right now. and we just launched a program called purposeful recognition. and it is teaching managers in a very important skill that they have not learned, how do you recognize people the right way with earned recognition? i hope people go to -- >> we have great management in comcast across the board we could always use -- >> i'm not saying comcast has the problem. a lot of other people do. >> join us tomorrow. "squawk on the street" is next ♪ good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. plenty to watch while we wait. including huawei ceo eon our air more draghi fallout, two year yield to a one week high today

road map begins with bracing for the fed. stocks near records, the market meltup continues as the president weighs demoting the fed chair, let's see what he does. >> head winds for facebook, the tech giant's cryptocurrency plan greeted by a wall of regulatory and data concerns in washington. >> and huawei ceo downplaying any revenue impact of a u.s. ban on the company in an exclusive on cnbc. federal reserve policymakers will conclude their two day meeting today. a policy statement will be issued at 2:00 eastern time. if the fed does not cut rates today, investors will look for indications it may do so later this year. powell will hold his usual post meeting news conference around 2:30 eastern we'll bring you live coverage obviously. generally i would say, jim, consensus is no cut today. but maybe clearing the decks for as much as 50 next month >> i spoke with lance fritz last night, union pacific

he said something very interesting, he said, listen, he supports tariffs in principle. but understands that -- please understand that everything is slower everybody is cutting back. and if you listen to him and you say, we got to monitor this, if you were powell. we have to monitor this. this is -- disconcerting and if we go to 10%, which is what i understand is going to happen on the 300 billion, we will be ready. but at the same time, i think he has to castigate at one point the president saying, the only reason we have to cut is because the president is -- does this tariff work. the president says we have this national policy like europe, like, you know, draghi has national policy. chinese national policy. this guy is insane he's not playing by the rules. now, at what point does he say he's insane meaning i got to remove him this is a very odd moment. and when i hear the president, the president is directly

threatening powell as if he's an employee as he's -- you're fired. i've never seen anything like this it must be for powell, i think powell is a very reasoned person he's never seen anything like this >> nobody has ever seen anything like this. >> but if you're powell, you're not an employee. it is like na, na, na, na. powell is insane. >> there is not the ability of the president to demote even a fed chair. again this seems to be somewhat -- >> any other chair would need to go through standard confirmation process. >> i agree but -- >> constant grieving on the part of the president is not something we're accustomed to seeing. >> no. if you're powell, at what point do you say, all right, i'm out of here, you want to do that stuff, you want to ridicule me sever si every single minute?

>> you hope that's not going to drive him from office. >> everybody else -- >> throws his hands up >> there is a lot of other vacancies. >> the president gave powell optionality with the xi phone call and giving the market a boost ahead of the decision. >> he should wait. xi calls the president and says we're concerned that things are deteriorating. which is what he said ahead of buenos aires president does it. goes to a meeting. president is -- president goes to the town halls, and there are people, even the farmers, soybean farmers, he polls positive with. the president is -- i don't believe for a minute that the polls we saw yesterday, this democrat wins, that democrat -- we saw that already last time. people with the base -- base doesn't take that call i'm in awe of the man's -- the love for the man's strategies even though i think that the soybean farmers probably have been hurt the most in the country.

and they're polling very pro trump. so i think trump feels way too empowered and almost -- >> he's going to get a good deal out of the chinese i think the fear on the other side is that you'll eventually just accept a deal, say it is great, but it really won't be changed very much, a deal we might have gotten anytime along the way. >> i don't think he wants a deal i think he commits to people that the deal is bad and the tariffs are good >> if you end up being right, powell may be waits one. you got to figure out this will last a long time. >> this is a siege >> what is the difference? >> a siege is that the president thinks that tariffs are very good and the more you raise them, the more business comes back to this country which means the more the gdp goes up i want to distinguish between -- this is the alternate facts world of the president and we can sit here -- >> not alternate facts, they're not true. >> take u.s. steel, we know what

happened with steel tariffs over a year ago today, they guide below. softer demand. lower prices two blast furnaces here and one more in europe we decided, can we agree the tariffs are disinflationary? >> they are. they are not a lot of things are happening the way they're supposed to. they are happening the way dan dama d'amico said former ceo of new corp. -- >> very much in favor of tariffs and protecting the steel industry >> it is hard. the economy has slowed it has -- >> you're listening, you're calling for a continued, if not increase in the tensions with china. you also have continued to say you believe there is a real chance we'll put tariffs on automobiles coming from germany. >> that's what they're trying to -- they don't know how to do it >> it would be a -- you would expect growth will continue to slow especially if you actually get a trade war with europe. >> they don't know how to do the

trade war with europe yet. they're concerned. concern that they still are allies >> what are you doing? >> nato. >> nato. >> yeah. the germans don't kick in. look, i get -- i do my reporting, i hear things that are new and different. >> i know you do. >> i get the 10% on 300. you just do it and then if they are -- >> don't go to 25, go 10. >> don't go 25, we go 10. >> on the full, on every chinese import -- >> yes, we get to 10 -- >> we start a 10, if they don't continue, if they continue to steal, we had the president of huawei, the ceo of huawei, you know what they think of huawei that it is a criminal enterprise you know, you're not -- they're not talking about having the revenues cut -- they're not talking about the revenues cut to 30 -- by 30 talking about the company going away. >> all of which leads us back to today and the fed and --

>> powell is living in a conventional world this guy is -- the president is playing with nuclear weapons and powell is playing with, like, you know, m-14s. powell -- >> hate when he goes to the weaponry. >> the president is the yankees and he's the toledo mud heads. >> really? >> yes that's what's so weird, if you're powell. >> do you -- >> really quick, before we button this up, what would happen to stocks if powell were removed? >> probably go up. >> you think they would go up? >> new guy -- >> who is going to replace powell >> look, if -- >> it is getting closer and closer. >> why are we even doing -- what he doesn't realize is that you have to think the other way. which is, oh, my, the president is saying why not and he'll figure out a way the president is not saying i like him no matter what. he's not talk about the independence of the fed. saying the fed is independent, i love jay powell, how do we get him to be a fed member

>> this is happening right now >> other -- i believe other presidents have had their second term or ability to get it, i'm sure he's thinking of george h.w. bush, for example hurt by the fed. >> yes, i do think that. trying to keep the fed from ruining his national economic policy he loves draghi. draghi is complicit with merkel. they love draghi they love draghi because what he did was figure out a we to steal a lot of our business and we want to steal it back. we want a dollar weaker, we need -- >> we still have -- >> i wish none of this were true i have great respect for the office the federal reserve and jay powell i think neither is shared with the president. >> seems to be pretty obvious. >> maybe the guy who is the grounds keeper at the bedminster one. >> say again. >> bedminster trump national i know the president has a lot of respect for that man. greens look good >> that's what it's about, keeping the greens fast.

