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 pressuring stocks as

you saw, set to open lower after trump says china broke the deal. trade talks are scheduled to resume later today plus a break up facebook from its co-founder, chris hughes calling ceo mark zuckerberg's power unprecedented and unamerican and one day more uber set to price today ahead of tomorrow's massive public offering latest technology unicorn. of course, this will be a very public debut talk about where that pricing looks. up to the minute speaking ining of up to the mi, let's get to a deal we've been following for a couple of weeks ever since chevron to acquire anadarko and occidental was

there with a bid that bid a few days ago, having been made or deemed superior by anadarko the question then is what will chevron do now we know, they've bowed out of the bidding choosing not to compete with that bid from occidental michael wirth said listen, you need to be aware of what things look like in a down cycle, always run the models, he sort of implied, of what the risk looks like with low oil prices and it simply seemed to be a line they didn't want to cross, whether it was 65, as their deal was, 68 or 72, he would not tell me what their return parameters exactly looked like. he continually said during a conversation we just had that he had a line in mind as to what

makes sense, this crossed it and that winning -- you know, in any environment doesn't mean at any cost, given we are in a commodity business. >> i thought that was great. what people forget is that a lot of oil people, all they know is to go full throttle. okay that's what they do. they don't have any market no oil company has a marketing department so chevron is very wise to say okay, look, these thousands of wells, they're short-cycle wells. maybe people feel -- scott sheffield is saying listen, they have to do some deal all the other companies are rationalized and anadarko was politely matched remember they had that terrific lng plant which would have really been great for chevron. chevron, david, is a deporter drill. everybody knows it they did a lot of gulf of mexico drilling at the time

people think they have to do a deal i don't know they get more gulf of mexico shelf they don't need to do a deal. >> mr. wirth saying to me, when i asked him that very question, not necessarily. in the permean alone, we're doing and 900,000 barrels a day without doing anything of course, mr. wirth, there he is, ceo. we don't need to do a deal we'll be disciplined clearly they will do it within the return parameters they see being optimal for a commodity that does go up and down. >> i like the fact that chevron has always used reasonable assumptions. what makes money at $50 oil, $45 oil? some oil people say what makes money for oil? whatever we sell it at that's not been that great one thing we hate about the oil companies, and when you talk to david dempshire, he runs core

labs the big change oil companies have done, if they don't please wall street by saying we're not going to over pay, we're not going to spend, then their stock goes higher. if they go nuts with spending, their stock goes lower wirth would rather explore oil with his stock price of $5 billion buy back than in the permean. nobody is getting any credit if they borrow a lot of money in this environment it's really rather amazing the companies that borrow money have been punished. >> of course, let's talk about oxy this morning chose to do something unexpected in that you don't see a company even when they were the higher bid, perhaps, in the auction that took place privately come public they did then she set out to basically say in her actions as opposed to her words as well, we're going to win this thing.

>> right. >> the buffett money, which you've criticized. >> i have. >> plan to sell $8.8 billion in assets to totale. >> shell has a lot of money. >> she prevailed here and clearly sees incredible value in this property and believes it is the deal she had to do in order to make occidental the largest single producer potentially in the permean. >> david, colorado had an interesting ballot, something on the ballot about not drilling more oil companies aren't liked in this country if that ballot goes back on the ballot again, all that acreage in colorado that is good for anadarko, you can forget about it david, i know she prevailed but the cost of her prevail

something going to turn pooeb people off to her stock. >> do you think so >> yes, i do. >> even though she told a potentially compelling story in terms of synergies >> she wants to be the permean company. i want oil companies to spend less that's just been getting clubbed. now, take a look at what they've done with equity offerings that's so smart. diamondback energy, they do not spend outside their means. now, is chevron spending outside their means? no, because they're selling those properties when you take 8% money, i don't care who it goes -- the bank is not relevant to me elon musk bought money from goldman. >> i know. >> and they had the sell on. >> i understand. it got them the money fast and got them the win. >> that's great.

>> free cash flow improvements between synergies. 76, 78%, 58 cash, remainder in occi stock. >> what does that tell you >> not overpressuring the deal that much even though the -- >> it's being kept up by the hope that chevron would come back and you wouldn't buy it. >> yes, it was. >> yes, there's synergies. >> you're really negative. >> yes, because the ones who do well -- this is from david dempshire not me he knows occi is spending within its means, you could say there's the buffett class and you, the common shareholder. that's not what people want in the patch. maybe she doesn't care short term where her stock goes. david, that is a dicey thing. >> do you know what will be interesting? in the weeks, months and years to come, you and i will sit here. >> we'll debate it and people

will say wow. >> just at the time of tariffs and uber, you're stuck on that, you little thinker you >> let's talk about uber and tariffs. what did you just say about me >> i'm kidding i love that occidental. >> in the midst of three-day losing strikes high-level china/u.s. trade talks are set to resume in washington it's 12:01 a.m., right it's tonight basically. >> if you break the deal, you have to face. >> i know. rally in florida, the president blamed china for his tariff push take a listen. >> 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 vice premier is flying in, good man. but they broke the deal! they can't do that so they'll be paying.

>> there's some coverage of this in the wall street journal, jim, that i find fascinating in that the chinese seem to pay close attention to his tweets and that his lower rates was his concern that the economy was weakening, therefore that the u.s. would be more amenable to a deal that would be favorable to china because they thought they had lerchl really are you kidding? >> i don't think they're that stupid. >> you don't >> that article basically has said that we are weak. >> it said that the chinese are viewing it that way. >> that's so stupid. >> well, all right but do you know what it shows me? >> what? >> i'm not questioning the reporting here. >> i'm not either. it's time to get tough >> there's tl isn't a person -- >> if you are thinking that the president's tweets about lower rates somehow -- >> other than larry kudlow, does anybody -- you have to face the wheel when you break the deal. isn't that incredible?

the president has changed the narrative. he says the chinese pay. >> i know. chinese don't pay. >> of course not but who cares? what are we, truth tellers david we've been by a president who goes to his base and says you don't have to worry about higher prices because the chinese pay, which is untrue, then we get criticized if we say that. >> 200 billion, potentially the prospect of another 325 billion, all the imports from china having that not too long from now. trade negotiations resume now. everybody who showed up here over the last few days thinks, come on. it makes sense they're going to get it together we have too much to lose they have too much to lose. >> we don't have that's the point. >> you look at -- okay let's look at steel. steel is down double digit from when we did the tariffs. it's scare tactics by, i don't

know -- do you know who trump doesn't listen to? industry industry saying listen, it will hurt earnings. do you know what my people say he says? we gave you that big tax cut shut up and move out of china. >> do you know what he does listen to? >> the dow. >> yes people don't believe that either why don't people believe me? they ought to. >> he's worried about the price weighted stocks. >> i'm wondering whether the chinese realize -- >> i don't know what you want to call it. >> do you think the chinese realize or do they say that's too nutty? >> i don't know what the chinese know or don't know. >> they have more rooms, david they're so brilliant nixon 30 years ago. >> finally before we get to a break. >> what, what are you saying

