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 we had one

after the sector lost its top spot as the best performer of the year to real estate. shares of apple fractionally higher but down 4% for the week as well. while you have amazon getting a $3,000 tag over at piper, that's by mid-2021. joining us this morning is wolfe resear research welcome both of you. >> thank you steve, i'd love to take your temperature on what's happening to tech both in the short-term in terms of like second quarter gdp revisions and so forth but also this increasingly structural story we're talking about in terms of a digital iron curtain. what are the ramifications? >> well, we've been waiting for a correction in tech for a while, and we're finally getting it a number of the companies i've had reported in the last week and particularly hp last night indicated that they are seeing longer cell cycles, so there is a macro effect happening certainly for companies like apple china plays into it in a

big way. i think the uncertainty is a problem and may continue to be for tech. >> all right, brent, facebook is up better than the overall s&p the day after they had this transparency report, their progress cleaning up the platform they seem to be making progress according to their data, but does that matter should investors be watching those numbers? >> you know, we think the big metric here is just what advertisers are seeing we had a call with many advertisers in the last week just stating that the roi and the platform streaming's off the chart relative to the other social platforms there's a lot of press headlines about, you know, privacy and some of the issues that are happening internal ly but whether you talk to the advertisers who are paying the bill they're saying fantastic things and they're getting one of the strongest rois relative to amazon, google and other advertisers. as long as we're hearing the good news from the advertisers and they don't care about the noise that's what investors should focus on. we still believe the company is

capable of producing $10 of earnings year out. you have a 200 to $250 stock >> the selloff in semi stocks do you think it continues >> i think it could, particularly the semi and hardware names have really been lagging here and they're getting pretty hard hit by the trade wars you're finally starting to see some macroeconomic impact here, companies are indicating that they're missing numbers and there seems to be a macro component as well as to some company kpe kiegexecution. a name like apple is fairly valued here. their fundamentals are probably bottoming but then you've got china overlaid on that, i think there still could be some further downside here. we're certainly not at cheap levels for technology where i'd be comfortable buying. >> yeah, when you say further downside, steve, i mean, we have seen some pretty crazy estimates

for what long-term china damage could do to eps in the realm of 29%: does that seem reasonable to you >> well, 30% would be apple sold nothing in china and they basically shut apple down in china. i would say that, for example, if their phones get tariffed in the u.s., that could be maybe another 100 to $150 expense per phone. that could hit earnings by i'd say more like 10 to 15%. there's still a material downside depending how the trade thing works out. i'd say 30% on eps is pretty unlikely apple did get to a market multiple i think that was pushing it. now it's back to about 15 times, p i think it's around fair value. >> brent, google, alphabet is down about 9% for the month, not surprising i guess given the market's action, but what's your take on google's exposure either to ecosystem wise, to huawei and these china issues or what's really having an impact on that

stock that will drive it from here >> yeah, john, what's happening to google is the lack of transparency so in the first quarter they had a number that was below 20% growth they've been putting up consistently 20% growth, and then that fell to mid to high teens. they did a very poor job of explaining it, so when you're seeing is a backlash from wall street saying if you're going it give me lack of transparency, i'm not going to give you a multiple, and so that money has flown into facebook, amazon, other names across tech, and so we think, again, it goes back to there's some issues that are going around on youtube as it relates to brand safety, advertisers are going to other platforms as there's been some short-term hiccups there there's been core issues around what's happening with search, and is that being in terms of the market share being shifted over to facebook, instagram. so i think there are a number of questions. the multiple is not demanding we

like google for long-term shareholders we think ten times ebitda with ebitda growing mid-teens the stock is actually very reasonably valued. however, just this lack of transparency from a company, they're the only one in tech that does not provide guidance among the big large caps so without guidance and without a good explanation of what happened in q1 their multiple continues to drift it's unfortunate i think that they could change their ways but that's what's happening at google. >> so many swirling currents in tech, guys as one of our viewers points out, nice to have the ubs alumni club with us steve, brent, we'll see you soon >> thanks. >> have a good weekend coming up, 230%, that is how much beyond meat is up since its ipo, but amid the hype can they handle the increased demand. jane wells is digging in jane, what's coming up after the break? >> reporter: hey, guys, perhaps

it's appropriate that the leader in fake meat is here in la la land, the leader in fake everything up next, hot ipos, heated demand and angry vegans we talked to the ceo of beyond meat about all of that when "squawk alley" returns which is why i wear skechers... wide fit shoes. they have extra room throughout. they're like a luxury ride for my feet. try skechers wide fit shoes.

