i had someone put urine in my water cup. jane welsh >> thank you, jane, you are welcome balcony time >> it is quite a friday. make sure you join us on monday. "squawk on the street" is next >> good friday morning, welcome to "squawk on the street." i am carl quintanilla with david faber and jim cramer dow ward revisions, the futureses afutures are recovering we'll give china more time to report tariffs many in vvestors believe the fes are in place

our road map begins slow down concerns >> plus, encouraged but no deal yet. mexico tariffs are still set to begin on monday. >> investors gobbling up beyond meat the base meat company is soaring after that big post earning. >> gains for april and march were revised down. unemployment holds at 3.6. our report comes in of all these trade tensions and signs of slow down in global growth. year to date average, 164 verses 223 last year. >> yeah, there is as down shift. you can argue like mark benioff did. last year was crazy because of the tax cuts this was more regular trend line i look at it and i say, the dow is just significant. if you get mexican tariffs, you are going to see another dow

there is been a lot of good work in the journals of where job losses will be mexico and texas that would mean that you have immigration coming into our country which is not what the president wants. you should have jobs slowing in texas. it is a kind of real backfire coming up. remember i didn't like the beigg ipo. >> it is really bad. they're going to tell you they can roll it back >> mexico is a different thing that's not the cost of american consumer goods at macy's i think we have to recognize that this may be the beginning of the end of the gains. they're very cavalier. >> you don't think the market is reflecting >> i think they feel that mexico

will completely roll over. >> reporting had mexico making a number of potential offers in terms at least addressing some concerns it is unclear of what trump will accept >> the president bush from beginning to end on the tariffs is the president is convinced that mexico is going to pay the tariffs.n tariffs. people who don't understand that have not taken economics because he's a business president. he thinks anyone who thinks the mexicans are going to pay for the walls and tariffs and the deficit has not been taken i don't know -- i took the class the class -- i think it was in third grade, the hamlin class. you should go see the play it is very economic. >> i believe pence went to the play >> did he go to the play

>> maybe six weeks -- we were coming off 3.2% gdp for the fourth quarter, great employment number >> yes >> and everybody was feeling good about things. i remember asking kudlow when he was on, do you feel embolden to be tougher with the chinese. the chinese backed away from some of their promises and off to the race. now mexico and now this number so we should we no longer be embolden? >> should we no longer as the administration feels embolden with their fight against china and now mexico because of economic growth. >> i like that did you know thhe said we i didn't know he's apart of the

administrati administration. >> we should not be embold >> the president's people generally believe that it is worth it to keep raises because deficits go down because of china. you can't get through. >> there has been no proposal to build the wall 6,000 troops to the guatemala border talks are going to resume today in washington. >> we had a big week of the market because the market is slowing and jay powell has decided to count down. father recognizes that twitter is the way he should be running his policy it is a bad thing to have that >> he's convinced that mexico pays his tariffs >> maybe he's done a good job making sure that jay powell is cutting rates.

>> makes your head spins expectations of getting another raise is not to stay i am looking at -- we'll get a cut in july and another in december >> well, the yield curve can't be completely wrong. they're okay semi 5000. >> he did tweet a few years ago on this week, he tweeted a 38-k number under obama which looks really bad >> the mueller report was garbage. >> so you don't see june happening. >> july because it is too soon when he did the december hike and makes him look too bad and rookie everything is done for a show down there now it is a gigantic play. >> that's not sure right there it is 2.0. that's real.

that says we are paying the tariff that's us getting the story right. that's us paying the tariff. mexico is int mexico is integral you know converse dogress does that change. there is an interesting opt-ed today. big business has been the winner overall these. and so there is a big cohort and people are buying into his economics. is larry getting in on it? >> we do have kevin haas going

to be on >> i don't know. >> i don't recall words like this >> is it because you have a home there? >> i have always been open i have two businesses in mexico. >> once you take his avocados, it is all over that's where it epnds. >> chipotle only has to pay 15 million extra for avocados i have done the numbers. cmg with an $800 target today. >> i thought it was a good piece. i will find the bull market and beat healthcare. look at what happens yesterday that's the big shift in the market to see change >> kimberly-clark. >> it is up 20 bucks >> the all time highs yesterday,

hersh hershey's mcdonald hershey's, mcdonald's and pepsi. >> mcdonald's all they have to do is listen to easter books when he's on >> today it is going to 220. >> that's where it is going. all companies are involved and tariffs. >> if you have china involved, it is a very good sense that things are going to go bad for you. >> you have china -- >> get tariffs >> because the president, i can't say this enough. the chinese pays the tariffs >> it is not just the president.

a week ago we had a discussion with peter navarro about it saying the same thing. >> peter uses a similar economic >> essentially the producing nation was going to bear the cost >> it was the first talk that they did our big companies had to scale >> yesterday indonesia says they are seeing negative impact from the trade war. i think other asian companies or countries are supposed to see benefits as manufactures shifted. >> well, there is a deflationary move it does not make sense i don't know if i can trust indonesia and those numbers. >> it is just one headline >> the trade war is remarkably bad if mexico gets involved because there is no stopping when you have all these companies.

but you go to mexico, that's a sad move there if he puts tariffs on the germans. he talked about germany last night. >> if he put as tariff on german cars -- >> because of their lack of participation in terms of gdp verses nato. >> that's where he's campaigning. he's honorable to the people who sho voted for him. this is happen right now in realtime economists did not know. it is not apart of the plan for the economic growth. they don't like mexico for the most part. they recognize it was our country to put -- >> we have a trade agreement that's negotiated with mexico and canada that was about to be going to the mexican parliament, i think it was and their own

congress >> right >> i thought everybody was happy where things were going. >> it just happened. it was the most capricious thing that i have seen it is like a bag of pigs >> which is why you are reacting the way you are and the markets is reacting. >> we are having the best week of the year from the dow and s&p. >> if you were over sold, look at what's going on, you talked about it, pepsico and mcdonald's i had to switch direction. >> they credited a lot of cnbc interviews with him. >> it was nice it was quite a nice piece for him. >> he got that sweater on.

