>> welcome to "squawk box" here on cnbc. we are live from the max market site in times square i'm becky quick along with joe kernan and andrew ross sorkin. let's get to today's top market story. of course, that would be trade president trump speaking at a rally in florida last night. he talked about his threat to raise tariffs on chinese goods as soon as tomorrow. >> by the way, you see the tariffs we're doing, because they broke the deal. they broke the deal. they broke the deal. so they're flying in the vice premier. good man but they broke the deal. >> the global markets continue to follow the trade fight very closely with u.s. equity futures at this hour under some

pressure right now it looks like the dow futures are down 112 points. this is kind of a here we go again every morning when we come in the futures have been under pressure, but yesterday you saw the dow actually clouds slightly higher s&p 500 is down once again it's bun down five of the says last six sessions, and this morning it's indicated down by 14 points. then the nasdaq is indicated down by almost 50 points overnight in asia, you'll see that the nikkei ended down another 1%, and stocks in china were under more pressure shanghai composite was off by 1.5% the hang sheng singe down by 2.4% in europe this morning where the early trading is taking place, it's continuing that kind of global sea of red that we see everywhere this morning. the cac is down by 1.3%. also, declines coming with the dax down by .8%. the ftse off by half a percent, and declines up close to 1% for italy. spain down by .8%. ten-year yesterday, the yield closing below 2.5% it's there once again this morning at 2.446%.

>> the market was up triple digits for most of the sessions. it only closed up two, and, you know, it wasn't until we were in panama city where he said that it was broke you see lyft yesterday >> yes >> down another 11%. >> 52. the old low was 54 >> it's about 26%. i don't know what that has to do with uber. >> we were saying it was the earnings or the -- the loss statement they put out, but that was out the night before, and it had been trading fairly well in the morning. what was it that investors didn't like later in the day >> i think that there's just -- >> i think everybody has anxiety. >> i think that's a commentary on -- we use anxious a lot i think it's a commentary on living in this -- what year is this >> i give the optimistic view about lyft the optimistic view is that there are some investors who think that actually that they've been impressed by the uber road

show, and that they're actually going to -- they're going to sell out of lyft and into uber i have heard that as well. just deposit both sides of the story to you >> the "wall street journal" -- >> not optimistic for lyft i'm saying largely more optimistic for ride space. >> if you look at that uber number, i mean, the "wall street journal" is saying that they're going to point to a low point. >> just a sec. >> that would be crazy to sell lyft and buy uber on the opening because it's going to be how much higher than they -- >> just tell me. >> you can't get in on the ipo unle

unless. >> now, in other geopolitical news, europe responds to iran's threat to pull back on the nuclear deal commitments in a statement today the e.u. says it rejects any ultimatums the president warped that he could end compliance with parts of the 2015 agreement in europe. or, rather, if europe doesn't step in and protect the country from u.s. sanctions. then as we were just mentioning, corporate news today, it is the big story and it will be the big story today. it will be the very big story tomorrow uber going public. the "wall street journal" reporting the ride sharing company is on track to price its ipo at the midpoint of its target or possibly below. it was already cut from an earlier target people talked about it being a $120 billion company the ipo expected to price after the bell today

>> all of this coming as the shares of lyft, as we were just discussing, and trying to make some sense of what's going on there. that stock has been on a downward slope >> so if uber were to price at the midpoint at $47 a share, that would suggest a valuation of $86 billion for the company overall. >> right >> that would still make a lot of the early investors and even some of the later investors quite a bit of money, including soft bank. >> oh, no. $86 is the last -- >> $47 >> $86 billion >> $86 billion is the last private valuation appraisal, so if you got in prior, you're effectively flat interestingly, derek, the ceo of uber, has -- there's almost a bonus built in for him if the stock -- if the company's valuation could be $120 billion over the three-month period after the ipo, which

obviously -- >> from 86 to 120? >> which is unlikely no, that was something that was built into his compensation contract when he originally joined the company in large part because a year ago the expectation was that the company could be worth $120 billion. there's a lot to talk about. we're going to go through all of the uber numbers today and, of course, big story with china and now -- >> financial -- >> financial times >> that's another big story. >> yeah. we'll get to that. the financial times says any room for travis? how uber's founder was relegated to the back seat before the ipo. that's -- you want to read that? you can even add more color. >> we can add drama to that. there was a debate we'll talk more about it throughout the show because i know we have a couple of segments that will relate to this about travis and what's going to happen tomorrow >>ing is he allowed -- >> he is allowed at the new york stock exchange he is not going to be standing -- >> he is not going to be ringing the bell >> not going to be ringing the bell none of the directors are ringing the bell dlz a longer conversation. >> he has, like, $5.5 billion in

the company, right >> he does >> can he take an uber >> yes, he can. >> i didn't mention travis i don't even think -- >> someone said he went to the -- >> met gala this year. >> yeah. >> he was there this year? >> yeah. >> in earnings news, disney beating the street shares are rising on the news. the company says it benefitted from more visitors to its theme parks along with higher ticket prices and spending on food

beverages and merchandizing. we'll talk to a disney analyst in the next hour -- in the next half hour. this is your interview, andrew >> yep >> have the pronouncer in the rundown if you need -- you know? >> john holt e holduc. >> the u is silent the u is silent. is hobluk -- it's hod-lik. i want to bring that up to you >> this is compelling tv you're making, joseph >> i'm trying to help. the u is silent. okay >> it's so boring i can't even tell you >> you're right. it is more interesting when you see the thing and, like, die almost the u is silent. just so you know >> beijing is sending a message that it's preparing to play

hardball the chinese commerce ministry made a statement earlier today saying that beijing will not succumb to any pressure from the united states. now, this comes after the ministry had earlier said that it was going to take necessary counter mersz if the u.s. imposed new tariffs. now, the hard line stance is giving us an indication of how the chinese negotiators are going to approach the trade talks in washington today. the delegation has arrived, and i was speaking to a source of mine on the chinese side who is familiar with the chinese way of thinking he wouldn't give me any specifics on exactly what the vice premier would come in terms of recessions, but he did say that the vice premier would be looking to try to clear up any misunderstanding he said that the hope is to be able to make sure those tariffs don't get imposed, but he also reminded me that the chinese feel that any attempt to change their political system or their economic model is seen as an infringement of chinese sovereignty.

i has been demoted, and that's really suggesting that he doesn't have a whole lot of leway to make compromises on his own when he is there the u.s. business community here is preparing for fall-out. they're really concerned because in that commerce ministry statement there was an omission of a word. equal or in kind or equal skpiez strength whether it comes to the retaliatory measures, which is what we've seen in the past. that's been interpreted by the business community to belief that any type of retaliatory measure is now on the table. they're all bracing for all sorts of stuff, like licensing delays, customs economics, as well as anti-monopoly probes >> all right eunice, there were -- yeah >> i just wanted to ask you. >> you read how many things that they supposedly reneged on, and

some people say they can't believe he waited that long to say something, and i've seen so much analysis. you may have mentioned that they saw trump saying we need lower rates, and bashing jay powell and all that >> that's what i was going to say. this goes to the larger issue. >> they figured the u.s. economy is week e weak, so they thoughts they had leverage. >> we've had talks at this table, and people on both sides have had, which is if the president is bashing the -- bashing the federal reserve, so regularly, a, whether you should be doing that publicly, and, b, you know, people say, well, are there real effects for him doing that well, now there are real effects for him doing that i think there is a real issue with that, and maybe they misinterpreted what he is doing. maybe there's some kind of weird negotiation, but it creates a real impact. that seems to be the argument that's been made in beijing. >> yeah. that's right also, just because there's been a feeling that the stimulus is

kicking in here that the economy is not -- i mean, obviously some of the numbers recently have not been good, but we're starting to see a bit of a bottoming out there is a bit of comfort that the chinese economy can be -- you know, is on the way up while the u.s. economy is having some trouble. there is an impact that potentially could be aftering why the chinese negotiators felt more comfortable to put some of the red line and the red ink through some of the comments on the trade deal >> hey, eunice, i was listening to a rrt on npr this morning, and they suggested that china is trying very hard to make sure that its people don't hear about some of the angrier tweets that the president is sent out, that they don't know about these things they haven't cut off our broadcast while we've been talking about this, right? >> brian just asked me on wex whether or not trump's comment about how china broke the deal was on-line, on state media, so

i just checked, and it's actually not that comment about china broke the deal is not being reported here the tweet -- the original tweet where he talked about the tariff threat is also very heavily sensored it's still a little bit better now. you could see it sometimes, but most of the time they're just a big gray box it's very -- it's still a very sensitive issue, and i also was looking at some of the other -- you know, whether or not trump was being banned completely, and he is not. there's tons of stuff about the russian investigation, about the tax returns, all of these other stories that are there, but his latest approach and comments about the tariffs totally nonexistent. >> right also, i guess his -- when he talked about his friendship with president xi, they think that gives them supposedly the -- they think they got some leverage there i guess he said some positive things about the rebound in china's economy as well.

a lot of things changed in the last couple of weeks, and that emboldened reportedly china to make it. >> i think what also was -- yeah, go ahead what i was going to say is what was also interesting in my conversation with the person who i know on the chinese side was another reason why they feel there haven't really been many modes of communication between the u.s. and china that the vice premier is really the only one since the conversations have been going at a very high level, and that in the past there have been several different exchanges on various levels and plenty of different agencies and that's not actually the case anymore the chinese feel this is a very important relationship that they

still want to maintain they want to make sure that for the long-term it's going to be good for both economies, so they want to keep that mode of communication still going. i thought that was pretty interesting. then also the customers ministry today reiterated that the fact that china is sending a delegation despite the tariffs is a sign of, like, utmost sincerity when it comes to the chinese trying to get some sort of trade deal done >> the leadership is seeing the tweets, just like -- not everybody else is. okay all right. we got it. thank you. >> my assumption is that they would be able to see the tweets. they might be able to get around the fire wall, but they don't actually -- they won't actually reference a fire wall. if you kind of talk to them, they -- well, they'll just kind of say we don't know what you are talking about. >> okay. >> they don't mention it, but i'm sure they have access. >> and the winnie the poo guy, the voice, he is actually alive. it was a different story.

the best case scenario is liu he says we didn't really mean this or we'll get to this that president trump and general secretary xi jing ping agree to have a conversation and potentially give another bit of time delay the tariffs so the increase in tariffs for another period of time to dloesz e close a deal.

