will see a lot of people are paying attention, too. there was some activity that took place there yesterday ten-year is yielding 2.31% everyone make sure you enjoy the long three-day weekend memorial day, you are doing this and making sure you remember those that served and lost their lives. we'll see you back here on tuesday, right now it is time for "squawk on the street. ♪ >> good friday morning, welcome to "squawk on the street," i am carl quintanilla with david faber and sara eisen cramer is starting the weekend a little early durable goods are not good got more heated rhetoric on china on trades. teresa may resigned in the u.k euro is bouncing a bit and so

does oil comes off the worst day of the year. china/trade dispute could be early. >> trheresa may announced her resignation, what could it mean for business >> amazon 3,000, shares can hit that milestone in two years without trying >> futures on the rise this morning. the dow is trying to avoid the first five week losing streak since 2011 heading into the session. the dow and s&p, each down more than 4% of the month nasdaq declined of 6%. need to get 273 points on the dow. >> summer is taking comfort by the rebound we saw in yesterday's session. yields kicked off the lows those treasury yields, the

market sort of follows some saw that as encouraging the news today is that the trade war does continue to hit home. look at the durable goods order. sharp drop, a lot of that was the orders for boeing aircraft, the aircraft category, guys, fell 25% in the month of april that's going to be a wait on overall growth however, if you strip it out, take out cars and planes, orders were flat. if you look at core which a lot of economists look for in terms of a proxy from business spending and how businesses are feeling. about .09% that was the first drop in five months the yearly base fell to the smallest increase since the final month of barack obama's presidency >> that's the lowest for the presidency so far. on the micro level, trans

pacific cargo is up 1.7. it was up 3.6 all of last year we are seeing agreement between the macro and some of the micro data as well >> a lot of headlines involving around trades and some conciliatory talks and we got reports of more hope is on technology and the sales of technology to chinese company. >> with huawei with the possible trade deal >> we did. >> it is interesting >> they're going after huawei. >> it does there is those who said it is outside of the current negotiations also, big news out of the u.k. this morning theresa may is finally stepping down as prime minister after failing to win parliamentary

approval steve segwwdwick is in london >> reporter: from the opposition as well, her main task after june 2016 when she set in was to deliver brexit we heard a very emotional mrs. may announcing her resignation earlier on here. let's listen to the first part of her speech. >> it is now clear to me that it is in the best interest of the country for the prime minister to leave that effort i am announcing that i will resign as leader of the conservative party

>> reporter: of course she remains as prime minister during the trump state visit and the memorial service as well the week of the third of june. finally two candidates will go forth to the party members of the country, 125,000 conservative members it could well be at the end of july before we have the new meeting of the conservative party who'll become the leader of the country the problem for the new prime minister whoever it may be, someone that's at the heart of brexit is parliamentary and mathematics. that will remain, and taking

down of the october 31st deadline when brexit does happen brexit will happen on the 31st of october whether or not there is a deal. it remains to be seen whether a new prime minister will go to the country of the general election it is still the same old here despite the fact that mrs. may has finally resign >> this is the first update in the last 15 on the spiral of uncertainty in to the political situation. so which potential candidates would be the market friendliest scenarios with regards to brexit and which one would be the least? >> well, let me tell you how the market behaves, 130 acted like an anchor, 133 when everyone thinks it is a soft for brexit going down the 126 when people fear of a hard brexit.

al soft to brexit and -- that'll boost cable. of course for the footsie prints, that may mean the opposite the market is behaving very calm today. it is a firm decision one way or another whether brexit tier or remainder, they want the process to be done with. steve, thank you so much >> joining us now, jp morgan, gentlemen, good morning. we are done about 1.3% for the week going into today which looks like it could be a positive day >> where is the market right now on the trade risk and the

european reparliamentary risk >> it is not all the way there let me level set there are more pluses than musts in the fundamental outlook you have a u.s. economy that's moving along at trend or slightly above trend it is our view that sometimes before the presidential election, you do get some type of stopgap narrow agreement between the u.s. and china on that score, you would say equity is up in a year's time. where does it go between now and then there is a big question. there is a lot of volatility that may still occur it is impossible to rule out a rerun on q-4 last year it is hard to get away the fact that equity has lower sharp ratio than usual at the moment and so i think if you are leaning into risk, low volatility ways to do that

thinking of credit as a way of fundamentals and maybe trying to ignore the noise or something. >> we can have a delay, right? in putting up the inevitable in terms of the faceoff with china. >> what's the contour of a narrow deal looks like because the disagreement is not narrow >> we think of come part compartmentalizing more fundamental issues, having to do with intellectual property the balance is heavily skewed against a transactional approach there will be some issues having to do with intellectual property what entity is reminds us this is all taken place in the strategic rivalry between u.s. and china. it is probably too much to ask for a narrow agreement to solve

that we expect for it to come >> would you expect we got something like that for these growth indicator to reverse? >> a lot of the pmi suggesting that talks fall apart. >> the gerber goods this morning was a good example of that the longer it goes on, it wears on cap ex and upside of the economic outlook i think it puts the outlook on an even field than we had been expecting earlier this year. does it wear down the bulli, bri a bullish call >> no. s&p 500 was up 20% until the day after christmas. clearly the international

components of technology, energy material and industrials have been hurt this month give me a break. technology is up 36% between those dates i gave you this is a give back, bit of a rest every time you have utilities hitting new highs, with respect to valuation of the u.s. market, it reads leading in terms of sector investors remain too defensive the market investor and economists are trying to thread the needle for the china deal. any kind of accord would be positive the first accord is not the last accord the markets are going to be volatile anybody can say that how do you invest in that? we think the return is a more traditional value, fundamental metrics but also dividend and growth is a way for investors to save their profits and invest back into equities

lastly all those that's happening in europe emerging market is positive in the united states don't discount how stable earnings are to the rest of the world. that's why we think we'll see rotation back into the u.s wh >> so is the advise for the positive sector and utility and healthcare and real estate you just have to hold your nose and buy because that's what's working in a jittery market. >> i am not sure i think i rather look at it from a regional perspective where one of the lessons we learn in 2018 that the shock coming from a geo political issue. what it is telling you volatility much more noise in the u.s. and persistent

elsewhere. bringing back exposure to u.s. equities would be a good idea. >> brian and ben, thank you both very much. >> now to the fallouts surrounding huawei in the u.s., china denouncing the secretary of state accusing him of rumors after he says huawei was lying take a look at what the president had to say yesterday >> huawei is something that's very dangerous you look at what they have done from a security standpoint and military standpoint. it is very dangerous it is possible that huawei would be included in a trade if we made the deal, i could imagine huawei being included in some form of or some part of a trade deal >> how would it look >> it would look good for us >> wow would you desihow would ? >> that's too early to say >> that announcement is extensively unveiling a $16 billion check that the u.s.

