong demand for pickups and suvs in north america did offset weakness in china and south america. shares are surging this morning, take a look at ford, up 9.5% then on the flip side, there is intel, shares plunging, earnings and revenue beating for the quarter. it is falling on the outlook the chipmaker slashing guidance on revenue for the year. we'll hear a lot more about intel and the concerns there

with bob swan in the next hour, the ceo is coming up on "squawk alley. >> let's start intel will it have bradd ebroader imp the question don't just sell amd on the belief that intel's weakness will be shared there we'll see. the data center perhaps not as much anticipated demand as they had thought. he did speak about china specifically and what he said was an acute deceleration happening in china, in terms of customers and their buying patterns they forecast operating margins overall, 32% down 3% year over year full year eps, $4.35 a share that is a 25 cent decline from what they had anticipated. we're talking about a company just for the record that has a 12% income tax rate. always like to put that in there, given everything we're seeing this morning. tax cuts, you want to keep that in mind. that's low. >> pretty low. not amazon zero, but it is low it does raise a question about

the semis, which are near the highs. especially intel, had a pretty good run-up so far this year, more than 20%. >> it trailed the group, it has trailed the group and you -- xilinx was weak. we'll see what the sector looks like after this. it may be more intel specific. we'll talk to mr. swan about it when we get to speak to him a short time from now. they are refocusing as they say on 5g. remember that announcement right after qualcomm and apple declared peace, intel said, yeah, we're not going to make the chips anymore for the smartphones as well. they are making them for the iot and areas like that. not the same. >> wanted to hit ford quickly. check out this big bounce in the shares up 10%. actually taking general motors up and the whole auto group is one of the best individual sectors in the s&p 500 now just better results. and real signs that the restructuring plan that has been put in place is starting to work we had the cfo on closing bell last night, bob shanks, talked

about china, this was a big focus for investors. the losses in china, while still losses, is -- are narrowing. the automaker has a loss of $128 million in china, $22 million improvement. here is what shank said about it >> the chinese economy seems to be stabilizing, we saw on an industry level the flat over year basis the government has already announced some things they're going to do, for example, reduction in that to stimulate the broader economy and our sector and there is rumors that they're going to do more the government recognizes the importance of this particular sector and it is possible that they'll give us a bit of help and simulation as the year progresses overall, i think we're seeing a more stable environment than perhaps where we were a few months ago >> better china, better north america, i like the release, the ford earnings release. you can go through and see which models are working this is a company that is changing its entire lineup they're focused on trucks and

utilities, the new ranger super duty explorer and escape they said by the end of 2020, ford is going to have replaced 75% of the u.s. product lineup >> interesting they cite china in fact that things have been coming back a bit. you have intel which we just said is seeing this deceleration perhaps two different parts of the economy in some way, interesting nonetheless. >> for autos, it wasn't necessarily all macro. getting back to profitability for the sector and getting the product lineup right in terms of what works for the market. >> let's get to chevron earnings this morning they are out the earningings did beat the street, even as profits fell from a year go getting weighed down by lower oil prices weak profit margins in refining and chemicals. the oil and gas giant struck a $33 billion deal earlier this month to buy anadarko petroleum and occidental launched a rival offer for the company. it is setting up what is a

somewhat rare bidding owar. we didn't get a lot from the ceo on the call, but he had some things to say about their deal seeing it as a real positive for the company in terms of over time and their ability to extract so to speak a lot of value from it. >> didn't get the sweetener that some were looking for. >> some expectation -- they're going to have to, it would appear, go up no way if anadarko were to say no to the $76, half cash, half stock offer that they have now received from oci, even if they say no, they won't get the shareholder vot the they ne for approval it will require chevron to raise their bid. the question is to what and when they have time, will they use it, will they choose not to and strike sooner? i don't know at this point as we pointed out earlier, there are shareholders of anadarko you might expect are making it clear to them they think they should be fully engaging with oci on this potential offer and earlier this week we did