sta sfloors you're concerned, people have said that he has to come here with a muaculpa and say you guys are right and give us more time, and then you think that that happens and the tariffs don't go on tonight? >> i think that's the best case scenario >> you're not saying it's going to happen. >> i'm saying best case because, frankly, neither side wants these tariffs to be increased. it's not going to be one that's public or cause the chinese to be embarrassed i would generally think that the odds of the tariffs increasing at 12:01 friday morning are

greater than the odds of them being delayed. clearly, the chinese do want to save this deal, and on the u.s. side -- last week both sides had folks who were looking at the logistics of a trump xi meeting sometime in mid-june even a week ago at this time there was a lot more optimism on both sides if this deal was going to happen. i know you don't need to venture your opinion, necessarily, but was what happened a confirmation that the chinese really do not want to change some of these practices that maybe most objective people would say are things that need to be changed and they saw an opening where they could get around these regulations? do they want to continue to operate in a way where they have an unfair advantage or do they i guess, you know, you work -- everybody tries to work in their self-interest. is that what they're trying to do once again, and we were right

to -- you got to watch very, very closely so that you don't get -- ambassador lighthizer has been preparing for this. he is the best person the u.s. could have to negotiate with the chiends. i think he is focused on getting the best deal possible, but nobody expects the chinese to give up their state-driven economic model any time soon, and so the best case deal was one that maybe changed things on the margins and added some ability to penalize the chinese when things got a little bit too egregious. i think what the chinese are trying to do is pushing back on even those enforcement mechanisms as well as trying to make the deal as ambiguous as possible, which, frankly, they always do. this kind of last minute blow-up is not unique to this particular trade negotiation.

i think it's basically chinese negotiating 101. it's a bhoel chapter in their playbook about how to sort of reopen things right before you think you're done. ultimately, you know, what the best case deal is one that's going to be better for the u.s it's not going to solve the issues -- the fundamental issues even if there is a trade truce here, the longer term trajectory for the relationship is one of much more friction and competition. on trade and other issues. >> it really needs -- you know, dragged kick and screaming into a deal they would -- the very end they would resist changing some of these practices? >> well, if they change some of the fundamental practices, it becomes a threat to the control of the party.

they want to ramp up their economic development and moving up to what they call the higher level economic development it's not going to be easy. >> half measures, but better than nothing, i guess, for us. that's all we'll get in the end, i guess. >> it's worked for the chiends for decades. muddle through not collapse >> okay. all right. thank you. >> a lot more coming up on squawk right after the break we'll talk about the morning's stocks to watch, including shares of a billion dollar company plunging by nearly 50%, and it's happening right now we'll tell you about it when we return

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>> nasdaq big losses showing this morning down 55. >> all right let's tell you about the stock we just mentioned. stamps.com looks to be a big loser today. shares dropping by nearly 50% this morning the mailing and shipping company is lowering its revenue forecast for the full year. i think earnings for the quarter came in line with expectations, but they suggestly cut that revenue estimate for the full year back in february you may remember stamps.com announced that it had ended its exclusive

partnership with the u.s. postal service. the stock came under extreme pressure at that point this morning down another 47%. coming up, why a good shave could be worth more than a billion dollars this morning stay tuned you're watching "squawk box" on cn cnbc i'm working to keep the fire going for another 150 years. ♪ to inspire confidence through style. ♪ i'm working to make connections of a different kind. ♪ i'm working for beauty that begins with nature. ♪

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sflo this is now the second unicorn effectively that the founders of harry created because he was also also a founder of warby parker where this original idea he had jest ated from. also, it speaks a little bit to the larger brand issue about whether gillette or even schick even worked. we were talking about subscription boxes we had this conversation about a usa today article talking about how much money people were spending >> it's something like $95 a month that the average household spends on subscription boxes, and we couldn't figure out how that is even possible. >> a lot of these subscriptions for things like razors -- >> makeup, clothing. >> exactly >> hoor we sit and we see these people come in it's worth zero, and they're sitting here talking to us >> we're, like, i know we're, like, shaving

okay it doesn't -- does that -- it's not like social media or something. you're going to sell razors, and then here we're still sitting here reading, and at $1.4 billion. that guy >> that guy. >> well done >> they now have factories they -- >> let's think of something. >> they have a huge operation. >> let's put our head together today. >> that was my idea. wait a minute. >> you gave it to him. >> tell you what, like jelly of the month. the gift that keeps on giving. >> like kiss my back end when we come back, more money at the house of cards that's what i took it to be. >> disney ceo bob iger on rising ticket prices, and the impact on the company's bottom line. kiss that, too

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>> this morning down by about 112 points for the dow yesterday the dow ended up by just a few points after trading -- being under pressure with these futures again in the morning. s&p did close down yesterday it's down -- indicated down another 14 points this morning, and the nasdaq futures are indicated down by 45 points. >> let's talk disney because the company reported better than expected profits in revenue driven by the theme park strength here's ceo bob iger last night >> we have been very strategic at our approach to pricing over the last number of years, and it's really paying off the results of this quarter certainly are evidence of that what we're trying to do basically is two things. to price according to demand,

and in managing demand, troo i to basically spread out attendance so that we can preserve or improve the guest experience >> joining us right now is john. the analyst at ubs your report this morning, headline no end game to parks momentum was that a surprise for you? >> yeah. the parks were better than we thought. ebit was up and that's a shift in easter that hurt the attendance a bit it looks like it's going to continue from here >> and when you looked at the espn subdeclines, that's still sort of the overhang issue obviously, we'll talk in a moment about the potential for disney plus, but that seems to be already built into the stock to a large degree. how should investors think about the espn subdecline issue. we think it's going to continue. we have traditional losses going from 5% to 6% on a year-over-year basis from second

to third quarter and the entire ecosystem, even if you add back the streamers, is probably going to decline in the 3% range there's more of that to come >> and in terms of your price target for this company now? >> we were at 165, but you said a lot of it has to do from up side from the b to c businesses. >> and how kwij -- well, first of all, when did you think you're going to see disney plus? >> should be november. >>ure absolutely going to see it in november. how long do you think it stays at $6.99 how important is that for you? >> i think a while you're right just as you saw with netflix, the price is going to go up over time as the content builds, and it's going to come from a number of different sources i think they're focused on taking share i think it will be there for some time. do you think that's a $60 million person audience, $90 million person audience? >> at least a $90 million person audience we're talking global here, right, and this content plays extremely well overseas. especially in china. it could be a massive market they have to figure out how they're going to enter that market >> bob iger made a comment about

some of the reports that have been in the press around the future of hulu and specifically the parent company of this net world war i, comcast about whether it's going to effectively -- whether comcast would be willing to divest the 30% stake in hulu that it already owns and what kind of exchange might be on offer iger making a comment that there might be some longer term relationship around programming. i assume part of the ek exchange will be around the pricing how do you see that coming out >> these companies have a long-term relationship, and that's in a number of different areas. i think eventually disney owns 100% of the asset. obviously rrks at&t is selling their piece. comcast is going to have their own offering, and it's going to make sense >> the report just this quarter is a markup of the valuation of hulu by some almost $5 billion do you believe that that valuation is warranted >> it's warranted relative to netflix. my question is long-term -- this

is the question i think, by the way, if you are comcast you have to consider. do you sell now -- if you sell now, you have to effectively assume one of two things either that this entire space is completely over valued, and/or it's too complicated to deal with this, and you don't want to take on the losses and you want to somehow move on on the flip side, if you think that there's actually -- that the valuation is correct today, you would imagine it would only get better in the future given the amount of money and marketing and everything else that disney is going to have to put behind >> that's right. i think they're going to hold out for the biggest number they can, but to us it seems like disney is going to invest, and i think the plan -- they haven't announced it yet, but the plan is to go overseas and it will require additional investment, and imauto not sure comcast is ready to sign on >> hold on for the biggest number they can get. hold on for the next six months for the biggest number they can get or for the next three years for the biggest number >> i think it could be double. >> or, you know, or not. >> who has the upper hand in the negotiations >> is comcast where they like to hold on to it just to be a pain?

there's no love lost between those two companies, right >> that may be true. i think it's eventually going to require some additional capital as they try to scale this globally, and i think comcast -- >> because they would like to -- >> how -- bhaewhat's a fair pri? >> what's a price that you should say disney should be willing to pay >> i think the recent transaction we saw between at&t and selling back its stake in hulu is a very reasonable price. >> and then one of the last issues i wanted to mention is they wrote down -- this is disney -- their stake in vice which at one point was worth $5.7 billion now effectively to zero. >> a lot of the properties are not scaling to the extent they expect advertising >> scaling the at the point that it's not worth a dollar? george soros -- put $250 million, but in -- it means to me that they're sitting around there saying to themselves, maybe this is zero.

>> coming up, it cldou be seeing

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time now for the executive edge sony and hedge fund manager dan loeb are calling a truce

we learn thad loeb was trying to break up the giant he failed. new york post was reporting the two sides are now getting along so well that sony has even hired investment banks to make loeb happy. the hedge fund manager reportedly promised to put away his poison pen loeb is said to now support sony's plan to keep sony pictures a feel good story. >> how long do when we return new numbers on the epidemic, and finally, it looks like there may tulye meoone in this fight "squawk box" will be right back. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business.

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snoo take a look at the futures this morning we've been talking a lot this morning about these chinese trade talks and whether they are on or off or what's going on today, of course, the talk will be on where they head nobody knows. in the meantime, let's talk about coach parent tapestry out with parent earnings they're up 1 cent above estimates revenue essentially in line with forecasts. comparable sales up 1% slightly above the consensus forecast of 1.9% a new study released this morning shows that opioid subscriptions are on the decline. meg terrell is here with the details. >> the numbers on the opioid epidemic are staggering, but new

numbers show they may be heading in the right direction the numbers dough clined by 17 last year. the ekwilent of 34 pills per american adult that's the biggest dough cline on record. it still sounds like a big number the data show that opioid prescriptions that opioid prescriptions peeked in 2011 about 72 pills per adult the decline was driven by high dose prescriptions which are associated with a greater risk of addiction and overdose. >> there's an overall much greater level of awareness of some of the risks of prescribing oip yoids and there are prescriptions put in place to try to reduce particularly the use of high dose prescriptions >> now, the study also shows an up tick in medication assisted treatment for opioid are drin by elil sit drugs like fentanyl this is an important step in the

right direction, guys. >> thanks very much. stay right here for more on the opioid crisis, lets bring in our guest, dr. scott got loeb. thanks for being here. >> thanks for having me. >> what should we be looking on the edges around this? >> a lot of addiction has been formed has been formed in the medical setting people prescribed a lawful prescription and became medically addicted. a lot is shifting to illicit drugs. so, a lot of the addiction is shifting to the illicit drugs. we need to recognize that the nature of this entire addiction crisis is now evolving we need to be mindful that if you talk to the guys at dea are very worried about is the methamphetamine crisis meth am met mean coming in from mexico we need to be mindful that these

addiction crises are evolving. >> the people who are looking for fentanyl or buying things online, are those people originally addicted because of legal prescriptions for the most part >> both. but if you look at the rates of new addiction, historically, they became addicted through a lawful prescription. a lot was from medical prescribing. more and more of the new addiction are actually people whose first exposure will be l illicit drug for the first time, fda and customs and border protections are working together to test the illicit flows and they'll report it not in poundage which is how it gets reported right now the statistics will be overwhelming of the potency of the fentanyl coming into the u.s. >> trying to measure it in pounds as it's been done in the past is nothing when you're dealing with something so toxic. >> marijuana was measured in pounds historically. that was customary of how

