a quick look at the ten-year, then a tesla chart before we go. 2.514 on the ten-year. let's show you the tesla stock getting a bounce after news this morning. >> jobs and buffet tomorrow. >> a big show. >> big, big show joan us tomorrow for that big, big show "squawk on the street" begins right now. ♪ ♪ goods thursday morning welcome to "squawk on the street." i'm carl quintanilla with jim jim and david faber. coming up the biggest drop since march 22 on the heels of this fed press conference tons of news from tesla to qualcomm, to square, to caterpill caterpillar. future is red as company q 1 productivity, 3.6 the fastest pace in five years stocks poised for a muted open,

still awfully close to historic highs. why jim thinks it is time to ring the register. >> what now for qualcomm stock up after a settlement with apple. an earnings beat predicting weaker shichlts for cell phone fits. we will talk with citi's michael car bot at post nine stocks are on track to open lower following the pullback yesterday sparked by the fed chair saying the policy makers are likely to keep rates steady. s&p hit a fresh intraday high before closing lower this is what jim said yesterday. >> we have had a triple threat i am blessing you to do some selling, tomorrow. other than that, i think we are in fine shape. somewhat overheated most definitely i think it makes sense to stay the course >> all right why now? >> because i actually think that i am worried about the uber

deal i'm worried about the uber deal. >> the uber deal >> it is so huge that would be the straw that breaks the camel's back. notice i didn't use the canary in the coal mine what i am concerned about is, let's say the deal goes well does anybody care? no if it goes badly, everybody cares. i am just concerned that this is it this is what i said from the beginning, there will come a moment where -- there will be a deluge of offerings. they put out a release saying listen it is tight you never say it is tight if it is tight. >> they have lowered the valuation range over time. >> really? >> yeah. >> to equal how much they were making >> uber? no listen, i think the main focus of a number of investors is the deceleration of growth. >> right. >> it is still growing, quite a bit, but -- >> you understand the supply. >> that's more a sentiment indicator is what you are talking about.

that kind of thing doesn't do well -- if it doesn't. >> if it doesn't people say maybe the market is bad. because uber is owe known. i don't know a lot of people -- >> is lyft part of the test or is lyft too small? >> they had the lock up, mysterious unlock up lock up all i am saying is it is okay -- here's what happened you turned the me yesterday and you said yesterday fastest for the dow since '87, for the nasdaq since 1999. i wanted to get ahead of people who will be saying that. raised cash, had an unbelievable run and then the lunacy yesterday of -- what was powell supposed to say? i was going to keep rates the same but i read the tweet and i am scared of him, i am frightened and i know he knows where he lives but of what was he supposed to do -- but the market took it seriously. if we went down on lunacy, what happens if we have a real reason

to go down whole years have been made. >> stocks to watch are up 27% year to date, 38%. apple, 38% facebook, 47%. amazon 27% ibm 23%. >> that's off of a christmas eve low. >> december was a powell bear market we have made it up i don't know, we pause. >> stocks are where they were in october. >> that's okay if we knew what was going to happen we would have sold some i just feel like we have had such a run i can't find -- you have to look hard 678 other than cbs. everything moved up so much i think years have been made years have been made and we are only in may. i am not going with the sell in may thing. that's echl e. comes. >> if you analyze the year to date nasdaq gain, 87%. you would be talking '99-type numbers.

>> i think people who are saying not selling are arrogant not cramer you know that's people who use third person references look, i don't know, i don't want to feel defensive about something that seems to make sense which is that i can't find stock. i am looking at qualcomm saying, well, they just said it may not be as good as it was and the stock was at 59 when you broke the story there was settlement 59 coming in it is 88 it is not as good as it was, let's buy qualcomm is that what you are supposed to say? i ask you? >> i get it. >> do you? >> i do. i do i understand, nobody issing go to be sorry if they sold a bit here. >> to sell or not to sell.

that's question. >> if they benefitted from the move up. even in the s&p, up 17%. or the nasdaq comp up 21% year to date. granted if you owned stocks from last year you hit lows in december that you want to come up off of. >> the market dropped 6% after the facebook -- how do we know that j.p. morgan, will they handle the deal right. >> it is not just uber we have 16 companies going public in the next nine days. >> 16. there. who is going to buy all that stock? where are they going to put that took are they all deals that you like do you like the suit what are you looking at. i do like the suit. >> the suit is worth more than some of these ipos. >> i bet it is. >> it also fits better you are going to be wearing some of those ipos. they are not preowned. i am putting it out there. i got this own a buy one get one. >> nice.

bogo >> i am being very serious listen to the number of deals. have we ever seen that to be a good sign? >> well, it kept up for some time during the.com boom. >> that's perfect, david. >> we started in '98 going this is crazy, crazy, it went on for two more years. >> give me some slack. >> no. >> slack no slacks, i would rather have slacks than slack right now. that deal is going to hurt us. i feel like there is so much stock. i want to be careful i walked by and they were throwing stock at me. >> you won't wear levis but you wear the sonoma deal. >> i wear the sonoma jeans that i get at coal's. what do i have to sell to buy uber facebook no, that stock just fell alphabet. >> they already sold alphabet.

>> alphabet soup campbell's look, i'm being series i don't like all the supply. when the best acting stock is znga -- that's the best acting stock. >> he zynga is having a good morning. we are going to talk to them this morning >> that's why we are going to break early, save time for the citi ceo we are back in a minute. -driverless cars... -all ground personnel...

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joining us now exclusively on his 59th birthday, which he probably doesn't want me to say here at post nine, michael corbat, crowe ceo of citi. >> thanks for having me. >> in april you were in front of congress and you said our ability to talk ourselves into the next recession could occur i thought that was a great note. what it says is confidence sometimes can trump even robust employment can you explain to people at home how you talk yourself into recession. >> the line jim came on our fourth quarter earnings call in early january. an analyst asked me what were

the biggest risks that i saw i said one of my biggest fear is we are potentially in the process of talking ourselves into the next recession. this economy, so much of it is confidence consumer confidence. in particular, business confidence a lot of what the tax stimulus was meant to do. the markets want consistency and clarity. the fourth quarter was unsettling particularly to business a great barometer is m&a despite this backdrop it is down 17%. if it weren't for a couple of big chunky deals we would be well down into the 20s that's confidence in the c suite. businesses are not planning for the next 60, 90 days we are planning for three years, five years, seven years. if you start to see some of these signs and start to deget some of these fears and we start with the rhetoric of slowdown and recession people have a tendency to pull back.

