a toll on investor sentiment and softbanc it's monday, may 13th, 2019. "squawk box" continues right now. ♪ ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. we're watching the u.s. equities at this hour and it is not looking pretty dow future down by 243 points. s&p futures off by 28. the nasdaq off by 103. we did see the markets close up on friday even after some red arrows in the morning. last week was the biggest declines we have seen from the markets in the dow, the s&p 500, the nasdaq all down more than 2%

for the month of may that's the first time we're seen losses for the month of may since 2012 obviously this doesn't bode well for what we've seen later. obviously people still reassessing with what happened with the trade talks last week and what happens next. overnight in asia, the heng seng was closed for buddha's birthday if you look at what else was there, the nikkei was down by 7% shenzhen composite down by just over 1%. in europe where there is some active trading taking place now in the early hours, you're going to see a mixed picture ftse is flat you see pressure coming on all the other major markets. dax is off and cac is off. when it comes to the treasury market here in the united states, you're going to see the ten year looks like it's yielding 2.425% so not even getting close to 2 1/2%. let's talk about the u.s. and china trade talks. president trump showing no signs

of backing down after talks broke off friday with no agreement. yesterday afternoon he tweeted the following. he said, we are right where we want to be with china. remember, they broke the deal with us and tried to renegotiate. we will be taking in tens of billions of dollars of tariffs from china buyers of product can make it themselves in the u.s.a. ideal he writes in perfect ren they cease or buy it from non-tariff countries. we will then spend, in parentheses match or better, the money china will not be spending with our great patriots or farmers. we can distribute food to starving people around the world. white house economic advisor larry kudlow acknowledging over the weekend the u.s. will be paying for tariffs in china. here's what he had to say on fox news on sunday. >> both sides will pay both sides will pay. and, of course --

>> if it's a tariff on goods coming into the country, the chinese aren't paying. >> no, but the chinese will suffer gdp losses and so forth with respect to a diminishing export market and goods that they may need for their own -- >> i understand that the president says china -- it pays the tariffs they may suffer consequences but it's the u.s. and u.s. consumers that pay, correct? >> yes, to some extent i don't disagree with that both sides, both sides will suffer on this. >> kudlow said that he expects trade talks with china continue within the coming weeks. want to get to eunice yoon in beijing right now with more on where things stand at this very moment eunice >> reporter: thanks so much, andrew china's top negotiator agrees with kudlow that the talks will continue the vice premiere spoke to the media immediately after the talks wrapped up in washington and he said that the discussions did not break down but that the

two sides did stalemate over a few issues the chinese state media has been playing up those issues. they couldn't agree on the lifting of all additional tariffs, the amount of chinese purchases and on the text of the trade agreement. he said that the text needs to be balanced and retain dignity for both countries the talk has been that the u.s. wants to see changes to chinese law that would incorporate some of the issues such as i.p. protection that the u.s. wants to see they want it to go through the legislative process which they think is going to be much more forcible we are arguing that a hey level state council here has said they've seen those types of decrees before and they didn't lead to a whole lot of action. china is going to be announcing soon retaliatory tariffs but exactly when that's going to happen is still up in the air.

what's been interesting is that china has been slow to move on the retaliatory tariffs and there's been a lot of speculation that part of the reason why is because the bay ying leadership is trying to gauge what kind of impact those tariffs could have on the economy. but they have also been explaining in the state press these days as to why they're being so slow or muted to the public and they're calling it a tai chi philosophy so in that fiphilosophy it mean you have to maintain a sober mind, that you have utmost rationality and that you focus on endurance during the trade war. guys >> endurance in terms of how this whole thing is playing in the media there, is there any sense or lack of support among the public, i know it's hard to gauge given that people can't speak as freely as they might want to. >> reporter: yeah, no, it is really difficult to say exactly what people are saying except

privately. there is some questioning about president xiening ping's overall strategy because there are some people in the public in conversations i'll have that could make at the end of the day china could suffer quite a bit but in terms of the state media response, it is wall to wall comments that china will be able to handle this, that china will not succumb to pressure. in fact, the foreign ministry reiterated that and said china wouldn't have to actually break in the face of foreign pressure. >> okay. eunice yoon, thank you great to see you appreciate it. for more on the u.s./china trade talks, let's welcome bruce haymon who served as u.s. ambassador to canada he's also the author of "the art of diplomacy strengthening the canada/u.s. relationship in

times of uncertainty." thank you for being here. >> pleasure. >> we're trying to figure out what's happening behind the scenes friday people thought, okay, we didn't make progress necessarily on this front but everyone ended saying basically we were on good terms and these talks woul continue over the weekend there were a lot more questions based on what the president is saying. >> first of all, tariffs are taxes and they tax the people who can least afford it. households, small businesses we saw that from goldman sachs in a report this weekend but it's falling on those that can least afford it. just a couple of weeks ago we saw the federal reserve say that 40% of american households have less than $400 in emergency money but this weekend we saw that the additional tariffs would cost the average household some $500. this is really impactful on america and that's why the markets are having this impact. >> we haven't seen it to date. >> no. it takes a while

this does take a while these tariffs bleed through the system and will result in higher prices over a period of time they just announced it over the weekend. that being said, i think all of us agree the chinese steal intellectual property, they don't give fair access to markets. we need to do something. i'm supportive of the administration doing this. the problem is the approach the administration has taken today has been not to collaborate with our allies but to poke at them like canada early on in their trade agreement so who's sitting at the table with the united states right now in this discussion we would have had a whole tpp set of nations but there's nobody there we're doing this by ourselves now. >> what do you think really happens next because the chinese have not retaliated to this point and that surprised a lot of people larry kudlow himself was saying, look, maybe we'll know something later tonight, meaning yesterday. what do you anticipate the chinese will do in response? >> well, i anticipate the chinese will do things like not necessarily add duties but stop

buying certain goods because they think the pressure is the hardest on the republican party of the administration itself >> in the past not buying -- >> agriculture. >> that's correct. >> clock is ticking towards 2020. >> exactly. >> they know how trump feels about the stock market. >> they do. >> you know, what is it? we're 1% again it's like 1%, water torture, it's not -- >> decline of 1%. >> you know that -- >> water torture may be the appropriate metaphor i mean, the chinese play a much longer game than we do we get up in the morning and we do this. america is so deeply focused on the market movement. >> the longer this goes on for the better chance we have to get the deal that we want? the worse chance did you read the malarian piece? his view is the longer this goes on for the better chance we get -- not get nothing but we

get a cease-fire and it's only brief and there's a continuatio for a long, long time. >> if the costs are being born by the american taxpayer here, the average citizen in these small businesses, but the chinese are still supplying the goods, i don't think they're going to be under as much pressure as people think so i think they can weather a much longer storm. >> a longer storm ends up changing all sorts of situations you have american businesses that are looking for other ways to source their goods. >> yeah. >> they've been doing that for a while. >> they have. >> it's not something you can do overnight and the longer this goes on the more likely you are to see structural change the chinese are looking for other customers. we're seeing suppliers finally there's less. >> china is trying to bring a lot of people into the middle class, too, and i mean a lot of people about 300 million. they've got big debt already they've put in a lot of stimulus

to get to where they are here. i'm wondering if that's not a house of cards there's a tipping poirchlt over there. they're watching this too. >> i think everybody's a loser in this. trade wars are bad tariffs are bad. more regulation is bad and i think the pressure will increase on both sides. >> it's interesting that some of the things that people have said all along, there are certain things that china feels that they're entitled to do that we think and the rest of the world thinks, this is like outrageous and egregious. >> agreed. agreed >> to them this is what we do and we're not changing this for you, at least not to the extent that you want to now we're really seeing that that may be true. >> best outcome would be to have all of our allies at the table and putting that out there and the aluminum tariffs on canada at this stage causes deep pain i know the trudeau conversation with the president last week very specifically said, hey,

we're taking a bullet for you, both in terms of how we're getting attacked by china on our canola, agriculture, life sentences of canadian citizens or death penalty sentences and we're taking it on steel and aluminum and we're looking for a little help here. >> what are the odds the new nafta gets approved by congress here at least? >> so i've been in touch with congressional staff and congressional leaders just this last week. i would tell you that the democrats are looking for a path to yes i am surprised that the administration didn't grab on to what the democrats are saying and say, okay, we're all on the same side. >> they're going to negotiate at this point we were thrilled we could reach any sort of agreement that all three countries to say we're going to approve this. >> i think there are provisions in here that could be amended pretty easily. my conversations with the

canadians, although they don't want to -- >> what about the mexicans >> that may be a little bit more challenging. >> why are the democrats now saying after they've been saying for so long, it seemed to me that everybody in congress was on the same side when the president was threatening to yank nafta everybody was on the same side saying that would be a bad idea. >> right still is. >> still is but now all of a sudden they want to nitpick on the small details. >> i don't think they're that small. enforcement is really important in these details if usdr had collaborated with congress, i think they could have worked this out together, but this is where we are nancy pelosi is in charge of the house. >> nancy pelosi is in charge of the house but what happens if we don't get a deal that goes through? >> i think it will get through it may have to wait until lame duck next zbleer thank you very much great to see you. >> great to see you. shares of uber tracking lower again today. they are threatening 40. lyft, meanwhile, is threatening

50 at this point the company suffered one of the worst debuts for an ipo in recent memory. stock traded down nearly 9% at the lows on friday before closing off almost 8% according to deal logic it was the fifth worst ipo company of at least few years. uber trickling down. lyft, as we said, isn't doing much better. that stock hitting all-time lows i was really ready for a hot ipo. i was excited. it's the first time in five years. uber is -- >> lyft is below 50. >> yeah, below 50. andrew, i'm mad at morgan stanley, i think, or i'm wondering about you want a good ipo, i guess you have to do it at the nasdaq, like us over here are all these unicorns, these

private valuations we throw around, you never had to monetize it. are they just pie in the sky b.s. numbers snnchts yes they lowered so many times, have it trade above -- >> that's the question, does the public investor base know something more drop box effectively when they came public, that was a down round. pinterest technically had a down round in some ways beforehand. the question is whether these ten year -- almost mature companies are shu fundamentally different. also whether the valuations and i was thinking about this over the weekend were effectively propped up by their own investor base. >> yes. >> meaning each time there's a new round they had to say, we went up from here. >> they were propping up themselves. >> yes >> and you had, by the way, public investors, black rock, t row price, others who had

already gotten in the stock a long time ago. these are not new investors. >> that was my question. when you have all of these private -- >> the last one -- but some of them, you know, mr. tusk who we had on, but there's not enough egg to go around i thought they'd at least get a 20% pop. can't you -- i guess i don't also understand, maybe this is an art not a science the ipo market, morgan stanley can't figure this out demand any better where to price this >> when you have all of these private investors that come in or the companies like black rock or others, who do you have left to go to when you are trying to raise $8 billion. >> other ones work >> this is massive >> i want to say that lyft -- what we've seen is lyft and uber have these issues. the others for the most part haven't. >> right. >> i think it's because unlike the others there's nothing to compare these to and the profitability picture, it's so unclear where the light at the end of the tunnel is, right? >> you have to lay this out.

