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it is like a boston chicken. >> is he running for president, jim in what's happening to that? >> i thought he talks about service and it is about good coffee luckin is a financial company

that howard schultz out. i think it is fabulous i urge them to hold the stock. >> we got five minutes for the ayitusg bell st wh

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you are watching "squawk on the street," the opening bell is set to ring in about two-minutes. busy friday after a wild week, we'll see if we can hold on the gains for the week if not, that makes it four in row lower for the dow. jim, go back to mid april and track the zen sche shen shares >> it is obvious that president trump wants the chinese market to go down remember i told to watch the dow. a lot of people are disbelieved that our government will be focused on the chinese stock market they want that market down and they think that is again just part of their overall world

view of hey listen, i know we are having a 17,000 year world view take a look at their stock market that's what they care about. i got to tell you, i would not want to own a chinese stock. look and find, verses say or how about alphabet which does business in china. baidu, look at that stock. >> that's because of their actual business, their business is in china, jim they're not monetized in the way consu consu consu consumably they should >> there has been a lot of talk about the flow of money that managers have to put into china to keep up with the index. >> well, that money is really

needed but it will be shorten and cut because of the notion of the index fund and how it is carl, you tweeted something about autosales. how are the auto sales in china. there is the opening bell. it is a little bit loud here, forgiveness. at the big board, avantor, we'll talk to the ceo when the stock opens and the nasdaq, luckin coffee the second largest coffee shop chain in china about 30 million or so chairs. it is the high end of the range and as jim says a moment ago, starbucks's biggest rival in that country it raises about a little more than half a billion dollars. >> perfect >> what? >> america raises money to be able to support a financial engineering company, it basically what

it costs them six bucks to deliver 3 bucks of coffee. i think howard schultz know about china and coffee about anyone 4,000 starbucks there. i find that owning luckin is a challenging hole >> what the hell are doing >> their stores are 100% cashierless. they're not starbucks. their stores are where you go and you get your order and pick it up. it is a different model to some extent than starbucks, is it >> well, is it in the end about good tasting coffee. this is not about, it is just like the old starke has said we don't want tuna with good taste, we want good taste in tuna luckin is uniquely manufacturing

for the starbucks market but starbucks is manufacturing for the china's market if it tastes better, is it important on how it gets you >> i have not tried luckin coffee carl did not have -- >> oh, it is a nasdaq. they are afraid that we'll drink it >> wow what's going on with you >> it keeps oncoming >> is bannon some where with you? is he hiding over the desk >> navarro somehow make a trip out there? >> no, he's a man of peace look at this oil is going up if the economy is so bad, why is oil going up >> -- there is -- >> tankers have been involved and we evacuated consulate embassies and u.k. is taking their threat alert own forces up a notch. >> the tension between iran and

the u.s. may have subsided in a bit in terms of china interprets intelligence lately that over the last week certainly led to a lot of concern that well, hostilities who are getting closer >> what does this have to do with the price ratios? >> speaking of that, jim, we did get some sale side calls today jpm takes under armour to over weight rationalizing as kus and reducing inventory and shrinking their vendor basis going to work >> matthew boss is delivering a real interesting piece of how they discipline. i spoke to kevin plank last week i really love this call. i think it makes a lot of sense. stephen curry, he's under

armour, is he human or hologram or a simulation? >> he loves the warriors still after one game, he's now a huge warriors guy >> they were a philadelphia team 50 years ago, right? >> yes, they were. >> what stock is leading the market today, it is a quiz >> amen. >> what stock leads the market everyday what's the most important ipo we have had >> beyond meat >> with no flow. >> it is vegan buying. they are powerful. millennial vegan buyers. >> how about another company that is a little bigger than beyond meat, it is called apple. do you have any concern that there is going to be a chinese response in some way that may involve this company to what is happening in terms of huawei's ability to get equipment that it potentially needs or chips that it needs for its networking equipment? >> it is the one company that's

vulnerable i think it is the one company that they can boycott. there are two million people who make their living doing anything for apple for china. but, you know what, i think they'll be nose cutters. they cannot cut-off boeing are they going to go after otis elevator again, i keep oncoming back to what are their weapons other than to get really angry >> i don't know. i think you got to start to think about it >> they're going to make everyone to go to luckin and not starbucks. is it kfc, david >> there are symmetric response one would expect if the chinese employs and if this ratch it up.

>> what do you think is preventing the chinese now that they're going to play this game of we don't feel like talking, going to europe or macron or u.k. or merkel remember that guy that's antagonizing you for two years, why don't you side with us instead of them? >> the president gave all -- bmw has no tariffs and mercedes, it is a terrible time for the chinese to go to europe when the president just gave them, listen, we'll cave to you guys i am not being facetious, the chinese are trying to figure out how wild and crazy our president is they're used for presidents caving in order to be able to sell more in china this president does not care the interest the american capitalist interests have defined our policy towards

china. suddenly, it does not matter the president is saying listen, don't sell to china. we need to stop what's been going on, the way we have conducted our policies i don't know if our president has ever been more to challenge corporate interests trying to do business with china. this is man is not catered to the elites of wall street. >> although wall street is cooperating. this is a president who focuses on the dow by the way, statistically a irrelevant index. it is cooperated for the most part we are down today. as carl pointed out, we could end up for the week. we'll see. this is after a weekend whether there is heighten tensions between two countries. i think of the cisco call and