customs and border protection reported their seizures. right now what matters is how potent these formulations are. >> pot was measured in ounces, right, andrew? >> i don't know how you measure any of that stuff. >> it was ounces man, right >> i only watched the movies. >> well, the seizures were in pounds maybe you measured in ounces. >> that was only the unit of measurement i was -- no. >> let's bring up the china trade talks because fentanyl has come up in these chinese trade talks. is that something where we would make a real dent in this if that is included as part of what we see if there's a truce. >> absolutely, if china cracks down they have scheduled a lot of the substances in their host countries. they come in through the international mail facilities. so, at fda when i was working there, we really stepped up the work we were doing in international mail facilities. but there's so much coming in right now that it's hard to control it just by trying to

control these flows. >> what do you see as the most crucial step that the government can take to try to stop either of these epidemics, opioids or methamphetamin methamphetamines is the government currently doing enough on all fronts or should it be doing more and what does it need to be doing >> the biggest challenge i see is we're fighting the less problem. when you're dealing with a burgeoning addiction crisis, you're dealing with imperfect information, one step behind we need to be more aggressive. it's why we were aggressive with the nicotine crises relative to kids we had imperfect information about what the sheer scope of it was. right now what we need to consider is the fact that there's a burgeoning crisis with methamphetamine and fentanyl i'm not saying we shouldn't be focussed on that as well that still is a major public health problem, but we can't be

focussed on that at the expense of where the crisis is evolving too. >> why is meth coming back i thought we cracked down on that you can't buy somebody's pseudofed or some of these things over the company. >> before people were manufacturing. now it's synthetic coming in from mexico because unfortunately americans will find something to abuse. we'll be moving from one crisis of addiction to another, but we need to be focussed on where these things are evolving. again, if you talk to the folks at dea, they'll tell you about the scope of the methamphetamine problem now. but you don't see that in the newspaper. we're focussed on the historical problem which is still a problem which is the medical prescribing of opioids. >> walmart saying it will raise the age that it sells cigarettes to its customers to 21 what do you think of that? >> very positive step. the large national retailers need to conform to a national consensus around age most states are moving to 21 it behooves them to move towards

the same age the one thing that was disappointing is that walmart is taking the flavored e cigarettes out of their store which is is positive because we know kids are using those flavored products and they're leaving in menthol cigarettes so what you'll have is you'll have menthol cigarettes, combustible tobacco but won't have the menthol e cigarettes. so if you're going to take the flavored e cigarettes out of the store, also take the flavored cigarettes out of the store. >> you don't have flavored cigarettes like e cigarettes >> not the same. >> so those were banned under tobacco control act. so congress took those out of the market we still have menthol ated cigarettes on the market if you walk into a walmart store, you won't have the option to buy that mentholated product. my preference is to always bias the market in favor of the less

harmful products we know the noncombustible is less harmful. >> that's a very in-depth message digging through the layers of it scott, thank you for coming in great to see you meg, thank you great to see you. >> dr. goetlieb is a keynote speaker may 21st here in new york city get healthy conference. president trump says that china broke the deal in trade talks. we'll tell you how the global markets are reacting to his latest comnts enmewh "squawk box" returns with two very big hours. back in a moment - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers.

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washington as we get ready for another round of talks drug ads are getting a makeover health and human services secretary alex azar joins us to explain. that first on cnbc interview just minutes away. disney taking investors to never neverland. the company posting an explosive quarter thanks to theme parks. this second hour of "squawk box" begins right now >> announcer: live from the beating heart of business, new

york this is "squawk box. ♪ good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick and andrew ross sork sorkin u.s. equity futures improved down 130 on the dow now down 74. you can see the s&p is giving back 11. nasdaq is now down 40 points. making headlines this hour right now, ride hailing service uber set to make its wall street debut happening tomorrow morning. initial public offering will be priced today and begin trading on the new york stock exchange friday morning coming as investors watched the struggles of competitor lyft since it went public on march 29th tappestry reported quarterly product of 42 cents a share, one cent above estimates then there's three economic reports set to hit the tape all happening this morning at about 90 minutes from now, 8:30

eastern time we'll get the march trade deficits numbers and the april producers numbers as soon as they come out. also, after deep selloffs this week, the market bouncing back on hopes of a deal with china on trade this morning, more red arrows after the president said china, quote, broke that deal want to get to aimen javers in washington this morning with more details on where things stand right now. >> good morning, andrew. it does look like we're headed toward reimposition of tariffs 12:01 a.m. friday east coast time if something doesn't happen in terms of a breakthrough in the talks today. the chinese delegation is in washington today we do expect those conversations to continue through the afternoon. obviously they have been in communication but now they'll be face to face sitting down across from each other. the question is, what can be done in order to prevent those tariffs from going into place at midnight, just after midnight tonight. last night the president was in

florida at a political rally and he laid out his case for new tariffs on china here is what he said >> i just announced i will increase tariffs on china. we won't back down until china stops cheating our workers and stealing our jobs. that's what's going to happen. otherwise we don't have to do business with them we don't have to do business we can make the product right here if we have to like we used to. >> so the president there sounding a confident note saying he's fine with tariffs going into place one possible interesting point here is that there could be a delay in the imposition even though the tariffs would go in effect on 12:01 a.m. friday. the notice that was filed in the federal register indicates there could be an exemption there for goods already in transit what the notice says is the increase will only apply to goods exported to the united states on or after may 10th, 2019 that is to tomorrow. so, presumably if you've got goods on the ocean right now, you might not have to pay those

tariffs, according to the notice filed in the federal register. that could give a little bit of leeway for businesses facing a steep tax increase in just a couple days' time, guys. >> thank you very much. let's welcome stephen roach, now with yale university and author of "unbalanced the codependency of america and china. stephen, let's dig through what just happened here when i first heard his response on sunday, what is going on? he's going to hike these tariffs and bring them back on since then we're getting more and more reporting that seems to indicate that china really was starting to renege on some of the terms. i heard some reports that president xi took out about 50 pages, people talking about how this is par for the course with china, how they want to change deals at the last minute what do you think given some of that potential context which granted these are still early

reports and i'm sure we'll hear more. >> there's a lot of rumors going back and forth, becky, but the deal was never a great deal to start with that's the bottom line the u.s. is good at producing high page count. i mean, lighthizer did 181 page report last march on this -- the allegations. now he apparently had 150-page draft of the deal. but, the basic elements of this deal, as we best understand it, featured this bilateral trade deficit between the u.s. and china, which is the least consequential aspect of the conflict between us. these tough structural issues like we talked about it before, technology transfer, intellectual property, cyber, state sponsored industrial policy, i don't think there was ever any agreement on that china may change their rhetoric, but they're not going to change their system in response to the pressure from the president.

and, the president says, well, you know, we don't have to do business with them china is critically important source of low-cost goods for american consumers they're the largest foreign owner of u.s. treasuries they're our third largest and most rapidly growing export market china needs us we need china. and that seems to be missing from the calculus of the so-called art of the deal. >> so far this week, if you look at the chinese stock markets, there were some major declines shanghai down by about 5.5 and 7.5% and then additional losses we have seen everyday there. we have seen a little bit of weakness here, but nothing like what we have seen there. does that tell you that the u.s. has the upper hand in this negotiation? that china needs us more than we need them? or do you think there's just some sort of belief that eventually a deal will be reached here >> look, you know, there's a lot of ways to measure relative strength, relative weakness, vulnerability, stock market is a very near-term assessment of the

potential losses, but there's far more to it than that china is very focussed on economic growth. they don't want to see the growth rates slip a lot. they put a lot of stimulus into the equation the fact that they sent their chief negotiator, vice premier lu over to washington after the latest rounds of threats indicates how serious they are about wanting to reach a deal. and i think, you know, ultimately we'll show our good faith in wanting to achieve the same but it's not a one-sided negotiation. it's a two-sided relationship, two-sided negotiations we have to reach joint resolution on these tough issues and, you know, that's china's responsibility, it's our responsibility, too. >> is there such a thing as a one-sided negotiation? i want to see someone get involved those are the people that maybe don't end up on the outside. i think they're -- they go somewhere, right

there has to be two sides. so i was going to joke -- >> let's hope so. >> i was going to joke with you, when we talk to eunice, say some politically sensitive things, they black her out you come on and all the tvs in china immediately switch to you because you're going to want to listen to this guy because he is -- you are going to take china's -- >> you watch tv in china, too? >> stephen, is that okay, that they're not going to change any of these practices are these practices -- i know cu culturely things are different even platform global trade system, should china be allowed to continue with some of these practices? >> we have a rules-based system. if china wants to get benefits from the world through a rules-based system, it needs to conform to the rules >> but it's going to -- >> is it going to resist that and try to work around the edges where it doesn't actually comply are you okay with that

you sort of say with a wink and a nod -- >> i'm not okay with noncompliance with a rules-based system we need to be very careful again, we talked about this issue of forced technology transfer it's the poster child of this big debate, the allegation that if you do a joint venture with china, they coerce and you take you into a back room and make you turn over your technology. that's a ludicrous claim lighthizer is specific on page 19 of his report that he has no evidence for that. why does he make this allegation point is if you joint ventures, do a different type of a deal, a bilateral investment treaty. it's a deal we almost did and now we're not doing it. >> the last guy we had on from ax says said that lighthizer his entire life has prepared him to take on this hallenge. you sound like you're almost

pillaring lighthizer and giving the chinese sort of take on what lighthizer is doing. it's a study in contrast. >> he's a lawyer i don't know if he ever took an economics class, joe. >> you're not a fan of lighthizer. >> i'm not a fan of a lawyer negotiating an economics deal. i'll give you an example econ 101 we teach your students in the first week that if you don't save, you need to import surplus savings from abroad and run big current account and trade deficits to attract the capital. we had trade deficits last year with 102 countries so we're going to knock down the biggest one, china it's like whack a mole the chinese piece is going to go to somewhere else and be a higher cost producer and tax american consumers these guys don't get it. >> this is what "the wall street journal" says this morning about why we're now in this position they say this is about the chinese they say beijing was emboldened by the perception that the u.s. was ready to compromise, in particular these people said mr. trump's hectoring of federal reserve

chairman jerome powell to cut interest rates was seen in beijing that the u.s. president thought the u.s. economy was more fragile than he claimed do you believe that rational >> no. >> do you think china is putting that out to embarrass the president? how do you explain those two paragraphs. >> andrew, i have no idea if the chinese take his fed bashing as a sign of his fears about u.s. economic vulnerability to the contrary, he's been bragging about america's strength ever since he took over so, i just don't put any credibility into that statement. >> your argument is you think there was never a deal to begin with. >> it wasn't a good deal, no i really don't think there was -- >> any deal better than where we stand right now? do you think that we need to readdress the situation? do you think that we reached a point where agreements that we've had for a long time maybe have -- our economy has changed. their economy has changed.