>> facebook, uber -- >> even what they told you, like to say that the loss has peaked but we don't know. >> they should have seen all of the pitfalls that happened with uber. >> but they brought it down, right? here's the art science issue if they had brought it down again -- here's the art science issue. would it have shaken confidence if you had gone to $44 as opposed to $45 on the open, that would have been the lowest end of the rein. >> we're talking about $80 billion valuation down from talk of 120 that was the crazy talk. we all sat at the table when they said $120 billion. >> bringing it in at 70 i thought they could get 90. >> the 120 piece is the -- is in the popular conscience but was never presented to irn vest

horse. this is in the fall of '18 we want to gi our ipo. that leaks immediately different time period for uber at that time their revenue was growing 40 plus percent a year today their revenue is growing 20 plus percent a year half of what it was. maybe 120 makes sense then. >> it wasn't just morgan stanley saying it then he had it built into his contract if he could get capitalization of 120 billion. it was not just morgan stanley. >> this deal is like my ge ops. >> the darr deal is 120 billion. >> within 90 days. >> within three months -- no, for a three-month period within five years. >> from the ipo? >> oh, within five years that sounds very different. >> it has to stay at $120 billion for -- >> for three months? >> or it gets sold for $120 billion. >> that's not nearly as crazy. >> for the equivalent of $80

billion. >> he had given up $160 million when he left expedia to come. >> that was part of -- >> that was part of what happened here. lots move to come. we will talk more about that i've got to go art is up for auction this week we have a full run down of what the pieces are for sale and what we can learn about the health of the high end consumer. everybody lost money on uber so they have to sell their art. check out the prices of bitcoin. a blockchain week in new york city bit cocoin back to $7,000. >> did you read the story in "the new york times" about 90% of the bitcoin is on the unregulated exchange >> you had months and months and months. >> right now as we head into break, a look at the biggest pre-market winners and losers in the dow. -driverless cars... -all ground personnel...

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nearly $2 billion worth of art will be on the auction block this week after uber -- i don't know robert frank joins us with -- are you sure it's not 1 billion when it's all said and done. >> it might end up being 1 billion. it is the biggest test of the year for the global art market 2,000 pieces totaling 1.5 to $2 billion set to be auctioned off this week. the big question as we just mentioned, will the trade war, the market swings and the china slowdow slowdowns scare away the big bidder -- >> and uber. >> that's right. china is the second biggest art market in the world accounting for 29% of global auction sales. last year six of the top 20 works sold by sotheby's went to asian buyers there is a lot riding on china in the art market. most of the top trophies come from estate sales, the estate of sinu house they're selling the top lot of

the week jeff kunz's 1986 rabbit sculpture. he made four of them this is the last in private hands. it's expected to sell between 50 and $70 million at christie's. >> wow. >> that was such a shocker when jeff first exhibited it in 1986. people were thinking he's out of his mind people called it outer worldly, alien, awful, everything so it was a really radical sculpture. >> christie's also selling buffalo 2. that could fetch up to $70 million as well. so sotheby's will sell a monet for over $55 million. >> that i can appreciate >> we're talking about private markets versus public markets? do these guys know something the rest of us don't >> well, obviously art is like

bitcoin, totally unregulated, but these pieces -- the raushenberg sold for $16,000 the rabbit sculpture was bought for $1 million now going up to 70 these special works can appreciate a lot. >> if asian buyers are the biggest buyers, i know in the united states our stock market often tracks what people are willing to pay are they mostly invest the in other markets. >> what's interesting about china is they are building up to 1,000 museums a year in china. there is endless amounts of demand for art they are less present in the new york auction scene than they are in hong kong and london, those auctions, especially with contemporary art they're more interested in this. this monet, that will be a lot of chinese buyers on that.

>> trying to figure out how you get a picture of that rabbit without having the photographer in the reflection. >> you can't. >> it is a very cool piece to see yourself three different times. you see yourself in the head, the stomach -- >> you can't get a shot of that. >> it's only three feet tall. >> it is kind of cool. >> $70 million cool tall >> it looks just like a balloon. that's what's so cool. >> i know. >> and his balloon dogs which became more famous those sold for close to $60 million. how could you -- >> get a shot of it without -- >> we'd be live from there today. in the act of measuring it you can't separate yourself from what's happening. >> separate yourself from the experiment. >> it's deep and it's buddha's birthday >> these are deep thoughts from you today. >> they are deep deep thoughts.

>> deep thoughts yes. >> thank you very much, robert good to see you. folks, when we come back, "the avengers" continues to rack up impressive totals at the box office your box office scorecard is coming up after this the lexus es. every curve, every innovation, every feeling. a product of mastery. lease the 2019 es 350 for $379 a month for 36 months. experience amazing at your lexus dealer. ♪

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well come back, everybody. disney's "avenger end game" is at the top spot. it was a close call. "avenge be gers" took home $61 million. that brings its north american total up to $721 million in just 17 days. but this weekend's take was a significant drop off from last weekend and it was $3 million more than the second place film "detective pikachu." that movie features the voice of brian reynolds as pikachu. "the avenger's" numbers are drooping off because it's in fewer numbers. i saw this yesterday >> that and the coisters.

>> you picked "pikachu." >> you picked for them. >> yeah, i picked for them all you want to do is have fun with your kids >> yeah, i had a lot of fun. >> packing >> yeah. driving to philadelphia in the rain and driving back. >> yeah. >> oh, yeah, fun. >> someone explain the weather isn't it may >> it's supposed to be may showers -- april showers -- it's like this every year it is. >> this cold >> not this -- >> 46 this morning i think. >> you know it's cold. >> it's cold because it's warm it's cold because it's warm. it's warming so it's cold. coming up -- >> coming up, look out below futures point to a big drop on wall street at the opener. trade wind for stocks. as we head to break, here's a look at friday's s&p winners and losers ♪ ♪ ♪

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♪ ♪ welcome back you're watching "squawk box," live from the nasdaq market site in times square. welcome back if you are just waking up, stocks are at a sharp drop in the market here. joining us is liz young, director of market strategy at vny melon and we're going to talk about china in a second i want to start with you, liz. i saw something that hit me this morning. the trumpput and the fed put are both showing signs of fatigue. this could be a heavy period that we're moving into in terms of stock prices. i mean, you can only do so much to keep things hitting new highs. >> right.

>> who can we count on now >> well, the market needed a positive catalyst to continue this bull run to keep going. when we were coming into trade i think everything was priced in that we were going to get a deal everything in the market was looking positive u.s. economic data was looking positive china data was actually looking positive we needed something external earnings helped us a little bit. i think what the market wanted and i look at feds funds futures, they wanted an indication that we were going to see a cut or that we were going to see even more dovishness from the fed and they didn't get that through 2019. >> yeah, i don't think we can look for help at either one of those things at least right now. the china thing can come back quickly, couldn't it >> it could. it did come back last week i will have to acknowledge that the market is not prepared for the deal to fall apart here because if you ask most people they would tell you there's 80% odds that the deal is going to get done mid may that's not the case. that's what worries me

if you look at valuation of assets, they're slightly over valued but then on the other hand i look at positioning and it's certainly not where it was stretched back to 2008 and 2018 levels for that reason the down side could be shallower the other thing i would say is you have to look a little bit beyond the next three months and you have to say what is it in the best interest of the u.s.? what is in the best interest of china? it is getting a deal done. i mentioned to you, joe, we were in klein na last week meeting with clients at various conferences and the take away on that is china is is a rational actor, one that wants to get a trade deal done because it realizes the dependency on u.s. technology is real longer term they want to walk away from that and reduce their dependency, short term they can't afford it. >> i mean, i feel like it's the

logical solution, it's a rational solution. politics come into play and politics are anything but rationale at times if you have both sides thinking, okay, we have to make sure we appeal to our home base, i'm starting to wonder. >> right i do agree that obviously being tough on china has played pretty well politically, but at the same time doing something for farmers i think is going to play even better politically. >> it hasn't hurt yet. people seem to get behind it even just watching the markets now we're starting to wonder how much pain will president trump also be able to take in terms of 2020 coming up. >> right. >> stock markets go higher, he wants gdp number, he wants job numbers. >> i think he's willing to afford a little down side in the markets, 5%, 10% the agriculture component this year is the one that's down while everything else is up.

how does that play -- >> who can take the pain >> that's the leverage question. >> yeah, i think china definitely can china definitely can but if you look at president trump's approval ratings, they tend to track markets pretty closely so that's why i say the near term down side is likely not that great because he will, to your point, joe, have to turn the ship around as we head further and further into the election season. >> meanwhile, the jobs numbers, that's going to -- i don't know whether that's going to continue forever because we're running out of workers, but the base economy right now, you would give it a b plus, a minus? >> i would give it an a minus. the interesting thing to look at, too, the unemployment numbers and the relationship between unemployment and overall cpi or pce seems to be broken. the relationship between unemployment and wage growth is

not broken that's what people are missing in this. some of the expectation that we might see a cut by the end of the year is ignoring the fact that wage growth continues to be pretty healthy now i would rather -- >> meaning we will see some inflation that crepes in >> we might t. would have to bake through that's not part of pce but we would have to see it bake through. if you have a force where it's more money chasing the same amount of goods or fewer goods, that's healthy inflation if it's a force where we have tariffs coming in, that would be a little bit more unhealthy. i don't want to see the fed make a move because of tariffs. i would like to see them make a growth because of this and then forcing the fed's hand to potentially raise rates when the president wants to see them cut rates. >> we saw that come through in first quarter guidance we had companies say our revenue is about steady or slightly growing. we had to pass through some of

our pricing increases to consumers. >> all right liz, thank you anastasia, thank you we'll see. when we return, the true cost of tariffs. we'll tell you about a new report on who's paying the price for the trade war with china later we will talk to a tech ipo researcher who says who is "the biggest loser" on saturday they say we were you're watching "squawk box" right here on cnbc you're watching "squawk box"

welcome back to "squawk box. time for the executive edge. president trump just tweeting about trade literally moments ago. there is no reason for the u.s. consumer to pay the tariffs which take effect on china today, he says this has been proven recently when only 4 points were paid by the u.s., 21 points paid by china because china subsidizes product to such a large degree also, the tariffs can be completely avoided if you buy from a non-tariffed country or you buy the product inside the u.s.a. the best idea, he says

that's zero tariffs. many tariffed countries will be leaving china for vietnam and other such countries in asia that's why china wants to make a deal so badly! there will be nobody left in china to do business with. very bad for china very good for the u.s.a. that they are -- they did not do the jobs >> if you're in china reading these tweets, what are you thinking >> if you're in china, you may not be reading them. >> no, they won't let you, number one. >> yeah. >> but for people to just think that he's just stubborn and isn't doing any thinking behind this, i mean, there's rationale in that, andrew, that you can't see. you can't buy it. >> rationality but only on half of it. the chinese can also start looking for other customers to sell. >> but there's a reason it can be used for leverage

it can be an effective product against china. >> we'll see how it plays out. >> that's fair >> the wto, no other way to do it after all of these years. thank you, sir, may i have another is what we've been doing. >> you have all of europe together an we all went after them. >> yeah, that works well. >> might have. it might have. okay coming up, we have a lot more to tell you about what can we learn from uber's ipo that happened on friday? mpch does it mean for other te coanies considering a debut? we will consider all of it next. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet...