hear from vicki hub, the ceo explaining why they are in her opinion, of course, the better buyer for those assets at anadarko >> we are the right acquirer for anadarko petroleum because we can get the most out of the shale. we have a lot more experience there, we're performing really, really well. and what is -- hasn't been talked about very much is that the upside in this deal is the shell play, the shell development. 75% of the value of anadarko is in the shell and we're the best company to develop the shell. >> maybe the best company, but if chevron decides they want to go up and own it, they will own it it is a question of whether they actually make that decision and what price they end up at. >> the most interesting thing i read about this game theory deal this morning, paul sanke at

mizuho, he says chevron should force oci, force the bid up. so determined to make this deal, and then swoop in and take over the oci anadarko combo and make chevron and mike worth the largest private oil company in the entire world >> interesting theory, yeah. occidental stock price has not been down that much since they announced their bid. that has been a key. question of is there a bit of a takeover premium that moved into that on that outside, outside chance that something like that would occur. >> speaking of oil giants, we should mention exxonmobil out with earnings today, first quarter profits falling nearly 50% from a year ago, hit by poor results in its refining and chemical segment question here is are these issues in the past the price of oil has run up so much, it is a better operating environment for some of these companies. the big story was in the refinery, and it was down, just so much volatility when it comes to oil, president trump as kayla reported, talking to opec,

higher oil prices are better for these companies. but it has been volatile. >> yeah. and the performance of the sector still really just in line with the overall s&p at this point. let's get to amazon this morning. shares are a bit higher. just a bit after reporting a big beat on profits, at least, for what we're expected and also announcing one day shipping is coming for the prime members. brian orlavski saying the company will make that change happen joining us for a closer look at the earnings, charlie o'shea and anthony takumba. give me your take on the quarter, they told us last quarter they would spend more. didn't show up in these numbers, but it is going to show up. >> it is going to show up. it is not only going to be on the free shipping. they're going to spend money on content, more money in india, more money in a lot of different places from a credit perspective, this is a great quarter you got lots of profit, you got margin expansion, sales are

getting soft, but that's okay. they're making more money on the sales. you got lid we ty, $40 billion, the company has a lot of flexibility to do a lot of things shareholders are supportive of anything amazon does they get to make investments and other retailers can't which gives them a huge competitive advantage. i think the folks in seattle have to be pretty happy today. >> yeah. anthony, are you pleased with this quarter the one area we have been focused on is the incredible growth in ad sales that growth did slow it is up 34% but it was nothing like they saw last quarter >> i'm very pleased as well by these results. first off, sales up 17%. that included a 200 basis point head wind from foreign exchange as charlie mentioned, operating margin was up 360 basis points earnings came in 51% ahead of the consensus estimate we're very pleased amazon is becoming a profit

making machine >> why are they cutting prime free shipping from 2 to 1. some would suggest maybe they need to grow prime, maybe growth there is slowing. >> i think they have to compete with the brick and mortar guys who have all upped their games online the buy online, pick up in store is effective for the brick and mortar guys. for amazon to keep pace without making a big expansion, they need to go faster. i live in bucks county, p.a., there is an amazon flex location around the block from me, i see 30 or 40 white cargo vans in the station filling up, all full of packages and that's the last mile capability that amazon is developing the prime one day is basically going to, a, keep up with the brick and mortar guys, and, b, enhance prime. that's what prime is all about giving the prime member more and

more benefits for their membership. >> how much room is there to grow prime in the u.s. what do they have now? consumer intelligence puts it at 100 million. >> not in the u.s. >> how much? >> we estimated 60 to 65 when you look at households in the u.s., like 120 million households, billion households and we kind of parse that into roughly 25% of them are under $30,000 in income. take those out of the equation 65, maybe 70 million members is probably the best number that we look at. >> anthony what about the stock price? sort of surprisingly in the sense of amazon usually gets a reaction one way or the other, but neutral reaction to the numbers. what moves it higher if you think it is going to go higher from here? >> i think that as investors start to realize more and more that amazon is -- it is not just about the top line growth, it is about the profits. i think that will absolutely help amazon actually right now has a