look at the where the money is coming from. always the money is coming out of faang there is a lot of money coming out of faang >> deutsche bank says alphabet, we want to buy ahead be my guest. >> go ahead. if they do too good of a number, they'll get a call from senator what -- >> how they're asking the white house to go easy on huawei >> well. >> wait for the next 18 months, jim. >> on the netflix is safe. >> the president does not watch a lot of it. >> i want to talk about hbo. >> i want everyone to watch

"chernobyl" to see how the russians are >> is that the most important 90 seconds of your life >> what 90 seconds >> picking of the -- >> oh, yeah. great show >> everyone has to watch it because it is really about what happened to that country it is not about beyond meat. >> we'll talk about russia and st. petersburg today beyond meat is rolling on after the company reported going public got the jobs number, trade head lie li lines and tariffs. we'll talk to kevin hassett as we see futures hannggi on the green. we'll be back in a minute. welcome to seattle. where people are into coffee, tech, and retirement planning. the perfect retirement for me

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doubled this year. ethan brown, the ceo, says there is plenty of room for growth >> we look to the future of all these activities, we are early on growth. beyond meat has 2% household penetration in the united states just as we have seen this tremendous run away ahead, we see a compelling future international. >> they did say q 2 and q 3 are the best generator of the year >> it was a carl's jr. it was a remarkably a good call the stock has been more remarkable than the call people playing the fire and buying it here it was a very well run call.

it is about a class of food that's better liked. we are not soy we are moving into sausage or whatever >> it was just a well orchestrated session of how well they are doing they really don't have a lot of sales. it is really a small company they price the deal wrong. they did a good job. >> they're working on tripling and manufacturing capacity from last summer adding onto some new u.s. suppliers 400% from 25 >> when you interview, mcdonald's has a relationship alrea already. you did feel that mcdonald's was going to place a gigantic order

with beyond meat it was kind of a tease one of these companies are going to do it if you have a chance this weekend to go get a beyond meat. >> i have no interest. i don't know why i am sorry i just don't >> david has no interest it is the most talked about things in the market you have to try one. i need you to taste it the impossible is just possible. my colleague here -- what do you want to stick with wendy's? what do you eat or shop or what do you do? >> i don't know, tait is a grea

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welcome back to "squawk on the street" on a friday. we'll be watching our numbers. let's get to our mad dash. >> what people are looking for -- is the market doing well. you are looking for companies don't need a strong economy to do well and what should come to mind i ciena. this guy is really, really smart. when was the last time you heard that verizon and at&t are starting to spend again? is it 5g i don't even care. all i know that this ciena quarter was remarkable all over the globe, ciena that

is beneficiary it is the first service provider spending if you are in the cisco conference call, chuck robins said look, i don't know whether service providers are going to start spending >> well, they always keep spending >> and zoom by the way is a lot of spending, too >> we'll keep an eye on zoom we got that opening bell in five minutes. "ua othst bk we are rightac onsqwkn e reet."

you are watching cnbc "squawk on the street," live from the financial capital of the world. opening bell in about 90 seconds. busy friday. we are still on watch for headlines regarding both u.s. mexico talks and china tariffs i guess you are not buying the headline that the white house is going to give china goods time

to avoid tariffs >> i think these tariffs are good for america in the case of china, he feels we are starving the military plan by making them pay tariffs. i do think china is slowing. >> that's oriented there are people coming in i don't think it is raw. i just wish it were not not -- whipping the mexicans democrats should be involve, too. >> the numbers are up. that's just apprehension >> the employment number should

change the president's thinking but i don't think it will. i mean really? >> we got to tone it down here for the opening bell at the big board it is fashion online retailer, revolve group over the nasdaq turning point therapeutics >> they may be the winners nyu. >> ken fisher says things are pretty good. they're not too hot or cold. i agree with that. that's one of the reasons why you can have a lot of stocks going up i remember money is coming out

of faang rather quickly. microsoft never gets hurt. did you ever hear that what do you make of the fact that microsoft is not on the red hot grill. >> they been through it and they came out of it they have a sound strategy apparently consumers first? >> oh fashion. >> come on >> it is enough. they are very happy. >> you are busy sending things of beyond meat being chemicals and being in the lab how dare you look through beyond meat >> we'll talk more about that. >> it is worth noting that microsoft is the highest market cap company. >> they're staying low key and concentrating on customers >> what's the song once bitten twice shy? >> oh yeah, they learned their

lesson they have dominating. they are not in the cross hairs. it is remarkable oh, you got to be kit kdding me >> we do the show down here for a reason >> i like enthusiasm i think it is also good to hear each other i am pro hearing >> it is nice. >> facebook, how long will that last how long will facebook last being up today 9:53 how about alphabet so democrats are running on being against these. >> drukenmiller has some comments on this if you are going to have a war on china, the last thing he'll

do is -- not to mention tech and aspect of google search. >> could not agree more. i thought it was a great comment. these are great american companies. remember i was growing up in my formative years, people make movies and sodas >> it remains very much unclear of whether there is going to be the ability to prosecute >> however, congress and issues of privacy, there may be a need for legislation. >> well, that's mark benioff says they have to. >> it becomes all the time on "squawk alley. and there is others of surveillance of society that's created. >> just a couple of companies who did it most of the company didn't do it >> just a couple of companies that rule the world. >> those are the three

remember i used to talk about ulta beauty and now it is z z scaler >> did you read orwell >> he actually said "don't be evil." remember that? >> no, not today that should be what they start with, not today satan. david, how is shopify doing? >> excellent etsy and shopify sticking to the man being amazon they're sticking to that >> amazon is really suffering.

>> reuters on the tape right now. white house officials still a long way to go on mexican talks. but, if they go well, the president could decide not to move forward with tariffs on monday the mar >> we had a great over sold rally. that will change if mexico is held off and there is progress not just viva or beyond meat >> everything is going to run wild bus yo because your buddy powell is going to cut rate? >> word "buddy" is putting too much polish on their relationship, right? >> i know jay and i know jay's wife very well they're my colleagues. they're terrific >> oh, we didn't get at&t. >> oh, that's just great, david.