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surrounding its ipo. jane wells joins us now with more on beyond meat. jane. >> reporter: hey, morgan, we had -- we were grilling burgers on squawk, so we're doing breakfast pork patties for you one of these is real, jimmy dean, one of these is fake i'm going to ask you later to figure it out. even though most americans have not even tried a meat alternative, demand is spiking and beyond meat says it expects to have twice as much supply as it plans to sell this summer just to be safe. >> what are the white flecks >> that's going to be our coconut fat. >> i was inside its headquarters here in l.a. one of the challenges is to bring down the price of the products currently they cost at least 50% more than real meat. ceo ethan brown wants to have one product at least cheaper than meat in five years. i asked him about pushback from vegans who questioned why he'd imitate meat. >> i believe it's part of who we are as humans. i believe that i'm hard wired to want meat. you know, i think the composition of my body, the structure of my body, we are

carnivores, and so i don't see a day when humans aren't going to be eating a meat i actually see a day when they're eating plant based meat instead of animal beat to try to build a brand that everybody loves by telling them not to eat what they love is a bad idea so we view our work here as enabling people to eat what they love >> okay. the company plans to have its first earnings report as a public company on june 6th and perhaps then we'll get some idea of when they plan to be profitable all right, guys, which is fake, which is real? >> jane, i'm going to guess that the lighter colored -- >> the bigger one, the bigger one's fake. >> on your far left -- >> the bigger one's fake. >> yeah. >> this is jimmy dean. this is not. >> all right all right. i know my meat, even if i can't smell it jane, tell us about sustainability here.

that's a lot of the conversation around meat and why some people are against it how does that stack up between the fake stuff and the real? >> reporter: you know, this was a question i had for him when you raise a cow for three years and feed it and you get a bunch of protein off that, how much land and water are you using to provide feed for the cow versus land and water to provide plants for him to process it into protein. he says they paid for a study at the university of michigan, much, much less land and water to cut the cow out of the process and send the plants immediately. you've got to convince more farmers to do that in order to bring the price down and build the supply chain. >> just to dig into that a little bit more, especially given the fact there's so much focus on soy, corn, some of these other cash crops, especially with all the trade stuff going on and what that's done to commodity prices, could we see a shift as these plant based proteins become more mainstream in terms of what farmers are planting and the demand

>> well, if a farmer could be convinced that he only needs to use basically a tenth of the land to create the same amount of protein product that he's currently putting into a cow as a bio processor, then yes, i think that shift can be made but it takes time. you know, the american ag machine is a huge ship you have to try and turn around again, that's why prices remain higher than regular meat ethan brown's convinced they'll eventually be lower. >> i was going to ask you if you think to the degree this takes off in scale, is it going to be a coastal thing, san francisco and l.a., or is this going to happen around the country? >> reporter: well, i have to tell you, this is l.a., right? you think everybody's eating it. i went to l.a.x. and did a couple man on the street interviews, not one person had had tried an alternative listen to what they said. >> i would never try it. >> sure. >> okay. >> why >> why not >> never have but i'd like to

try one sometime i think it would be cool. >> i'd be worried that i might get sick it's not healthy for you. >> it's not healthy i guess. >> i like meat. >> would you ever have a fake meat burger? >> no, ma'am. >> why not >> the real thing is the real thing. >> so there you go i mean, not one of them had ever even tried it and beyond meat says household recognition for his brand is still only 2 pre%.. great potential but a great barrier to get over. >> jane wells, great stuff enjoy the sausages, fake and real beyond meat leading what's been a red hot ipo market higher this year outperforming the s&p 500 in 2019, despite steep losses for names like uberin, lyft, pinterest. dennis burrman, and former evermart ceo join us to discuss this he's a senior adviser to general catalyst

gentlemen, happy friday to you both, denny, i'll start with you. >> yes >> the gang busters returned so far to beyond meat, do you see that as an outlier or do you see that, you know, as something that other potential ipo candidates are looking at with hopeful eyes right now >> well, look, if you go beyond beyond meat if i may for a moment, if you look at the overall ipo picture, you have some that have done well, some that have done poorly, it's about time these companies come to market. they've been private for so darn long if i could maybe veer the discussion one way for a moment, which is to say that we need to be blaming the fed, if we can, for the results we see in the ipo market, which is there's been a decade of free money that's flown into the financial system, and that's pushed private valuations ever higher it's deequitized our public equity markets along the way and frankly we've had very little