our friend chuck robins of what he had to say about the i mpact which is minimal >> when you talk to the walmart people, this whole over blown thing of tariffs, consumers won't feel it. i thought it was an important call i think that people who felt that the tariff issue is going to be important that walmart did not. they should talk to more people of walmart of the upper level. those people are saying listen, you may not see it, the everyday low price model continues. there are companies that really get it and pull themselves away from china and there is others that are saying like macy's. hey, i can't believe it. it is happening. so you either took the president seriously or you basically said i am going to cut my numbers those who saw it like chuck robins from cisco, there are stocks still incredibly well starbucks stock is doing well. how will luckin do >> why, what is it with you with

luckin did something happen that you are not telling us was it a bad experience? >> no, like i burn my tongue or something? >> i don't know. ve ve >> very much like the people who bought the stock nvidia is going hard that's very important. advance micro is going hard. oh, cvs is up! very remarkable market i think it can come back and led by nvidia and boeing is boeing supposed to be going down >> well, we got the news that they completed their software fix and it does appear now that it is fwoigoing to be a matter when the certification flight is and we'll start to see a path getting that plane back into the air and confidence back in the carrier. i asked you this earlier in the week, we spent years at this desk asking the companies what their growth agenda is and in

china, now, they're being awarded for forgoing that growth how long can that get rewarded and how long will investor say you are not going to grow as much as we thought well, buy more stocks. we are not going to buy the companies that are all hostage for china. how amazing it is that the president is willing to hurt u.s. companies in order to be able to teach the chinese a lesson remember all the intelligence has told us over and over again that the chie menese are much me powerful than we are the president comes out just today with that auto news, they can put larry kudlow talking about a coalition against china. it is going to stick is larry coming out? that would be a good one >> jim, having increase

hostility between the two largest economy for the world can't be good for global growth. >> it can't be the longer it goes on, the more impact it could have it will be depressive on europe and any other number >> remember when alphabet decided not to do work in china and the stock got hurt it does not matter now amazon could be up today pinterest should not been down that much. they're spending the win we like to spend the win baidu should be down much more look at nvidia they don't have much chinese exposure i got to tell you, wong was confident that the steel will be completed. they want it completed is what he's telling me.

>> well, we are eating away at the losses in the first few moments. now we are down less than 100 points, let's get to bob pisani. >> hello, we are down. dow and dupont and the usual trade related names are weighing on the market. take a look at the over sea markets of what's going on shanghai was down about 2% germany is down. we knew brexit fears that over there. shanghai and japan and ftse and some of the car companies are weak as well seco sector here in the united states rk eem is down again. we got the huawei suppliers is down again and industrial and energy also is fractionally on the downside we know the names right now,

taiwan and semiconductor and sky works and qualcomm all moving to the downside here. they're all moving down as well. this is the second day of course we have seen those stocks moving down as well deere, we see the names there. deere, we saw the name down here and what was trading and agricultural market. china is about 9% of their revenue. the market has sniffed it out. jim was right. the market already sniffed that out. we are down 10% so far this month. if you take a look at big machinery name all of them reacted to the issue that deere described today caterpillar is down 11%. so the market is well aware of what's been going on

ipo trading over here. let me tell you how remarkable it is. 205 million shares at $14. they change to terms a little. this is the biggest ipo this week we'll see how that opens right here at the new york stock exchange i want to bring in luckin coffee they raised about $500 million this is a company that a year and a half old that has a roughly $4 billion market cap. it was literally created out of nothing. one shop in beijing and how has thousands across the country and expand everyone more than that $4 billion in a year and a half. that's a remarkable field. we have not seen that kind of movement in a long time. this is going to be over on the nasdaq today 33 million shares at 17, prior price, open at the high end and upside is the size of that by

about 10%. we should get that in about half an hour. just off of the lows coming down less than four or five minutes >> bob pisani, we'll get some confidence numbers in a bit. let's get to rick santelli >> yes, you know you nailed it the reason why 238 continues to be so important. let's look at february 2018, that's last time we close these areas. we really have seen a decent rebound so to speak and at least we are not violating the lower bounds for example, we are down on the dan 10-year you pointed out 238, hovering 238 right now and it is down one and down 9 on the week. this chart for mid march. 237 is the low yield close of the year you see it on the chart. if you go longer and a 30-year

bond at equivalent level at 281. now even though there has been violations and those are significant. you chip away an important area really the closes and the most important aspect to technician and analysts and therefore a lot of customers and end users and investors and especially considering it is in the cross hairs today and today is friday, weekly closes has a higher prioritizations. everybody has been looking at this chart this chart starts in november of 2018 as we get closer to dishing out 7 yuan to get a dollar of course, all the issues with regard to what they are going to do with treasury and how it marks treasury international capital shows a big drop in their position that has been some what ongoing since mid 2017 finally the dollar index itself,

it is only about a third of a percent away going back to the summer of 2017 as luke you look at the one-week chart of the dollar index is really getting powerful. chinese yuan going down and there is no notion of the country leaving the dollar carl, jim, back to you thanks very much rick. a quick check on bitcoin dropping at trading above 8,000 you know that's a 9% drop in the last 24 hours but the big run up since the lows earlier this year all kinds of theories about whether or not the chinese trying to expatriate their cash through bitcoin and how much truth do you think is in that? >> idon't think so retrieve bitcoin, it is a foolish thing to do but you get a lot of momentum. p i talked to several people here

doing nothing but trade bitcoin. i think that business is going away i think it is a fool's gold rally. grade school's gold is t fool's goal is tld is to descrit >> it is more accepted than 12 months ago that's sort of what they are resting their hopes on >> this has a big way to end the week, jim. interview with sheryl sandberg is coming you. jul julia boorstin got that for us as we are down 100 points. don't go anywhere.

