mark the dow is off by 74 points. s&p looking open to dow about 10 points we'll keep our eyes today on qualcomm of that suit, now they're appealed against that ruling with the ftc suing them make sure you join them tomorrow, "squawk on the street" begins right now ♪ welcome to "squawk on the street," i am carl quintanilla with david faber and jim cramer. we took a light lower as mnuchin told reporters he has no trips planned. our road map begins with qualcomm in a trust fight, shares are down after a federal judge says the company strangles

competition. >> nordstrom and urban outfitters are tumbling. target is at the right spot. >> doj staffs block the t-mobile merger a federal judge ruled the company unlawfully hinder competition in the mobile phone market the judge cisided with the ftc the chip maker strongly disagrees with the ruling and will seek an immediate appeal. you will walk us through what it means this morning, david. >> 233 pages, so you can imagine a lot of people are going through that at this hour in california and new york trying to understand the ramifications.

the judge during the course of the trial had been seen perhaps going against qualcomm it has been a long time since those arguments ended and we have been waiting for the decision some say she's basically discredited every single qualcomm witness and gives a lot of credit to the witnesses that provided by the government the ftc was charging monopoly power, saying essentially qualcomm used its leverage in the chip business to extract payments for licenses that otherwise would not have been paid or certainly not at a rate they were. qualcomm itself as we know has been involved in battles with so many of its customers but many of them have been resolved most importantly that battle with apple resolved a few weeks back sending stock price soar g

soaring. i am told that deal is not threatening by this decision at this point however it is pretty much unclear of the exact ramifications of this decision will be in terms of giving the right to customers to open negotiations with qualcomm or try to re-negotiate in some fashion. some what unclear. as carl says they are seeking a stay and they're going to a judge. the ninth circuit of appeal is likely to do so and you get appeal itself and we wait to see what happens there at least what critics would say or those on the qualcomm side would say, she had a p preconceived notion where she wanted to go and went there. the stock is getting badder on that and on the concerns of what it will mean for qualcomm. the likelihood is we'll get a

stay in the ninth circuit and then wait for the appeal >> i think a lot of people followed this and believe the ftc is going to win. a apple agreed hey, listen, wait for the ftc. >> you know the best i can tell based on the number of conversations, well, i can't say definitively, they clearly structure their negotiations outside of any connection to how this judge were ruled. i am told the ruling itself is sort of the terms of question bha mark there >> everyone one uses qualcomm. is it ironic that some asian in china don't use them in. >> huawei is still outstanding in terms ren-negotiating a deal

with qualcomm. this judge seems to me coming out and benefiting huawei's case in any negotiations with qualcomm defending huawei, i guess. she's very odd >> qualcomm is an engineering genius marvel. the judge is saying you know what, qualcomm is not allowed to negotiate in monopolies. >> right >> and yeah, the judge -- just because you succeeded as a competitor, does not mean you should be penalized. >> being monitored for 7 years that intel waved the right flag

here >> that may have influenced apple more than anything else. they needed those chips. they could not miss an entire cycle without a 5g hand set. >> what's incredible is that if you follow the president, apple is the winner in 5g. there was a piece today - today -today -- is that amazing >> they did say the risk to earnings per share in china because of china lies in the mid 20% range. apple supply chain, the company be able to shift iphone volume outside of china this is the continual theme. when i spoke with jensen

huang -- what's the matter >> we are moving on? >> in term of qualcomm and the ruling itself, the judge again i have not gone through 233 pages. it does not giver the best reason of arguments. it does seem to create that qualcomm created the barriers by virtue of putting the best chips out there. we did speak to molenkofmolenko. she said unfairly tends to destroy competition. we did have the company's ceo on with us after the apple settlement we asked him about this very

case and what he expected. >> the ftc case concluded some time back but we have yet to hear from the judge. was that still a risk for you and qualcomm and its business model? >> we did finish that trial at the end of january, we are waiting for the judge to rule. i think it is hard for me to talk about that. we'll deal with that when the judge makes a settlement >> the settlement impacts that ruling regardless of what it may be >> i don't think so. when we look at this deal, we are just happy to be able to do it the environment with which we were able to put the deal together is obviously right in the middle of a trial. but, you know the court is going to make a decision and - >> there has been some concerns given the comments of the judge and perhaps things did not look like they're going your way. >> i think we are quite happy of the way the trial progress

i think we put on a strong case. it is in the hands of the judge and we'll wait for her decision. >> we got it we have not heard from mollenkofp yet >> short statement as you said earlier. retail earnings, target is up sharply after posting better than expected numbers. comps above consensus. there is lowe's and nordstrom after missing on earnings. nordstrom add executional misses mnuchin says he spoke to the cfo of walmart to mitigate on u.s. consumers.

>> there was a lot of odds here talking about formulas -- so i mean the idea that we are somehow going to be hurt by chinese's formula, abobott is u.s. source. you just go to the website, there is pictures of usda cows nordstrom was horrible they had the wrong merchandise and digital and wrong look and pricing. >> were they right >> nothing >> to be fair to lowe's. the outcome for the first time and people can't remember. >> he's been there for five minutes. marvin, a lot of it is legacy.

you know the old lowe's lost a lot of business to home depot and now we are discovering why lowe's does a lot of contractors and trying to get where it has to go. the stock was too high your friend the activist makes it seem like -- they made it feel like allison has already won. anyone who talks to allison just like anyone who talks to michelle gass knew there is problems brian cornell transcended. >> it is not a question on consumers. it has been a mix picture the last couple of days. >> is it true that it was raining on kohl's side and sunny

on target's side >> target is going to have its best day in about a year and a half >> that's not the story. cornell has figured ou out -- growth in digitalis fabulous cornell is a winner. we have been at it for a while michelle gass is new nordstr nordstrom, we had no idea. i keep on thinking about going private at nordstrom and why they could not get finance maybe the reason why is they didn't deserve finance it is time for nordstrom to break -- the >> there is going to be a giant nordstrom on 57th street it is there. it is going up >> look at david with the retail >> it is going to be one of the

tallest buildings in new york city >> i checked with tjx -- >> i have been there they moved the socks and the under garment. >> that's what i am talking about. >> when we come back, a lot more on sprint and t-mobile stocks moving on the new reports of doj position. potential pick for the fed, judy shelton will join with rick santelli later this morning. take a look at the premarket here as we have been back and forth pretty much the middle of the over night range "squawk on the street" is back in a moment. t you have ter to do so much more. let's not just develop apps, let's develop apps that help save lives. let's make open source software the standard. let's create new plastics that are highly recyclable. it's going to take input from everyone. so let's do it all, together. ♪ ♪

