breathless ♪ >> good wednesday morning and welcome to "squawk alley." i'm morgan brennan live from post nine here at the new york stock exchange carl and john are off this morning. we're going to begin with tesla, shares are up big after setting new delivery and production records. phil lebeau is in chicago with more on those numbers. phil. >> and morgan, we've talked about this over the last 24 hours how these numbers are record numbers, and they have exceeded expectations. lets put this into perspective in terms of where tesla is in terms of deliveries through the first half of this year. that red line on that last bar there, they've delivered about 158,000 vehicles so far this year they've said they plan to deliver 360. they've got to come up with 200,000, a little over 200,000 deliveries in the second half of this year. this report left something for both the bulls and the bears to jump on. let's start with the bulls they say, first of all, order

backlog was growing in the second quarter that's according to tesla. that's proof that there's not a demand issue here. also, the company's guidance has not been lowered the bear's counter that by saying, yeah, but they didn't reaffirm guidance. they could have done that yesterday. they did not do that also, there were details regarding these deliveries that were lacking in terms of how many went to china, how many went to europe, a few other details people would like, and they also point out that the margins are likely to be under pressure when the q2 financials come out later this month. that's why most of the analysts' reports, it basically comes down to this, the analysts' reports essentially say these are numbers that support the idea that you can lower expectations for the second quarter, but full-year numbers you've got to hang onto whether or not you buy into them being lowered from where they are right now in terms of the loss expected. >> phil, thank you joining us now, cofounder and early facebook and google

investor roger mcna mee. great to have you on. >> always a pleasure >> what fascinates me by tesla it is run by a man who thinks very, very long-term he's a long-term visionary, yet when you look at this company and the financials from an investor's standpoint it's short-term it almost seems quarter-to-quarter what do you think of these latest numbers >> morgan these are obviously fantastic numbers. after the march quarter there were legitimate concerns about demand and essentially the viability of facebook -- or sorry, the viability of tesla. it has such a high valuation. >> we're getting there, don't worry. >> expectations were so high, right? and let's face it, this is one of the great brands created in the last 50 years, right the cars, people love the cars people love the brand, and you've got a ceo who's distracted by another incredibly cool company spacex, and that i think caused really legitimate

fears. this quarter doesn't solve anything, but it is way better than what people were expecting, and as a consequence buys the company time to me, though, it still comes down to this issue this is the car industry they've got to be really good at manufacturing. they've got to be better at forecasting, and they've got to learn how to make money making cars at this kind of volume, and i'm really hopeful that they'll get there, but, you know, as an analyst, i don't think we know enough yet, but this is so much better than what we were thinking just, you know, a few weeks ago that i'm personally relieved >> yeah, i mean, you mentioned spacex spacex has a ceo and president, which i think is a big contribution to that company's success. are you surprised that tesla still doesn't have somebody in that position? >> i just don't get it, right? i mean i look at this and i go why is this any different than any other car company or frankly any space company? these are really hard engineering businesses that

require tremendous discipline because people's lives are in the balance, and it's super, super important as we saw in the case of boeing with the 737 max that you really need to have attention to detail top to bottom, and you need to have predictability in your manufacturing processes, and i think tesla's getting there. but it's getting there in a way that just i think causes investors an awful lot of heartburn and candidly, you know, just me as a fan of the company, it just -- it feels like it's harder to get there than it should be. >> roger, i spent a lot of time looking at autonomous vehicles down in san francisco, especially when it comes to waymo and lyft and uber. when we talk about the long-term, where do you think that tesla ranks here? there's been some skepticism about where it actually is in that competition to get there? >> deed ra, i've got to be honest with you, i remain skeptical about the timing on autonomous vehicles. we've learned over the last 50

years with ships and aircraft that if you want to be safe with an autonomous vehicle, you want to give it its own lane for driving so it doesn't run into anything, and then you want to put beacons on everything that doesn't mover so it doesn't hit them either, and in my mind, the notion that we're going to do self-driving cars with all of the intelligence in the car, and we're just going to figure out everything as we go along, that will work eventually, but i just think that the process of getting there, of making it secure is going to be incredibly fraught, and i worry a lot about pedestrians. i worry a lot about passengers and i just think all this is going to take longer than investors are currently expecting, and so in a sense, from tesla's point of view, whether they're part of this or not, you know, they're going to have to just make sure they survive as a car company, and you know, they're going to have to just learn how to manufacture. it's not like self-driving is going to bail them out. >> no, but roger, why would they