mechanism for finding out what a true price is. whether it's high or low, to me this is a good moment 2019 for the ipo market we can finally get a true sense of what these companies are worth absent basically ten years of fed intervention that we've had. >> yeah, so it's a good point there, the impacts that the fed has had on the private market. certainly we've seen record amount of capital going into the private market in recent years do you see that continuing to happen here, or do you see some of these companies starting to go public sooner given the reaction we have seen in the public markets >> well, i mean, i think that the latest slate of ipos is certainly raised people's eyes about what is my company truly going to be worth, but you have to keep in mind, the world of 2019 is so, so, so different than even the world of ten years ago or the year 2000 companies don't need the money generally speaking what they need is the liquidity, so they're not necessarily

raising capital. they are getting a mechanism to get their capital out. and so to me as long as that's going on, they'll keep doing it. >> phil how has this late stage capital boom changed the valley? has it changed it appreciably from where you sit >> yeah, i think there's been a good evolution, and i think the previous point is totally right. the point of ipos isn't really so much to raise more capital, it's to get liquidity, but it's also to have credibility, to have more transparency to make it easier to attract talent and to hire people. i think we have to keep in mind the long view. companies going public are a very good thing. they're supposed to be public. they're supposed to be accountable and transparent and you're supposed to be able to buy into a company wherever you want and can afford it. >> does something need to stop this flow of late stage capital into companies that stopped them

from going public earlier? do you see that as a problem >> no, i don't necessarily think so i think there is a big disconnect between the timing that the public market expects and what tech companies operate in tech companies, especially in their first few years, they have to make very long-term plans, right? they have to plan for things that are years out public market doesn't really we r e ward that, right the public market is trading based on what they can do by the end of the day or maybe by the end of the quarter if they're lucky. so being able to delay subjecting yourself to that kind of time pressure, which isn't the time pressure you're making decisions on is important. i think there's an important role the late stage private capital plays in letting companies get ready to be in public market time pressures. >> john, i don't know -- >> dennis. >> yeah, go ahead, please. >> i was going to say, if phil's right and companies are meant to be public and they want more credibility and they want to be more visible and more transparent, why do we see the big ones, the important ones you could argue come to market with

ownership structures that are i would say put individual investors at a disadvantage? >> well, because frankly speaking, the market is willing to tolerate those structures if they weren't, they would not buy the shares, and they are buying the shares. and why are they willing to buy the shares this gets to my earlier point about deek witization in the stock market in london, the amount of shares available to the public has declined 20% in frankfort it's 45%. we know the famous figure, 7,500 public companies in the 1990s to basically 3,500 companies today. basically the answer is you've got no choice. >> and they're doing it because they can which doesn't mean they should, though, right? this is sort of story of silicon valley, more companies should focus on what they should be doing, not just what they can get away with. >> gentlemen, thanks for joining us today have a good memorial day weekend. >> thank you >> and still to come, british prime minister theresa may

resigning the impact that announcement had on european stocks is next. but first let's take a look at the worst performing stocks in the dow so far in today's session, nike, mcdonald's boots a lot more "squawk alley" ahead. bye snowball.

now this is training. keeping my reflexes sharp. ha, oh! you were just beaten by a rabbit. you don't even know it. [ ding ] oh, my pizza rolls. welcome back to "squawk alley. are shoppers in rhode island more likely to buy chocolate when it's cloudy, and how much beer will be sold on a sunny day in new jersey versus a rainy day? that is some of what ibm and its weather company subsidiary are hoping to figure out with the launch of their new ai tool weather signals, the data service aims to help companies understand how weather impacts consumer behavior. i spoke with the weather company's ceo cameron clayton about how it works. >> we're launching a new product called weather signals it brings watson's ai, a huge volume of data to bring insights