will write to farmers. we'll see how iowans feel about this trade war >> we spoke with senator grassley from iowa yesterday, chairman of house and financial services committee you know he was sort of supportive of the president's position, saying the farmers are on board it has to open these markets he thinks they'll be on board in the next election with president trump. we know the rural states were so important for the president in winning. we'll see what happens they're feeling a lot of pain. one final point on huawei, taiwan is a huge provider of their chips, that's where they make many of them. >> they're not on board. if they were to become or get on board, it would be a significant moment another ratcheting up between

the chinese. >> tsm is a good ticker to watch. when we come back, eye opening wall street calling on amazon. we'll tell you what the thinking is as we try to avoid the dow s&p for the week breaking 28.59. we'll be back in a minute. people know aflac. aflac! but not when to use it. do i use aflac when the kids get slime in the plumbing? no. that's home owner's insurance. slime in my motorcycle. no. that's motorcycle insurance. slime everywhere? ughhh nooo, there's no insurance for that. do they help when i have bills health insurance doesn't cover? yeah! that's it! aflac! gross guys. get help with expenses health insurance doesn't cover. get to know us at aflac.com

amazon is up in the premarket. stocks are expected to reach $3,000 between mid 2021 and mid 2022 again further out and not exactly at 12-month target but getting people attention >> 3,000 draws your attention. you think 60% from here to the next three year is not outrageous to expect some would think could go higher >> i thought what stood out was

the value of aws, based on what they call static multiples brick and mortal and retail sales and ecommerce multiple, you get a far higher value on the amazon retail business, $61 billion. this is to get to their 3,000 target aws, they're evaluating at $610 billion how quickly it is growing and how it is in terms of -- >> what stands out is the 100% of analysts have a buy rating at 100% >> in april, it was 98%. average price target 22.26 official target is 22.25 these analysts they got a ton of headlines especially when you

are talking tesla and amazon >> absolutely true >> we are remembering our good friends mark haines who passed away eight years ago he's the coanchor of "squawk box. we remember him for his whit and for being the champion and ne9/1 and the financial crisis speaking of the crisis, you know what mark calls '09. the haines bottom. our thoughts are with him and his family that's plaque he has here. so many days even today wow we can really use mark right about now. >> we had a lot of good times and see how quickly times gone by and i can't imagine it has been eight years since we lost mark going back to the fun that we

had in particular mid to lat late '90s and into the odds with joe and maria. we had a great time everyday and mark was the center of it. "squawk on the street" will be "squawk on the street" will be right good! so good to see you. it's late, where are you? i'm at work. oh gosh, so late. i know, but guess what? what? i've saved enough to come visit you. well, that's such great news! at u.s. bank, we believe that hard work works. and for everyone working toward a goal, we're here to help.

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minutes. we are here with mike santoli here helping us with the open after an eventful few days, whether it is yield and oil and copper and we have real estate how much of this rotation is done >> the bond market has a defensive crack now. what went from maybe we'll get the fed to cut rates as an insurance policy proactively now the bond market is saying we may not need one in the next several months that's the way the day is going. if you look at industrial all foreign companies. the market is taking out of the value area and putting into a steady cash flow how much of that is a big question i don't think the big episode of the testing phase of the market ends some very clear signal.

there is some moment, the trade war is over, all good. it is much more of the market digested this enough and certain sector gets over sold enough and the market feels like it is discounting a bad scenario and not having a get worse is enough for a while. or the feds can change its tune. what has happened this week from all the bad news and the data and the trade war and everything else is the odds of fed cutting this year have gone up the fed has been patient ace bui is not seeing through the world of the colorful glasses. would that change the tone >> i don't think you want to wish for that to happen at the june meeting sm what would have to happen for things the get out of hand on the economy is not great for the markets. >> what about september and december >> sure and you have three months the whole story of this year, the defense of sector and we are so over sold of december, got us

this slip. until we get into the second half come back, until we get a little bit of a hockey stick second half is five weeks away we are using up that grace period, oh don't worry about it. it is going be better soon if that's going to come to pass >> the bull cases this week. i am thinking of tom lee, he's going to want to own the u.s but, the urgency does not seem to be coming before say the end of the year, right >> the other talking point is deutsche you may get a resolution on trade but not until things get dicey in equities >> that's right. that's why i don't think the out right resolution is what you are playing for it if the market holds in here for a little while, i think you will have a lot of people coming in here, what's wrong with with stocks here?

that's where you may get the next leg for the come back and not necessarily have good tangible news on trail >> the s&p is one point below its level come january of last year january of 2018. our cnbc realtime exchange the big board cents ability and at the nasdaq celebrating red nose day we should get to some of these retail earnings, guys, because there is a bunch of those from foot locker. >> a rough week for retail looks to be a bad day hereafter a miss across the board. here are the numbers it does not look terrible when you look at comp source sales. analysts are looking for a plus

5% number on foot locker that was disappointing that was going up against the easiest comparison of the year they reiterated guidance but they lower the19 eps growth. guys, foot locker did not need to mention tariffs that's the story with retail very vulnerable. these are companies that are facing margin compression and getting traffic through the door and trying to bill out ecommerce. if the next $300 billion go through of chinese imports and tariffs, then they're stuck. they're going to eat it or they're going to pass it onto consumers or either way looks really bad we are talking about 10% to 20%

revision down in terms of revisions for earnings this is a sector that got slam this week. the mark het has priced in a lot of these stocks looked relatively expensive the head winds of the death of it all and if you look at target this week, great come back. strategically, things seem to be working well so everyone the winners are kind of going sideways and holding their on as oppose to plowing ahead and making new ground. it is becoming a relatively small piece of the overall market for that even though the stock swings around quite a bit. >> it is going to point out on retail, the off price sector, ross and tj max has been an exception. they're not as amazonable because people like to go search

for bargain as and they have ben getting great merchandise from department stores. ross was a bit of disappointment the ladies business within ross is not as strong as we saw at tj max, traffic declined and inventories suggesting as numerous says it is not in a strong position as tjx and maybe the gains have been locked in for a company like that. off price are doing better than department stores, it is still a winner people are taking a chip on ross >> i am not sure what the reach should be, obviously you are dealing with the tariffs situation and the impact on consumer overall but, to your point, sara,