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recently we invented a brand-new technology called rtx which basically simulates light. now the entire industry has jumped on top of it. microsoft with dxr, epic with unreal engine has rate tracing, unity. electronic arts, great publisher, jumped on it. pixar is using nvidia rtx to render films adobe autodesk, we basically have the -- >> power everybody >> jim, so what is your general take on nvidia going into that >> i have often thought that one day we would be looking at simulations, but thinking that the real -- i saw simulations yesterday, video games, i thought it was real. this is the future jensen huang is a visionary and he's back. i think people should just go by the stock. i saw a future yesterday it is astonishing. it is life-like. it is brilliant.

>> jim, i do recall when they gave us that warning that day you and i were here that morning, part of it was due to demand in china. is that not a concern any longer >> they're not as concerned because they think that gaming is back in china jensen huang is talking about a billion people around the world who game when i see the life-like nature of the games, versus what we have, i understand that. i, again, one day people are not going to be people they're going to be simulations. and you'll be thrilled to be with them. >> day's here right now, jim we'll see you tonight and look back to seeing you back on monday we can't wait. when we come back, facebook's sheryl sandberg, dow down 138. heading into retirement you want to follow your passions rather than worry about how to pay for long-term care. brighthouse smartcare℠ is a hybrid life insurance and long-term care product. it protects your family

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ramp up their rhetoric, saying that the u.s. is acting in a bullying fashion coming up this morning, an interview with facebook's coo sheryl sandberg. sit down with julia boorstin, something you do not want to miss we'll talk data security, privacy, breakup controversy in the meantime, lei and let's get to santelli. >> let's start in chronological order. april, economic indicators, expecting a number up around .2 and no number to be found. look for a may preliminary read on university of michigan sentiment, this is a biggie, wow. 102.4. 102.4. that really is something to behold that is the biggest level going all the way back to january of 2004 january of 2004. monster size number here le leading indicators is out, not as exciting as michigan. up .2 as expected.

lost a tenth last month from .4 to .3. subsequentially that 102.4 follows 97.2 that's what we were expecting. very quickly the one year inflation outlook also ticked up boy, this a biggie from 2.5 to 2.8 and 5 to 10 year outlook moved up .3 from 2.3 to 2.6. so pressures are capturing imaginations here, and, remember, this is the preliminary. these readings will change once more as more data comes in carl, that was a big number on michigan back to you. >> rick, i'll take it, thank you. rick santelli. our road map for the hour begins with u.s. china trade tensions domina dominating investor sentiment. the major averages lingering in the red today. we'll discuss where stocks can go from here >> plus, it has been an ip o craze. shares of pinterest down this morning, one week since uber

made its debut and three companies preparing to go public this morning we have it all covered for you >> we're going to begin with the markets. china trade tensions continue to weigh on stocks. you saw the michigan number at a 15-year high as the white house announces a six year delay on the auto tariffs decision. jeff mortimer wealth management director, scott rend wells fargo investment institute, happy friday good to see you both scott, consumers just not rattled. i would like to know norabout when the survey data was taken but not reflecting the jetters that we're seeing in the past week. >> rick was excited about it it is a good number. and these retail sales numbers, that was kind of an odd thing when you see that kind of confidence number. what consumers do, and what they say are usually two different things for us, wages are rising, obviously a good labor market.

we expect continued good things in terms of consumer spending as we look down the road. so we like the consumer secretary for a long time. we continue to like it and i think readings like that should be expected >> why are you not at all worried about -- if not tariff pressure on consumer prices and spending, then i don't know, liability to the equity market, wealth effects goinging the wro wrong way, if this thing lasts. >> for us, we expect trade positives over time now. this week i think you have to say that the probability of a great deal are the best possible deal probably gone down a bit. consumers are not really seeing prices yet, if we have more tariffs and they last longer, they're going to start to see some of that that could dampen some spirits there. but, you know, for us, we are expecting some tariff positives over time. there is more uncertainty after

the last week or two but, you know, that modest growth, modest inflation environment that we're looking for over the next 12 to 18 months seems to be in tact and we don't really see a lot of reasons to change that outlook right now. >> jeff, where do you stand on the markets right now, given the fact we do have some of these uncertainties around trade and around the goings on with china? >> similar to what we just heard from scott, we continue to think no recession comes in 2019, no recession in 2020. certainly the trade issues may continue to weigh on markets in the short-term markets may continue to suffer from bouts of schizophrenia as trump is certainly a president who negotiates in public and so the markets have learned from that but it doesn't dim our sort of longer term outlook of decent growth going forward and if you were to get a trade resolution, you could see markets move to the upside

but they are going to be volatile in the near term. >> so then, jeff, would that make something like industrials attractive and some other cyclical stocks attractive to you right now, especially when you have a company like deere coming out and cutting its outlook based on the concerns around agriculture and the impact from china? >> so i'm not the person within our firm that makes sort of the individual sector bets but we are -- we are neutral weight to our equity posture to our overall risk posture for our clients right here certainly we have well diversified portfolio within all sectors for our clients allowing our managers to perhaps buy on weakness if they deem it appropriate. but for us, you know, you have to make sure that the inclination can be volatility, you know, picks up like this, is to derisk your portfolio and we're trying it the best we can to keep our clients at their neutral target, trying to have them participate in the market even though it can be uncomfortable. >> scott, if consumers are not