to the supply chain so retailers can know what stock they need, how many employees they might need, the behavior changes that might happen because of the weather all comes together with weather signals. >> so if you had a string of cloudy days, people at least in some places tend to buy more chocolate. how does that intelligence affect the way the business plans. >> people in rhode island in particular on a cloudy day see a 37% higher likelihood to buy chocolate. >> not necessarily eat chocolate but buy it. >> not necessarily eat it but buy it i think there's a close correlation for most people to eating and buying chocolate. businesses plan, right and so you probably see it here a lot. companies that are using weather as an excuse for their performance returning that around, right? that excuse is being removed, and now there's an opportunity to really integrate weather, ai, into decision-making for businesses, everything from

travel and transportation to, you know, your flight this holiday weekend, the list is almost endless of the applications >> part of ibm's continuing efforts to monetize watson you see it in health you see them making efforts in hr they're trying here to watson for agriculture, they also announced this week, the idea that they can increase crop yields by more closely being able to analyze the impact of weather on crops how much do you really need to water? what kind of fertilizer strategy is really necessary? so they're pushing this. we'll see if it translates into results in the ways that investors have been waiting for on watson and ai. >> it's really fascinating the idea of applying this to agriculture given the focus on that right now, and also natural disasters and the role that's been playing i would imagine there would be potentially a lot of demand for something like this. >> also watson for trade wars might be a good idea that might help farmers even

more than weather signals at this point but we'll see. >> if only there was yield management for trade wars. that's for sure. we're going to get the market close in europe in a few moments. stocks rebounding after yesterday's selloff on the hope the president could ease restrictions against huawei. stocks sensitive to train tensions, europe's broader market set to post its third negative week in the last four one weak spot was dane itch shipping giant maersk. also seeing a volatile session for the pound obviously trying to snap that 14-day loss against the euro after theresa may announces her resignation early this morning wilford frost is here at post nine to talk about may and that emotional statement and what happens now. >> as you said june 7th, she sits down. it's the conservative party itself, which will pick its own

leader the biggest factor of the last couple of weeks has been the realization that the successor of theresa may is likely to be a brex brexiteer whether that's because of the rise of nigel fer aush. boris johnson the overwhelming favorite but the following three are all true brexiteers. boris johnson said we will leave the e. yuchlt deal or no deal. the way to get a good deal is to prepare for a no deal. we don't know if he's being serious there. if this is an early negotiating tactic that's the rhetoric from the favorite not confirmed yet and that therefore shows the immy occasi -- implication. >> i think today small moves either way i think what you've seen in the last month is sterling very clearly fall in fact 14 days in a row of

losses coming into today and that's really what's been price ds in over the last couple of weeks. today small moves around the edges in and around 127, you're at the lows of the last six months i think what's priced in now is theresa may leaving and a brexiteer to become prime minister >> what else is there? this whole brexit situation seems to me the primary example of easier said than done. >> absolutely. >> i'm not sure what theresa may looef looef leaving does at all. >> i think both extremes are fractionally more likely than a deal what doesn't change at all the mass in parliament there was a skren electigeneraln i think both a new prime minister who truly believes in brexit and also we haven't got the results of the european

election could give us an inkling which way is more likely whether it's a second referendum or a no deal brexit. of the two if you have a true brexiteer clearly the latter is more likely. >> you cover banks as well have banks are they going to accelerate their plans to pull can want out as a result of this >> i don't know if it's a case of pulling capital out clearly they've already moved operations and if the u.s. investment bank for example now makes sure it has a banking license in europe, morgan stanley's moved more towards germany. jpmorgan's moving more towards paris. the delay from the 31st of march to october 31st has already meant they've pulled most of those people out regardless of what happens i think the uncertainty and the delay is hurting the u.k. economy as much as anything. of course remains to be seen how damaging a no deal brexit will be for the u.s., clearly the trade war with china has had an effect

on european growth, germany of course is a great example as a big exporter if you have a no deal brexit, the percentages of german exports around 6 to 7% go to china. the same percentage goes to the u.k. there's big swing factors for global growth. for france it's 11% of their exports go to the u.k, 4% to china. if we're saying the trade war has hurt european growth i think brexit has a large amount to do that too. >> s&p has some comments about the successor likely to take a harder stance and will make it harder for the government to meet its promises about ending aus tear terit austerity. the small swing factor is if someone's truly promising no deal brexit, does brussels change its tune, offer a better deal that gets through that has got to be a very small chance the swing factor is how much