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welcome back to "squawk on the street." shares of zprisprint and t-mobis going to be down of course that does not necessarily mean the doj will move to stop the deal. that'll be up to in part of course the staff's boss and other political appointees there as well. incremental story here it is not the first time we heard the staff is opposed a couple of months ago, similar

and there has been from any number of other organizations reporting that the staff was lining up against the deal we did get some timing if reuters are accurate saying could be as much as a month before we veer the final decision much is up to del raheem. most recently when i caught up with him in los angeles and asked him about whether he made his mind up on sprint or t-mobile and what was going to be behind the final decision >> will there be a price increase in ultimately the price of consumers for their cell phone bills as well as their broad band with the innovations that's happening with 5g and other technologies you are going to be able to use that phone you will get your media and

video and we want to be sure to encourage that but the ultima ultimately is there going to be a price effect when those two combined >> really? >> that's what they're trying to figure out we got the news on monday that the fcc was supportive of the deal with certain conditions being met by the party that the fcc wants it >> i have done a lot of work on this the last 48 hours you can't compete in 5g. it will be expensive the more i look at it, the equipment, the 'ten attenna. it is mind boggling of expenses. >> 5g is configured into a lot of the stories this morning. here there is also that question whether or not it is a national priority, whether that will win the day somehow for these two

parties. >> these 5gs is so powerful. >> we'll goat to moet to more dt of 5g and the u.k., and cramer's mad dash and the opening bell. we'll be back in a moment. my experience with usaa has been excellent. they really appreciate the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat usaa" we're the webber family. we're the tenney's we're the hayles, and we're usaa members for life. ♪ get your usaa auto insurance quote today.

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there is a ton of news this morning whether it is qualcomm or brexit, we'll cover it all, opening bell is just about eight minutes away

all right, we got about 5.5 minutes before we start with trading here at the new york stock exchange we talk a lot about beyond meat.

>> yes >> i am not just talking about beyond meat. i have to tell you theres as report today, it is called "i can't believe it is not meat." this is a new research that i want it talks about frankly that the younger generation don't like the cows are braised they feel it is eating animals you should not eat and basically you must be healthier and save the planet and waistline one bite at a time there is an older view, they talk about the taste test. i have the impossible burger, beyond meat burger first cooking process, beyond burger did not bleed realistically. my favorite is flavor.

and the flavor here is for beyond burger is really close to real burger. why is impossible burger is not a threat to beyond meat? juicier in flavor. weird after taste, over cooked corn >> the analyst went out and did test tass on tasting >> this makes me feel like the party is a cook book it is rather amazing because it does capture why this thing is such a -- people are looking for something like what millennials want >> the health impact, a lot of sodium in this stuff it is more about the planet, is it

the chemicals are bad. when you talk to someone like a vegan. a vegan will say -- methane comes from cows, that's natural methane. we are talking about the planet. so you can eat one of these. >> the key is economists you have got to flood that thing with economists. >> go long kfc or something like that >> well. they have cheese whiz. >> they got it all >> the next generation is thinking more about saving the planet than taste. >> no. >> hey, this report is excellent. i want everyone to go open an account at barclays and get this report it is brilliant.

we have the nestle burger. the chocolate? >> the burger, not the chocolate. >> mustard and tomatoes and lettuce, you want to make that thing go you put all that in there and throw in some bacon on top of it and some cheese. >> beyond meat topped at 96. citron made that public call never going back to 65 and calling it beyond stupid >> i really feel it is important that people understand it is about finding a new category we have gone -- this is a disrupter. everyone though tyson has one. does not matter and nestle has one. they say beyond meat is pure

disrupter until the impossible comes in it is a wow burger >> tyson must know what it tastes like because they were investors and they decided to get out. >> that after taste. >> that was the thing. when we bit into the impossible -- oh, juicy. david -- >> yes, sir. you have to go out to get an impossible burger. >> they have a big gigantic concession for impossible burgers at the oracle giants i was the only one there >> that's a line i will get on >> the shorter the better. >> my vegetarian daughter says dad, that's the best burger i have ever had. i am like you don't eat burgers. >> let's get to the s&p 500 at the cnbc realtime exchange

it is schmidt and avon there is a ton of news today >> the administration -- >> every time i hear you say it, are you crazy? >> look at luckin, do you think it is a good winner? >> their ability to raise capital. >> they're losing money for people buying their ipos >> you prevent people working from high-tech industries. >> you want to save people money, you care about the

investors? block the ipos you see what howard schultz said about luckin >> hello toronto and hong kong and hello london >> tom freedman today with a powerful piece >> he's got a great piece. >> it is a wake up call. i regarded that piece as mildly positive about president donald j. trump >> he does say trump is right, they can't free loading off of our innovation that was a great piece >> freedman has come around and bannon made a strong case with a lot of different people. we know the right and the left there has been decent support. tpp was a perfect opportunity to

do that. >> na. >> why >> because it was not working. >> freedman. >> you have not read one word of the ttp. >> it would have taken 18,000 tariffs to zero with 42% of the global economy agreeing. >> all the germany has to do -- >> and rule of law >> we let them in wto. >> they were not in the ttp, jim. it was excluding them and actually going to be something -- >> it would not have worked. >> that's easy to say. >> peter navarro -- he has helped some people i know bannon is your pal, can you find out whether he listens to the show. >> he did call me his brother when he saw me >> you are my brother. >> ask your bro --

>> and now people are talking about what if msci excluded them >> look at that stock. msci has been great. i really feel like we have to -- >> maybe we are already there with qualcomm. >> now we are going after the company that's following you >> what's left >> they always bought soybeans and boeing then when we start getting tougher, what did they do that piece read like he wants to be in the commerce department. >> okay, all economic with china. where does that lead us? >> and now i know you think it is a good election stance for him.

this point, china's policy, 40 approved and 50 disapproved. it is not playing right. >> they have to go interview the people who believe the chinese paid the tax the base it is all about the base >> mnuchin in his testimony says largely the chinese have been paying for it in some fashion. he went onto say as well if we do 25% on 300 billion additional it will -- >> they're talking about $100 billion >> michelle gass -- some people moved off. they did not move off. it is not as fast as they should under armour is moving rapidly it is easier to source the power. a lot of place they can do it. >> to your point mnuchin is telling maxine waters and not

only the cfo of walmart and there was a business lobby that said 40% of their members have considered or have moved some production out of china. >> you have to this thing as david said is all out work it is why the company have the least exposure of china are doing the best >> it is pretty funny. the endless procession of people coming on the show there is dpoi going to be a deal >> now we are talking about all economic war >> every time the dow goes down big, we see soften things. that's important the poll numbers, you can start. we ask every company about tariffs. it becomes the issue i still feel that the expen expense -- you will be able to go to walmart and amazon you are not going to feel the price as much as people think.