so i was really glad to see that coming into the first quarter we rebranded. the confidence has begun to come back i think backed by the numbers of where we came in on growth at 3.2% we will see tomorrow but the jobs reports last month was pretty strong. i am hoping we are healing some of that rhetoric that has been out there. >> we may see some of a bounce in m&a as well: i'm curious. we know you as a global bank and there seems to be more to your point positive sentiment about your economy here. what about europe? what about asia where obviously you have very important franchises i think the sense is europe in particular is a real weak spot in the global economy. do you agree. >> i think the numbers that have come out re-energize people in terms of where the u.s. economy is i think the other surprise in the first quarter, second, had been china we were fearing a china slowdown, we talked about a lot of china stimulus being put forward in the second half of

last year and into the first quarter. i think that's now taken seed. i think we see a chinese economy that's stabilized. it feels better. clearly trade talks feel like they have got a bit of momentum. i think we could continue to see that trajectory. as you say, i think the weak link out there is away from the two book ends of the u.s. and china and it is really europe. how does europe break itself into a better growth cycle we have had some slowing we are back into negative rates in some territories. that's tough to overcome. >> what gets you there we have been having that conversation for a long time. >> i think it takes the rest of the world. i think it takes the rest of the world to stay on track what we have said, if europe just continues to need time, time the heal, time to get the growth they are going through some electoral things brexit obviously continuing to be there maybe it will be there for a while. i think it just needs time. >> i want to speak to the

inexpensive nature of citi stock. you have been buying back stock, 7, 8% of it. the market is not giving you credit for 17 months your stock hasn't really moved how do you explain why it is good to buy back stock at tangible book value. and that you are going to produce fabulous earnings growth and at the same time shrink the huge number of shares that you have >> since i have become ceo we have taken our share count down by over 25%. the past year we took them down by about 9%. so we get that embedded eps growth in share buyback. first quarter, we bought back about $5 billion worth of stock. couple of years ago we talked about a plan to go in and return at least $60 billion of capital to our shareholders over three c car cycles, two irds this of the way hrough, we are over $40 billion of that done obviously the end of june we will get our next series of

results and we hope to tick that box as having done that. as you talked about, you know, returning that, reducing the share count, getting the embedded eps growth. a bit of top line growth, good -- discipline share buyback, return on return of capital. >> you mentioned confidence, business confidence, planning. on the manufacturing front we have seen some surveys roll over, chicago, ism i saw reaction yesterday that some of it is due to trade, worries about trade. even worries about the southern border how much is riding on us getting a trade deal with china in two weeks ostensibly now. >> i think expectations, carl, are there that we are going to get something done in the second quarter. we are optimistic we are going to get something done. business wants clarity, the ability to plan and predict.

if your supply chain, whether it is coming from the southern borders or whether it is coming from asia, from china, whether it is coming from europe and you don't clarity in terms of your supply chain you are having to plan for that and plan alternatives for that and that's unsettling >> did powell's explanation make sense to you yesterday >> i think so. we have got the s&p at a high. we just posted 3.2% growth i don't know how you cut rates in that environment. i give the fed a lot of credit one is putting credibility back into the balance sheet we don't see it in the near he were the at some point we will get a recession. we want a balance sheets that's credit, we want rates in a position where the fed has the ability to act and stimulate the economy. we didn't see -- i didn't see anything that led me to believe that we should be cutting rates, that we should have cut rates yesterday. >> i think there is a bizarre nature to this market. if you have thin tech, so to

speak, people pay pretty much i go in, 30, 40% earning, if you have a good balance sheet people don't pay anything how do you as a traditional banker look at a company like a square or anything in payments and say you know what, that's not worth as much as my own internal businesses? >> well, you know, one is our treasury trade solutions is in a number of businesses we had what i would describe as a solid quarter across the board. good growth in terms of our credit card business, good growth in terms of our investment banking business. or investment banking business materially outperformed the street your annuity businesses and security solutions, 7% growth. by the way, i think it is the 15th consecutive quarter of year over year earnings growth in

that business. i think it is an underappreciated asset and something through time we are going to continue to show the value in. >> michael, something that caught some investors eye was value act taking a secure position and reaching an agreement with you guys in terms of supporting empty at least until the end of this year can you give us insight in terms of the relationship of that large usually very long term investor and how you are working with them, if you are at all >> sure. we signed a cooperation agreement to share some information with them. as you cite, and as we did our due diligence they have been constructive owners and holders of company stocks over time. listen, if they have great ideas we are wide open to them we have engaged them we have talked about -- we have been transparent with everybody in terms of our plan and the thing we are doing we believe we are executing against it we have been in constructive dialogue with them

we continue to do that going forward. >> you have a new chairman, cfo, head of icg. even u.s. consumer a lot of new people potentially bringing new perspectives. is that something you were seeking. do you expect there will be a different decision making as a result of those new positions or new people in them. >> when you are talking about new people, they are new to their positions. they are not new to our firm they have been there, coming up through the ranks. they have earned these opportunities. what i would describe is when you look at the people who are leaving, retiring, a lot of generational mo we have had tremendous stability. we have been building a bench and i couldn't be happier, prouder of the people, and also to congratulate the people who have been in those seats and done a great job. >> seems like every day there is an executive comp story. you were asked about your

executive pay ratio and what employees should think about it. you said i hope it is inspirational to our rank and file did that resonate back home? >> i am that person. i hope so. i started in 1983 at $7,000 a year and i through the grace of god and hard work got to where i am. i am that person who said maybe if i work hard enough i can get there. >> if the ratio is what it is, there must be a ceiling somewhere before it gets absurd. >> well, i think in there, the numbers will challenge themselves because they are not apples to apples we run -- we have got 200,000 people, many of them outside the united states. we have 40,000 people in mexico. i have people in the philippines. i have got people -- so to compare citi against a u.s. company, our average employee in the united states makes right at about $100,000 a year. >> let me ask you about something that happened yesterday. your a traditional banker, 1983.

you have been around did you ever think you would have this signed of silly site called twitter and the president would urge the fed chief to cut rates down to one and it would be taken seriously >> i would say today in those 36 years, jim, i would say more and more nothing surprises me. >> all right what is something personally that you did a little more than a year ago, you set restrictions on firearms by business customers. has it hurt business has it helped? has it mattered? why did you do it? >> i think as expected, when we put out our policy, it was put out in the form of a policy, we got reactions on both sides. there were those that applauded and felt that it was a great movement again, you look at yesterday north carolina closing day of school. we have got to do something about it and there were those who were adamantly against it believing a business shouldn't be taking

second amendment stances it want a second amendment stance it was a push around best practices that might help a challenge. >> you have so many of these hair trigger policy decisions, for example, sponsoring an even with the president of brazil and knowing what he has said about lbgtq. how do you balance those things? you know you are going to get blowback >> most importantly, we spend a lot of time making sure people understand the values of our company. i hope in the case of that there is no question in terms of our support our unwavering support for our lbgtq community. in there, we are supporting the brazilian chamber of commercials. we have operated in brazil for many, many decades i think we are very clear in terms of our stance. but we spend a lot of time, carl, making sure that we are communicating those messages and that we are clear with our people. >> earlier this week, i sat down with saved solomon, ceo of

goldman sachs. we talked a lot about the changing at that institution that are much more focused on the consumer, on building a mass affluent brand and a platform to service them more 30e tensionally of competition for some of our franchises do you see that as a potential competitor in the future do you think they have an opportunity to succeed at goldman? >> i think that the strategy is one that i have read about, is -- you know is a bit of a niche strategy in terms of the wealthy or ultrawealthy trying to cater -- >> consumer loans, consumer deposits it is not your typical investment banking strategy. >> i would also describe it is not necessarily your typical run of the mill high street maine street consumer bank either. >> right. >> from our perspective, we think we have got the ability to combine the best of both having the physical presence and being able to provide that experience and at the same time investing heavily into technology.

if you look at what we talked about in the first quarter earnings call we grew a billion dollars of consumer deposits on line experimenting in new ways of attracting new customers to the bank. >> excellent i want to thank michael corbat, his wife and daughter are here we always like to point out when someone brings their family we get a kick out of it michael corbat is the ceo of citi >> when we come back, we will get to tesla, kramers' countdown. got a dip on caterpillar and more don't go anywhere. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition.