lower enterprise value ebitda than brick and mortar retailers, which is remarkable. the second thing is the next white whale. the next big market opportunity for amazon that could be health care, certainly could be groceries, new chain they'll be coming out with, so i think either way the stock works off valuation, off of increasing free cash flow, or off of finding this next white wale >> always an amazing thing to see. $2.2 billion in profit top line growth after you x out fx the thing keeps growing. i would assume the expectations are that that will continue. >> yeah. at some point trees have to stop growing. they don't get to the sky. this has been explosive growth on both the revenue and the margin expansion side, which for me is more important it provides the retail business and the ancillary businesses with a lot of cushion. you know that aws is going to generate x dollars in profits on

a quarter over quarter basis the retail side has a lot of flexibility and still maintain a solid credit profile. >> got to remember, you're moodys, you care about the credit side of the bank. >> i'm trying to pick holes in all of the arguments all the analysts are very positive on amazon we saw similar results from microsoft, azure business continues to climb on cloud. is there any risk that as these two get in the cloud war, one of them could lower prices and then we could have a margin problem >> amazon has been very vocal about lowering prices, they're in the 60s now i can't remember the time period but there is that risk right now it is a lot of storage, which is our tech analyst steve sohn does a lot of work around this and helps immensely. there is a lot of competition coming in that sector. and you got microsoft, you got oracle out there that wants to grow this business as well so you'll see over time the same kind of competitive landscape in the cloud that amazon is now facing with retail from brick

and mortar. >> guys, thank you appreciate it. charlie and anthony. when we come back, big beat for gdp. economic growth accelerating in q1 we'll signal what it means for investors and the fed as they get ready to meet next week. uber sets its ipo price range as it kicks off its road show slack releases its financials for the first time as it prepares to enter the public markets. all the details for you. "squawk on the street"ilbe ghback wl dow down 51.

big beat on gdp number this morning. why are stocks lower s&p on its third day in the red after setting all time highs earlier this week. here is national economic council director larry kudlow with us in the past hour >> it is a blowout number and i'll just say that president trump's policies are rebuilding the economy. and actually the prosperity cycle we're in is gaining momentum not losing it. it is gaining momentum so i think that's extremely positive >> joining us now is peter, global market strategist and if it is such a blowout number on the economy, why are stocks lower and bonds higher sunday it be the opposite?

>> well, i think -- i guess you could probably say that. i think digging deeper in the numbers and larry mentioned this in his discussion with you guys about half an hour ago, it is this inflation story that really has people a bit confused. the headline pc came out below 1% quarter still in the 1.25 to 1.5 region and the fed pushed on this idea that they're upset with how much they have missed the inflation target, their inflation target over the last seven or eight years it is a big miss if you look at it on average, the pce data, the headline data missed on average 65 basis points a year for the last seven years or cumulative over 500 basis points they're doing a terrible job of their inflation target and so as much as we're excited about the growth, it is a supply side story like larry was pushing that is dominating this market and i think generally speaking, a lot of people get confused by that story they fall into this old philips

curve trap of strong growth means higher inflation and it is just not really what is happening out there. >> i mean, you really are sounding like kudlow there so has there been precedent? does the fed lower rates because they're missing on the inflation target even when we have 3% growth >> it is not really something that we have a lot of precedent with the late '90s we had the low inflation and the strong growth. and the fed did cut rates. that was a different scenario, we had russia blowing up, southeast asia blowing up, a lot of financial instability and we have some issues in argentina, issues in turkey, nothing like what we saw in 98. there is precedent for them to be cutting when growth is strong, and inflation is weak, but to sort of get them to push back inflation up to target with no financial instability, i think that's not something that we have a precedent for, but we do have a framework change, discuss -- that will be discussed in june, led by rich