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success today is a stable price, a little bit higher than the pricing, not a lot higher than the pricing, because we want the pricing we want there to be a fair price that the company received. but we're going to be measuring success in three to five to ten years, not in one day. >> that was dara khosrowshahi on "squawk box" friday morning ahead of the rough first day for uber as a publicly traded company. want to bring in leslie picker now to join us with more on uber's debut, which is not much of a debut. >> it debuted. it just was somewhat of a disappointing debut. uber's stock plummeting nearly 8% on day one. by nearly all measures, that was a very disappointing debut the deal was not priced conservatively enough, and it was not priced to pop. while valuation expectations had come down over the last few months, the price still did not match what the market needed and was looking for. but when things did go wrong, the stock wasn't adequately stabilized

morgan stanley had the ability to ensure a smoother debut by supporting the stock, and while they may have used some firepower on friday, it was either too little or at the wrong time to get uber's stock price closer to $45 a share before the close now, i'm told that uber allocated about 15% of the offering to retail investors now, that's slightly higher than other recent tech deals. underwriters tried to minimize that allocation as much as possible as retail investors tend to be more fickle than their institutional investor counterparts and retail investors do tend to sell more into declines, but i'm told that institutional orders were slightly smaller than where they normally would be on a deal of this ilk because so many firms already had exposure to uber preipo, and at least some of those that did obtain al yokes appeared quick to flip them. now the question becomes whether this ipo scuttles other deals in the pipeline or whether the unicorns in the wings are taking notes not to repeat some of that

week's mistakes, guys. >> leslie, stay where you are. thank you for that we want to bring in rhett wallace, ceo of trident research and you sat down in the commercial break and seemed to indicate that this spelled the end of the ipo sort of -- >> parade. >> -- parade. >> well, it could close the window for big money losers like we work, but really, this outcome -- i mean, we said last week, this is not like the other ipos and this outcome is really off of every chart uber as we talked about here, scored out at 6.35, so kind of a "c" student. so getting expelled or suspended was kind of beyond what was called for given the quality of the company so there's something else going on here. >> do you separate uber and lyft from the others? look, we saw zoom, we saw pinterest, we saw these others where there were comps, you could actually measure them against other companies. >> sure. >> this was one of -- these, both of these companies, you just don't know where the light is at the end of the tunnel, right? >> so, this is where the scores

are sort of interesting. i don't know if you guys have this thing, but we went back and looked at them by scoring quintile, and you can sort of see that the top quintile scores like zoom tend to perform really, really well on game day and then do a little better thereafter second quintile companies like pinterest also do pretty well. lyft, bottom quintile, so even underperforming the bottom quintile peers there and uber really underperformed companies that are the same in terms of quality. >> dan what do you know? who is being screamed at over the weekend? >> i think everyone is being screamed at, but the thing you said about the other ipos doing well, which is why i think this week's slack deal -- and i know it's not a traditional ipo, it's a public listing -- but it's incredibly important for whether you want to say for we work or airbnb or others to come because if slack does well on top of zoom, on top of pinterest, spotify from last year, i think this is going to say this is a ride-hail problem,

not a unicorn problem. >> what about we work. if you're talking about losing money in an up market and there are all kinds of questions -- >> when you see the s-1 -- >> but spotify loses money pinterest loses money. slack loses money. >> but not at these levels when you look at what pinterest is doing, you can see a clear path to heading into the black, where uber, you know, may be going the other way. i think also, the difference in disclosure was really significant. if you look at spotify, they give you like the churn rates of their subscribers and stuff. you can actually build a model out of it, something lyft and uber both decided very seriously to go the other way on. >> here's the question i have for you, dan, since you spend a lot of time with venture capitalists. clearly, for the last virtually decade, they've been supporting these prices and very high prices does the public market -- is the public market a clearly more efficient and better valuator of what's going on in terms of the value of these companies in the private market >> whether they're a better one -- they're the ultimate one,

right? doesn't matter the venture capitalists generally ultimately sell to the public markets so whether the public markets are smarter or better, they're ultimately the arbiter but remember, the venture capitalists for the most part have made a lot of money on this it's the public-market investors who dipped into private-market investing that are getting killed here. >> all right, okay rett wallace, thank you. dan crikrimak, thank you. leslie, thank you as well. coming up, latest on potential trade talks as the yuan slumps to a new low for 2019 the live report from washington, where president trump is up and tweeting that's next. introducing the first-of-its-kind

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>> announcer: live from the beating heart of business, new york, this is "squawk box. ♪ nothing is really wrong good morning on this rainy monday morning here in new york city welcome back to "squawk box" right here on cnbc in times square i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures at this hour the president has already been tweeting this morning about the china/u.s. trade talks and where they are headed. right now the dow looks like it would open off about 281 points. nasdaq looking to open down about 114 points s&p 500 looking to open down as well a little -- we'll call it 32 points right now joe. all right, for more on the u.s./china trade talks, we welcome heidi heitkamp, former senator from north dakota and cnbc contributor, and dan, chairman emeritus who served as

senior trade adviser to the trump campaign, chairman of the coalition for a prosperous america. senator, there are farmers in the state you represented, obviously, and there is some pain there, but i think you also in the past have expressed some empathy towards trying to bring china into the real world in terms of ip and theft and things like that. so, what would you do if you were the president right now >> well, the first thing -- joe, as you know, i was a supporter of the trans-pacific partnership. i think backing out of the tpp was a huge mistake we're going into this trade war without allies and i think the quickest way to bring china back into the fold is to engage everyone who realizes in the free world that china is cheating. unfortunately, the president has decided to go it alone, to use tariffs as a lever, as opposed to other kinds of trade

restrictions, and quite frankly, it's not working very well it certainly isn't working for my farmers here in north dakota who are hoping that their soybean market will be re-established we've got a lot of soybeans in the field, going in the field right now, a lot of soybeans still in the bin, and we're at 11-year low for prices and record amounts of storage, and that's just a formula for disaster for farmers and i think the president recognizes that. but the bigger problem to me is what are we going to do about china and how can we actually fix this problem i think we're headed in the wrong direction using only unilateral strength. >> trump didn't do the tpp, but it was a nonstarter in your party as well, so i mean, that -- you know, people love to point to trump and say he didn't do the tpp, but obama couldn't get the tpp through because of the democrats. he had more support in the republican side of the aisle than he did with democrats for the tpp. >> well, the republicans used to

be the party of free trade i guess -- >> no, i understand, but you just can't ascribe all the blame to trump for tpp because it couldn't have gone through because of the democrats. >> except, joe, he had a chance to try and renegotiate instead of just backing out unilaterally, and that's what should have happened. >> dan, what do you suggest we do now, just slash and burn and just stand our ground? >> well, joe, as you know, this has been an issue that i've been championing for a long time. and you know, this is not about cheap t-shirts or cheap tvs. this is about the future of our country, our way of life as a country, we need to be together we cannot at this time in our history allow for short-term thinking or partisan politics to get in the way of standing up to china, which has been allowed to run rampant on the global

trading system and undermine our u.s. economic security and national security for decades. you know i feel very strongly about this the tpp was a failed effort. it never should have gotten to the point that it did. there was no point in renegotiating it we've been talking for 20 years on these issues. we could not bring our so-called economic allies together, one administration after another that's a false mantra. so, trump is doing what he needs to do to get their attention and stop china's economic and national security aggression on this country who do you want to be the leader of the world in the future it certainly isn't china >> a couple new tweets president trump says, "i say openly to president xi and all of my many friends in china that china will be hurt very badly if you don't make a deal because companies will be forced to leave china for other countries. too expensive to buy in china. you had a great deal almost

completed and you backed out." do you think it got close, senator? >> i actually do i think that there was a lot of negotiation that was going on, and i think that they were close to penning this. it got sent back, red-lined. and so, you know, everybody needed to back off i think that the united states needed to back off but that doesn't mean that we should simply say we're going to go it alone and we're only going to use tariffs as a lever. i think that's a really dangerous policy, and i know a lot of people in the trump administration think that tariffs is the single strategy for solving these problems >> it is. >> it hasn't worked so far, and it isn't going to work long term. >> dan >> i would like to disagree with her strongly that it hasn't worked so far. they absolutely have been working. it's brought china to the table. our economy is strong because the president had a four-point plan to lower taxes, to trade reform, regulatory reform,

energy reform. and because of that, gdp is at 3.2% in the first quarter, our trade deficit with china shrunk. it is working. it is working very well, and it's going to continue to work and listen, the chinese did what all of us knew they were going to do because it's their history. they talk, talk, talk, deal, talk, talk, talk, work the deal backwards, undo it, and want to talk some more and delay and delay and delay. it becomes a rinse and repeat event, and it needs to stop. the president's doing the right thing by putting the tariffs in place that should have been put in place back in january, and we'd be a lot further along in getting an agreement with these guys now they know he's going to put them in place and he's serious i think we'll get a deal and i think it will be one that we will be able to live with. but china is the one that's going to be damaged the most by this and we've got to look at the long term. enough's enough. china's cheating, stealing, and

economic aggression are going to end now. >> senator >> well, i couldn't disagree more that the strategy that we're deploying right now is going to have serious and permanent long-term challenges for this country and so, there's a lot of companies out there who will look at the chinese market, realize that about 70% of global population is going to be in the indochina. and if we're not figuring out how to trade and trade fairly with the indochina, in the asian region, we are not going to be successful into the future and so, this go-it-alone strategy isn't going to work we're going to see, i think, china continue to stall this out. and we're going to see farmers and a whole lot of other people hurt in the process. when we could be deploying other methods to curtail chinese domination as they move forward not only here but in the

military it just -- you know, the south china sea, all of this is very problematic. there is no one in this country who disagrees with that. the question is, what are the tactics? and i think the tactics that this administration's deploying, which is tariffs and more tariffs and more tariffs, is not going to be successful in the long run >> dan >> it absolutely will. we've tried everything else. i disagree with the senator. she's rehashing the same old story. the president's going to take care of the farmers. the farmers are out there still supporting him we represent a lot of farmers and ranchers in the coalition for prosperous america we touch the heartbeat of this country. and this country is supportive of the tariffs and the president has no choice. we've talked for two decades and watched ourselves be undermined. we talk about losses and pain. how about the tens of millions of people who have lost their jobs because of china's

aggression how about the fact that thousands of towns and communities throughout this country, including the midwest, have been decimated by china's attacks, by their pushing of fentanyl on our young people and importing -- that's where it all comes from it comes from china. china needs to be stopped. >> no -- >> thank god president trump is in office. >> all right, i'm not going to get any agreement. can we agree uber was a disaster, senator, and dan can we at least -- i mean -- >> well, i watched andrew, and i think he's right you might look at this whole ipo with uber in two weeks and say, man, was that a smart move so, i think you've got to give it time, joe. >> really? okay okay we'll give it some time. >> just like you have to give trump's plan time to work. >> oh, dan, last word. good one >> -- years is a lot of time. >> no, heidi, last word. dan? no, heidi, dan -- >> i'm taking the last word. thanks, guys. >> you got it.

in other headlines this hour, qualcomm has given out stock bonuses to its executives following its multibillion dollar settlement of a longstanding legal dispute with apple. those bonuses include stock worth about $3.5 billion for the ceo. the battle over patents was settled with a payment of at least $4.5 billion from apple to qualcomm qualcomm shares down 1.75% this morning. impossible foods has raised $300 million in a new funding round ahead of a possible initial public offering. that comes following the successful ipo of another meatless burger-maker, beyond meat however, cfo david lee told reuters that impossible foods is not in a hurry to go public, maybe especially after what we saw happen last week, too. and oil field services company weatherford international is filing for chapter 11 bankruptcy protection weatherford had once a market cap of more than $50 billion but has never recovered from that 2014 slump in oil prices and is now worth only a fraction of

that amount. it plans to reduce its debt load by more than $5.8 billion with the chapter 11 filing. the debt load being some of the biggest issues the stock is off 60%, a decline of just 22 cents the stock is trading right now at 15 cents a share. coming up when we return, stocks to watch ahead of the opening bell on wall street, including, we're going to show you boeing check out the futures right now. dow off 293 points nasdaq off 117 points. s&p 500 looking to open down 33 points there's a lot going on this morning. stay tuned you're watching "squawk box" here on cnbc ♪ ♪