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all right. we have a mad dash to get to as we count you down to the opening bell we will go to the bell two minutes from now what have you got? >> it's been a long time since kevin plank thab has been able to say better than expected. this has always been a sense in the last let's say even eight quarters that he is behind the 8 ball, that nike came on strong, that there were chinks, inventory issues in the system no it looks like that's all past. i don't want to be too gutsy the stock is soaring i do think there is a better narrative than there may be in a long time and a lot of people want to get behind him because they are playing catch up to nike a lot of those stocks have been strong something to cheer. >> was there anything in particular on the earnings report >> international was very strong i think also that, look, we have been waiting for growth stock. it has it. everyone is always looking for a

new growth stock it is not huge growth but i think people fell like the bottom has been put in remember, this stock used to be much, much higher. we are used to the hard charging plank. i think he might be back i think it is a healthy situation after my being concerned -- those were short squeezes this time it feels real. >> we haven't gotten to tesla and shelf offering, they look to raise $2.3 billion in gross proceeds they indicate that musk has shown preliminary interest in buying some himself. a year after he said i am not interested i am not interested in raising capital. >> talking now about buying 42,000 shares for roughly $10 million. you know, if you want to sell stock -- david faber liked this, if you want to sell stock you should hire someone who has a sell on the stock. that's goldman sachs >> yes but goldman and citi are the lead. >> you tell me david we finally really have chinese wall

separation, right? you would not dchts obviously the research department is going to say i think you should sell the stock. otherwise the salespeople are saying buy the stock what do you do [ bell ringing ] >> in the meantime, this is a man who never lacks for confidence in his own company. also, i think confound -- he seems to have a thing about the short sellers. you know if you buy stock that is going to get the stock rolling. this is the event short sellers are going to cover on. it is not panning out that way it is up $11. >> bernstein this week said they isn't very a capital raise would be impactful on this stock they certainly probably did not expect shares to go up. >> there is the bell clear channel outdoor holdings celebrating its first indicate in public trading following its

space from i heart media i don't know if we have a picture, jessica chastain helped ring the bell just now. >> that's a faster growing company that's every single company going public >> that stock has great texture. >> you can make it a climate change there methane from cows. >> i thought buying the stock was going to affect climate change >> eating less meat. doing to decrease methane. it appeals to multiple people's taste not just those what want a

vegan diet >> and they have a burger that many people say tastes good. >> close to making its way into big chains burger king. into how did chastain know is she a healthy individual? >> i wish we could talk to her i think she already walked away from the bell. >> how did she know? >> i look at kellogg, which i regard as being old-fashioned. and look at these. we are talking about being able to buy up to $35 given the fact it is such high growth and the world is looking for a replacement to white wave, which was soy milk and almond milk this is a company that fits the -- i guess i will say it, the millennials and then the gen -- >> y x? >> z i thought. >> i have no idea. >> i think we haven't had an explosive food stock in aims and this is going to fill the slot

of portfolio managers who want something in the sprl market i had the sauce amg yesterday in my hands it felt -- the stuff -- it's like real food. >> yeah. that's great are you surprised that shares of tesla are up this morning, jim >> no. the man -- no one those tesla better than elon musk. for him to buy, what a strong sign of support. thank you for getting away from the sausage situation. >> you are welcome. >> strong sign of support. remember it wasn't that long ago that he was told he can't tweet about the financials >> correct. >> so i think that he's not going to say go buy the stock. he is going to play it by ear. >> we should point out as carl said almost $2 billion, $650 million in common, $1.35 billion in a convertible, 224 with a 1.5 to 2% coupon range

conversion between 27.5 and 32.5%. >> when you raise money at that level that's pretty blue chip. on the is it what did apple raise at. >> that's a big discount >> something feels -- the company is on the verge of bankruptcy every minute. it is really on a verge of bankruptcy how can goldman sachs do a deal of this size. >> 2020 bonds are yielding 8 and change it is more expensive for them. >> if you listen to michael corbat, ceo of citi, he is saying china comes bags back and tesla is a good china call i don't know there are two sides to every story when it comes to tesla. >> you got that right? maybe more. >> any time spend on twitter will prove that. >> i have been going back and forth with you on mostly just things not involving the company. keep it that way.

>> jim's square's guidance disappointed some. lowest tier since january. >> i will take a 43% growth rate any day. i think they are talking about the ecosystem. jack dorsey, @jack was he will kept i had no problem with what they had to say it is not sarah fryer saying it. the former cfo was a partner at goldman sachs who moved on to next door, a terrific site if you want to sell it i think you have to rethink why you owned it to begin with it is a terrific play on the register point of sale and then bringing all the other parts of a business to it. this is the kind of company i was talking to mr. corbat about, that aren't you jealous that here they are with a register thing and a small business and they get a valuation that's big. but it is a love stock i don't think it stays down for long. >> talking about stocks that don't stay down for long, qualcomm is up now

>> of course. >> it looked as though it was going to open down due to his action in the premarket or the post market yesterday after reporting earnings. >> right. >> but there was a bit of concern about china, and the slowdown there they did take in, according to at least them telling the journal at least $4.5 billion from apple as part of the settlement at the time we reported we said it was billions. we know it was at least $4.5 billion that apple paid to qualcomm to settle the outstanding litigation worldwide that the two companies had of course also a chip buying agreement, also a six-year royalty agreement could be extended by another twoers yao and qualcomm has done nothing but go straight up when i talked about taking a little profit at the top of the show you and qualcomm just made -- several years, several years of gains in a matter of weeks.

>> bulls make money, bears make one money. hogs -- not beyond meat, but hogs get slaughter i'm concerned. that stock was at 86, 85, literally 14 hours ago. >> right. >> i would be -- i am trying to be cautious. i never think it is wrong to be a little cautious. >> it was in the he radio lease, they didn't tell the journal, 4.5 to $4.7 billion resulting in the setment. >> they were gracious with apple. the conference kale was him talking about how he likes the partnership with tim. >> it was all peace when he came on, we know he had nothing bad to say it really was all friendly the whole way. >> kind of like ten bears with josie wales. >> yes. >> once they got together -- when the outlaw josie -- when they got together, he came in friends. >> we were always friends. we misinterpreted the hatred i wasn't hatred. >> it wasn't hatred. and once they got together -- did they go out for cocktails?

no. >> what was the word the bloody litigation? is that how cook put it? >> that was really -- you didn't want to be caught in that crossfire. it felt like a -- situation there. the 5g, even though they frankly talked about it, don't get too excited about 5g people are so juiced about 5g. there isn't any way -- you hear the number 5 and the letter g you have got to jump how high how high should i jump all anybody wants is a play on 5g broadcom, people think it is a play on 5g do you know that dow dupont think it is a play on 5g they make some of the antenna. dow, dupont, which will soon -- what a confusing name. they have due on the po. they have dow -- [ bell ] >> fabulous. >> they really hit that bell hard. >> that's great.

>> well, anyway, yes, anyone who has a claim to 5g is moving too high, i think because it is not like it is going to be tomorrow. >> it is not going to be tomorrow. >> right. >> it is in fact, and they acknowledge this, moving slower than answered. >> right, they were cautionary i said, wow, after this big run, they basically give you a high sign the ring on the register a little bit no no this market is too bulletproof that's how i feel. it is too bulletproof. >> dunkin had good numbers a brief y'all time high before settling back this morning here jim. comps up 24. >> i am glad you mentioned them. yesterday we saw a good number from yum i thought it was a good number it didn't matter that stock didn't do well. it is like a row takal thing remember, starbucks did very well and coffee has come down a tremendous amount. >> we are going to talk to them on air tomorrow.