clarida at the chicago fed and i think this framework change is a place where the fed could lay out a sort of new inflation targeting framework which does set a new precedent that's what the market is really going to focus on two or three months from now. >> so the markets focused on inflation versus the better growth what about that better growth, though a lot of it was driven by inventory, some driven by trade. how sustainable is that for the rest of the year in. >> i agree with much of what david said there is a lot of layers of the onion to peel back in the gdp number we wrote in our note this morning, the number wasn't as strong internally as it was on its face in terms of the inventory growth, a massive swing there, personal consumption actually missed by my view in terms of the contribution and the net export number was larger because imports were lower. so the gdp number really wasn't the blowout 3.2% that is being advertised the pce data was weak as well. in terms of the 1998 analogy,

that's something i've been talking about quite a bit. i don't think it is analogous that the big difference in this cycle is that emerging economies, especially china, are particularly important to the growth backdrop and the federal reserve is particularly sensitive to the global growth backdrop and so in fact, i think that's why we're seeing fed funds futures indicating that a cut is possible because it is not looking at the u.s it is looking at the global growth setup by the way, interest rates and global yields are telling you that things are an awful lot worse than what we're seeing in the u.s. economic data you've got zero rates on the long end of the curve. >> we should frame your answer in the fact that you're among the most bearish strategists on wall street. >> yes, i am i'm not a permia bear. i saw value in equities at 2800. i thought risk reward was tilted the other way. and i still feel that way. sentiment is what is driving equity. >> still trying to work through some things. 3m's report from yesterday, for

example, was very weak and it is sort of an industrial economy, bellwether worldwide. we had intel citing chinese demand weakness there i assume you're buying into those is perhaps being more than company specific. >> yeah. the funny thing is, plenty of data to cherry pick from to craft whatever narrative you would like to. we all pay attention to narratives here. other economic data from south korea, south korea actually printed negative gdp growth for the first time since financial crisis we're seeing small economies, austria printed pmis that were negative not a big economy. but that's in line with the rest of what is going on in europe. germany factory orders have been persistently weak. this is a global phenomenon. they said they're getting more dovish because i don't see growth and inflation write want to see to hike again i think central banks are seeing the global slowdown.

we're not seeing it here in the u.s. because we had the benefit of fiscal stimulus and that is soon to wear off i think that's masking a potential issue that the fed is aware of. >> so peter stopped by and the record highs on stocks, david. wrap it all up for us, the growth picture, the better earnings mostly with some hiccups, better economic data, mostly with some hiccups does it take us to new record highs? >> i think we absolutely go to new record highs timingwise, who knows, maybe we get a pullback, maybe we don't the data is going to take us anywhere but i think the bottom line is the fed is very concerned about this inflation story they're going to change the framework. we're going to have an easier dovish fed going into the end of this year. and into the 2020 election cycle. and that's going to support multiples. even if earnings are a little softer and growth isn't as strong as people think it is we're just going to have higher multiples and that's going to push equities to new levels.

and i honestly think that playing this game of figuring out are we going into recession, slowing down, it is a -- what we really want to do is figure out what the fed's reaction function is if things slow down, we know we have a fed back stop that's what we have been pushing for our clients for a long time. think about the fed reaction, may have been very clear what they're going to do. you have a put structure in place, i think it got a little misplaced in q4, talked about that in q4 and there was a lot of communication problems, but we're right on track with it i think that's really the supporting mechanism for the s&p as we look for the next leg up either toward the -- as we go to the second half of this year or into 2020. >> you better hope they cut rates. you need a haircut >> i love my hair. i hope they don't cut it until next year, yes i know >> david, peter, by the way, david, president trump just tweeting about that gdp number real gdp for first quarter grew 3.2% at an annual rate this is

far above expectations projections, inflation very low. make america great again >> yeah. on the program with kudlow in terms of -- they got their narrative. maybe more -- making more rate cuts as we head to break, let's give you a look at the top performing stocks on the s&p 500. there is ford, mattel having a strong morning

