and "squawk alley" is live ♪ good monday morning. welcome to "squawk alley." i'm carl quintanilla big morning. dow is up 167. we'll start with the president joining "squawk" on the phone talking tariffs, tech, and this morning's m&a. take a listen. >> we should be entitled to have a fair playing field even without a fair playing field because our fed is very disruptive to us even without a fair playing

field, we're winning because the tariffs are putting us at a tremendous competitive advantage. >> gave investors a lot to work with this morning. for that we turn to eamon javers >> it was a remarkable interview this morning the president calling into cnbc talking about a wide range of topics including this comment harshly critical of the u.s. chamber of commerce. this was remarkable for a republican president traditionally republicans have been close with the business community in general today, though, the president signaling he's not like those previous republican presidents here's what he said. >> we lose a fortune with virtually every country. they take advantage of us in every way possible and the u.s. chamber is right there with them and i assume and i'm a member of the u.s. chamber maybe i'll have to rethink that. because when you look at it, the chamber is probably more for the companies and the people that are members than they are for our country. >> the president will suggether

suggesting he might resign his place in the u.s. chamber of commerce siding more with companies than it is with the country i've reached out to the u.s. chamber for their comment on that but that is a striking departure from what previous presidents have said. if you look ahead to the politics of 2020 going into the next election cycle, you've got this president who's taking a much more populous tone in terms of big business and the chamber of commerce. then you've got a democratic field where a lot of the energy is on the political left and so there might not be a candidate in 2020 who's sort of right down the chamber of commerce's lane as we've seen in past election cycles there's been one, sometimes two candidates for president in that lane and this time around, you might get a much more left-leaning democratic nominee and a populous leaning republican nominee in the president and nobody's sort of advocating for that chamber of commerce big business position that we've

seen in the past from centrist politicians. it's fascinating to watch and we'll see whether the chamber of commerce has reaction to that today or whether they stay buttoned up the rest of the afternoon. >> some pieces over the weekend argued that for a long time the stock market and investors thought the president was, quote, on their side with tax cuts and deregulation. is there any discussion in washington as to when he flipped that switch when he went into election mode? >> it's clearly tariffs. the trade war the president's engaging in around the world not just with china but as we've seen with mexico, that's something that the president wanted to do but the early part of his term was dominated by tax cuts and deregulation those are things like the chak ber of commerce really liked the chamber of commerce worked hard on the republican tax cuts and helping to marshal the votes for that this tariff issue, though, splits the business community.

and so now you see an entirely different reaction and so often in politics, carl, where you stand depends on where you sit. >> eamon javers of the white house starting off this hour eamon, our thanks to you of course the president also made comments on china specifically huawei and technology take a listen to that. >> it could be very well that we do something with respect to huawei as part of our trade negotiation with china china very much wants to make a deal they want to make a deal much more than i do if you look at china, china as great as they are, and they are great, they don't have near the capability of our jugenius us in silicon valley that walk around in undershirts they don't have nearly the genius these people have they don't want to exactly say that so they try and buy the companies. now we have restrictions on that, too, which we put in under my administration. >> elevation founders, roger

mcnamee is with me this morning. good to see you again. the comments on huawei we've gotten them from putin, chinese,bet, and the president. how do you synthesize all these points of viewa global economy where we maintain peace and prosperity by having interconnected trading relationships to some increased form of nationalism. i don't know where we're going to wind up, but i don't see how from a business point of view this is anything other than bad news you know, globalization has been so good for earnings it's been so good for growth and obviously good for peace in the world that to the extent that we stop having open borders for trading, that's just going to have an impact on economic growth it's going to have an impact, i think, on just the level of tensions in the world. >> roger, huawei is folded into or i should say regulations bans

around huawei in the u.s. for certain applications is folded into the national defense authorization act. lawmakers have actually crafted some of these laws around huawei do you -- would you expect to see it actually get swept up into the trade talks and for there ultimately to be a positive outcome in term os v the dynamics with that company >> i wish i knew the thing i find so troubling about all of this is that we basically had a strategy as a country for, what? 30 years that we were going to have a relationship with china that ensured lowest possible prices on the largest number of goods. so you go to walmart and it's, like, 90% products made in china. and we were obviously changing that strategy. the trump administration is going, that is no longer our priority and there's a legitimate case to be made that the deal with china was not a good deal for us their industrial espionage was killing a lot of tech businesses and at the end of the day, though, i think you have to have