you are not. >> well, i am not because i don't buy anything >> you look at what they -- they don't make a lot of stuff. you can buy the stuff made from other countries. you just have to go on amazon and find the cheapest one. amazon is the answer to the problem. >> furniture what about furniture >> go to way fair or ikea. >> all right furniture, a lot of it is made in china >> you can't have your cake -- >> let them eat gatoue >> i think the idea is ludicrous. they're talking about baby formula here >> do you think it is worst taking the pain? >> let's deal with some facts,

okay we talked about baby formula comes from china we do not source our formula from china, there is no exporting. we did not source our products from the u.s we us imported milk. >> the biggest guy is not all about china. >> if we day agragree tariffs il painless, what about the promise growth over there that we talked about for years. that's over, right >> i think the problem is is like what freedman say they steal your ip we are big in china. they piloted everything. >> they did. you can go back when gates was defense secretary, he went over there and he saw a copy of our

fighter plane. >> i know, i am just -- old gates' joke. >> you are still selling boeing and cat. >> i think the cat is done >> done selling off? >> i don't think you need to sell cat anymore i don't. >> infrastructure - infrastructure -- $2 trillion. >> if it continues to ratchet up fine, we are not going t buy any -- >> starbucks you are not opening anymore. >> that's an issue will you stop? >> i am just saying it is not going to be easy >> no one said it will be easy >> the president i guess he factors in >> the same way there is a cost, there is 900,000 per steel

worker job is what we are paying maybe it is worth it >> it is made in china 2025. it is about belton road. we kick those chinese ipos 80% of them are losing money bannon is doing everybody a huge favor. i would sell luckin. >> how did he everyone n do it? >> the last i remember is we still have laws here what laws would you use to block the chinese here at the new york stock exchange >> a brand new law >> would it be one of these executive decree w >> why not >> your fair market ideas are eroding. >> i do like caterpillar

boeing has a seven-year backlog. >> it is a terrible idea >> who are you >> how about lucy koe. she's off the reservation. >> lucy liu -- she's from queens >> lucy koe, i don't know where she's from >> a big victory to the ftc in the case that was heard some time ago but only last night before midnight we got the decision on. >> how dad she decided eight wes ago. >> the timing is interesting to negotiate a settlement which sent qualcomm's stock price soaring. it has been coming down since then and of course largely -- >> what a short squeeze that

was. >> it is some what unclear at this point and not unclooear basically saying qualcomm is abused of a monopolization in terms of forcing customers to take its ip and pay a lot for it and it is linking the two of them in a way that's simply not in the public's spreinterest >> anybody could have made the chip they chose not to. they're likely to go to circuit court to get that and get an appeal as quickly as they possibly can we may be in a sort of appearance as we wait and see what actually occurs mollenkopf got a bonus here. >> i don't understand why the

board gave him a bonus for doing this job >> i don't want to take it away. >> he never sleeps >> it is a hard job. >> that worker is going to change senator warren. >> oh, i see it will change everything. >> by the way, bannon could have gotten out of this bannon is the man. i am over waiting bannon here. >> he's got a lot of influence, i think. >> he's listen and talking to the chinese. think abo-- >> by the way, interesting results of this. one of the outstanding deals that qualcomm is still negoti e negotiating is huawei. but, this decision would have seem to benefit the likes of huawei negotiating

>> what does it mean for at least? l tesla >> they were active in the third bond offer but sort of echoed of what we heard out of bernstein >> how do that stock rebound >> you go on twitter, look a this, there are three tesla in the parking lot, i am buying tesla. that analysis -- at the same time, the $10 bear case. what kind of research gives you - i have a $10 bear case, is that really value added? >> no, it is not you made that point. the headline got us talking about it all >> that's true if the chinese is going to tesla. wow. >> what if they go after gm? >> or las vegas. >> it is not a rose garden you got to be in united health

with joe biden >> those stocks are red hot. >> it is not agreeing or disagreeing, just about having a conversation about some of your ideas. >> i don't like this conversation that implies there are two sides. >> yeah, right that's how a lot of people feel. dow is down 100 but good action on target and netflix is up 3% let's get to seema mody. giving back to some of yesterday's gains. s&p is down just about 10 points 3% below its all time highs. technology is under pressure it is a combination of qualcomm plus those trade embassemicondus are fallen today let's get to retail. a mix reaction to retail earnings

target's earnings is beat. down beat results from jc penney and nordstrom and kohl's the conversation on these earnings calls were dominated by tariffs and what the big retailers are trying to do about it home depot says it could spend additional $1 billion due to the added cost and the 25% tariffs and opens a new sourcing office in vietnam all this comes after walmart last week said it may be looking to raise prices on certain products that stock is slightly higher on today's rate chinese travel firm reports more retail names and we have l brand and shoe carnival. a close eye on shoe coarnival. roughly 70% of u.s. footwear is imported from china.

chinese stock closed down on the day. keep an eye on the indian stock market this time modi is expected to stay in power. >> let's get to rick santelli in chicago. good morning, rick >> good morning carl yesterday all maturity of 30-year bond closed at a highest yield. a couple of weeks of tens, it takes you back to the tenth there. we have moved close to it yesterday, backing a way alittle bit. we are still flirting and holding the current low yields of the year right around 237 what's interesting is it spent enough time for it to be officially a nice looking double bottom it does not look all that different from what's going on in the u.k. and the ten-year the only difference you see on the right side is they have not

come down and based on what's currently there, low yield and a similar formulation. that was a whisker, look at the currency of the u.k., so much turmoil regarding brexit and theresa may. if we go to march 1st on the dollar index, what jumps out at you there is that we are once again and there is been several sessions trying to test what stances 24-month high a dollar index slightly of 98 it is not making any big b line to go through that level 10:30 eastern. we have dr. judy shelton, we'll enjoy talking to her about all that is interest rates and foreign exchange carl, jim, david, back to you.

>> we'll see you in a little while. still to come, the road ahead for tech, we'll talk about it with venture capitalist, bill gurley s&p is down at 10 and dow is down by 9 points don't go anywhere.

some of the worst performing components to start out this wednesday include a lot of retail nordstrom, lowe's, vf in there, tjx not far away we'll t megeso stock trading action in a moment with jim. dow's down 90. xfinity mobile comes with our internet,