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i'm kelly evans, here is your cnbc news update at this hour president trump says the u.s. did not pay $2 million in medical costs to north korea in 2017 to get otto warmbier released this in response to a washington post report that a u.s. envoy set to retrieve warmbier signed an agreement to pay the money on trump's instructions. carlos ghosn leaving his residence this morning, a day after he was released on bail. he criticized prosecutors for their actions and for barring him from communicating with his wife

ghosn has denied all charges media cameras and journalists have been allowed inside st. anthony's church in sri lanka first time since it was bombed on easter sunday. the church was one of several sites which were targeted, resulting in the deaths of 253 people prince william visiting the two new zealand mosques where a gunman killed people last month. he commended first responders for their quick action sara, back to you. >> kelly, thank you. now time for our etf spotlight. dom chu, looking at the energy sector, moving lower as crude prices fall. >> those are the key catalyst oil prices today for west texas intermediate and brent crude are sharply lower as they contemplate the next steps for opec

that will take iran oil supply off the market now, shares of exxonmobil, which is america's biggest integrated oil and gas company, lower by 2% to 3%. after it posted profits and sales of both missed expectations chevron's profits came in better than expected, but sales were weaker than analysts estimated, both companies cited weakness in downstream or refining businesses that chemicals operations that pressuring key parts of the exchange traded fund market like the spider fund. iye also down on the day as well as is the vanguard energy index fund, vde. today's losses mean that the s&p energy sector now slightly underperforming the broader market on a year to date basis and it is down 11% just over the past 12 months, so we watch energy, oil prices, still

hovering near six month highs. big drops today. we'll see what happens 1:00 p.m. eastern. back to you. >> thank you. when we come back, uber sets its price range and slack files to go public we have the details on both. dow just going positive, led higher by disney we'll be right back. the latest innovation from xfinity

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with the latest. good morning, leslie >> good morning, sara. we're here at bank of america which is one of the lead underwriters for uber's ipo. the executives for uber have been traversing the three underwriters for goldman sachs and morgan stanley and then coming here where they meet with the sales forces and help explain to them how to really pitch this deal to investors as they embark on their road show which should span the course of the next two weeks or so according to marketing materials released just a little short while ago, they plan to pitch this as a deal and a company that really has scale and reach that is unmatched by other companies in their industries. they talk about their total addressable markets for personal mobility, for uber eats, for freight, as being number one or number two in a lot of the markets that they operate. and they also said they have solid corporate governance practices as it relates to other companies. they have a single class of stock, for example

so after today's meetings, this is the third and final one today, the company will have meetingings with investors, one on one or through group lunches and group meetings and so forth, where they will be pitching about $10 billion worth of stock to investors the company will raise a majority of that they'll raise about $9 billion worth. some selling shareholders will raise about 13% of the entire offering, about $800 million worth. these include travis kalynic, the former ceo of uber, softbank and bench mark, two earlier investors in the company according to terms set this morning, the company is seeking a valuation between $80.5 billion and $90.5 billion on a fully diluted basis. so we will see over the course of the next two weeks whether investors feel like that is a good deal or not guys >> leslie, i mean what are you hearing as far as the lyft sell-off, down 22% from the ipo price. is that helpful for uber or does it make the economics just

harder to understand for both? >> it is -- i wouldn't say it is helpful for uber lyft is one of the comparable companies that investors will use to assess the valuation. so the higher lyft value is, the higher the valuation uber could get in its ipo the fact that lyft has sold off since its ipo means uber has to come at a valuation that would compel more investors to come in the door, which you can't always do at a valuation that they may have been targeting previously. >> all right, leslie, thank you. >> another listing to mention on the horizon, slack, that company releasing its financials for the first time slack is pursuing a direct listing here at the new york stock exchange ticker sk. 400 million in revenue, 139 million in losses. some are wondering if zoom is a good comparison here, david, because it is popular in