a goal the thing that really troubles me about all this is i don't see a coherent strategy around this. and for the tech industry, there are obvious benefits if you could find a way to reduce industrial espionage but at the same time, we need access to china as a market. and so i don't know how we're going to balance all of this and, you know, my fingers are crossed, but to me this is a moment in time when as an investor you have to be more careful and cautious about what's going on. >> you know, roger, i think about sheryl sandberg who was on our air not that long ago. and one of the points she made was that while there's all this regulatory and now, you know, anti-trust breakup scrutiny, that same type of scrutiny is not taking place on chinese rivals thus maybe putting american tech at a disadvantage on the global stage. how do you think about t >> i think that's utter nonsense and here's the way i handicap it the chinese have a very focused

strategy in technology at least domestically. they're really focused on what they call social credit. which is a behavioral manipulation strategy. designed to get the entire population doing what the government wants them to do. if you look at google and you look at facebook today, they're in a business that a professor at harvard describes as surveillance capitalism. where for all intents and purposes they're doing the same thing the chinese are doing. they're gathering data about everybody, creating these data voodoo dolls and using that to manipulate the choices around them it's not a government. they're doing it for commercial purposes i don't think we should be competing against china in behavioral manipulation. i would much rather see us spread the opportunities out and do what the united states does really well which is have millions of different start-ups doing amazing things right now you can't do that because google and facebook are

so dominant that start-ups can't go near them >> what would need to happen for those start-ups to really grab a foothold right now >> that is the $64 question. that seems they're two parts of the problem. on the one hand, the way these guys basically take ownership of data if data comes anywhere near them or if they see it unclaimed, they take possession of it and as a consequence, they know more about us than we know about ourselves. that's why google knows if a woman is pregnant before she does why they can show us ads for things we just thought about something has to be done to limit that then the second piece is you have to use antitrust law for start-ups. and i think that's a place where there's a lot of examples in our past where we've done that successfully relative to at&t to create the computer industry in order to create silicon valley and later on to create the competitors and we're finally seeing our

antitrust mechanism get started again after 25 years of being inactive >> roger, on the uncertainty you suggest the president introduces into markets, i mean, the ipo market is still robust we're getting multi-million-dollar m&a deals i mean, american business continues to chug along. >> well, let's not forget, carl. some of these things are sold, not bought, right? there've been massive marketing efforts to get these ipos to work let's face it. they've worked really well and some of the stocks continue to work really, really well hope always springs eternal. let's face it. we're in a ultra low interest rate environment where there's a real opportunity for rates to go lower. stock market is going to be the beneficiary of that. at the same time the m&a thing, that stuff is definitely sold. we see this morning the transaction between salesforce and tableau.

what a big thing for the tableau shareholder. their biggest competitors were going to be amazon and google and they get bought out. we're breaking out champagne on behalf of those shareholders that was a great outcome >> benioff with cramer tonight at 6:00. roger, we'll talk to you again soon >> take care the president also touching on this morning's megamerger, the merger of equals between raytheon and united technologies take a listen. >> i'm a little concerned about united technology and raytheon because one of the things that i bring up all the time, we used to have many plane companies we used to have many, many they've all merged now we have very few we have the two main ones as you know and you have lockheed and boeing and a little bit some others they've all merged in. so it's hard to negotiate when you have two companies and sometimes you get one bid.

