nasdaq is off of 65 points s&p 500 off about 5 points make sure you join us tomorrow, "squawk on the street" begins right now. ♪ good tuesday morning, welcome to "squawk on the street," i am carl quintanilla with jim cramer, faber is at the global conference in california, another big day of coverage coming up over there home prices at the bottom of your scream. the futures are mixed, the nasdaq is going to get pinched by google revenue disappointment oil close to 65 and some

breaking news on an oiler merger from warren buffett. our road map begins with corporate earnings, gd shares spiking after beats. mcdonald's rally boosted by strong u.s. and global comps and alphabet berkshire hathaway investing $10 million to finance acquisition offer to anadarko. does it change your mind about backing chevron on this? >> chevron is down i think chevron walks away that's why the stock is up a lot. kudos to gordon hasket i do think that we were discussing on "squawk," they're talking about expenditure capital and i was talking about total endorsement.

wirth spoke to me on friday, i think you just walk away now, chevron verses warren buffe buffett. you are in a peace universe. >> david, we got to get your take on this one >> listen, i tend to agree with jim as usual, i don't want top say as strongly as he did but it does put the pressure on chevron. i was planning to come on the show to share reporting of the last couple of days indicated to me that at least based on what i was hearing close to chevron camp or within the camp they were unlikely to compete anyway. a lot of narrative around, mike wirth, wanting to show discipli discipline and some information in terms of the back and forth that took place.

when they did get the deal goes beyond 65, indicated that you had to take the possibility that chevron would choose not to compete. this was before the news that we just got a few moments ago, mr. warren buffett fully endorsing anadar anadarko investing 10 million in occi and as jim said that ringing endorsement would seem to raise the bar higher for chevron to get over jim, let's not forget, if chevron truly wants to own this, they still can the fact is it seems highly unlikely at this point right now, although i can't confirm if that's the case. >> yeah, look i think chevron, they would do it to pay more money. i am saying that wirth had it.

chevron does not have it chevron walks away the question is, when you have all the fire power at schevron, tell me what happens if you thought anadarko was under value, did they go for something or you know, we our heart was in anadarko. do they go or do they buy? >> clearly there was a desire on their part to expand particularly in that part of the world. anadarko is not really important to them. as you pointed out to chevron, this would have been potentially for chevron. i don't know, jim. they'll be able to look back and sort of wonder where they may have tactically done a better job or whether they were some what misled in terms of the

process from t process. from the anadarko side, maybe it is an opportunity for them they really were incremental and only went up to $1 best to final. they did get their deal at 65. occidental was there and vickie, i have to give her credit, she did something unexpected mounting the public bid on last wednesday and signing up mr. buffett to endorse that bid with not just the words but more importantly of $10 billion >> speaking of someone's word. i don't know if anadarko kept wirth from chevron fully in the loop here. if i were chevron, guys, we didn't get the right call and we thought we were in maybe they should be more transparent over there with anadarko >> yeah, perhaps, there is going

to be a break here conceivably yesterday i failed to clarify some things in terms of the way this work. it needs to be superior, that's likely the occidental bid for anadarko prior to the four-day period beginning under which chevron does have the right to come back that clock has not started yet there has been contact on between anadarko and occi, they started to exchange contract, we'll see how long that takes or more diligence and something along those lines. then conceivably we'll get to that and most likely it will be superior the only question chevron chose to say we are done they'll start to run as they consider the route >> as for buffett. when you put buffett and prefer and warrants to purchase more of the same release to get your attention, what do you think

he's thinking on long-term of oil and gas. >> remember all the problems to not do a pipeline, i think occi, great worldwide company, occi committed to its dividend, i don't know, i want to figure out the coupon verses the dividend i think he thinks he's aggressive and smart and in the area it sure as helped. when you have warren buffett in your camp, you are different from the day everyone if yn if e paying a lot >> for warren buffett, talking about it not being attractive. at least for his elephant hunter >> i just think it is a question of personality, chevron goes to

125. >> we are going to keep our eyes on all of this rapidly developing story this morning. other news today general electric shares are popping. stronger cash production while reaffirming the guidance for the year larry larry culp david is going to talk to ge's board member, ed gardner the company is way out there, the timing there are clients paying a little bit faster and pull through orders don't get too excited. people get very excited. i think you can argue are not perfect. aerospace is really great. the idea of paying up because you think wow, it is over. i think larry culp, i am getting

my arms around power you see culping faze out eventually you well see a path something that's worth for powell to put money into >> david, what question for gardner? >> listen, it is the first time i met him and spoken for quite some time, we certainly detailed for years now, looking forward to getting his reflection on the quarter and as jim said on the long turn around, they're still talking about this reset year in 2019, the company did not change its guidance he's not going to get out there and start cheer leading at all

you did have these long cycle business he did have 14% increase business and 7% aviation and 3% renewables and healthcare had a 10% increase those are all nice to look at. in cash flow it is still making it less negative than it may anticipated. you can understand why both he and investors still want to temper expectations here >> exactly when i see the number, i want to jump all over to say you know what the coast is clear. larry culp is the last person who says the coast is clear. they still don't understand. they're getting their arms around long-term care problems or how much money they can make with turbins working better and new refresh. the fact is it is a coming business it was a good business