>> good. because i want to ask them about the cups. >> 1250i row foam? >> that's how i feel about jim from dow. >> you gave him a hard time about plastic straws. >> i wasn't asking how he can live with himself. it was my daughter he is a good man he makes plastic he makes plastic kinds of what he does. plastic, at one point that was the job you wanted to be in was plastics. >> yes. >> we know that from the movie the graduate. >> you were benjamin and you wanted to be in plastics. >> i want to talk about that company, almost everything in that company is frothing and yields 5%. that's a good investment that's not what i am worried about. >> we began the show by saying you think it is time to maybe do some selling. >> yes. >> not all sectors are alike info tech is up 27 health care is up 3. what are you mostant to sell right you no >> at this particular time -- most apt to sell right now

>> at this particular time if we don't get a trade deal i think you will regret that you didn't sell itw, emerson. you will regret -- 3m the selling is continuing. that's daunting. >> heavy cyclical. >> heavy cyclical and and i worry about the techs. anything that looks like uber. twillia was up very big. then it got hammered that's the independence could of thing people sell. they have to raise money index funds, 0% of the money coming in, they can't buy uber a lot of the companies -- there has been buys put on uber before it becomes public. what are you doing >> i am texting. >> i am talking. >> i can listen to you and text at the same time like my kids. >> but you are not like your kids. >> no i am not. >> i remember when my daughter graduated and my other dad was texting and playing a video game

at the same time she said dad i am more focused often this than you are. i did nap. >> the second gen generation, they are annoying. >> i am concerned about selling general to raise money to buy uber i am going to be right. >> really? >> yeah. because after uber have you seen the deals coming after uber neumann. >> neumann. >> now the ceo. >> it is neumann >> i forget what it is what is rework the wee company. >> wee what is this. >> wee, keep sabi. >> i am cautious i will be less cautious after we get through this big in the python right? inside a pig in the python. >> that being china trade. >> that has to happen. now suddenly we have

expectations in that story yesterday. >> we said it is possible by next friday. >> that's the last thing i want to hear -- what happens if it doesn't happen what happens if it doesn't happen what happens >> what happens? >> yeah. >> if it gets pulled >> yeah. >> it would only get pulled if the market was really weak, don't you think? >> i think he is referring to china trade. >> oh, oh. >> you have been texting so you haven't been completely -- stick with me, here. >> oh, the market goes down 7 to 10%, right >> again, a deal >> if they don't push out a china deal and say it is off, we are done, we are walking away. >> if we get a china deal right now, i think that after the run we could sell off. if we don't get the china deal we will sell off if the uber deal does well we will sell off, if it doesn't do well we will really sell off these are not positives. do you want me to stay positive forever? >> no, i don't. >> i like it when you live in the reality based world in i

don't want to be a sitting bull. >> i like the fact that you change your mind occasionally. >> facts change, i change my mind, too. i am concerned this amount of supply, we are going to look back and say why didn't someone say we have so much supply? markets are supply and demand driven that's kind of what you learned in ec 10 or ec 101 the supply is going to overwhelm the demand the next three or four weeks maybe a month. >> you have been raising that flag since before this pipeline came to the front. >> we have too many deals coming we need a breather i'm choking. him lick. >> you are supposed to hit them in the back now. first, if i have blows to the back, then a him lick. >> everything has changed. >> imins changed that, too. >> red cross changed its recommendation >> i thought it was genx. >> bob pisani? >> mixed open. look at the sectors. banks were up just prior to the

open as we went in here. consumer staples materials down rough week for materials freeport, the aluminum and steel stocks have been horrible this week underperformers. a lot of good news in the market and that's why we are at new highs. a lot of things need to go right to have thissin the. their risks out there that are very obvious besides having a trade deal stall you saw what happened, the market went into a hissy fit when powell implied a rate cut was not imminent yesterday that's a risk there. stocks are overpriced now. we are at multiples looking at 2020 levels. 15.5 times forward earnings. that's pricey for a 2020 levels. we could have no trade deal, each the dollar going up could be a major problem for the market the risks are more to the downside than to the up side easier to move the market down than up. the correlations are low carl hypotheted that with the

lower numbers that we have been seeing for big sectors out there, retail investors have not been big participants, energy stocks are where they were in 2016 even emerging markets, china is up there here, but china is up to where it was a year ago we are in the at new highs here. small caps, the russel is 10% below its old high there is a lot of stuff that's not participating. the correlations are very low. carl hinted at this earlier. look at the last time we had a new high rally it was september compare to now look at this 252 stocks are up since the september high 252 are down exact same mirror image how many are up more than 10%? 135. how many are down more than 35%. 136? an exact mirror. why am i bringing this up? it is lumpy. stock correlations are not high. there are definitely winners and losers it is a stock pickers' market. i hate that word but it is clear there are some big winners and

big losers out there and then there is china. i doesn't go away. lower than expected shipments for their cell phone chips out there. the revenue guidance was weaker, reflecting what's going on in china. of course they waved the magic word everybody saying it is 5g. this is a stall ahead of the 5g phone availability all you have to do is mention 5g and a lot of stuff goes away qualcomm trading to the up side. but it is a big question whether that's actually going to turn around april 16th they allowanced the apple settle men it was $57 then. now it is at $88 elsewhere -- i want to mention the ipo. we mentioned the beyond meat ipo. it is at the high end of the range. typical now, high end of the range for most ipos. $25. they use peas as the protein source another one, aesthetic services.

there is a lot of interest in china in cosmetic surgery. thanks bob pisani. >> let's get to to bond pits busy morning in the world of data rick santelli. >> we have had data points that are spongy lately but you have to be excited about the productivity pop that we had we will keep in mind of course associated wills in a nice drop in labor costs two day of two year. the left side of that chart, 220. we are at 233. treasuries definitely rebounded after the route they had where the buying pushed rates down look at a two day of ten year. traded down to 245 you know at the lows, 220, 245, that meant the spread briefly

was like 25. i actually think i saw a 26 basis point intraday trade let's flash it on the screen now. where is it at now 19 to some out there, it was at 25 yesterday, now it is at 19 for a spread, that is a lot of movement, and the movement was really predicated on the biggest part of the curve swings were the shortened because of trying to divine exactly what may lie ahead with regard to fed action. nobody knows that's the way it should be in my opinion let's look at the dollar index two day turn of the dollar index. it knew what it wanted to do it rallied and it stuck. it is holding even though it is now at 98. the chinese currency the boys at the desk were discussing china certainly, loo like something might be going on. the dollar is starting to strengthen after being somewhat coma toes for a period of time against the yuan.

we will see you in a few moments for factory orders. beyond meat makes its debut today. we will bring you that opening trade followed by a live interview with ceo ethan brown dow relatively flat, up four i consulted with your grandmother's doctor. we can do the screening at her house. hi.