>> now, i did speak with both ceos raytheon's tom kennedy and utc's tom hayes. we spoke about how this deal came together. take a listen. >> i always ask my investors if you're going to do a merger, when's that and who with i'll tell you who the company is we're going to merge with. it's raytheon. what i was trying to tell them is that we want to be able to merge or acquire a company that has the same characteristics as our company. a strong technology foundation, strong set of franchises, and a strong international market for us and when we looked at utc, we saw once they do their spinoffs, looking in a mirror like raytheon but with no overlap so i approached him. i approached him after the

public said he was going to spin off otis and carrier so i called him up with those gone, it made it the ideal company to merge with. and then of course i did say -- i think -- i know you're busy. the story was so compelling he did listen he spent time asking questions and whatnot. after that happened he said, look give me some time. i've got to work these spinoffs. we got back together late in 2018 a little bit more in terms of the social issues, figuring those out. then we kicked off our teams in january of this year and here we are. >> we've already seen quite a bit even before today of consolidation in the sector. do you think especially after this news with you guys today, we'll see more >> as we think about it, the merger of utc and raytheon, it's almost a perfect combination

there's no regulatory risk here. it's hard to find businesses in the defense space that don't compete in some way, shape, or form while we're fortunate to be that way, i'm not sure you're going to see a lot more. whether or not there's other consolidation, we'll have to see. but not as simple as what we have here. >> yeah, carl. we will have to see. certainly a flurry of analyst notes today speculating. what this could mean for the other primes what this could mean for the other major manufacturers that have big aerospace manufacturers. also this i didn't do of an all-stock merger on the heels of a similar structure which is l-3 and harris which is due to close as soon as the end of this month. complimentary seems to be the term coming out of the

commentary from both of these gentleman on the heels of this news today also the acquisition -- the merger is going to be platform agnostic meaning the technology will be accessible to a wide range of customers both on the defense side and also on the commercial side. we also talked a little bit about china. and lastly the other big news of the weekend is the fact that the dod seems to be moving forward with pulling the f-35 away from turkey which has been an integral partner in the program because they are looking -- the country is looking to move forward with the purchase of a russian missile defense system the u.s. has suggested that turkey buy the defense system from raytheon. the president missile defense system that's another one to watch. it would be $9 billion worth of potential future sales that no longer happen.

united technology makes the engine for that plane. it plays out for raytheon as well. >> there's some geopolitics wrapped up in this as well meantime, another deal we mentioned a few moments ago with roger, that is salesforce buying tableau. shares up 34 on that news. we'll get more on that but first, gold man initiating uber with a buy, a 56 target we'll talk to heath terry right here at post nine as we are trying to get above 2900 back in a minute awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills.

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one month ago today, uber went public here at the new york stock exchange and now a major executive shakeup coming into the weekend, its chief operating office and chief marketing officer both stepping down dara khosrowshahi said this is a good time to set u us up for the future joining us is keith terry who just initiated a buy welcome. >> thank you thanks for having me >> why buy >> it has to do with the category from this usage, this has been transformational any time we get one of these companies in technology that becomes a verb, it's a good

investment as well we've seen a lot of that volatility uber has a lot of ground to make up i think it's going to be the right call >> yet looking at your note, it says one of the key risks to uber as an investment is its business model what do you mean by that >> sure. this is a category that right now has a lot of subsidies going to drivers, riders we're in this sugar rush period where it's been let's subsidize these things on both sides of the marketplace. that's been a big part of the volume one thing in that note, it's time for the sector to grow up so we think there's going to be this sort of transition period as they -- consumers and drivers kind of get weaned off of all these subsidies. we estimate not just uber but $9 billion of venture capital being burned in this category in 2018 alone. that's going to have to change >> so no more 30% discount emails what fare hikes

what >> fares are going to come up you know, we've seen that already. one of the things we looked into in the report we did is the impact fair increases have had you see it in new york city with fares going higher it's costing 25% more to take an uber this year versus last year. it's one of the reasons you've seen uber's growth slow and you're seeing slowing in the category with lyft beginning to slow investors are going to have to expect that. >> we had this discussion last week is the core driving business closer to profitability? >> yeah, i think that's definitely true. i mean, when you separate out the different markets and the businesses they're in, there's so many different things that oo uber is doing like with the eats business which is losing money this week they have a big line around elevate they're spending a lot to make

this a platform and not just a business. >> how is your take on ewer compared to lyft >> that's largely a function of the stock doing so well going into when we initiate it i think a lot of what makes lyft interesting as an investment is its simply tis they don't have to deal with all the competitors. and they're in the food business which is incredible. >> looking across your coverage universe right now, certainly we saw tech come off. and now it's really rallied again. what is your favorite stock, favorite pick, why >> top of the list for us still is amazon. you guys are probably tired of hearing that because we've been saying it for so long. but the reality of it is we're going into 2019 at this point have been seen more retail store closures announced in the first four months of this year than in