okay meantime, facebook and its new libra cryptocurrency facing a backlash from capitol hill house financial services chair maxine waters asking the company to halt development of libra until congress and regulators can review it. in a statement, she says, quote, with the announcement that it plans to create a cryptocurrency, facebook is continuing its unchecked expansion and extending its reach into the lives of its users. the market currently lacks a clear regulatory framework on day one >> look, we're -- this is another one where you go over every single aspect, facebook did everything it could to say this is not facebook it is so arms length it may be one day, market will make some money. it is this institution to help a lot of people become -- become banked they didn't explain it well. why not? it is hard to explain. i thought -- i said on the show that waters should love this because it is to help people who are unbanked

constituents and the country unbanked this shows you the hatred of facebook it is incredible facebook is despised by democrats. even though people say they lean toward democrats but -- >> i don't think they have a lot of friends in congress, period >> they don't. >> on either side of the aisle what made the point that this in many ways is going to be viewed -- should be viewed positively as a real olive branch or whatever you want to call it. >> it is really positive it is. >> they have time. it was a white paper not going to be like this thing is coming out tomorrow will be time for them to deal with any potential oversight or regulatory questions >> right >> the white paper -- didn't you think the white paper was hard to read? >> yes >> it is a very complex, very complex strategy and umbrella they created it is about taking -- empower people who are not empowered i would have thought that this

would be embraced. >> well, sheryl sandberg just made a headline a few moments ago. they're taking down 1 million fake accounts a day. her day. so that is not -- i don't know is that conducive to your willingness to share your money with them? >> it is absolutely incredible to me that they are -- that the facebook that we know -- the actual facebook just seems to be a screwup. but this thing is run by markets. got the mastercard, visa and pay pal. that's all you need. >> i know. it seems that -- >> when it comes to all these things, the unintended consequences, things we'll be talking about three years from now, look what they ended up doing with that. >> who knew? >> like creating -- >> i don't know. i don't know >> i thought this was good >> social media was supposed to be great for the planet. now people argue otherwise. >> this is a bank under this new -- this plan, okay

why is that bad? why does maxine waters not want everyone to have a bank? everyone needs their own bank. that what's pay pal does that's what this does. i'm defending something facebook is doing can you imagine? least popular position in the world. >> you take a lot of unpopular positions. >> why not >> i like it >> i like adobe too. >> we'll get to adobe. in an exclusive with huawei as well, his company grapples with the challenges surrounding this u.s. ban and stay tuned for interview with jeffrey katzenberg and meg whitman live from cannes lions we'll take another look here at the futures. coming off the best day in two weeks. fed decision and just a matter of hours don't go away. [leaf blower]

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the ceo of huawei speaking exclusively to cnbc and downplaying the impact of the white house's ban on the company. despite expecting $30 billion less in revenue for the year he says huawei's business is still strong in china. deirdre bosa talks to him.

>> translator: maybe even more they can't for all these years, american suppliers have contributed to huawei. if we do not buy from them when we can, that will be a blame on our conscience but however we are not to blame. now there is a restriction on us to buy from them actually until today we're still placing orders to american suppliers. they just -- those suppliers have to ask approval from washington if they get approval, we can still buy from them. if they don't get approval, we have to find other ways. >> sounds like he's counting on exempti exemptions. >> good luck >> track record so far is not in their favor. >> they don't want -- they don't

want huawei to talk. they want huawei to die. this is unbelievable, the disconnect between this very kind gentleman, and the people in the administration, who regard -- they have documented lists of what huawei stole from this country, this country, this country. you talk to people in the communications business, in our country, they all agree, they like samsung samsung is being anointed behind the scenes because ericsson and nokia aren't fast enough samsung is a friend. they're willing to make samsung even richer. >> however, i mean, the president has tied huawei's fade-in with the broader talks over trade with china. he's done that in answer to a number of questions. >> if we were to impose tariffs on the europeans, would they be willing to play along on huawei? >> not yet not yet. merkel is not willing to go there. they don't know how to deal with merkel

merkel is wily and not behind the scenes playing ball. but they don't want to seemingly take on germany. they do not yet want to take on germany. they want to do this serially and really -- after the big victory in mexico, their debt company and that gentleman, i don't think they have -- that gentleman has any idea who he's dealing with that's the whole thing he keeps the long game -- the president is playing the short game >> always difficult to know what huawei has or has not done the first documentary i did on chinese cyber espionage, many years ago now, we cited nortel i had a gentleman from nortel who saw the chinese in their system years ago, many years ago. nortel went bankrupt and out of business in part because allegations were that huawei had stolen their technology. that's long time -- >> nortel's technology was superior to nokia. problem is that nokia and ericsson dropped the ball.

and the price for their product is twice as great as huawei and it is half as good as -- >> rich mcginn was killing, except for the brazilian contract they thought that would come in. holy cow, i remember that contract like it was yesterday didn't come in look, i just think that huawei should be more worried that gentleman seems to be very confident. the president doesn't like huawei the president, when he doesn't like it, he doesn't stop he's like a -- he's new. he's different help me, david. >> yeah. he's like the terminator, i guess, is what you're trying to say. he's relentless. >> yes, like the terminator. terminator one or two? i don't know >> 3,000 or the -- >> the one that ends with nuclear -- with the end of the world? >> that's terminator one john -- yeah, no, no this is terminator two

>> they're all hiding in them. >> we're going to get a lot more with the exclusive with the huawei ceo come up in the next hour and the thoughts on the trade war, the relationship with google and a lot more. when we come back, we'll get cramer's mad dash, count down to the opening bell here. dow erased 90% of the losses from may and futures up again back in a moment through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from using feedback to innovate... to introducing products faster... to managing website inventory... and network bandwidth. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

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we celebrate hump day as we like to call it here, middle of the week, wednesday. adobe reports earnings, they were quite strong. >> yes. >> we talked a lot >> look at this breakout don't you see this head and shoulders. you think it is shampoo. this thing is happening. >> it is happening what i like to do on adobe is go back a few years, the accretion of value has been nothing short of amazing over a period of time. >> look. this has become a company that was, if you look at the long-term, this was a nonsass company, it was a -- on prem company, some subscriptions, it then -- the boldest man, he actually breaks ranks, and says i'm going software as service, going cloud. and initially you can see the little dip, right here, people say, wait a second, that may not work i believed him right then. boom, this is for -- david, your kids, if you went to school right now, and you start --

elementary school, their own spark, get hook on spark, this great creative -- this is the golden age of creativity after that, you move to gravitate to all of the others people think this used to be just a document company. david, it is the most powerful e-commerce company out there other than dare i say sales force. and believe me, the stars are aligning sales force, maybe amazon, again, against, but not necessarily, these guys and microsoft. david, these guys submerge with microsoft and would be game, set match. this is the company that is pulling it all off they have a great ai thing you can draw with. i love these guys. i love them. i love them. i love them. >> 25% top line growth. >> can you believe that? see how big this company is? this is not a little company this is not, you know, zendesk this is not ring central, david. >> we have an opening bell coming up we don't want to miss. re."onheh us on "squawk t stet this is my headquarters.