walmart target tjx and costco. >> winners and losers. >> macy's did not report of that number it got penalized then we see nordstrom and some others really taking on this wee week tjx was lower than it was. the entire group had been swept up in this over hang that's been remarkable turn around story the second they started talking about the next wave of tariffs being eaten by consumers that freaked people out on the top of the list, cell phones and computers and all sorts of equipment that's sold by best buy. >> that's what we are watching in the next way if things continue to get worse. the rhetoric and the chinese newspaper and media over night, that's the first place i go this morning. it is not pretty

they're accusing us of all sorts of antibusiness activity from banning from huawei and the aggressive stance in the u.s >> chinese envoy this morning say there is no official talk of getting xi and the president together at the g-20 wh goldman had an interesting note of the next round of tariff and how that's the one they believe would be truly painful, not because of the category so much as the company exhausted a lot of their sourcing option at this point. they would take more of a hit. >> it is not a lot of flexibility absorbing what they can and sharing. that's why you wonder if that remains kind of dangle out there. and the standoff with terms as they are right now not really sure. it is interesting, the whole retail discussion, i have been saying that if you really -- the

u.s. is strongly single force of the global economy and the most reliable one how would you invest in according to that. it is kind of difficult if you go to additional place because of domestic retail and all challenges housing and coming back but not really that big on the market it is tough. it is individual brands. consumer finance held better on the big banks. although now you start to see some of the economy starting to say the standard because of the timing and you are on that tai end of the good part of the cycle. >> i am watching the twitter feed of the atlanta fed because they always provide updates on their tracking model which a lot of people look at. last time they got words from them a few days ago. second quarter of gdp was coming in estimating 1.2% it is a slow down and after durable goods today expected to be marked down given further

i wonder, mike, if that's behind the big move that we have seen in bonds and correction that we have seen in the u.s. market >> you already expected to be a slow down. the bond market seem to treat as a 2% economy baseline. you have this exacerbating factor of the trade disruption that's kind of what it is about. it is interesting, there was not another round of panic this time it seems like it got accustom to it that's probably okay the signal for the bond market is pretty clear. the market kind of softens a little bit not alarmingly you get the sense of the longer it wears on, the more you may have and a little more defensiveness across the capital market >> we have not mention about theresa may and her emotional

resignation announcement earlier today. boris says the u.k. should be prepared to walk out without a deal and we know what the pound has done relative, the expectations he would take over. >> exactly >> to me, if you are an in re investor, keep it on the screen. >> boris johnson as the u.k. previo's prime minister would be opening a can of worm of nightmare not the only silver lining i manage to see is that this could push the bank of england into easing mode to deal with some of the

fallout of business on uncertainty that we'll see >> a couple of bright spots, hp, did beat the consensus by two kre cents. >> margins are better. also produced more free cash flow than investors had been anticipating we'll be speaking to the company's ceo. >> a lot to talk to him about. >> the faa source telling reuters expect the jets to approve to return to service as early as late june you saw phil lebeau as the faa met with 30 global regulators.

>> i think that's probably true. it seems like the stock is sort of has a lid on it verses the highs that we saw not that long ago just until you have clarity on that. it is honestly held up better than you may have expected given this way >> an upgrade for alibaba adding to the select list saying this company has under performed so much verses the s&p, they say it is just too cheap now. 13 times 20.21 ibita is cheaper. they say this is worth the look just because it has gotten so cheap. >> they're basically in the market they're selling off their alibaba as they said they would.

it is something to keep in mind. >> alibaba is -- you bet it going from the overall china trade, it is too big in the indexes. >> longer term horizon >> it should have higher highs or lows of the overall index >> we are up 160 on the dow and up 17 on the s&p, let's get to seema modi >> trump on the current u.s. china trade negotiations were up 1606 points for the industrial, s&p 500 up about 2800, up about .6% as well. >> caterpillar is coming off its lows of 3 quarters of 1%

names like goldman sachs and jp morgan and some of the bigger names and regional banks trading to upside right now by about 1% to 2%. here is where we stand for the week of the three worst performing sectors, nj is doene down 4% and tech is driven largely by tech. utilities and healthcare and real estate are on track to close the week in the green. utilities session highs again this morning up to 2%. some big swings that we have seen throughout the week impacting the market, first it was the trade disputes and negotiations taken place between the u.s. and china taking aim at huawei and tech, you saw that drop. the retailers, a number of them talking about the negative impact of tariffs and that stronger dollar. here we are coming off the lows. >> stories we should see we

should point out much worse. $3.8 billion bringing the out flows. that's primarily driven by china. much worse overseas. >> seema, thank you. let's go to the bond pit for a morning check up with rick santelli with the cme group in chicago. >> good morning sara well, it has not been a good week for interest rates as good as defined by moving lower all maturity reflecting similar patterns, bund is getting close to all time negative low yields, look at one-week of ten, you can see how we drop out the zone closing last week at 239 you open the chart up january of 2018, carl was talking about

this this was the s&p on top of 10-year, they're trading coloniesclosel to where they were what jumps at you, after interest rate had a big break establishing their early year closes on january 3rd, where the notion of the pivot and the pause took hold and all the metrics for stocks were being replaced for lower yield, the great divergence began all the talks are about theresa may as it should be, maybe a no deal exit on brexit. however it turns out, the guilt and the pound moved but not very much may 2015 of the guilt, this is a 10-year instrument, you can see it is same pattern of our long end covering the lowest yeields of 2017. it tries to do a little bit better we are hovering to the lowest

levels of the year against the green back on the pound side here is a one-week, it is down a bit. we have lost the 98. if you take a step back, dollar is still trading at lofty levels, not far away from 24-month highs carl, back to you. >> some movers here, let's get to bertha coombs >> nasdaq is on its third straight loss, none the less, we do have some strong movers into it among the biggest gainers this morning on the back of strong earnings and outlook. on the other side you have au auaut auto debt, it is not seeing brexit issues or none the less, it did offer disappointing guidance take a look at chip names, we got a broad advance bouncing back for the week. chips are down about 4%.

a month ago today they put in an all time high. the worst decliner regarding to the chips this week is qualcomm. if there was not bad news between huawei and apple and on top of that a ruling about its revenue model. that's a big impact for them biotech is a big winner that's up 1% for the week that those are the among the leaders, back to you. >> wti crude is trying to bounce back on its worst day yesterday. dom chu , good morning >> wti's price is up $68.34 it follows up on steve's losses on the energy market overall as concerns ramp up over the increasing stock for oil and

gasoline in the united states and the effect of the prolong trade dispute between the u.s. and china. oil will be poised for its biggest weekly drop of the year. a couple of notes at the institutional level, it is still much lower than they are for a delivery right away, reflecting the near term uncertainty at the retail level, gasoline prices in the u.s. sit right below the highs of the year. that's still lower than it was a year ago when it was closer, guys to $2.97 a gallon carl, i will send it back to you. >> a lot of people driving this weekend. when we come back, a different look of the hottest ipo and fin out what the ceo of beyond meat is saying as we go into memorial day weekend. need about 114 points for the dow to go positive for the week we'll be back in a minute. when it comes to your customers' expectations,