does no deal hurt the u.k. economy, and that's very hard to say. we can't be sure. >> that's a big game of chicken right there. >> and some people say a couple of the brexiteer candidates really believe in that and because they believe in the purity of brexit boris johnson is seen ultimately as being quite pragmatic >> thanks for breaking all this down for us. continue to bring us the latest developments on this story. let's get over to sue herera now. >> good morning, everyone, here's what's happening at this hour, the aclu and planned parent hood are asking a federal judge to block an alabama law that would ban most abortions in that state they filed a lawsuit on behalf of alabama abortion providers seeking to overturn the nation's most stringent abortion law chbl a russian court has extended

the arrest of a u.s. marine. it ruled to keep paul whalen behind bars another three months >> for sanctions there is absolutely no legitimacy i've been threatened my personal safety has been threatened there are abuses and harassment i'm constantly subjected to. >> protesters are holding rallies to demand tougher action against global warming thousands attending a rally in berlin were mostly young people waving banners saying save the plan planet that's the news update this hour, back downtown to squawk al ri. >> when we come back, amazon 3,000 the piper is predicting that 60% jump happens within about two years. we're going to talk about their call today major averages we were up 180 on the dow this morning. ckn mont0.up 5 ba ia me

turning back to the markets, major indices higher a bit this morning after yesterday's selloff. the dow still on track to post its first five-week losing streak in about eight years. can stocks shrug off these trade concerns over is this more than just a normal pullback our mike santoli and steve liesman both join us now

mike, what is this what is going on no headlines that i can see that have this effect, but you know, we've been pretty much settling into. >> right now, i think we are just really still in this thing, i think in this stuck place for the moment, anyway yes, it's a normal pull back from the highs in terms of magnitude, in terms of duration, in terms of coming after a very strong four-month ralrally i think the korch complicated factors are not just the headlines about trade, and coming at a time when the bond market seems to be bracing for something a little bit more jarring on the economy, perhaps. i mean, maybe that's the message of the treasury market that's why i feel it feels a little more dicey. the other piece is a 5% pull back from an all time high but also bringing you back to levels we first hit almost a year and a half ago for the s&p 500

that kind of makes it feel like a little more of kind of traversing it trading range as opposed to we had a really great run. now we're settling back a little bit. >> not down that much really, what are the economic trends >> first thing i want to remark on this trade story chrwhich is pretty interesting sometimes reporters stretch to take the big story and link it to their beat. there's no stretching going on here i've yet to see a story that links to and affects and impacts so many individual beats and stock sectors out there. technology, consumer products, commodities, the industrials, all of them are affected and the reason is because there's 20 years of growing linkages of the supply chain with china, and so china understand how that -- it doesn't quite decouple, but certainly gets reduced and understand in the first instance the impact on earnings

in the second instant the impact on the economy i want to show mike a couple charts and get his take on this. mike, there's two ways to tell the story. you go back to january 18 when the first tariffs are put in place, and we're essentially with a lot of up and down, we're essentially flat along that. but then you zoom out and look at -- go back to say 2014 where the market for four years was flat until then and you have this big up. yeah, the president to some extent has been playing with the bank's money but at some point in time here after a year and a half of stagnation he starts digging into our pockets. >> i don't know if i would tie the entire fact that we've been mostly sideways since january of 2018 to the point that that's when the trade war in a sense got being. most of the story of last year was hey, this market can shake

off the trade war without much of a problem we have had this kind of stair step paraphernalia in-- a huge u after a state how, that's not too unusual: i do think this idea that we had a faze when everything was working and the economy was growing and people got excited about tax cuts, we kind of locked in the repricing of the market to that level, and then we've been struggling to figure out if that was enough, too much, not enough that's been really the whole chore of the last several months at least >> guys, i want to get both of your takes, stooefr, staeve sta you. ken was on last hour talked about the impact of the china trade situation. >> i think we did 15 transactions from china outward into the u.s. and europe the last 12 months, it's close to zero, and so we were very active in the market, almost

impossible to tell a public company board to enter the risk of fegetting chinese approval right now. >> steve, your thoughts on that, especially as we do have all these discussions? >> i think it really underscores the point aye bei've been tryin make for a long time now, which is that the u.s. china relationship is much deeper, broader and more significant than just the trade number there's all kinds of stuff going on there the there's m&a. americans send $170 billion of goods from the united states to china every year that was last year american businesses had revenue of $340 billion or double the export number inside of china. one of the things we have to start thinking about is if that gets impacted through this -- as a result of this trade war here, and when you look at the profitability of that business that americans did in china, it's growing at double-digits.