>> we'll get to it in a moment let's get to the jobs number first and what could be an economic warning signal. kevin hassett is joining us today. >> looking at the miss today, the revisions and the year to date average, it sure feels that the economy is slowing, is it? first quarter, let's go to gdp number second quarter looking in maybe t two-ish. we had one quarter in threes and one in the low twos. the job number today was a little bit below our expectation. one thing i have not soeen in discussion was there is serious weather effect, there is a lot of flooding and i-29 was closed. if you added that back in, it is

a little disappointing but it is not changing out the year. >> some where thinking census hiring could have hadded 90-k do we know where it came in? >> my reaping on the census hiring was there was not anything on this number. it is more apparent in the next few months >> first, congratulations on a great run. >> oh thanks >> well, you know economics well i think what we did with china, i do worry that this and mexico, there will be the u.s. citizens, people who lose their jobs in texas than other state will this be the tariffs that you have to admit it will not be great for americans. it is imperative to crime. this could actually make it so americans have to pay more and they could lose.

>> i think the realist on that if you guys covered before, the talks of the mexicans proceeded favorably, the president is going to get back from that european trip and look at a bunch of options and weigh the options over the weekend the headline on the mexican talks really have been a lot of talks and progresses made. i think people feel they're going to present the president of possible choices. >> well, that'll be grateful and what could be a reach by the market rally what is great and what does the president want is there a way to create consensus. a consensus in congress that this is really important and democrats agree to >> well, i think we are still making progress, speaker pelosi is open and letting it move forward. i do think there is a chance to work with democrats. when president obama was in the white house, he was

disappointed, we certainly feel it on the other side i have also this week been briefed on a lot of progress and with democrats >> if and when you are ask by the president, whether or not you favor tariffs of the immigration dispute, what did you tell him >> the president and i have talked about everything in that space. i think everything has benefits. the president's priority is to secure the border and you got to admit, there is a crisis down there we could have fixed a long time ago the president is not going to take no for an answer. he decided to take this approach you got to admit that the approach is successful >> right, there is some questions as to what would be acceptable do you feel as though you or the president really have a line and understood what it is that would actually result in no tariffs

going into place on monday >> yeah, that's the president's call the president has spent hundreds of hours studying and saying there is a lot of materials on the table and i think a lot of progress will be made that the president will weigh to that and see if he think he knows. >> i am not going to give you a number that gets back to him our tariff revenue this year are up quite a bit >> what do we do with that money by the way >> i imagine some of it goes to farmers, right >> well, not specifically. for sure it has been a heck a lot relief for farmers now it is hurting more because we see the floods and some farms

are under water right now. that's something that does not necessa necessarily get tariffs. >> what do we think the president's action will be if the fed cuts rate this is month or next month or september >> my job is to respect the fed and not cheer them on one way or another. you can watch the president's response i think the president's supporters want to see what he thinks that's a good thing. that does not mean we don't respect the fed. we should not be giving them advice hey if you do this or that -- >> kervin, thank you how close do you think the chinese are rolling over their economy is hurt by this and i think it has been working. it is very clear their stock is down 20% you keep on hearing the 200-year plan is china very weak right now and could they make a deal in order to get their economy restarted

for sure this has a much bigger impact on them and us. that's by the design of tariffs you put in place we are hopeful and we think back to where we were, we are close to a deal. while the deal hit a roadblock, right before the roadblock, a lot of us at the white house stopping at a place to have a final deal where we are now which is not much talking in closing a deal is not a big threat. >> kevin, thanks for sticking with us with this loud noise here with the ipo and the exchange today >> i thought they're cheering me >> yeah, you can take it that way. >> sure, sure. >> if i can get back to the u.s. economy for a moment you mention 3.2% fourth quarter gdp number, we had a strong employment number out of that. we average 150 over the last three months there are concerns about consumers depending on who you

talk to in the retail industry are you concern that there is something going on here in the slow down of the economy right, for sure there is a global slow downgoing on that's something in the u.s., the thing that i held onto is that you refuse to watch my forecast throughout the year watching a month or two of bad data is that the income growth is very strong. we had wage growth and first time since 2009. when you get income growth like that, you get a lot of consumption growth we had a strong first quarter, the first quarter is usually weak if you look at income growth that tends to move, it is something that should be insurance policy against down below 2 for the year i think 3 is a pretty good sweet spot given how strong the first quarter was.

>> kevin, we'll let you go >> thanks you guys i will be here for about a month. >> we appreciate your time and candid hope to see you again. kevin hassett. >> wow, mexico >> he sounds positive on mexico. similar to what headlines was that we heard from the report. >> this rally could be justified. very important that was not that was very -- hey, we are not close. we are real close, i thought it was very significant and positive >> the dow is up 180 i want to mention at&t this is apart of a story that we have been following closely for years. the streaming services that are in process or on the market or

being considered, at&t is among them of what had been a believe that they would stream a lot of the content fs from their warne accusati acquisition which not necessarily including hbo. yesterday from the journal, jul jewulia boorstin added on there they're going to be including it would appear, hbo, sin mcinemax different contents from warner and networks and the likes in the streaming service. where would it be priced that was another key question when they were thinking of only having the service sort of stand alone, a warner service. how could they possibly price it above and disney is charging disney plus. certainly with hbo apart of it

it would be far higher we don't know -- these decisions have not been made final, jim. probably september and october before we get it interesting development here there were a lot of questions from people, what are they doing over there talking about one streaming service for this and meanwhile they got hbo, majority has loyal followers and a streaming service that has been on the mark for quite some time now it is all going to be one. will it be apart of the hbo winter phase unclear. whether they support something new? unknown. >> another reason to buy roku. roku can just soar here. >> it is interesting to see what the consumers of this world is willing to pay for and which services are seen as vital and

which are not. a lot of people questioning whether you really need a service for at&t which content did you want only a few bucks up from hbo, perhaps it becomes more value. >> people still trying to figure out pricing structures and product structure on this stuff. let's get to the bond pit, a huge piece of the story here today. rick santelli, morning, rick >> good morning carl absolutely, markets, paying very close attention of today's weaker than expected numbers weakness in the dollar and rallying a fed fund future, the further out you go in time or further back of the crack. t contract. look at a one-week of two-year, a couple of notable features here right now we are trading at 181.