offices. it relies on the cloud it has a millennial fan cultish following within the offices >> a lot of places again, listen, nobody is going to be upset with 82% topline growth but it was 110 you got a deceleration of growth again, some of these companies, uber is dealing with that as well it is interesting because companies are able, as we said so many times, to stay private longer as a result of the robust funding mechanisms available to them and miss the growth peak conceivably, makes it -- it is larger as a result, but a different sale in some ways when they do go public. >> the other thing is the path to profitability is murky for some companies on uber, the net loss of $1 billion on sales of $3 billion that's to simplify it a lot. but the economics, i think, people are struggling to figure out. >> yeah, they are. it will be interesting to watch all of them. when we come back, the nfl draft is still under way, fan duel's

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2019 nfl draft kicks off in nashville, or kicked off last night. the best are still coming in fast for the year's top picks with legalized betting now in eight states, where does the industry stand almost a year after the supreme court lifted a nationwide ban joining us is matt king, the ceo of online betting company fan duel nice to see you. how much has your business grown since that was lifted? >> our business has grown tremendously the market in new jersey is three to four times what we

thought it would be. >> three to four times what you anticipated it would be once it was legalized. what accounts for that >> one is the offshore market is far bigger than anybody thought. so funny when we launched, we spent a lot of time talking about educational materials, people would be new to sports betting, and more often than not, somebody would walk in the door for first time and say, i would like to put $100 down on six leg parlay that does this, this and this. you've clearly done this before. and so a lot of our early business has been people that are shifting away from doing it illegally and doing it legally and then we're also picking up a lot of people that are new to sports betting >> you are and people bet on virtually anything i would assume including the draft order last night >> people will pick up -- >> anybody have that absurd pick from the new york giants at number six anyone out there >> i think we had a couple o people there we did. >> that will continue even into the second round people betting on the draft? >> yeah. >> what is the most concentrated

area of betting? >> so if you look at it from the number of players perspective, football is still the biggest. nfl weekend, 100% of the people that bet put something on football it is actually only about 25% -- 25% to 30% of our handle. so when they're betting on football, they'll bet on a lot of other things. so college has been huge basketball is big. you get small sports that overindex, tennis, golf, et cetera, our sports that on the average week most people don't care about, we get a lot of people engaged with for betting. >> if you're talking about how good betting has been for your business, why are you saying it will never be legalized across the country? >> from a legislative perspective, gaming has been a state by state issue and so if you look at casino gaming, it is only about 30 to 35 states and after you've seen a rise in casino gaming. our perspective is there is such a patch work of regulation that exists between state by state and also the interaction with tribal compacts it would be very

hard to ever enact national legislation that legalizes it across the board >> now, if i access your website via my phone in new york, can i make a bet >> no. >> i can't >> no. you can see the odds. >> i cross over to new jersey, i can? >> yeah. you can drive across the bridge and at some point when you get over the bridge, it will recognize -- >> it will allow me to bet you're telling me there are people in new york who aren't figuring out way way to game that >> we test is six ways to sunday, the regulators tested it six ways to sunday we look at it and say there is no way that we're ever going to let somebody bet when they're not in new jersey. >> i have a question, it is a busy time for you with golf and the hockey playoffs, nba playoffs how do you capitalize on the fact that basketball is the hottest sport now even with playoffs without lebron james? what kind of action are you seeing there in. >> so basketball has been huge for us, you went from college basketball and march madness