2018 the last time we saw that record set in 2017, it turned out to be a huge catalyst for e-commerce growth we think that's going to be the case again it's a little bit of a dark reason, but it is going to benefit amazon's retail growth if you look at what consensus in the stock is implying, no one's really expecting that kind of retail growth accelerating in the second half of this year >> should investors pay closer attention to the goings-on with that company i bring it up because of the d fedex news they're not going to renew the u.s. express contract with them. >> you have to look into that. it's how amazon gets product to people it's a bit of a lagging indicator i think. 30,000 is nearly a third the size of fedex's fleet in the u.s. it's a big investment. so their reliance on fedex is a lot less than it used to be. it's going to obviously get a lot lower. >> heath terry from goldman

sachs, thanks for joining us here when we return, how money ball and the fed tie together ahead of a rate decision time to bring in the closer? meantime, a triple digit rally for the dow this morning up 174 points take a look at the names leading the way higher prs.man, apple, american we've got a lot more "squawk alley" straight ahead. fun fact: 1 in 4 of us millennials have debt we might die with. and most of that debt is actually from credit cards. it's just not right. but with sofi, you can get your credit cards right - by consolidating your credit card debt into one monthly payment. you can get your interest rate right - by locking in a fixed low rate today. and you can get your money right. with sofi. check your rate in 2 minutes or less. get a no-fee personal loan up to $100k.

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baseball's new way of thinking is causing managers to go to relievers earlier. what's that have to do with the fed and the call for a rate cut? mike santoli has the story >> right now it doesn't seem like we're particularly late in the game if erm thes of the expansion. markets at their highs credit markets good. the vix low. why is the market now pressing the fed to come in with what you might consider its strongest web out of the bullpen

well, it's part of the same logic that has why wait to use it at the end of the game. if there is a kraushl moment in the game, you should bring in that closer. that seems to be what the markets are saying a rate cut right now would be the equivalent of bringing your best weapon in to diffuse a threat before you actually need to use that person later on down the line now, the quants in baseball and markets are using this you don't need a cycle to ward off later. that's basically what we're talking about here you've kind of used that weapon in a way that really is not most effective. now down the road you don't have that rate cut in your pocket and, in fact, the market might go on to new heights in the economy.

wimp is the thing calling on the fed to make this move. you see this inverted structure, right? we have three months very high all the way down to about 1.85% it starts going up higher later on the market is hinting it might work if we got a rate cut now, that's all you might need to do one or two cuts this year, pretty soon this summer. then all of a sudden the economy does better, inflation picks up again. so that's the argument i don't think that powell is all that comfortable with this new kind of quantitative thinking. that's why they're hoping, just suggesting something might happen in the way of a rate cut might be good enough with the way the markets are acting now, it's hard to really argue that we urgently need one, isn't it >> mike santoli. baseball and markets i mean, it's like a perfect coming together of the world for you today. >> i see everything through

baseball once in awhile i actually get to put it on a work schedule. >> all right well, it was a home run. european markets are set to close momentarily. seema mody has more. >> that was good moving modestly higher following the trade truce but the u.s. and mexico markets in germany are closed for a public holiday new data shows europe's economy is struggling to rebound specifically in the uk the economy contracted due in large part to the auto production around the initially planned debarture date on v from the eu on march 29th they had the worst monthly drop since march of 2016 and well below analyst forecasts. the british pound, check it out. currently at 1.26. meanwhile, the world's oldest travel agency could soon have a new owner. thomas cook confirming takeover talks with china's fo sun.