they're much bigger than they used to be. >> that's a great point. becky, i agree we certainly need to look at the framework by which we engage all of our trading partners but, to do a deal and to talk tough just for the sake of talking tough and then turning that into a political message is not the approach that i would recommend. again, i go back to for ten years we negotiated a framework to come up with a bilateral investment treaty. that would have eliminated foreign ownership caps, eliminated joint ventures and taken this joint technology off the table. it was a reasonable approach we were this close under the former administration. and now there's no hope for that why can't we go about developing frameworks like that to really be methodical in locking china into a framework that is more up to date and by the way, tpp strategy would have done the same thing >> tpp would have been interesting but both the democratic and republican candidates were not going to go

along with that. >> the alternative frameworks that go well beyond the bluster and threats and intimidation of tariffs. if we do it -- if we raise the tariffs in, what, 17 hours, the chinese will, of course, retaliate and have more of an impact on us. >> you mentioned the bilateral talks that were set up, it sounds like there was a lot of good that was almost there but it's also ten years of talks that explains some of the frustration, feeling like china can play the long game much better because they don't have the same elections you have the same party that's there all the time they have a much longer term view of things and the feeling here, at least among a lot of parties has been that they have been playing beat the clock and just playing with us from that perspective. >> i don't know if they have been playing with us i understand i understand that there's broad bipartisan support right now from democrats, republicans, wall street, main street this is the time to get tough on

china. and i think it is appropriate to negotiate on tough issues, especially as you correctly point out, their economy is significantly different than it was when they did wto back in 2001 so, all of these frameworks need to be rethought in that context. but i don't think that justifies, you know, this unilateral imposition of tariffs and the global repercussions that that calls for. that's not the best way to do this relationship in my perspective. >> stephen roach. one of facebook's founders calling in the breakup of the social media giant we have details after the break. you have to see this. then we'll get stock ideas who has been looking at a few names in the health care fields who says could be winners for your portfolio you'll want to know those names and we'll tell you them right after the break. sticking with the health

care theme, new rule for drug makers is coming to a tv near you. alex azar will be with us to explain. stay tuned you're watching "squawk" on cnbc ♪ ♪ memories. what we deliver by delivering.

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with these chinese trade talks dow jones off about 85 points. nasdaq off about 41.5 points and the s&p 500 looking to open off about 11 points. let's also show you what's happening in european markets right now. it's a bit of a similar situation. as we flip that board around, you're looking at red arrows across the board as well. wanted to tell about this op-ed in today's new york times and also the interview that just took place facebook's co-founder chris hughes, been on our program many a times calling for the breakup now of the tech giant and wrote a lengthy opinion piece published in the paper today hughes says while he hasn't worked at the company he feels a sense of anger and responsibility we are a nation with a tradition of reigning in monopolies no matter how well intentioned the leaders of those companies may be mark's power is unprecedented and he says un-american, guys. those are powerful words to hear from the founder of a company

who's obviously had enormous amount of success, financial success as a result of this and able to per sue all sorts of philanthropic. he's never been this outspoken about facebook before. >> he was zuckerberg's softmore roommate in college. >> talks about mark very personally. >> and says mark is a good, kind person but i'm angry that his focus on growth led him to sacrifice security and civility for clicks i'm disappointed in myself, chris hughes says and the early facebook team for now thinking how the news feed algorithm would influence elections, empower nationalist leaders and mark surrounded himself with a team that re-enforces his beliefs instead of challenging them why do this publicly >> well, look, we heard the same thing from sean parker about two years ago made the mental health issue and made mental health issue for his own philanthropy and said that facebook poses a huge challenge to mental health

in the country it's funny when i first said is this chris cox he has not come out publicly and said anything like this before but i do think there is a sense inside the valley of misgiving if you will about some of what these products have done and what they're creating. now what that ultimately does is change the debate in washington. i don't know right? does anybody stop using facebook because of it? that's the bigger question coming up, health and human services secretary alex azar joins us to discuss drug pricing and consumer protection. that's first on cnbc interview straight ahead can you match watching an ad watching nightly news and it says 11,000 a month. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. in 1964, what beetles song held the top spot in the billboard 100 for three and a half months?

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>> announcer: now the answer to today's aflac trivia question. in 1964, what beetles song held the top spot in the billboard 100 for 3 1/2 months the answer "i wanna hold your hand." when we return, disney delivers for investors higher ticket prices as its theme parks are paying off we'll break down the quarter and talk about what's driving revenue and what the company is saying about its future. dow futures down by 71 points off the lows that we saw earlier this morning s&p futures down by 10 the naaq dsdown by 38. "squawk box" will be right back.

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here to talk about the market and give us some stock picks, managing partner at douglas lane and associates and cnbc contributor every once in a while it's great to go bottoms up honestly. with everything swirling around the macro, you really can't -- we can't gauge we're not in position to know how some of these things play

out. good, solid companies that are doing things everyday to advance their business and raise revenues and manage expenses, maybe that's a way to go can you help us with that today? >> absolutely. if you think of where we are in the market, s&p up 15% so let's look at a sector or stocks that we think have some appreciation so look at the health care sector did very well last year in the down market this year only up 3% if you do bottoms up, couple companies like zimmer -- >> zimmer, there's one you making a call on zimer >> i'm making a long-term call, a call to own it now for the next couple years. 15 times earnings. it's in the knees, hips, shoulders. it's got a lot of runway you look at demographically, not just in our country but overseas this is where money will be spent. this is a company that is self help, trades at a multiple below its competitors. and i think there's some

opportunity there. >> why do they trade at a multiple below their competitors? >> i made the acquisition a year and a half ago that hasn't turned out as well as they thought it would the market put them in the penalty box. you look at the long-term growth of this area and a new ceo in place, it's really kind of the value opportunity of a company that has some good products. >> i look at a lot of these guys and the orthopedics companies had issues with the affordable care act because they were heavily penalized. they didn't go along from the get-go now the concern is about drug prices >> yes. >> is there anything that makes you worry about these or do you think these guys get to skate below the rail. >> they already felt negative pricing year on year 5% of spending and health care is on med tech there's an opportunity for them to, quote, escape underneath all this rhetoric and prove they can actually increase earnings and use technology that's another part that we like this company because technology really helps them with productivity and international growth so i think there's an opportunity there.

>> and in a slowing economy, which obviously we're not seeing that, we may at some point, but these for some reason people do put off some of this surgery but you don't of course see that. >> well, i think when you have issues with your hips and knees -- >> why are you looking at me and how do you know? >> because you asked the question >> do i limp around? >> it's the golfer's problem too? >> it is on the left side. >> as people get older, they want to be more active this is also international play. 40% of the revenue come from overseas so as people are more coming into middle market, that's kind of an area. >> let's talk x-ray. that's the symbol. up 48%. >> it was down 50% last year. >> so, one third of all dental expenses are cash pay. so if you look at kind of where dental is going again using technology and also by the way insurance doesn't play a big part of dentists as well people will go to the dentists when they need it. in a slowing economy, yes things

will get put out another turn around story, new ceo, in an area that we don't really need to watch kind of what's going on in macro land whether gdp -- >> well, it seems like you have a real age, demo story in all your picks today and bristol meyers, too. these are all in an ageing population it would seem that this is -- is that your biggest macro factor in this >> i think macro factor in the sense that this is also undervalued sector, out of favor. bristol is down 11% this year. they're not getting any credit for the acquisition that's about to happen. huge cash flows coming oncology products down the pipeline, which people are not giving them any credit for basically saying, hey, guys, you got to prove that these stocks are going to work. i like the bristol story just because it's not a metoo story they're not making similar drugs to what are they out there already. if any of these new drugs come on, the stock would really reflect. 11 times earnings a lot of cost

there, too >> not necessarily the ageing -- all health care and health cares -- you think worries about the 22 democrats >> there's been so much negativity on this sector. if you're going to look for market and global geopolitical issues, this is a part that i think investors can the next couple years do well on and also invest in the other sectors. if you're looking for opportunity out of favor, here are a couple of stock picks. >> bristol meyers you don't think gets hit by any of the regulatory drug prices >> i do. 11 times earnings, you're buying something heavily discounted already. i think people will pay for these drugs as well. you're going to have some of them. >> what do you mean metoo drug >> they're not copying what else is out there these are drugs that are distinct in what they're doing in the oncology and cancer area. >> you're reading the journal, which is good. i also asked you reading at

grudge did you start looking at this? you didn't see this today? >> i read it everyday. i don't read breitbart, like you do. >> you should. you should the reason i bring it up, the top story -- it's a cnbc piece by tom frank one of the top stories human life span could soon pass 100 years thanks to medical technology analyst report about the strides being made and some of the really preventable things that cause quality of life and length of life. >> alzheimer's. >> all those things could be affected to where we are routinely pushed it past 100 >> you know what that means -- >> what. i was going to mention andrew i don't know if you can anchor a show past 100. >> you need a lot more money in your retirement fund. >> also for knees. >> for knees, hips, shoulders, teeth and also drugs to keep you

going. 60 is the new 50 as people get older, they want to be -- >> the new 45, i think. >> you can't retire at 65 and live another 40 years. you need to work longer. >> you need to take care of your body and invest. >> take care of your mind. >> i get it, though. see how that played into this whole thing, having read drudge, played into his length of life. >> we do a three-hour show where we talk to some of the smartest people in the show yeah, we try to play smart it's not like we do this show to try to stay smart. because doing the show is kind of mentally stimulating. >> it's exhausting is wa it is it's exhausting. >> emotionally. >> emotionally exhausting. >> mentally exhausting >> sarat, thank you. you're a contributor, so you had to be here. >> thanks for doing it cheerfully we appreciate it. >> thank you. still to come on "squawk box," new requirements for drug commercials are coming to a television near you.

we will speak to health and human services secretary alex azar. and then disney theme parks driving the company's quarters we'll break down the results and tell you what happened also, later, we're counting down to new tariffs. this all comes as chinese trade negotiators head to washington tr a new round of talks willhere be a deal we'll talk about that in just a bit. "squawk box" will be right back. it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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♪ coming in july to a tv near you, prescription drug ads are going to now be required to share the price of the medication being advertised. this is just one of the trump administration's efforts to cut down on the cost of prescription drugs. joining us now, health and human services secretary alex azar as you can imagine, so many things there's two sides depending on which side of the aisle you're on, mr. secretary. a lot of democrats say anything is welcome but this doesn't really address the root cause, and that is the price itself and you need medicare to negotiate prices with these drug

companies. do you really think this would change behavior of any of the majors just because they have to put the price on their tv ads? >> you know, this is a great development for american patients president trump is telling the drug companies you've got to put your list prices on your tv ads. he's saying level with the american people for the first time ever and actually disclose what your drugs cost now, this is part of a comprehensive plan where president trump has done more than any president in history to tackle drug prices my president, democrat or republican in the last 363 days since he put out his comprehensive blueprint on how to tackle drug prices, we have been delivering results and this is one important part of it, but it's just one part of it. >> so, what's the rational, though and let's say that someone wants to quit smoking, which is a great idea, right? i'm talking to you so let's say they want to quit and they want to do chantax and see on the ad it's $500 a month.