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time for jim and stock trading. >> maybe i belabored my thesis about what could happen. rbc goes buy to hold estee lauder estee lauder had remarkable quarter, china was fantastic, asia, europe is good but, you know what, u.s. just okay this piece, the downgrade is about -- can estee lauder sustain this level of top line long-term? they're saying, you know what, it had a great run, perfect. it is actually perfect this is the kind of thing i say this is what you want to get ahead of analysts downgrate graid iding you've run so much bob pisani pointed out, perfect, there is half a market that hasn't run but the half that has run has run so viciously that i think you say, here is the perfectly

reasonable downgrade of a great company. i don't want it to be -- i worry about that for people. don't want people -- i would rather have people rotate into hmos managed care that haven't moved at all than be in the consumer product -- >> well said, jim. what's tonight >> whole logic, one of the companies, big mission, ge competes with some of them they take health care machinery. and david demshur, oil moved up, the service companies are terrible got to find out what's the matter. >> we'll see you next hour for dow. >> i'm not going anywhere. >> when we come back, ipo in focus. we're waiting for beyond meat to open for trade we'll talk to the ceo later today. doisp w u9. there are people out there who see things others can't. they're the ones who see a city that make those who live in it feel a little safer. who see the efficient shape and design of the ocean's wonders as the future of aerodynamics. at dell technologies, we see it too.

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♪ we don't bake. ♪ opportunity. what we deliver by delivering. welcome back to "squawk on the street." we have breaking news. factory orders for march, 1.9% better than expected we gained .2 in the revision from minus half a percent to only down .3 if we look at ex-transportation, it holds up, .8. and, of course, now we're going to look at ex-transportation going to factory or durable goods. this is a march final. which means the mid-march for all the durables gets

subtracted our last look was 2.7. now in the books, 2.6. not a lot of difference. if you take out transportation, we had .4 mid, now .3 for final. let's look at some important areas. capital goods orders, nondefense ex-aircraft, proxy for business spending, it actually improved, 1.4, 1.4 is a pretty good number keep in mind, 2.7 was the original durables number that went to 2.6 this actually gained a tenth from midnumber and if we look at shipments, they're unchanged versus the midread of minus .2. this is pretty good data we see yields moving up a bit. we want to continue to monitor tens minus 2s on the yield curve to see how treasury traders are viewing kind of post fed with regard to initially how aggressively they pushed down short rates. carl, back to you. >> all right, rick, thank you very much. rick santelli. good morning, everyone welcome back to "squawk on the

street." i'm carl quintanilla with sara eisen and david faber. markets relatively tepid here after that late day sell-off the data has been good not just factory orders, but productivity 36, fastest pace in five years >> road map for the hour will start with the market meltup major averages muted, but still near historic highs as the fed holds rates steady. >> chemical maker dow inc. reporting results for first time since being separated from dowdupont in april john fetter ling will join us exclusively. >> and the other big movers of the morning from the capital raise to under armour's big earnings beat. >> still some overhang this morning for the markets after the post fed reversal yesterday. fed chair jay powell saying low inflation is transtory that has investors wondering if a rate hike may be coming as corporate earnings flow in and big jobs number comes tomorrow. for road map of where we go from here, joining us at post nine is noted market expert goldman sachs senior investment strategist abbie joseph cohen.

welcome back >> thank you very much happy to be here. >> i usually think of you over the years as someone who is optimistic, and bullish on the markets. what is your level of enthusiasm right now? >> i'm optimistic and bullish when the data suggests i should be and right now i take more of a neutral to positive view the valuations are already reflecting the economic scenario that we think is most likely economic growth this year, 2.5 to 3%. the current quarter obviously the numbers that we just got, robust but we think the trend in the u.s. is 2.5 to 3, a little bit weaker this year versus last year in other countries. so that's something that comes into consideration right now the valuations, not just in the u.s., but elsewhere, are reflecting a scenario we think makes sense. so likely gains of 3% to 5% in markets around the world this year >> what about that sort of mini

tr tantrum we saw from the markets, not getting strong enough hints about ray cuts is that an appropriate reaction? >> i think investors need to get into their heads that the period of low inflation, low interest rates, and monetary policy continuing to provide nothing but stimulus is over markets instead should be looking at the economy and profits, it is a good picture. and one that we think makes sense. now, the fed did not say that they're about to raise rates anytime soon certainly not. but what mr. powell indicated were things that i think should be obvious inflation at this level is transtory for a couple of reasons. number one, the technical factors that are keeping the reported cpi and pce numbers lower than you would otherwise expect but more importantly, we're looking at wages rising. i think that's good news because when wages rise, the consumer is willing to spend more, we're in

a good situation right now low unemployment we have a situation where consumer balance sheets have gotten better. and so consumers are able to spend the wages that they're getting. when i say things are better for the consumer, obviously we know there are some areas of exception. >> on the gdp print, we got all those numbers about ip investment today we get a nice productivity number unit labor costs are down. we know what demographics look like why would wage inflation suddenly show itself, given all that >> wages begin to rise, of course, when there is less slack in the labor market. the unemployment rate now down well below 4%. and that underemployment rate that shows us that formally discouraged workers are coming back into the workforce, that's great news it is half the rate it was and so we will be seeing some wages going up keep in mind that productivity is the offset.

when companies invest in new equipment, when they invest in new ip and so on, that allows each worker to produce more per hour and it is just fine to pay that worker more >> is it -- so you don't think it is not an either/or. >> i think it is the combination. and if we go back over history, we see that when the consumer does well, the overall economy and economic expansion lasts longer and that's good news overall for investors. >> have you been so far impressed with the level of spending given the tepid, some say, wage gains? at least on a real basis. >> consumer spending consumer spending shows some volatility, depending upon large ticket items like autos and housing related, but our sense is that for the remainder of this year, consumer spending will most likely be a little bit faster than the rest of gdp. and it will be that sort of consistency and steadiness from this point forward that should be quite helpful. >> one last thing, do you think

on the consumer front their willingness to spend will be driven more about their wages, the level of stock prices that they own, or the value of their house? >> i think that the wealth effect issues that you raise in terms of the stock market and housing, those are things that obviously are important when they're a big swings and our expectation is that over the intermediate term it will be more related to wages and how people feel about their employment situation, are they feeling good about their jobs or not, and this is where we get into that whole discussion about those individuals and families that are participating more actively in this economic expansion and those that are not. and we see a great divide by many different characteristics, one is geography one has to do with what industries are located in which areas, but education also plays a critical role. and one of the things that all economists look at in terms of the outlook for long-term

economic gains including long-term improvement and the household sector has to do with productivity and that in turn is linked to things like investment in education, investment in ip, and investment in capex. one of the things we are seeing now is growth in capex on the order of 4%, the ip investment obviously running 8% that's good news for longer term gains and productivity that's good news for consumers and workers who can participate. those who are -- get the education and the training and the skills they need to participate in this economy. >> so which sectors or pockets of the economy would you be cautious about right now and steer clear of >> what we're seeing is that since that incredible nose-dive in november and december, we have seen an improvement in a few categories one has been those sectors that are related to the global economy, because trade tensions

have also eased up we're also seeing cyclicals are doing better and to answer your question, i would basically say that it is selective within a whole number of sectors. we're at the point in a market expansion, i think, where it is not so much the rising tide lifting all ships, but rather looking at the individual companies that have strong revenue growth, have good roe and rising roe and then the deployment of cash we have seen earlier in the cycle that the companies that use their cash to deploy in terms of share repurchase and so on were able to boost their roe in an arithmetic sense what i think investors were looking for now are companies that can deploy the cash to grow either through capex or through let's call it acquisitions that -- >> apple is an exception there >> there are some critical exceptions you guys have done a great job