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spread good breadth this morning as the s&p tries to patch up damage from earlier in the week yields up a bit, oil is up, vix is down. more "squawk on the street" in a minute at mercedes-benz, we make every vehicle

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now. ylan mui has the details >> reporter: taxing wall street is not a new idea, but it is gaining new momentum bernie sanders, kirsten gillibrand, elizabeth warren, pete buttigieg, they have supported some form of a financial transaction tax. this week sanders introduced legislation to impose a .5% tax on stock trades. a .1% tax on bond trades, and a tax of .005% on derivatives. >> it is time we made wall street pay their fair share of taxes and stop the type of reckless gambling by wall street speculators that nearly destroyed the economy over ten years ago. >> one of the co-sponsors of sanders' bill is one of his democratic rivals, kirsten gillibrand she has gotten behind a separate bill that would impose an across the board fee of .1% on all transactions now, warren and buttigieg have been on the record supporting this concept, but they don't have detailed plans just yet

proponents say a wall street tax could raise between 700 and $777 billion and $2 trillion in new revenue. the concern is that the tax could dampen investment. critics point to sweden which tried this in the 1980s, home to see trading move to london instead. back to you. >> it seems a little crazy doesn't sanders want to court millennials increasingly buying these, you know, fee free kind of investments, etfs and brokers? wouldn't that just kill off some of these companies and make it very onerous when it comes to trading. >> reporter: i think sanders is betting the overall ire against wall street among millennials is going to be greater than their desire to invest in free -- fee-free vehicles. but i think that the interesting point here is that this is an idea that has become much more baked into the democratic party.

when he first proposed this, years ago, and his 2016 campaign, it felt like something that was sort of on the fringes of the policy realm, but now compared to other proposals like a 70% marginal tax rate, this feels pretty vanilla. >> something the markets are going to have to pay more attention to over the coming months great piece. thank you. meantime, holding on to gains here, dow up 128 we're just getting started about half an urnttre. n'goway. io ad to a single defining moment... ...when a plan stops being a plan and gets set into motion. today's merrill can help you get there with the people, tools, and personalized advice to help turn your ambitions into action. what would you like the power to do?

good friday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber. stocks looking to bounce here. we're trying to avoid five weeks down on the dow. >> our road map starts with britain's embattled leader stepping aside >> so i am today announcing that i will resign as leader of the conservative and unionist party on friday the 7th of june so that a successor can be chosen >> will britain depart the eu

without a deal in place? we'll take you live to london. >> the oil slump recovering slightly this morning, but seeing the biggest weekly drop of the year. >> the faa says it won't release a timetable on getting boeing 737 max planes back in the air, but a new report says otherwise. we're going to bring you up to speed on the latest. >> we begin this morning with theresa may resigning. our villa marks joins with us the latest. >> reporter: an emotional end, she walked outside of downing street and announced she would be resigning as leader of the conservative party and thus resigning as british prime minister she made clear that there was among many reasons a very important one that was responsible for this decision. of course, it was her failure to deliver on brexit and guide the process through a very complex set of circumstances take a listen to how she described her failure in this regard >> i negotiated the terms of our

exit and a new relationship with our closest neighbors that protects jobs, our security, and our union. i have done everything i can to convince mps to back that deal sadly, i have not been able to do so. i tried three times. i believe it was right to persevere, even when the odd s against success seemed high. >> reporter: she was going to try for a fourth time in a few days from now, but she decided seemingly that was not going to work she announced already she's going to be stepping down in the early week of june that's going to be after president trump comes here for a state visit. and at that point we'll have a number of candidates from inside the conservative party vying for the leadership and thus the premiership and once those candidates are voted on by parliamentarians and whittled down to two, those two candidates will be put to the tens of thousands of conservative party members across the uk to decide on who

they would like to see as their next leader. markets clearly seem to have been pricing this possibility for quite some time. it was the largest secret in british politics that was not a secret that she was going to step down, she made this very clear quite some time ago and yet the timing was still somewhat of a surprise this week >> so, clearly, as you just described the market reaction was sort of sell the rumor by the fact now what what are investors going to be hanging on to when it comes to these candidates, they're campaigning and their ideas for how brexit is going to look and it is going to happen by october? >> reporter: it is going to be very dependent, of course, on the candidates' view on brexit only one individual so far has thrown that hat into the ring. that's a relatively loyalist member of theresa may's government, jeremy hunt. also the foreign secretary responsible for britain's world stage kind of situation. in terms of what these candidates will be arguing about

in this context, brexit once again will remain front and center investors will be watching to see whether a candidate breaks through and ends up winning the leadership of the conservative party and thus the keys to the building behind me, whether they are in favor of a harder brexit, in favor of a softer brexit, what that means for the future trading relationship with the european union and the negotiations that will lead the uk out of the eu and decide on that future relationship. >> willem marks, thank you very much, from london this morning meanwhile, u.s. stocks opening higher for first time in three days, closing out what has been a volatile week dominated by concerns over the trade war with china joining us now is samir samana and ben steel, counsel on foreign relations director of international economics. ben, how do you view the current trade fight between the u.s. and china as far as what comes next?

>> well, we entered a new phase in terms of this administration's trade policy. on the one hand, a big victory for the hard-liners, the navarro ring, substantial tariffs on chinese imports are here to stay that's what he wanted to achieve. on the other hand, a big win for the more dovish kudlow wing of the party as trump walks back import tariffs on metals from our nafta partners, and delays auto tariffs on the europeans. this is a direction in which kudlow has been trying to push the administration for some time >> did you see the latest from the commerce department looking at a new rule to impose anti-subsidy duties or tariffs from countries that undervalue their currencies i can't even with this story that is impossible to determine. how on earth are they going to do that? >> the u.s. treasury going back to the obama administration has tried desperately to find some quantitative means to define currency -- >> the treasury does that.