i'm going to keep smoking. so then they don't get -- maybe chantax doesn't get sold and the person doesn't quit smoking either because they get scared away from the medication what if that's the end result of this >> when should you learn the price of a product you're being advertised not knowing if the drug costs $50 or $5,000? when you go to the doctor? or when you show up at the pharmacy and get that sticker shock? if the drug companies are embarrassed or afraid that patients will be scared off by their drug prices, reduce your prices it's that simple >> you still think that drug companies are not just recooping research costs and the expensive -- the expenses involved with developing a new treatment, they're still gouging people and a lot of air in these

prices that can come out just based on shaming them? there's nasty drug companies >> it's not about nasty. it's about a game of cat and mouse that's going on. them and these middlemen, the pharmacy benefit managers with the artificial lly inflated list prices and back door rebates and deliver those savings to patients when they walk in the pharmacy but these list prices are too high there's no reason they need to keep going up, 10, 15, 20% per year that's not part of rnd that's part of a real sickness a sickness that's happening in the drug pricing channel and president trump is taking action to try to get at that by removing those rebates also and making sure patients get those discounts when they walk in the pharmacy. >> secretary azar, let's talk more about the rebates and some other issues out there obviously there's not a lot in washington that the two sides of the aisle can agree on these days pharmaceuticals reporter is hearing that there have been some talks between nancy pelosi

and the white house to do just that part of that would potentially include working on those rebates with the pharmacy benefit managers but also would talk about capping out of pocket costs when it comes to medicare. can you tell us if that is true and how close a deal could potentially be >> we're interested in working with both parties on a bipartisan basis anything would have to be bipartisan to get through congress there's a lot of bipartisan con sen us around measures we can take to really tackle drug prices i'm not waiting for legislation. we keep driving ahead on our regulatory agenda using every authority our president has because the president is absolutely committed to get drug prices down. he wants list prices, out of pockets down, better negotiation for federal programs and end foreign free riding. we want to work with congress on a bipartisan basis we want to tackle rebates. we do have in our budget capping out of pocket expenses for our senior citizens. congress would have to act to make that happen we're open for business. >> do doctors know all the

prices i often wondered who the ads are designed for half the time when i'm finished watching these which is all the time at night. if we didn't have them, i don't know who would sponsor the tv shows. i know what the side effects are but i don't know what the drug does half the time but i've been told that it's directed at patients so that the advertising works so that they ask their doctor about it. i mean, the whole system seems kind of crazy to be advertising like platelet medication on -- to a mainstream audience and i really want this anti-clotting stuff. i mean, the whole rational for even doing that is a little suspect. but in your view, why do drug companies decide to do it? because then the patients ask the doctors. do the doctors know what the prices are or are they going to be learning along with everybody else? >> the doctors are going to be learning along -- >> that's not good the doctor should know if it's

11,000 a month, shouldn't they >> but they haven't known that that's what president trump is fshtd first time delivering to them. >> can't we get rid of the ads are they effective >> obviously the drug companies believe they're effective. the core metrics they use is whether it causes the patient to go into a doctor's office and whether it causes patient to ask for their particular drug. >> do they need it >> i'm sorry >> they sold it on -- if you need -- it seems like a doctor should be in charge of prescribing something that the patient has from an actual medical need. >> that's what -- >> it shouldn't start with it being advertised on tv and guy or gal goes in and says, gee, i really like this purple pill everybody looks happy. this couple is walking around. i want to be like that they take nice vacations >> well, that's why we believe a core element has to be transparency of pricing so that you, the patient can have an informed discussion with your doctor another thing we have proposed is to require that these senior drug plans offer a tool for the doctor, a realtime prescription drug benefit tool so in the

doctor's office the doctor could know what the price of the drug is but also under your insurance, if you have insurance, what you would pay out of pocket for that drug so you can look at comparative products there might be a more affordable option including a generic the doctor could put you on. >> thinking about the knock-on effects of this and wondering whether you think ultimately this lowers drug prices or simply shifts the way these companies market and advertise their product which is is to say how much of the media companies out there, which benefit from these type of ads are now going to start worrying if -- i don't know if they're lobbying you already to say maybe some of these drug companies are going to stop advertising as a function of this keep the prices where they are but stop advertising. >> again, if the drug companies think that their list prices, that the prices they're charging on their drugs are dissuading people from using their drugs, once they'll finally reduce their drug prices to fit that. they have that in their control. you know, we have required for over 50 years that you disclose the price of a car on the

sticker of a car this is a vastly more important choice you have to make about the drugs you're going to put in your body. >> is your expectation that if they had those list prices they would continue to advertise at the same level they are currently or more? >> i don't know what their behaviors will be. i hope that what will happen is they will reduce their list prices if they find that they're getting consumer resistance to going into see doctors or if they're seeking more affordable options when they engage with their physician. >> would you prefer they not advertise? >> i don't want to say anything on that front. what i'm trying to do right now is to get more transparency into these advertisements they can -- these ads can provoke important discussions. people can recognize conditions they have. but the important thing is there's got to be a fair and balanced and informed discussion with the doctor and without the pricing information that's not an informed discussion. >> probably not a great system when a lot of people, people over 55 are medicare so they advertise these things you have no idea what they cost.

the doctor doesn't even know so then if people go in and ask for it and then medicare pays it because it has to and it just seems like that's part of the blow to cost structure. >> let me give you an example. i have a relative who was prescribed a medicine for a particular condition, a very high cost medicine my wife and i spent the entire weekend simply trying to find out what that drug costs, even to find out whether that drug was on formulary would it be reimbursed by her drug company and was the drug plan actually wanting her to use a different medicine we couldn't find the answer over an entire weekend of searching to get that information. and i'm the secretary of health in the united states >> i don't know. you better not screw this up for us, though, mr. secretary. all we'll have are mypillow ads. >> the netty pot. >> if that's all we're left with, i want to go back to these nice couples on vacation walking around mountains and stuff.

>> if you can't figure out if it's the right drug they're trying to make you take instead of the expensive -- >> people look happy and healthy on these drugs i want them. i'm going to ask my doctor. >> they're happy until they walk in the pharmacy and get that bill >> 8,000 a month >> exactly. >> all right there's a lot of things that probably -- i wonder about first amendment rights, too, though. aren't you sort of infringing on that you're making them do this. >> what about the car prices you think they shouldn't put a sticker price on the car that's the point. >> they do >> my hats off to you. i'm glad he's doing this. >> but then it's not the price any way. who knows with all the middleman. >> i think this forces the issue. >> all right >> you like what trump's doing >> yes >> oh my god did you hear that! did you hear that, mr. secretary! >> i heard it. i'm writing it down. >> that's the first. what is the date what is the date >> mark it down. you're doing good work, mr. secretary. >> thank you, mr. secretary. >> thanks. coming up, the forces with

disney we break down the company's quarter and talk media stocks in just a bit. a columbia business school class of 1967 reunion. mario gabelli, leon cooperman are together picking stocks. don't miss the "halftime report" today at 12 eastern. "squawk box" will be right back.

♪ welcome back to "squawk box" this morning disney beating the street in its latest quarter shares are rising on that news and the company says that it

benefitted from more visitors to its theme parks. handing it over to the west coast this morning with julia bornstein to help us break down those numbers. julia? >> good morning, andrew. well, that's right it was disney's parks vision that drove the upside surprise in its results as higher priced tiered ticket prices helped gross spending at the parks without suppressing visitor demand saying they're continue to invest in the parks will bring more marvel to the parks and expecting a huge response to the debut of upcoming "star wars" lands. >> we're looking forward to the grand opening of star wars galaxy's edge in our disney land resort on may 31st the excitement around this new land is unbelievable and it will only grow once people have a chance to experience it for themselves as we said, it's the largest land we have ever built, sheer audacity of the creative and technology is more impressive than the size. >> iger showing how disney will

leverage marvel's success in theaters to drive its new streaming service. announcing that avengers end game will stream exclusively on disney plus just a month after that service launches. now as for hulu, iger is saying they have talked about potentially buying out nbc universal's one third stake, they would want to keep that nbc universal programming on hulu as part of that analysts are starting to weigh in this morning. they're largely bullish on disney's ability to leverage its newly acquired fox assets. praising disney's strategy that has them, quote, escaping the bearish and increasingly realistic hell of traditional cord cutting becky, over to you. >> let's talk more about this. we are joined by tom rogers, executive chairman of wind view and former ceo of tivo someone with a long history in this industry. tom, i was interested in your notes because you have a pretty unique perspective on this you're right in that all of this

is great news about what they're planning, but you point out that disney is more tied to the traditional way of doing things than just about anybody else out there. what does that make you think? >> well, it makes me think is what was in this quarter really isn't the story. it was what was not in this quarter. end game, which you have to give them an enormous nod for, not in these numbers yet. extraordinary to pull off 2 billion in ticket sales within a week nobody else in the world does that what's not in this number also is the prospect of what they're challenges are on the streaming side as they transform the company. the streets voted. they have given them 35 billion of additional market cap on it but the challenges, i think, are far greater than the street is recognizing. and thirdly, what's not in these numbers is just how bad the decline of traditional television looks like it's getting. it's not meaningfully showing up

yet in their numbers yes, they're losing espn subs. but this was the worst quarter for traditional tv decline yet 1.4 million subs in a quarter disappeared from traditional television satellite tv looks like the wheels are coming off completely i think dish declined 11% on an annual rate now. and that's just not being taken into account analysts are arguing disney deserves better than a market multiple for its core business and yet i would argue with that kind of challenges linear television has, disney more exposed than anybody, it deserves less than a market multiple given the head winds it's facing there. >> what will be the next sign that tells you whether your thesis is right? >> that's the thing. we won't know too much more about how disney's doing on the streaming side i think for a couple years i think that in the meantime i

don't expect the market to change how it's voting here, giving disney credit for establishing a streaming business you got to give them credit for having changed the narrative to the future as opposed to how bad traditional tv is getting. but, there's some really significant things to look at there. the fox deal, look, they got two traditional cable networks that have all the head winds of traditional cable networks they didn't get sky. and their product in europe is tied up in sky they didn't get the regionals. yes, they got the fox library but fox pulled all of its programming from netflix in 2017 didn't touch netflix growth and they went over to hulu it didn't accelerate hulu's growth so it's a variable it's an important one. but $48 billion when they're underestimating how much they have to put into originals is a lot. >> we have to go but hulu over

or undervalued right now. >> hulu is in the hands of comcast. i don't think it's going to give up that asset any time soon. >> julia >> tom, i just have to weigh in here you're talking about the decline in traditional it have we saw grow and help disney is the growth of these skinny bundles. disney managed to get all of its networks into the skinny bundles including espn so we're in this transition period where we're starting to see these smaller packages and disney has unusual lench there also when you're talking about the movie business, disney is a rare movie studio that doesn't want to collapse the window between theatrical and at home release because they do have the pricing power and the ability to have a weekend like we saw endgame. within ten days get to the biggest second biggest movie of all time. >> on the skinny bundles, we

just hit 20 million cord cutter, cord nebers. only 40% are in skinny bundles skinny bundles are raising their price now because the program networks including disney forcing more channels in is going to slow that conversion ratio even more. that's not a panacea >> we'll see >> sorry, guys we're at the end of the hour tom, julia, thank you both for being here appreciate it. coming up when we return, why facebook's co-founder chris hughes is calling now for the breakup of the tech giant. plus, they're going to talk trade taxes and so much more with senator david purdue of georgia. later, former new york yankee and entrepreneur a. rod will be on the program teaming up with businessman carlos watson for a festival of the ages we'll talk about it.