bothered by all the things we talk about all day, you know, philly fed, six month outlook yesterday was near a two-year low. and that tends to track industrial production over time. so do you think if there is liability to the economy, it comes from capex growth or something really defined within manufacturing? >> it looks like, carl, really we have to continue to rely on the consumer because capex growth, you know, we expect, you know, it to be positive certainly, but not -- not going to blow away expectations or anything like that because there is just too much uncertainty out there and you can see it across the globe whether it is -- you mentioned one of the ag companies there, but also if you look at, for instance, emerging market earnings, if you look at the -- what's coming out of taiwan and south korea, big exporters of gear into china, those earnings are down big time.

25, 45% in the first quarter year over year and it is due to this uncertainty. so uncertainty here in the states, you know, it is urn certainty around the world and it is going to cut into capex spending and it is going to hold back capex spending. so for right now, what we're counting on is incremental improvement in capex spending, but really in the u.s. economy, anyway, the consumer is going to need to continue to be the horse. >> finally, jeff, a lot of people watching this dollar traded index and arguing that a break above these levels are right around near where we are could be relatively destructive. how much of a problem might that be >> certainly for large cap stocks, multinational stocks, higher dollar makes it tougher to do business overseas. we'll have to monitor that closely. if the dollar moves are measured, however, seems to be in companies that have a chance to adjust to it, history is

okay, but we'll have to watch for sharp upwards spikes in currencies which catch markets off guard and companies off guard and as they report earnings, they can talk about currency having a downward -- putting down pressure on profits. we'll continue to monitor that but if we hold at these levels, we think companies will be able to adjust. >> jeff and scott, have a good weekend, guys. thank you very much. >> you do the same up next -- >> the book is frozen. the book is frozen we have just opened. 35 million open s at $42, uber priced 45. 32 million shares open at $42. >> that was a week ago and my goodness, what a month it has been for ipos. one week since uber, four weeks since pinterest. that stock plunging today. three companies are preparing to go public this morning one of them with an interesting

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welcome back to "squawk on the street." shares of pinterest are lower. company coming out with the first earningin inings report s going public as for revenues they did beat consensus, grew more than 50%, but full year guidance in line we spoke with pinterest ceo ben silbermann on "squawk alley" the day the company went public. here is what he had to say about keeping an eye on stock price. >> we're watching the stock hit new highs. up 29% what do you think in terms of where it was priced and where it is trading right now >> i really am just focused on where it goes long-term. we're delighted that opening happened and it is a fun milestone. we're not overly fixated on day to day movements. >> well, we're also watching uber, one week since its ipo three more companies making their debut this morning

there is a ton to discuss here a lot of people here today -- >> this is my favorite thing as a stock reporter this is america here they're all here, they all presumably have shares in the ipo. i love this kind of day. the market has done pretty well. the ipo market has done pretty well 56 ipos. that's good considering january, february we had nothing. we had -- they're up 60% of them on the up side, above average. first day pop has been 20% that's above average as well if you look at pinterest, pinterest is still up this year 60%, even with the decline of 10% that we have seen today. so there is beyond meat, zoom,

levi strauss pinterest, 60% the market is differentiating. they don't like ride hailing i see some discipline. this is not 1999 i'm happy with the way things are going, in terms of people trying to figure out who is making money who is not. i'm worried six months down the road when the lockups expire that's the real test that always is for all of these companies, i don't care who you are, a lot of people own the companies, five, six, seven years, that's when we see -- >> beyond meat with the small float that seems to be helping that stock levitate when you add a lot more supply. tell us about what we're going to see this morning, not just here, but lucken coffee as well. >> 14.25 to 14.75 now, that was $14. they change the terms a little bit yesterday. lucken here, waiting for that to open next half hour. $17. this company raised $500

million, they're a year and a half old with a $4 billion market cap think about this this company about not exist a year and a half ago, one store in beijing 18 months later, $4 billion market cap even by my standards, that's, like, wow. how did they do that they just opened thousands of stores all of a sudden. >> very small. stores are small. >> i know. but $4 billion in market cap in 18 months? i don't see that very often. i'm calling on my people saying when did this happen they're, like, well, '99 i don't want to hear about '99 that's a remarkable story. that will open to the upside a lot of demand there. i'm still pretty happy these are companies that tariffs are not affecting them they're all still growing. some of them have a lot of debt. but most of them have fairly decent stories again, the biggest issue is you got people who own these companies, six, seven years and they're going to sell when they get the lockup