be a part of it? i mean they've already got semiautonomous functions in the car. a lot of the drivers of them actually love that, and they're reporting every single mile. i mean, the key as you well know is data, and they're certainly taking in a lot of it every moment of the day given how many automobiles they already have on the road. >> no, no, david, i'm completely with you on that i'm just saying that we've seen, you know, a small number of examples of the failure modes that you can have in a tesla in the self-driving domain. and i'm just looking at this and thinking to myself, i don't see them being any more secure than anyone else simply because they're using the same approach, which is to say putting all the intelligence in the car. yes, you gather a ton of data, but the reality is, as we all know, when you're driving things happen you know, anomalous stuff happens. you know, it's not about being right 99% of the time. you've got to be right 100% of the time, and the liability

around that i think is going to turn out to be a real issue if there are -- or let's put it this way, when there are accidents. >> right, so roger, are you saying, though, that autonomous driving technology may not be essential for tesla in the long-term in the same way it is for -- >> sorry, sorry, no. i actually think tesla's much better positioned than uber and lyft, and of course it's going to be essential because eventually we are going to get there. what i would really rather see is i'd rather see the country invest in autonomous to create, you know, specific lanes for cities like new york to experiment by taking an avenue and making it -- dedicating it to self-driving buses and self-driving, you know, vehicles, and that sort of thing where you have real density i think makes a ton of sense whereas i think this notion you're just going to throw them out in the streets of phoenix, you know, that may work, but i'm just -- i don't know, i've talked to too many engineers, and i just feel like there's a

lot of risk in that that we're not factoring in right now. >> yeah, and certainly a big part of all this discussion when you're talking about data and this new technology is that as of yet detailed insurance product, auto insurance product that tesla says it's going to be rolling out, too up next to talk to you about, roger, facebook facing growing pressure on capitol hill over its crypto currency plans, democrats on the house financial services committee, which is set to hold a hearing on a project later this month calling on facebook to halt the project now, they argue that opposes a risk to the global financial system writing that if not properly regulated, quote, vulnerabilities could be expl t exploited and obscured by bad actors roger, what do you think of liber libra? >> i think that the house committee is exactly correct the europeans particularly in the unit united kingdom are raising the same kind of issues. here's what the problem is, if you're a sovereign government whether you're the united states or japan or the united kingdom or even the european union, you

basically have two things that give you control and power one is your control of the military forces and the second is the control of currency in general, countries should be really skeptical about private companies competing for reserve currency that is something you want to be super careful about because if you're a democratically elected country, the notion that you're going to give up one of the two elements that really define you to a corporation should give you enormous pause, and it should be a subject of huge debate and a real national discussion before it happens here you have the added problem that the company in question is facebook, which has a long history of violating people's privacy, a long history of being, shall we say not sufficiently careful, protecting against downsides and unintended consequences, and so i think in this situation stopping it in its tracks and having a serious debate about it and having facebook demonstrate safety, efficacy, and you know, the fact that they really put measures in

to protect privacy, i think those things are the bear minimum. >> is it -- can you really say, can you really make the argument that it's going to be competing as basically a new currency when it's backed by a basket of existing currencies? >> oh, definitely. >> i might be getting into the weeds here, but. >> i think you're asking exactly the right question because i think from facebook's point of view, they clearly view it as an alternative to the reserve currencies of the world today. you know, the argument that they put forth that this is about providing a service to people who are too small to have banking services around the world. to me that's just a dodge. in the short run, the people who will benefit most are people who are trying to move currencies across borders without being detected by governments. you can imagine this might be criminals. you can imagine it might be folks in countries like china, russia, that are trying to move capital around you can imagine people trying to