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the opening bell in just over a minute's time. we await the fed decision and just about 4 1/2 hours we talked about china trade and huawei a ton of sale side calls you read tusa is on a roll taking unit by unit on ge all week long today. today it is aviation. >> he continues to question the accounting of aviation i thought this last i'm a big tusa backer. you did work on the aviation cash flow. i believe it is being driven by strong passenger growth, higher engine authorization i don't think they're making it up i think they're being incredibly honest and tusa is really questioning about how the business is running off. i don't know i'm troubled >> yeah. >> i'm troubled. i think their numbers are real >> they're going to have to make

payments of some kind. >> that was -- >> when it comes to jet engines. >> do you know, when i think of people, i think from -- as a competitor, or other companies that supply, or the big companies, no one thinks that ge is an outlier or doing anything wrong. no one thinks that larry culp is hyping the company he's the ceo this is one i start saying, i think tusa made his point. he has nothing new >> we'll talk about that in a moment the opening bell, s&p at the cnbc real time exchange. big board, the treasurer of the commonwealth of australia. at the nasdaq, health equity, provider of health savings account. tusa's line, we see a pattern of numbers adjusted several different ways, distorting what we believe the company would look like as a fully loaded

public company >> yeah. at the crux of what he is saying is that the free cash flow isn't there. i think that is an argument that can certainly be made for powell i think the aviation accounting was never wrong. >> okay. >> look, i -- there is no reason really -- culp has come out. wherever there is weakness, culp has come out and said we have weakness where there are real problems, culp has said we have real problems times ten one thing that no one has ever questioned, is the accounting for aviation accounted for turbines in ways we can't swallow and turbine business is terrible because the whole country -- there is a great article today, lead story, new york is getting away from 2050 they're going to be in -- new york times," carbon neutral saying sar n ining they're not e

turbines i wish they would call it turbine. turbine is something that is -- we know that's like a hat. >> yes, you call it that >> i speak their language. >> you speak philadelphia. >> i speak turbine this is a big point, culp, i'm saying culp is an honest h hahnemahaman wh is right about the cash flow and they're questioning culp's honesty. >> to your point about of a nation general, southwest does guide above for the year solid demand they extend the max cancellation through september 2nd. we have seen american lift ticket prices. >> yes i thought it was interesting southwest hit 52 over the weekend. it should be higher. i think that this story about the boeing plane and how may not be strong enough, fiscal strength of pilots, that sounded like a -- >> do a crank of something manually that you might need to. >> got to find out more about that. >> that does not seem -- got to

get the full story there is phil around >> phil is around. >> we'll hear from him later boeing got the first max orders since the crashes. from the owner of ba 200 737. >> really unusual. it was a huge win, the stock immediately lifted wow. surprised they got that. they needed something, they got something. something bigger than anybody thought. i continue to believe the plane is going to be back. and southwest air should be higher the airlines have been terrible, except for united. and united i think is really -- munoz, has done a great job. has done a great job easy comparisons >> what is the old line, planes before trains? i see the cast freight index, jim, down for a fifth month. >> i know. >> year on year. >> i know this will sound ridiculous, but the weather is really playing havoc the weather is -- it is -- do you know lance fritz said to me last night, the ceo of union

pacific, maybe -- he used climate change he said there is climate change. that in itself is like to get you on anti-creationism. >> most ceos in the -- of major companies believe there is climate change and are doing things to -- >> what he's saying is we have to start changing the way we do business because of climate change they have to find ways to make it so tracks aren't under water all the time the weather was really bad the weather has been terrible in the country. like switched. we're in a moment where trade is not -- trade and the weather are conspireing to make the numbers go down more than they would all the ag stuff that used to be shipped, that's off. we don't do that we don't ship soy anymore. we don't ship sand anymore because sand is local. we will ship oil as we drill more and more permian, because there is not enough pipeline ferc is a problem. ferc is still a holdover from the previous regime. president hasn't had a chance to address ferc yet >> we are rolling back missioemn

standards from powerer pla epla >> i interview all the ceos of the major utilities and they're not -- they fear if they do what he wants and a democrat comes in, it will once again right back to what obama wanted. they're not going to change. >> to the point you're making about new york, you got different standards and different places including california and then new york as well that are going to be demanding certain things that are in complete opposition at least to what the administration is currently >> some of the turbine decline is related to renewables companies -- big clients are demand renewables. google, demanding -- they all want no carbon footprint and this is something that -- geez, these executives eric lot of them are pretty sophisticated about carbon footprint they're not going back to coal they're not going back to coal

they're not. every coal plant that comes up -- >> natural gas >> well, there is also -- >> abundance and then -- >> wind. >> continued growth of alternatives >> renewables are real interesting is that tusa attacked ge, on renewables saying that even the renewable counting isn't any good. it is beginning to sound very much like the great white. moby dick. >> moby dick in. >> yes, it is becoming moby dick call me tusa >> all right, so he's ahab >> yeah. >> who is the whale? >> ge. >> ge is the kwhaewhale. >> an update from sprint and ge and mobile and dish. some reporting yesterday from bloomberg indicating getting closer to a potential divestiture of their boost mobile business. to dish. my understanding is that continues to move forward.

and perhaps you get something even as soon as the end of the week this is say very complex situation, though, not to be forgotten in terms of its complexity you're dealing both with significant potential divestiture and negotiating points that will go along with that you're also dealing with charlie irgan, somebody who watched him through many deals that did not happen, negotiating him in the easiest of times is not easy at all. in a situation where there is a fairly high level of complexity, where you have the department of justice looking over your shoulder saying, no, yes, no, that won't be good enough, one would imagine that while there is optimism in the t-mobile camp, i continue to hear it, they will get something done near term, we'll see we'll see. then, of course, you still got the question of the states themselves and including new york but others as well they're opposing the deal on antitrust grounds.

first hearing is going to be friday in the southern district. it is not about getting a temporary restraining order at this point to stop the deal. there you're going to have a status conference trial management, things of that nature nobody needs to get a tro at all for some time because even if you get doj approval, the fcc is already signaled its -- it is okay with the deal you still got the california public utility commission probably not going to be ready to approve it until august so there is still time to go on this the near term focus is honest divestiture, boost and spectrum and whether dish is going to get it optimism seems to be the key word here. hoping that they get something done in the next few days. but, man, charlie irgan, one tough man to deal with >> yeah, how about the fact that sprint is all the way back to where it was before that day, attorneys general going against them that deal i think will get done. >> you do? >> 5g. >> starting to hear a few

investors say maybe, just at this point, from the t-mobile perspective, is it really worth doing? >> really? >> wondering. >> ledger every day -- >> not saying much to us. >> the deal, the deal, not saying much what is he going to say other than the fact that the deal is going to close >> yeah. >> i think he's right. the president wants strong 5g, one of the main reasons why they want to shut down huawei they know that -- they got to catch up. >> they hit the right theme. no doubt that the 5g -- >> national economic policy. you have -- that's what the president has. national economic policy and -- >> who is standing in his way. >> fourth competitor, you don't are have to stand it up right away, they want the idea within a certain amount of time you really could have a formidable fourth competitor to what would be at&t, verizon, combined -- >> maybe one that would lead in 5g, which would be what they want and that's why they think