they find that nobody manipulates their currency. >> they -- the obama treasury didn't want to come to that conclusion because they didn't want to implement tariffs, but, of course, congress had been ratcheting up pressure on the obama administration and really now this is an open lane for the trump administration because the democrats are not going to oppose them. >> given that, samir, there is this circularity with countries like china and mexico. equity is down 4% from the high. how much has been priced into this new chapter then? >> we don't think a whole lot at all. if you look at the forward trajectory of earnings growth, it is under fire look at the top line, that is as weak as it has been in the last year or so and you have margin pressures, from wages, from tariffs hopefully they reach some kind of deal at the end of june at the g-20 >> i guess we should start

asking everybody, is it the base case that we get the fourth round? >> it is least right now. if our target is to be achieved, we have a target of 2950 on the s&p, a little bit outside from here we do need that trade deal to come together. if it doesn't come together, there is probably a little more downside of the markets, doesn't mean markets won't eventually stabilize, would be a disappointment, now they're not discounting it. >> goldman tries to put some numbers on that. they say fourth round of tariffs, take 4% off of stocks, add additional auto tariffs, take 7% off of stocks. do those numbers sound reasonable to you? >> they do they probably start to take you back, in the realm of something with a 26 or 27 handle on the s&p. that's right in between where we were in december and where we were just recently at 2950. >> back to china, how do you view the approach to huawei and what is your opinion on sort of this -- what seems to be this rising nationalism we're hearing out of china in part in response to what we're seeing. >> we're seeing a new cold war

in the tech sector, back to the 1940s, we divided the world geographically with the russians, now we're actually doing it in cyberspace with the chinese. you will see a china region of the tech world developing around chinese 5g, huawei and you will see an american version of that. and there is going to be a real competition for allies and counterparts in building this. >> is that a good thing or a bad thing? >> look, it is clearly a negative for the global economy. but this is one area where the national security issues are real so the president is not facing any serious resistance, either from his own party or from the democrats on this. again, this is an open lane, even if the president should lose his position in the next election, you're going to see continuity on this. >> if the risk is real, how much does he owe us in terms of

evidence or smoking guns about huawei's ties to the party or their nefarious intentions regarding our own security >> well you know, the president has never been particularly adamant about the need for hard evidence he has convictions about where we stand on these matters, but, look, going into 2020, he's got some heavy head winds coming against him. u.s. trade weighted import tariffs, now 4.2%, by far the highest in the developed world, higher than those of china and russia the new york fed recently estimated that u.s. households would pay $831 a year more for goods and services because of the tariffs. >> the -- as david referenced, the chinese nationalistic tone, which has been building throughout the week, where does that take us >> we hit a brick wall in terms of the trade negotiations. the trump administration is demanding structural reforms

from the chinese government that really hit against the governing philosophy which is intellectual property, acquisition through all means, fair and foul, technology transfer, boosting national champions, particularly state owned enterprises. i don't see president xi backing down on these issues anytime soon. >> are the chinese able to go forward with the next act, something wall street worries about boycotts of american products and source products overseas are they able to take this to the next level and really implement some sort of economic policy around it >> they are going to be far more targeted than the trump administration they don't want to see tariffs across the board because they recognize that it is going to hurt their own economy but they're making a political calculation that the president will not be able to bear the pain going into a 2020 election campaign and therefore he will be the one to back down first. >> samir, what is what you're hearing here mean for your view

of overall growth as the rest of the year unfolds >> that's one of the things i was going to add too, that ben mentioned, while the president may not face resistance from his party or from the democrats, he will face resistance from the markets and from the economy again, at least right now for us, for a lot of the consensus, you know, a walkaway from the trade deal and tariffs that are ratcheted up on a broader range of goods are not in the consensus estimates for earnings and not in the consensus estimates for economic growth. those have to come down for, you know, for large parts of the street that will be downside risk. >> so, samir, do we continue to load up on verizon and mcdonald's and utilitys? how much of that -- does seem a tad overbought, doesn't it >> it does but people tend to pay up for that we continue to focus on quality, we continue to move up in market cap. small caps have in the been the place to hide. we do want to make cyclical bets here and there technology, consumer discretionary, financials, which are much more domestically

oriented we like energy and industrials would be the one area that we like that is most exposed to trade >> it is not all doom and gloom in terms of data we have seen pain in manufacturing sector and the durable goods report today and market report yesterday, but we saw jobless claims go lower. they were at 2110. if there was some sort of crisis of confidence at the business level because of all of the headlines, wouldn't you see it shay up there on a weekly base nice terms of more americans filing for unemployment benefits because of being laid off? >> yeah, no, that's a great point. while you see business sentiment soften with the pmis and the ism, you haven't seen an initial claims yet that being said, you do have -- you have seen it in the layoff announcements that challenger gray puts out. there is a lot of different ways to look at the labor market. fire s fair to say it is stable now. the margin, there are signs things are weakening. >> interesting point sara is right, even though some

of the poll numbers on trade are net negative for the president, consumers are not rattled by this g this. >> i agree with samir. another element, the possibility of a -- by september, you may see the fed ready to turn around this tanker and start a loosening phase. that's also supporting the markets at this time >> samir and ben, thank you, both >> thank you when we come back, investment banker ken moelis on the m&a landscape and his own company's performance. don't forget hpe today out with mixed results. they did hike their outlook despite weaker q2 sales. we'll talk with e o rahtthcestig ahead. dow up 108 there are people in the investment industry who hold themselves to a higher standard. they are called "cfa charterholders."

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are only knocked down own -- you were down more than the market. >> m&a, it is a long cycle business, number one and when we created the company, we don't give guidance at all, what is 12 weeks of m&a when you're trying to build a firm based on advice. advice is a long-term relationship and m&a are big generational risks that companies take. i think i've gone out of my way to create a company that has the opportunity to say no to a deal, as well as yes i think it is very interesting how much of the industry's success is based on saying yes to transactions versus thinking through truly a symmetric risk in the market and giving long-term advice. >> you say to a client, we don't think you should do this, which, of course, means near term you're not going to get a fee you otherwise might. >> right you sit here and ask me about my success on a 12-week period, our success is did we give good advice, because ten years from now, that will be what counts.

when i started the firm, i used to say to our partners, let me give you some advice, never go to a brain surgery with a big mortgage on commission you might not want to trust the resulting advice and i think the whole system about financial advice is now set up with, you know, heavily levered, high fixed cost companies with commission-based bonus pools and i'm not sure that's the best environment. >> right although as a public company now for five years at this point, ten years since you founded the company, five years as a public company, it can't be particularly nice to watch your stock price drop dramatically as a result of a revenue decline, where everybody is still asking the same questions. >> no, but actually, it doesn't affect me, look, i'm in it for the long haul, it is a long-term investment for me. and what i think about is are we delivering quality are we connecting with our clients, did we give good advice there could have been parts of that, i said part of it was specific to our firm that we did