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bring in your own phone, switch to xfinity mobile and only pay for data. now that's simple, easy, awesome. get $100 back when you bring in an eligible smartphone. click, call, or visit a store today. it is time for cramer and stock traid iding. >> if you are on a conference call, go to urban outfitters, they missed. the main store did miss. they're closing some stores. it is obviously disappointing. they're starting this new thing nully, and it is a rent the runway competitor. rent the runway, our staff uses heavy rent the runway. i just say urban is doing the right forward thing. >> that's a juul ad. >> that's not fair just first time i ever saw two us and now i got a second uu it is a brilliant analysis of what the new world is, which is

you need subscription. it is a subscription economy i can tell you the stock is down way too much >> all right interesting discussion this morning, the three of us >> remember howard told you to get out of luckin. howard and bannon, same. tom friedman and bannon, we are -- the -- >> schumer and the president. >> i felt that caterpillar, $2 trillion infrastructure bill, wouldn't that be something notice he never makes fun of -- >> they'll meet at 11:15, the president and the dem leaders about infrastructure >> they'll talk about everything who is talking about impeachment? nancy pelosi has never been made fun of by our president. notice that? has respect for nancy pelosi everybody does business person too, by the way. >> fair amount of power. what are you going to cover tonight? >> i have idexx labs

i have ring central, and then edgewell they just bought, what -- >> they bought harry's. >> can they do what duben did? i got them to stop sending me that stuff from the er guy i have like 5,000 razors. >> send some over my way. >> done. >> jim, we'll see you tonight. "mad money." when we come back, judy shelton said to be in the running for a fed governorship with the dow nowow50 dn get it. get it. get it! get it! crowd chanting: get it! get it! get it! (crowd groaning) (crowd cheering) narrator: give your town a reason to celebrate because every goodwill item you bring home, brings job training and more to your community.

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♪ good bewednesday morning. welcome back to "squawk on the street." what a morning, whether it is the fed, brexit, china trade, qualcomm, retail, tons of swirling currents here dow managed to shave the initial losses in half, down 47 points >> our road map for the hour begins with retail tumbling. nordstrom, lowe's, delivering

lower numbers. this as secretary mnuchin called the cfo of walmart over tariffs. >> qualcomm's antitrust shares are plunging after a federal judge says they strangled competition in the market for cell phone shifts. >> a rate cut coming bullard warns it is in the cards if inflation does not hit the fed's targets. >> we start with qualcomm this morning, shares down as much as 10% this after a ruling that we have been waiting for some time, judge lucy coe ruling on a case brought by the ftc against qualcomm sometime ago. arguments had ended months ago but we got the ruling last night, just before midnight. 233 pages in which it is a clear victory for the ftc in terms of its case against qualcomm, alleging that the company used its position in both the ship business and portfolio, intellectual property and

licenses to extract, well, unfair payments essentially from its customers far beyond what it may otherwise get and also use that position to prevent competitors from effectively competing with it in the chip business now, qualcomm itself this morning says courts disagree with the judge's ruling. it is seeking a stay on that decision it will go to the ninth circuit court of appeals as well to get the stay and to seek an expedited appeal of the decision itself interesting in going through the 233 pages, the question becomes well, what does it really mean in terms of what customers now can conceivably do with qualcomm, can they immediately try to renegotiate with the company, it is unclear qualcomm share price had skyrocketed only a few weeks back after they settled long running litigation with apple, one of the largest customers, of course

and then you get this deal, or i should say this decision coming not long after that. i am told, though, the two are separate, there is not necessarily anything in the apple settlement that would have connected to the ftc decision in terms of a triggering mechanism for something different than what they originally agreed to people close to qualcomm tell you this judge discredited every one of our witnesses, credited every one of the government's witnesses, from both intel, even from huawei. and they obviously believe there was a preconceived notion of where she wanted to go and she got there. let's bring jon fortt in as well, he's been covering this closely for us, been going on for some time, the litigation in terms of apple this case where many believes judging from what was said in the court that it might go against qualcomm. >> yeah. but this is as close to a total victory as you get for the ftc which is in itself remarkable in

a case like this there is a guy whose blog i've been following for a long time, florian mueller and he kind of thought it was going to go this way, even he seems surprised at the degree to which it did as you said, the question now is so what? what does this mean given that qualcomm has settled with so many of the oems who it was battling with over this, except for huawei this puts huawei in an interesting position of course, it is not like qualcomm can -- >> we were talking about this earlier. huawei, of course, they are -- they were trying to negotiate a new deal this would seem to obviously be very beneficial to huawei's negotiating position but we all know that qualcomm may be prevented from selling chips from them 89 days from now or whenever that -- the 90 days began, i think it just began so it may be moot. >> 24 hours ago, i think a lot of people were thinking about qualcomm in terms of well, they have this major risk and issue off the table.

they can do m&a, build the business from the perspective of their core business model being in tact. now you can no longer do that. when you look out five, ten years, some of these agreements nair already expire, then what happens. they go beyond 5g, what is qualcomm's model going to be do they need to do something structurally or m&a wise to hedge against the possibility that this doesn't work out, this royalties and chips things, its days are numbered. >> as you point out they settled with them, most prominently being apple itself 5g figures so prominently in this qualcomm would somehow weigh on the judge because you had them weighing in, didn't seem to matter >> lucy coe has been around for a long time. she has presided over a lot of these cases. one imagines perhaps she was going to show that this -- when

it is a judicial issue, it is a judicial issue 233 pages, this decision took a long time to come out, a lot of people were wondering what is taking so long well, i mean, whether you agree with what she says or not, arguments that she makes are meticulous in this thing i haven't been through all 233 pages yet. i looked through a sampling of it it is something else >> as you mightimagine, qualcomm vehemently disagrees with t we asked specifically about the risk of the deal or this trial at the -- in front of lucy coe the ftc case concluded sometime back, but ywe have yet to hear from the judge is that a risk for you >> it is i think we did finish that trial at the end of january. we're waiting for the judge to rule i think hard for me to talk a

lot about that, but we'll deal with that when -- >> do the settlements including the one with apple yesterday impact that ruling regardless of what it may be >> i don't think so. i think when we look at this deal, we're just happy to be able to do it. the environment with which we were able to put the deal together is obviously right in the middle of a trial. but, you know, the court is going to make its decision and -- >> there have been some concern given the comments from the judge during the course of the trial itself that perhaps things did not look like they were going your way. >> i think we were happy with the way the trial progressed if you look at the record, what we argue, we think we had a strong and put on a very strong case but, again, it is in the hands of the judge we'll await her decision. >> now we know, we have heard very little other than the statement from qualcomm, jon he got a bonus for the settlement with apple from his board of directors some wondering whether he should also get a minus now