you can see on the one week chart that we kind of touch 177 twice on held. the slowest yield is 183 of the cycle. we are below that. same one week of 10-year, you see the same notion, 206 spike, 206 spike. the close yield is 207 we are sitting right on top of it the 30-year bond is trading at 257 which is really interesting. it is the omnivonly one in jeop of a cycle yield close that's currently 253. back to that dollar index. right now we are getting close to down half a percent look at the intraday dollar, very responsive and makes a lot of sense in the grand scheme of they thin things and determining probably we'll see less support of the dollar

or at least through the interest rate complex and finally opening that chart to may 1st. a very large dollar index drop carl, jim, david, back to you. >> rick santelli, thank you very much obviously markets is enjoying some of these headlines. dow is down 28 s&p, 28.64 back in a moment i'm working to make each day a little sweeter. ♪ to give every idea the perfect soundtrack. ♪ to make each journey more elegant. at adp we're designing a better way to work, so you can achieve what you're working for. but we're also a cancer fighting, hiv controlling,

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♪ good friday morning.

welcome back to "squawk on the street." i'm carl quintanilla with morgan brennan and david faber at post nine sara eisen is off today. job numbers disappointments. some of the headlines on trade regarding mexico had the markets in a better mood dow up 208 on best week of the year for the dow and the s&p 500. let's get some data with rick. >> yes, april sales down .4, down .4. that's actually a much bigger drop than we were expecting. and that's the biggest drop in sales since the end of last year at minus .7. that was december, of course if we look at the inventory side, a bit of a different picture which is unfortunate it is up .8. we have inventories building up a bit and sales not. and that isn't very good the interesting point is on the inventory side, this is a final number, meaning that the .7 was april, midcycle, now gets replaced with .8 so the question is, what was it

the previous month and that was zero so our comp is zero this may have a little bit of an impact on gdp, though the .7 was factored in. in terms of treasury yields, we have many maturities at or slightly below cycle, low yields so far, so we want to pay very close attention. morgan, back to you. >> yeah. inventory is going to be an even more focused with all of this tariff talk. rick santelli, our road map today starts with a job slowdown fueling chances of a fed rate cut. stocks rally we'll discuss with goldman's chief economist yuan hatsis. >> walmart is planning to send groceries directly to your fridge we're going to go live to the company shareholder meeting. more on that markets rallying this morning despite the weak jobs number the chairman of the president's council of economic advisers talked to us in the last hour,

talked about the numbers >> the jobs number today was a little bit below our expectations and the market expectation. one thing i haven't seen in the discussion is there were serious weather effects. all this flooding in the midwest. i-29 closed, a lot of the ports had to stop taking traffic and my professional staff thinks it took off the number. it is disappointing but not cause to change our outlook for the year. >> joining us this morning, grant thornton's diane swonk and david kelly. happy friday, guys good to see you. >> good to see you. >> diane, he said it didn't contribute much, and pivoted to gdp when asked about the jobs number what do we make of this idea they were serious weather effects? >> there were some weather effects, but i think the context is important we have seen a slowdown in monthly job gains since the start of the year, relative to

last year. slowdown is in the context of trade wars and i think that's something that we're really sort of facing a head wind on now the context is also really important for the federal reserve because they are more than willing to do a preemptive cut to deal with the sentiment effects out there. they really saw what happened in december where we had really big data and had a sentiment collapse and had almost a self-fulfilling prophecy of pullback in orders and retail investment that's something they're concerned about. so in the context of the fears we have out there and the skiddishness, that's why the fed is going to take this number and use it as one more reason to do a preemptive cut in rates. >> speaking of which, david, two year, 18 we have citi today jpmorgan and others on the cut bandwagon. when does it come? >> i think it could come in july the fed funds future market is pricing that in. i want to say something about

the weather effect there is a way of checking that. a series in the household survey, a series which says did you work part time last week instead of full time because of bad weather? we find that to be an excellent sort of variable in explaining what weather effects were and there is nothing in may. so this is not about weather this is about a slowdown in the economy that we started in the first quarter. first quarter numbers were elevated because of inventory growth but that doesn't really affect jobs that much so we think this is a natural slowdown in the economy. but i am worried that the tariff talk is making this worse in a global basis and adding some drag to the u.s. economy here. so i think the economy is growing more slowly and this stage, i think it is quite possible the fed does cut rates in july. >> david, i just to dig into that a little bit more how much of this is potentially the slowdown in the economy versus the fact that we have had, what, six digits, you know, job growth on a monthly basis for the most part for years now? and you do have quite a number

of workers out there who are maybe unskilled for the job openings that are available. >> absolutely. the thing is, the economy is in a really nice level. it is just a shame we had the pace of growth which is slowing down you look at discouraged workers, that fell to a low level, about 350,000 in this report u-6 number came in it is a very, very tight labor market almost anybody who wants a job has got one. the problem is in this economy, we're not growing labor force that much. and we are not actually growing jobs that much it is just, you know, the unemployment is actually very low. >> diane, you agree, the economy is slowing, the slowing in a natural way or being exacerbated by all of these fears about trade wars >> no question there is self-inflicted pain. we see the hesitation out here, businesses and consumers tread with caution instead of confidence in response to the volatility we're seeing in financial markets and that is direct link to the trade wars. and escalation of tariffs.