>> those lockup periods will be key to watch retail investors should mark their calendars. bob just touched on this bifurcation we have seen in the companies that have gone public in recent months in terms of the conversations around valuations, the conversations around the investor sentiment for the companies that are still in the pipeline and looking to go public, what is it >> i think you have to differentiate the ride hailing companies and a class unto themselves yes, they have losses, but lucken coffee is losing twice as much money as it is bringing in the door now the key difference there is investors see a path to profitability. it is a consumer name. a retail company if they pair back some of their sales and marketing expenses, which were equivalent to the amount of revenue they made last year, then they could theoretically be profitable. there are levers that company can pull to get to a path of profitability. and difference between uber and

lyft is that investors don't really see those levers, see those options where they can just reign back spending to be profitable and that is the big concern there. and it makes it way more difficult to value those companies, which is why you're seeing so much volatility in the market now, they try and assess how to price these companies from a market dynamic. >> we were talking with cramer about direct listings and those experiences which you covered from top to bottom makes it worth the feat. >> i think that's a good question the fees are still there you don't get the proceeds like you would for an uber or lyft where they went out the regular route. they may not be happy with the outcome now with their shares trading lower but they were able to raise billions of dollars each and they can then use to kind of fight that ride hailing battle in the market now so direct listing imay be a

positive for some people, they don't have to do that dance with investors. don't have to necessarily go on the road show and meet with as many investors as you may have to do with an underwritten deal. but you're still paying fees you still do have to do those meetings so it is interesting as these companies try these new models some of them are trying them just to try something new and see how it goes. as opposed to saving money throughout this process. i think you'll see potentially more but not for companies that really need the cash as part of this financing event that an ipo is >> yeah. bob, in terms of pinterest, you started with it, we started with it, now let's end with it, the fact it is still up from its first day of trading, but down big today in general the top line growth is very strong the user growth was strong i know the losses were wider than expected. is profitability a much bigger focus than we have seen in the past >> if the market turns town or

we have an economic downturn, yes, it will if you look at what pinterest did, they did what they said they were going to do. there was no disasters in that report that i particularly saw the bottom line is, it is expensive, the stock was up 75% from the ipo price people took some profits i don't think that's necessarily a bad thing. i think it is nice to have a little bit of realism associated with it. >> guys, thanks for joining us today. leslie picker and bob pisani >> bitcoin is plunging a bit this morning, wiping out about $21 billion worth of market cap of the cryptocurrency. in just 24 hours seema mody joins us with more on these volatile moves >> big news, david bitcoin suffering its biggest intraday decline in over a year and a half, bringing the month's megarally to a halt. some traders say this is purely profit taking after bitcoin's 38% jump in the month of may others are pointing to a large sell order on bit stamp, a european cryptocurrency exchange that resulted in reportedly $200

million in long position liquidations they have opened an investigation into what is behind the large scale movement in its order book. and analysts say that today's price action serves as a reminder that bitcoin and cryptocurrencies are still prone to extreme volatility and price pluck wa fluctuations the believers are still sticking by the cryptocurrency. a fund dedicated to investing in cryptocurrency is telling cnbc that after a $100 rebound this year, it should be expected that there will be small drawdowns periodically after parabollic movements. the founder are of the fund expects bitcoin to continue to outperform we'll see. back to you. >> thank you when we come back, deere taking

a hit on trade, falling after cutting its forecast as uncertainty he was on the ag markets. another interesting stock story, jpmorgan buying a health tech records company called insta med. cnbc has that story up live now. and sheryl sandberg moments away with the dow close to session highs. down 67.

welcome back trade tensions hitting deere now. that stock down 5% the company cutting full year forecast citing uncertainty in agricultural markets mike santoli joins us now. >> focusing on the move, the big agribusiness deere is the second largest holding. the largest holder is zotus, the animal health business, i think part of pfizer formerly. down on a one year basis, almost 2% underperforming this year, up about 9% versus the overall market 13.

crop prices, under pressure, farming counts for deere in general, not a great backd p backdrop etf as a side note, a lot of basic food companies in there, tyson foods, has tractor supply, which, you know, not so much agribusiness as hobby farmers. it is a diversified mix. it shows you it is not a very strong part of the market. deere highlighting that today. >> you look at a company like deere, caterpillar and some other big multinational industrials have been trading lower is, yes, there is the china trade stuff and the fact we're seeing all this weakness in commodity prices in agriculture, but also, and i'm not sure we have been talking about it now what has been devastating catastrophic weather in the middle of the country that has been affecting so many farmers and so many industrial companies. >> yeah, so a little bit of a give up trade after weakness, even before this in deere. >> yeah. still, the company is expecting to increase revenue, increase equipment sales 5% this year

just not as strong as previously. >> not too bad keep looking stock we'll see. >> mike santoli, thank you >> back over to you. >> morgan, thanks. when we come back, facebook under fire could a breakup happen julia boorstin will sit down with chief operating officer sheryl sandberg with the dow taking another leg up here, now down 53 points we're back after a break

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good morning, everyone i'm sue herera here is your cnbc news update at this hour. taiwan's legislators voting today to legalize same sex marriage, a first for an asian country. the vote allows same sex couples full legal marriage rights including in areas such as taxes, insurance and child

custody. thousands of people celebrated in the streets outside parliament after that vote chinese officials say eight people remain trapped in a flooded iron mine in the country's northeast. 35 miners managed to escape. china suffered numerous industrial accidents in recent months mexico city has canceled classes for millions of students for a second straight day as smoke from brushfires continue to choke the city. the pollution remains at about 1.5 times acceptable limits. and i.m. pei, the architect who revived the louvre museum in paris has died he was the architect for the rock & roll hall of fame in cleveland. his buildings added elegance to landscapes worldwide with their powerful geometric shapes and grand spaces i.m. pei was 102 years old what a great talent. that is the news update for this hour carl, back downtown to you >> yeah. what an amazing life, sue.