5g is a military issue, too, by the way. all these things i say are true. >> i know you think that they're insane, like it is some sort of -- there is no fighting in the war room scene of dr. strange love but it is not that i am not sterling hayden, just so you know. >> i hope not. i hope not >> flfluoride. >> yesterday, we had every semiconductor stock higher, every one of them, giving some back today have they put in a new low >> i think that they're so deeply rooted in china, that they can give it back. obviously the one i follow closely is nvidia. i follow lam research. those were up the most, percentage wise. they somehow have become chinese. big chinese business it is autonomous driving, it is artificial intelligence, it is crypto, which, of course, has gone down. it is gaming

and because chinese gaming does matter, this stock has become linked with that then the big thing, this is why i'm bringing up nvidia, david, this is about the deal closing and whether there will be an olive branch, allowing the deal to close do you think it is a possibility? >> it is a possibility i don't know specifically. there has been a lot of concern, samper is the antitrust regulator. that's been the key question here will they hold it up qualcomm and nxp may have been just its own situation sort of stood alone. >> right. >> we'll know better if in fact they do -- >> jensen huang, it was a lot of different products that if you look at -- if you look -- undo the product, you'll see in the nvidia piece next to the melanox

piece, and jensen huang tells me would favor this would the chinese cut their nose off to spite their face? >> i don't know. it is being watched closely. as you might imagine, any ceo is considering a deal in which there would have to be antitrust approval, whether as a seller or buyer, is going to think long and hard about it. >> this is the one if you want to know -- >> if you think -- the administration is not even focused on this, at all. >> they won't disapprove it. they won't approve it. same with nx -- >> they'll hold it up? that would be so bad that would be very bad if they hold it up nvidia does not go up if they just do that >> yeah. >> amazing what everyone is talking about, how broadcom all the way back almost to where it was before they had to short fall the group did get legs again but it is all because of the tweet. not because of the fundamentals, which are just okay without china. >> sure. >> let's get to bob pisani with

the dow up 65. hey, bob. >> hello, everybody. this is very indeterminate open. it should be given the run-up we had and the anticipation on the fed meeting. sectors, you see here, not too much going on overall here we have got banks, semiconductors, industrials doing a little bit better. consumer discretionary stocks, energy stocks. a bit on the downside after a great run-up the other day here you see, this is fairly indeterminate open overall here. this is one of the toughest setups for a fed meeting i can recall in a very, very long time just consider what has happened running into this thing. so we got a dovish european central bank, widely commented on, we have a fed that is expected to be dovish or signal dovishness we have china trade talk optimism starting to get rather extreme at this point from the other side and then we have markets, 1%, from record highs. 1% from record highs here. just take a look at the s&p 500. we had a mini meltup going on in

the last several weeks here. right here to that 1% high. just off the 1% high we had it not on fundamentals, we had it on anticipation of trade talk optimism and we also had it on anticipation of dovish central banks which so far has been materializing. that's why we have got this. the risk is very much to the downside now powell has to thread that needle in the middle, economy is strong, we're vigilant, and we are ready to cut rates, or imply they're ready to cut rates at a moment's notice. that's a very fine needle to thread and the market could go down very easily, just on a misplaced comment. how about fundamentals, how about commentary from corporations we haven't talked about that a lot. just what happened in the last couple of -- last 24 hours two big companies out making comments lazy boy had comments this morning here they had guidance earlier in the month here, basically saying things would be down stock has been down. they talked about concerns about tariffs and geopolitics.

u.s. steel, steel companies, new corp., talking about softer demand out there overall as well as trade issues. the softer demand is on fundamental weakness, not just trade weakness more going on here than trade and tariffs. they had a tough time. look at how the stocks reacted today. lazy boy down. there was -- up, i'm sorry guidance early part of june they gave downward guidance, the stock has been down in the last few days u.s. steel up a bit today. don't kid yourself about what is going on here. this stock was almost $40 in the middle of last year. these steel stocks have essentially gone nowhere but down and essentially, very, very tied to the overall trade issue. waiting for slack tomorrow that's a big story, right over here talking about it. one of the biggest ones this week, what we're seeing here is continued upward revisions and some of the numbers for these

ipos we'll keep an eye on that. the ipo continues. back to you. >> thank you to the bond pits as well, rick santelli at the cme in chicago. good morning, rick. >> good morning. lots of fascinating trading in the fixed income space o, of course after the big u-turn yesterday, intraday, 181, now it is hovering at 1.89, up a couple of basis points the ten-year, one of the only coupons on the curve yesterday that actually made a new cycle low. we're not talking by much. one basis point. look at the three-day chart there. you see 2.06 is the settlement price. we traded down as close to 2%, 2.01 and change f you open the chart up to may 1st, you'll see what i'm talking about the steep drop in yields, then you see kind of that little bumpy part to the right. well, 2.06 yesterday

2.07, basically twice. very technically significant one basis point make all the difference in the world, all depends how your models and triggers work. but i would say this level continues to hold. of course, today, will be a big day. if you look at three-day chart of bunds, they clipped off nearly minus 33 basis points yesterday. 32 and change to be exact. now they're minus 29 what is interesting is they had a 30-year bund auction, yields went for about half what they did the last auction so these low yields are really going to continue to take a toll just look at the banking indices in europe. finally, mario draghi's drop here is a three-day of the euro. it recovered a bit, flirting with 112 but some damage done when many thought the euro could get up as high as 1.14, carl, david, jim, back to you. >> rick, thank you very much. despite a strong economy, charitable donations fell last year by the most since the financial crisis on the heels of the new tax law. americans gave just shy of $428

billion to charity in 2018 according to a new report by giving usa total contributions rose less than 1% from a year earlier, not enough to keep pace with inflation. and giving by individuals down by more than 3% after four straight years of growth maybe somewhat tied to this is bonuses. nonproduction, private sector bonuses in q1 down 24 from the big boost we saw after the tax law. >> just so many things happening all at once there. in that and salt, people keep talking salt as a reason -- >> want to look deep near the numb numbers if it is possible. they're paying more in taxes, chose to cut back on their -- >> that's what i keep hearing. and i would love to be able to quantify it. i've not been able to. >> we're very charitable people. >> really? >> yes we are. >> i thought you had malice

toward all and charity toward none. >> i think it is the other way around. >> house divided stands? >> yes, it does. >> when we come back, a pair of heavy hitters at cannes lions, stay tuned for an interview of jeffrey katzenberg and meg whitman. dow is up 42 back in a moment

obviously, a huge week for facebook, 185 and change here. we take a look at the faang complex this morning dow's up 53. w we will get stock trading with jim after a short break. r. ♪ because a vision softly creeping ♪ ♪ left its seeds while i was sleeping ♪ ♪ and the vision ♪ that was planted in my brain ♪ ♪ still remains ♪ within the sound of silence ♪ in restless dreams i walked alone ♪

♪ narrow streets of cobblestone ♪ ♪ when my eyes were stabbed ♪ by the flash of a neon light ♪ ♪ that split the night ♪ and touched the sound of silence ♪

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[ sigh ] introducing an easier way to move with xfinity. it's just another way we're working to make your life simple, easy, awesome. go to xfinity.com/moving to get started. time for jim and stock trading. >> positive note by goldman sachs. netflix. highlights where they continue to believe that new production, new and different original films will drive sales and that, therefore, it's game on. and i don't want to disagree with this. i think it's very positive and they continue to remain a buy. we haven't heard a peep out of the netflix until now. i like it. >> originals now nearly half of their amortized content spend. >> now we are maybe a little less worried about disney plus i think they can co-exist. >> it's going to be a lot of

different bills people are paying. >> still not -- >> let's see what the world looks like when disney is out. >> buy roku. when you hear about that, you buy roku and roku is like heavily shorted. >> not like beyond meat. >> what's on mad tonight >> wicks, which is very much a part of this -- i have used wix to design a website. part of this shopify, wix, adobe world where you can make your little enterprise look every bit as big as a fancy department store. and that's kind of what you use them for a restaurant, make it look like john george. you can say, oh, it looks like -- >> or san miguel >> yes, five michelin stars. that's president trump five michelin stars. >> i think it is only four. >> i think the trump national is five >> jim, we will see you tonight. "mad money" 6:00 p.m. eastern. when we come back, jerry