we're expecting tariffs to hit their highest levels by the end of this year since the latter part of 1980s, early 1990s before we sort of came to all these trade agreements which erased those taxes in the economy. so that's a major shift going on and even though we have seen a roller coaster ride on the tariffs, the trend has been in one direction and that is up and i think that's very important to remember as well. unless we see a 180 on the administration's posturing on tariffs, this is going to be a major head wind going forward. >> david, the optics of cutting rates when the markets are 3% from their highs and unemployment is at 3.6, how does the fed get past that and what kind of precedent does it set for the years to come? >> well, very bad one. to be honest, i think what they should do is say, look, we're not going to, you know, we don't want to get involved in trade policy, but we're not going to be let monetary policy hostage this, not going to enable an

aggressive trade policy. i think -- i don't think they should cut rates, i think it is a slippery slope it will damage confidence. don't think it will stimulate the economy at all but, you know, i think the problem is that low rates are good for the markets it makes it very hard to be honest to invest in bonds from the yields of this low that i think is pushing money to stocks it doesn't stimulate the economy. and it will be a huge mistake for the fed and for the administration to assume that we can have aggressive trade wars, unsettling global economy, shutting down investment and somehow get bailed out by fed rate cuts. because that won't work. rate cuts will not stimulate the economy at this point. >> diane, speaking of trade wars, we had kevin hassett on with us, a short time ago, he seemed to indicate some favorable movement in terms of the talks with mexico. that may be one reason why we have the equity marks strong this morning the work you've done if we go to 5% on monday, and 10% a month later, and maybe 15% on mexico, what is that going to do to

economic growth in the united states >> the tariffs on mexico are so much more complex. this is part of a supply chain and components go over the border so many times before they become a vehicle coming into the country, so they compound much more rapidly and that's why there is this razor hope that we'll delay tariffs or maybe avoid them entirely on mexico. i'm not as positive on that. i don't think we're going to go to 25% tariffs on mexico i think at some point in time the administration is going to come back and commerce will have to decide how they deal with that with the 5% tariff, but even 5% tariff compounds very rapidly in the supply chain and really hits the vehicle sector very hard. and so you get job layoffs on both sides of the border and all the way up to canada issue with one other point that david made, mortgage refinancing is up now. that's helping to buffer the slowdown, any slowdown we do see from trade, consumers and not

overwhelmingly great wage growth out there. that's very important as well. so the fed is having an impact and i know that they don't want to look like they're capitulating to bad trade policy but they don't have a choice but reacting to what could damage the economy, when they laid out their goal is to extend and a marathon of expansion to bring more people into the raise when they got more room to run, inflation below their target, they can justify it. >> good discussion, guys what a week, diane and david, we'll see you soon, thank you. >> thank you >> feel like we say that every week my goodness. beyond meat is surging this morning after reporting its first quarterly results, up around 400% since its ipo in may. jane wells joins us with more. hey, jane. >> morgan. it was a different sort of earnings call i listened to. the ceo spent a lot of time telling and selling the story of what he's trying to do

not in a slick way, but a believer's way he talked about the innovation center filled with scientists which he calls the manhattan beach project as a so cal reference to the manhattan project. he quoted scientists and inventor edwin land who co-founded polaroid and said they went public even as they're tinkering and improving the product. you know the numbers but the projected $210 million in revenues for the year could be low >> we're being very conservative i view this as a floor i believe that it is important to note that we really don't count in our forecast on boarding of customers until we are in post trial distribution >> so basically what he's saying is the company is not folding in their projections test markets like the one going on. they wait until the tests are done and he says there are other test projects in the works with a huge jump in gross profit

margin, a full 10 points in a year, two points from the previous quarter, when do you start to bring down the price on these products to be competitive with real meat management says they're working on it, they have new contracts for suppliers, they tripled manufacturing capacity they want to be a break even by the ebitda basis. >> jane, a lot of potential other competition that is going to be coming into the marketplace in the coming months and coming years how much does beyond meat have a head start on those other potential rivals >> he thinks they have a lot ethan brown does they wanted to be first mover, that's why they came to market, doing deals all the time which he can't talk about. yeah, others want to come on the market this is not an easy thing to do. it is to make something that is plant-based, taste like meat he feels like he and, of course, you got impossible foods at the same time feeling they have a head start sure, nestle my want to come in, tyson may want to do something

they have already put in the r&d. other companies have deeper pockets. >> jane, what a story it has been all week. we love the fact that you cover it too jane wells when we,back, you' come back, y what one ceo has to say about all of the tariff threats. a look at some of the top performing names on the s&p, which is up 25 points. and the dow up 231 we're the slowskys.

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welcome back mexico trade negotiations continuing in washington this hour but so far, no deal. and the white house says tariffs are on track to kick in at the initial 5% level on monday among the industries bracing for impact, auto parts suppliers joining us at post nine, jay cra craig. thanks for joining us here on set. >> great to be here. thank you very much. >> in terms of mexico tariffs, let's start there. your expectation for the impleme implement, of them and we're having discussion in the last block about what that would do if you were to see them potentially ratchet up to 25% to jobs and to manufacturing here in north america. >> sure. well, as you would expect we make plans as soon as we hear policy changes that are proposed like the ones in mexico. so we're going through the planning phase

we think we can withstand the change that could be implemented on monday without missing any of our near term expectations at this point in time >> would you pull forward any inventory across the border ahead of higher potential tariffs? >> i don't think with the initial levels that have been proposed so far. certainly if it ramps up to 25%, that's something we would have to look to consider to do. >> also have a lot of manufacturing in china as well how much of that is parts that are moving back in between the u.s. and china and how much of an impact is it that on the company? >> for us, we produce locally for the markets we're in obviously with nafta, and with the new usmca, we consider canada and mexico part of that region for the u.s but the chinese tariffs have had very little impact on us because of that. >> would you do more manufacturing in the u.s. if you were to see tariffs, be it mexico, china, become a more

permanent thing. >> the key word there is permanent. capital intensive business like ours, we're making plans three to five years out in investments. so we just have to see this stability and really have confidence that that's the new environment for the long-term. and certainly if it was higher tariffs, we would make plans to produce more in the regional markets to be protected from that. >> what will tell you if this is more permanent than temporary? >> that's been most difficult challenge for all of us. our manufacturing associations like national association, manufacturers, that's been their big objection, we're not necessarily for or against any single policy, it is just the stability you need and capital intensive business such as -- >> did the industry groups feel like they are making a case convincingly in washington or is this like running up a hill >> i believe they do i take the one thing you can compliment that thiat thiis adm