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high-profile initial public offering we're going to have much more on that company in just a bit. okay boeing expected to reach some changes in the way that aircraft are certified across the global aviation industry. in an interview with the "financial times," lead independent board member david calhoun defended the role of the ceo, dennis muilenburg, and how he's played all of this in the crisis and provoked, of course, by two crashes of its 737 max aircraft boeing and regulators are working on a fix to the flight control system that played a role in both crashes mr. calhoun defended muilenbu muilenburg's decision not to ground the jets after most global regulators have done so, saying "i think our leader has done a really good job in keeping the company focused on delivering a fix to our part of the issue and also to begin planning for long-term changes which i think are going to be quite far-reaching and not just for boeing but for the industry at large." i have to say, i didn't totally understand what he's talking about, his part, or our part in

all of this. they're the only part in this issue, unless he's trying to suggest the faa has another part in this issue -- >> or suggesting the pilots, pilot error. >> his comments come as signs of a deepening rift emerge between the u.s. and european regulators over who should be in charge of ensuring the safety of the max before it returns to the global skies. later this week there will be a hearing on capitol hill ahead of a critical faa meeting with other global regulators, which boeing hopes will lay out a path to allow the max to return to the sky. and of course, questions about whether the faa was too close to boeing to begin with as well so, i don't know i'm so troubled. i feel troubled by all of this. >> i think there's going to be much more to come. the investigations are going to go on for a very long and extended period of time. >> but who should be in charge of this? do you trust the faa do you trust the european regulators the european regulators were the ones who were more out front than anybody else, right and everyone jumped on them for jumping too quickly -- >> problem is i'm not sure any

of the regulators have the engineers it would require to sign off of any of these things, so i don't know. >> it's hard to know. when we come back, the markets reacting this morning to the possibility of retaliation by china against higher tariffs. we're going to run you through what you need to watch this week and what could help lift sentiment. that's next. the dow is down over 300 points right now in the futures market. also later, uber stalls out after going public we spoke to ceo dara khosrowshahi about the company's future and self-driving vehicles his comments and what it means for the auto industry is straight ahead uber below $40 at $39.85 that's down another 4%

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so plants... can be a little more... like plants. ♪ the s&p 500 coming off its worst week of 2019 you joining us is the ceo of oppenheimer funds along with our own mike santoli, cnbc markets commentator. krishna, last week we ended higher for the end of the week, but i know it was still the worst peys we've seen for 2019 on a weekly basis. is that something that worries you or is that just a signal that we've had a huge run since this year started? >> i mean, it has to worry you

the trade tariff issues are real and they have a direct impact on the economy. you know, if you think about it, the impact on the economy is roughly, let's say $100 billion of financial consolidation, so half a percentage point in growth we are coming off of a decent growth picture, so the economy can withstand that shot, but at the end of the day, the impact is going to be meaningful and significant. having said that, the question as investors we have to ask ourselves is, let's say equities get derated and we go down another five percentage points what do you do after that? and i think the answer to that is, well, the global economy's still decent and even with this shock, we will probably grow at a decent clip policy support will probably intensify more, both here in the u.s. with potential fed rate cut, and in china, for sure, with added fiscal stimulus and i think that probably does enough of a job to support the economy. it doesn't mean -- >> if we go down another 5%, you

would say to buy you would say don't buy right now because you're worried about things, but if we drop 5%, you would buy on that dip? >> yes i think the trend for the markets overall, from a long-term perspective, is still up the two things in the last ten years that have mattered the most is the fed support of the u.s. economy and the chinese support of the chinese economy through stimulus both of those things stand so, the right model for dealing with the trade deal is the way we have dealt with -- or the way europe has dealt with brexit, which is, it's a gift that keeps on giving and is probably going to be the case for a reasonable amount of time underneath that, though, we will have continued policy support and probably the economy continues to grow. so, rerating, perhaps rerating takes place and then we go up from there. >> mike, i have to say, if you really thought the trade deals were collapsing last week, i don't think the market really panicked at all. i think that probably most people are betting that you're still going to see some sort of -- >> no, the market didn't panic

the market entered last week in a position of almost looking for something to upset this happy scenario, right? i mean, you basically had this embrace of very good u.s. economy, better than expected and the idea that trade was going to get done. i think whenever you get whether it's this addition of trade frictions or back last quarter, the fed seems like maybe it's getting a little too tight for where we are in the cycle, is it brings this conversation back to how much longer do we have in this expansion what's the market telling us about that now we're back to looking at a very flat yield curve again. we're back in kind of the same treadmill, i think, and it doesn't mean we're going to get the wrong answer on that, but the market has to -- i think it's shaken out a little bit every year but two in the history of the market, you've had at least a 5% pullback from a high we haven't had a 5% pullback from a high yet. and i do think you had this little bit of unleashing of volatility because of the trade issue. i think only in retrospect are we going to know if this was fully about trade. >> we had earnings that came in that impressed everyone, and that was part of the reason that

we really saw the momentum continue what happens between now and the next earnings season >> and yet, second-quarter earnings forecast continue to go down so, i think, basically, very good results relative to very depressed expectations in the first quarter. and i think that one of the issues that arises when you have this re-escalation of the trade issue is no analysts have an excuse to start taking up numbers, because i think that's what would happen. if you got a trade deal, first thing, all of the firms say we're raising estimates for industrial earnings. >> from a longer-term perspective, there is no issue this is not a good situation however, i think -- >> what's not a good situation >> the trades, the trade wars and tariffs is not -- it's not something that helps the global economy. having said that, i think the market perception is still very much that we will reach some sort of a trade deal it won't be what anybody wants, but we will still reach some sort of a deal until that gets fully pressed out, this is something that we'll be living with.

>> all of the concern about trades and tariffs before, we didn't really see it impact the economy here. >> so, again, if it was a true trade war and we were restricting imports, that's very different than imposing tariffs. tariffs we can quantify what the impact is. half a percentage point for the u.s. economy if we were going to grow at 2% and change, then we grow sub-2 right now. but that's not the end of the world either. >> can i ask both of you about uber do you have a take on uber >> well, so, i think focusing on uber from a near-term trading perspective is kind of missing the picture. >> okay. >> uber is really about a long-term growth story and i think the long-term growth story will play out over the next two, three, five years. wasting time on how the ipo worked out and how the allocation process worked out i don't think is really helping the -- >> but as people look at that stock now fall below $40 this morning, there are some people who will either want to trade it -- either they're going to want to sell or they're going to want to buy. there's going to be a question in the marketplace now about

whether all these private market investors know what they're talking about and whether this has been some kind of decade-long charade in silicon valley about how much these companies are really worth, whether public investors actually know better i mean, i think there's some larger things at play and whether -- or is this all part of this china story and the market's just going to hell in a handbag? >> well, i think uber is a combination of both. in a negative market environment, expecting uber to do very well, i think that's unrealistic. i think uber investors belong in two camps. it's like tesla investors. either you believe or you don't believe. and if you don't believe, you're not buying it. doesn't really matter what the ipo has done and if you believe, if you believe that it's a long-term story and it will play out, i think you're still a buyer. >> there's a chance that it has a little bit of a feedback loop, though, both reflects tough market conditions, and the fact that uber did not trade well also feeds the sour market perception out there i think it was just too familiar, too widely owned already as a private company, and it is a reality check, at

least on the ride-hailing business i don't think for silicon valley in general necessarily >> okay. >> gentlemen, thank you both good to see you. coming up, will the rise in autonomous vehicles disrupt the auto industry with new competitors and transportation options? we're going to debate how uber and lyft have been preparing for such a transition and whether or not it's a cash-burner. and as we head to break, look at u.s. equity futures, almost 300 points on the dow side for the dow 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

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♪ on a rainy monday still to come on "squawk box" this morning, we're watching the futures right now the dow is implied down by about 300 points this comes as there are more concerns about what happens with the china trade talks next we know what happened last week, but what's the next step s&p 500 indicated down by about 33 points. the nasdaq off by 116. but of course, some of the big declines we've seen in the futures, at least over the last week or so, have not always played out at the closing bell we'll see what happens a little later. also later on "squawk box," more on uber's debut and its goals on autonomy. and coming up at the top of the

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we are on top of the markets this morning, obviously, in what appears -- what is a big drop at the open and the futures down 300 points, as you can see and then we are talking about uber a lot but there is one other big story that we're following that is uber, which is now below $40 a share. we're going to take a quick break from the markets, though, and speak to a special guest because if we can, we want to talk to him. obviously, if bubba's available, we're going to talk to him pro golfer bubba watson is in hartford, connecticut, where the travelers championship will be held next month. but closer than that, of course, you should eat up, bubba, with your -- i think it, like, one of the most brilliant marketing moves in history because suddenly i'm really excited about the pga. >> yeah, for sure. when you think about tiger woods winning, though, that brings us

to a whole new level, and winning the masters and then not going to the next major, it's pretty special. >> and he's won at bethpage before i think he won a u.s. open there. we don't want to talk all about tiger. >> yeah, he pretty much won -- right, exactly he's won pretty much everywhere. so you know. but no, coming up to new york, what a treat the fans come out. the golf course is hard as you want and as long as you want so it will be a good test. any time you come up here to the northeast, it's pretty special >> you probably watched in horror at the end of last year as tiger, it became clear that that back was okay and that mentally he was where he was, too. so can you feel the difference out there, bubba i mean, there were a few years where you might have been worried about jordan spieth or any of the, brooks koepka or any of these new guys, but tiger's back on the radar screen and you

hear the tiger roars again it's great for golf. i'm not sure it's great for all of you other guys that want to win majors, though. >> no, i think it's -- brooks koepka's the one doing all the damage right now he's the one winning all the time but you know, it goes in cycles, but having him back, it pushes the game of golf i mean, there's more people hitting golf balls the monday after the masters than we've ever seen in our lives i own a driving range down in pensacola, so we saw it. we saw what the masters does and what tiger woods does to the game of golf it's pretty remarkable and young guys like jordan spieth want to see him. they want to see him at his best and they want to challenge themselves to see if they can stack up to it obviously, he's a little older now, but i mean, in his prime, yeah, everybody was scared so, it's a treat to be able to watch him in his heyday and try to win again. >> and golfers that, you know, golfers that grew up watching him are now competing with him and you know, golf is different than some other sports

i mean, what's tiger, 43, bubba? he could go -- he could be in his prime for another, i mean, look at brady. i mean, tiger could be there another five years, don't you think? maybe even more, all the way into his early 50s, i would think. >> oh, for sure. phil mickelson won at 48 this year so, yeah, so tiger's got a lot more as long as his body holds up, as long as he keeps doing what he's doing. and he has the drive and i think he does have the drive. it shows that. and so, yeah, he can go for many years, especially with advances in technology, you know, the surgery and stuff that's helped him be able to play again. >> so, how are you -- how's your game exactly right now what are you working on? and what are your chances this week, do you think >> it comes down to the driver, you know, the driver and then making a couple putts. if you hit the driver, hit the fairways, you have a shot. in these championships like this, the rough is usually up, the golf course is obviously really tough and really long, so it's about hitting the fairways

and then just trying to make the putts inside ten feet. so, that's my whole goal is just try to hit fairways and then go from there. >> are you going to play with one of them yellow balls still, bubba? >> oh, yeah. timeless makes a yellow ball and that's what i play now, so it's perfect. >> i see that thing. you find it more, you think, in the rough? is it easier >> yeah. >> yeah? >> it's easier to find it in the trees, yeah. >> who are you most -- give me three more guys that you think are in the best position to win this week. brooks, i guess. you can never count him out. he almost won again yesterday, a few strokes off. but who else >> yeah, i'd have to say dustin johnson. gosh, i'd have to say jon rahm and then, obviously, brooks. just because i'm looking at bigger hitters just because they hit their drivers really well and they have the length >> i can't believe that you really never took lessons. i watch the way you do that and your hands i mean, with me, i'm so

mechanical because such horrible things happen if i'm not, like, doing the same thing over and over again and you don't think about it at all, do you? you just, i'm going to hit it there and then you just do it. so bizarre to watch you. but we're big fans and -- >> yeah. >> we're a financial channel i've probably already taken too much time. people are probably at home going, what the hell is going on but we have a chance to talk to you, bubba, we're always going to be doing that we appreciate having you and we'll be watching this week and good luck. >> thanks very much. >> you're welcome. are you okay with that, andrew >> absolutely. >> it's a three-hour show, right? >> i want to know more about his -- >> the financial -- >> the yellow ball >> no, about his own golf business. >> are you still there, bubba. >> we lost him anyway -- >> he's already gone. >> i thought that was fascinating, because he owns a golf range he sees -- >> they've got tentacles everywhere. >> he knows what's going on in the business. >> yeah, he does. >> i like that. >> do you think he could have a better ipo than -- ♪ >> i don't know. he can send us his s-1

we can take a look. >> he may have learned something. >> is it profitable? i don't know. >> he may have learned something from what happened here. >> my guess is it's profitable. >> can only hope. when we come back, uber and lyft's self-driving dream, both companies spending millions as they prepare for a transition to autonomous taxis, but will it ever happen? we'll talk about that after the break. and at the top of the hour, minneapolis fed president neel kashkari is our special guest. meantime, check out the futures this hour. dow futures indicated down by 280 points s&p futures off by 32. the nasdaq down by 113 ♪ ♪