thank you. sue herera watching the market continue to shave away at the losses. we opened the market down obviously well into triple digits now down 36 points still waiting on opens on avantore and then we'll keep our eye on luckin at the nasdaq as well with leslie and bob talking about that a few moments ago >> it is interesting, carl those who are potentially going to play this, you look at per capita coffee consumption in china as a play of itself. when you read the s1, you see it is about six cups a year now and the expectation it will go up to ten cups a year, which doesn't seem like much given we drink 388 cups a year. that's the market opportunity there. so luckin, which bob pointed out, year and a half ago barely existed, created a lot of small shops where people order on their mobile app and just pick it up.

not the same experience as starbucks, which is much more about the experience of the coffee and the place >> yeah. i also think one of the things to keep an eye on here, a lot of couponing, very aggressive discounting as they do try to take more market share, which in that sense is not as different as ride sharing and the price wars there either. so just something to keep an eye on we also have fastly will debut and go public today too, which is much more enterprise facing, tech company also lose something money, but, again, another one to watch, especially when you had other enterprise tech like zoom do so well in their ipo debuts too >> market got some relief from that university of michigan number confidence among consumers at a 15-year high got the ten-year repairing almost back to 24 this morning and the vix back below 16. so just putting the weekend in

perspective here we had the presidential tweet over the weekend, came into pain on monday. sort of battled it out for a couple of days, nice midweek run. and we'll see if we can close positive in about another 120 points or so for the dow to do that >> interesting, so much of the conversation now around trade war which is clearly only ratcheted up over the last week is less concerning than you might anticipate at least from the many people we bring on, whether -- and/or whether it is monitoring a few conference calls we had of ceos that conceivably would be running companies where there could be some pain, whether it is walmart or cisco, and then you have this general talk, well, it is only, you know, 25% on 500 billion in goods is a number so small, given the overall u.s. economy but i've got a lot of people focused on huawei. and the damage that could be done to that company, what the response will be from china because they feel as though

there is an expectation there may be a response from them. and whether this moves to yet another battle between the two countries. >> there was a smart note on that yesterday the fact that huawei is a very bipartisan issue and that there are national security and defense implications and a sentiment around it from that standpoint and the expectation that when you're talking to lawmakers in congress who are starting to put together these spending bills for national defense, that huawei is a longer term issue that is not necessarily going to go away, even with some sort of trade deal with china. the other thing to keep an eye on, of course, here, the industrial stocks. the comments added here, certainly royaling investors and some big multinational names today. you're seeing names like caterpillar and 3m trade lower, in sympathy as well. >> baidu, which david pointed out today, a lot of the chinese names are seeing weakness, not

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fastly here. you'll hear the words edge cloud a lot more in the years ahead. that's 11.25 shares. now settling back a touch. we'll watch that along with avantore and luckin today. to julia boorstin in new york with facebook's sheryl sandberg. hey, julia. >> thanks so much.

sheryl, thank you so much for joining us here today. you're straight off the stage where you were just talking about lean in and a new study you just released indicating that women are actually having less access to mentorship and to their bosses than they were a year ago what is going on here? >> yeah, it is really important. so today we just released a lean in survey monkey study that shows that 60% of male managers in the united states are afraid to do a one on one activity with a woman, including having a meeting. can you believe that 60%. a senior man is nine times more likely to hesitate to travel with a woman and six times more likely to hesitate to have a dinner with a woman. and the problem with that is women already weren't getting the same mentorship, particularly women of color. and no one has ever gotten a promotion without getting a one on one meeting and so i think men and women need to travel together, they need to be able to go to meetings together, go to meals together, all of that can be done in public spaces.

but those one on one conversations, and if there is a man out there who doesn't want to have work dinners with a woman, he shouldn't have work dinners with a man group lunches for everyone if that's how they feel >> seems like the movements of past yar or ear had real negati implications for many women in the workplace. what is your message to corporate america about that >> i believe they're overwhelmingly positive. but the thing is it is not enough it is really important not to harass anyone. but that's pretty basic, we also need to not be ignored so my message is if we want to change workplace dynamics, where the least sexual harassment is organizations that have more women in senior leadership roles. we need to have one on one conversations with them that get them promoted. this number moved up last year it was 46% of men were afraid to have that one on one meeting. today, it is 60. both are totally unacceptable.

>> shifting gears over to facebook there have been a growing number of calls to break up the company. beith from people who are -- have been very close to the company such as co-founder chris hughes, roger mcnamee and vice president biden. how do you respond to these concerns that facebook just needs to be broken up, it is too big? >> i know that people have real concerns about the size and power of the tech companies including facebook and i think those are the right questions. and the question is what is the right answer i think the right answer is to set up the right rules for the internet you could break us up, you could break other tech companies up, but you actually don't address the underlying issues people are concerned about, they're concerned about election security, they're concerned about content, they're concerned about privacy and data portability. so we know at facebook that we have a real responsibility to do better and to earn back people's trust. we're doing two things we're fundamentally changing how

we run the company we are making massive investments in these areas and if you look at what we have done before, to what we're doing now, we have large teams of people in the company whose only job is to safeguard elections, protect content, protect privacy. but we also know we can't do it alone. we're call for regulation. just last week, mark was in france with president macron we know that we have a real responsibility to get this right, and we're going to work hard, we're going to work hard to get the right rules set for our industry, but also to do the work we need to do no matter how big the investment, no matter how long it takes. >> even if there is regulation around privacy or the spread of hateful content or violent content, there is still a significant concern that will not be enough, there neds to be a new regulator established or the company needs to be broken up are you girding for an antitrust battle you have hired a couple of