not have transactions complete i didn't mean that as a negative i said it very purposefully. some of that is a positive some of that is slowdown, some of that is possibly deals that didn't happen that i'll not saying all of it was, but i really do assess the firm on the quality and the consistency and the value of our relationships more than any 12 week period. >> want to get back to the company itself, but broadly speaking about the m&a environment right now, as we -- a month away from wrapping up the first half of the year, what are you hearing in board rooms what are you hearing in terms of confidence from ceos, willingness to actually do a deal, particularly in light of the ratcheting up of tensions with china and the overall concerns in the marketplace. >> interesting, you're -- people ask that question as if every risk is the same i was thinking about this, the fourth quarter risk, october, november, december market, was really a risk that the market had seen a recession coming. i think the fed was saying they

were going to raise two more times and the downturn in the market and the volatility was about a coming recession, very much more hides middle market m&a, access to capital and economy. i think what you're seeing in this new environment, and i think that kind of settled out when the fed said we might cut rather than raise. what you're seeing in this volatility is a macro risk, china trade war, regulatory risk, nationalism, elections, and i think that affects strategic, more large cap, they think about strategy and large impacts such as a long-term china trade war. and so i think you're seeing two very different responses to what maybe people see as the same volatility, but i think it is different volatility. >> meaning we should not expect to see any large cross border kinds of deals or not many of

them and perhaps to the point you're making, some of the larger strategic deals we have become accustomed to seeing? >> yeah, i do, because m&a is a symmetric risk reward. when you're right, you have linear progression of the company and when you're wrong, it can be, you know, very exponentially wrong as some of the past mergers that you and i are aware of look, with the china trade war hanging out of -- out there, i do think you have to think, okay, we might all think there is a 9 or 8 out of 10 chance, i might disagree with that, that this settles out, but the consequence of the other 20% is too large to enter into a very ill liquid, long-term risk >> certainly if your deal requires antitrust approval or u.s. at this point, who knows where that goes. >> then it is the other way. you can't do it. >> very few boards i think would be willing to take that risk when dealing with technology

deals, they often will need chinese -- >> 2016, i think we did 15 transactions from china, outward into the u.s. and europe and the last 12 months it is close to zero. we were very active in the market almost impossible to tell a public company board to enter the risk of getting chinese approval right now. >> you also -- it is funny, on the call, you seemed a bit stumped by the lack of activity in europe as well. is that going to continue? i won't quote you here, but you basically -- i'm not sure i get it either, a pretty big economy, nothing going on. >> stumped might not be the right word. >> not that you're ever stumped. >> amazed -- as an economy, it is as big as the u.s. taken as a whole. but you're having these elections and nationalism and brexit and it is just not creating transactions, but, look, germany is entering into a recession, italy in recession, you have different things going on and europe is difficult

i would just say europe is a much more difficult market than most people dream it to be >> you're not painting a pretty picture for the second half of this year so far >> it is not -- i think some of the big cap strategic will go away i think that the signal from october, november, december was truncated by the fed saying we're not going to raise twice i think most of the market is not looking at recession risk anymore, but i think the large part of the market might be looking at strategic macro risk. >> right and what you operate, middle, also dealing with -- and they have gotten -- some the deals have gotten larger over time as you become affirmed that aged a bit through the years. >> i think the middle today was what we used to call -- the middle is up to 10 billion is considered middle market, 500 million, 10 billion. those transactions are humming along. the amount of money being allocated into the private equity world is mind boggling. >> it is, but there are deals

here and there, but we keep dry powder -- >> i hate the word. >> i do too. it is all you hear >> you're in the business of buying and selling assets. when you raise a $25 billion fund, you're sort of indicating that the next five years you're going to buy $100 billion of assets then if you hate your rate of return, you're sort of indicating that two to three years after that, you start to sell $300 billion of assets. that's a half a trillion dollars of m&a and there is, what, six or seven funds of that, and 8,000 -- i'm saying there is a lot of activity in that part of the market, and i think -- >> you think financial sponsors will be more -- >> i have to. >> you got to believe it. >> is walmart going to sell bananas? the answer is it is their business. >> we won't talk about levered returns. back to moelis and company, how do you manage a period like this in terms of head count one analyst was saying, look, over a long period, last five years, head count is up 80%, but

your number of transactions is up only 17%. >> yeah. interesting because i don't know what he was talking about, but i do -- look, we are -- we have grown the firm to 800 plus million of revenue and we think we can double it again in the future. but i will tell you one of the things that i think will prevent that is a complacent bull market you've been around a long time, i've been around a long time what happens in these markets is people inch out on the risk spectrum i think that's what our job is in m&a there is an implicit risk out there, we run the company with no leverage. no guarantees. the desires to be able to first of all have no pressure on our bankers, to give advice, just to pull forward, a fee structure into a bonus pool, we tried to set up the firm to be owners and give ownership type advice and i think we're living that in our own business, which is to --

is to be careful and i think there is always a moment in time when things get over their skis, we want to be ready to take advantage of that moment and accelerate our growth. that is the plan is to stay very unlevered, very nimble, and take advantage of opportunities. >> what is the plan for you? are you going to stay at the helm of this company you founded ten years ago, public five, you're still a young man i say that now more and more often given how old we're all getting. >> it is one of the only businesses in the world you get better with age. thank god i'm not a football player, you get a very short term at this having seen 40 years of deals, i think will make -- makes you better for the next ten. i love the business, i love the quality of the people we interact with, i love being with young people trying to change the world. starting to come back to finance, which is really exciting >> are they? >> they are. young people have realized that if you want to change the world, actually doing it the way we're

doing it is much more effective than starting at the bottom of a large tech company and focusing on what the color of a button would be on the screen and so we're starting to get really great people back in our -- in the firm, out of school i'm excited about it i said that i shouldn't be the ceo of the company five years from now and it is because i want young people to see a chance to get ahead and want them to know there is a shot for them and i'm going to -- i'll be in the firm and i'll be doing deals, but i hope somebody else will be ceo. >> we hope to speak to you between now and then quite a few more times ken, thank you, as always. >> thank you. >> ken moelis, founder and chairman of moelis and company. >> i think you get better with age, david faber, thank you. when we come back, the faa says it is not giving a timetable for when boeing 737 max will be back in the air. but a new report says otherwise. we have the latest plus, one sector having its worst week of the year

i'll tell you what it is and why. "squawk on the street" will be right back with the major averages higher, dow up 100 points off the highs most are higher, so we're cutting our losses for the week no jt wno w,usdo ta little under 1% we'll be right back. when it comes to your customers' expectations,