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>> good wednesday morning. welcome back to "squawk on the street." sara eisen is with us from the cnbc evolve summit she will be talking with the former ceo of aetna. meantime, a check on the major averages here. typical waiting game ahead of the fed decision in about four hours. our roadmap begins with that crucial fed rate decision. the market melt up continues as the president reportedly considers demoting his fed chair. >> plus, is short form the future of streaming? jeffrey katzenberg and meg whitman will join us from caanes in a few minutes. and facebook's cryp cryptocurrency plan facing data and regulatory concerns in washington first up, fed reserve policymakers will conclude their meeting today. if the fed does not cut rates

today, investors will be looking for indications that it may do so later this year, potentially next month fed chair powell will host a post-meeting news conference at 2:30 eastern time. we will bring you live coverage. steve with us from washington on fed day. steve, it's been typically not kind to equity prices the past few sessions. >> yeah, that's right. the fed doesn't like to move the markets with its statement it prefers to go in for a lot of debatable reasons with the market pricing in. but this is especially an interesting meeting, carl, where there is some probability out there right now, it's down around 21%, that the federal reserve cuts rates this time but usually they go in, you know, when there is no rate cut expected it's down around zero. obviously, hopes are high among many that there is going to be a rate cut come july and we will see the teextent to which, if ty don't deliver the cut today,

they signal a way that satisfies markets and especially equity markets. >> steve, in terms of the likelihood of things we could get, there is different scenarios. one is they remove patience. one they change the dot plot somehow, maybe close qt early. are we getting that granular yet? >> yeah, the word patience is probably not long to the world it made its entry into the world in january it survived three meetings or six months or so it was not a long period of patience i think they downgrade the economic outlook you made an interesting comment, carl you said they changed the dot plot so the dot plot is not a function of policy as we understand it. they don't get together and decide what the dot plot is going to be. it should be the way it's been told to us the result of the median forecast of 17 different

e members. that is the problem, that it's taken by the market as policy, but it's actually just a derived number from the forecasts or the separate forecast of the fomc members. that said, no fed member in the march forecast, forecast to rate cut, is expected that some will with a very interesting question as to whether or not the median becomes a rate cut or just a few end up doing it. >> steve, to what extent, if any, do you hear from the fed their response if we get one from powell to this relentless pressure from the president on him to cut rates or move back to quantitative easing? it's so unique, this situation i just wonder, is there an expectation of a continued response are they concerned about it undermining their credibility? >> they are certainly concerned about it undermining their credibility.

they wish it wouldn't happen they certainly expected it to happen at some point when it initially happened it was kind of mild and they thought maybe they dodged a bullet i don't think they felt there would be this unrelenting pressure on the fed. and then you have this extraordinary development yesterday wherein response to a question, the president said we'll see, which i'll tell you how different newspapers said it was mounting pressure. another one said it was gathering pressure i wonder, david, if you would call it a direct threat to the federal reserve that if you do not cut rates, then i will consider or think about removing you. >> yeah. well, listen, it never stops i think there have been some expectation that perhaps it would come to an end, that powell -- but it just keeps going. we will follow it as part of this overall story, steve. >> i think it has to raise the bar for the fed to cut i think the fed has to think

about its credibility and the idea that it will be seen as bending to the women's of the preside -- whims of the president and they believe that's hurtful to the fed's ability to create policy >> steve, thank you. of course, you will be joining us throughout. we will be there covering the press conference as well. let's get to breaking news on the china trade negotiations. caleb has that for us. >> we are getting information on the run of show that will take place before president trump meets with president xi next week at the g20 and those talks that he said yesterday are going to start today ambassador robert lighthizer, the top trump administration trade negotiator, is telling the committee he is going to have a phone call with his counterpart in china then he, secretary that mnuchin, the treshary secretary and chinese officials will have a meeting before the president

since down with president xi he said it's unclear when formal negotiations will restart, but the lines of communication are open and they are ready to continue this discussion guys >> all right a lot of headlines popping on that one we may come back to you. meantime, let's get to julia borstein live from caanes with two special guests good morning. >> good morning to you, carl it's afternoon here. we have two of the biggest names here in caanes we have meg whitman, and jeffrey katzenberg, chairman -- who is getting a big award here in caanes thank you for joining us could be making big news here, announcing that your mobile video service is launching next april has just solidified major advertisers. tell us about these ad deals and what it means for the company. >> we have an add-supported platform we announced six launch partners

and our category exclusive partners png, google, ab, pepsi, walmart and broeg progressive. >> you did it. >> tell us how much money you secured and what this says about your path to launch. >> we have secured about $100 million of advertising revenue against a budget of 150. we have $150 million of ad inventory to sell. as i said, we have done them in categories cpg is png insurance is progressive and so we have about two to three more categories to go. of course, the studios, who are investors in our company, are also interested in buying advertising. so we're trying to put this together but i think two to three more categories. >> so definitely unusual to have these ad deals locked insofar ahead of a product existing. jeffrey, tell me how your conversations here around the

premium video products that you are creating reflect all the other issues that people are talking about here such as brand safety, concerns about privacy, particular particularly when it comes to the digital duopoly, facebook and google. >> the cmo of p and g and is the sort of gold standard setter said it on stage with meg and i in which quibi represents for him a singular opportunity, one, to reach this millennial audience that's getting harder to find in a safe, well defined environment in which they can tell brand stories we have some great innovations around the way commercials will play within quibi. in the same way we have long form stories told in chapter, they can tell a one-minute story in four 15-second chapters

in in network tv you get 7 1/2 minutes in an hour, hulu 10 in an hour, quibi it's in two minutes. he says if we have gotten it right for him as an advertiser, there is no better place to be and so having that endorsement, having him come in with us as well as these five other of the biggest most important brands in the globe is just a real boost. >> do you see the challenges that facebook and google are dealing with both in terms of talk about regulation, people calling to break them up, privacy regulation, does that provide a bigger opportunity for you and your ad business >> i don't think so. i don't think anybody is talking about breaking up quibi yet. we are doing all right here. to be in the same sentence with google and facebook, we are already a winner here.