former microsoft executives. >> any concerns we have are ones we need to answer. but let me share with you something else i heard in my meetings in d.c. i heard this in private meetings from both sides of the aisle that while people are concerned with the size and power of tech companies, there is also a concern in the united states about the size and power of chinese tech companies and that, you know, realization that those companies are not going to be broken up. so the question is for us is how do we make sure we protect privacy, how do we make sure we work with authorities to safeguard elections, how do we make sure the right content is on facebook and how do we make sure that the right regulatory framework is in place and we're working hard on all of that. >> you are making a lot of changes now, but chris hughes said that mark's obsession with growth led him to sacrifice security for clicks. when people at the company began to notice issues, whether around privacy, or the spread of manipulative fake news what do you think stopped people from immediately taking action? >> i think we have been taking action i think it is fair to say that

as we grew facebook, we were focused on growth. we were also focused on privacy and security i think it wasn't the most important thing we were doing and we should have been doing it at a higher level. if i look at my job now, my job is really changed. that we -- i used to spend more of my time working on growth and now i'm spending more of my time safeguarding the company and i think now this is front and center and it wasn't front and center -- it is front and center now because there are things that happened that we didn't expect we didn't expect the kind of interference we saw in the election we didn't expect bad actors and now we know better we learned from what we missed before, we know we need to work hard to prevent the problems that are happening now and we need to work hard to make sure that the problems we haven't even thought of don't happen >> there is a lot of conversation about, especially in washington, d.c., now, about what kind of cultural change needs to happen in the company to make sure people do speak up when they immediately see

something and not wait until it becomes a massive issue. the ftc in addition to levying a fine about $5 billion is considering all sorts of structural changes implementing oversight for as much as 20 years at facebook how could that change the company and actually impact your business potentially impact your growth >> well, we're going to do the right thing. the right thing is safeguarding people's privacy we have massive teams working on this it used to be that we had one team working on this and now as it has become more integral to what we do, every single engineering team and product team has a safety and security team as part of it. and so whatever the regulatory framework we end up with, what matters to us is that we take all the steps we can to protect privacy. and that's what we're doing. >> to have a team of people from the ftc inside the company, that would be unprecedented would that hurt your ability to make changes and grow your revenue. >> i can't comment on anything we're talking about with the

ftc, what i can say is we're going to do the right thing and that means we're going to have the right kind of oversight. i think we have a very strong board. i think we are accountable to people all over the world. and we are taking the steps to protect privacy to go through our systems, find the vulnerabilities, be open about those publicly we also know that the challenges we face are unprecedented. with so many people on our services, whether you have them in one company or many, there is still a lot of people. and we're going to have to go through and make sure we're protecting people. >> one of your privacy changes is implementing a clear history tool, which you warned advertiser was going to impact the way they can target and reach consumers. are investors vastly underestimating how much this kind of tool eliminating targeting for people who opt out of it could really impact your bottom line? >> so our bottom line is getting this right and we are making real changes that have impact our growth rate is lower we're spending huge amounts of

money, billions of dollars and we're taking on real things that do change that we believe deeply that doing the right thing for people on our service is the only way to protect our long-term business and it is the right thing to do. so the bottom hiline for us is making sure we get this right. >> what will it do to your business what will it do? if any meaningful percentage of your users opt out of targeting and if they use it more for private messaging than they the news feed. h >> we're running the company differently than we used to. i think you're already seeing that we announced messaging first we limited ads targeting for certain categories we have rolled out and took the gdpr tools androlled it and you're right these things lower the revenue growth and cost a lot of money but they're the right thing to do we have been doing this now for

the last few years and we're going to continue doing it and we believe in it we believe if we do the right thing to protect people, the right thing for consumers, that we are going to have the best long run business we can >> i feel like we're hearing two messages from the company. on one hand, mark said on the earnings call, the long-term growth trajectory is not going to be impacted by our shift to private messaging and all these changes we're making but on other hand, you're telling advertisers that the fact that you can't target consumers as narrowly is going to have an impact and you still have to figure out a business model around inserting ads into messaging. these are two different messages here is the growth potential going to be as strong in terps ms of revu or are you going to take a financial hit? >> i think what we said is the long run we believe the long run growth rate is the most important thing. we have always run the company for the long run and we do that by making the right decisions in the short run. so if people clear their

browsing history, we can still target ads because we still have information they have shared on facebook but it will make those ads a little less effective. but it is people's information and we want them to use it as they want it to be used. that's a choice we offer a choice they might make it may harm our revenue growth in the short run we have been open about that on earnings calls and others. and we believe in the long run, it is the right thing for the business and we'll keep doing the right thing. >> just a final question about what's app you revealed that it is basically used to hack into users phones there has been so much talk about how much you're investing in safety, security, privacy, how can you assure us now that things have changed. >> that work is because things are changing we have assembled big teams in the company and they're going after these issues we found that vulnerability because we're doing this work. we're putting more engineers on looking for bugs, looking for vulnerabilities, we found this, we shut it down, and here's what