>> i don't know. would they have taken compensation away if they hadn't settled with apple i don't know as you said this morning, maybe it was a little odd to give them a bonus for, you know, a settlement victory anyway. i think this does put into question, right now the ball is on the field when it comes to 5g that seems to be apple's calculation. time to execute now. we have to move forward with the world we have. now it is a little uncertain what world we're going to have, and to what degree if apple or somebody else decided. to stop paying qualcomm, then what happens because qualcomm is already in this tough position where a judge has ruled against them for an anti-competitive standpoint, what sort of negotiating leverage or payment leverage do people have even as 5g rolls out? we'll see. >> thanks, jon meantime, treasury secretary mnuchin is on the hill this hour with some interesting comments saying he's spoken to the cfo of

walmart about the impact of tariffs. let's get to ylan mui with the news >> mnuchin arrived here on capitol hill this morning for a second round of questioning before the house financial services committee that testimony is still ongoing in the room right here behind me but as you mentioned, lots of pointed questions from lawmakers about the impact of tariffs on consumers and the economy and it sounds like mnuchin has been getting an earful from retailers as well. >> i can tell you i am monitoring the situation very carefully. i was on the phone with the cfo of walmart, which obviously one of the biggest sellers of the items that you've described specifically and understand from walmart what things they can source from other areas and what items they can't i would say we haven't made any decisions yet, but we will be especially sensitive to the consumer items >> now, mnuchin there specifically calling out the

potential impact on prices for baby formula and diapers, but also said later he's spoken to all of the major companies that produce consumer goods he said he hasn't seen price increases yet, but did acknowledge they could be coming down the pike later on, particularly if this next round of tariffs does take effect. mnuchin said the final decision will likely not happen for 30 to 45 days as that public comment and investigation period goes on there could be products that are removed from that final list, but, of course, we'll have to wait and see this testimony should wrap up in about the next half hour or so we'll let you know if secretary comes out and speaks to reporters. guys, back over to you. >> such great work already this morning. ylan mui on the hillmnuchin heae house. nordstrom and urban outfitters tumbling. target was the bright spot today among the retailers. also delivered some warnings on trade. ceo brian cornell saying they remain concerned because tariffs

lead to higher prices on everyday products and they're working on contingency plans to mitigate the impact. joining us this morning, jerry storch good to have you thank you for your time. target is on the tape, expected 25% increase in tariffs is baked into guidance. so how many companies do you expect to cut numbers and what are the options in terms of sourcing >> look, first of all, the people have been winning have been winning all along discounters, internet companies, value players like tj max. we're seeing what is expected. department stores are losing that's nothing new tariffs, there are areas particularly hardships like private label apparel, toys is one that is very heavily concentrated in china. bicycles difficult to move it sounds like the administration is trying to find pain points. beyond that, i think we all need to pause a second. there is not going to be a 25% increase in the cost of all these items. the reason is because there are

alternative sources and companies working on this for a long time. it really should be just a single digit, you know, increase, low single digits over time they're in china because the best place to be there you have the rest of southeast asia, vietnam, indonesia, bangladesh, india, north africa, eastern europe you have plenty of places to go as alternative sources apply for most of these products and that's what the big and smart retailers have been working on, and will work on a lot more. it is not what -- >> when you say they have been working on it for a long time, this alternative sourcing method, why did they start moving, it was because business in china just got too difficult? >> china is not the low cost manufacturing solution for many products anymore and manufacturing tends to migrate to the lowest course source of production so many industries have already been migrating, apparel is one that has been diversified globally for quite some time and continues to do so china is just so darn big that

it is going to take quite a while to place all those products they have been moving before any of this came about and once people heard about tariffs, certainly that's accelerated efforts to look elsewhere for supplies there can be other sources of manufactu manufacturing over time. it doesn't mean there won't be short-term dislocations in many categories because there will it is not just manufacturing costs, it is know how, machinery, other things. but whether it has an effect on the fall this year is one thing. whether that affect is large, look out next year, the year after that, that's a different story altogether >> jerry, i hear you but we have also been listening to some of the conference calls and a lot of these companies still have 20% of their production coming from china that's not an insignificant number that was a number i heard from urban outfitters last night. i think adidas does about 20% of its total volume still in china, under armour a similar number.

that is significant. we're going to feel that, aren't we >> and the short-term we certainly might. the capitalism is flexible, and it will change and one thing i might comment on, you may notice that the concerns are loudest from those who have the weakest numbers i don't mean to, you know, to make a joke about that that is true you hear from people doing well. we're going to be able to handle this we're on top of it we know how to do it it is in our guidance, that kind of thing there are people struggling other i was saying it is the weather, it is this, it is that. that's typical. >> jerry, just take -- we can go back, long way when you're running toward -- which i think sourced a lot of goods from china. if you're a ceo from one of these companies where you see your stuff coming from there, what are you doing right now in terms of trying to make sure you're not passing that cost on along or much of it along to the consumer so you can stay competitive? >> right pick a category in toys that is heavily concentrated in china,

toys, bicycles, certain categories very intensive there. it will be impossible to shift all that production elsewhere. so there will be price increases, so what you're taking a look at is where to take the price increases and pass that along. and it is not great. but it is not all bad news for retailers. many have seen no inflation for a long time. we have talked about that in the economy as a whole you have fixed costs that do -- costs for rent, wage rates are under incredible pressure and keep rising. a little inflation may improve the bottom line ironically enough for some retailers. look at where you can pass it along and move rapidly to see where you can procure goods that aren't subject to the tariffs. it won't be possible in every area i think that's why you hear the administration making calls, and trying to understand, okay, which areas are just impossible to find elsewhere and toys is one of them that is very concentrated. >> in terms of other pressure pain points, jerry, furniture, you mentioned, we talked about toys, where else does it extend?

with you look at luxury, especially if there is some sort of nationalistic movement to exclude american brands? >> luxury is an interesting question luxury is heavily sourced from europe so in terms of the cost pressure, the tariffs largely don't apply. but if you're selling in europe, china has been a big growth market for a lot of players for a very long time you question whether or not that may or may not slow down that is a potential pressure point. i highlight private label apparel. you mentioned i think kohl's companies that have high private label apparel are getting a lot of -- from china, that's where the supply chain has been. the costs are pretty good. it is not the lowest anymore that's something that can be put up and run very rapidly elsewhere. and so you will see that production shift turkey, north africa, eastern europe, bangladesh

>> jerry, good stuff really helpful to our viewers obviously, your insights are valuable today see you soon >> my pleasure when we come back, is the market mispricing the chance of a federal reserve rate cut federal reserve president jim bullard giving a new signal this morning. and speaking of, minutes from the last fed meeting this afternoon. and later, she's being floated as a potential fed pick. judy shelton joining rick santelli for an exclusive interview all coming up later this hour. "squawk on the street" will be right back with the dow down very slightly, 22 points, fractional declines through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from using feedback to innovate... to introducing products faster... to managing website inventory...