in terms of identifying the ten companies or so that have massive amounts of cash. and how they deploy will be one thing. it is idiosyncratic in terms of how the markets will respond i'm really referring to the s&p 490, those other companies, and we think that investors will be looking at how they perform as companies, they're operating cash flow, how they use it to benefit shareholders immediately. but also shareholders and employees long-term. >> our viewers will remember you from helping us process the dotcom boom and the bust are -- is the market's willingness to fund money losing companies coming public a danger signal to you? >> yeah. you know, if you go back to that dotcom bubble, i stopped forecasting the nasdaq two years before the bubble popped because i said there are no earnings, no cash flow, how do you apply valuation? what we see in the tech sector

right now writ large is not that we have by and large companies that are profitable, they have business models that make sense. the fact that there is a willingness to bring to the market companies that may not quite be right is something that obviously we need to look at, but here again, it depends upon whether they have good technologies, proven technologies, for which there will be demand in the dotcom bubble it was more whispers and big stories, not business models >> when you stop forecasting the nasdaq, then we can worry? >> that's correct. i'm not forecasting the nasdaq now. there is also a huge difference in the overall valuation of the market now versus then at that point the s&p. when i actually did come on cnbc and tell people, cool it with technology, reduce equity exposure, raise cash, the s&p pe at that point was 25 times

earnings today it is 18 times earnings. >> good comparison speaking of technology, do want to mention this event you're speaking at on monday, talking about the role of technology and economic growth. we have seen so many acquisitions in those israeli startups how do you think about the role of technology right now in deal-making and the impact on overall global economy >> we clearly are seeing and have seen for last 20 years a shift in the industrial composition towards these companies that can generate really extraordinary use of tech and development of ip. and israel has been a great laboratory for that. there has been an enormous devotion to things li s like education, government spending on r&d we're seeing incredible numbers of startups that have been very successful one of the questions for israel is can they go from startup to scaleup and that becomes more of an issue because it is a small country. we're talking about a population roughly that of new jersey and so what we do see is this

intere interesting integration between israeli companies and startups and american companies awful lot of what's happening now in israel in terps ms of go fr to r&d is in relation to new companies. you can go to incredible places between tel aviv in the northern part of israel and haifa and see google and apple and microsoft and you name it, they're there but the israelis seem to also have more of a focus on entrepreneurship if you look at the latest world economic forum studies on this, they rank israel near the top in most of these measures and at the top in terms of being able to use new ip and new technological innovation and actually integrating it into business use that's something that we're pretty good at here in the u.s. and i think we need to see that combination. >> mcdonald's, the latest example of buying an israeli

startup. thank you very much. good to talk to you. >> pleasure. thank you. when we come back, chemical maker dow inc. reporting better than expected revenue since separating from dowdupont. lower prices having an impact. we'll talk to jim fitterling 'lexain next dow at 14. don't go away. 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.

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separation from dowdupont. however, those april earnings were impacted by lower prices. joining us now exclusively is dow ceo jim fitterling and mr. cramer also back with us happy to have him participate. jim, thank you for joining us this morning in your comments you talk about the quarter being one in which dow showed its resilience. what do you mean by that >> good morning. well, you saw in the fourth quarter obviously we saw the big compression in margins that happened as oil prices declined. and also as china slowed down at the end of the year. and what i mean by resilience is that in the face of those compressed margins, our downstream businesses and our performance silicones, polyurethane systems business and packages business showed strength to overcome some of that also, we delivered 125is in ther

so we're off to a good start there. i think all and all, the portfolio performed well, and in most cases better than our peers. >> jim, jim cramer, good to see you, sir >> good morning, jim. >> good morning. where are we with the buyback? you have the highest yielding stock in the dow but i understand that you do have a lot more firepower and when will that come to work? >> we declared a $2.1 million annual dividend. that was our main priority to get that out before the spinout happened we also said we would have the capability to do share buybacks. our target is to return 65% of operating net income back to the shareholders through the cycle we put a 10b5 in place at the spin because we could not be in

the open market. because the way the stock traded post spin, and didn't move down, nothing really triggered any share repurchase during that time so that expires in june and we will be in the open market and my cfo and i said on the call today that our target is to look at the least 500 million of share buyback through the remainder of the year. >> i know there is a correlation with oil a lot of people say, wait a second, oil goes down, doesn't dow do better. at what point will people realize, geez, you know, as oil goes up, this is really a great opportunity to own a company that makes plastic that stock goes up, even if maybe you think it shouldn't the correlation really does beg to -- for people at home to understand, could you try to figure that out for people >> sure. i think what has happened is you can make petrochemicals from natural gas, liquids, can make

them from oil. the oil base assets really set the high end of the cost curve so as oil goes up, you get a spread between naptha and ethane so as oil moves up, that actually creates spread and creates margin but the other thing that happens is it is positive for the whole economy. so what we have seen right now is that the consumer demand has been strong, but maybe a little bit weak on some of the big ticket items like buying an automobile or housing starts or durable goods. i think as you see the whole economy progress, you see the big ticket items come on you get the demand move and a spread move from that. the other thing to remember is we brut on a lot of capacity in 2018 so there was -- the bulk of the

po polyethylene capacity happened in 2018. about the same time that china slowed down at the end of the year as that capacity is already online and in the market, through the back half of the year, we think that the polyethylene demand will outstrip any new supply. as you move into 2020, you'll get back into more midcycle and more peak 2020, 2021 some of the analysts are seeing that and they're saying, look, this is the cycle time where you expect things to start subsequentially improving. that's where we put out in second quarter outlook we think core earnings will improve. we got a couple of turn arounds coming in the quarter which are a little higher cost than first quarter. but we're starting to see pricing turn the corner in our key intermediates, mdi and polyethylene. >> jim, it is sara question on the industrial economy. you guys had so many different industries and production. in the u.s., we're getting mixed

reads now. weaker ism report, better factory orders what is your outlook for the u.s. for the rest of the year in terms of the manufacturing sector >> good morning, sara. i think the u.s. economy is relatively strong. i think there is a little bit of a drag we saw some currency head wind in the quarter for us about $100 million. so as the u.s. dollar has strengthened, that's put a little drag on exports from the u.s. i'm a little more concerned with the eu the eu slowed down so when china slowed down, it backed up some things into europe like automobiles. you got some inventory to work through both at the dealers and the manufacturing and automobiles and europe and you see that pressure obviously in germany. i think we'll work through that in the back half of the year and we're starting to see some stimulus in china. i think this trade deal, we get the trade deal done this week, i think you're going to see some positive market psyche come out of that.

and a couple of our value chains you may see people start to make commitments and build some inventory to get ready for the back half of the year. >> jim, you've got this gigantic middle east venture, and we're all -- i remember when i -- this will be the lowest cost, greatest production field in the world. this is going to change the game for dow. i'm trying to figure out where it went. i know it is there, but i'm trying to figure out why it doesn't matter more for your earnings >> it is a great asset and it has been running exceptionally well it does have a very low variable cost, very low cash cost of operation. it was a big project it was a $20 billion project and so it has got some project financing and what we're doing with sadara is working through the debt and the capital structure on that project now that it is operational when we completed the lenders reliability test last year, that

gives us the ability to go back and talk to the lenders about doing some refinancing, get it out of project financing and really get it more into an ongoing concern. so we're working with sadara and our partner aramco to get that work done in 2019. >> jim, finally, david again we -- jim and i have talked to you about this in the past but there is a worldwide effort that one would expect will only continue and pick up momentum to try to get people to use less plastic. does that represent a head wind long-term to your business >> i don't think so. one of the reasons plastics has grown and continues to grow is because it is the most sustainable package that is out there. and it is lightweight. it is flexible it is durable. it can be engineered to do things like make composites to replace metal and steel and glass. so i think you're not going to overcome that trend. we do have to address the waste

issue. and i'm very excited about the partnership that we have got, the alliance to end plastic waste. we have more than 35 companies in the alliance. we have it up to $1.1 billion. we're very actively moving projects through the pipeline now without any solicitation since the beginning of the year. we have more than 300 projects coming at us, we're talking about even taking plastic waste and breaking it back down to the chemical molecules so we can put it back in to either ethylene or plastics plant we call that feed stock recycling. that would be a full loop circular economy, just like you have with an aluminum can going back to smelter. you're seeing a lot of activity in this space. i think over the long-term people are going to say we should put our effort into that versus trying to ban everything. especially things that have a very positive sustainability impact >> all right, jim, to be continued on that.