>> what do you do with the stock market here? >> you wait. you wait look, the base isn't angry. >> you wait? >> you wait. the base in panama city are happy because the chinese will pay in tariffs who the hell are we? we're the media. we got taken out by twitter a long time ago. >> something mark zuckerberg doesn't want to hear, when we return his co-founder, chris hughes, hasn't worked at the company in a long time. has an op-ed, calling for the breakup of facebook. 17 minutes before we get started with trading at the stock exchange and we are going to open lower more when we come back

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new calls to break up facebook this time from chris hughes. he said the giant shouldin separated into multiple companies, to undo acquisitions of instagram and whatsapp and warns of mark zuckerberg's, quote, unchecked power, which he calls unprecedented and unamerican. >> 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, there's no regulatory agency. >> you had a sour look on your face. >> what is it, orwell, 1984, big brother? in the end, this is a social media site it's not the american party like the communist party or the

soviet union it's a darn social media site. >> mark alone determines algorithms, what people see in their news feeds, what messages get delivered. >> is he the great dictator like charlie chaplain honest to god, chris hughes, i totally get that david, you don't have to use it. you can opt out. there is no law in this country that says you have to use him. now his prices have dpon up a lot and you may not like him it doesn't matter. it's social media. >> we've had the conversation and i'm sure we'll have it again. it occasionally comes to the fore about market power of these enormous platforms, whether it be facebook or amazon or alphabet the power that they have to prevent competitors to create the inability for those to come,

who would otherwise compete with them zblie asked makim delrahim about it he runs the doj anti-trust division i asked him specifically about the power of these platforms. >> it seems like silicon valley, capitalism venture world is very alive and well anti-trust laws need to be there to make sure they do not prevent the next competitor to come in that's exactly what the justice department did in microsoft years ago. it was challenging their monopoly power and i think that case probably led to a lot of

innovations we're seeing today. >> come up with a better mouse trap and you have it i mean, there's no monopoly in facebook break up whatsapp? fine the stock probably goes to 600 billion. >> what do you want to do? let's sponsor a french facebook. >> right. >> look, he's justifiably angry because zuckerberg is not a sympathetic character. who says who says he has to be sympathetic. right? what's he running for? nothing. you have every right to pull out of instagram you can go out of instagram right now and teach him a lesso lesson. >> says he's got influence that's staggering far beyond

that of anyone in the private sector or government. >> does he see that guy on twitter? that guy got a lot of power. david, they broke the deal they have to face the wheel. i'm telling you, two countries go in, one comes out all right? there we go. >> i guess a death match up next, get ready for the -- >> what, are we all marionettes? >> there's another look at -- >> should have stuck with it. >> mad dash coming up.

we have an opening bell six minutes from now you better move it along here. >> david, david, there was an intel analyst yesterday -- >> yes >> okay this is the analyst data they are saying, we have an opportunity to lead one of the most successful transformations in corporate history, but it won't be easy? david, they used a new curse word it's a journey then they have a recent change in guide and they're all down. three arrows that are down what's the key thing for the business at the bottom of their date -- remember, this is like -- remember jon wooden triangle

truth in transparency. they're in semi conductor. what is it how could truth and transparency be -- fearless. >> fearless. >> fearless? do they think they're the niners or something, the golden state warriors david -- >> which adds up to what, jim? >> you know in a sobering time, a good laugh. >> throw your hands up a little bit? >> gimme, gimme, throw your hands up remember that at club med? love these guys, bob swan. they have to say listen we'll be autonomous driver, go up head to head don't worry. it will be hideous it's going to be a journey don't worry. we have truth in transparency. chris, you should work there mi uneve got an opening bell congp xt

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financial capital of the world opening bell in about 1:20, which gives us time for asking you what is the key to this market >> david, i hate to be so cliche but it's still bob iger and disney, stock up 3 last night. people wok up to the fact that the panama city address, that's what i'm calling it. the panama city address where the president basically blew up the trade talks. >> yeah, but it's trump. >> right tomorrow he could say, hey, listen, they've really come around by the way, if the chinese succeeded in nothing he would say the chinese came around. whatever he says fox news beautifully records. then it's true. >> he creates his own truth even though it isn't true >> he has an alternative universe that's very hard to penetrate, including if the chinese are paying tariffs. >> tariffs are being collected by the u.s. treasury.

>> and we'll give it to the farmers who are being hurt david, the family farm is once again the target of the chinese. [ bell rings ] >> there's the opening bell. we'll have another down open over at the nasdaq, it's head hunt er, online recruiting platfo platform russia -- >> putin had the ire zuckerberg to rig our elections by the way, killing stock. >> facebook is down 1% i wouldn't call that killing it. >> i guess so. your right, david. i stand corrected. it's not moving the stock up apple breaking the 200 level

because the president has said look, i don't care if you're doing a lot of business in china, i don't like it but david, at a certain point they'll bring down the dow because it's a price weighted index. at that point maybe the president concedes in the dow goes down too much. >> it might be if you want more of something to use for a proxy on trade talks, alibaba is more appropriate. 190s now it's 175. >> wow >> down another 2.5%. >> renegotiated the contract imagine they called amazon and said listen, we're looking at that now they're not. they're not going to do that it's not a two for one split. >> you're referencing it let's explain what's going on, jim. >> they said on a conference call that they just became where recently the u.s. post office is currently renegotiating those

service agreements suboptimal situation for them. they don't know what's going on. that's always a position that worries you. >> we don't have charts for people because we're showing the dow .7%. stamps.com is getting cut in half. >> yeah. >> there it is thanks, guys. >> that's bad. there's a lot of companies that are doing well david, roku, taking it right from the original equipment manufacturers. roku, david, has really an rpu, so to speak, that could go higher i misjudged roku i thought amazon was going to destroy roku. >> it was easy to misjudge it. you didn't quite understand what the competitive advantage was. >> yes, what was it? >> i'm not quite sure. >> i don't know either that's how i missed it i couldn't think of it

i really couldn't. >> here they are $8 billion market value up another 9%. >> define both the trade talks and uber, which we haven't talked about at all. >> no, we haven't. yesterday, you and i were hearing tightening up toward the higher end of the range as the day went on yesterday, middle of the range and now people talking middle lower of the range. >> they don't want retail to come in and talk about what happened with facebook that's before facebook became the rule of the world and was telling putin what to do. >> right. >> putting putin down as they did in "house of cards." >> don't get distracted here. >> okay. uber this is morgan stanley posturing. what do they want to do? open a price, big account, say i'll average up and buy. use a lot of it to try to keep retail from blowing this thing up to 100.