when you take that out of our profitability in the rest of the world, it's zero or flat so a lot of profits from a lot of american companies have been coming and helped from china it's not a big number but in terms of the growth it's significant, and there's one other sector, the m&a sector that's going to be impacted here. >> steve, jpmorgan just took q 2 down it 1% i think they were at 2 and a quarter, we saw existing homes earlier in the week down four year on year with mortgage rates down 9 basis points. >> i think that's an interesting way to think about it. we don't have our wrap up it date yet hopefully later on the day we'll get the broad median those durable numbers did take it down. i think there's worse to come in that score remember, these are april durable numbers. if you're going to have an impact from tariffs, that's going to show up in the main numbers. i'm not sure that the worse of the tariff effect would have shown up in the durables numbers

and also you have that boeing effect in there, which is a decline in boeing orders which impacts the civilian aircraft where the top line's on the durable number it's an issue to think about and whether or not the fed has more they can do here i think where they are is they're on hold and i'm taken by the phrase for at least the coming quarters where they look at and try to figure out how all of this stuff shakes out. >> whether it's a pivot on an insurance type cut or a traditional downward risk cut, market's going to rally on that? >> rights from what level. >> that's the question. >> if it's the latter, you would have to imagine that the market would probably have some more erosion up to that point unless it just becomes such a slam dunk it's going to happen i take the fed at its word on patience and the fact that it can see its way toward either direction up and down from here, whether that's, you know, as legitimate today as it was a

couple of months ago, i don't know but i do think we have to keep in mind, the market over anticipates things all the time. we don't necessarily know what kind of cut are we going to get in three monthsment s we may not get one. >> mike, steve, thank you. >> what the latest launch for spacex means for its broadband ambitions. but first rick santelli what are you watching today >> i'll tell you what, the big story today is how interest rates could be going down and stocks holding in. in the beginning of 18 interest rates were going up and stocks were going up. that's the definition of goldilocks how long can did last? we'll talk about it after the break.

here's a look at what's coming up. today it's an amazing stat, stocks are nearly at the exact level where they were at the end of january of 2018 so what gets them to break out or are we heading towards another december like drop some eerie similarities are starting to take shape. one firm just giving a big boost to one stock playing right into the china story it's our call of the day josh brown with a new invest in you tip of maximizing your investment returns all coming up at noon on the half we're less than 15 away. have a good holiday weekend. >> you too, scott. let's get to the cme group and get the santelli exchange. good morning again, rick. >> good morning, carl.

it's so fascinating. there's so many interesting facets to the markets especially the way they align dmesedomesti and globally on the domestic front, in the beginning of 2018 in my opinion, that was truly the definition of goldilocks the economy was really heating up the global economy was probably being turned in a positive direction due to many of the positives going on in the u.s. rates were going up, always something that makes equity traders nervous, but it was the perfect pairing. rates were going up because the per section and tception and ths backing it, and the stock market looking at that made the obvious assumption that earnings and profits and revenue would benefit down the road. let's go to the why had board. the blue of course ten-year note yields red s&p 500, and you can clearly see it started to go down. rates started to go up all of a sudden your stock market ends up going up towards the highs.

the problem is is that we had the volatility at the end of last year. we all remember january 3rd when everything went down here's the problem you can't have a and you can't b both existing indefinitely, and b of course being that the stock market continues to go up, and this time the positive was a combination of the pivot and the pause by the fed, how the long end market driven rates perceive that when i said this is domestic not global, that's really an impossible statement because much of what's going on both with the s&p and the ten-year note yields is a function of what's outside the country, a good percentage of s&p 500 companies profits come from overseas ten-year note yields are affected by minus 12 basis point boons, by the negative yields all the way out to the ten-year now with respect to what's going on in europe the japanese markets have been

depressed, not only a thumb on the scale, i think they've stacked as high as the empire state building with regard to how they have tried to control markets. in the end, i think this is the waiting game, and it might last longer than we think, why? the waiting game, that is interest rates are making all the metrics for stocks down road obviously look better but only under the guise that a lot of the uncertainties of today have positive turnouts. we could see there's always a half lime to a positive outlook by investors when uncertainty linger morgan, back to you and have a terrific memorial day weekend. >> thank you, you too, rick. thanks rick santelli. >> after the break, spacex launching 60 satellites last night, the first step in its big bet to bringing high speed internet to anywhere in the world from space more on elon musk's broadband ambitions after the break.