evade tax this is way, and i look at that and i say i totally respect the concerns that governments would have about a new product whose basic function is to enable that kind of behavior, and at the end of the day, that's the path to creating a reserve currency you got to start somewhere, and as willie sutton used to say you go where the money is. >> roger, i have a broad question i've been going to fintech conferences for years, and one thing that always comes up is when and if the big tech giants like facebook would become face bank and go into this very regulated sphere, as the years have gone by there's only been more scrutiny added particularly on facebook, why would they risk this now do they have to diversify the business is there any chance this gets pulled completely with this added scrutiny >> this is such an important question because i look around, and the financial services industry has prided itself on having great mathematicians to

process data, but google and facebook, amazon and microsoft have the actual data as well as -- to process it, which is a huge advantage, and you can see amazon going into portions of the health care insurance market and presumably other insurance markets. you can see google making plays that suggest that they're starting to look at financial services obviously now we have facebook with its effort in libra, and i look at this and i think the financial services industry is incredibly vulnerable, unless regulators step in and require the tech giants to observe all of the same regulatory constraints that have historically been applied to banks and insurance companies. at the moment, the way the tech guys are approaching this, they're just going to move fast and break things and that shoul give everybody a lot of pause. >> always great to get your thoughts hope you have a great 4th of

july holiday. >> happy 4th of july. broad cam nearing a deal to buy symantec josh lipton is in san francisco with more. we're certainly seeing those symantec shares surge. >> he could be ready to make another big one. cnbc confirming broad come is in talks to acquire symantec. the two sides have been targeting a mid-july announcement the price is not set, so no guarantee that a deal does get done here, but the ft reports that the transaction could be worth more than $15 billion. this is hock tan's playbook, buy companies, build out a portfolio of products and services for example, acquiring brocade for $6 million for exposure to the storage market, and buying ca technologies for $19 billion capitalizing on its profitable mainframe business it doesn't always work out

though, remember the trump administration blocked broad com from pursuing qualcomm citing national security concerns this deal does make strategic sense, that security would seem to be a logical addition to broad com's portfolio, though there are questions he says. after all, hock tan is pivoting here, a traditional chip maker now moving harder into the software market. he successfully integrates such companies in the same way and symantec faces challenges of its own. recent management turmoil and increasing competition from cloud skpuecurity companies that are taking share of the enterprise market. guys, back to you. >> josh, thanks very much for that david, you've done some reporting on this this morning as well. are there any sort of regulatory concerns or what have you found out this morning >> regulatory wise, what's interesting is there may not be that many other domestic companies that conceivably could pose a potential bid for symantec, and therefore you can cross off any foreign companies.

of course broadcom is no longer a foreign company, though they were once. they are in a position to not face that kind of scrutiny on the national security front or on overall regulatory. we'll see. potential other buyers would simply include private equity firms which have looked at symantec in the past, but it's a large equity check, over $7 billion, and so it does sort of strain their ability to actually do that it doesn't mean they can't >> it also really speaks to how much consolidation we've seen within the chip sector that a company like this would be expanding in software. >> yep, ca was their first deal and now potentially this, yeah >> when we return, retailers versus big tech, why some of va a rdyo ggt oogle's bies rilsreea tassist in the government's antitrust probe. "squawk alley" returns after a quick break. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you

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the battle between retail and big tech continues the retail industry leaders association, this is a group representing companies like walmart, target, best buy, they wrote a letter to the ftc saying it is ready to assist in the government's antitrust probe joining us now that organization's chief operating officer brian dodge. thanks for being with us this morning. in a lot of ways it feels like consumers have more choices, more convenience than ever, so what exactly is it that you want to see changed in the retail landscape? >> yeah, sure, well, thank you for having me on

i think, you know, the regulators are asking all the right questions, and the question really is has technology changed the rulebook or does the rule book need to change to reflect that technology has changed the marketplace? we believe it has. consumers have lots of options and they should have access to all those options. our belief is there's lots of ways these big technology companies can constrain consumers' visibility into what their options are. the old play book and rule book has been do consumers get the best prices? if these marketplaces can push the results of better products and better prices down to page 25 and outside of the view of consumers, then they don't have full visibility into what their options are. we think that's a problem. >> so brian, again, what would you like to see change are you seeing more competition from startups or, you know, a different playing field for some of the other giants in the retail space, the physical ones like walmart and target?