on for sure is they have an ear for industry input do they always listen to it? we wouldn't expect them to do, but we believe the industry has a seat at the table. >> we talk about on air, people come on and talk about shifting supply chains like you just turn off the lights but can you describe to viewers what it is like to vet a new supplier, get a new contract, arrange new distribution, that is a massive undertaking, isn't it >> it is even changing your own production which is very similar. so we are doing significant investment in our plants those lead times again are 3 to 5 years. we're redoing a significant amount of one of our major plants in the u.s. right now and just to order the equipment has an 18 month lead time, much less the planning and the installation and the quality checks you want to do. >> i'm curious from a management standpoint, your time, you only have so much of it you talked about planning here often. planning that you might not have

had to have done if things were just sort of the way they had been what has that taken away from? what is that time that you've spent worrying, thinking, planning, taken away from that you other we have would have been doing >> well, this will sound funny, i don't worry about much and this isn't something i worry about. it is something we plan through. and it does -- every single change requires additional time to be invested by management to make plans to adapt to those changes. so i won't mislead you it has added to that list of things we have to plan for would it be better not to have to put another item on that list certainly. so we could continue to focus on growth we have grown over 40% since 2015 and would like to continue that run we have more than doubled earnings per share since 2015. i would like to continue to focus on those things. >> on growth initiatives perhaps. >> that drive direction

shareholder value. so, but, you know, sitting in my seat, if you can't adapt to issues that come up like this, you probably should look for something else to do >> just to dig into the growth initiatives a little bit more, and stock is up something like 30% since the start of the year. this is that recent headline in the new york times, car industry is under siege, car ownership becoming optional in the age of even uber and auto sales slipping globally where is the growth coming from? >> well, we are exclusively heavy commercial trucking around the globe. so we are the largest supplier to the commercial truck industry and every region and we have chosen that path intentionally because we think it is a significant growth market and we have ridden the growth of those markets, but also captured significant market shares as well >> specific to mexico, to end on what everybody is focused on, it

may happen as soon as monday, if it is 5% and going up, you talk about 3 to 5 years, what will be your immediate, if any, reaction in terms of the way you potentially change your business, given you have a plant there that manufactures gear sets for assembly carriers, for export. >> we have three significant facilities there including one of our largest manufacturing facilities in the world through joint venture. again, if it is 5%, i think that's manageable. certainly manageable by us if it ramps up to 25%, it is an industry issue and it is hard to see where pricing through the entire chain to the final buyer doesn't have to occur to compensate for that. but the industry, our industry has been very good at adapting to change and i'm sure it will over time. it is just those times of disconnection such as this where

you really have to keep your feet under you. >> yeah. certainly a lot of opportunities in the electrification of vehicles as well dave krieg, thank you for joining us here. >> thank you very much for your time. china's president xi jinping speaking on u.s. chinese trade tensions at the st. petersburg international economic forum in russia jeff kudmore joins us with more. >> there is a lot of symbolism here, these two countries have a different relationship with the united states right now. they used the opportunity to talk about what unites them. interesting though on the trade story, president xi on stage here still and his language, i would say, has been very measured in front of this audience, you could call this a free swing of the back to be critical of president trump and the united states, but instead, he's chosen to focus on the need, i think

for a much more globally coordinated position on changing trade rules. let's just listen to what he had to say >> we have always been in peaceful co-existence. we still have to arrive at some common ground. and duly settle any differences that might arise >> so the message, one of maybe we trim the sales a little bit on the international rules maybe we need to see the wto change the way the rules operate. but we don't need to rip up the global system and the wave of globalization he says continues in spite of i think what he tried to play down here as this ongoing dispute between the u.s. and china on the current trading rules as they exist at the

moment back to you. >> jeff, amazing headlines i notice too some $20 billion reported deals being written between russia and chinese companies. how much closer do you think these two nations are getting. >> i think this really was an important moment, in fact, probably for the russian president as much as it was important for the chinese president to be seen here because the russians want to demonstrate that they are able to survive and thrive in the face of sanctions. and so now china has become an important destination for russian energy and the russians would like to take chinese technology and among those $20 billion worth of deals, carl, the one that i think really stands out is the fact that the russians have gone to huawei and signed an mou and said, you can come in to russia and build a 5g system

here and i think nobody, nobody needs to be explained to why that is significant in the context of the way washington at the moment is trying to squeeze huawei out of a lot of its international businesses and deals. so a lot of mous inked here. the headline is $20 billion. when it comes down to it, we'll have to wait and see how many of these deals get put to bed the huawei one in particular i think is just worth singling out because that's clearly designed to send a message to the state department and president trump >> yeah, absolutely, jeff. not only in terms of business dealings, and trade, but also from a military and security standpoint as well between these two countries, right >> yeah, absolutely. that's an area, i mean, if you go back over the history of the relationship between these two countries, even though they're here boasting about a 70 year long period of strengthening

ties in reality, it is only in recent years that i think that they have come more closely together and much of that has been about their relationship with the united states and so there have been deepening ties around energy, russia's got it, china needs it, there have been the beginning of ties around technology. bringing huawei in seems to make sense as you build up the commerce and the internet here in russia. the military aspect has been a little bit more slow in the coming because, remember, you only are to look at a map of the world to see how geostrategic these two countries are and at times they haven't always been the best of friends. so that is coming. but slowly back to you. >> jeff cutmore, thank you when we come back, walmart announcing new plans to deliver groceries directly into your fridge we have the details next

as we head to break, take a look at the markets right now, dow is up 213 points the s&p is up 24 poised to have the best week of 2019 at close later toda he resquawk on the street" coming up. ♪ i want it that way... i can't believe it. that karl brought his karaoke machine? ♪ ain't nothing but a heartache... ♪ no, i can't believe how easy it was to save hundreds of dollars on my car insurance with geico. ♪ i never wanna hear you say... ♪ no, kevin... no, kevin! believe it! geico could save you fifteen percent or more on car insurance.