>> some time benefit on cash and quarter changing the game but it is clean enough to debate. >> this is it. i am not going to deal with it this time. this is probably the only time he does it jim, stop it >> i will tell you if it sells a whole. when i want your opinion, i will give it to you >> david >> we got a lot more coming from the conference day two, of course carl, i am going to speak with edgar d ed guard darden. he's also a board member as well

devin wenig and meg wittman is going to join us big show is coming up. "squawk on the street" right back after this. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

revenue fell short due to a slow down in ad growth it continues to struggle at youtube, estimated accounts for 15% of sales we have seen revenues at sub 20. >> this is one of those quarters where both companies would say look it is a disappointment. we know we disappointed you. the wall street journal calls it the poor results i wish they would have been more humble and understood the frustration of the analysts. i wish they would execute better i wish they figure out a way to temper expectations and i wish i knew how much their numbers were softer because they have to clean up the site like twitter did. i wish they understood what the hell they were doing >> that's a long wish list they did flag uncertainty but it

was so opaque, it was meaningless. they're hard to deal with. amazon is not. amazon is really easy. alphabet picked up the phone for many years if they keep changing their darn algorithm and making it so hard to figure out, i am going to write a check for amazon amazon and web services killing it alphabet has to spend a fortune to keep up with amazon and microsoft and they still may not be able to handle the cloud because they're not an enterprise company was it disappointing it should have been personal works. what matters is did you do well verses your own standards. they're not holding verses other companies. i think i would have started we did not do as well

like mike roman did. you can say he blew it but alphabet didn't. video games? fw no, it did not matter. i don't know, i finished that call and i said really we did get one downgrade today david, we do know that at least for online shoppers, they're now starting their searches on amazon more than other search engines. >> amazon is a real player although it continues ad growth. it is getting larger and larger as we know from the earnings from amazon last week. they missed about a billion on the revenue line you are looking at a stock down 8% numbers are going to be enormous, in part because these things are so widely owned by so many managers that can't find anything better to earn. you got other guys wanting it

for value and growth you can make an argument if this thing was not a 6% or 7% position for so many asset managers out there, i don't have any better ideas, it would not be down 8 plus percent today here you go. >> yeah, it was rated 10% going in when you have a terrific cfo constantly answering no it is currency what makes you feel like -- no, please, drop the nixon wrap. >> i know but jim, this whole idea of the timing of product changes, the timing of product changes and ads that can impact your growth rate you are going to laugh that next year but what exactly is she talking about? do you know? >> that's exactly. when i finish, just like my ma,

if you don't understand jimmy, maybe it is too hard my father always say, if you don't understand, you are an idiot. i want to say the root we are going to come back and crush amazon instead it was like hey guys currency i was waiting for him to say brexit how about brexit >> it is the deselling, 39 on the cent and the 50s and 60s these product changes may have had an impact, they think they're going to make it better and you are going to see resurgence again once they play through. i guess that's the point >> any significant period of time, it always seems to come back >> i am sticking with it i believe in ruth having said all those bad things, i am sorry.

>> premarket cap loss is about 57 billion it would be the worst gap down on earnings since '04. >> wow >> david, it is discouraging do you think they know it is opaque we don't have to tell you. >> i mean, i think it is a little both. in the call, they found a decent amount of information,numbers and sort of targets. what exactly is going on in term of the way advertisers are using it and why, decelerating at such rate we can learn perhaps more. >> there is not a retailer or consumer product company that did not tell me they spent much on the web if that's the case, it seems like it did not go to google >> there is certainly that

sense. we'll learn more we'll get cramer's mad dash and count down to the opening bell still have not gotten to mcdonald's or gm or pfizer or some of the other news we'll be back in a moment. ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis.

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opening. mi mcdonald's is at a high. global 5.4 there is also an element, one time only, bacon apparently the bacon burger was good my wife is a bacon eater from wendy, she likes the bacon they got all the franchises and simpler menu and a lot of digitalizing he's remarkable. >> this purchase he made during the quarter, dynamic yield we see them go through a whole retrofit and changing the restaurant >> drive thru is the only part of mcdonald's are not crazy about. >> do you think they surpass

domino's >> i would say rich allison is not an heir to patrick doyle what's left to digitalize for domino's other than waymo. never mind, that's alphabet then it is ahead. it is at a plan. so i think that's really an interesting question it is really driven by digitalizing something like what grub hub do. i think mcdonald's should own the customers which is a delivery problem but he's very smart and most importantly, you get that company energized by the franchise franchisees. >> it was definitely a material. 4 x 9 cents impact on a diluted basis.

they track the level of which people have jobs to go to and coffee to get on the way to that job. it is a big structural tailor. >> they're doing quite well. i am worry of the cups and the environment in california. they have the hottest coffee which i always love. >> speaking of europe and global comps. we did get a euro zone gdp number that's not recessionary german cpi is up one in over a decade >> well, look they have to solve deutsche bank. look out it could be unreached. they have a lot of businesses away from europe

you got to solve deutsche. there is a look at the opening bell at the s&p 500, cnbc realtime exchange. at the big board, alderyra we'll look at mcdonald's >> it is up a little -- they get too excited. if you get too excited then go on mastercard. mastercard is a $257 billion company that is just pure fin tech notice paypal, they cannot seem to get it down it is the quiet $250 billion man just delivers it.

>> look at that. 251 gross dollar have volume. >> i think he wants to focus on this company because 250 billion, by the way, visa was not as good but visa was darn good, it fits an all time high these are two companies if you own, you look like a genius. they're in your wallet is it in your wallet, think about it that's a good placement. >> i got to ask you financials in general disney is the best jpm is right behind. wells up their year-end target to 30.88, based on the love that banks get. >> they're trying to get -- you once again get ahead of the curb i think people are realizing,

you can't let this group go for 9 or 13 times earnings how about deutsche or how about 35 or 40 you have a group that does not deserve to be more but catching up for the rest of the market the next thing is single payer a concept that it is medicare for all. it is not going to happen and we'll start paying up. hca, that was an unbelievable good quarter, it is up 3 it is healthcare the people of healthcare and the pms. they're so frighten. the counter argument on banks that although it may be reacting to the steepening, banks are not a late cycle play. >> no, they're not it is going to be -- you got c card, this is another theory i have been working on these things c-card, the government revealed and they feel that perhaps trump

gets the c card and they can start buying that everyon more stock and raise dividends. if the fed, treasury, if they're all saying you guys do what you want because we work for president trump then you really get really good growth with good dividends and the federal government receives. how about dividends and everybody is stocking. one of the best stocks going all over the place nxpi, autosemis, it is going up. we have auto s and banks and healthcare a >> after ford's number for sure, your point about autos is well taken. >> ford's beautiful, what they said is we got this truck, i want a super duty. man, super duty, that was the coolest man in the room which was really hard.