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use a lot, just switch to unlimited. get $250 back when you buy a new samsung galaxy. call, visit or click today. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. u.s. equity futures at this hour are indicated down dow futures down by about 290 points once again on concerns about what happens next with the china trade talks. the negotiations ended last week china has said that the next round of negotiations will take place in beijing that's the good news, that there will be a next talk. the bad news is we don't know when and a lot of tweets coming out from the president, both this weekend and this morning, suggesting that there's no agreement in sight and that this is still a pretty hotly contested series of trade talks. s&p futures are down by 33 the nasdaq is off by 117 if you watch what happened overnight in asia, you'll see that stocks in china were under pressure

the shanghai composite closed down by 1.2% the shenzhen composite was down just over 1% and in japan, stocks were off by about 0.7% in europe this morning, red arrows through most of those markets. in fact, through all of those markets at this point. the ftse is basically flat it's been slightly higher a little bit earlier this morning. but the cac is off by 0.5% and the dax is off by 0.75%. you also see losses in italy and in spain in the treasury market here in the united states, the yield is well below 2.5%, 2.428% for the ten-year. and the price of bitcoin rallied over the weekend, now topping $7,000, andrew >> yep. >> oh, man. >> i know. i missed it. i missed it. >> you said under $5,000, then -- >> i have no discipline. i have no discipline. >> then it went under $4,000 and you still, well, maybe it will go -- what was your thinking when it was under $4,000 for like six months? >> you know, i don't know. >> you've got no excuse. >> no excuses, none. >> okay. are we allowed to buy? >> i don't know. i don't know

i always thought it would be a good idea just to have one or two -- my view was one bitcoin per child, hold it for 20 years and see what happens it was like a lottery ticket. >> too late now. >> but i never did it. >> the price rise coincides with the beginning of the biggest events on the crypto calendar. blockchain weekend and coindesk consensus 2019. when the bug gets added back to "fast money" is i think when you really know it's time, when it's a permanent or -- >> when we're watching that more often than the ticker? >> in the past years, it's been big price spikes leading up to those events. >> yep, and then it's dropped, though, after, too i remember last year they thought -- anyway, we'll see. okay, let's talk about the other thing that's been dropping like a stone uber shares dropping below $40 a share this morning, this after the lackluster debut on wall street that took place on friday i spoke to uber ceo dara khosrowshahi last week about what he calls the car bundle >> the car's this ultimate

transportation bundle. you use it to go get grocery, take your kids to school, et cetera and we and our competition are slowly debundling what i call the car bundle as the bundle has been broken up, we think the car bundle is going to be broken up, and we view ourselves just like netflix has been kind of carrying this secular tailwind of the bundle slowly falling apart, we are going to be riding this secular tailwind of transportation on-demand services, and there's going to be plenty of winners in this space. >> let's talk more about the threat to the auto industry from the rise of the likes of uber, lyft, and autonomous technology, or is it a threat at all these days joining us right now is editor paul ingrassia and former gm vice chairman bob lutz, ceo of vlf automotive and, of course, a cnbc contributor good morning to both of you gentlemen. we're looking at the stock of uber continue to fall. i'm curious before we even get into a conversation about

autonomy, which, of course, either poses a great opportunity or threat to the future of uber, whether you actually think that uber and its ilk are good investments? bob or paul, did either of you guys buy into uber >> starting with me, i guess -- >> well, not me. >> yes, i do i think the way uber is organized, their software package, how they let you know where they are and when they'll be there, the way the vehicles are placed, it's basically operating like an autonomous robotaxi fleet, except there's still drivers. and people who use uber are extremely pleased with it. i think the future is bright and they will be among the very first large robotaxi fleet owners and i wouldn't look at the current stock performance at all. it's just a blip long term, i think the

autonomous fleets are going to take over a major portion of transportation in the u.s. >> so, paul, are you in agreement with that? do you believe that ten years from now, there will be a true sea change in how -- in mobility i mean, that is the central thesis underlying, effectively, what uber looks like, but also -- when we get into it, i know bob doesn't like tesla, but all of these companies to some degree >> well, absolutely. there's a revolution under way now in propulsion, in autonomy, and in community, which is ride-hailing and i think these things will actually come to pass. but in the meantime, from an investment standpoint, i agree with bob, you shouldn't necessarily look at the uber stock price right now, but as an investor or prospective investor, i'd want to know, how do you square the circle between retaining riders and cutting these massive losses and they really don't have an explanation for that right now except, well, gee, we're going to wait for autonomy

well, that's going to take a decade, you know, to pan out so, what is the solution to this in the near term for investors i don't see it >> are you a believer, by the way, in terms of autonomy, that the waymos, obviously, google, which owns waymo, and some of these others are clearly going to be the winners? or is it possible, since it sounds like we're now ten years away, even though i know elon musk says he's a year away but if we're ten years away, isn't it very possible that others emerge out of nowhere bob? >> well, yeah, sure. first of all, i can't believe that anybody still believes elon musk and his autonomous technology is significantly behind waymo, general motors, and others but -- >> so you don't believe him? >> no. because i think we've all been disappointed numerous times with claims of wait until next year, wait until next year, and,

frankly, next year never comes tomorr for tesla. by the way, i love tesla i love the cars. i think elon's a good guy, i just think the business is lousy. having said that, yes, it's possible that others will emerge but the essential thing to remember is, whether it's 10 years, 15 years, maybe 20 years, the big winners in the future are going to be the owners of the large autonomous transportation fleets. the automotive manufacturers, when that time comes -- and as i say, it could be 25 or 30 years away -- but i think paul and i agree, it is definitely coming to where the vehicles, the autonomous vehicles will all be owned by the big transportation fleets, and the car companies will be mass providers -- you know, orders of 200,000, 250,000 at a time. >> right. >> to the transportation fleets. that makes it a lot like the

cell phone business, where the manufacturers aren't capturing much of the value, and value is captured in the provision of services. >> bob, let me ask you this, and paul, weigh in on this as well, though -- is it not possible that you see all of the car manufacturers start their own fleets, right? that's -- >> well, sure. >> -- that's one possibility the other possibility, and it's something that dara's talked about at uber, is that effectively, you know, an uber runs the system, if you will, and then there are the car manufacturers, and in between are almost like reit-like structures, essentially investment-like structures that make it capital light, effectively, for an uber, that effectively own the fleets is that a possibility in terms of how you see this all play itself out >> i think -- >> all of this is possible, honestly i mean, the truth is, none of us really know right now. >> right. >> the one thing we do know is

that this disruption is already happening. for example, a decade ago, if you were a resident of los angeles, you would have no choice, really, but to be a two-car family, right? at least two cars. now i know people in l.a. who get by with one car just fine. they use one car and the other, the spouse uses an uber for his or her needs during the day, et cetera, et cetera. so, this is already starting to happen in an incremental basis, and it's going to unfold but really, the question is just how fast and again, uber and lyft need to figure out how to retain drivers and reduce losses or give the investment community some indication that they know how to do that. >> right. >> could you see a car manufacturer buying one of them? >> well, general motors owns a good percentage of lyft. >> right. >> and you know, your question -- one of the reasons why general motors is abandoning unprofitable businesses is they're building an enormous cash hoard because they know it's going to take a monumental

amount of cash to own a fleet of hundreds of thousands or millions of cars it's normally, you know, they sell them and cash comes in. if you have your own fleet, the cash comes in gradually as people make use of the service so, yeah, general motors and others do plan to be a player. whether gm is going to be a player through lyft or whether it will be their percentage of lyft plus a wholly owned gm subsidiary but yeah, people are going to try that but the essential thing to know is the value of transportation, the monetary value will be captured by the fleets and no longer in the sale of the automobile to individual customers. >> bob, you do realize the irony in saying that gm is getting rid of its unprofitable businesses and then buying up a big stake in another unprofitable business >> well, but that's all -- general motors is getting rid of

conventional unprofitable businesses that have proven to be unprofitable for decades, like europe, and they're investing, they're making a long-term investment in what they see as the transportation future, which is the on-demand fleets so, i think it's a smart move. and besides, if you want to look at how can anybody invest in uber, they're not profitable, well, how about amazon how long did it take them? >> amazon lost $6 million before its ipo. uber lost $8 billion. >> okay. but the point is, a lot of times these high-tech start-ups lose a lot of money initially, and if you want to once again point at tesla, the profitability record hasn't been stellar either, even though it's not a high-tech company. it's just an automobile company that uses batteries. >> all right hey, lutz, i always ask you -- i can't help myself because you've got some secret. are you a vegan? what is it, red wine what is it

what is it, dinko prev jen crap? what do you do -- tell me the one thing you do to be who you are at 87 years old like this, because i thought you were like 72 >> i tell you, i think i, genetical genetically, i picked my parents very carefully. >> that's the problem. you've got nothing else, honestly do you have a cocktail once in a while? i see pictures of you smoking cigars >> well, cigars are vegetarian and martinis are made out of vegetables >> god almighty. all right. i hope you don't mind me asking. but can't we learn and do you have a monitor? can you see? >> yeah, i've got a monitor. i think bob is a paleo vegan, by the way. >> i think he is why share everything, you know >> thank you that's real news you can use, right? >> did you -- i mean -- i asked becky -- right 75, 74 -- >> yeah. then you had to keep saying higher >> higher, higher, higher. >> what? oh. >> didn't really tell us

anything, did he anyway, coming up, minneapolis fed president neel kashkari joining us then, redpoint ventures geoffrey interested to hear what geoff says about uber. "squawk box" coming right back a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see. learn what a cfa charterholdr can do for you at therightquestion.org

trade standoff futures deep in the red as the u.s. and china circle each other. can they salvage a deal? president trump issuing a new threat on twitter this morning another chance for uber. after stumbling out of the gate in its stock market debut, the ride hailing giant faces its first full day of trading today. >> and is facebook too big for itself last week's call to break up the company getting pushback we'll hear from one prominent skeptic, the company's former privacy officer, as 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 i'm joe kernen along with becky

quick and andrew ross sorkin the futures right now are indicated down more than 300 points, 320 points at this point. nasdaq taking it hard this morning, down 140. and the s&p down 38. and as you might imagine, treasury yields are lower on the ten-year i saw it getting close to 2.40%. uber was at $38 for a minute, $38 and change, that at -- >> priced at $45. >> it's questioned, is the market hurting uber or is uber hurting the market or are they hurting each other >> it's hard to understand what's going on. you're looking at shares down to $39.20 stock breaking below that $40 level just a short time ago and actually going below $39 a share in the past couple of minutes. it's now come back marginally, but $6 down from the ipo price and a lot of question marks about the pricing of it, private

investors. was it the bankers and the underwriters >> although on friday, the markets overall managed to end higher, even after concerns about the china trade talks. uber did not, so -- >> so that was the other question, did they just walk into a terrible day? was it really unrelated to the day? and what kind of indications were they getting from investors that final week in terms of what prices they were willing to pay, how long they were willing to hold, you know i felt, and i thought that nelson, who is the cfo, and dara felt relatively confident walking in that morning that they thought they had long-term shareholders that were going to be in this so, clearly somebody was selling. 15% was allocated to retail. that's typically more than is traditionally aloetlocated. maybe they're the ones selling. >> but if you got it at $45, why turn around and sell it at $42 or $44 -- >> because you got it at $2. and this is bad for people that -- i say -- i can lose 10%. i can do that, you know, easily. i can just pick a stock, lose 10% -- >> i thought the people who got it at $2 --

>> i don't need help getting into a hot ipo to lose 10% -- >> i thought they were locked up i thought those people would be locked up at least for a little while. >> but this is going to leave a bad taste in people's mouth. that's wealth destruction. that money has gone to money heaven. >> we'll see whether it's gone to money heaven -- >> right now it has, and for anyone who sold. if you bought at $45 and it's at $39, your money went to money heaven, and you have less. >> unless you're -- yes. you could buy now for less. >> if you got it on the ipo. >> right the question with all of these things -- we're looking at alibaba was down below the ipo price. a year later facebook obviously had its own travails -- >> the difference is facebook and alibaba traded higher on its first tick. >> so did lyft. >> that's why people wonder, what does this mean, if your first tick was lower and now here you are -- >> but you do sort of think, the underwriters -- >> you have to have a long-term game plan -- >> you think the underwriters have this under control. they're talking to people. you've got supply and demand.