david, the drivers are being hurt by the prois of gasoline going up 5.9%. >> and a number of them were on strike yesterday you know, we'll have plenty of time to talk about the long-term prospects for uber i haven't heard you weigh in yet on what your expectations are. this is a company that will lose money and has lost money for its entire history and has raised money for any company ever prior to going public. >> there's a lot of convertible money going around where i believe you can easily short stock. i think the stocks were 50 bucks. who cares? do i it doesn't matter. >> bulls are focused on 20%. you get a $20 billion revenue number four, five years $5 billion, throw a multiple on that and it's growing still. i don't know. >> you're conflicted. >> they need to prove they can make money. >> some of these companies that

have come public, they have prospects. zoom is not so great i prefer cisco to zoom anyone who has taken uber may be tempted to buy uber. and that's what i think morgan stanley is most worried about. >> if anybody bought lyft, will they be tempted to buy you felt ber? >> lyf it. is up today. >> is it really? >> following another bad day over concerned earnings. >> did they think they were incubaiting, that they would come out with a lot of money no they wouldn't even become public. >> whoa said all along that uber was focused on lift in terms of wanting it to be successful in the marketplace because it would ultimately help its valuation. >> how many times did i come on the show and say this is going

to be a horrendous week? over and over again. i said everybody has to raise capital. i think you would be able to short uber by using derivatives. the whole thing coming at the same time as the 12:01 cinderella deadline with cinderella not being there it's fraught it will be a bright, bright sunshiny day when we're finished with this. just put on your buffett hat and he'll say what's the difference? now, of course, if you're as much like he is, it doesn't really matter. let them take the market down and buy high-quality stocks. how is that wrong? how is that wrong? i told you over and over again to raise money it's going to be a horrendo week we didn't know about the panama city doctrine. >> it's not a great week for those who own stocks but not horrendous so far.

what's horrendous? what are we down for the week? >> nothing. >> not that much. >> the president will stop it when he feels boeing is down enough. >> it is down again today. >> do you know how he feels about boeing listen, you've got orders all over the place you keep saying that forget it. i'm not helping you. caterpillar, come on, 5% china the president is -- doesn't want you to do business in china. when are people going to understand that? he is okay with nike because it's presented by the ministry of sport, sounds like something from orwell. >> it does. >> how about the ministry of phony media? david, starbucks will not be hurt by the deal, $7 for a cup of coffee to build their business lots of luck so, david, it's -- >> whoa keep watching the dow. >> the president watches the dow. he's not interested in the s&p

if he was, it would be a different formulation. >> i am. it's down almost exactly the same amount of the dow. >> what's the weakest market right now? chinese auto market. too many companies, including 3m, are used in the chinese market. >> i want to come back to uber and move on in the sense of their ability to make money has been impinged to a certain extent from competitors raising money from their largest investor, softbank goes around giving money to everybody, which enables them to compete more fiercely against uber in certain markets. >> they're making money. >> division fund has done well, so well they're now talking -- take a look at softbank. >> i would like to see some tape. >> i will gev you tape, too, but mas masa did discuss the possibility of raising -- >> double vision. >> end of march, i think it was.

take a listen. >> there are lots of interest that i am receiving that they would like to invest in our next investments. >> do you think you could do it again? >> of course. >> raise another $100 billion fund >> i wouldn't say what is the size but i'm getting a lot of inbound call that they would like to come into our new investor, into us. >> can you imagine if he succeeds in doing that, jim, the amount of capital that will then be available to all these companies that have yet to go public, that will allow them to continue to lose money for extended periods of time >> you always hear from these entrepreneurs. if they only let me lose some m money so i can dominate like jeff bezos there is only one jeff bezos we should break up amazon. >> amazon, not part of his discussion. >> all we cared about was foreign companies were killing

us suddenly we had these fabulous companies that are really dominant now we have to worry that our own dominant companies are killing us shouldn't we be proud? >> anti-trust law worked pretty darn well in this country for a long time. >> it's not standard oil you can't get gasoline from anybody else break up standard oil. i don't think tr would break up facebook. >> you have no idea what tr would do. >> i've read a lot about it. >> i'm sure you. >> smart fellow. >> do you know i read a book about it >> didn't live too far from here. >> great boxer. >> got shot and kept giving the speech that's tough. >> what can i say? >> that's tough. >> some people are saying on twitter i'm losing it, which i think is funny what i think is amazing is we have uber on the same day as the panama city doctrine the docket rip. >> i have to read those tweets.

>> chinese pay for the tariffs. >> chinese don't pay for the tariffs. >> why do you care about the facts if they get in the way of the story? >> i'll try to stick to them till the end. >> your killing me let's talk disney. it's up again. >> it is >> very little but up 7 cents. >> theme parks were quite strong they say they're on target for realizing the synegries of realizing $8 billion in cost. >> took a shot at netflix. >> took a shot at netflix and cord cutting no longer seems to be a concern. >> isn't that amazing? >> we spoke about how many consumer are falling off, particularly, the direct satellite plt forms but also the cable companies. not all of them are going to their virtual mdpbs.

>> you're using alphabet soup. >> youtube tvs, sony, vue, all of those. >> sony panel over the top, inexpensive, throwing a lot at it anyone with kids will probably get it. >> without a doubt. >> with what >> without a doubt i think that say belief amongst those -- >> those of us who paid for sleepy and whatever. >> all those dvds. $6.99 a month and have access to every single fm in the disney library when you were kids i'm not sure why you wouldn't do that >> should we break up disney every great company we have to break up. >> we need to get chris hughes in here. >> you're as passionate about this as i was about --

>> we have great american companies. we're supposed to break them up? we need great american companies. >> the idea is do they prevent growth in some way that they're too dominant >> myspace, they wrecked it. >> i check my feed. >> anadarko, occi. occidental shares, not the main part of the currency most of it is cash they'll be paying for anadarko with shv ron getting a bounce after the stock had been down the past couple of weeks. mike wirth used the word discipline a number of times that, the returns are not there at a price level they felt comfortable with, given they're

in a commodity business in which you have to assess the risk that the economy doesn't just go up but down as well anadarko, some disappointment that chevron would perhaps come back now we've got a done deal. occidental will be the purchaser of anadarko. >> there are other companies you can buy that are down a great deal the stock has been cut in half the idea that chevron comes in and buys someone chevron is cherry. and i think they're not going to hurt their stock i wish people understand how good they are versus everybody else, honestly. >> happy thursday. opened down 2200

that's about where we are now. i want to show you a new part of our set at the new york stock exchange very excited about this. it has new lighting, a new wall, fancy new gadgets. we'll have a lot of fun showing the markets to you in a new kind of way the thing to think about today, we're seeing the usual people in the downside take a look at the industrials, for example, you can see down. you can see the usual suspects here, tech, apple, intel weak. and, of course, the industrials usual declines here, caterpillar, united technologies as well as 3m. i want to tell about the steel sectors. down another big move today. important thing here, 2 1/2-year low. look at that big drop here again, big story here. their comments for the day, higher raw material costs they're seeing concerns over there with the tariffs higher, lower prices, lower demand from autos.