♪ trade countdown. the clock is ticking on u.s./china negotiations. with tariffs set to spike if negotiators can't reach a deal in d.c. how uber loses so much money with the biggest ipo only hours away why uber burns through so much cash and why that must stop. >> behind new york's own south by southwest, alex rodriguez joins us on set. the final hour of "squawk box" begins right now

♪ >> announcer: live from the most powerful city in the world, new york this is "squawk box." good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square the futures right now are right at the triple digit level basically above and below that on the dow down 99 now down 100 s&p indicated down about 13.5 and the nasdaq now losing more than 50 in the premarket trade let's get you caught up on some of the top stories investors will talk about today. ride hailing service uber is set to make its initial debut. it will begin trading on the new york stock exchange tomorrow morning. this all comes as investors are watching the struggles of competitor lyft since it went public on march 29th lyft's stock is down 27% since then the stock lost 11% yesterday

concerns about its earnings and then as andrew mentioned also just if you're looking at lyft versus uber, it's hard to say whether this is down on all of them or people are deciding they rather be in uber. >> i heard a little bit of that from some of the big investors who have been participating in the road shows in terms of selling out of one and going into the other that would be the optimistic view at least for the space. maybe not for lyft itself. >> lyft shares last tick at 52.50. it went public at $72. earnings news, disney beating the street in the latest quarter. the company says it benefits from more visitors at its theme parks along with higher ticket prices and spending on food, beverages and merchandise there. disney shares down by 49 cents and facebook co-founder chris hughes is calling for the breakup of the technology giant. hughes wrote a lengthy opinion piece published in today's new york times he says that while he hasn't worked at the company in a decade, he feels in his word a

sense of anger and responsibility he calls out ceo mark zuckerberg's level of power un-american. he's expand on his op-ed and views on zuckerberg earlier on "today show". >> do you think facebook is dangerous? >> i do. the reason i'm speaking out is because i think facebook has become too big, too powerful he is extremely powerful because he has no boss, because there's no regulatory agency >> in his op-ed, hughes also says that the federal trade commission should undo facebook's acquisition of instagram and whatsapp remember, chris hughes was the former college roommate of mark zuckerberg that's why he's the co-founder. >> unclear by the way whether those splits on to itself would take away all the power. any way, longer conversation we should visit meantime, the clock is ticking down to a key deadline imposed by president trump when he says he plans to increase tariffs on billions of dollars on goods and

the united states and china if it can't reach a new trade deal. want to get over to aimen javers in washington, d.c. with the latest where a delegation from china is arriving today. >> yeah, that's right, andrew. we expect that delegation to arrive today and be engaged in negotiations through the afternoon here as you point out, the deadline just after midnight tonight here in washington, d.c we'll wait and see whether they can break this log jam that's developed in the past week or so toward the end of last week, a lot of investors were on track for u.s./china trade deal as soon as tomorrow over the weekend, that picture changed. the president was at a rally last night in florida and he laid out his explanation for why things seem to have broken down in these talks here is what he said. >> by the way, you see the tariffs. they broke the deal. they broke the deal. they broke the deal! so they're flying in the vice premier is flying in tomorrow.

good man but they broke the deal. they can't do that so, they'll be paying. >> so the president there accusing the chinese side of having broken the deal u.s. officials have suggested that the chinese walked away from some written concessions that they had made in the course of the negotiations. but never been clear during the course of this entire week of kpa exactly those concessions were that the chinese side allegedly walked away from, according to u.s. negotiators. we'll wait and see what happens today. one important caveat, guys, is that the regulation that's been put forth in the federal register about this new tariff indicates that goods that are already on the water, goods that are already in transit may be exempted from these new tariffs so that if companies have goods that are on their way, might be arriving ten days from now, they might not have to pay the tariff on those goods when they arrive in the united states so that gives some companies a little bit of flexibility going forward, but that deadline nonetheless approaching pretty

quickly here >> all right thanks for that. for more on the u.s./china trade talk, let's bring in our guest, david purdue, republican of georgia. been a while, senator. excellent to see you this morning. welcome. >> good morning, guys. >> so many things swirling around, specially in what's happened in the last week or so. what are your overall thoughts of where we are and what's going to transpire over the next 24 hours? >> joe, i used to live over there. i traveled over there recently negotiations with china are not linnier, so this was not really expected it's disappointing that last week we did hear that the chinese were backing up from some of the things that we thought we had earlier agreements on. but the fact that the vice premier is coming today and we are entering into the negotiations again today, i think are encouraging. so i'm very hopeful that mnuchin and bob lighthizer will be able to get us back on track where we

were last week, joe. >> and do you think where we were last week is more than just half measures for what china is willing to take? because that's the one thing that keeps coming back with people that i guess are somewhat cynical about any advances that we can make with the chinese that they're just not going to be able to change their basic structure of the way they approach commerce and the economy. that some of the things are just sort of systemic to their system and all will get some slight changes at the margin. >> well, they have political realities, just like we do but let's remember that the last five presidents have ignored this issue and what president trump is trying to do is create a level playing field. if they can ship rice here, we should be able to ship rice there. this equal access just very basic in common trade practice the problem is the last 40 years we've dealt a better hand to them than we've dealt to the american worker. what president trump is trying

to do is say we'll protect our interest we know you've been protecting yours and let's get serious about this it will take a long time the president said when we started these negotiations, joe, these will not be done overnight. they have decades of bad practices, as you said violators of wto since the day they were allowed in and we are just standing up now, establishing our interest to determine that we are going to stand up for our rights and our workers. i applaud the president. i don't like tariffs any more than anybody else. but i absolutely think we have a bipartisan support for standing up for american interests here. >> what happened you have any granularity on that and how many things did they completely renege on >> they didn't break the whole deal what they're really doing is i believe there are interests in china are really coming to realize what they're going to have to do as you said to change and eliminate the theft of technology to remove this barrier that is forcing technology into joint ventures

in the cyber warfare is not abated what's happened is their rhetoric has come back in the last six months but their actions really haven't slowed down that's what we're looking for. >> could xi with his personal relationship with president trump, could he say we're going to put these things into law with the congress over in china? that's one of the sticking points that the administrative laws that we want, that they're agreeing to, that we wanted on the books in china and they hesitated to do that, could he get that done quickly? >> the best thing we have going right now is that president xi jinping and president donald trump have a personal relationship they have both done favors for each other they talk to each other directly i think there's a mutual respect. but both have political realities. i want to reiterate that china is not a monolithic leadership president xi jinping has his own pressures there to maintain solidarity around what they're trying to do but remember, they're the ones that published made in china

2025 they're the ones that have this belt road initiative around the world. they're the ones that are violating the common trade practices established by the world trade organization there's a lot of changes that have to happen made in china 2025, that was really aspirational, we're going to re-write that we'll see if they're serious today, tonight and tomorrow in these negotiations i'm very hopeful they'll come with something very strong we can avoid going to the next level. let me be very clear, president trump is not kidding he will go to the 25% tariff this is the right thing to do long term to get china to stand up and do the right thing relative to our trade relationship. >> senator, thank you. >> good to see you, guys. >> that's all we got to talk about today. there's other things -- can i ask you one more thing richard ber wants to extension

the russia collusion investigation with the president's son? do you think that was a good idea >> well, i don't want to comment on -- >> why not >> a particular investigation. i think this thing is over there's no collusion there was no obstruction let's move on. i do think there should be some investigation as to how that investigation mueller investigation came about in the first place. >> is there a rift in the senate with richard bur. >> no. >> there isn't >> i don't think so. we want to see what really caused the mueller investigation in the first place. >> you need to talk to donald trump jr. about the meetings >> absolutely not. >> why did you subpoena him? >> i have no idea. i have no idea talk to burr >> thank you, senator. >> see you guys. when we return, uber's ipo this week could be the biggest of the year. but the company still loses huge amounts of money annually. why is that? and what does it say about uber's future? that story is next right now, though, as we head to a break, take a look at

the futures this morning dow futures back down about 110 points below fair value. s&p futures off by 15. the nasdaq down by 54. as we wait to see if those tariffs are put back on, goods inimported from china. "squawk box" will be right back. at carvana, no matter what car you buy from us, you get the freedom of a 7-day return policy. this isn't some dealership test drive around the block. it's better. this is seven days to put your carvana car to the test and see if it fits your life. load it up with a week's worth of groceries. take the kiddos out for ice cream. check that it has enough wiggle room in your garage. you get the time to make sure you love it. and on the 6th day, we'll reach out and make sure everything's amazing. if so... excellent. if not, swap it out for another or return it for a refund. it's that simple. because at carvana, your car happiness is what makes us happy.

welcome back to "squawk box. the futures down 117 points. triple digit losses on the dow 15 and change on the s&p 57 or so points on the nasdaq.