>> they should know. they should know. >> right. >> and clearly they didn't. >> it was a huge allocation they raised >> where are we right now? what's it down what is that from $45? >> that's what the company got. >> no, down to -- so it's down $6, is that 12%, 13% >> oh, so far. >> how much -- >> then you can do the paper loss that we got, if it's not just paper, yeah. >> from $45 to $39 >> yeah, 6 on 45 -- i want to get my calculator. all right, president trump weighing in with a fresh trade threat this morning, saying on twitter that china will be very hurt very badly if it doesn't make a trade deal and calling out the country's president for backing out of an agreement that trump said was almost finished so, what would a renewed u.s./china trade war mean for the global and u.s. economy, and how will the fed and other central banks respond? senior economics reporter steve liesman joins us with more on that front hey, steve. >> good morning, becky wall street economists spent the weekend gaming out the impact of

the renewed trade dispute, mostly reduced their outlook for u.s. and global growth and increased their outlook for central bank easing. the problem? gauging these impacts is hard enough they also have the problem of putting probabilities on the outcome of political talks, how long it all lasts, how do markets respond, and how the effects of all this on business confidence and capital spending. jpmorgan writing that "trade war could hold global capex growth to zero this year and damp china gdp by 0.8%. conflict escalation also would amplify easing bias across the globe. that means central banks goldman sachs sees a worst-case scenario, risk to the u.s. growth of 0.4 of a point and more if equities take a big hit. its report sites recent studies finding u.s. businesses and consumers pay almost all of the price of increased tariffs all of this leads morgan stanley to forecast serious fed easing, if the trade battle lasts three to four months longer. morgan economists see more chinese stimulus and 50 basis points of cuts from the fed because of these tariffs. >> wow

50 basis points? >> as a starter. as a starter and it's interesting, becky, that while you are raising prices -- and this is something i think we have a special guest coming up on -- >> right. >> almost all of the forecast impact is deflationary. >> right. >> it's lower growth, it's ultimately lower prices, lower confidence there is no -- i could give you one economic reason for that tariffs end up being a one-time rise in the price level. so, let's say you slap -- slap -- there's that word again. >> you slap it. >> slap a 25% tariff on. prices go up 25% the one time. the next time they don't go up unless you change inflationary expectations and create an inflationary cycle, but it's a one-time rise to the price level, and that could ultimately, because you've raised prices, cause incomes to decline and other aggregate, growth to decline as well, aggregate demand as well. >> let's bring in another voice on this. >> more important voice. >> joining us is minneapolis fed president neel kashkari.

neel, what do you think, just in terms of what happens with tariffs, with the trade war? what would that lead you to think the fed should be doing? >> well, good morning, becky i think it's far too soon to know so far, there's been a lot of bluster on both sides about trade over the past couple years. we haven't seen much evidence that it's showing up in the aggregate economic statistics. i think most investors, and i'm certainly in the camp, where both china and the u.s. have far more to lose, and i'm hopeful that cooler heads will prevail and this won't go down a very nasty path obviously, if it's the worst-case scenario and it's ever increasing tariffs for an extended period of time, that could change things, that could have a real effect on u.s. gdp growth but right now i'm not seeing it. so, i'm, for one, i'm in a wait-and-see mode. >> where would you see it? would you be watching the inflationary figures that we normally watch would you be watching growth figures? where do you think it would show up >> i think in both places. so, as steve said, there would be somewhat of an upward

adjustment in prices from the imports that we're buying from china, but then i think the bigger effect, as the other economist noted, is that there could have an effect on psychology, could have an effect on markets, could then have an effect on investment if u.s. corporations are nervous because of global trade dynamics and they pull back, that could then have a much bigger impact on the u.s. economy overall. but when i reach out across my district, there's no question that farmers in my part of the u.s. are feeling some of the bite of the trade battles -- soybean exporters, for example -- but by and large, most businesses in my region are still feeling quite optimistic about the u.s. economy if that sentiment were to change, that's something we would have to pay attention to. >> neel, we talk all the time about where we are in this cycle -- is it late cycle, is it end of cycle what is your expectation just again based on what you're hearing from people and companies in your district >> well, i think it's a mixed -- there's some mixed signals on one hand, we've got overall pretty healthy u.s. economic

growth the job market just last week put up over -- were averaging 205,000 jobs a month, which is remarkable this year if we were really at maximum employment, the u.s. economy should not be creating jobs at that rapid rate. so, the job market seems very healthy. wages are slowly ticking up. that's also good for consumers it's also good economic indicator. at the same time, i look at the yield curve, i look at the bond market the fact that the ten-year, as joe said earlier, is around 2.40% this morning says bond investors at least are signaling slower growth in the future. so i think right now we're getting different signals from different parts of the economy, but the fundamentals of the real economy appear to be quite healthy right now. >> neel, what are you hearing from the inflation numbers that are out there? they're down in the 1.5%, 1.6%, sort of moving the other way from your target do you see this decline in inflation as transitory? >> well, you know, i'm not so much in the transitory camp because it's been pretty

consistent for the past ten years. i think over the past ten years, core and headline inflation have been averaging 1.6%. our estimates, the minneapolis fed, we look at inflation expectations we think are anchored at around 1.7%. so to me, that is an evidence that our own monetary policy has done that. we've been tightening. we've been raising interest rates when inflation has been below our 2% target. for me, we've been demonstrating that 2% is more of a ceiling than it is a symmetric target. so, i personally think that we need to act as though it's a symmetric target, let inflation continue to build, let it actually go above target for some period of time to demonstrate that we're serious about that symmetry. >> but at what point, neel, when you keep missing your target, does that require a response on the monetary policy side >> well, it could, there's no question i mean, if we saw job growth really slowing down, then you might say, well, you know, the u.s. economy is slowing and we're really going to anchor these inflation expectations in at 1.7%, we need to do

something. i'm not quite in that camp yet because we continue to see the job market exceed expectations as you know, steve, we need about 100,000 jobs a month to keep up with population growth the u.s. economy's creating 200,000 jobs a month and wages are slowly picking up. i still think there's slack out there, and as the u.s. economy uses up that slack, more people come into the workforce, we'll see wages climb, and eventually, that will pass through to inflation. so i'm not giving up on a long-run philips curve story i just think we've been underestimating how much slack is there. >> neel, i just want to point out that while we've been talking, the futures have taken another leg down we're looking at dow futures implied down by almost 400 points do you think that's an overreaction by the market or not, just based on how the market's trying to figure out what's happening with these china trade talks? >> my guess is it's just a lack of news, you know. it's a low-information, people are trying to assess it, so you see this kind of volatility.

i don't think you, your viewers, or certainly we should be paying too much attention to short-term movements like this up and down in the stock market. i think it will take more time before any of us know where these trade negotiations ultimately are going to end. >> neel, separate question, somehow related to where the stock market is. we've been talking a lot about uber this morning. i wonder whether you think there's a bubble in private market valuations that isn't being accounted for in all of this >> well, there could be, but i think private market investors are well positioned to take any kind of repricing. and so, if they paid up rounds and then the public markets don't reward them, i think they're in a good position to be able to bear whatever those losses are so that doesn't give me too much concern. >> we should probably break in here, steve. you want to just read what's going on here, because this may explain -- >> the new reuters -- joe, you got it >> china plans to set import tariffs against $60 billion worth of u.s. goods, taking effect on june 1st it will impose tariffs ranking from 5% to 25% on u.s. goods

that hit about two minutes ago. >> looks like that's why the markets hit another leg down -- >> i saw it happen, couldn't click on it. >> it wasn't neel's comments. >> you're not helping, kashkari. >> you said cooler heads will prevail, but in the meantime, we're going to have to watch every headline that comes out. >> we are. we are going to have to watch these headlines and it's going to be more volatility. and i think steve said, it's very hard to put probabilities around these different possible outcomes, and that's what makes the analysis so difficult. so, all of us are somewhat in wait-and-see mode. but i think relative to china, the u.s. is in a very strong position not only is our economy bigger, our economy is much less sensitive to trade trade is important to the u.s. economy, but it's much more important to the chinese economy, just as a share of its economy. so, if there is a tit for tat strategy here -- and i'm not advocating it -- but a tit for tat strategy would seem to lean towards the u.s.'s strength, rather than china's strength >> neel, there was a note out from morgan stanley today saying that the fomc is likely to take

fund rates to zero next year if there is even a mild recession you'll be a voting member on the fomc next year does that sound like a likely scenario >> well, i hope not. i think that i was more nervous six months ago when the path that the committee was forecasting were continued hikes. i was more nervous about what that monetary policy path would do to the real economy the fact that the committee has moved and we're now paused, i feel pretty good about where we are. i think we have rates roughly at neutral. and again, if the job market continues to be strong and if gdp continues to be strong, then i'm optimistic that the expansion can continue the one area that's -- well, other than trade, the other area that is flashing a yellow light is, of course, the bond market with the ten-year where it is. investors are signaling more cautious economic growth so that's something i'm paying close attention to inversion of the yield curve i also think is something we're all paying close attention to. so it's not all green light from here, but i think the fundamentals will be so far strong and we want to do our part to keep the economy

growing. >> neel, maybe you could explain to us -- on net, do you see the impulse from tariffs being inflationary or deflationary obviously, tariffs raise prices, but then the effect on economic growth seems to go the other way. >> yeah, i think you described it well. the one-time repricing boosts prices, at least one time, but then if it has a broader hit to psychology and then that reduces investment, then i think that would be probably the bigger effect but of course, these things, as you said, are hard to model out. so, we'd have to a little bit see how they play out, see what sectors are impacted, see if there's any kind of a fiscal response to support the sectors that are most directly impacted. i mean, again, in my region, as i travel around, farmers a lot are feeling some of the bite of the tariffs. >> can you put some color on that because the fed in its recent financial stability report talked specifically about the rise in default in agricultural loans. and i've heard from other bankers that they're not taking

up the loans that would be normal this time of year for replanting how much is the agricultural sector in your district feeling the effect of tariffs? >> well, they are feeling a lot of stress, and they've been feeling stress for a number of years, but it's hard to separate out how much of it is tariffs versus how much of it is recent flooding versus the fact that year after year after year, the ag sector in general just keeps putting up record crop production and if you keep putting up record crop production, that ends up leading to lower prices. and so, one thing that's interesting is that prices have been low in commodities for a number of years. farmers are suffering. but land values aren't falling and so, they're getting enough credit they have enough equity built in that they're hanging on to their land, believing that there will be better times ahead in the future so, we are spending time looking at this. we do analyze the portfolio of banks to see how exposed they are. it seems like most people are able to get through it, but if you are, you know, the marginal farmer or you have a little extra debt, this is ending up