>> sure, so regulators have an obligation to make sure that there is real competition breathed into these markets so we want to make sure there's no major players in these markets that are suppressing new entrants from gaining a bit of share. the consumers ultimately have the control that they are entitled to have to make the decisions and find the options that they can choose from to make good business -- good consumer decisions and find the best products and best prices. >> brian, i know we have regulators considering perspective antitrust probes against the big tech companies right now, but if retail is so concerned about possible antitrust, anticompetitive behavior i should say and the dominance of a select few in tech, why wait until now to write this letter and make this case >> we've been making this case for a long time. what's different now is that the ftc has gone through a nearly year-long process to think through this question of whether

technology has changed competition in the community i think what we see now from the department of justice and in congress is a real strong inclination to take some sort of action our view of this is we have an obligation to share our perspective on what we think the challenges are and to work with them as they go through this process. >> in this letter, you mentioned payment platforms as well. is there risk of anticompetitive behavior certainly we've seen change over the last few years, it used to be visa versus paypal versus the banks and now they're all friends. they call themselves frenemies but they look more like friends these days what's the risk there? >> yeah, retailers believe that the anti-competitive streak in the card networks runs quite deep our perspective, and we note this in our comments to the ftc is that if a group of banks showed up at the ftc today and asked for permission to work together, they'd be laughed out

of the building. because that conversation happened 60 years ago, that practice is allowed to persist we think it iswell past time t review how visa and mastercard centrally set prices and charge them to her chamerchants. >> the association represents quite a number of retailers, are there any specific examples among the companies that you represent of what could be seen as anti-competitive behavior >> our perspective is that regulators have an obligation to look at practices, not necessarily at companies i know a lot of time and attention is being focused on specific companies and we think there are companies who are particularly egregious in this area we want to make sure that the ftc and other regulators are looking at the practices that we believe are problematic in the economy right now, and taking actions on those irrespective of which companies employ them. >> brian, thanks for being with us this morning. brian dodge. >> thank you taking a look at markets

right now, the dow is off highs of the morning up 67 points, but still poised to close at a new record high. the s&p also coming off its seventh record close of the year it's hitting another record high earlier in today's session here are the names that are powering the s&p, the broader market hher eaigahd of the holiday. we've got a lot more "squawk alley" straight ahead. is supporting military families. when i have a child deployed, having a reliable network means everything. so, when i get a video chat, and i get to see their face, it's the best thing in the world. and i've earned every one of these gray hairs. military moms, we serve too. (vo) the network more people rely on, gives you more. like military plans with a special price on unlimited, $100 per line, and big savings on our best phones when you switch. that's verizon.

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welcome back to "squawk alley. european markets set to close in just a minute. seema mody joins us with a breakdown. >> european stocks are higher today after european leaders nominated christine lagarde to replace mario draghi in november of this year the market response has been positive we're up about 6/10 of a percent, higher by 2% in italy here's the wall street reaction. capital economics say ecb easing is even more likely with lagarde as the new president, and td securities says in the case of a steeper downturn in europe, having lagarde at the head of

the ecb may be particularly important for her political connections at the highest level. we know that the ecb only really has limited monetary policy fire power remaining and lagarde may be able to use her influence to push for further fiscal stimu s stimulus let's take a look at the market reaction the euro zone currency is weaker, yields in the euro zone continue to dip even further on the prospect of more stimulus, and in the u.k. odds of a rate cut by the bank of england are rising following another set of disappointing day in the u.k. on the services front lastly, turkey set to enter the international bond market with hopes of raising $1 billion. that is according to the ft with a potential yield of 6%. that is a story we will continue to watch back to you. >> thanks so much for that let's get over to sue herera for a news update.