they have been expanding their travel portfolio and is already the owner of club med. shares fell 30% last month as brexit uncertainty resulted in many delaying travel plans thomas cook issued three profit warnings last year so this takeover certainly being welcome. the stock is up in today's trade. back to you. >> all right, thank you very much let's get to sue herera for a news update. >> hello, everyone here's what's happening at this hour a fire official says one person has died and five others were injured sunday when a construction crane collapsed onto an apartment building in dallas the national weather service had warned of 70 mile-per-hour biwid in the area. and a spokesman for the fire department says there is a strong possibility the winds played a role in the accident. the worst measles outbreak

in the u.s. since the early '90s has spread to two new states idaho and virginia reported new cases last week bringing the total number of states affected to 28. the cdc has seen more than a thousand total cases this year the head of the iran nuclear watch dog has -- the agency says as of may 20th iran was still in compliance with the nuclear deal it reached with world powers several years ago. but it is not clear when it might hit limits on the amount of european r you're rauranium. prince philip still rides a horse drawn carriage on the grounds but stopped driving after a accident in january. happy birthday to him. back down to you >> we should all look that good

at 98, sue >> exactly when we come back, from dating to crypto, why facebook could be in hot water with the ftc. stay with us johnson & johnson is a baby company. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you.

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welcome back to "squawk alley. facebook stretched into at least 16 different businesses. but is that a problem as the federal trade commission's task force investigates big tech? julia boorstin has the story from l.a >> the ftc will be taking a hard look at whether the tech giants are unfairly using their dominance in their core areas to disadvantage competitors in facebook's case, the question is whether using the dominance to promote its own dating service or virtual reality heads it to limit the opportunity of rivals who are operating on its platform now, facebook is now competing in a wide range of businesses. from video games and esports to job postings to ticket sales

eleanor fox professor of antitrust at nyu law school says it's a more flexible law the ftc could decide a dominant platform is a gate keeper and has a duty of fair dealing on the firms that use the platform. abusing competitors would be an unfair method of competition we've seen some tech giants fine for this we've for giving an illegal advantage to its own online shopping service in search results. the ftc did investigate google for this but did not ultimately find the company amazon paired back promotional spots for its private label products after criticism for giving them an unfair advantage over rivals. now, one thing's for sure. now you can make calls and sell products, you have to show it's

not disadvantaging its new rivals including mobile carriers and ebay back over to you. >> that sets us up nicely, thank you. president trump weighing in on big tech regulation and antitrust earlier today on "squawk box. >> every week you see them going after facebook and apple and all of these companies that are, you know, they're great companies. but there's something going on the european union is suing them all the time we're going to make look at it differently. we have a great attorney general. they're attacking our companies. but we should be doing what they're doing. they think there's a monopoly. but i'm not sure they think that they just figure this is easy money. we'll sue apple for $7 billion and make a settlement and win the case so i think it's a bad situation. obviously there is something going on in terms of monopoly. >> joining us now for a closer look at regulating big tech,

former attorney general in the antitrust division and now berkeley haas cool school of business professor michael katz. good morning to you both dina, i'll start with you. you've written extensively about anti-trust and what that could mean from a big tech perspective. what do you think of the president's comments just now and do you think there could be a case to be built here in the u.s. >> sure, thanks. i mean, i think the focus is going to be on facebook and goog google they have niche markets. for facebook it's social networking and google is the piece of technology publishers use to sell ads online. it's also online search. and in those markets they have a very dominant position and, you know, the ftc and doj are probably going to start looking to see if conduct in those markets can be labeled as exclusionary >> michael, do you agree how do you think this plays out? >> no, i agree with her

completely t i think sometimes we need to remember that antitrust is very fact specific and case specific. i do believe the agencies are going to look closely at big tech i think it's going to be much more drawn out and in the trenches and details than people think. i don't think we'll see these wholesale changes or breakups that people are talking about. >> dana, do you think we could see a breakup whether it's the siphoning off at apple or the unwinding of previous acquisitions like instagram and what's app at facebook >> perhaps but i think from a shareholder, the greater risk are other remedial measures that could come from an anti-trust perspective. from one social network to another. or a reining in the data practices. those sort of fundamentally form the core of facebook and google revenues, the data practices

and so if you have wholesale changes in the way that data can be used between the two different divisions, that's a much greater risk to the revenues than breaking up the companies. >> michael, is there any reason to think the antitrust law that's on the books in the u.s. needs to change? >> i think there is. because, you know, i just said i think it's unlikely we're going to see companies broken up certainly when it's organic growth being unwound we maybe see some mergers that are going to be revisited. i think facebook what's app is on everybody's list as something to think about but i think what's important is to understand it's not that somehow i think at least that the ftc screwed up before. but it's very hard in the u.s. where the company companies have r not head-to-head competitors i think we need to think seriously about legislation that changes the standards and makes it easier to block mergers and particularly in the tech area where maybe the companies aren't