the problems in europe are not going away trade commentary is exacerbating them these comments and concerns would exist even without some of those trade issues overall here. as for the markets globally, it's been rough. everything in europe is down 1.5% today, china is down 1%, 1.5%, shanghai down 8% a lot of people say aha. you see? china is losing on the whole trade war battle shanghai was up 30% a couple of weeks ago, far outperforming the united states. don't get too smug about this underperformance here in shanghai it is still among the best-performing markets in the world up about 22% for the year. let me switch over here and talk a little bit about the ipo market and what's going on here. everybody is very excited about uber coming because, frankly, the ipo market has been doing spectacular this year. very unusual 40 ipos. that's a lot essentially january and february

it was shut because of the government shutdown. 42 ipos, 22% that's really good that's a lot more than usual typical first day pop, 14 to 15%. overall, the recent ipos, you've seen some of these companies we were astonished look here, 189%. pop zoom, 115. pinterest, 55. levi strauss, which started it out, seems like a long time ago, is even up 32% the one that didn't work is lyft, of course. today, sitting -- yesterday closing at a new low that's up a little bit by the way, the valuation of lift, about $15.1 billion. that's exactly what the last round of funding was for that company here of course, we are waiting for uber what does left tell us about uber you can't just price anything you want this is a cautionary tale for the overall ipo market

everybody out there is saying okay, they're working. if you jack the prices up too much you'll get pushback overall. 44 to 50 there's talk they may price in the middle of the range. we don't know that for sure. what you can be assured of, we'll be standing right here, 50 feet away, right at that post tomorrow throughout the morning and into the open for uber david, back to you. >> okay. hopefully not long into the night. bob, thank you bob pisani rick santelli is at the cme group in chicago good morning, rick. >> good morning, david volatility isn't only in the vix or in the uber nervousness regarding what's going on with the trade talks. it's the markets divining rods did find water now and again but i'm not sure that they're technically significant. same could be said about all the comments we're hearing about how this trade deal is going the market, the machines, people trying to day trade. they're all voicing their opinion.

two day of two years, you could see yesterday how it dipped and when the stock market came back because there was a better tweet it moved back up you see a new dynamic and realize right now we've given a lot of that goodwill back that sold us off. but we're down four basis points across the curve again the real key issue is how much confidence do we have? i get it markets are responsive i think down 27 wouldn't reflect it if the deal was dead, do you think? ten-year and s&p have, over the last week, been joined at the hip, it makes perfect sense. one hand, nervousness. other hand, a little bit of flight to safety the confidence in how much that rally has moved the markets hasn't done really well by the auction. today at 1:00 eastern, the final 84 billion in supply with 40-year bonds. finally look at bunds.

let's look at april of this year, dollar one look at that chart you talk about the dollar screams against the yuan, payin close attention to news and tweets of the day. it strength in the dollar against chinese currency, also the weakness against the other safety trade and that's the yen we're hovering at the lowest levels on the greenback since early february this year jim, david, back to you. >> okay. thank you, rick santelli still to come, former twitter ceo ali rowghani, we'll talk about the ipo, facebook, and a lot more

all right, the s&p taking a leg down you see there. nasdaq as well we hit new lows. 23 minutes into trading. we got stock trading with jim coming up next i consulted with your grandmother's doctor.

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let's get to a quick stock trading. what do you got? >> do you feel the earth move? >> i do. >> that's why tapestry is going up better than expected quarter

very few people thought they could deliver. it was good enough to be able to move up and don't forget, their trade worries everywhere 10% china but, david, the base is so happy. >> whenever you're around. what do you got on "mad money" tonight? >> i spent the day at etsy they would have known he was going to have a revenue number like this. 38% of the business is international. they had currency issues i want you to buy the stock and i want you to buy it aggressively right into this -- the only stock doing well, by the way, is roku. >> yeah. good old roku. lo looking to hearing from silverman on "mad money" tonight. >> you'll like it. pull uber? >> i'll see you here tomorrow. >> yeah. >> don't go changing. >> okay. > ren e llffomg >>mo othse-o cin up

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to collaborating remotely with your teams. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence. welcome back to "squawk on the street." last of the breaking news, this could be important if you're looking for any types of changes or revisions to first quarter gdp. this is a march wholesale trade sales up 2.3%. that is a blowout number multiples, four times what we're looking for, looking for

somewhere up half a percent, up .6. following .3 now, here's an interesting one this is our march final on inventories. in other words, we had a march preliminary number that was zero now that number gets changed to minus .1 it went from 0, now to .4, now back at minus .1 that is our final read the interesting notion of that, of course, is that it is going to actually subtract a little bit from gdp first quarter, released at 3.2. it isn't the only number that is going to be tinkering with it. we have to factor them all in together interest rates, lowest levels of the month, actually they're at the lowest levels in more than a month, going back to the end of may. and i think that really is an end of march -- it really is significant how much we have lost just as equities continue to speed lower

so the relationship is very nervous. don't forget, 30-year bond auction at 1:00 eastern. sara, back to you. >> we just reached new lows of the session here, dow down 319 thank you and good morning welcome back to "squawk on the street." i'm sara eisen with david faber at post nine from the new york stock exchange carl quintanilla has the morning off. take a look at the markets as rick was saying, hitting new lows here on stocks. s&p down another 1.2%. the nasdaq 1.5%. and dow down 321 points, 1.25% the s&p has been down every day this week. and now down more than 3.5% so far for the week >> one reason, of course, is, well, a quote like this, as we get started with our road map, they broke the deal. that's the president, the major averages taking on the chin as he blasted china can a deal get done before the first batch of tariffs goes into effect, 12:01 a.m.