and all other subjects certainly appreciate you joining us this morning. thank you. >> thank you >> jim fitterling, ceo of dow. >> jim cramer. >> yeah. >> david's last question matters tremendously the younger portfolio managers, are they regarding plastic as coal and tobacco i say that because of the island of plastic in the pacific is because it has proven to be uneconomic to recycle. great question. >> and also usg is a very important component now. you can't dismiss it any longer as something that a lot of asset managers are truly considering and dealing with from their investor base. >> he's trying to get so out front. >> yes, he is. >> he was on a panel in davos about this topic to say, we're part of the solution, we're going to talk about how to recycle waste instead of ban plastic. >> not going to get a more thoughtful person about this >> jim cramer, see you later. >> have a great rest of the show be a little cautious it is okay

>> when we come back, a breakdown of the big movers. so many earnings to talk about how about under armour up 2.5% we'll discuss that and more. athleisure apparel was flat footwear wasgood jimmy buffett on a pot play joining up to launch a new 'lta autherand wel lkbo t ceo of that company. ♪ 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.

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and reaches everywhere. this is beyond wifi. this is xfi. simple, easy, awesome. shares of tesla are up this morning after detailing the capital raising plans that would generate about $2.3 billion in gross proceeds that includes a 2.7 million share common stock offering of which elon musk is expressing interest in buying nearly 42,000 shares for about $10 million. the company offers 1.35 billion in convertible debt. back on april 24th, elon musk addressed raising capital on the earnings call. >> i don't think raising capital should be a substitute for making the company operate more effectively. at this point i think there is a -- some merit to raising capital. that's -- but, you know, this is sort of probably not the right

timing. >> he was asked about this in may of last year his quote was, i specifically don't want to raise capital. but he's changed his mind. >> maybe out of need unclear, that's what the bears would say. shares of under armour, surging as signs of the turn around plan appear to be paying off. revenue getting a boost from strong overseas demand that was the story there the company raising its full year forecast on profits i'll go through some of the positives and negatives in this report it was kind of mixed positive shrinking inventory, really solid progress, that's been a good story over the past few quarters, down 24% from last year they are expanding aggressively and growing abroad revenue growing 12% overseas asia pacific is particularly the bright spot. footwear also came back this quarter, up 8% and the margins continue to improve. however, north america is the key market for under armour and sales decline 3%

also apparel is its biggest business, and that business was actually flat. so, you know, bull bear debate, a hot stock, right usually gets the ben if the efi doubt. bulls say, look, it is a cleaner quarter, the growth is happening overseas, they're making a lot of progress. bears say there is not a ton of evidence that under armour is dealing with competition in its own turf, north america, where adidas and nike have shown better results lately. by the way, tomorrow morning, before the bell, we will the ceo of adidas, their reporting earnings overnight, a real feel for what is happening competely across the space. news update with sue herera at hq. >> here's what's happening at this hour. drake, the big winner at the billboard music awards, setting a record as the top award getter in the show's history. winning 12 this year, which brings his career haul to 27

and that record, topped taylor swift's previous high mark of 23 awards michael bennett became the latest democratic hopeful to enter the crowded primary field, announcing this morning he's entering the race. the colorado senator overcame pro state cancer earlier this year he is the 21st candidate in the democratic field. the family of a chinese student admitted to stanford allegedly paid $6.5 million to rick singer, the central figure in the ongoing college admissions scandal a morgan stanley adviser referred the parents to singer morgan stanley says it fired that adviser. a cruise ship with nearly 300 passengers and crew has now been quarantined in the caribbean after a case of measles was confirmed on board the st. lucia coast guard told nbc news that the ship is owned and operated by the church of scientology. the measles patient has been isolated on board, but st. lucian officials will not let anyone disembark for now, the ship is scheduled to leave at midnight tonight

you're up to date. that's the news update at this hour back downtown to you, carl. >> sue, thank you. when we come back, john harwood sat down with 2020 presidential candidate senator amy klobuchar. why she says she's no elizabeth warren or aoc when it comes to her take on taxes. get a check on the markets here again within a range, dow up 9 points, s&p 2929 what's a target date fund? 529 plan? a 10-k? what's an etf? an ipo? 401(k)? where do i start?

empower yourself with the free tools and resources on investor.gov. before you invest, investor.gov.

time for our etf spotlight, financials reboiunding a bit today. we talked to michael corbat of citi earlier this morning. this is what he had to say about his confidence in the economy. >> the confidence has begun to come back and i think backed by the numbers of where we came in on growth at 3.2%, we'll see tomorrow but the jobs report last month was pretty strong. i'm hoping we're healing some of that rhetoric that has been out there. >> both the kbe and the kre are

up over the past week. >> best sector for the month of april. as we head to break, dunkin' brands beating the street, reporting better than expected same store sales increase. dunkin' ceo david hoffman is joining us tomorrow right here steve liesman live from the hoover institution sitting down with four federal reserve presidents here on "squawk on the street." maybe we can get some clarity on the transient inflation picture. tomorrow, 10:00 a.m. don't miss any of ose thbig interviews all day on cnbc we'll be right back.

one 130-year-old dow stock is having a record-breaking run this year. find out what it is on tradingnation.cnbc.com more "squawk on the street" coming up.

john harwood sitting down

with amy klobuchar, getting her take on taxes and why she thinks tax policy is the most important lever for making the economy fair >> the first one is to make sure we have fairness for workers so they can afford things that means save the tax code i think the republican tax bill went way too far you look at the corporate tax rate, i supported bringing it down some. but it went way too far, down to 21%. if you go up to 25%, you get $100 billion for every point that could be used to pay for people's roads and bridges and those kinds of things. >> you want to take it to 25 for infrastructure bill, i believe, right? and two more points for your retirement bill. >> look at part of that for that also look at doing it with things like the buffett rule, closing the -- the carried interest loophole, $14 billion, capital gains changes would bring in hundreds of -- >> tax it like ordinary income >> you could, yes. you might want to make some -- want to make some dispensation

of people holding it for longer periods of time so it helps. you got to do something with that that's hundreds of billions of right there when you do something about monopolies you bring money in. >> your retirement bill takes the top rate from 37 to 396. is that high enough? you think that's where it should stay >> i would look at what the rate is, but that is an example i would want to go back to where we were at least where we were before trump came in, yes. >> now, with positions like that, amy klobuchar hopes to compete with former vice president joe biden for the vote of democratic moderates who promised bipartisan achievement. and when i asked about a contrast, why they shouldn't go with biden, she gently laid the age issue on the table, said i'm a candidate for our time >> any chance of getting her to also include a deduction for salt again in her tax plan there, john? >> well, i think she might, but one of the things you'll find with democrats is that they care