that might be as bad as we have seen this morning in terms of downside. >> okay. let's talk uber because it's set to go public it's going to happen tomorrow. one thing worrying investors is that the company isn't close to being profitable despite having a capital light model doesn't own any vehicles and classifies drivers as contractors how does uber burn through so many billions of dollars that's the question. good morning. >> good morning. i think we have a -- >> uber is a classic -- two-sided marketplace. it connects drivers to riders through its app. for each ride a portion goes to the driver and the rest goes to uber but since its inception, ubers costs have far outweighed the revenue it brings in there's taxes, payment fees, insurance, driver and rider incentives, and other operating costs. in 2018, uber actually lost $1.8 billion. in the two years prior, it burned through nearly $5

billion. uber is also pouring money into expansion across the globe though it sold its russia, southeast asia and china businesses to cut costs in regions where they faced intense local competition. and its investing in moon shot projects like self driving cars, trucking and flying taxis. ultimately uber wants a piece of every passenger and passenger driver globally what it calls a 5.7 trillion dollar market opportunity. >> and diedra bosa joins us now. the big question is whether those numbers are going to change materially over the next several years. >> several years, right? even the next year is a big question we saw that lyft said they would see peak losses this year. we already know we have some of the latest financials from uber and they burned through more money this quarter than they did the previous year. they're on track to spend more money than the previous year and at the same time growth is slowing. so even if you can accept all of

these losses as a new investor in uber, can you accept that perhaps its best growth years are behind the company >> let me ask a question and bring other people in the moment one of the questions is in terms of pricing and how much those losses are, how important it is for them to actually get a lot of money out of this ipo to actually hold them over until they get to profitability? >> absolutely. they're spending a huge amount of money they're burning through huge amounts of money we know how much money they raised in the private markets. $20 billion. they're going to get 8 to $10 billion through its ipo. how long will that last them as you saw in the package, it's not just ride sharing, food delivery, flying taxis, freight. all of these other moon shot products. >> stick around. we want to have a larger conversation on this and what to expect i want to bring in ceo of triten research which gives uber slightly above average score did i mispronounce the name of the company? >> triten. >> every time i get it wrong

and business editor at axios can we talk about the pricing issue. how important is it that they actually raise a ton of money? what is a successful ipo actually look like given by the way there will still be a huge part of the company that won't be public, so there could be secondary after the fact >> this is the age old question with some of these ipos. uber every dollar it raises more the prices, that's $150 million in its coughers. they're burning a lot of money, 150 million. so it mat aers lot for them. but on the other hand as we have seen with lyft and facebook years ago, when a stock price goes down, it's not just talking points on cnbc, it's employee moral for folks who can't cash out for several months, they keep watching their money go down >> you think though you're more bullish on this than lyft? >> this is in our scoring system an average score, lyft had a very below average score this is playing out. it's straight down the middle.

they won't push their luck on price the way lyft did the trading dynamics we were talking before, who knows what's going to happen. i think this gets down straight down the middle. >> what happened yesterday with lyft stock in. >> will, look, lyft did something that was sort of outrageous you heard us complain about transparency lyft announces its first quarter. management paid themselves $895 million in stock base compensation unit economics we're not going to disclose those. it's going the wrong way. >> sources say uberwould price at the midpoint of the range and that's quite rare for a ipo this anticipated that is stopping some of the excitement out of this whole ride sharing industry that lyft is in. >> you think it's zapping energy out of it as opposed we also heard this optimistic take is there were some people might have been selling out of their lyft in anticipation of buying uber. >> what we're hearing just quickly is that uber is so broadly held already by so many big mutual funds this isn't really an ipo.

right? this is already kind of a follow-on. you don't have to sell your position to buy uber if you already got it that just puts pressure on the book for people not buying more. >> why is there so much focus when it comes to these two companies, we talk about path to profitability, path to profitability and i'm not saying we shouldn't be. that makes sense to me and yet there are so many other companies that have gone public over the past year where it's been a revenue story nobody even talks about that >> because the losses are so much bigger in these companies we're talking losses in the billions of dollars here it matters a little bit more that's the basic reason. >> if it's a revenue story, it's still not that great revenue has been slowing down significantly quarter after quarter, year after year you take away the losses and just look at that. >> uber is a ten-year old company. if uber had gone public four or five years ago the growth numbers would have been extraordinary. they're not. it's a decade old. >> but decade old but they still haven't reached profitability. >> which is why we're talking

about it more with this one. >> i think the trend lines are also important if you look at pinterest, the trend lines are moving in a place, all right i see where this goes. zoom, you look and see the trend line is already above the water line is you can really get comfortable there. it's more of a parabolic curve when you look at uber. >> it's also an industry that hasn't proven to have profit pinterest, a social network, facebook has proven you can be profitability in that. zoom nobody knows if ride hailing can be profitable. >> when the competitors are blowing head wind on each other, it blows up the economics for everybody and people don't know what the long term climate will look like. >> you can't guarantee even with the market with just two competitors that they will eventually become profit snbl. >> well, so lyft has the two competitor problem because they compete against uber uber is up against a bunch of all other guys around the world. they don't have this problem and those guys are all very well funded. >> dan, can i ask you about the

soap opera that's still taking place? travis expected to be at the new york stock exchange on the floor with the other directors but not up ringing the bell with travis. >> which is why when your cameras are on him, i want to see what travis is looking like and taking pirtures of. >> he's bringing his father. >> i believe so, yeah. >> and -- i mean, we were talking about this do you think he should be up there? >> honestly, i do. here is why. i understand if he was up there then everybody would be focussing on dar and travis. if somebody said during one of the board meetings apparently the company would not be going public without dara and would not go public without travis >> my understanding of what happened here was that the plan was always for the directors to be on the floor, to have the drivers up there with dara and of course -- >> that was always uber's plan. >> right part of that issue was they still wanted to keep some separation from travis so the focus wasn't on the previous culture, right >> that was the issue. >> clearly

>> then during some board meeting travis says, hey, i would like to be up there. >> got great support i think that's parnlly a silicon valley vc founder thing. even if they're not really involved, it wasn't just travis. there was talk he should be up there with garrett. >> we're talking about dara or travis up on the balcony of the new york stock exchange. lyft ipoed with all of their drivers. optics point of view, very different stories here >> we will watch tonight to see the pricing and of course a lot of coverage tomorrow of the big ipo. coming up, new york's answer to south by southwest, ozzie fest co-host alex rodriguez and carlos watson will join us to talk media, ideas and investing. later this morning or later today on "halftime report" a columbia business school class of 1967 reunion. mario gabelli and leon cooperman

together picking stocks. don't miss that today at noon eastern time. take a quick look at the futures as we head to the break. "squawk box" will be right back.

the latest reads on jobless claims, ppi and international trade. stay tuned "squawk box" is coming right back this is the couple who wanted to get away who used expedia to book the hotel

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♪ welcome back to "squawk box. finally we're getting some big top-tier economic breaking news. our april read out producer price index up .2. a little cooler than we were expecting. and that up .6 up last month shocking stands unrevised. strip out all important foond energy up ppi light, .1. .4 that's the first one in the series that's a little hotter. it's twice the .2 we were expecting. final year over year 2.2 if you look at year over year, 2.4 sequentially unchanged

year over year, ex-food and energy and trade 2.2 see hook and trade it gets hotter, but all things considered, you know, kind of tame 228,000 on initial jobless claims that's down 2,000 from unrevised 230. boy, these numbers remain in very low territory continuing claims, they have moved down pretty much as well although this particular week we moved up a bit from 1.671, 1.78 1/2 million for the trade balance, this was march, this is interesting because this will figure any revisions for advanced first quarter gdp 3.2. this number is minus 50 billion. we went from minus 49.3 to minus 50 we know this number along with inventories and we'll get those later can make revisions so we'll have so to see if

there's any changes. oh my gosh, lot of data, becky. >> we have more breaking news. chevron saying it will not increase its offer to acquire anadarko they'll take that $1 billion cash determination fee, the breakup fee and walk away with it some comments. winning doesn't mean winning at any cost and they will not delute returns or erode shareholder value for the sake of doing a deal. probably the smart play on this. that's kind of playing out of the stock market right now chevron shareholders liking this that stock is up by 3% increase of 3.50 to 121.01 i can't say this comes as a surprise after michael worth told us the ceo and chairman that he would not bid higher wants to make sure he sticks with his credibility and gets a billion dollars to walk away. >> he's an engineer, too maybe doesn't get quite up with the financial engineering side

financial engineering instead of the dr. >> the animal spirit side of thing. occidental shares down by 2.5% >> the street didn't love the idea that occidental would go to any length to get this company not surprising -- i think from chevron's point of view it's so much bigger. this would not be any kind of transformative deal. it would be nice to have not something worth burning capital for. >> why are the shares down so much when it looks like the guy they would be bidding against are stepping out. >> they don't have to pay at the high price on the table. >> isn't this now the natural progression. >> in terms of the arc they couldn't really set it up properly in advance of this. >> it wasn't a pr before this because too many players that's true. i'm not sure that accounts for down 4%. it could

there's a big cash component in occidental. again, chevron -- >> there had to be some probability that chevron would win this and occidental is not going to pay a very high perceived high price. >> there's still a question how quickly they'll sell these assets and everything else. >> it's not up to you but is it a smart move for chevron do you think at this point? >> listen, you guys have said it, we sort of talked about it early after vicki of course occidental came public at 76, price discipline, wanting to show that, what i'm told is he had a line in his mind he was willing to live with and this crossed the line and that has been relatively consistent to what i have been hearing out of the chevron camp. that said, i think they gave in a long, hard look in terms of

what they were willing to do it was not transformational for them the same way, of course, it would be and will be for occidental interesting, mike, you can speak to this, not that long ago i'm told energy was about 14% of the s&p. now it's about 5%. the reason is because they destroyed so much capital along the way. and so mike worth seems to be wanting to go in a different direction and not destroy capital and not put it to work where it's not going to get decent returns so, they bow out here. a big victory certainly for occidental showing all along how aggressive she was willing to be, of course, in terms of everything she was willing to do. >> their stock is actually increased -- it's gotten a little bit better situation. >> firmed up. >> see whether it firms up when the market opens but that's why i'm saying i think right now we're literally

in the moment where they're sitting around trying to do the math and most have already done the math and now need to set the position. >> it's obviously noisy moment the industry separated return of capital and steadiness and basically not necessarily looking to grow at all costs that's their franchise that's what they have decided. that's how they'll be in shareholders minds look, we need to buy assets. we need to buy territory we need to basically keep growing and replenish. so i think that's basically the two camps these companies differentiate out. >> doesn't mean it's a win/lose. it's different situations for both companies >> let's get jim cramer's thoughts on this, too. what do you think it means for occidental and chevron >> warren buffett is offering 8% money. i thought that was a mistake i think that's one of the

reasons occidental is down they have real big properties that are just pumping out in the gulf of mexico they're doing so well that they don't need the 10,000 wells they were going to do scott cheffield, the ceo of pioneer is saying, look, they have to come back. but the problem is anadarko is the most undermanaged. i don't know what chevron can do to make them produce more. this is good for everybody chevron will come up with something. >> does that mean that there's not another potential bid that they could make? >> not everybody else is as bad as annadarko pioneer was too good they can't rationalize it. simmer x is a good company they might go for that what worth wants to do is take a company that has great assets that's not doing well and make

it do well the rest of the operators are really pretty extraordinarily good anadarko was the prize because them mozambique. it was brilliant what vicki did was off load the ones she can't handle good deal for everybody except for the price of money david faber talked about the idea if there's an oil downturn the last you want to do is pay 8% for your money. that's way too high. remember, uber -- elon musk got four times. >> you made that point the other day he can go back and -- >> musk is not good at credit, but if you really need warren's you got to pay 8%,come is i think really stupid. i don't know it's okay to say that. >> no. look, there are other people who would absolutely jump in and agree with you it's very expensive price to pay on these things and it's the type of prices people were paying in the financial crisis goldman sachs and ge. >> do you think money just wasn't available to them from anybody else >> no, money was available but

they had to wait a few days and they felt that time was of the essence. david, you know what, i think time of the essence versus paying far more is very shortsighted. >> it may have been, jim, but it won. >> it's peeric >> that's what they aim to do. that's clearly what she wanted to do from the earliest days of course, remember anadarko -- oxi has been after anadarko for two years. offered 76 did not win. we told the day that chevron unveiled the deal at 65, we told the world that oxi would come, she got more aggressive as you point out. getting the expensive money from buffett who had more behind that if they wanted it. getting the $8.8 billion sale properties to total if in fact and when they complete the deal. so i think you have to also remember that when you think about chevron was thinking it was facing not just okay do we come back in