>> uber on the way, expected to price tonight. we have the details. >> chevron bows out with the battle with occidental. >> stocks tumbling, equities fa falling. trade tensions are escalating between the u.s. and china as the chinese delegation is slated to arrive in washington today for the latest round of talks. with us is david rosenberg, and christian mahami does it matter to the markets whether we get a deal this week? >> well, i think for the here and now it certainly does matter we can always have a situation where the talks get extended but, remember, that the market were pricing in, just a week ago, that a deal was going to be in the works for this week so i think what this affects, maybe not so much earnings, because if they raise tariffs, that's going to have an impact, but right now it is the extended uncertainty, going to have an

impact on the market multiple, i think it is the heightened uncertainty, maybe, you know, a week from now we'll get a deal or maybe not but it is the fact that the markets had been pricing in something happening by tomorrow. that hasn't happened we're not getting the deal that quickly. >> it looks less certain by the day, especially after a rally cry from the president like that they broke the deal. it does appear to be it an issue for earnings in the economy as well, david. if we do see those tariff rates go to 25%, who pays for that >> right, right. china will pay and consumers and business in the u.s. will pay. it will be mutually shared pain. i think if we go this route, and do the bean count in terms of u.s. putting on the tariffs, china retaliating, you can probably shave about half a percentage point off u.s. gdp growth, like 1.5 points in china. it trades this through, what it means for earnings it is a 3% hit on s&p earnings, and you got to factor in the multiple that's always the elephant in the room and my sense is that if we end

up getting this situation where there is a trade war, in my opinion it is at least a 10% hit on the stock market and, well, we're about a third of the way through in the past couple of days on that store. >> on that, if we do get to the point where we're 25% on the $200 billion and even perhaps on all of the imports from china, what do you see as you hit economically both here in the u.s., but globally >> i think david's numbers, half a percent probably for the u.s. and 1.5% for china, those are the imf estimates. i don't have any reason to quarrel with that. the real issue for us is let's say we have the 10% market correction that david was alluding what do you do after that? once you have that correction, my point would still be that growth in the u.s. and growth globally is going to be relatively stable. it is not going to be at the same level as it was before, but it would still be relatively stable one other thing that we have to price in in that context what does the fed do when the growth starts slowing down because of

tariffs? the likelihood of a rate cut coming forward and the immediacy of that is it increases meaningfully and that to some extent will support the markets. we went through a lot during the cycle. we have gone through brexit, we have gone through the downgrades and we have come out of it. >> we haven't gone through brexit yet. >> well, we went through the possibility of brexit and i think that every day looks likely the point is we will -- we will come out of it reasonably okay, wouldn't be good, growth will certainly slow down from a longer term global trade perspective, it is not a good outcome by any measure i think after we have the immediate downtrade in the markets, probably for the rest of the year it probably goes up from there, then continues to slide down >> but brexit is nothing compared to a trade war between the two largest economies in the world. >> well, i think brexit is pretty important for the european economy as well not to the same level of significance, however, the fact that we have a tariff today, doesn't preclude the likelihood

of reaching some sort of settlement in not too distant future come back to the motivations the motivations to arrive at a settlement are very acute on all fronts including trump, despite his brave talk, and including china, despite their brave talk. >> that's the best case for it i know you definitely disagree with the fact that you think growth is stable you think we're going in a recession? >> i think we're going in a recession. look, i'm not going to sit here and pinpoint the day, the week or the month it is going to happen it is out there. i think people tend to forget that the cost of the recession or the lags between the monetary policy tightening cycle and the eventual hit on gdp growth, so we're talking about trade right now, but my premise all along is that there is no get out of jail free card after you had a monetary policy tightening cycle like we had when you count in the quantitative tightening and nonfed rate hikes, the fed tightnd 350 basis points this cycle. the only separating where we are today to the recession which will be in the next year, just traditional lags, david, we would be sitting here 2006ing

having the same conversation and say to me, i don't see the recession out there, and i would be saying, focus on the lags, those lags between the fed policy cycle and works both directions, how do we get the recovery in 2010, all the lags that kicked in from all the fed easing, aggressive easing? it works in both directions. either believe in the power of the interstate cycle, take into account that the lags are long, variable and insidious, between 4 and 8 quarters as we focus on trade -- >> i think the difference -- sorry to interrupt, i think the difference this time is you got a powerful tailwind in fiscal stimulus, which did kick in late in the cycle, lower corporate tax rates, deregulation which we continue to hear has been very positive for businesses. at the same time, you already had this bloated fed balance sheet. i get it they have been trimming that down. but it is still very large they have totally pivoted. and the rest of the world is still easing. >> okay. totally pivoted. the fed pivot -- didn't call it a bernanke pivot in 2006

but they pivoted we had recession in '07. greenspan pivoted in 2000. the pivot doesn't mean anything. the impact of the previous tightening is yet to kick into the economy. talk about fiscal stimulus, that's last year's story it is so evident, any economist, no multiplier impact from the fiscal stimulus last year, which actually was a huge mistake and put the fed in a bit of a box in terms of having to raise interest rates more than he otherwise would. you mentioned deregulation come on, that moves the economy by maybe 20 basis points, okay what you don't mention is the other side of the coin, which is this restrictive immigration policy and not just illegal immigration, but look what is happening in terms of each one -- visa entry into the country. i couldn't get a job today at merrill lynch like i had in the last cycle being a canadian working in the united states the biggest constraint on the economy is the lack of skilled labor. immigration policy is more negative for the economy than we have seen on the deregulation side >> christian, last word to you. >> yes, i think the 2006 model

for today is -- i don't think that's valid because 2006 we had the global financial system leverage to the hill when the shock arrived, the global financial system wasn't in a position to withstand that shock. at the end of the day, david would be telling you the same story earlier. 2013, 2015, didn't turn out that way. the fact of the matter is the likelihood that we end up with a recession anytime soon given the growth trends we have and the policy support that we have on a global basis, i think it is probably not very likely. >> hold on, hold on. 2013, the fed was still easing policy 2015, they tightened once who is talking about a monetary policy tightening cycle two years ago. >> the likelihood of the recession, the conversation about the recession were quite evident even then. again, the -- >> not from my writings. >> okay, how long have you been calling for recession? >> i would say that -- really

starting about six months ago, nine months ago. when i saw that the fed -- my estimate of neutral is not where the fed's estimate of neutral is i saw the fed overtightened, that was my flashpoint and that was probably -- sometime in the last six or nine months >> it is a good debate, guys we're out of time. thank you, both, very much david rosenberg, christian momami >> the latest on what is happening for the fight for anadarko it is over chevron bows out and that's the key here. you can see its stock is responding positively to the decision by ceo michael wirth not to try to match or exceed the $76 a share, $59 of which is cash offer which has been deemed superior by anadarko's board that it received from occidental spoke to mr. wirth earlier this morning. and he said to me, simply, listen, i'm in a commodity business, you have to be aware of the ups and downs in that

commodity and you have to model for the risks of lower oil prices this was simply beyond the line at which he felt comfortable going in terms of the potential return parameters from buying anadarko he said we always maintained we would do a deal if it is a good deal clearly he no longer believed paying 76 or perhaps 77, whatever the number would have been to exceed occidental's deal would have been a good deal. and so chevron returns capital, gets a billion dollar break fee, increases share repurchase rate by 25% to $5 billion a year. and lives on to fight another day. i did ask mr. wirth, well, what about buying something else, perhaps permian. he didn't go there he said, listen, i don't need to do a deal and i'm going to continue to be disciplined if something comes along that meets the return parameters we like, as was the anadarko deal at 65, they might move

but they're going to do 300,000 barrel a day in the permian now going up to 900,000 in the next four years without any acquisition in that region anadarko down, perhaps in the hopes -- hopes dim completely on any bidding war here chevron up, occi is down. >> down about 7.5% so far this year i guess the question is going to be whether it will pay off for a company like of course dentccida big risk, a big backer in warren buffett and making a bold play and whether investors will buy in. >> that's going to be the key. we're not going to know the answer for some time the deal itself will not close and you have to move forward from there making it very clear she would not back down, being extraordinarily aggressive in securing that money from warren buffett as sara alluded to, 10 billion at 8% and securing asset sales that will now be in effect once they close the deal, some 8.8 billion.