being very painful for you. >> neel, it's pretty widely expected by investors that the fed's going to be on hold, at least for the near term. the market can't figure out, though, if the fed's next move would be to raise rates or cut rates. if you had to place a guess on that right now, what direction do you think it would be >> well, that's probably not a bet i'd like to make, only because i don't actually know. i think that markets don't know because we don't know. it really is going to depend on the economic data, what happens with the tariffs and broader risk appetite for u.s. companies on one hand, what happens to the labor market, what happens to wages and inflation. and so, right now, you know, we've put out this dot plot every three months in my view, the dot plot has a very low signal-to-noise ratio right now, just because there's so much uncertainty that we're all wrestling with we at the fed are wrestling with it, but so are market participants >> is there one number one report, one market price that

you watch more closely than anything else? >> wage growth for me, you know, we've been -- in my opinion, we've been misreading the labor market for the past several years we keep thinking we're at maximum employment, and then, wow, 200,000 jobs a month are getting created month after month after month. that can't happen if you're really at maximum employment while wage growth is modest. so, i'm watching wage growth you know, you're trying to assess supply and demand in a market if you want to assess supply and demand in a market, start by looking at the price and the price of labor is wage growth so for me, until i see wage growth pick up to around 3.5%, given productivity of around 1.5%, that to me means we're not yet at maximum employment, and that's probably the most important determination i'm trying to make as a monetary policymaker. >> 3.5% on a year-over-year basis, and that's a number that we will watch very closely, too. neel, thank you very much for being with us. always great to see you. >> thank you for having me >> neel kashkari stan thanks, steve. >> joe, before you go, big news

for you. a new ceo just appointed to bed bath & beyond. >> what? >> yes, just happened. >> he's the guy who ran the beyond department. >> mary winston has been appointed. she was on the board, interim ceo. she worked at family dollar before. >> does she have a strategy? >> i don't know. we'll have to talk to her. >> i think she presented a plan to the board that she was actually going to sell beds at bed bath & beyond. no >> we should make it our job to get her on our show. >> it should be beyond beds and baths, if you're not going to sell baths, or beds. >> mary, call in to the show this morning if you're watching, call in. you have two big bed bath & beyond fans. >> you do. and do you have a heavy convey -- >> i don't one of the weighted ones >> it's like a swaddle i feel so safe so safe. coming up, uber shares -- thank god i didn't buy any of these -- $38.80. thanks, morgan stanley appreciate that. if it's $8 billion and it's down 13%, is that $1 billion is gone?

>> yeah. >> figure that out will the company's shaky start in the public market put the brakes on other ipos what happened? i could use that billion redpoint ventures' geoff yang is joining us next to weigh in. he thinks it was a huge ipo. what do you want anyway, it's not hurting him he's load.de anyway, you're watching "squawk box" on cnbc ♪

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use a little, pay a little. use a lot, just switch to unlimited. get $250 back when you buy a new samsung galaxy. call, visit or click today. welcome back to "squawk box," everybody. we've been watching the futures this morning, and they have taken a significant lick down just in the last, oh, 20 minutes, as we heard back what the chinese retaliation will be. china now says that it's going to raise tariffs on $60 billion in u.s. goods, anywhere from 5% to 25% as a result, the dow went from being down about 280 points to being down 441 points. 445 points in the futures market this morning. s&p futures indicated down by 51, and the nasdaq down by 186 again, we had been waiting for the retaliation and just moments ago we seem to have gotten it.

>> okay. meantime, uber shares dropping now below $39 this morning following a very rough entry to the public markets. now it's time to talk about the next big ipo deidra bosa joins us with that. >> that may raise questions about the fate of the other unicorns getting ready to go public this year and right up next to slack. in about an hour, it will hold its investor day in new york, live-streamed on its website they are seeka direct listion, so this investor day's in lieu of that traditional road show on head of a expected june market public debut, but the big question is does slack look more like a zoom, companies that have soared in public markets or like lyft and uber, which have badly stumbled it's not immediately clear slack is a cloud software company but is also unprofitable and it's barely narrowed the losses revenue grew last year over 2017, but the growth has been slowing. and we are just getting some

preliminary numbers from the first quarter of this year that make it look like these losses are on par to perhaps increase this year. what makes slack unique is that unlike the other unicorn ipos this year, it's not raising capital. rather the listing is to let existing shareholders and employees sell stock to the public but this is a chance to broadly share to investors and that path to profitability just a few days after uber's flop. with slack, we could get an indication of how much uber may or may not have chilled the ipo market for the other unicorns. it's not just slack. postmates, we work, and others to follow this year. >> deirdre, thank you for that cnbc's annual list of groundbreaking venture start-ups is back. the disrupter 50 list will be revealed wednesday, may 15th slack made that list back in 2016 will it climb the ladder this year find out in just a couple of days for more on uber, let's bring in a venture capitalist who's backed a number of

companies aspiring to ipo. geoff yang, co-founder of redpoint ventures, friend of the show, friend we see all of the time great to have you. >> thank you. >> at least an equal yang in terms of good and bad yangs with jerry, right i don't like this good-bad yang stuff. you are great as far as i'm concerned. >> thank you. >> and so is jerry, all right? so, is that now -- we got that out of the way. >> i love it. >> so, listen, do we all need to take a deep breath, do you think, at this point or -- i mean, i'm hearing comments like, this just shows you that all these unicorns are just out of control in terms of private valuation and that when push comes to shove and, you know, the rubber meets the road, that the money's not there, the demand's not there, and that we're in some kind of dotcom bubble, even. >> well, let's put it into perspective a little bit so, uber and the ipo raised about $8 billion and has a market valuation of just under $70 billion. >> now. >> now, right. and by any metric, that's a huge amount of money to raise in an ipo and that's a very large

valuation. but any time you're looking at a valuation that's north of $50 billion, there aren't many companies that are worth north of $50 billion so, in the grand scheme of things, i think it'd be hard to say, wow, you know, it failed, right? it still raised -- >> is that a lot of large numbers, geoff is that what you're saying >> i think -- well, part of it is uber and lyft and some of these others are kind of unique animals, right and i think it's a tough -- what the uber deal showed, even though uber is kind of a unique animal in that it raised a ton of money and there aren't that many ubers and right now, there's no real path to profitability. but i think what it shows is that some of these consumer companies that are losing lots of money with no path to profitability and some mediocre unit economics, i think they're going to struggle, you know -- >> did you know this before the open on friday did you have concerns? >> well, you were starting to see it in the private market where consumer businesses with

mediocre economics were having trouble raising, you know, large amounts of money. >> what do you make of the t. roes and blackrocks and everybody who in the last three or four years jumped in on to the sort of the mature end of these start-ups? >> right. >> and effectively pressed the prices up? >> right well, i mean, the argument is the market size is so enormous, and at some point, you look at size of markets and you look at top-line growth and you say, wow, that could be really valuable, and so i want to be part of it, and there aren't that many ubers out there in the world. so if you want to bet on ride-hailing, uber's probably the platform to bet on but i think what's happening in the current environment is that people are moving away from that, and the public market, at least, is moving away from that -- >> how much -- >> did uber wait too long to go public >> well, you also have to appreciate that -- i mean, as you do, as you've been talking about all morning, we're in a really bad take and there's a lot of global uncertainty. whenever there's uncertainty, i

think investors tend to move to more safety. >> i was thinking about that if they had gone public a year ago, when their revenue was growing at 40%-plus. >> right. >> sure, that might have been better out of the gate, but if a year later their revenue was growing at 20%, we might be back in the same suit. >> well, it gets back to the question of were the valuations way too high to begin with when morgan stanley wanted to take them ubl it the a -- public at $120 billion. >> well, it's the same question on facebook. facebook grew into their valuation. they started posting real earnings and then -- >> how much do you think softbank played a role in -- >> propping it up? >> propping -- no, and pushing all of these valuations up in the valley, because they clearly had a piece of all -- >> which plays not only to softbank, but also just to the broader issue of how much liquidity there is out there. >> well, that's part of it, too. one thing, before i get to the softbank thing, one thing is that you also have to recognize

that uber tapped the well for a lot of public or light public investors, that they raised over $10 billion, and a lot of the people that may have come in, you know, with appetite as investors as the company goes public already had an allocation and so, to some extent, they kind of tapped the well -- >> overwhelmed. >> yeah, a little bit. but i think your point about softbank and other really large, private technology global funds are definitely, you know, changing things. because you know, when you have to put $500 million or $1 billion or multiple billions of dollars to work, you become a little bit less sensitive to what the valuation is and more to kind of putting the money -- >> andy, what you always say when there's a big jump on the ipo, you go, they left a lot on the table! they probably -- >> left a lot on the table -- gif you like to buy low and sell high, uber was a huge success -- >> but you don't want to burn

money -- >> who do you blame in this situation? do you say, oh, these underwriters just totally missed it because by the way, they're talking to investors all week last week. how do you think they -- >> well, but look at the tape. >> right. >> i mean, you know, they do pricing based on what demand is and what the current environment is, and a lot changed last week -- >> changed very rapidly. >> yeah, it changed very rapidly. you look at zoom as a contrast they probably left some money on the table. but one thing i want to say is that there's a lot more demand right now, it appears, for enterprise companies that still have the high growth and a path to profitability -- >> and you can understand. >> and you can understand it and much more predictable kind of behavior because enterprises -- you show an enterprise how they can make money on an investment, and they'll do it. with consumer-type stuff, it's hard to predict that priority, what organic demand is going to be. >> does this change the way uber itself operates from here? because if you are looking at

potentially this being the largest year of losses, although dara couldn't say for sure, couldn't promise, andrew, that was going to be the case on friday when andrew spoke with pimm you said uber and others put a face on valuation by turning a profit does uber need to stop trying to expand and expand and expand and say wait, we need to try to make a profit on the markets we're in >> i think at a minimum, it has to influence behavior because now there's a public perception, but they also have a list, a group of investors that they are responsible and they have to answer to -- >> but is that a good thing or a bad thing? and the reason i ask is because, people say what's their path to profitability? i think if they stopped trying to grow eats, for example, if they stopped investing in any of this autonomy, if they stopped investing, if they completely rid themselves of all these things and raised prices in a handful of markets, i think they could get pretty close to break even or even better. however, if they do that it. >> that's the difference between being a public company and a private company. at this point, you have investors you have to answer to. >> well, and the other aspect --

>> you have investors to answer to in the private market, though. >> but the private market i think was a lot more accepting. >> and it's also -- the other factor is access to capital and how much capital you need, right? >> but you can't burn through another $1 billion a quarter -- >> yeah, you can't burn through another $10 billion if you know what the resentivity of capital markets are -- >> do you not know who elon musk is >> although the "journal" has an article today about tesla is not going to be able to wait as long the next time they need to hit the capital markets again because of the burn rate on it. >> so, my bottom line is, i think the uber -- what's happening in uber is more statement of things of that size that need to raise that much capital and consumer companies with marginal economics, unit economics and no path to profitability, versus enterprise companies that are -- and i suspect that the slack ipo is going to be very well received you know, i think the underwriters will probably be more cautious pricing it, but i think there's a lot more demand for that because enterprise

companies -- you look at a company i'm involved with, twilio, came in at $134 a share. enterprise companies have just gone through the roof. >> will private investors still have the appetite to fund these companies to continue to grow and continue to pile up losses, or based on what you're seeing with the uber pricing right now, will that change the perception among private investors? >> i think it will be much harder for consumer companies with marginal economics that are burning through a lot of capital, even in the private market this will put a hamper on it but for enterprise companies, pricing right now is almost indiscriminate and people are throwing money at enterprise companies. >> in a word, you'd say the uber ipo was okay, i think you'd say? >> yeah. i would say -- >> you'd say it was okay. >> i would say as a public shareholder that bought on the ipo, you're probably not very happy. >> but overall -- >> as in overall financing, they did pretty well. they raised a lot of money at a big valuation, and hopefully, time will tell, right? >> okay. thank you. >> what do you think time will tell >> well, that's pure speculation, but i would -- i

mean, and as a speculator, i'd probably be an owner now >> at this point with the down. >> yeah, okay. thank you. coming up, a lot more on "squawk" this morning. the market tumbling. take a look at futures right now. we have more news on tariffs out of china dow jones looks like it would open off $450 -- or down 450 s&p 500 off 51 nasdaq off 186 and later, facebook's former chief privacy officer responds to growing calls to break up the l athe o alth aadn "squawk. from fidelit. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity. you need decision tech. people know aflac. aflac! but not when to use it. do i use aflac when the kids get slime in the plumbing? no. that's home owner's insurance. slime in my motorcycle. no. that's motorcycle insurance.