i don't think so i think we are a very different flavor than them i think the issues that they are dealing with really are, you know, meg from the outset has said things around data, the use of data, the -- what do you call it >> animous on data is things she is taking a very, very conservative path to protect privacy. our advertisers have responded and understood in the end, a great environment is valuable for them. >> i was going to say one of the things mark pritchard and the other cmos like, yes, we are a brand safe environment we curate everything that gets on the app it is during the lean forward on the go moments for the millennial audience, which is hard to reach, but also they are going to be co-creators of this platform they all know exactly what they would do if they had a chance to do a new streaming platform from the start, and they have been

helping us make a great platform for advertisers as well as a great platform for consumers. >> you recently announced your pricing. $4.99 for ads with the subscription service $7.99 without adds a hair less than hue lu lieu how do you see it competing especially with a concept that has never existed before >> 75% of our customers will pick the $4.99 supported it's a low ad low. our customers are millennials. and dollars matter to them but we give the opportunity, if you want the $7.99 version i think your question is how do we know that people will sign up and pay. we won't know until we launch, but we have incredible content with a unique viewing experience that's mobile only, targeted to a use case that doesn't have this very high quality hollywood style content. so, you know, you never know

until you launch we are encouraged by the informal feedback we have gotten we do user testing every single week with the app and there is some enthusiasm building. >> since you set the stage almost two years ago, the landscape has changed. we have apple tv plus. you have disney plus getting ready to launch. of course, you already have espn plus and we're still anticipating that there will be launches from nbc universal with ads. warnermedia is going to launch with ads, without ads. the landscape changes all the time is to making it harder or will to make it harder to continue to secure the highest quality content? >> here's what i'd say all the folks you mentioned are doing long form living room oriented content we are doing quick bite content, short form everything on the app will be under ten minutes. there will be long form stories in chapters. these are quick bite contents for a different use case this isn't you get home at 7:00

and you start watching uibi. you are commuting, waiting for a starbucks coffee, at a doctor's office we know people are watching 60 minutes a day. we are expanding that pie with a real alternative. >> jeff, from your perspective, all the companies that invested launched their own services. depending how you think about it from a subscriber standpoint are competing for subscriptions. how do you stay ahead of that? >> i have to say the wonderful thing about this, julie, is these partners have been supportive since day one they continue. they see this as incremental they don't see it as a zero-sum game that we are competing i don't think anybody would suggest that the television ecosystem is competing with the music ecosystem. you know, what apple and spotif do in music you don't say

instead of netflix or amazon or hulu it's just a completely different use case our belief from day one is that there is about to be a third category, and that category is premium hollywood quality content, hollywood quality storytelling on the go on a mobile device. and so what happens, the battle in the living room for the television set and the disruption that is going on around that, again it's amazing to step back and watch it. thrilled we are not involved in it we're in a white space that is our own to lose. >> and do you think that there will be other players that jump into this space, especially as all your investors launch their own verges of something that's more probably akin to a netflix or a hulu? do you see them becoming - >> listen, if we are successful here, and we believe we will be, therele most certainly be competition. three major networks at first. there was netflix and these different competitors now. we will certainly have competition. we hope to be first.

we hope to define the category and have a first mover advantage. >> so much consolidation in the space. there is speculation that more consolidation among the investors, how does that change things >> so far it hasn't. and i don't think there is anything that we see on the horizon right now that does anything other than, frankly, put more wind in our sail, whether it's 5g that's coming on to this. the enthusiasm, and you have seen this the last four, six, eight weeks, julia, an avalanche of talent and projects and ideas. i feel like for six or eight months we were kind of pushing that bolder up the hill. it feels like we have gone to the other side of it now and this thing has taken off and the quality of talent and story stellers and filmmakers that everybody now wants to -- we were submitted 185 projects last week. >> and meg, just give us a sense of how the tell co is going to

impact you. >> remember, watching video today on your mobile is good i think 5g helps it be great i think naturally what 5g does is make video on your mobile more attractive than it is today. of course, our offering will be great for the tellcos. they think it highlights their technology innovation. >> a lot of change coming. meg whitman p jeffrey katzenberg, thank you for taking the time to join us here >> thank you for having us in the middle of your own personal hurricane. >> windy here. guys, back to you. >> all right windy but beautiful. thank you. let's get back to sara she is at the cnbc evolve summit right here in new york city. not nearly as nice and caanes. what's next on squawk in the street. >> yeah, hi, good morning. we are here at the evolve conference at cnbc talking about corporate leadership one of the headliner speakers is

mark bertlini, former ceo of aetna. he sold this company to cvs the end of last year, we will get an update the promise was it would help transform the way consumers get health care, but the stock is under pressure and skepticism has risen on wall street we'll be right back live from the evolve conference on cnbc with mark. my degree from snhu has helped me tremendously. the flexible class schedules allowed me to go to work full time, run my catering business and be a mom and parent.

when i reached this accomplishment, it was like, it's here, it's happening, it's now. we at southern new hampshire university are the ones who succeed. we are the ones who break through.

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leadership and transforming businesses in lower manhattan. i am here with one of the featured speakers mark be bertolini, the former ceo of aetna, currently on the board of cvs health he got a very warm reception from the audience here even gave out his email address. we need an update on the cvs aetna deal and the status of the new company. since that deal closed last november, the stock has lost about a third of its value what do you think has investors so concerned >> i think getting a better understanding of what it is the two companies are trying to put to the there was recently an investor conference this that i think answered those questions, like what do we intend to do and what do we think. i think that's a baseline. the next big step is, you know, executing against that. >> how do you envision the combined company when you made the deal with

larry merlot, is it starting to look like what you had envisioned >> we are a ways away from that. this is a complex integration. the idea is how could we get closer to community, how could we create for individuals in the community easier access in their homes and in the community to care that is more effective, cheaper, and has higher value from a quality of life standpoint so that requires the term i like to use is place making how can we create in the community a place where people can gather to get what they need in the way of their health because what we're seeing now with 60% of the american public $400 away from a financial disaster and the next 24,000, health care is now pushing people to the limit. and if we can do it better, cheaper, and more conveniently in the community, then that's going to be a value to those consumers. so how do we use both the cvs

assets and aetna assets in the community to bring more to the home and more -- and away from the medical industrial complex where the pricing arbitrage is so powerful and just doing infusion in the home. >> and cost? >> yeah. >> part of the concern is regulatory scrutiny. putting under one roof the retail pharmacies, the pharmacy benefits managers, the insurance business i mean, how do you explain what we are going into it on a bipartisan basis and whether politicians will be looking into it >> it's not how we finance health care. it's how we deliver it and unless we get that investment right, how we finance it, if we finance a bad investment, whether that be a car or a home or a business, then we are going to get a bad return we are not going to get what we expect so if we were to look at health care as an individual right and issue that we need to deal with,

then how do we build it for me, for you versus building it for the average ideal person, the cover the men's "fitness" magazine. >> some of the democratic hopefuls, elizabeth warren, bernie sanders, kamala harris have talked about medicare for all and getting rid of the private insurance industry is that realistic? >> i don't think it is number one, nobody has defined it if the government finances everything, we are not doing the right investment when you ask people about medicare for all, they can't answer the question. you say show me another country they are doing it, they point to the u.k. and canada. those are not government-paid health care. they are government funded and government run health care and we have a system like that in the united states it's called the v.a. right now it's not doing so well what does the model really look like is question number one. question number two, how much will it cost again, if you finance, if you just finance a bad investment,

you are going to get a bad result so vermont has backed away from it two months before they were going to implement the single payer program. colorado passed it but couldn't afford it. and california -- >> they don't have a good track record. >> right so you need a public/private partnership which is how medicare runs. medicare is single pair, people say. no, it's not aetna has the first check written from medicare in 1965 from aetna to hartford hospital. we were the financial intermediary we set up the stps if you create the right public/private partnership, how you finance it is irrelevant. >> vice president biden has talked about a solution where it's just restoring the affordable care act. where are you on that you pulled out of a lot of the exchanges. it didn't seem to work. >> it could have been solved a lot simple lar than what we