competitors today, but they're each other's likely competitors in the future. and maybe the best hope of displacing facebook, for example. so i think that's where we need to see some legislative action >> dana, i'll put the same question to you. do you think the laws need to be changed or will be changed >> i don't think that the laws need to be changed right now for us to see cases brought against these companies. i think we have something going on in these markets and it has to do with how complicated they are. many in the industry joke they're more complicated you have the exchanges that can buy one off of another you have arbitrage between the exchanges. they are highly technical markets. and i think we're going to see a period now where regulators need to catch up as to how these markets are really working to see as michael said the fact patterns and we'll likely see scrutiny on specific conduct in these

markets that competitors have been complaining about for some time now >> yeah. i'm sure we're going to be talking a lot more about all of this in the days and weeks and months to come thank you so much for breaking that down for us dina and michael. >> thank you salesforce answering google's analytics purchase with one of its own we're going to talk about that after the break. as we did crack 2900 just a mome andntgo a dow's up 210. man: stand up if you are a first generation college student. stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. the world in which we live equally distributes talent. but it doesn't equally distribute opportunity, and paths are not always the same. i'm so proud of you, dad! man: i will tell you this, southern new hampshire university can change the whole trajectory of your life.

here's what's coming up on "the halftime report." with tariffs against mexico not happening, are now record highs once gwen within reach we'll debate that question as some say it's still time to play defense. plus, the return of merger monday meaning we're trading big deals today from utx and raytheon who could be next? and with home depot trying to move back to a 52-week high, one firm puts a new price on the stock. it's our call of the day we'll do that and much more at noon on the half see you then >> all right, scott. sounds good. one of the big movers today tableau. agreeing to be bought by salesforce an all-stock deal valued at over $15 billion. acquisition follows google's position of looker last week shares of tableau as you can see up 30% we talked with a ceo last month with the growing big business in analytics.

if we had the sound, we'd play it for you, but trust me we did. it's the biggest accuracy wigs from salesforce in its history a leaked memo back in '16 about their interest in tableau. when at the time the price would have been more like $4 billion instead of $15 billion, but of course benioff's market cap has gone up as well. jim is going to have benioff on tonight "mad money" at 6:00 p.m. >> yeah. that's going to be a key interview to watch and certainly anybody who wants to see the previous tableau ceo comments can go to cnbc.com to see that fun factoid here, what do both of today's merger monday deals have in common technology, analytics. all of these next generation capabilities that are being put to use whether on defense and security side. up next, microsoft unveiling

its answer to google in the cloud gaming arena giving a preview of its new service at e-3. the president of microsoft's xbox division is going to join us we're becoack after this break the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. you get the freedom of what a 7-day return policy. this isn't some dealership test drive around the block. it's better. this is seven days to put your carvana car to the test and see if it fits your life. load it up with a week's worth of groceries. take the kiddos out for ice cream. check that it has enough wiggle room in your garage. you get the time to make sure you love it.

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the head of xbox evp of gaming >> thanks for having me. >> exciting for anyone who follows gaming what do we need to know about this next generation >> yeah, we're here at e3 in los angeles. had a great show yesterday talked about project scarlet which is our next home console the real thing that's critical for us is the basis for our home console project scarlet is the basis for our platform in the cloud with project xcloud. thousands of games already run on that platform thousands of games in development. so we think about gamer choice and what games they'll have that are going to be available. we think a real strength with the platform of xbox >> phil, with all this focus on cloud-based gaming and xcloud now, make the case for why the hardware is so important to this >> yeah, there's still hundreds of millions of people that love to play in their home. it's really about choice the highest fidelity experience