i got elon musk in the room. >> google, of course, we know is going to have an impact on the nasdaq i am not a fan, which by the way came up with the term faang so you can figure out what faang is >> would you be rotating that out of twitter or everyone facebook here? we have twilio tonight i happen to see while i was watching the sixers. i happen to see a piece of research on my desk it is now 200. the cloud came vm ware, adobe, going from alphabet to adobe. had there been news on the alphabet call. we are going to start executing instead of currency, the fact they they don't seem to think that they think they are executing so well is the real

pain there i don't want to be a dead horse but i am being a dead horse. >> you talked to 3m last night at mad money we are putting 3m and intel and google in a basket of executions >> basket of hell. i like pinterest >> it is not a reflection on the quarter. >> roman just got there. he still got a sell in 3m and sell in ge i agree with that. i agree with that. his favorite recommendation is honeywell. last night in the middle of nowhere in the second quarter when the sixers were up a couple, they announced $10 million buy back that's what a great company is $10 million by the w $10 million buy back >> there is more where that came from

>> gm and ge is okay alphabet has to spend so much to play the role of number 3 in the cloud. look out at ibm. >> david, i wonder if that has any implications for all of the break up talk that we hear about big tech and google. >> you know what, i was on the phone there, i didn't hear all of the questions in terms of google >> we said you are great looking and fascinating guy. >> thank you thank you. >> no. >> we need your take on these stocks, david. >> no, you don't listening to you from far away, you are better in some way than when i am right there. >> holy cow, that's how my wife says, further away i am better pretty interesting >> you were dead on google earlier with wish, that was poetry >> hey that's a good byte >> that quarter was full of

salmon and signifying nothing. >> it is a soul searching event which they seem to have no soul. if you patrick them, they don't leave or if you push them, they don't die. >> oh man. >> i want to look at occi, those shares down and before we open them, i would like to see them right now. i don't have access to my computer it is an inexpensive financing 8% money only warren buffett gets that kind of deal, right? 62.50 is a little bit more than when he sign the deal. it gives him flexibility if they want to increase the cash component or something they feel they need to do it may put them to a position to avoid the issue or create

conditions less than 19% of their equity will they compete as i said earlier of a number of different things i have been hearing that chevron was having a harder time imagining going higher as it was just given price discipline and given where they were prooefeviy in terms of their so-called period they're simply going to say no mas. >> key thing here -- >> sorry, skrjim, go ahead. >> this is hostile remember kraft heinz and the idea of going after delivery he's funny and hostile >> it is not hostile anymore because anadarko is talking to

them now but, it is an interesting point, you are right. he certainly didn't like it in the case of kraft heinz and uni labor. this is what they train him to say, well, it is not hostile to shareholders which is not. out of the gauge here when occidental came with their public proposal and she joined us onset at the new york stock exchange, the synergy, in terms of being hired and at least if they are real putting occidental in position where it could pay more than chevron ever would be. here is her talking about it and why she believes they can deliver on it. >> $2 billion is based on things that's already done in our operation and taking that and applying on what we could do

with the combined asset. that includes logistics that we have been able to establish in the firm and make work a lot of people heard of our hub which was an innovative way to support. we'll apply that to anadarko asset. we have drilling and software and modelling that we do to reduce our cost on the drilling side we can do this for lower cost and others and when demonstrating that, we can apply it to anadarko >> you know with those kinds of numbers, they hope to come through. they'll be well levered. i think there will be investment grade. it is not they are taking dead here and a risk that goes along with it. it is an oil company it is possible that commodity does go down >> you look at the five-year curve for oil. it is back in the 50s. that's not good for occi

you are right. this is not -- i like celgene better i think you are right. there will be moments where you did not want to own chevron. >> mike wirth is going to buy back a lot of stocks he would be buying back $5 billion to close the deal >> oil is hard to read right now given the iran sanction waivers and headline we are getting out of venezuela very disturbing and unclear of what the situation is there. we know what a difference that supply would make. >> david, so right >> $7 on that. >> really quick, jim revenue and gmv beat stock is up 65%.

>> this is the opposite person, when you are a small business person, you want to have your own store. they everyone will sponsor shopify is the company that a lot of people in silicon valley want to buy and adobe. they're not for sale and they're on "mad money" today. >> shopify >> i didn't know that. >> let's say we decide to go into a business. mainly brick and mortar. we want to do great looking shirts and ties and pocket squares. shopify they think us do well, they'll give us some money for the millennials. can you imagine? >> you work at the front of the store. i will be in the back. >> thank you, i will be the happy guy. >> dow is roughly flat s&p is coming a bit, 29.35

let's get to bob pisani. >> the two big stories, pmi is a little soften there. google is trying to figure out how much of an anomaly of the tech situation take a look at the big names, ge, it did not change the guidance overall general motors, oh, okay, big beat, 31 cents came from lyft, that was interesting mcdonald's did okay if you include the income tax i would say that's not a bad number mix number for the pharma. and beat only raisinining guidae moderately eli lily is down by 5% everybody is trying to figure out what google means overall. the stock is at an all time

high it is back where it was on the early part of april here it had a huge move overall this month. understanding where it was to the start of the month the question also, look at the rest of the tech earnings, generally, this is a bit of an out liner. tech earnings are pretty good. okay, yes, intel was definitely a disappointment by and large, big cap tech has been pretty good this quarter. the big question is what's the trend and earnings, keep your eyes in the big picture, it is up today we are at the half way mark, half of the s&p is reporting. we have and as i predicted move into positive territory for the quarter. no earnings recession, early part of april, we were down at 3%, now we are up fractionally there is too much in december and now we are beating a little larger than normal than the typical beat that we see how about the sector in april? everybody is figuring out why banks are doing so well.

but, with greats moving up a little bit, maybe some hope that loan growth will be there. the big concern is healthcare down 3%. carl, back to you. >> bob, thanks let's get to rick santelli at the cme group in chicago with some data pretty soon. >> yes, let's go to our data, we are expecting our april read on chicago's pmi, 52.6, we are expecting the number over 58 52.6 is the lowest level and we are going to be going back away. that's the lowest level going back to january 17, when it was 49.9 now we need an asterick here it is 6 under the previous but

it is an expansion number, well, i have to monitor. the pmi seems to insight some trading in europe. they're not going to give you the definitive clue but we are going to stir to see how this all fits in the grander scheme let's get to the charts and the markets, we see interest rates easing back a little bit, steady and a little lower on some maturity look at a one week of tens really says it all we are bumping around in the 250s we have lost the big top up at 260 and 261 on that trade. bund popped a little bit maybe it was their gdp number that did not disappoint too much you see a two-day chart there. likely positive. if you look at a mopt nth to da, you can see what i am talking about. definitely the perception is relative value trade and

treasures from europe and in our own data sometimes can be a bit spotty there is demand side for treasury at this point dollar index was on a tear it went higher than 98 when the old story used to be 97. we reversed a little bit you can see the way we have given back some of the best levels we have seen since may of 2017 we want to monitor what's going on in the euro currency. that once again over taken the 112 handle carl, jim, david, back to you. >> thank you, we'll see you in a while. the company formally known as as wework has filed public. wework did not disclose a time i line for going public.