created. if we would have reduced the age for medicare and means tested that difference between the current age, let's say 55 and 65, and allowed people to buy in, and we had allowed medicaid expansion to occur, we could have done exactly what the aca has done cheaper two systems that work from a financing standpoint and are structured and supported by the industry, right? we are the financial intermediaries for medicare and medicaid. >> this is going to be top of mind for voters going into 2020. what do you think will resonate most whose plan what ideas >> i think what people want to know is it's going to be better. >> cheaper >> and cheaper and so if you look at, for example, the amazon business model. what can i do to leverage my platform to meet an unmet customer need that is reliable, credible, and affordable that's the same problem in health care. the unmet need is, is you are waiting until i'm broken to fix

me what can you do to help me live a healthy life >> this is what -- >> in a convenient way it's what we did at the aetna. so the idea is not to do a breaks fix warranty operation, but to really do a program where, on the example i like to use, and you probably are too young, trip tix from aaa they circle the attractions. you bring the bag home you go, oh my god, we are going on vacation. we do that for health care, what are the things that work for me and the life i want to lead and how does health get out of the way of the life i want to lead. >> has the trump administration done anything to move the system forward or backward? >> no. i think it's stalled and it's only worsening the health care costs are breaking the back of our economy. >> and so this is obviously going to be top of mind? >> it should be.

i think if you look at people looking at things like reverse mortgages, et cetera, they are looking at it because they are one deductible away from having a huge financial problem. >> finally, i just want to end where i began on cvs and how this is a company trying to transform this individually. there has been some uncertainty lately with unprecedented hearings in washington from a federal judge, judge leon, looking at the doj approval of this merger. do you expect there to be any hiccups there? >> after having been through the humana transaction, you know, i -- >> that got reject the. >> yeah, year over year take any bets on the doj and the judge. that's to be seen. >> legitimate concern? >> i think the judge will do what he needs to do. year over year make any bets on that, nor do i do any predictions. >> good to hear from you former ceo of aetna. currently on the board of cvs

health carl, back to you. >> great stuff see you again. when we come back huawei pushing back cnbc sitting down for a rare and exclusive interview with the ceo of huawei. and a check on the major rinchs averages as we wait for the t hrsstatement in 3 1/2ou goyou covered all day here on cnbc don't goway.

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good morning i'm sue herera here is your cnbc news update. hope hicks arriving for her closed-door meeting with the hughes jim cramer. hicks held key positions in president trump's campaign and administration the white house telling the committee the president will assert executive privilege over that interview. an independent u.n. report in the killing of saudi journalist jamal khashoggi said there is credible evidence to warrant further investigation into the possible role of saudi crown prince mohammad bin salman the report stated there was no conclusion as to guilt and a saudi minister called the report baseless. israeli prime minister netanyahu attending israel's largest military drill in years

with thousands of troops simulating a war with the hezbollah militia. it comes amid growing tensions in the persian gulf. americans gave less that charity in 2018 than the previous year. according to giving usa, individual giving dropped by 3.4% after increasing four skiff years. you are up to date that's the news update this hour back to you, david. >> thank you sue. it is one of the most talked about and controversial companies in the world huawei currently blacklisted by the trump administration we spoke exclusively with the company's founder and ceo at huawei's headquarters in china. >> reporter: for a company trying to prove to the world it's becoming more transparent and trying to win over the trust of governments, huawei's ceo and founder ren zhengfei was very unforthcoming.

he not only played down the effect of a $30 billion hit on revenue this year, but he refused to lay out any kind of strategy to as to how huawei could recover. when i pointed out what happens to huawei is important for global trade and the chinese economy, he replied that he sees huawei simply as small as a sesame icy seed. when i pointed out their revenue last year was bigger than that of alibaba, he turned it around on them and said that they should step up >> translator: then we should ask alibaba and tencent to work harder so they can step in to make more contribution toss the country. we don't have pressure on our shoulder i think this issue is a test for us if we weather the storm, we will get stronger so what doesn't kill you will get you stronger in china, we say the phoenix will rise from the fire and the bird that doesn't get killed by

the fire is a phoenix. and we believe this big fire will address this issue at our hand. >> reporter: he also wouldn't entertain the idea of setting up an autonomous subsidiary outside of china and beyond the reach of chinese law to alleviate many of the concerns that the company is facing regarding its relationship with the government. >> translator: we have plenty of subsidiaries outside of china in every country. we abide by local laws and regulations. we have subsidiaries across 170 countries around the world and they are independent subsidiaries, but setting up those subsidiaries is not trying to prove to politicians. instead, it's to fully comply with laws, regulations, and the laws of the u.n. and international laws so those subsidiaries abide by local laws and regulations i do not have any intention to prove to politicians >> reporter: so nothing to prove, he says, guys

but here he is talking to us and defending the security of his company. back to you. >> deidre bosa with the founder and ceo of huawei trying to argue they are less significant than they are. they are china's biggest technology company. >> they are very important very interesting to hear from him though, carl i mean, they are sort of on a, trying to sort of make their case, certainly here in the u.s. importantly so not sure that they have a lot of believers in the trump administration obviously, we talk so often in terms of 5g, how it is viewed by the administration as not just an economic goal or a potentially a threat, but also national security as well. >> as lighthizer testifies on the hill about this topic, we will keep an eye on that. dow is up 30 s&p is slightly red. >> carl, we are watching right now shares of oil companies as well as oil itself, they are

seeing a spike still lower on the day this is on the heels of weekly inventory data from the u.s. government showing a draw of 3.1 million barrels of crude the expectations for the analysts 1.25 million barrels. a larger than expected reduction in crude stockpiles in past week in the united states again, oil is lower on the day you can see that bit of a spike there. we are also watching shares of energy stocks. energy-related companies they have now spiked to their session highs as well as oil prices have moved. one of the big etfs, xle moving to the highs in the session. we will keep a close eye on oil. back to you. >> don, thanks very much. when we return, congresswoman maxine waters of california asking facebook to hit pause on the development of that newly unveiled cryptocurrency we will tell you why and what it might mean for the social media giant. quk t see cties"sawonhetrt"onnu in a moment.

don't go away.

markets relatively muted today as we await the fed decision later this afternoon. of course, powell's presser. brian levette, senior director of investment strategy, and stan stovall. guys, good to see you. expecting fireworks today? >> no, i am not expecting fireworks. i mean, what the fed has accomplished just in june alone is an easier financial conditions environment so what was decision concerting in may is that the dollar strengthened the yield curve had flattened, even inverted ten-three, and simply sager with going to go at a more moderate pace or we're going to adjust as necessary has helped to ease financial conditions so that has been positive for markets. that extends the cycle because of that not expecting fireworks. >> you think they codify that today? >> i think if there are fireworks they happen after the

press conference to see what kind of response the president will have. but i think the $64,000 question for me is, if they cut rates in july, why? you know, what is it that they are that afraid of that's going to cause them to do it but for today, you know, i think the thought is that, no, they just remove a word and say we are going to continue to monitor the data. >> you have been constructive on equities for the year? >> yes. >> any reason to change your view up or down? >> no. if anything, the fed's about face on rates is a very positive sign i mean, we have talked about this before, carl. any time we have corrected or had volatility in these markets, it's been the result of policy that's too tight in a still slow growth world with really no inflation anywhere and so i would view what the federal reserve did last year as a policy mistake multiple interest rate hikes when the stimulus was never going lead to higher sustainable