about those distribute tables and the fact that the salt benefit, the loss of the benefit has disproportionately impacted higher income people, maybe not the richest, but higher income people and places like new york and california, it will be difficult for them to justify restoring that at the expense of people lower on the income scale. they might try to find some work around, or restore part of the deduction, but that will be a big challenge for new democratic administration if they win in 2020 >> you know, she is obviously not alone in making tax a key issue. it seems like all the democrats are jumping on that bandwagon, taxing the wealth. as far as public consumption and public opinion polls, john, do the details matter >> well, that's a very good point, sara. broadly speaking, taxing the wealthy is a very popular position now, amy klobuchar is not going

nearly as far as say elizabeth warren not proposing a wealth tax she is not going nearly as far as aoc she, as you saw in the clip, she's not going anywhere near 70%. she's talking about more modest tweaks to the tax code, those are going to be popular. the question for democrats is going to be how do you get anything enacted at all if you don't get republican support she said she can do that there is not much of a recent record of any democrat getting republican support on legislative priorities and so you get the argument from the other side, well, in for a dime, in for a dollar. if you raise taxes at all, might as well raise them a lot but amy klobuchar is going to the center right of the democratic party, many other candidates are competing on the left >> all right well, interesting to watch with bennett in too joining that part of the center. >> absolutely. he's going to be right in there with her

>> yeah. john harwood, thank you. up next, how the growth of cannabis is bringing some unlikely names to the industry we're going to speak to the former wrigley ceo on why he made his move into pot and his newest partnership get a look at what's coming up on "squawk alley". >> zynga, fit bit and beyond meat, one higher after earnings, he lower, one ipo weave all three ceos coming up on "squawk alley." pnc bank has technology to help make banking easier, like... a business borrowing solution to help get a little more space with a lot less mom. or home insight, to search for a new house within your budget. because, they really need their space. pnc - make today the day.

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welcome back to "squawk on the street." stocks are higher today, but off the best levels of the morning so far as the s&p tries to claw back some of yesterday's losses. strength in tech, semiconductor stocks in particular outweighinging the relative weakness in materials and energy shares let's drill down into one sector in particular, that's perhaps outperforming, that's the financials today that sector is now on track for its sixth straight week of gains, reebgional banks rallyin today. also big money managers like morgan stanley, goldman sachs on the investment side of thing s following that move higher keep an eye on trt rahe interes rates now.

i'll send it back down to you. >> surterra wellness is led by an unlikely name, bo wrigley, former ceo and president of the wrigley company, maker of the iconic gum, before taking the helm of surterra, he led the fund-raising for the company, later being named chairman of the board. since taking over as ceo in november of last year, he spearheaded a number of big name partnerships with the company including jimmy buffett and as of today, iconic surfing documentary the endless summer bo wrigley joins us today on set. great to have you. thank you for your time. >> thank you for being here. >> what do you see in the space? what is the promise of the space? >> i think the promise is huge we're building a global health and wellness company with surterra wellness. we believe we're changing the paradigm for health and wellness from -- for health care, on a global basis we think there is so many possibilities for quality of life, for the benefits that are going to be delivered, and it is exci exciting it is fast growing category. there is lots of stuff

happening. but at the end of the day, it is all about execution and who is really building true businesses here when you separate all the hype and the excitement. >> what do not true businesses look like? >> well, look, we're in early w innings in the business as a whole. you know, in a sense i compare it to a monopoly board, if you will, people got licenses to begin with that got you a seat at the table to play. now people are going around. there is consolidation in the industry, m & a, deals those are people buying up the park places and iconic places on the board. but the next phase is really who is going to be able to execute who will be able to build the business, build brands, operate what's really a complex, fast-growing company we have grown from in early 2018 we were a hundred people we are now 2,000 people.

to me it's companies that will eventually be valued on cash flow and really fundamentals right now it's more people that aren't doing that. that's where frankly we come in. i have the background from being chairman and ceo of wrigley, running a large public company, global company, 180 countries, 16,000 people. i know what it takes to get there. we are building the fundamentals that's where it separates down the road >> you do wellness products, correct? what are the top selling products >> all of the products are cannabis-based we are making hemp-based products coming down the line here we are dealing with a plant, a natural substance. it has health benefits that are well known from basically inflammation down to pain to ptsd we are at the tip of the iceberg in terms of research to understand what this plant can

do and how it can interface and replace pharmaceuticals, opioids >> i was wondering if you need the fda and other regulatory agencies to get there and whether they are there when it comes to creating drugs, topicals, i don't know, other wellness products. >> i think it will be good to have some degree, parameters and guidelines for the category so it doesn't get out of hand it is very fast growing. we are about integrity, safety, compliance that's the company we're building i think some oversight on that it's really not well suited for the fda now. they are set up to approve single molecule drugs in a pharmacalogical way. they don't know what to do with a plant with hundreds of cannabanoids something has to give in terms of how we tackle this. the benefits are too great to

ignore >> vaporizer pens, time release patches and anything else i may find, what's your supply chain like and do you benefit from vertical integration >> i am 100% a fan of vertical integration. i think it controls from seed to sale it allows us to produce a consistent product in fact, we produce our products and our specialized formulas to a tolerance that is tighter than pharmaceutical companies i can't speak for other companies in terms of what they do we have extraction, cultivation run them through different forms. it's really the right way to go. states that haven't done it are running into challenges. they have too many licenses. people in distribution, retail,

cultivation. it makes for a complex -- more complex for the states to keep track of and less economically viable for an industry that has to invest a lot of capital this is not a slam dunk in terms of making money right and left >> plenty of capital available at least now, it would seem. >> there is. we have a highly curated investment base off of our -- i have been around for a while we have to have a robust network, strategic people who bring value to our company you can't go to a bank and get a loan if you are an american company you can't list on the new york exchange which would be great someday, if need be. right now we have sources of capital. it's a challenge >> we'll see how much of that changes in years to come please come back we're fascinated with the area >> thank you very much appreciate it >> david >> i do want to mention before we hit the brake shares of msg

networks, the regional sports network for knicks, rangers is down sharply the concern is a loss of subs. it is sports-specific. fairly high rates but it is having a spillover on much of the rest of media. discovery reported earnings this morning, quite well received in terms of ad sales, international. yet that stock is lower and dramatically so. a number of other names getting hit again because of the overall fear that we continue to see reflected in many equity prices that people are leaving the bundle and leaving it dramatically and not going anywhere else at this point in terms of subs. i do want to point that out this morning. >> all right meanwhile, s&p worked its way back to the flatline what are you watching tonight? >> we are going to watch to see if the market can fully recover. could be on record high watch again. we have a rare and exclusive interview with the former fed

governor daniel tarullo. haven't heard from him much. and cbs, expedia, activision, gilead and more. we are in an earnings h s heyday >> better than expected. "squawk alley" starts in a few minutes. we'll talk to the ceos of fit bit and zynga and beyond meat, the plant-based burger maker getting ready to go public we'll talk to that ceo after the opening trade. [ alarm beeping ]

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♪ i got to get it ♪ left my wallet in el segundo ♪ left my wallet in el segundo ♪ come on ♪ let's go ♪ good thursday morning. welcome. i'm carl quintanilla a big show ahead the ceos of fitbit and zynga joining us another ipo, beyond meat the ceo will join us after the first trade. starting off with a question from our friend kara swisher can anyone tame the next internet it's the subject of her latest piece on vox arguing it's not the individual tech giants we should worry about but the underlying trends driving the companies. as faceboo