>> bernstein would be a fan. >> yes, anyone who looks at this company recognizes like shopify, this is the new company. it is not great balance. it would be good for soft bank to keep putting money in it, i don't know it is a tremendous real estate play in an environment where you would not want a real estate play >> san francisco is getting a little tippy >> yes, was that interesting housing prices going down for the first time is david with us >> no. >> my take on this one is really premature to make a call in this this is not interest and it goes up pretty much everyday. >> we are watching pins and we got initiation of zoom today we'll watch that coming up on "squawk alley."

do not miss david's interview with meg whitman ge is leading the pack though. back in a moment

we're going to get some earnings after the bem tonight amgen, mond lease, fire eye. apple will be the showstopper, currently down 1.5%. >> what a break, that's what you want not alphabet whi cchame in too hot. >> stock trading with jim is next -driverless cars... -all ground personnel... ...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.

no matter what you trade, at fidelity oh, sir. that was my grandma's. don't worry, ma'am. all of your stuff is in ok hands. just ok? they don't give two and a half stars to just anybody. here you go. what's this? it's your piano. hold this for a sec. we don't have a piano. no.. but the neighbors do. just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing. feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

time for jim and stock trading. >> louie had been the best performing drug cap last year, just on fire they missed on a couple of key drugs, diabetes drug and autoimmune drug. can't get in front of it right now. new world and a world that's not so good. if you're lilly, great for the american republic. pricing is in trouble. there's more pricing in the hamburger business than in the drug business. >> that's actually true. what are you going to handle

tonig tonight? >> zebra technologies, tri point, a very important play on the housing in california economy, shopify, the best small business stock i know. i have lisa sued meyer from amd. intel created a negative rap on the entire semi world. what happens if it turns out that they took the share from intel, the whole group comes back we would see broad com come back lisa su, a lot of pressure on you. don't worry about it. >> a curveball for all those people who said those companies exist at the pleasure of intel. >> that's the old days, the anti growth days. lisa su says only the paranoid survive these days. >> a good show tonight we'll wait for later in the week. >> shopify >> mad money, 6:00 p.m. eastern. a couple interviews you don't want to miss dave will set down with edgar

den and ebay's ceo devvin wenig. don't go anywhere.

♪

good tuesday morning welcome back to "squawk on the street." i'm carl quintanilla with sara eisen. the milken global institute in california talking to the ceo of ebay down is down 21, s&p 500 down seven. the nasdaq getting pinched by the revenue information out of google let's get to santelli. >> i am waiting for the conference board to release consumer confidence and it just hit the wire this actually is a good surprise 129.2. we're expecting a number in the neighborhood of 126, 127 unlike previous number today where we had a disappointment with regard to chicago pmi, this 129.2 is the best level since february when we were at 131.4 but it is a lofty number

if we look at the internals, and i always like to do that, if we look at the present situation, that moved up from 160.6 to 168.3. expectations, what we see on the road propped from 98.3 and now 103.0. you can see there's been major improvement. now we have a housing number with sara. >> i'll go to the expert, diana olick on pending home sales. >> jumped a wider-than-expected 3.8% in march compared with february this index from the national association of realtors measures signed contracts during the month, not closings. march we saw the big drop in mortgage rates, down from 4.5% to around 4% the biggest one-month drop in over ten years that's a reaction to that drop sales still 1.2% lower compared

with march of last year. that's the 15th straight month of annual declines realtor chief economist saying the numbers have been exceptionally fluid lately we have seen the mortgage rates pop back up again since the lows in march bru not nearly as high as they were back in november of last year. the strongest sales were out west, up 8.7%, still lower than a year ago also, we did see home prices on the s&p case-shiller price home index shrink from 4.2% in the previous month those are annual home price gains. prices are getting lower the mortgage rates are getting lower, but again,pending home sales taking a nice jump in march. back to you guys >> diana, thank you. our roadmap pour the hour is going to start with buffet's big oil voemt. committing $10 million toward the deal >> earnings mania mcdonald's,

ge, alphabet all on the move >> the last trading day of the month. we'll take a look at april's record climb as the two-day fed meeting kicks off today. very big oil and gas news. warren buffett's berkshire hathaway investing $10 million for the proposed anadarko takeover we've been looking for buff fet to place his chips on some part of the table unimpressed by valuations overall in equities. this is one way to get into oil and gas. >> putting his money where his mouth is in support of that deal the question is what does chevron do next? >> that's the key question, you're right, sara it makes it less likely that they try to ompete, one would expect if they want to, of course, they can. the $10 billion coming in to occidental certainly emboldens them conceivably to bit higher to increase the cash portion should they need to.