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when you're not, you pay for data one gig at a time. 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. stocks are lower with the federal reserve minutes from last meeting out later this afternoon. overnight in hong kong, james bullard making the case for lower rates saying, quote, a downward policy rate adjustment even with relatively good real economic performance may help maintain the credibility of the fomc's inflation target going forward, which may become a more attractive option if inflation data continue to disappoint. joining us now is gabriela santos, global market strategist, and brian jacobson, multiasset strategist from wells fargo. good to see you both bullard is more on the market side of the coin when it comes to the federal reserve cutting rates. but the center of the fed does not seem to be there

is that going to be a problem for this market? >> yes, i think when we look at the minutes when they come out, i think the inflation question is crucial to understand where most members of the fomc are are most members with bullard, thinking some of this transitory fall in inflation might not be so transitory, may warrant a rate cut, or most members with chair powell who do believe that this is transitory and a pause is enough to deal with the inflation question i think that's up for grabs at this moment. we ultimately still think this is a fed on pause and we ultimately -- the trade issues is very important if it escalates further than a cut really would be warranted. >> why is the market so convinced that the inflation picture is not transitory? >> i think there are two major themes going on. there is a structural disappointment in inflation. and then there say more transitory depth to 1.5% we saw in march with the pce numbers.

i think there is a struggle between distinguishing between the two, more in the camp that some of the cyclical falls, transitory, while still structural issue, reaching 2%. i think it is still very unclear where the fed falls on this. that's where the market is having a tough time pricing that in. >> where do you think the market is on fed policy is it helping the stock market still, early part of the year, when the celebration occurred over the big pause in the pivot? >> yeah, well, i think that the way that the market is pricing in with fed funds futures and such as far as the probability of being a rate hike has probably helped the equity markets if you expect that the federal reserve will be easing monetary policy going forward, that tends to be a bullish signal for stocks. but it is also important the caveat with the idea that why is the fed likely to ease it is not necessarily because growth is going to be as projected to slow dramatically it is more because the fed is missing with its inflation target and so if it is because inflation is a little bit lower than what the fed is looking to

hit, then that should continue to be a relatively bullish signal for stocks. i would be really concerned if the market was pricing in a cut because growth was slowing it is important to distinguish as to why the market is pricing in what it is, as far as with bullard's comments, i think it is important to remember that he's been a bit of an outlier when it comes to the summary of economic projections where initially when they started with the rate hiking he effectively said let's do it once and never hike again and i think that -- i'm somewhat sympathetic to that view because his reasoning was growth is good, inflation isn't bad so why ruin a good thing. and in a way i think that he's been maybe arguing against further normalization of monetary policy. and just, i think he's reiterating that statement again as i kind of, like, i told you so >> yeah, that's why it is so interesting. voting member, he said he's not worried about the impact of the chinese selling treasuries, says

we overdo it in december probably and then said, if tariffs were in place for six months, that there is some magic in that in terms of leading to a rate cut what do you make of that >> i think the fed doesn't want -- >> i'm sorry go ahead >> so i think the fed doesn't want to preempt any sort of impact of the tariffs, right it wants to wait and see is the heat high enough that it actually impacts consumer prices and consumer spending, and is the smoke in and of itself the uncertainty strong enough that it starts impacting business spe spending want to wait and see the actual impact and wants to wait and see to see if we turn up the heat further. i don't think we'll know for another few weeks, maybe a couple of months. >> brian, similar question on where the market is, and on what the impact of the tariff damage will be. 3.5% off the highs here, the s&p 500. what does that signal about what the market is expecting in terms of economic cost of this trade policy >> sure, i think that what the

market is signalling is that there is indeed an economic cost to an increase in tariffs. however, those costs might not be as dramatic as what a lot of people are probably fearing. if you think about if we go to 25% tariffs, is that where it stops? my guess is under the trump administration they would hike it to 25% and probably keep it there. so this is nothing like we saw during, like, say in the 1930s with the smoot-holly tariffs where tariffs went up to 60% and in some cases even higher. as long as it is not a game of escalation, if it just is where the rate gets capped at 25%, i believe that there is downside for the equity market, but probably not as bad as what a lot of people might be fearing >> gabriela, i think you previously advised people to look not just domestically, but for global equities. what is going to be the impact if we continue to see escalation in terms of china versus the u.s. for europe, for example,

and other global economys? >> we're getting a little more concerned about this i think the issue is the actual escalation, the turning of the heat further to the 25% and the remaining 300 billion. that's actually a very strong fire that would be burning and that's not just for china, or for the other economies that trade with china, like europe, like japan, like the rest of -- it is an issue for the u.s. economy and that probability has gone up. what we have been advising clients at this point is make sure their portfolios are right sized, there is more of a neutral balance between equities and bonds that maybe there say better balance between growth and value, maybe some hedges for downside protection. maybe a little bit more of a u.s. focus now than we had thought before, maybe just two weeks ago. and on the bond side, treasury for protection. >> finally, brian you want to be defensive or want to be cyclical lately the market is being let up by utilities and consumer staples and the more traditional

defensives, but so far for the year, still technology on top. >> sure, exactly i think that the most recent events that we saw as far as with value, outperforming growth and more defensive names, it may be somewhat temporary because as you point out, year to date, technology is the leader on a lot of our portfolios, we went from a very procyclical position to more neutral position so i think that is not necessarily a issue of -- i think that my friends over at the wells fargo investment institute have a year end target for the s&p 500 of around 3,000. that seems pretty reasonable to us still some upside from here, but not tremendous amount of upside. i think that really it is making the argument for keep it neutral for now and then you canalways make an adjustment later. >> gabriela, brian, thank you. >> thank you when we come back, high end real estate taking a hit we're going to break down the markets being impacted the

hardest. judy shelton being floated as a potential nominee for the fed. she'll join santelli straight ahead. we briefly went positive as mnuchin said he's hopeful the president and xi will most likely meet, he says, at the end 'rba ia nu wee ckn mite my degree from snhu has helped me tremendously. the flexible class schedules allowed me to go to work full time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we at southern new hampshire university are the ones who succeed. we are the ones who break through.

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time for our etf spotlight santoli taking a closer look at the dollar index >> it has been at a pretty steady uptrend for a while here. this etf is the uup. it is basically the predominant way to play a strong dollar. u.s. dollar index based etf. does track the standard dollar indexes. lock at thi look at this uptrend we had for several months now higher than the index was back in december, before the fed pivot. clearly not all about fed expectations i do think we'll be listening for the fed minutes to see what we might know about the prospects for fed ease or hike down the road. dollar implications there, perhaps what is interesting too is a longer term look at this index and at this etf over a five-year span it puts the current hikes in

good context you're challenging these two highs from several years back. so this is, what, right at the beginning of 2017, or maybe mid-2017 and then back to 2015 this is just above where we have been trading right now and i do think you have a lot of eyes on this on the long-term basis. short-term, a lot of bullish sentiment among futures traders toward the dollar, people saying maybe this run could soon ease back, run out of gas, see how the minutes play on that >> the positioning is a signal to me, this chart shows who the market thinks is the winner of the trade war. it is the only way to show the relative gains and losses between the u.s. and every other country in the world and the euro and europe is feeling it hard and their economics and china is feeling it hard and that burns a bridge to key level of 7 so the whole trade fight has been nothing but good for -- >> what big economy is least dependent on trade in general, right? the u.s.

and what is more stable and more of a destination for capital rather than a source of capital. yeah, that would all fit together. >> shows why our stock market has been so resilient. money comes in the u.s mike, thank you. my favorite etf spotlight, uup over to sue her raera for a cnbc news update. >> here's what's happening at this hour. british prime minister theresa may revealing a new 10 point offer to politicians to break a stalemate in the brexit deal she said if a fourth attempt passes, the points in her plan would be legally binding most observers do not think it will pass. >> first, we will protect british jobs by seeking as close to frictionless trade in goods with the eu as possible while outside the single market and ending free movement the government will be placed under legal duty to negotiate our future relationship on this basis.