welcome back to "squawk on the street." now, time for our etf spotlight. taking a look at semiconductors. ticker smh on pace to break a four week losing streak for its best weekly performance since early april. leading the group, names like amd, broadcom, nvidia, advanced micro up double digits, on track for the best week since september 2018 smh outper forming s&p 500, posting an 18% gain. pretty surprising given all of the huawei news and trade talks and worries about the global economy slowing. >> all right, when we come back, we're going to be talking to goldman sachs' chief economist he'll join us at post nine we'll get the job numbers,

tariffs, impact on the markets, a lot more "squawk on the stree bk afr is teth t"ac

welcome back and good morning. i'm sue herera an unsafe maneuver, that's how the u.s. navy is characterizing actions by a russian destroyer this morning which nearly struck the uss chancellorville in the philippine sea video shows just how close the two vessels were, but both sides are blaming each other for the near collision joe biden is reversing a long-standing position on abortion, saying he no longer supports the hyde amendment which bans federal funding for the procedure. the 2020 presidential hopeful told a democratic gala last night new state laws restricting abortions prompted him to change a new york city man is under

arrest he's being charged with plotting a times square attack using guns and hand grenades. according to fficials, the man was acting as a lone wolf and there is no imminent threat. and disney land cast members are going to get a new work perk the company will launch a $10 million program to help full and part time employees pay for child care you're up to date. that's the news update this hour carl, back downtown to you >> sue, thank you very much. a bit of a disappointing jobs number for the month of may as you may know. u.s. lawyers added 75,000 jobs, that's well below estimates. billionaire investor stanley druckenmiller this morning on "squawk" predicted a weak jobs number take a listen. >> i don't use the jobs number to predict the economy i just -- it is unbelievable the obsession with the lagging indicator. i use them for entry and exit points to fade but i think if the job number is

weak, given everything else they're saying the fed will be on a clear easing path by july. >> joining us with more, jan hatzius is back at post nine love seeing you on jobs friday sounds like the report did make you raise your eyebrows. >> yes and the -- i think it raises the question about whether the trade uncertainty was already having some impact on the economy prior to the latest escalation this came after the original tweets about china, and i do think it raises that question. now, i don't think it answers the question because while both the bls and the adp report were both very weak, some of the surveys including nonmanufacturing and unemployment were very strong. so i don't think it is something that would lead you to judge conclusively that things are weakening, but raises the

question, raises the downside risks. >> you don't see an emergency cut this weekend some had been toying with as an idea but is june a possibility. >> i think june is unlikely. i do think that they will want to see a little bit more information. june comes before the g-20 meeting. we have a lot of uncertainty even between now and monday. but then right after the june meeting, you've got the g-20 so i think they certainly will change the guidance and the signals that they're sending but i think the cut would still be a surprise. >> the comments by stanley druckenmiller are key. this idea that the jobs report is basically lagging information. so much of the data is actually data that we have -- from -- it is a reading that we have already seen take place. when you have a fed that says it is data dependent if they mack a decision to move in one direction or the other, by the time they make that decision, are they behind the ball >> i think it is only one input

into the decision. and, you know, almost everything that we have is lagging to some degree, right? we're looking at things that have happened. those are data points. some are more up to date, some are less up to date. i would agree the jobs numbers do get too much emphasis i think in markets i don't think they're as informative about where the economy is, and where it is going as people often think. so i'm very sympathetic to that general view but i think if you use it as one input, alongside a bunch of other indicators, and what is happening in financial markets and what is happening in the news flow, i think it makes sense to put weight on all of that. >> you're talking, what, industrial production, pce, rail track, what else what is on that list >> the surveys for sure. both the consumer and business surveys and i think those are particularly useful at the moment when you have a potentially significant change in the outlook because of this

big shift in tariff uncertainty. but i also am talking about financial conditions financial markets, while as a policymaker i don't think you should blindly follow financial markets, you have to take into account financial conditions and you have to be very aware of what financial conditions are expecting. one thing the fed is going to have to look at is, you know, on the one hand, we haven't seen that much of a tightening in financial conditions but on the other hand, the -- one of the reasons for that is that the market is pricing a substantial amount of cuts so they're going to are to basically decide, you no he kno extent they view that. >> you mentioned this number may have shown at least some impact from the china trade dispute where do you see that or where do you look for continued impact as a business investment confidence, does it spill over to the consumer in some way. >> i think you would probably look more on the business side, so the hiring side

and the -- both the surveys and the hard data and there is a split verdict they get at the moment, investment for sure. the problem with investment outlook is that we don't have a lot of great, timely information. if you're worried about looking in the rear view mirror that would be a particular concern with respect of the investment numbers. consumer, i think, could become more of an issue if we actually do see increases in tariffs the next round if there is -- across the board tariff, vis-a-vis china, that's a bigger impact on consumer prices. >> what could have the bigger impact on the economy, and i guess business and ultimately consumer sentiment the uncertainty of not knowing how long the tariffs are going to be here, when they get implemented, what that looks like or a permanent implementation of tariffs in which businesses can then start to pull the trigger and make the right investment decisions >> that's a great question and i think you, you know, how much of this increase in uncertainty can be reversed, you

know, a similar question how much of this can be reversed by, say, shelving the mexico tariffs, for example and, you know to what extent that then again changes the economic outlook in the risks in a more favorable direction it is hard to know i do think if you see increases in tariffs, you never really are going to be that sure that this is the end of the road, right? so i would be a little bit cautious, i guess, about the idea that you, you know, you go through with it and then you have the uncertainty out of the way because you certainly have questions about what does china do in response and, you know what potentially out of the next steps of escalation that things do continue to be more and more adverse. but it is a great question >> there has been some debate in the past week about say the consumer confidence surveys, right? conference board and the bond market historically do we know who ends up being right >> the bond market has a good

track record in the longer term in terms of predicting what is going to happen. there are a lot of people who look at this very, very closely. doesn't mean it is always right. but relative to any one economic indicator, i would not put my money on -- one of the economic indicato indicators together, that could be a little bit more confident >> jan, thank you. appreciate it. obviously over at post five, we have an open on revolve. green arrows to start thissi ipo on a busy couple of months we have seen some winners come out of the gate. 40% on rvlv. we'll talk to them later on "squawk alley". >> e-commerce and that intersection between data and fashion has been hot