it simply strengthens their bid overall with the endorsement of mr. buffett as well. it's 8% money. the warrant that comes along with it was almost in the money. it's not any longer with shares down about 2.6%. it's money apparently they thought was worth it in terms of strengthening their hand in terms of investor perception perhaps, now that mr. buffett endorsed anadarko and giving the wherewithal to increase the cash portion even as much to eliminate the potential need for a shareholder vote don't know that that's going to happen as for chevron at this point, the question, of course, what will they choose to do as i reported earlier in the last 24 hours, as they were examining anadarko's decision to engage with occi, there seemed

to be hesitation as to whether it would be the right decision to move up and compete one would have to expect that mr. buffett's participation in that bid will give even more hesitation in doing so. >> let's bring in becky quick to talk more about this deal and especially from the vantage point of berkshire becky, you were on squawk this morning. how do you see this from a berkshire framework? >> this is a classic warren buffett move -- based on deals they've done in the past these are very reminiscent of the deals they did back in the financial crisis with general electric and goldman sachs and later with bank of america the energy sector in particular has had trouble getting investors to come in, particularly on the credit side. this is real money and hard core money that can go towards the deal the 8% a year it pays -- $80

million in warrants that would have been in the money based on where the stock had been trading. this is a classic buffett move versus rumors we've seen about other potential deals. last week there was the rumor that berkshire hathaway was going to buy pge that is not something that is typically what you would consider classic buffett, particularly given all the problems surrounding pge and the potential for bankruptcy down the road for something like this this is something where berkshire hathaway is going to get paid either way. good housekeeping seal of approval you get with any warren buffett deal that comes through. you can see the market moving immediately. as soon as the news came out, chevron shares up. occidental, down 3%. this is a knee-jerk reaction

i think they're assessing it saying, look, this is much more likely that occidental's bit is going to go through. anadarko down 1.1% probably less likely you'll see a bidding war. >> becky, it also raises the question about buffett's investments and berkshire's investments in the oil and gas space. bring us up to speed how is he positioned and how much does this increase this exposure >> additional exposure, but he's never shied away from energies or even oil. right now berkshire hathaway has phillips 66, also a new stake in suncor berkshire hathaway is one of the big four they've got power plants, natural gas pipelines, wind energy, all kinds of things.

this fits in nicely and is one of the areas where he kneels comfortable. he feels comfortable in industrials, railroads, but also places like financials again, this is pretty classic berkshire move, pretty classic warren buffettt move. >> i'll lean on your intuition and what you know about berkshire over all these years is this how about it fits in the portfolio or the terms that only buffett can get and they happen to be too attractive to pass up? >> i haven't talked to him today about this i'm trying to get ahold of him now. i'd have to say the latter, carl it's a situation where it benefits berkshire but also benefits what you'll see with occi those are if types of deals that few other people can get, when you know you need money right away, look, here is $10 billion

and i can give you that. i doubt buffett talked to anybody else at berkshire about doing this sure, i've got $10 billion sitting around i have over $100 billion in cash sitting around i think more than worrying than balancing out a portfolio which is something that works out well for berkshire shareholders. >> you brought up he's got all this fire power and the cash that has been waiting to get in and he's talked a lot about valuations they haven't done that much in terms of deals how much cash do they actually have >> the last i checked it was -- i think it was $111 billion in cash on hand that moves rapidly i don't know what it is as of right now. as of the end of the year it was like $111 billion. hard to even get your head around that. he says he likes to keep around $20 billion cash on hand

still gives this guy $90 billion to $100 billion. i've been told recently, in the last couple months when they look around and look at the premiums to buy a company outright, they've seen premiums that they've never paid before in their career and that makes them uncomfortable that's why they buy stakes in other companies, increase stakes in other companies, apple and other companies, or they can find things -- unusual ways to put their money to work. this deal would fall in that category you can get a great deal and you think it's a great deal for your shareholders, that's when they can put unusual deals like this in lay. >> great perspective >> certainly keeping the game interesting, becky, thanks for the time after a long show today. becky quick joining us on the cnbc news line ton of earnings movers to get to starting with ge.

general electric shares popping swinging to a q1 profit after reporting stronger cash generation and reaffirming 2019 forecast stock up 4.7%. google parent alphabet falling after reporting q1 earnings that beat the street. a slowdown in ad growth to blame. apple faces more competition from amazon and struggles at youtube. mcdonald's surging after beating on both the top and bottom lines. global and u.s. comp store sales beating the street's expectations a lot to talk about. how about mcdonald's and the bacon event? >> that was cramer's point this morning, the stock got a nice bump out of the initial print. people started saying, well, if it's really bike con, 4x a problem as well. nine cent impact on a diluted

basis. their digitize asian trend continues. >> it bodes well for their marketing efforts if they can try this again doughnut sticks were also a key point. on google, carl, that's the stock of the morning to watch. there's one theme and that is lack of visibility and transparency not easy to dissect where that big revenue miss came from the company did blame foreign exchange as so many other companies do it's legit they have a stronger dollar. they also blamed product changes. i think you had this conversation this morning and you saw it a lot in the notes. what exactly does that mean? is there weakness at youtube, in search rbc's mark ma haney, google, what happened to revenue growth? that's really the question. >> that's a problem. overall now with half of the s&p in, q1 has gone positive

blended growth rate now .7. >> we're at the halfway mark today. >> calls for the earnings recession at this point look premature. >> yeah, backing up. >> that's helped send stocks to record highs. >> when we come back, ge board member ed garden is with us. we'll find out what he says about the surge in stock and future of the company. later on the ebay ceo. the dow down 25, s&p down seven. ? it's time to get a personal loan from sofi. borrow up to $100k, and pay us back with one monthly payment... and no fees. ♪

netflix made a spectacular debut on the nasdaq. online dvd rental company priced 5.5 million shares at 15 bucks a pop. >> netflix up 11%. they'll mail you a dvd. >> cory, tell me how this system works. >> the ipo worked today. it took a few tries toda

frmgts welcome back. i'm david faber, joined by ed garden, board member of ge in addition to other companies as well of course, co-founder and cio of t rnchrian ge's stock is up, responded to positively by investors. it does seem that mr. culp wants to temper expectations to those who say this is the light at the end of the tunnel, what do you say? >> what i would say is you can feel we're getting on our front food operationally i think you can feel that we're starting to make progress on the places we need to improve and the issues that we have. but nobody at ge is doing a victory lap. while we're confident on the path that we're on and the progress we're making, we're