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good morning, everyone i'm sue herera here is your cnbc news update at this hour. british prime minister theresa may resigning as of june 7th, admitting demefeadefeat opposition labor party leader jeremy corbyn calling for general elections. >> reality is a new conservative leader isn't going to solve the problem. there has to be another opportunity for people of this country to decide who they want to be in their government, how they want the government to be run, what the long-term strategy is of that government. i think we need a general election. >> celebrity chef mario batali pleaded not guilty in court to allegations he forcibly kissed and groped a woman at a boston

restaurant in 2017 his lawyer says the charge is without merit, he was released and ordered to stay away from the woman. some good news for motorists. according to gas buddy, the average price of regular unleaded gas has trickled down for a secondconsecutive week a refineries begin to boost production 38 states say gas prices decreased last week, which is good news because a record number of people are going to hit the road starting today. that's the news update this hour, guys, i'll send it back downtown to you. >> summer already getting started. thank you very much. wanted to give you an update on boeing's grounded max fleet this morning a reuters report says could b be certified as soon as late june

china was the first country to ground those planes as you may remember after the ethiopian air crash back in march. time for etf spotlight, back to dom chu, looking at energy and the rebound in oil this morning after a rough week >> so, even oil prices are higher for both wti and brent crude futures so far today we're likely slow going to end up having the worst week of the year for this oil prices that double whammy growing u.s. inventory for both oil and gasoline, couple that with fears over a global economic slowdown, you hammered the energy complex pretty well. energy is the worst performing sector in the s&p 500 this week. that means that the key energy related etf, funds, have taken a beating as well including the spider s&p energy fund the xlp is down double that amount this week traders are watching a couple of

exchange traded products tied to the underlying commodity complex, the u.s. oil fund ticker uso and u.s. gasoline fund ticker uga. these funds track the daily performance of west texas i intermediate oil and gasoline futures as well. sara, some big moves here, we'll see if they continue as the summer driving season gets kicked off in earnest this weekend. back to you. >> thank you. when we come back, hewle hewlett-packard enterprise, the ceo of hpe joins us exclusively. up 82, losing a bit of steam in this morning's rally we'll be right back.

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roxana: when i got into teaching, it was this idea of really transforming our schools. marisa: one of my biggest responsibilities as a teacher is to serve as an advocate for my kids. newscaster: hundreds of teachers are hitting the picket lines. newscaster: thousands gathered here. rosanne: we need smaller class sizes. angelia: more counselors and more nurses. roxana: we have to be able to invest in our young people. angelia: every student has a right to quality education. ever: no matter what neighborhood you live in. roxana: our students don't have part-time needs, so they can't have part-time solutions. rodney: because we know quality public schools... roxana: make a better california... marisa: for all of us. shares of hpe moving higher. quarterly earnings beat forecast though revenues missed on weaker

sales. joining us today in the cnbc exclusive is president and ceo antonio neri good to have you back. >> thank you good morning. >> a lot of investors are curious, revenues down 4, how you managed to raise your targets. how are you doing that >> well, listen, we had another very solid quarter where we grew the company 1% when you exclude the tier one cells and the currency impact, but we deliver an incredible strong performance on operating margins eps growth and robust cash flow. and the reason why we are able to do that is because we are continuing to drive our makeshift to higher value services and the actions we took last year with our hp pay enough we were able to improve our operating growth margins by 200 basis points and 110 basis points subsequently. we see the momentum on our

profitability, and at the same time we continue to drive our growth in key strategic areas. we have strong performance in high performance computing, up 25%. cloud, which is very unique, that brings the public experience on prem 78% hybrid conversion 25%. and then services, services so critical, and our flagship offering in consumption driven model was up 39% >> you mentioned super computing. everybody is familiar with the trade deal announced just a few days ago how much of that is built into the guidance >> none. that transaction will take a few months to close. as we said in my opening remarks like friday, the transaction will close in the first quarter of fiscal 2020 and i'm incredibly excited about transaction. at the core of this is to enable customers to process the ever growing amounts of data. and we see the growing in three

particular areas, big data analytics, ai, machine learning and simulation modeling. and that requires an incredible amount of competent tegs ition t seen before. that's why the on prem solution with our green lake, with the technologies is an incredible opportunity for us >> you said a number of times on the call that the company didn't execute as well as it could have in north america specific in part to sales there. what went wrong and what are you doing to fix it? >> yeah, i mean, listen, if i have to be a little bit self-critical here, we could have executed better in specific segment of the markets, in particular north america as a geograp geography. what we realize beginning of the quarter, we have a certain amount that shifted in down market and we didn't have the exact right coverage within the few weeks of the quarter to take advantage of that demand so we know exactly what it is, it is coverage, in particular

segments of the market and also realizing that it is technology transition here on the wireless side but i have to tell you, we know exactly what it is, we made the changes, we're confident about that, and we have an incredible product in innovation we already brought to the market and excited about what we can do the second half of the year. >> trade continues to be a concern for so many people you have an important jv in china. you have a put option you say you're not interested at this point at least in exercising what are you seeing in terms of china trade and what are your concerns there when it comes to your ability to continue to have success at that joint venture, which you own 49%. >> yeah, we like to clarify one thing. we refer to joint venture, the reality is we own 49% of that entity we used to own 100% three years ago. and we tend to refer to joint venture. not a joint venture, it is 49%

ownership. we believe it is absolutely the right model. it has been an incredible success because that entity continue to grow very, very well and continue to expand profit. the reason why we highlighted this yesterday is because in may, actually open up the period of time where we could exercise the put option and that put option today is valued 15 times trailing pe. and so we believe that that setup is very critical, particularly in the context where we live in today so we have no intention to exercise that put option at this point in time, maybe in the future we will re-evaluate what the best use of that cash for shareholders and the company in terms of what we see, the tariff and the global trade continue to put some uncertainty in the market. but the reality is that the tariff we just saw in the last couple of weeks has no impact to us, very negligible, we already manage it and that's why we are able to raise the guidance on

outlook despite the tariff so for us, we are very excited, we have a very strong partnership with our entity. and that business is doing extremely well as i said yesterday, we're optimizing the profitability of the entity which our shareholder. so very good and we will continue to execute with them. >> the well known bernstein analyst put out a note before your earnings that got a lot of attention, called you a structurally challenged business, wanted to give you the chance to respond, said you should consider m&a buying to try to drive growth. >> yeah. i mean, listen, i respect everybody's opinion and, listen, we have been going through transformation and you have witnessed that transformation over the last seven years. and we decided to build a purposeful company that looks into the future and meet those customer needs in a way that no one else can do. we continue to shift our investments in the high growth

areas. and obviously, you know, we continue to divest in areas we don't think are important. and good example of that is the tier one cells which we decided not to sell. that has an impact, let me remind you of the height of the business, 20% of our compute revenue and this quarter only 2% and despite all of that, we continue to run the company, we continue to go to high value growth areas we continue to think about innovation in three forms, organic innovation, where we invest our dollars and we have done a good job thinking about, like, in memory computing or composable cloud or other areas. in organic and, listen, the acquisition will be my 14 acquisition where i think about bringing ip intellectual property and talent to the organization to us and then the third is through partnership and this quarter we announce partnership with