i think making it very clear to mr. wirth, hey, i'm not going to lose >> and looks like she succeeded in that point. chevron, one of the few energy stocks up today. the uber ipo is coming expected to price tonight, one of the hottest stock deals in years, but expectations have changed a little going in. leslie picker joins us with more what is the latest >> a source tells us that uber is likely to price at the midpoint of the range, or even less than that this is just the latest indication that investor demand has been somewhat muted for this deal but at the bid point, uber would still be valued at $86 billion on a fully diluted basis and final pricing decisions made this afternoon so theoretically things could shift between now and then but regardless of the final ipo price, uber's executive team has another valuation to guide to. that's $120 billion, that's the level that triggers the payout of performance-based options and equity for the management team,

including the ceo. now, according to an analysis by cnbc with executive compensation research fund equallar, he would forgo more than $80 billion if the company does not reach the threshold and sustain it for 90 days before the options expire in five years. that equates to about half of his compensation other executives including cfo nelson chai and barney harford are held by similar standards, but options don't expire until 2028, so longer runway to get to that level the $120 billion valuation represents 40% upside from the midpoint of the range and considering the average ipo returns only 10% in the first five years after their debut this could stack up to be a pretty high hurdle for uber's management team. guys >> all right, leslie picker. thank you. when we come back, disney delivers, but not just at the movies plus, why the co-founder of

facebook is calling for a breakup of the company new tariffs set to go into effect on china. investors waiting to see if the trump administration can strike a deal as soon as this week. "sawonhe quk t street" will be right back 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. ♪ to treat every car like i treat mine. ♪ at adp we're designing a better way to work, so you can achieve what you're working for. ♪

shares of disney are down 17 cents after the company reported earnings that were ahead of analyst estimates. stock is up more than 22% so far

this year, really much of that coming just in the last couple of weeks the company now looking ahead to the launch of its new streaming platform, of course, disney plus, with us to discuss, kate coplavis, follower of all things media. d somehow interestingly, no longer the fear among investors, they have done a good job of taking the conversation elsewhere. >> they have they have pivoted to the future as omar says in his current book of pivot to the future disney is actually executing on compiling vast content from fox, from disney, from marvel, from all of them, they're really looking to how to market that to the future we have been saying for the last couple of years, the whole move is direct to consumer.

so that's what they're betting on they're using their best assets and moving them to the future of what they expect the world to be in three, four years and continuing to go that way. i think people in the stock are really looking at momentum, the momentum that they're creating with the content and the move to -- >> the growth potential a few years out. it doesn't take away from the fact that espn is still a very important property for them. and there are fewer and fewer subscribers as a result of cord c cutting. not all of them go to the virtual mvpds to get espn there. >> absolutely. i've been saying for the last couple of years, you're going to see this momentum flag on espn because not all of cable subscribers are sports fans and when they cut the cord, not all of them are going to sign up for streaming. now, the streaming number at 499 a month for espn plus is $3 under the $7 that espn is getting from cable operators today. so that is under that.

and then as the people disconnect from the cable, or the satellite, and don't have sports, that's also going to affect the revenue stream on advertising. i think you're going to see the price of espn plus rise to 50 to 100% before -- >> very different services, we should point out i talked about this. espn plus is not trying to replace espn right now there may be a day that occurs, but it is not right now. >> they have a long running room for their access, but do they have full access on streaming? that's another question that has to be answered. >> i have a question on expenses clearly they're going to have to spend to get the disney plus and the new content they're working on, correct to consumer division did post a loss of 393 million that was up from a year ago. and clearly they're working on products like the madalorian and new content. do you think investors will give disney the benefit of the doubt

in a way they gave netflix >> i think that if you have your tent poles and they lease ereled their schedule for the next eight years for the big sci-fi movies, and, by the way, when i launched sci-fi network in '92, it was with the "star wars" trilogy. they're doing a similar pattern, the "star wars," the avatar, the science fiction that really drives an audience and you see what avatar did, you know, when they were released and recent releases for them they're using their biggest tent poles to drive their revenue both in their traditional market and on streaming they have already announced that through 2017, 2027, excuse me. so, you know, they're betting big. >> yeah, they are. of course, to your point, they benefited the box office and then people want to watch those movies over and over again and they end up on the -- will end up on the disney plus service,

which sort of helps. >> that will drive interest. the question is, when you sign up for the streaming service, will you go in and out of it or stay with that will you go in when you want to see these big tent pole things but when you look at streaming services like netflix, the preponderance of the viewership is on the library of product and so disney has very, very deep library >> does it put pressure on netflix over time, do you think, from a competitive position? >> of course it does i think that these are really big properties that disney now controls having bought marvel and pixar and all the different companies. and getting all the fox product. it is going to put pressure on netflix. but netflix has really been very smart about their marketing, their database management is superior to just about everybody else out there they really refined it disney is a great marketing company, but they have to learn how to do it still they're going to be -- they're

going to be some fits and starts with this direct to consumer they have laid out what they expect their costs to be for the next five years. a question for the, you know, investor, the consumer, interested in stock, for example, the estimates for the costs which are pretty substantial. >> if you think about winners from the whole streaming war, look at roku today, up 22% in a down market. it reported, you know, blockbuster numbers last night, taking the gains for the last 12 months to 118% is that -- is that who wins from all this the best play? >> i don't think there is one winner i think there are going to be a couple winners there that are going to do extremely well in this market place. i think netflix, i think disney, and roku has been really interesting as a much smaller company, but with really great -- a lot of people through

the in the marketplace so they could be one of the winners too. >> amazing thank you. always appreciate you joining us. >> thank you >> the dow now down well over 360 points "squawk on the street" will be right back only one dow stock is positive got 29 in the red. 'lbeigould be chevron. wel rht back.