sober about the fact that we still have a lot of wood to chop a lot of things that we need to improve at, and a lot of issues we need to address. >> when you say feel, as a board number, what's the feeling in other words, what goes into that feel? >> well, if you -- maybe to frame the discussion, if you think about what's happened over the last 18 months, when i joined the board, the board was 18 people. today it's ten people. highly engaged, very active. the board is very fas siel on all the issues it's a very strong board this is not a board that treats a position as an on rare yum. it's very much a responsibility to shareholders. we started simplifying the business we separated the transportation business we've publicly announced we're going to separate baker hughes ge. >> significant with health care

as well. >> of course. >> something ha hasn't gotten a lot of attention, we've announced we've taken the vast majority of corporate costs and pushing them down into the business units that's going to make the business less bureaucratic, faster moving, faster decision making, more dynamic that's a very, very big deal. >> will it actually have the effect of improving margins? >> absolutely. it's going to make the business much more efficient in my opinion. >> how long does that take >> it takes time it doesn't happen overnight. that's not something you flip a switch and it happens. but it's in process. >> new ceo first time ever an outsider ceo of ge, and not just any ceo, larry culp who many think is the best industrial ceo -- >> do you agree with that? he was on the board first and then elevating him to ceo. given what you've seen, you feel as though you're confident

obviously. >> yeah. larry is a real leader of people he's very strategic. he's a real operator the other thing i've learned about larry and other great ceos, a common trade i see is a great judge of talent, putting the right people in the right seats to manage the business i think he's really good at that the last thing i would mention is the culture is evolving i think what i've observed at the ge culture is no tolerance for rhetoric or spin very much grounded in reality, very humble and hungry and i think that type of culture is going to serve all our stakeholders well. >> it's still going to take quite some time. we are, to bring reality, talking about a company, so is negative cash flow it's getting better, but it's still not even positive. >> i can give you my assessment of the issues.

my goal is not to promote the stock today, but let me give you my perspective on cash flow there are those who would say the company is not worth a lot because the cash flow is negative this year, and i understand that. i'll take the other side of the debate and say you need to look at the sum of the parts. the negative cash flow is primarily related to one business, the power business and other legacy liabilities our two most important businesses, aviation and health care, generating a lot of cash i would argue those two businesses are beach front property in the industrial landscape and very strategic so making progress on cash flow, our goal is to get power cash flow positive. >> by when >> but i think you need to look at this from the sum of the parts perspective. larry has talked about power getting turned around over the next couple years.

it's not something that happens overnight. the other issue is leverage. clearly we have too much leverage, but i would take the point of view that we have line of sight to really bring the leverage down in line with our industrial peers you mentioned the sale of the life science business. we're going to monetize the baker hughes ge stake at some point in time. we'll monetize the wob tech stake at some time i think we'll clearly grow the denominator in that calculation as well. >> this has not gone as you might have planned originally when trian made its first investment years ago i'm curious from your perspective as someone who obviously examines your mistakes and tries to fix them, when you look back at this odyssey, my words, what do you see as sort

of what went wrong and, obviously we know what you're trying to do to make it right? >> what i would tell you is, first of all, as you know, we were asked to invest by the former management team in hindsight probably had too much trust and not enough skepticism but we told the management team at that point in time that the financial commitments that they were making to us and to the rest of the investor base we would hold them accountable to deliver on those commitments at some point in time, if they didn't, we would influence corporate events and corporate behavior that's what we've done and we're very focused on making -- helping management and the rest of the board make this company the best in class. >> originally invested long-term care, for example.

the liability was not something fully known at all ended up paying an enormous cost and any number of other -- we didn't know what was going on in power either and the execution issues. >> so trian, we go into corporate board rooms and look to be a positive agent of change as i listed the progress we've made over the last 18 months, i think it's clear that we've added a lot of value at ge and this is an iconic u.s. company it's an important u.s. company it's a company that's important to the world the products are important to the world. i think it's important for us to play a role getting this company back on its feet and we will. >> how many years do you think it will take >> i don't know. we'll see. when we go on the board, david, our average duration is six or seven years. we've been in wendy's for close to 15 years. we'll stay as long as it takes

to make this company best in class. >> ed, we appreciate you taking some time, thank you >> good to see you, david. >> ed garden, cio, co-founder of trian as we've made clear, a ge board member sara, back to you. >> as we head to break, take a look at the financials, really on fire this month up 8% in april leading all s&p 500 groups we'll talk to ron skull chef ski. more "squawk on the street" when we come back key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

stocks marginally lower off a day of record highs and a move higher in financials take a look at the kbe it has absolutely been on a tear ronco chef ski is out with earnings today, ron, nice to see you. i guess the big question in your report, how did you navigate the market turmoil we saw at the end of last year in terms of client activity and the government shutdown which also i think had

an effect on your business the government shutdown certainly impacted our equity business it did across the street our equity issuance business was down in the first quarter. we see pipelines strong for ipos going forward. it's important to look at the market let's go back. on september 20th, the market is where it was today it promptly dropped christmas eve about 14%. it's an interesting look back as you look back to september financials have had the same path i think companies have been growing nicely and the market has taken a nice v-shaped trip around -- up 14, down 14 orr the other way around >> right we were on that ride, too, here. what have you seen in terms of client activity as the market has come back and hit new record highs? have they been bullish coming

back into this market? >> they've been in the market. clients have been engaged. our client cash is at historical lows which is sort of an indication of whether or not, in defense of cash versus being in the market clients have been engaged, and the markets have been good one of the things i might say, it's been a good year so far understand what i'm saying it's been a good year so far >> good year for investors, good year for stifel. >> good year for stifel. i'm talking about investment returns. where are we going from here is a question i know a lot of people have. the markets appear fairly valued the fed is -- i don't think they're going to raise rates they certainly can't lower rates politically at an all-time market high. you have to look around and wonder if the u.s. is somehow an

island of prosperity in the world or a pinnacle of interest rates. our interest rates are the highest in the world of developed countries. i've been bullish on this show a lot. today i have some caution about the overall levels of market considering financial conditions >> interesting, ron. to your point we get a downgrade of bank of america today because of the 25% year-to-date gain wells upped their target because they think banks are the catalyst and the renewed interest in banks is the catalyst you need. what tips you to the bearish side >> i'm talking about the overall market i think financials can perform well stifel is up over 40%. we were down significantly in the fourth quarter i just view that as a round trip that's true for many, many financials the question will be ultimately

what's going to happen to grow, what's going to happen with what the fed is going to do, again, raising rates i think would be a mistake. we need to be careful in this environment regarding policy mistakes. >> that's what is making you cautious >> no. a policy mistake being raising rates too fast i think we're at the neutral rate there's a concern and i think the chairman of the fed has said this if there's a concern, we have yet to have sustainable inflation at 2%. so when you factor what's going on in the world and look at everything else that has happened and again growth seems to have been muted here, the word deflation starts to creep in to the dialogue again, and we need to be mindful of this