you're going to see from us. as we continue to do this work, you're going to see more things. we're going to find them, close them down. we also have other people finding these things and telling us about them and we'll be open and honest about those this is the work we're doing to make sure we protect people. >> we're out of time but sheryl sandberg, thank you so much for sitting down and ta talking about these very important issues with us here today. really appreciate it guys, back over to you >> julia, great work julia boorstin with sheryl sandberg back at the desk, jon fortt, david faber, morgan brennan and myself, dissecting what we heard. i lost track the number of times the right thing. >> facebook has contained the risk i think we can say that at this point. they have been under a withering amount of pressure it is not clear to me -- they haven't answered the question whether their business model or product model needs to fundamentally change in order to fix some of the issues that they have had but, look, their stock is up 42%

year to date compared to 27% for microsoft, 26 for amazon, 13 for google they have rebounded in a significant way because i think investors have recognized that the kind recognized these kind of moral and ethical issues are not financial issues and they're not immediate issues as far as affecting the bottom line >> you know what got my attention? when she was talking about her meetings in d.c. and this idea the people are concerned with the size and power of u.s. tech companies, but perhaps more concerned with the size and power of chinese tech companies. this sounded like what we heard from donald graham, a former facebook board member when he made similar comments about the idea of competition on the world stage for tech companies >> yeah, not a fan of bogeymen in business. i mean it was japanese and there's always a boog geymabogen yes, there are always legitimate

issues in size and competition the way the company uses those to define american versus a big chinese tech company nobody's explained kind of the mechanics of that in a way china's always going to have bigger stuff because they have this planned economy does that make china better? i don't know >> david, i don't know about you. ears perked up a bit when she said those ads will be less effective. it may harm revenue growth in the short run, but we believe in the long run, the right thing. that's the key, right? will a less effect i havive ad result in less advertiser interest >> as you picked up on that right away, as julia honed in on that key question. how are you going to maintain the long-term growth rate when your profitability or margins may be impacted because you're not as relevant to investors

it was interesting to hear, but sandbu sandberg saying if we do the right thing, it will result in the right thing long-term. the idea of a hit to margins, shorter term, maybe investors are willing to take that if they believe this is going to be this eubiquitous platform that figurs out new ways >> i'm not convince d there's going to be that much of a hit i think it's to facebook's advantage right now to say yeah, we're taking a hit, but really, who else has the asset facebook has being able to tie real world identity so closely to digital nobody else has that even google doesn't have that. so if facebook is kind of knocked down to closer to google levels of target they're still going to be better at google than targeting there's no alternative i'm not sure it hurts them that much >> over all, some viewers say it sounds like an earnings call from the last couple of

quarters coming from her has a bit more of a human touch >> cheryl sandburg is a pro. there were questions, does cheryl sandburg need to go no she is not going anywhere. there are few u people in american corporate life who can speak for their companies as clearly and effectively as sheryl sandberg. >> incredible communicatcommunir there's not many management teams that could have withstood what facebook has and be the same people telling you we're not going to get it right when we got it wrong. julia's not there. >> probably talking to sheryl. >> david, can you hear here am, david i kept on trying to push her on what all these changes were going to mean for the advertising business

advertising is their revenue and she kept on say iing well the bottom line is we neat to get this right for the company i think what they're trying to balance now is how you fix the strurk churl issues of the company, whether around the fake news, the manipulation ahead of elections or of course around the privacy issue. how you fix that so the company can exist for the long-term while at the same time, making sure you maintain some revenue growth as you transition to new companies. i think the bottom line what she said is they are really willing to forgo near term revenue u growth in order to secure the company for the long-term. >> you asked her about the culture, too i thought it was interesting what she had the to say about how much time she's spending now focused on privacy and security versus growth. and also what that has meant in terms of the composition of their different business units across the company >> yeah. i asked her whether or not you know, what was going on and what

was wrong when mark zuckerberg was allegedly according to chris hughes, trading the focus on privacy trading clicks really focusing on the clicks rather than security of the platform i asked her specifically about those allegations from a cofounder of facebook, chris hughes, who was so close to the company. and what she said is that back then in the past couple of years, she had not been focusing as much on privacy and security. she needed to. it was all about growing business and now that's really her primary focus. you have u to wonder though how distracting this must be she was just in washington, d.c. meeting with lawmakers they're dealing with the very real prospect of regulation. you have u mark zuckerberg in paris dealing with new rules around live streaming. this has got to be a real distraction from the day-to-day running of this business >> stocks green even just a touch. even despite those tough questions and of course the questions extended to things like china here's what she had to say about that >> well, people are concerned

with the size and power of tech companies, there's also a concern in the united states about the size and power of chinese tech companies and the you know, realization that those companies are not going to be broken up. so the question is for us is how do we make sure we protect privacy. how do we work with authorities to safeguard elections how do we make sure that the right content is on facebook and how do we make sure that the right regulatory framework is in place and we're working hard on all of that. >> this points to the answer about break up and that is you can break companies up but doesn't mean necessarily you're going to address the underlying problem regarding the internet >> this is the challenge with democracy when it comes to big acute problems it takes a while for people to come to some sort of agreement on what the problem is facebook knows what its agenda is you can feel them getting ahead of it. as julia was saying, yes, they're perhaps distracted, but

they know where they're putting zuckerberg in france they have their marching orders and they are executing what the agenda of the governments is, less clear >> jon, thanks for the reaction. good stuff see you in a minute. off to a good day for ipos fastly waiting on addvantour the dow now up 50 points don't go away. about diversity, and actually be more diverse. as investment management professionals, let's measure up. cfa institute.

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