growth now we are dealing with the lag effects of that. it came through in may, tighter financial conditions and they are backing off. >> how much does powell take into account the continuing tensions with china and what may develop there negatively or positively >> i think the way he views it is through what the kurpcurrenc doing. if you see a flight to quality amid greater uncertainty on trade and the dollar continues to strengthen,that's going to slow economic activity and that's going to be a big headwind to u.s. corporate earnings so the fed is going to focus on their mandate of 2% inflation. if we go too far down a path on a trade battle and leads to a flight to quality and a stronger dollar, that's not price stability. that's going to be disinflaegsary and the fed will have to respond to that. >> up 6%, sam, in two weeks. so are we pricing in some

disappointment, risk of disappointment >> yes history would actually agree with that. we had the third stronger year to date performance through the end of april history said watch out for digestion in may we got it. history said of the five best since world war ii, we were up 100% of the time in june well, you can add this one to that as well what about the remainder of the sell in may period, july through october? down 80% of the time so basically it would imply we are going to be going through mapping out the design on charlie brown's shirt, i like to say, basically seeing an ungulation -- >> summer lull is your view? >> i do. i think so but i think there is still a lot of concern that will be out there, but i think it will work its way through by the traditionally seasonally optimistic november/december period and heading into the presidential election year. >> does this white house lend any -- can anybody use cycle theory given this president? >> no, but i think what we can focus on are the fundamentals of

the economy where inflation isn't have where valuations are. if you are a longer term investor, regardless of what your views are on seasonality, we are in an environment where growth is okay inflation is benign. policy is accommodative. valuations are not that excessive given the inflation environment. >> what does that mean not excessive? >> you are trading at a 19 times trailing earnings compared to a long-term average of 16.5. so that could be expected at the, you know, we have been longer in this cycle but if you consider what the earnings yield on stocks is, which is closer to 5% in an interest rate world of 2, that tells us stocks are still cheap to bonds cycles don't usually end with no inflation and accommodate a fed and stocks cleheap to wonds. >> i have seen tables when the fed starts a cutting cycle, you don't buy tech necessarily you buy things like health care >> absolutely.

those sectors have the best average price change, frequency of beating the market are consumer discretionary staples stick with the consume because they are feeling optimistic. we are going to hedge our bets and gravitate to the more defensive areas. >> we will see what happens in a few hours. thanks for coming in brian and sam. >> >> when we come back, facebook's digital currency announcement drawing immediate backlash from some members of congress we will give you the details neck ne nex. t. some members of congress we will give you the details next backlash from some members congress we will give you the details next

>> we will see what happens in a

othere is a $2 trillion piee of the auto market wall street isn't tapping into found out more more squawk on street is coming up geico makes it easy to get help when you need it.

with licensed agents available 24/7. it's not just easy. it's having-a-walrus-in-goal easy! roooaaaar! it's a walrus! ridiculous! yes! nice save, big guy! good job duncan! way to go! [chanting] it's not just easy. it's geico easy. oh, duncan. stay up. no sleepies. maxine waters taking on facebook after they unveiled libra. more on that story >> david, not a lot of love for

libra here on capitol hill maxine waters is the head of the house financial services committee, and she is calling for a moratorium on the cryptocurrency until congress has a chance to weigh in and ask questions. she said that facebook's expansion has been unchecked the crypto market lacks clear regulatory frameworks and this is a wake-up call for anyone worried about privacy and national security. now, both waters and the ranking republican on the committee, representative patrick mchenry, are calling on facebook executives to testify. meanwhile, over in the senate democrat rusty warner says that this issue is fundamentally about trust. >> interesting that facebook has tried to bring about a number of other partners i'm willing to listen to their proposal but what i heard virtually uniformly from commentary this morning, here is a company that has lost the majority of

american's trust about their ability to keep visibility' data private already. the idea that we will turn over financial data to that company, they have an uphill effort >> meanwhile, his colleague shar brown said facebook is too big, too powerful, and libra is too risky. thank you. >> watching that story for us today. can you see muted market action? s&p within a point on the flat line. >> yeah, facebook though not participating. as is faang, really. nice rally in that spot. the announcement, including the white paper of libra, stock down 6% john has a look at what's coming up on squawk th"squawk alley." >> i have a stock participating adobe after strong earnings. it is up better than 4% today.

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the street." i'm dominic chu. stocks just about flat with the major indices hovering on both sides of unchanged, but one of the key sectors we're watching today is the financials and why? because of that big fed interest rate decision coming up later on this afternoon the s&p just about flat right now, but the financial sector, one of the better performers today alongside energy, materials one of the big laggards one of the reasons why with interest rates very much in focus, the financials are big, especially the regional banks. they are leading to the upside regional banks like huntington bancshares, citizens financial you can throw m and t and fifth third in there as well all moving to the upside as interest rates generally tick a little higher that financial trade for one to watch. i will send it back downtown to you guys at the new york stock exchange dom, thank you very much san francisco is moving to ban

e-cigarettes our aditi roy joins us with all those details. >> reporter: hi carl, san francisco's supervisors have voted unanimously tuesday to ban the sale of e-cigarettes in the city this would be the first vote of its kind in the country. the measure still faces, though, a final vote, and the mayor's approval e-cigarette giant juul is based in sf and opposes the measure. in a statement, they say the pro hi hi bigs will not effectively address underaged use and will leave cigarettes on shelves as the only choice for adult smokers. the company is supporting a competing proposal which would limit sales to minors. the board of supervisors also signaled its support for a different measure which would prohibit the sale, manufacture, and distribution of e-cigarettes on city property juul's announced it has purchased a downtown sf office building to accommodate its growing staff. that's one way the company can partially work around that particular measure

back to you guys >> fascinating development in a hometown business really, juul in san francisco thank you very much for that watching the markets here, which is a typical game we play in the hours ahead, especially in a fed meeting as fraught as this one with issues that go way beyond interest rates. >> yeah, there we are doing absolutely nothing as we await the commentary and the decision from the fomc, which we will be covering very closely as you might imagine, carl. i'm also curious to see whether -- certainly there will be questions how strong will powell be in terms of responding to this continued pressure from the president on him it's a lot of side show. steve actually said that if in fact they were to cut, they'll have to actually give more reasons because there will be concerns about their credibility. >> stan fisher just over the weekend said he didn't think the december hike would have happened at all had it not been for the job owning by the

president. i was thinking we've seen powell get a little bit tough on this question in interviews like on "60 minutes" a couple of months ago. i wonder what the chances are of him backing that up live this afternoon. >> to your point he has said he does not believe that he can be removed, and that appears to be at least the case based on the reporting we've seen in terms of this idea of demoting him, but it is an important point and one that we'll be watching for. >> cannot miss that decision at 2:00 and the presser at 2:30 "squawk alley" is coming up next with the ceo of adobe after reporting results, so stay with us i consulted with your grandmother's doctor.

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♪ good wednesday morning, welcome to "squawk alley." i'm carl keequintanilla with moa brennan who's back watching the fed decision this afternoon, the markets we're going to start with facebook and an exclusive story from the verge, it's titled bodies in seats. our next guest spoke with several of facebook's contractors at its worst performing content moderation site in north america breaking nondisclosure agreements those workers told of abuse, fear, severe uncleanliness and even death. take a listen. >> at what point did it become clear to you that you weren't going to be helping businesses on