>> finally, are you a fan of this idea of insurance cuts in rates, sort of the 95-esque thing that others have been talking about? >> no. i think it's -- again, to cut rates in this kind of environment while we can talk economic terms all we want in today's environment, you have to look at the political aspects. that would be very difficult politically. i think you have to be data driven and ability accordingly we use the term it's kind of a chicken and the egg. i think a couple of economic eggs are going to have to break for the fed to play chicken and cut rates. >> ron, wanted to quickly ask about your ipo business which you mentioned is doing well. you have a strong outlook. you advised on zoom and lyft we covered them and they went in opposite directions on wall street so far. what do you think the price

action tells you about the environment and the appetite for ipos >> ipos, especially tech ipos can be volatile at the beginning. they're very well marketed and get priced at market value i remember facebook coming near 40 going to 20 what is it today 190. i believe you have to let these things settle a little bit, and for long-term investors i believe these things will work out. >> ron kruszewski, good to talk to you, ceo of stifel. let's get to sue for a news update. >> hello everyone. here is what's happening at this hour, venezuelan opposition leader has taken to the streets with a small contingent of heavily armed soldiers teargas is billowing and people have been throwing objects near an air base is caracas.

treasury secretary steve mnuchin is meeting in beijing for trade talks. next week china's vice premier will head to washington for more talks. u.s. ambassador to sri lanka says the militant group blamed for the easter attacks may still be at large and planning more assaults, this just before the start of the islamic holy month of ramadan >> i can't comment on specific intelligence or investigative information, but i believe our warning is valid and still stands which is that we do believe that there is active plotting underway and we have warned u.s. citizens and others who might read our warnings to be mindful of places that might make attractive targets for terrorists you are up to date that's the news update this hour i'll send it back downtown to you, carl. >> sue, thanks so much. when we come back, ebay surging this year, up nearly 40%

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welcome back to "squawk on the street." i'm david faber. joining me is somebody from this side of the country, devin wenig is the ceo of ebay, a little north of here in san jose. >> same general neighborhood. >> you're dressing like a west coast guys. >> i dressed up for you. >> you're wearing a collared shirt. >> almost. >> nice to see you. >> thanks for having me. >> an interesting interview with jeff bezos when he wrote his annual letter. it want your response to what he said for some reason he decided to throw ebay in there in terms of discussing the growth of

independent sellers on the amazon platform. he said, you know, wrie did independent sellers do so much better selling on amazon than they did on ebay what do you respond to that when the ceo of one of the most powerful companies in the world calls out ebay and says we're growing faster than you are for our core con constituency. what is your core con constituency >> we had back and forth i'm busy trying to run the company. there are millions of sellers that sell only on ebay amazon is pretty good at what they do. the question is what is that why is it that millions of sellers make their home on ebay. i think it's because this is the number one or number two e-commer e-commerce platform in the world. our pricing, velocity is incredible for small sellers we built an almost 100 million

dollar marketplace amazon is really good at what they do. it's a $17 trillion commerce market there's plenty of room for ebay and amazon and i don't want to compete with amazon. i want to get as far away from amazon as we can get and build a moat around an independent ebay that stands for something different. i want ebay to stand for a human form of commerce for consumers in an amazon world, why do they buy $100 billion of stuff every year? i think the reason is, there's no better place you can find incredible value or incredible selection. it's rare you won't get a better price or better choice on ebay that's why our business 22 years into this commerce war with amazon has never been bigger and still thriving. >> 95 billion plus in gmv in 2017 your last quarterly results well received by investors. nonetheless gmv went down. one would anticipate eventually

that's got to go back up >> sure. >> you're looking at your return on investment, changing parameters around that to increase margins when do you expect gmz will resume >> i think what we said is the long-term growth rate is probably above retail, below e-commerce we're running a business in high 20s margin in an industry that has many competitors that are 2%, 3% margin. that matters in commerce we were really happy with the way the quarter started. it started exactly the way we wanted it to we said we were going to withdraw low value marketing and we'd focus on profitability. at the same time we're growing some new businesses that are really exciting, payment, advertising. they're both in very high growth modes. you saw our revenue grow well above our gmv. we've been able to deliver good profitability with that. gmv will come back it always does we're very confident in the

long-term growth of the core marketpla marketplace. >> at the beginning of this year you briefly had what appeared to be potential battle with an activist and you settled it. jesse cohen from elliot joined your board why did you choose to go that route as opposed to fight? >> there's no point in fighting if you believe in core principles we would have no problem standing up for things that we didn't believe were sensible, but actually we sat down with elli elliot and there was a lot they were saying and we were saying the exact same thing a lot of what they were saying revolved around our portfolio. we, if you look back over the last couple years, we or not a company that hangs on to assets when we don't need to. in fact, we've been net sellers over the past few years. with regards to the two assets they called out specifically. >> stubhub and the classifieds which they said would be better served aptz independent entities >> we said we will look at it as

we always do and take a clear-eyed look at how best to create value for our shareholders that's exactly what we're doing. we represent all our shareholders i think what they care about is we get value for those assets but we don't compromise the long-term growth and viability of core ebay there are a number of ways that can come out it's early in the process. but because we thought that was the right thing to do, we were largely on the same page as elliot i think from them issuing a letter to us settling was a matter of weeks. >> giving more financial specifics around classified, around stubhub do you anticipate when your review is completed or are you starting to think they would be better a off >> it's premature to even guess at that. what we care about is we recognize the value for ebay shareholders, but we don't compromise either the viability of those platforms or, most

important, the growth and competitiveness of core ebay we'll see how that comes out. >> that was the key, of course, of the letter originally from elliot as well revitalizing in their words the core platform. are you doing that what can you point to specifically that says yes, in fact, we are >> i think if you look at just the last couple years, we've added about 10 million new buyers we've added a massive amount of new sellers and inventory. in fact, we had 800 million items for sale now we have 1.2 billion. gmv has never been bigger at 95 billion. there's no metric that's not the greatest it's ever been on our core marketplace we focused on what's unique about ebay, but modernizing and improving the core customer experience what matters to me is consumers who shop with us, 180 million of them, get a great experience every day.