and you can see that playing out right now in the first trades in revolve. floor here is pretty busy. quite a number of social media influences and very well dressed models and the like here also representing the ipo as you mentioned, we'll be talking to co-ceos in the next hour speaking of retail, walmart announcing plans to deliver. courtney reagan is live from fayetteville, arkansas, with more of the details. >> reporter: good morning to you. so the annual walmart celebratory meeting is happening in this arena behind me. this morning, walmart came out with an announcement, the convenience of having groceries delivered directly into their fridges or garages st. louis, pittsburgh, and vero beach, florida >> we have a camera that is on

their vest when they walk in, and customers can actually watch on their app and come into the home, put the stuff into their fridge and then leave. and they have a code to get into the home. >> the store associates use walmart logo vehicles to make those driveries. walmart isn't detailing what it costs other than saying it is not that much more than what it already costs it to deliver directly to your doorstep. also not disclosing the price that shoppers may be paid for the service or the cost of the locking system that is going to be required. the retailer initially tested inhome slif delivery using delir driv drivers. lori says the inhome delivery actually opens up more opportunities for the retailer to be able to serve shoppers. >> first of all, delivering

general merchandise into the home without any packaging, that's another pain point for customers. customers being able to actually leave products on their kitchen table to be returned, so we come in, deliver the grocery, those are two examples lots more thin things we can d. start talking about health and wellness and other areas like that >> amazon does have a similar program. amazon key, you have to have a special smart lock installation, you can choose from one of a number of options, it is available in 50 u.s. cities. those delivery workers also have a camera, so you can watch a live stream of the delivery or video clips. that's where general merchandise as opposed to fresh or frozen grocery that would go into your fridge back over to you. >> all right i'll take it courtney, doing such great work on walmart all week long as we said earlier, revolve opens at the nyse. nice 40% gain at the open along

with beyond meat after the first public earnings last night this is -- they call themselves a next generation fashion retailer specifically for millennial consumers, been around for quite a while. founded in 2003 in los angeles we'll talk to the co-founders, i think, later on this morning interesting story, cramer would love this one. >> oh, yeah, for sure. ipo price at the high end $18. we just showed, stock trading around $26 and change definitely a strong start out of the gate certainly interesting just to, you know, talk to the co-ceos on "squawk alley,". more to come on all of this. we'll keep watching that also beyond meat >> meantime, as we go to break, look at the dow, up almost 300 points 2878 now on the s&p. take another look at shares of

another recent ipo after the first quarterly results. we'll talk to the company in the next hour. president xi is on the tape saying trump is my friend. and with that, we're close to session highs. dear tech, let's talk. you blaze trails... but you have the power to do so much more. let's not just develop apps, let's develop apps that help save lives. let's make open source software the standard. let's create new plastics that are highly recyclable.

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one technician calling the faang trade dead money as tech is under pressure. more on that on tradingnation.cnbc.com more "squawk on the street" coming u

. now to the cme group in chicago and rick santelli with the santelli exchange. hey, rick. >> thank you, morgan today was a very important day and viewers, you understand, radio listeners. not that one number like today's weaker than expected jobs report doesn't make or break anyone's investment strategy, particularly our central bank, but it definitely is a piece of

the puzzle and has to be placed in, and ultimately you put in enough pieces, you can alter the picture. that's kind of the process that is going on. you can see it playing out in retail here is some charts of fed fund futures, let's not get into the we've been expegting it to hit and if you open it up to may 1st, you can see the is yelling something at the central bank. but isn't is real issue then become the markets versus the economy? consider this. you look at global stocks. places like japan, even though their stock market is nowhere near the 39 plus level it was many 1989. if you don't go back that far, doesn't look bad europe's don't look bad.

the is with 3% of highs. read some of the growth updates, from deutsche bank, ecb, imf you get global stocks look more buoyant than global growth rates which beckons the only question. are central bankers really doing us a favor because ultimately, if it's the vapors of policy being easy that are igniting the stock market but not the economy, that is a road that at some point gets quite slippery also beckons one more question there's a chinese proverb. i'll simplify it it says if you save someone's life, you are then responsible for it now harken back. central banks, mario draghi, i'll do whatever it takes. all central banks. they got the bulldozers out and made road. it was to much riskier assets. how did they get people to take

it by giving them basically zero interest rates which still exist in europe and to some extent, japan. is that the dynamic some are cling clinging on to they force d the investors into an arena and now feel some responsibility when you about it like that, makes sense. david, back to you >> thank you time to send it over to jon fo t fortt. >> projections better. 'lha t cs b4% wel veheeo coming up on "squawk alley.

welcome back as you can see, stocks flashing green across the board all 11 sectors in the green. the dow and s&p on pace for their second best weeks of the year tech is the top performing sector up about 6% so far for this week. that puts tech's gains at 22% making it the top performing sector of 2019 leading the way higher, you've got microsoft, apple and adobe shares ones to watch especially, microsoft and apple.

megacap stocks out there back downtown to you guys, carl, at the stock exchange. >> thank you very much sessi session, dow's up 318. guys, i don't know if you're watching this, but materials for the week, 9% the best week in ten years. on some of these >> certainly seems contrarian! t . >> emotional removal is something to watch bond's not ratifying a lot of this the two-year still stuck and still 206. >> haven't seen that in quite some type time but maybe that's part of what has got the market going >> when we come back, we have another soaring ipo. online retailer which was a proponent of social media to sell opening moments ago here for trade. it's up 45%. the ceos will join us on "squawk

alley" and i'll be back for the closing bell today as well we're going to speak with john chen about tech's trade war fallout and breaking up big tech plus, stacey cunningham on the ipo wave and whether the momentum will continue we got so much great programming straight ahead for you on the summer friday. stay with us there's a lot that needs to get done today. small things. big things. too hard to do alone things. day after day, you need to get it all done. and here to listen and help you through it all is bank of america. with the expertise and know-how you need to reach that blissful state of done-ness. so let's get after it. ♪ everything is all right what would you like the power to do?® ♪ all right

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