bothing goboth i google cloud to give customers choice we are in that transition. we are able to deliver very strong shareholder value let me remind you this quarter we grew by 31% when i go back to the end of 2017, we actually deliver 96 cents per share on the year and this year on track to deliver more than $1.70. that is an incredible journey, almost double. >> finally, very macro, i see non-u.s. net revenue almost two-thirds of total net revenue. when it comes to the global economy, whether it is slowing growth, slower trade, or the dollar, do you believe the coming year will be a tougher needle to thread >> it is all going to depend on what happened with the geopolitical situation and the global trade definitely we see a little bit of slower growth at this point in time. and that's why i commented yesterday in my remarks we see

elongated cell cycles. so but let's not forget one thing, the digital transformation will continue to happen the ever growing amount of data will continue to happen. two years from now we have twice the amount of data we data has. that data has to be put into some sort of business outcome. so that gives me confidence. however, all the things we hear have to be addressed to give the confidence of the market that we can continue to accelerate this journey and continue to make the right investment into the future >> our viewers appreciate your candor very much good to see you again. >> thank you very much for the opportunity. >> when we come back, trucking and the trade war, look at the road ahead for the companies heavily caught this the cross hairs. a quick check of shares of tesla, after starting the day higher, now lower by 2%, a rocky week for the stocks. since monday morning, companies lost about 8% of its value

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learn what a cfa charterholdr can do for you at therightquestion.org welcome back to "squawk on the street." rick santelli. my last guest of the week, john sylvia, dynamic economic strategies john, you've written and many are in your camp that what is going on with stocks is putting a whole lot of extra demand in treasuries and sovereigns in general. how do we calibrate that against the obvious downward pressure of other central banks policy and the lack of ability to remove stimulus >> big challenge with equities, profit expectations have slowed for 2019 relative to 2018 based upon slower global growth. when you have those lower profit

expectations, people are looking for safer returns, steadier returns and that's shifting over into the bond market so that bond equity calibration always goes on, sometimes obvious right now, it is very obvious. >> if you overlay the s&p on top of ten year note yields since the beginning of 2018, s&p very close to where they were in 2018, what you see is after january 3rd, everything diverged lower rates became a way to adjust multiples to allow stocks to rise. what we also learned in 2018 is rising yields for the right reason also propels stocks are we ever going to get back to that and is the former going t run out of gas, the lower rate advantage to stocks? >> well, i think the lower rate advantage is gradually disappearing because the lower rates are associated with lower economic growth. if it was stronger economic growth, the growth in the economy was picking up, that would really help the overall equity market in general

that balance always is there, and the short run, the fundamentals are really driven by what is happening with the volatility and expectations. but over time, those fundamentals will reassertreass. >> now, something odd happened yesterday evening. u.s. department of commerce issued what they call a notice of a proposed rule making. basically and i'll summarize, they want to create a set of penalties to allow the u.s. government to go after countries that manipulate their currency for export advantage what do you think of that? >> well, it's kind of intriguing to me, rick, because i thought the u.s. treasury was the one to decide who, in fact, was manipulating their u.s. currency now, basically what the commerce department appears to be doing is setting out specific penalties so that nations will know that if they're in violation, this is what will happen that creates a certain level of

certainty, i think, for other nations and says upfront if you mess around with the currency, here are the penalties be aware of that, and i think it's actually more transparent in terms of information and actually will discourage countries from manipulating their currencies >> excellent, i'm glad to hear your thoughts on that, john. i'm sure we'll hear more about that in the future maybe from wilbur ross. thank you for joining me, have a great holiday weekend. sarah, back to you. >> and same to you, rick now i'll send it over to jon fortt with a look at what's up next on "squawk alley. good morning, john. >> good morning, sarah it's memorial day weekend coming up, a lot of people thinking about the weather. we've got the ceo of ibm's weather company on new ways people are trying to make money off predicting the weather ats mi uonsqwkth icongp "ua alley. [knocking]

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welcome back to "squawk on the street." trade and tariffs causing quite a serious stir in the trucking industry impacting kbacompanies revenue, stocks and pay for its drivers. our friend collin joins us froms aton, pennsylvania, with more on that story >> good morning, sarah, the trucking industry delivers about 70% of the things we all buy in

stores with surges of imports and declines in exports it's not surprising this industry bowoule impacted three of the biggest trucking companies have sign their shares fall by 24% or more since the tariffs were put into place. in their last earnings, jb hunt executives, they said that their lower revenues were due in large part to lower volumes at the west post ports that handle shipments from china that'ses a known as the spot market spot market rates have declined by double-digits since april of last year. for standard trucks that deliver most things we buy in stores they've fallen by 19%. for refrigerated trucks that handle things like meat and perishables they've fallen by nearly 14%, and for flatbed trucks that handle industrial items they've fallen by over 14%. analysts and truckers agree on one thing tariffs are a major factor in all of this. manufacturer and retailers front

loaded their shipments to beat the tariffs. now with their warehouses full, they're in the driver's seat when it comes to pricing >> with the volume being down, there's a surplus of trucks for the 2019 as we see it right now that it's a pricing market it's a shipper's market, and which is driving the prices of the rates down >> and there is hope that a trade deal could reverse these trends by increasing exports dual transactions are when a trucker drops off a trailer like this one and pick up another one at the exact same time we spoke to the harbor trucking association. they rempresent companies at the l.a. port, all these dual transactions were at 80%, in 2019 they've fallen down to just 20%. so a lot of concern there. you have to remember the truckers, they don't make any money unless they have a trailer full of goods behind one of these trucks back over to you.

>> frank holland, thank you, and congratulations on doing something i could never do, which is a report while driving a truck. that was amazing later today, kathy wood joins us on closing bell, the firm that says tesla could hit $4,000 per share, is she still sings that tune? the stock is down 26% over the past month these gains are slipping away. we'll be tracking it next up on "squawk alley. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

you still have service? call the insurance company sfx: [phone ringing] it's them, calling us. it's going to be a week before they can get through on these roads shhh, sorry, i didn't catch that. i said ask how soon they can be here right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering? look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪

good morning, it is 8:00 a.m., 11:00 a.m. on wall street and "squawk alley" is live ♪ hey ya, hey ya. hey ya, hey ya ♪ ♪ hey ya, hey ya ♪ hey, ya >> good friday morning, welcome to "squawk alley." i'm carl quintanilla obviously losing some of the gains here dow session high up 180. we're currently up 19. faang leading the rebound this morning to the degree