that's improving customer service, shipping and e tending the inventory advantage. if you look at the underlying metrics, we're really, really happy with where we are. we've accomplished a lot the business is big and it's growing. i don't think it's ever been as competitive as tuesday right now. >> you don't >> i think it's at its strongest now. >> when it comes to ebay and, of course, i can go back many years when we first did a documentary on it in the small and medium-sized businesses that made up the core con constituency of your sellers, you're relying now more on bigger sellers. >> the mix has changed we added a lot ebay still represents this long tale of small and medium-sized entrepreneurs and sellers. that really is the heart and soul of our company. we are champions of entrepreneurs. they bring a lot of the unique inventory to our platform. a lot of the things you can only find on ebay which are millions

of items, they come from those small sellers. that is never, ever going to be not the core of what we do it happens to be that as we've gotten big, brands have joined the party, big merchants have joined the party we have a lot of diversity -- >> don't you end up looking a lot more like amazon as a result >> i don't think so. i think what customers want is choice i don't want to be a commodity retailer we're not the drones and robots company. i think we stand for a more human form of commerce that doesn't mean people don't want to buy adidas shoes and dyson vacuums. they can do it alongside unique inventory on our platform. >> without those things you just mentioned, can you ever be as efficient as amazon? >> i don't know that efficiency is the only thing consumers care about. i would argue, go take a look and see if you don't find a better price on that dyson vacuum or adidas sneaker on ebay we're not trying to win a

logistics war. that's not what we're about. amazon and others are very efficient. it happens to be that in the united states now an average package is delivered in about two days that's not too bad but we don't want to compete on one-day shipping, half-day shipping, quarter-day shipping. >> although if you put ebay on those boxes, it might be a good marketing opportunity. >> not a bad idea. >> we've been watching alphabet shares this morning. you're one of the largest advertisers with them. any sense of how you've been approaching the google platform or what your sense is in terms of their share and what might have been behind this deceleration in clicks >> i don't know what's behind their deceleration i will say what we find is there's no better platform to get a return on advertising than google that's been the case really for the last 15 years. it's also the case that there are a lot more alternatives now and there's a lot of competition. whether that competition are social channels, other

publishers, there are a lot of places to put advertising dollars. if you're a digital advertiser like we are and measure return religiously, there are probably 15 competing platforms now, and a few years ago there were a couple i will say google in terms of return we find is still the best. >> you do. okay devin, we appreciate you taking some time. >> thanks for having me. >> devin wenig is the ceo of ebay back to you, sara. as we head to break, let's recheck some of those big oil names on the move. warren buffett investing in occidental for their bid for anadarko s&p 3,000. the llbuish result from the cnbc fed survey after this break. t? that's the beat of global markets, t? the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity,

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veteran tech investor paul meeks is waving a caution flag on the group ahead of apple earnings

find out what he's watching on tradingnation.cnbc.com more "squawk on the street" is coming up.

the federal reserve kicking off its two-day policy meeting today. our senior economics reporter steve liesman joins us with some exclusive results. steve, it shows some enthusiasm for stocks right now >> yeah, it's come back a bit. the survey shows a three handle now predicted once again for the s&p 500. what i want to show you here is the track of the forecast, going back to september of last year you can see right now, we're about 2935 in the s&p, going up to 2974, not much to go. you can see back in september, we believed it was going to be over 3,000 for this year it's gotten most of that back but not all of it.

watch what's happened to bonds interestingly, you've come down. you're at 3 1/2 for a prediction for the ten-year yield that's come down, down, and stayed down. while stocks have come up, the outlook for bonds has remained lower. this is incredible, you see over 75 basis points of easing coming into the ten-year yield in terms of expectations of lower interest rates one reason why you may have this bullish outlook in the market is expectations for a trade deal, 77% of our fund managers, strategists, and economists expect a u.s./china trade deal to happen this year. 79% say a government shutdown is unlikely some of the commentary we've received, scott wren writes, what the market needs is a reasonable trade deal. the s&p is mod he es the s&p is mod he etly underval.

michael painchaud writes that it's overextended, that's how we have a market, folks the fed funds rate outlook, this is what it was if december for each year, going up around 2.8, 2.7% in 2020, that's come down again, easing working into the market, all of that helping out the outlook for stocks back to you. >> really good color, steve, helping investors understand what people are thinking about the market, our steve liesman. take a look at some of today's big earnings movers as we go to break heinously ge and pfizer lpg lead that pack s&p down 8 we're back in a moment (indistinguishable muttering) that was awful. why are you so good at this? had a coach in high school.

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a ton of news so far this morning. but we know what's coming after the bell, sarah. >> the whopper of an earnings report apple will be reporting after the bell reaction, of course, what is important in that report they're not going to report iphone shipments so we'll look at the iphone sales, services. the stock has really bounced back, up, what, 30% so far this year can it keep going? we've also got a number of guests, former fed vice chairman

donald kohn will be joining us as the fed kicks off a two-day meeting. some reaction to stephen moore on "squawk box" this morning so join us at 3:00 >> can't wait. "closing bell" this afternoon. meantime, "squk awalley" is coming up next dow is down 40 through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

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reaction to apple's

quarterly results. plus adp's early read on america's job growth tomorrow on "squawk box. good morning, it's 8:00 a.m. at alphabet headquarters in california, 11:00 a.m. on wall street "squawk alley" is live ♪ ♪ good tuesday morning, welcome to "squawk alley." i'm carl quintanilla with contessa brewer. jon is on assignment we'll begin with google parent alphabet today the company is on track to have the worst day in nrl