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stock declines getting deeper dow down 387 points. s&p down 1.4%. all sectors in the red now technology is the hardest hit. president trump ratcheting up the tensions with china ahead of a meeting that is set to start today. the chinese delegation arriving in washington. trump telling a rally last night they broke the deal andthreate i ing to impose higher tariff rates starting tomorrow. the market throwing a tantrum. one week chart s&p down every day this week and it is now tracking for the

loss of almost 4% on the week. mike santoli is over at the telestrator, taking a look at technology down again this morning. what has been a tough week for that sector. i think the nasdaq is down 4.4% so far for the week. >> has been tough and really tech and placed a couple of different ways as you'll see here is giving back a fair bit of the outperformance that built up over the prior months six-month chart, shows you the communication services sector etf, a lot of what we think of as tech, alphabet, facebook, twitter, and netflix, things like that. a lot of faang in there, tech traditionally speaking has outperformed slightly. but both up 7% in the last six months which takes you back to before the worst of the december drawdown in the overall markets. what you're seeing over the last quarter to date, basically since the beginning of april, is the communications services sector had held up relatively better and that was thanks to the fact that there is not as much china exposure there and semiconductor stocks which are a very big part with apple and software of core

technology have actually been hardest hit in this little bout. so you see communication services up 3.8% for the quarter. tech up 1% still both outperforming the s&p, but this week will be a little bit of a different story. seems like this pullback has broadened and deepened, become a little more inclusive, not just about china exposed companies and stocks, about reducing risk levels and kind of going to the sidelines to some degree with a lot of big tactical investors especially >> mike, thank you for more on this sell-off, ubs director floor operations art cashin joined us on set. art, what is the big fear today in the market? >> well, multiple. first of all from the technical sense, when you broke out and went below tuesday's lows, that was a bad signal for the market. there is some speculation that the vice premier of china is here, but his hands may be slightly tied. that the chinese government may have limited his range of

negotiation and that has the market concerned and keeps us down here. now, there is one other thing you've got to keep in the back of your mind is that the president did notice that on tuesday, when we had the sell-off, there was a decent enough reaction, he seemed to respond to that by a slightly bullish tweet about the dealing. so if we stayed down here minus 400 points or so, i wouldn't be surprised if we saw a little bit of a tweet saying -- >> he's watching the market and the market is watching the tweets >> yes that's pretty much it. so, you know, i mean, it may not happen this time but i think there is a general feeling here, you know, the bears are a little nervous that he's going to come in and say something like, well, they -- the conversations have been cooperative and therefore maybe we can postpone this for a week

or something like that and that would clearly have an impact on the markets. but from the technical side of things, we're in the doing ourselves any good by making lower loans here >> well, your point, mr. lu was not given the title of being a special envoy, maybe what you're talking about, in terms of how much latitude he has to actually give or take >> yes, as we discussed the other day i think what became reasonably evident is we were probably 90% done on a deal, and they went back and rechecked with the chinese leaders and the chinese leadership said, whoa, you know, you can't do that. and since many of these concessions are interrelated, that put a good chunk of the negotiations back up in the air. >> so, art, mike just spelled out some of the carnage right now. it is way beyond names that are exposed to china either through revenues or through imports. is there something larger that the market is saying right now

about the growth risk, especially if those tariffs do go into effect at higher rates on friday? >> you did hear from david rosenberg earlier that this will take numbers out of the gdp. >> half a percent. >> yeah. so it will be larger for china now, there are other aspects of this we haven't discussed. china is the largest holder of u.s. treasuries. yet today we had a ten-year and it was a dismal flop now, china -- from yesterday's auction. is this a sign of things to come these are the kinds of things that the market worries about. >> you can go down to a road that gets you at a bad place, not that we're going there. >> it does kind of compound on itself you have a domino effect there

but we think on the one hand the president needs both sides need to get a deal done >> that's what everybody comes back to. both sides need it, so it is going to happen, right >> but the trouble is neither side wants to look like they gave a concession under fire so we got to get away from the threats and tariffs routine a little bit if we're going to get a deal. >> does that meantime has to go by >> either that or as i said, the president comes out and says he's going to postpone things, feels a little progress here, chinese seem a bit more cooperative than he had first thought. >> let's talk about how this week could shake out what would be satisfying to the markets, just seeing talks progress and continue at this point? is that sort of the best we can hope for >> well, yes i think some sign that things are moving along at all. storming away from the table would be the worst thing that the market could see

so even if you don't get resolution, if you do get some encouraging words from either side, then the market will be partially satisfied. >> we're only, what, 13 1/2 hours away from the tariffs going up or something like that. >> they're going to have dinner tonight. >> if you have a tweet that says we're putting them off -- >> i think probably 30, 40 points, you know if it looks like there is some sort of cooperation. that's how much of a swing i think is built in here. >> yeah, look, we have a countdown clock, art we got rid of it i didn't know we had a countdown clock. >> should be that's when the tariffs are set to hit i find it odd that the premier will be dining with lighthizer, possibly mnuchin and others, tonight, ahead of that deadline at midnight for when the tariff rates are set to increase. by the way, we haven't talked about the fact that china is set to retaliate

they're going to announce tariffs back on us. >> well, you know, it is there but i think what you got to watch is what areas are hit, how large is the trade built in there. so just keep your seat belt tightened and we'll go from there. >> art, thank you as always. "squawk on the street" back right after this with the markets down, as you see, 1.36% on the s&p the unber ipo full coverage, only on cnbc

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right near our lows on the s&p. you see the tech heavy nasdaq is the biggest loser thus far this morning, down 1.7% let's check in on the bond pits or check in with them and get a santelli exchange. rick santelli, take it away. >> thank you, david. i would like to welcome my guest, vincent reinhart. let's get right into it. you know, i've been watching the china trade story, markets always have a higher time handicapping such a topic, so much opaque topics related to those that are proactive in the talks. but i have noticed that the dollar is screaming against the chinese currency were there some institutions or finance structures more surprised in china than we were in the u.s. with this turn that this deal has taken? >> so i think both sides are needy, that's why we think we ultimately get to a deal the issue is which side thinks the other side is needier. and for a while, i think last

week, coming into the beginning of the week this week, china felt a little better about its macro economy. felt a little bit better about finance and its fiscal stimulus and it was probably letting its currency slide a little bit. >> i got you you know, vincent, you write a lot about the fed. i love reading it. this has a strange twist the one excuse we're hearing is because of the way trump and his people were talking about we need to have an ease, they questioned the economy so in a way this all comes back to that kind of weird relationship the president has with the fed want to weigh in on that >> so no -- neither side of a trade negotiation really understands the other side. and it seems like chinese leadership took the president, what they view as unprecedented criticism of the central bank as showing a real sign of concern about the macro economy.