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u.s. equity futures showing lower this morning, now 445. that's just under 2% 2% will get your attention when the average is up in the mid-20,000s, the dow is. the s&p down 50. nasdaq indicated down 184. this is all on trade fears we've seen red arrows all morning. picture got worse, though, following word that china is retaliating against washington and raising tariffs on $60 billion in u.s. goods. the hardest hit dow components -- apple, boeing, caterpillar, intel, and cisco. >> i think boeing by itself is

about 80 points off of the dow, apple about 40 points off of the dow. just each of those components. >> the nasdaq is, you know -- is the nasdaq down on this or down on uber? and just technology. high fliers are definitely getting -- i'm worried about that -- i'm worried about that -- what is that, a little rabbit or something? that little sculptor piece they're supposed to sell $2 billion of art. >> good luck with that. >> it's all related -- >> so tightly correlated -- >> i liked that little sculpture -- >> for $70 million >> are you bidding >> unless it's in yuan, no joining us right now is paul hickey, co-founder of bespoke investment group and maybe not a surprise when you hear china retaliating and over the weekend just trying to add all this up -- what comes next we don't know when the next talks are scheduled. we know that tensions are ratcheting up on both sides. >> right well, i mean, earlier this morning, everyone's waking up wondering, what is china going

to do? how come they haven't responded yet? so, they responded so, it's to be expected. the futures are weak this morning. which is somewhat expected and so, i think it's the initial reaction let's see how things shake out. >> if this is the only retaliation, i'm surprised that people are really selling that deeply, because i would expect them to do at least this, which is to take $60 billion of goods and raise the tariffs by up to 25%. >> right i think you're right there, becky. there's very recreationary component to things. and we almost forget, last thursday and friday, the market was weak in the morning. the pattern in may we've seen is we've seen constant -- at the market open, sell-off, and then once europe closes, literally within about 15 minutes of the european close, the u.s. markets' last two trading days have bottomed and rallied throughout the trading day. >> having said that, last friday was the worst day we've seen for the markets all year. >> it's been a phenomenal year,

though so if we're going to get bent out of shape about a 3% pullback, which is a run of the mill pullback that is, you know, that shows how spoiled we are. 400 points that's nothing to, you know, scoff at so, i think what you want to do is you want to see how things play out we haven't necessarily seen internal indicators break down at this point, so there's nothing necessarily saying that this is a major sell-off, but you know, you just have to listen to what -- >> how about 500 >> yeah. we may be 600 within a minute. from grand central to here, it was 300. >> i get the feeling a lot of people are still trying to buy the dip, whenever there is a dip. is that a smart strategy would you be telling people to do that right now? >> i think if you're holding equities at this point, i don't think a headline like today is -- to react like the futures are reacting and start selling off everything en masse. see how things shake out see how once the -- you know, people have time to think about it for a little while. see how the market shakes out through the remainder of the day. we talk about -- we've been talking about how uber's been so

weak -- >> but if you have cash, should you be buying today? >> i think you can incrementally add positions. if you have cash, look for companies with u.s. exposure, not companies that are going to be caught in the midst of the headlines, which don't seem to -- >> you mean boeing, apple, caterpillar, intel, all of the stocks we just listed? >> a lot of international exposure, technology as joe was saying, is weak, a lot of chinese exposure last week the fed said in their financial stability report they were worried about some lofty valuations in the market well, the pe of the s&p 500 is one point above its 25-year median so, we are a little bit above average or above median, but not ridiculously so. the two sectors that are the furthest below their median are health care and financials, which are two sectors that don't have very much international exposure. >> paul, thank you good to have you. >> good to be here. coming up, facebook's former chief privacy officer and general counsel responding to a

high-profile call to break up the company. we'll talk about it as the social media giant a monopoly? and is ceo mark zuckerberg up to the task of managing a company that one out of every five dae er in the world usevy y? we will discuss that stay tuned you're watching "squawk" on cnbc bye! ♪ hey dad! hello, betee! kaisi hain aap (how are you)? i'm good, how are you? good! so good to see you. it's late, where are you? i'm at work. oh gosh, so late. i know, but guess what? what? i've saved enough to come visit you. well, that's such great news! at u.s. bank, we believe that hard work works. and for everyone working toward a goal, we're here to help.

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additional pressure. if you are just waking up, we're now looking at the dow futures indicated down by about 470 points below fair value. we've seen down by about 500 points s&p futures are down by 51 the nasdaq off by 184. additional weakness. we were weak from the very beginning morning, but additional weakness did seep into the markets after china said that it would retaliate against the u.s. tariffs by initiating or raising tariffs on $60 billion worth of its exports to the united states probably not unexpected. we've been waiting for some sort of a response, but you do see the knee-jerk reaction with the market selling off even more. last week, facebook's co-founder chris hughes called for the breakup of the social networking giant, hughes making that call in "the new york times" in an op ed that he wrote. he talked about the controversial statement and mark zuckerberg's power with kate snow of nbc news >> do you think facebook is dangerous? >> i do. the reason that 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 been no -- there's no regulatory agency >> joining us right now to tell us why facebook should not be broken up is a former high-level official at the company. chris kelly is the former facebook chief privacy officer and he was the company's first general counsel. he also represented netscape in its antitrust lawsuit against microsoft back in 2001 and we thank you for joining us this morning, chris. >> thanks so much for having me. >> you don't like the breakup argument tell us why. >> so, antitrust laws, ultimately, are a really blunt instrument and you have to justify a number of different steps in terms of monopolization, attempted monopolization, monopoly maintenance, and none of those criteria are met here. it's not even clear that facebook has a monopoly in any relevant market. people talk about social networking, but that's not a defined antitrust market we're talking about telecommunications services, messaging services, online advertising. facebook isn't the number one player in any of those markets,

so it's hard to imagine a court ever thinking anything seriously about an antitrust argument about breaking it up. >> okay. let me ask you a separate question do you see the problems that chris hughes laid out in that there is a remarkable amount of power that mark zuckerberg has and whether that power should be checked one way or the other >> so, ultimately, there has to be accountability for every company. and i think that facebook is accepting that and devoting millions of dollars of resources and some of the brightest minds on the planet to addressing problems of election interference, problems of hate speech online. you know, when we set the standards -- you know, i've been out of the company for ten years now, but when we set the standards on hate speech early on, we knew there would be problems eventually. the scale on which this operates right now, it was hard to imagine. but ultimately, the company's investing very, very heavily in these. and breaking up the company

would hurt that, not help it. >> okay, so, is there a market -- do you believe there's a market mechanism to keep facebook in check, whatever that means, or would you -- >> competition, which is canceled by the loss -- >> or the other question is, given some of the regulatory questions in washington and even the way we regulate, by the way, banks in the united states -- and i don't know if you consider facebook to have the sort of size and power of a bank and want to consider a utility, but there are regulators now who literally sit inside banks in america. do you think there should be regulators sitting inside of a facebook >> i don't think it should go that far, because one of the things that when i represented netscape in the microsoft antitrust trial, the worry was that microsoft was constraining innovation facebook's not constraining innovation in any way. there's all sorts of different ways that people are competing every day that you see, tictoc,

a number of different apps get deep penetration quickly you have a larger player in online advertising in google you have a larger player in messaging, like apple. all of these companies should be competing. that's what the antitrust laws are ultimately about >> that's what the antitrust laws are about. >> i consider chris is a friend. i was a little bit surprise at the way he's taken this. >> i don't understand the motivation there i am glad he was involved because you know kate snow and anybody else is going to listen to everything you said i am not sure his opinion is relevant than mine just because he was there at the beginning. i don't know why we have to jump how high up or any of the stuff he decides on it >> chris took an extensive role in the product he was a major contributor

it is not clear that he sort of got the right prescription in any ways to address the problem any of these companies identified >> what would you do >> well, i think the engagement that the company is under going right now is something that we did in the early days when it was something that could have killed the company we talked about safety standards online and we talked about fighting sexual predators online and we work with regulators regularly. now the company is deeply engaged with that mark was meeting over president macron in france, you got this whole engage he's done and talking about what the future needs to look like here that's the path that it should continue it is not like you are not getting attention or throughout the company attention on these issues break up would hurt that and not help it. the idea that we have to address these issues >> it is not about facebook, it

is about the others which there has been arguments made whether google should be broken up and elizabeth warren is making apple. you can go down the list, amazon, do you think any of these companies have too much market shares right now? >> when platform sort of appear in an area and when you get to a major domination of any given platform, i think you have to look at the possibility of structural ideas about how to promote competition in those areas. i don't think any of these companies are at a point where somebody with a different platform can't go after them in a meaningful way it is always a hard question to -- you have to point to particular problems where a market is being constrained in order to justify any sort of relief under the antitrust laws. i have seen a theory developed in any of those companies at

this point that could justify that under existing law. now i do think that you always have to watch about concentration or corporate power and the roots of the antitrust laws are very significant factors in the history of the company. we should worry about things as it applies to harming consumers and people throughout the ecosystem. it is a pretty high bar and we are not close to that. >> chris, i appreciate your time this morning >> thanks so much. >> let's get down to jim cramer. i get your point, i am out of the ipo, if morgan stanley has no idea whatsoever what's going to happen, i will never eve ever -- i want this to be a

nice, hot idea so much you can't wish things to happen. now, i am worried. are some of these unicorn unicorns -- was there an indication that it is a little bit too much fluff in some of these stuff now that we can extrapolate it in the market >> i think it was hard if you are a retail investor, you did get a couple hundred shares or uber driver, you got a couple hundred shares. they're waiting to buy more, maybe at the market bob pisani was covering closely, as soon as you saw 45.5 or 6.5, you know it is done. some of that derived from the tweets from the president. some was done a year before that would have placed it much higher i think the door is a mandate

that nobody invest it before would lose money you had to expect there was going to be buyers but as soon as the take turns bad and you heard the initial price, the interest dissipated and that was pretty much it >> what do you make of the continued disinterest this morning, we are now at 38.64 >> now, it is totally broken with the mark thet that looks le it is and the company not able to stabilize it. they should have found the market before. >> where do you think the true market is, jim >> i don't think there is a true market right now where he trying to price discovery. i think it could end up. lower but not substantial. >> i know we got tariffs >> tariffs was full t jo, joe.

why don't we understand that >> right >> so half of the stuff we had to sell. no, they can't >> thanks, jim, we'll see you in a couple of minutes. don't miss "mad money," jim got cfo of twitter, stay tuned, "squawk box" will be right back.

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more breaking news on china's tariffs retaliation this morning. >> you did see the $60 billion china is targeting the editor of "global time" in china tweeted china may stop purchasing u.s. agriculture products and restrict u.s. service trade with china and many chinese scholars are discussing dumping u.s. treasuries and how to do it specifically additional retaliation in addition to those tariffs. >> that's definitely additional

information on this that may that is what the market is doing with some of this. >> kayla tausche >> it is still 2.42. dow and futures is down. kayla tausche is going to have much more. "squawk on the street" is coming up now good monday morning, i am carl quintanilla with jim cramer and david faber. another monday, you just heard the chinese announced retaliatory tariffs on 60 billion u.s. goods europe is right across the board. that ten-year approaching two for one. our road map is going to begin with trade tensions taking stocks todayme china retaliates >> uber's bi