being a tremendous opportunity for us and also something people engage with, for us the way we approach the world is always every night there is an interesting story to tell. and what we typically do is use our marketing and promotions to tell the interesting story of the night. so if the nets are playing in the playoffs, we'll do an odds boost on the nets. we'll make it richer for the better to back the nets and it makes it more likely we'll lose money if the nets play, but what it does is it puts us side by side with the sports fan on their couch, kind of rooting along with them. >> have to create the buzz. >> we have to create the buzz. >> what about speaking of buzz, golf has been popular, how much of a bump did you see with tiger in the masters and winning that in. >> so we saw a huge bump we lost a lot of money which we were happy about, most people say, why are you happy when you lose money and the reality is it was a great day for sports people engaged and it was a lot of fun. >> is a lot of things 10% of your customer base is responsible for 80% of your

bets >> it is a lot more even. >> is it >> yeah, it is. >> thank you for coming in appreciate it. >> appreciate it >> "squawk on the street" will be right back after this quick break. stocks hovering near the flat line nasdaq getting hit the hardest, down a third of a percent. don't go away. the latest innovation from xfinity

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welcome back to "squawk on the street." stocks are trading off their worst levels of the day but still a string of earnings results offsetting the stronger than expected gdp data technology is being dragged down by the weaker outlook from intel. one of the outperforming groups is consumer staples following colgate's results in emerging markets. the company's upbeat quarter lifting several other names in the sector including procter & gamble and color relorox. i will send it back downtown to you guys >> thank you i will send it out to chicago and rick santelli with the santelli exchange. >> thank you i would like to welcome my guest

on this gdp friday professor, let's get into it the headline number, 3.2 was terrific i don't know anybody that nailed it or had a three handle with any intensity. here we are nonetheless. yes, personal consumption was on the weak side, so were pricing pressures. whether you looked at gtp, personal consumption, so what is your read? we know that there's some issues here that are not sustainable. talk about the strength and then talk about why it can't be replicated if that's your line of thinking. >> my line of thinking is that it's like the company coming up to the lender and saying look at my numbers, they're great. but the basic revenues were 1.2% the future orders were missing that's what my worry is. there were one-off factors like lower imports, higher

inventories that added to the growth going for the future, i'm looking at the future, where are my future orders where is my investment >> well, now -- and i completely understand that. so the worry is that we have all these widgets but not the type of demand to get rid of them the payback for that will likely be less horsepower in the next quarter. is that how you see it >> i think the next quarter will turn out to be decent. consumption will pick up the issue is the second half of this year and later on investment today is jobs and consumption tomorrow the lag time could be from 3 months to nine months. that's my worry the second half. not the next quarter this one-off factor will cancel out. something else will come up. you may have a 2.5% growth next quarter. the issue is the second half

i'm not seeing numbers getting over 2% over there i didn't see the investment on the tech side. >> out of curiosity, what was your call for this number? >> my call a few months ago was 1.7. i reduced it to 1.3 when i su the bad c saw the bad consumption numbers. who would have thought imports would drop so big. >> hasn't this recovery been marked by one-off issues it seems like analysts never fully jump on board on some things that move the economy, and they miss it yet we always continually see these surprises and move on. your final thought is there anything that can graze demand in the second half that you're not thinking about now? there's a lot of issues that could do that, are there not

>> the one-off factors are a sign when the economy is transitioning from a higher growth rate to a lower growth rate and inbetween you have wobbles that causes the confusion. >> always interesting getting your perspective have a nice weekend. >> thank you >> david faber, back to you. >> thank you very much, rick santelli time to turn to sara parting is such sweet sorrow you'll be back i won't be with you. >> you'll be watching. we have an interview with adam aron we'll talk a lot about the avengers opening weekend and the theaters plan to stay open around-the-clock. professor jeremy siegel coming on talking about market reaction and how many juice is left after this market rally. a 17% gain for the s&p should you hang on for more? this just in you will be jealous of this.

wu tang clan is ringing the closing bell we'll speak with them. >> that makes me think of martin shkreli. >> he tried to buy the album back from them >> all right enjoy. >> yeah. >> we'll see you then. when we come back, shares of intel are down sharply after the company slashed revenue guidance for the year the company's ceo, bob swan, will join us next on "squawk alley. ♪

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