somebody is going to have for many years will be on local hardware in their home, whether that's a pc or gaming console plugged into a television. but we also know that there's 2 billion people who play video games on the planet. many of these people are never going to buy a gaming console, never going to buy a gaming pc they have a phone in their pocket and want access to the great stories, characters and worlds that people have been playing on xbox for years. so we invest in the cloud to reach 2 billion gamers but we also know the heart of that experience for so many of our fans and customers is in the home and the fact it's the same platform in both places gives creators one platform for them to target to reach all of those customers. >> in terms of gaming franchises we talk about some of these all the time i mean, they're literally blockbusters the size of the biggest hollywood movies but are there some on your radar that maybe some gamers aren't aware of yet >> well, i'm going to go back to, for us, with project

scarlet, this will be a generation that we launch with halo, which is one of our biggest console franchises not a new franchise but one that's been around for years last time we launched a new console with halo was when we launched the original xbox 18 years ago. so for many of us, having halo right there at the launch is going to be a really special time but the cool thing, as you said today, you look at games like fortnite, minecraft, they have become the pop culture landscape that's just around everybody games are as much part of the dialogue about what's going on in the world as any other art form and today we -- or yesterday we had 60 games on our stage. all of these games 30 of these games are available in our subscription service called game pass which gives people access to over 100 games both on pc and on console. so the discovery of all of these great new franchises is, you know, really easy for gamers and you never know when the next great hit is going to come from.

a game like mine craft created by one guy, posting it up on the internet and it becomes a global phenomena to studios with thousands of people creating games. the amount of creativity is just unreal >> phil, the spectator element of this. the fact so many people are basically engaging just to view and just to watch, i think it's really, really fascinating and maybe overlooked by the investment community do you see opportunities to leverage that into future business in some capacity that hasn't been discussed yet? >> absolutely. when you think about the engagement that somebody has with the play of video games, the art form of video games, you're right there's actually more hours spent today watching people play video games than actually playing the games. and both of those numbers are at an all-time high it's not like one is cannibalizing the other. somebody is away from their home they have their phone, they have a screen they can log in. you see these celebrities getting created. i'm an old guy i go back and i think about the launch of something like espn, a network that was about watching

sports highlights. and people, is that really going to work? i think you can see video game viewing to be similar to that. it's not always about playing. and also for us, it is the way that people are finding their next new game. they go online they go to a site like twitch, mixer, youtube and they are looking -- that's their discovery mechanism. what are the people, what are the screamers talking about? we had a great launch with our partners at electronic arts, a game called apex most of their promotion for the game is with streamers online. they had an incredible launch of that not only changing the way we market but the way you manage the engagement of the game with customers over time. >> it still makes some people shake their heads, phil, but people are figuring it out quickly. thanks congratulations on the launch. please come back soon. always good to have you. phil spencer, head of gaming at xbox at microsoft. "squawk alley" is back in less than three minutes we're at sessions highs, 2904.

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look at shares of beyond meat they are up another 23% right now.

gaining more than 160% since the debut. that's not right 600% since the debut since the ipo price right there. my god, it just keeps going higher >> it's on pace for the third best day so far. the best day was the ipo day, up 160% it had another great day in june up 39 something. it's been an incredible story on very marginal increases in revenue guidance revisions, but we'll see where it goes. meantime, tomorrow, don't miss our coverage from the code difference in scottsdale, arizona. and kara swisher will be there jon fortt and myself live at 9:00 a.m. eastern time really, i think, it's going to be the 50 code where full-blown tensions about big-tech breakup and regulation will be front of mind other years it's been about new projects or interesting innovation but that's going to be on everybody's agenda to talk about. >> i'm sure you'll have some

amazing interviews and generate quite a number of breaking news headlines while you're there i'll be manning the desk here. >> yes, not bitter at all. i got it meanwhile, session highs, even though goldman has a note out saying they do not expect a rate cut in 2019 so watch the afternoon session and let's get to the judge >> carl, thanks. i'm scott wapner stocks are surging bond yields rising as the tariff threats against mexico won't happen is another run at record highs possible it's 12 noon this is the "halftime report." >> stocks rally on a u.s./mexico trade deal and looks for progress on a resolution with china. the federal reserve is meeting next week. and president trump is targeting the committee again. >> they certainly didn't listen to me because they made a big mistake. they raised interest rates far too fast >> two big deals being emerged today. we'll debate t