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>> welcome back to "squawk alley. elon musk's spacex launching its broadband ambitions last night as the first 60 of its starling satellites were carried into orbit by a falcon 9 rocket and successfully deployed. the rocket's first stage booster was once again recovered as well

on a drone ship. star link would consist of thousands of small low cost satellites to provide broadband service from low earth orbit this is a big and risky bet for spacex but one that musk sees as a big potential revenue stream that would be crucial to funding new rockets and spacex's longer term plan to go and colonize mars satellite broadband is quickly getting crowded. you've got one web, telesat, even amazon looking to build out similar constellations one name already providing services, viasat, also getting attention today with that stock spiking 7.5% after trouncing earnings expectation meantime, it's been big news week for spacex as a recent lute by the company against the air force was uneeld we've got details this week. also a supplier was criminally charged for faking inspection reports. meantime, spacex has been raising capital, two rounds in the past six months or so. there's actually a new filing out today, guys, we're still digging through all of those details, but this is a company that is now valued upwards of

$30 billion and one of the things elon musk said on a call with reporters, myself included, last week is that they continue to have more investor demand than they actually need, that they essentially can be very picky in terms of who they choose to bring into these funding rounds >> that's a company where he has a strong number two, something some investors are hoping he will get at tesla. it sounds to me like spacex has been executing more methodically and consistently perhaps than other efforts. >> i think that is probably a very fair thing to say it has been an incredible disrupter in space, really sort of brought renewed energy to the sector, obviously. and what we know from conversations with gwen, his number two at spacex, is that this is a company that has been profitable in many recent years, but this star link constellation is going to be one to watch very closely because this could be a revenue generator if it works out according to elon musk's estimates this could be something that generates tens of billions of dollars for the

company versus launch services, which is more like a $3 billion business >> yeah, interesting dichotomy between the space business where there's a lot less consumer interface and the car business, which is just hypercompetitive right now. "squawk alley" is back in less than three minutes we're back up 70 point s. so servicenow put your workflows in the cloud, huh? mm-hm. your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you.

memorial day weekend always high stakes for the box office and rainy weather could drive even more people to the theaters so how does the forecast look for the summer season ahead? >> well, john, what's old is new again at the summer box office and the appeal of old tried and true franchises will determine whether or not the summer box office is a success and will determine whether or not the box office can rebound from declines earlier this year. so far this year, the year to date box office is down nearly 10% versus the same period last year now, take a look at these three trends that both studios and theater chains are betting on. the first trend, familiar brands to draw families disney's live action caption of 27-year-old "aladdin" is kicking off the summer but perhaps the most highly anticipated example

of the return of family brands, disney's "lion king" remake, pixar's toy story 4 as well as universal's secret life of pets 2 are using a similar playbook second, big action movies are back such as universal's fast and furious spinoff, "hobbes and shaw" building on the success of the eight "fast and furious" films and third, more marvel on the heels of the record-breaking success of disney's "avengers: endgame," sony is releasing marvel's spider-man far from home and disney will release "dark phoenix. despite the fact that the year to date box office is down, theater chain stocks are actually up this year. imax up 18% year to date, already making up last year's losses, cinemark up 7% and amc up 5% though still not rebounded from last year's declines. we're told that despite the year to date declines at the box

office, if some of these movies deliver, we could actually see a new record set by the box office this year. >> lots going to depend on a very small pool of films unbelievable story in the north american box office and the global box office, universe this year julia, thanks. that's going to do it for us have a great long weekend. see you tuesday. let's get to the judge carl, thanks, i'm scott wapner the long road to nowhere that's how it's been for stocks which are now barely above the level they were at the end of january of 2018. so, our question this hour is this is a breakout finally in the cards or are we setting up for another december-like drop it's 12:00 noon, this is "the halftime report. >> announcer: breakout or break down today the halftime investment committee debates the next move for stocks noted market watcher ed joins the team today he's saying the market's problems go deeper than trade. what else is there to fear all four f.a.n.g. stocks, facebook, amazon