>> a suicide car bomb by islamic extremists has killed at least six people in somalia's capital. 13 more were injured most of the casualties were soldiers al shabab claiming responsibility for the blast. back at home, beverly hills voted to ban tobacco sales there is one exception it will allow the exclusive havana room, a cigar smoking club, to operate it counts arnold schwarzenegger as one of its members. it is unclear whether that new law, though, will get through the courts you're up to date. that's the news update at this hour back downtown to you guys. >> thank you up next, she's been floated as a potential pick for the federal reserve. judy shelton joining rick ntlisael exclusively dow is down 38 points.

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let's get to rick santelli,

a special santelli exchange. hey, rick. >> yes, i'm excited. thank you. i would like to welcome dr. judy shelton, former trump transition economic adviser also currently in london because she's the executive director of the european bank for reconstruction and development which means we have a bit of a delay. i'll get right into it you have a history of sound money, and the mechanism by which interest rates are maintained, altered. you believe could use some tweaking why don't we get right into it you've been put forward as a potential nominee to be a federal reserve governor what do you think about how quick we can make any modifications and how long would that process take and is the federal reserve ready? jay powell already made that turn after he paused and pivoted in january

>> well, rick, thank you for having me. i do think this is a pivotal moment for the federal reserve we have seen a fed that is somewhat humble in asking itself questions about how its models work when you bring up the issue of paying interest on excess reserves, that's really the primary mechanism that the federal reserve uses today to drive interest rates in one direction or another it was adopted as an emergency measure in october 2008. and here we are, 11 years later, and i think it is not a good practice for the federal reserve as an agency of the government to be paying banks 2.35 interest rate on reserves that are sitting there doing nothing. it is like the basic income model, universal income, you pay

someone to do nothing. the goal of banks is to serve as the financial intermediaries and to take the savings of people and make them available as the seed corn for investment and i think that the fed is giving a disincentive to banks when it pays them to sit on the reserves and i notice banks are not really passing on that excellent rate, 2.35% they're getting on dependeosit accountso actual depositors, people with checking accounts who are getting nothing. >> dr. judy, here is the issue, though, basically the fed now has gone full in on using reserves to tweak the effective -- to hold the effective rate in the old days they buy and sell securities. if we go back to that, a, there is the issue of what we do with all of the securities, how long will it take to drain them off, but maybe an even bigger issue

is that's going to be a long process. do you think it is something that jay powell and company are ready to discuss >> well, i think as you point out, things shouldn't happen too quickly. what you don't want is to disrupt financial markets because once you kind of set the rules, people act accordingly. it is not fair to pull the rug out from under them. but i think it would be wise to think in terms of some kind of a glide path, whether it is one year, two years, but some kind of a glide path toward reducing that disincentive. and getting rid of that practice because there are recent studies that are now showing before the crisis in 2008, 93 cents out of every dollar deposited was used to make loans to consumers or make mortgages to me, when banks make loans to

small and medium size business, for example, those are productive loans those actually involve risk. but the goal of a bank and of any loan officer is to assess the character of the borrower, and their plan, and their commitment, and to say this is a worthwhile risk and we're going to end up with greater reward in the future that's the whole idea of capitalism so i think you don't want to discourage that kind of productive lending >> my final topic we have a minute and a half left, judy, the notion that donald trump, president donald trump made it no secret he thinks lower rates are better, especially as this issue with china is ongoing. you at one point during the campaign and the transition believe that as well you're not necessarily in that camp today your final thoughts on what has changed. >> the big thing for me is you

don't want the central bank or federal reserve giving you an artificial interest rate i have more faith in free market mechanisms and more organically determined rate. i think something fundamental has changed from the earlier days, prior to the trump administration what we now have is a genuine pro growth economic agenda and we're seeing results, we're seeing productive growth, we're seeing higher numbers in terms of the gdp numbers strikingly high growth. we're seeing increases in wages and yet inflation has not been an issue so the last thing you want to do is starve a high growth productive economic trend by not providing the financial resources. so that is the difference and that is why i am prepared to concentrate on the mechanism, but for the purpose of prolonging and even further empowering a productive growth

strategy >> you know, dr. shelton, we also have something big happening today. we have the minutes to last fomc meeting. and many, including parts of the market in a static snapshot believe that an insurance ease is necessary because inflation just doesn't seem to be hot. we're getting hotter now, if you saw the current conditions, how would you view an insurance cut is it something you would consider when you look at the notion that it is very iffy trying to control inflation, most central banks haven't been able to get it to rise to levels that they have been hoping for >> well, i think that's the main point. we have had this idea that the federal reserve can control inflation. and it turns out that you see countries such as japan who try forever to unleash inflation and

it doesn't work. so that is why we have to start thinking about whether a central bank could end up doing more harm in its attempt to keep flogging away at some inflation number i think the fed is starting to say is inflation targeting the most effective way to try to calibrate the money and credit needs of an economy to purposes of growth. and so we're now re-evaluating all that and it is time to just have a fresh idea of making sure that money is reliable, and not a tool of government policy, but rather a measurement tool, so people can plan ahead and so free market mechanisms can work. >> dr. judy shelton, thank you for your time. good luck in whatever may be ahead for you with regard to your association with the central bank sara, back to you. >> all right, rick, thank you

for bringing us that interview as we head to a quick break, quick shares check on shares of tesla, moving lower again this morning after yet another analyst sets out a bearish case for tesla. stock down almost 3% now over to robert frank with a look at what is up next on the show good morning. >> good morning. we'll take you inside the front lines of the megamansion wars. investors who built giant homes in hopes of seeing a big profit are sitting on falling prices and rising debts we'll show you one of the era est and most expensive in amicand talk to the owner coming up after the break. fun fact: 1 in 4 of us millennials have debt we might die with. and most of that debt is actually from credit cards. it's just not right. but with sofi, you can get your credit cards right - by consolidating your credit card debt into one monthly payment. you can get your interest rate right - by locking in a fixed low rate today. and you can get your money right. with sofi. check your rate in 2 minutes or less.