i think the script on our side is the president likes to criticize the federal reserve. he's essentially buying themselve an option. if something goes wrong in the economy, he won't blame his erratic trade negotiating style, he won't blame the uncertainty he's creating. he'll blame jay powell and he's going to continue to lead those markers down as -- because that's his insurance policy. >> i got you we're basically out of time. one quick question at the end of last year, everything looked horrible with the markets. but yet the data that came in for first quarter was solid. could it be the same with this markets are having a hissy fit here, maybe the data here in china, when it comes out for this time, will look better than we think and that will make the markets heal better. is this a possibility, your final thought? >> market views always swing in

a much higher amplitude than the reality. everybody panicked in december going into january about the global economy we're actually doing pretty well everybody has gone back and forth, and very, very wide margin, about their views on bilateral negotiations really supposed to smooth through those if you have a medium to longer term perspective. >> excellent vincent, it is always very enlighteninging into speak wit. wasn't to have y thank you, have a great weekend, sir. back to you. >> all right, rick, thank you. when we come back, losses accelerating, investors, businesses and workers are bracing for new, bigger tariffs that could be cominging e ing i than 14 hours.

unch

. e p chontotenician says we reached the top. more "squawk on the street" coming up.

another day of steep declines on wall street. near session lows. dow down 375 points. we're down 1.4% a moment ago but it is a broad-based sell-off most sectors in the s&p 500 are in the red one dow stock higher, that would be chevron bob pisani joins us on set what stands out to you amid the sea of red >> how difficult this is to game out. you can see this, for example, in the vix we're at 20, essentially the front month vix contracts, the futures contracts are higher than the contracts farther out that means traders are confused. only two weeks left in the front month futures contract and they're saying, we don't know what's going on, we're going to buy protection right now more than we would normally buy couple of months out so that's telling me there is a

little bit of a short-term crisis going on. and who can blame them we got three outcomes, one, you get a trade deal, another is you don't get a trade deal, but they decide not to raise any new tariffs and continue to negotiate. that seems to be the best the market is hoping for, third is you don't get a trade deal, everybody goes home mad. that's not going to be a good outcome for the market this is a little bit of a miscalculation everybody seems to think our economy is strong, the chinese economy is not as strong and because the stock market is down, they're going to be losers i'm not sure about that. if you look at our market, it is pretty bad this week on the key trade names that you're looking at so shanghai is down 8% for the week we're down about 4%. shanghai was up 30% this year. a week and a half ago, two weeks ago. it is far and away the best performer of the year, even with the declines that we have recently been seeing don't think too much look at the big trade names, look at the big industrials we all follow these are the poster boys for the whole thing. rockwell and deere and best buy

and lion dell, big chemical companies, connected with trade related things they're all down 8% on the week. the semis, the other big poster child, it is pretty much the same thing all down 8%. so i'm not sure we're necessarily going to get the better of this game. what i'm saying is they -- i'm not sure both sides are exactly calculating this whole thing properly we're getting hit just as badly as the chinese. >> i think the administration would say short-term pain for long-term gain and we do have a position of strength >> yeah. maybe. but if this goes on, we did this all this week, into 2019 and into 2020, the entire earnings picture is wrong the global growth picture is wrong. and the multiple the market trades on right now is wrong so we have been trading at about 17 times forward multiple, historically that's high you have lower global growth, have to drop the multiple.

pick a number, 15, 15 1/2, where it is historically is normally you're at 2600 art and i have been going back and forth all week on this if you have to deal with ongoing higher tariffs that will reduce global growth, even a quarter of a percent, for example, it is a tough situation. >> that's a lot. >> it is 10 to 15% downside is much greater than the upside right now so supposedly get a trade deal. >> i kept asking everybody, are we not appropriately discounting the risk that this doesn't work out? and it was a risk. clearly we're seeing that now. >> what is the upside? we get a trade deal. what happens we go back to 2900 to 3,000. >> right >> what happens if we don't get a trade deal, they go home angry and the president says it is over, we're going to institute -- we could go to 2600 to 2650. so the -- >> that's based on what, on -- >> you take the multiples down, just the normal, if you start

dropping the earnings estimates dramatically, if you start talking about negative earnings growth for the rest of the year, they're talking flattish for second quarter, 3% or 4% for the third quarter, 7% or 8% for the fourth quarter if you to say forget all that stuff,stuff, it's all flat, definitely 2600 >> i think there's another possibility, which is somewhere in between and if those hikes do go into effect, a, what's that going to mean for the economy and earnings picture and b, how are the chinese going to ret retaliate? is it going to be a tariff nontari nontariff? >> the non tariff is scarier the subtle things that can suddenly happen with individuals, with people, with supply chains. local rulings that can happen. zpl regular laces. >> suddenly somebody shows up and there's some unusual problem in the factory, an irregularity.

the non tariff stuff that can get very, very scary the market has notdiscount ed that yet we're not there. 2600 is not so crazy if you've got full out everybody can't assistant each other >> oh, i hope that doesn't happen >> you would think that cooler heads will prevail >> every person who sits here, of course, it's in both their interests. they're still human beings >> the important thing is a lot of this, too, is about elections and what's going on and it's not just about tariffs the elections here >> president xi though is, you say well he's not elected. he could be in trouble, too. he is not -- >> he needs support. needs to keep the economy humming to some extent >> there were people staring at him carefully and want things to happen a certain way and aren't going to be pi if they don't happen in a certain is way he is not the emperor of anything everybody says oh, he doesn't have to worry about anything he certainly does.

>> he has more leeway. >> a different time frame. >> correct, but he is not invincible and the emperor and they can using very careful political calculations over there acting like -- >> seem to be able to figure anything out they're listening to the president's tweets and thinking he wants rates to go down. >> if that is true, a lot of people are miscalculating people's intentions. if that is true. i thought that was the most interesting thing today. >> thank you we'll have much more when we come back, but first, over to jon fortt for a look at what's next for "squawk alley." >> also, also we're going to have twilio's ceo and we'll be talking about that company's long time close relationship with uber, which is set to price tonight, go public tomorrow in this crazy market and a bunch of other in incdithgslung the growth of the company we just reported earnings. "squawk alley" is coming up.

welcome back stocks are trading near their worst levels of the morning so far with the s&p 500 now pace for its worst day since late

december all s&p sectors traying firmly in negative territory. i want to call your attention to 28.59 on the s&p why? because of the 50-day moving average. technical level some traders are watching we are now below that. we are sew iing weakness in-taek and materials and industrials as the trade concerns start to mount, but one of the other notable groups underperforming not only today, but this year. the health care sector that group in danger of going negative for the year. names like alexian, biogen back downtown, david, to you guys at the stock exchange >> we wiped out the gains yesterday in the final minutes of trade wooechl see if the sell off holds and what happens

during the volatile hour dow's down 400 points right now. s&p down 1.3%. bucking the trend amid the red today is roku. it is surging after reporting blowout results, raising guidance 50% revenue growth. anthony wood is with us today on close iing bell we're going to find out how much they're benefitting from the wars 29 million people now using it average viewing, three and a half hours per day also as uber makes its debut, we'll get the pricing. it's going to be an exciting one. 3:0 p.m. "squawk alle iupy"s next. nasdaq down 1.5% music: [ 'watch me walk' by spencer ludwig ]

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