'76, well above what we ever intended to pay. but the fact that vicki olive given how aggressive she's been clearly wants this so badly she would probably pay more than that. >> david, look, if you pursue for two years you could have called greg lemkal at goldman sachs. fine, we'll do it for you. elon did it in four days i think it's really ill-advised way to do it but you know what, maybe she's buffett's oil company. for that, she gets the luxury of paying 8%. if oil goes to 40, we'll be laughing. >> gentlemen, we'll see you in just a little bit. you have a lot more to talk about this and everything else that's going on. gentlemen, thank you mike, thank you. you sticking or leaving? coming up when we return a lot more of your biggest stock movers when we return. a. rod and carlos watson are both going to be here to talk about the change in media landscape. they're co-hosting what some

call south by southwest of new york city. as we head to a break, take a quick look at the futures we're in the red, dow off 113 points stay tuned, you' wchg aw on cnbcin

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♪ we don't bake. ♪ opportunity. what we deliver by delivering. welcome back to "squawk box," everybody. we have been watching the futures this morning as we await to see what happens with the china trade talks and to see whether those tariffs actually get put back on the $200 billion, raise to 25% to

$200 billion on imports coming from china, you'll see the futures are under pressure dow futures down by 118 points, that's about the weakest we have seen this morning. s&p futures off by 17. the nasdaq down by 63. under an hour to go to the opening bell on wall street. dom chu. >> we have a decent slate of premarket earnings movers. tappestry, the company formerly known as coach is up around 17% or so on more than half million shars on pre-market value. it came out with better than expected profits on sales that were in line with expectations but sales growth at existing store locations posted a slight beat and said it would buy back a billion dollars worth of stock in a new program so those shares up big now, shares of norwegian cruise line holdings also higher by just around we'll call it 2% or so on roughly 20,000 shares pre-market the cruise line operator posted better than expected profits and sales. norwegian said it boosted itsd

full-year profit outlook it was helped by the ability to increase prices on those products then we'll end on shares of fox corp. where the class a shares are up just around 5% or so on roughly 15,000 or so shares premarket. fox reports sales came in better than expectations after yesterday's close. it was help aid long by better performance in its cable and broadcast tv operations. this is fox's first report as a stand alone company after selling the bulk of entertainment to disney but those shares certainly all on the move back over to you, joe. >> thank you coming up, baseball great alex rodriguez is on deck and he's swinging for the fences with his latest investments. he's already needled me about the reds, if you can believe that. >> about what? >> about the reds. can you believe that no-hitter. then tonight on "mad money" joe cramer and don't miss his conversations with the ceos of

etsynd a bausch health stay tuned "squawk box" is back in a moment

♪ welcome back to "squawk box" this morning it has been a busy day with the futures down and trade talks causing tension in the markets but right now, we have some unusual, unique guests in the house we wanted to bring you news company ozy media announcing its fourth annual ozy fest, built as a two-music festival set to take place here in new york city some people call it the south by southwest of new york. new york yankee, former new york yankee a. rod will co-host the event this year. we're thrilled to have both of them here along with the man behind it, carlos watson as well thank you, guys for coming in. >> great to be here. thank you, guys. >> you've been on the show talking -- >> been here. >> you have also been on the show how did you get together in. >> well, carlos interviewed me last year at ozy fest. when i walked, i said, are you

serious with this snechbt it's really the coolest event i have ever been a part of because having 25,000 people in central park, like, i don't know if big parks usually yankee stadium i finally reached out to him carlos, how can be i involved? how can be helpful >> with ozzie fest, we marry people you might not expect to be there john legend, trevor noah and others alex said this is something i want to play with a little bit it keeps getting bigger. >> how many people >> 100,000 people this year. >> how much do you have to pay the city of new york and the parks to do this >> you say i'm with aaron ross sorkin and it works out. it's easy that way. >> is it hard, though? >> it is but the city has embraced it. we're in a moment kind of postamazon where the city is looking to put its front foot forward and they like the idea you've got something outdoors, not just music festival or ideas festival. >> that's interesting that stit is looking to put its best foot

forward. do you think people you've been dealing with is having a little bit of blowback losing amazon? >> we lost amazon but gained ozy fast little media, little entertainment, little swag taechls fun. it's music we're going to enjoy t it is a celebration of the greatest city. >> we all like a swag bag. >> crazy stuff, unusual vr headsets for those of you who are chefs, three crazy chefs this year. rachel ray, marcus and padma lashmi. >> one of the things i wanted to ask you about specifically is digital media. disney's earnings last night, you're in the digital media. that's your business entire stake in vice to zero. >> are you trying to say iger should have invested in ozy? >> that's one way to look at it.

that whole space has been very, very challenged. a, how it's going for ozy and, b, how you look at this. >> it's perfectly timed to the conversation that alex and i are having companies that have been digital only, that's the only way consumers can enjoy it, it can definitely have a harder time, whether that's vice, buzz feed, mike gimlet and podcast space, folks behind coacha and the event space, people like ozy that are doing prime time television shows, festival like ozy fest, you have more legs to stand on and i think you've got a broader, sturdier media company. >> iger hired jimmy from espn, all of a sudden you get espn plus now they've gone past the $2 million mark great defense by bob iger. >> also the sale of the regional sports nets went for $10 million. >> 10 billion.

>> 10 billion, i'm sorry, rather than the 20 some had been expecting. this is your world. >> you go back to comcast, one of the great, great purchases has been nbc and five, teniers from now, that may be even better it's going to be a great trade lot of interesting things going on there a lot of low-hanging fruit. >> when do you think the amazons, googles and everybody else really moves big in terms of bidding for professional sports >> i think it's there. i think we're right at the fringe people always ask, when are these teams going to stop getting better value it's not going to stop for a while. they are expensive but if you sit tight and hold for 20 years and think about breaking even, you're going to be in a good place. >> what is the plan for the a-rod digital media empire podcast, you're on tv. you've got a whole thing going now. >> we're trying to storytell one thing i'm most excited about is ozy fest. you have an opportunity. when i approached carlos, we're

both from miami. he went to ramsey, where my daughters went to school i said i would love to be involve buddy students from all over the world need to be able to come in for free. he said absolutely. >> one of the things we're thinking of a lot about, one thing i heard people say about ozy fest, i went to a cool festival in central park expecting to have my mind blown. instead i had my mind grown. i hope that ends up being true and a lot of people enjoy it. >> millennial generation is your target audience. today, they're not so happy with the word capitalism. they actually talk a lot about how they like socialism. this gentlemen over here is a true capitalist, i know that but i also just am trying to understand how you think that's changing and shifting, what they mean by that and sort of how you see this debate playing out. we talk about it on this stage every day.

>> you certainly -- >> when you finish this i want to ask him something. >> hey, joe, i see where you're going. you want me to let you go first? >> no, no. >> he wants to talk about the met gala. >> no, no, the marlins i want to talk about -- >> let carlos answer first. >> i'll give you two seconds with that. what is super interesting is that millennials are focused on politics in a way that we haven't seen in a generation and, you're right, people like aoc, the former bartender, are focused on the question about capitalism in the times recently about buffett being one of the champions. you'll see that debate on the ozy fest stage along with comedy, music, food, certain presidential candidates will want to have their say, maybe even young millennial presidential candidates who will weigh in on that. >> which one that's a good tease. >> kids today are driven

you have to come at them with more than just roi or money. >> you have to help with the marlins. they're 5-23 or something. jeter, you know, bought this group. it's is an onion piece because the baseball operations are a loss leader at the marlins, it never really captured public interest, they're going to spin that off and focus on concessions and apparel. >> wow. >> it's a joke. >> how many onions >> going to spin off today's operations and focus on concessions and -- is that a viable -- what would you do? >> miami is a complicated market but it's a great, great mark i've been there over 30 years. have you to speak spanish in that community you have to tell your message. >> you have to win, though, don't you? >> around five miles of that stadium is the greatest talent in the world have you to double down.

you can't compete with the yankees internationally but in miami, florida, south america, you can crush it i do have faith because of jeter. >> i'm from cincinnati so i feel his pain and it takes time to rebuil rebuild. >> when you take over a team, give new ownership five years. >> you would be willing to give him help on this. >> i'm a big mlb fan and always willing to help a former teammate. >> a-rod upstaged j.lo at the met gala. >> pink tuxedo. >> it was great. i don't know about that tuxedo. >> i was going to say costume. this was camp.

some people thought this was more halloweenish. >> yeah. >> what was the craziest costume you saw? >> odell had something interesting on. >> with the shorts. >> right. >> he will be at ozy fest, i'm sure. >> saquon? >> yeah. >> how about cardi b.? >> who was holding -- >> jay leno. >> one of the kardashians had his head on -- >> not his real head. >> it was much better than last few years. by the way, cher was amazing god bless her. cher, you are a rock star. >> she literally is a rock star. >> she actually happens to be, for a long time. >> it's like a sauna in here. >> you're a rock star as well. carlos, appreciate both of you. >> love you guy. >> he was on an airplane and literally got here an hour ago. >> i had to come. >> miami boy. >> a-rod, you have to go through security and everything? >> always. >> get pat -- >> always. >> not at teeterboro.

>> you don't have a -- >> i don't have anything markets are tough. they've been volatile the past few days we'll be right back to -- >> and uber. >> come back for more tomorrow >> john foley next. >> right, right, right. >> thanks for having us. >> folks, let's take a final check on the markets as we get ready to hand this over to squawk on the street futures have been under pressure all morning long right now the futures are at their weakest moments of the morning, dow futures down 145 points we have seen the futures under pretty enormous pressure every day this wooerk eek on concerns the china trade talks and whether the tariffs will be put into place when the clock strikes midnight tonight right now tariffs at 10%, jacked up to 25% unless something changes between now and then s&p futures are down by about 21 points, nasdaq off by 74 s&p has been down 5 of the last 6 sessions and all these red

arrows are going around the globe this morning dax and germany down 1.2%, stocks off more than a percent in italy and spain watching the ten-year is yielding below 2.5%, 2.446 was the last tick i saw. that does it for us today. join us tomorrow right now it's time for squa"sq on the street qug. good morning welcome to "squawk on the street." carl quintanilla has the morning off. futures when we start trading one half hour from now from the new york stock exchange. looks like we'll start down, at least if things hold for the next 30 minutes. let's get to our road map this morning. it does start with that growing tariff this threat which, of course, is pressurinoc