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one technician is making a big contrarian call on a beaten down group of stocks find out more on tradingnation.cnbc.com more "squawk on the street" coming up. [ "done melody" plays ]

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>> as the plastic surgeon to the stars, dr. raj kanodia worked on everyone from kim kardashian to jennifer aniston his latest project in bel air has an uncertain future. he built the home in hopes of flipping it for a big profit >> the beauty of architecture is very similar to the beauty of the face, of a human being so using that desire to create, that's what started me to want to create a house. >> reporter: but as it grew in size and cost, kanodia struggled to find lenders and investors. his real estate friends told him he made a big mistake. >> they said way out of your league it became more and more challenging. and for me, if i have a vision, i want to fulfill that >> reporter: when it was finished, he listed it for $180 million. but like many high end communities today, bel air has an oversupply of mansions.

many built on spec, or speculation, to sell prices and sales are falling, and the modern white mansions have become the empty white elephants of the housing market. there are over a dozen homes for sale in l.a. for over $100 million. the spec home built right next to kanodia's was asking $250 million and just got a $100 million price cut. >> the ones that had to drop prices by dozens of millions or even $100 million, that's already a disappointment, but perhaps it was originally overreaching this market we're entering is going to shake all of that out >> lilly, beautiful. >> reporter: he beams look a proud father as he tours the home's exotic gardens, three kitchens, eight bedrooms, state of the art gym and spa, and infinity pool overlooking one of the best views in l.a. it is still for sale he says he would consider offers of over $120 million, and he will rent it for $1.5 million a

month. if all that fails, he hopes to live there himself if he can afford it. >> in las vegas, called all in, all in times a million sometimes you lear sometimes you learn as you go along and yes, it could be a mistake, but in my heart and in my soul, i think it will all work out >> it will all work out. 180, he will take 120 or $1.5 million a month. the guy next door trying to sell a quarter billion dollars. >> he dropped his price and the l.a. real estate market fell in sales by 20% and prices are down this is not getting better soon. he will probably take something soon if he can get it. >> not getting the s.a.l.t. deduction. >> how would you compare the pain in california to the pain in connecticut >> not as bad. the weather in california which brings in second home buyers from around the world, but it is

hurting that market, no question. >> i like his style. >> it's a gorgeous house there are a lot of them, by the same architect that look exactly same. >> next door to each other. >> plastic surgeon originally and poured all this money in with an enormous amount of debt, willingness from some to give him the capital. >> he talked a about how hard it was to get loans and the lenders and probably doesn't have much time left. >> want to go to capitol hill. secretary mnuchin has been testifying, think he's just out of that room being chased down by reporters let's listen. >> come up with plans to get money to support our farmer and china wants to come back to the table and move forward on the basis of [ inaudible ] >> this memo exclusively -- >> i'm sorry >> memo that we're talking about the alleged draft memo that showed up in "the washington post" that we don't know who wrote, no. we have an independent legal

analysis we did in conjunction with the department of justice this is a very important issue for all americans, weaponizing the irs is a dangerous thing and the third branch of government, the courts will ultimately decide the constitutional issue here when the courts decide we will abide by that. >> what other retail -- >> talk about bailing out farmers by why not other industries as well. >> we will have a 301 process and look at exceptions that impact certain consumers because talked about diapers and other things if they can't be sourced other ways we're going to be very careful on this. the farmers are being personally retaliated for political reasons. >> are you hearing -- >> what other retailers -- >> from china now. >> i'm not yet i haven't heard any. >> what other retailers have you spoken to about the tariffs and what has their message been to you? >> i spoke to the cfo of walmart, obviously the largest,

spoken to others, i'm not going to comment on all of them. we're working closely with them to understand where they can resource things and what the consumer impacts -- >> have you talked with the president -- >> is there anything that huawei could do to restructure -- >> i'm not going to comment on any of the specifics >> other companies you've black listed -- >> the united states about the tax return fight -- >> i've said multiple times, okay, i don't know how much clearer i can be, i have had no conversations with the president or other people at the white house about the issue of delivering the president's tax returns. i don't know how more clear i can be on that >> do you expect other chinese companies to get -- >> what's that >> drawing up any plans to eliminate -- >> we're not doing anything. i know that's something the president is interested. that would require legislation and we'll see maybe during a technical corrections bill if we ever get something through congress, wecan contemplate. >> do you expect any other chinese will get black listed? >> a moment on infrastructure, what are you hoping comes out of negotiations with house democrats?

>> we had productive conversations with the big four on spending and debt limit it is a big priority of mine to make sure the debt limit is raised if we can get an appropriate deal the president has considered that, if not down the path of a cr and on -- today on infrastructure it's the president's objective to do infrastructure i look forward to a productive conversation. >> any new revenue measures in an infrastructure bill >> thank you very much thank you. >> treasury secretary steven mnuchin answering questions of reporters on capitol hill talking a lot about trade and his negotiations with the chinese. think he got a question about why farmers get aid and not, for instance, retailers or other companies and industries that he's talking to that get effected he said farmers are being personally retaliated for mi political reasons. he talked to walmart and they're looking at products like diapers

where it's hard to source from other places and they will consider that when they -- if they do go ahead with the next round of tariffs elon moye was in the gaggle of reporters and with us now. what else did you pick up? >> sara, i didn't get in the last question on whether there might be any new revenue measures in a new structure bill i was surprised of the hearing that was focused on the issue of tariffs. he did say as the hearing was wrapping up he has spoken to more than 100 ceos, they have been in regular contact with him about the potential impact of tariffs on their businesses and on prices and he framed the status of the chinese trade talks as sometimes you need to take a step backwards in order to go forwards however, earlier he told me there is no current scheduled meeting with his counterparts in beijing, so those talks again, appear to be on hold as for right now, right, he's

hearing from businesses and consumer groups about the potential economic impact and the impact particularly on middle and low-income households guys >> elon, thank you doing her best to get as many questions in to the treasury secretary as possible during his walk down the hall there sara, of course, some reaction in the market to some of his comments this morning. should point out the idea that trump and xi will meet potentially because they will be at the g-20, very much unclear whether there will be a real meeting between the two but he did comment on that during some of his testimony what will you be watching on "closing bell." >> break through at g-20 rarely happens, just fyi. later today former federal reserve governor sara bloom ras kin, will react to fed minutes at 2:00 p.m. eastern and the ceo of goat, a resale sneaker company, eddy lu, his push into china where sneaker tariffs

could be coming down the pike. >> "squawk alley" is coming up next don't go away. .

good morning it is 8:00 a.m. at qualcomm headquarters in san diego, california, it's 11:00 a.m. on

wall street and "squawk alley" is live. ♪ i fought the law and the law won ♪ ♪ the fought the law and the la won ♪ ♪ i needed money because i had none and i fought the law and the law won ♪ ♪ i guess my race is run ♪ she's the best girl that i ever had i fought the law and the law won ♪ good wednesday morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan and jon fortt at post nine dow down 93 points on a busy day, mnuchin and china trade or the story right here, qualcomm. >> yeah. we're going to begin with that on pace for its worst day since january 2017 shares falling you can see down almost 11% on the news that federal judge lucy koh ruled the compan