good morning, everyone here's what's happening at this hour dozens of central american migrants who were forced to wait in mexico for their asylum cases to be processed have opted to return to their home countries this with the mexican government's help. u.s. asylum cases can take months or even years to be decided. russia's defense minister praising the crew of a russian submarine in which 14 sailors died he visited the russian navy arctic base investigating the fire he said there were survivors though it is unclear how many. tunisian security forces killed a man wearing an explosive belt after chasing him in the capital late last night police opened fire on the man who they described as the alleged mastermind behind twin suicide bombings that shook the capital last week. and alex morgan scored the winning goal in the u.s.world cup semifinal win over england on tuesday, but she may have made some waves for what she did after the goal as she celebrated she stopped and pretended to take a sip of tea, which seemed like she was

trolling her opponents the americans will play for the world cup on sunday. and that is the news update this hour, back to you guys >> when tech trolling goes back off of tech. sue herera, thank you. let's get a check on the markets right now, the dow is up 80 points right now, 26867, 868 right now, we're poised for a record close if it stays at these levels on this shortened trading day. the s&p is also higher up about 12 points, 2985 as we close in or move closer to that 3,000 mark treasury yields ten-year trading below or down below 2% again, and in general if you take a look at what is moving in the market, it is very much risk off ahead of this 4th of july holiday. it's real estate, consumer staples and utilities leading the charge. >> very quiet right now, and markets just within striking distance of record highs but there's a lot to look forward to, we've got jobs

friday we've got earnings season, which is going to kick off soon, and some worries about it, right 77% of companies issuing pre-announcement say their profit picture will be worse than wall street is expecting. so you had this sort of relief over trade talks and markets, you know, moving forward but there's a lot on the horizon. >> yeah, we want to get over to phil lebeau in chicago who's got some breaking news for us. >> morgan, we want to take a look at boeing as the company is announcing it is setting aside $100 million that will go into funds that will be used to compensate the families of victims for the two 737 max crashes as well as communities whether in indonesia or in ethiopia remember the accident in indonesia happened last october with the lion air 737 max and then the ethiopian airlines crash happened in march. that was just days before the max was grounded, so again, boeing setting up $100 million to compensate the victims'

families as well as communities. we should point out this money 100% separate from any funds that might ultimately have to be paid out as part of lawsuits in other words, if a victim's family accesses some of this money, they're not waiving their right to sue the company, and guys, this is yet another move by boeing to try to change the story narrative out there when it comes to how it's been responding in the 737 max crash. you know for some time there have been people who have said, look, they were tone deaf when they first were trying to respond to these accidents suggesting that maybe, you know, the pilots were not experienced enough, et cetera. boeing has been working hard, and this is another step to try to change that narrative setting aside $100 million. >> phil, how unusual is it for a company like boeing to set aside an amount of money like this separate from everything else? >> well, morgan i asked them that specific question have you done this in previous accidents? and the company said, well, the person i talked with the company said not really sure

we'll get back to you. i have not heard of it happening before where they set up, you know, funds that will go to victims' families as well as to communities. so it is an unusual move now the skeptics out there will say $100 million to a company like boeing is a drop in the bucket it's certainly not chump change, but it's not something that's going to hurt the bottom line, so, and it's going to be put aside over the next several years. nonetheless, this is boeing, as i mentioned, trying to change that narrative in terms of saying we understand the significance of the two crashes and we need to reassure customers around the world that we are not tone deaf >> phil lebeau, thank you for bringing us that breaking news shares of boeing are down about half a percent right now still dow moving back to the high of the session up 101 points we've got more "squawk alley" after this break

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not quite ariana grande but vocal enough a new brand of activism, shareholder activists, the topic of our next guest eat latest piece in the ft saying the stock market has turned into a 24 hour speakers corner. he's lazard managing director dennis burrman he was previously of the wall street journal, hence the ft. >> a nice change of pace there >> first time i would assume. >> why were you compelled to write this >> i work with companies who are trying to figure out who their shareholders are, what they want, how to approach them, and there's been just sort of a

confluence of events today or in the last few weeks that have really shown how the dynamic has changed, and so obviously we know some of the big headline activists, they do what they do. they've been doing it for a long time, but i think the biggest change we've seen, david, is i call them the vocalists, that they are not ariana grande, it's much less exciting than pop music, but it is very important skprs these voc and these vocalists are active managers, who are expressing their desires to companies they own. they of course have done that at times in the ast. >> but they're doing more so >> we're not talking about that, i think, you know, i made a lot of -- when wellington showed up in the bristol-myers. >> and you were dead right to do it. >> they didn't do a great job of communicating wellington, they sort of showed up publicly, and then they didn't say a word, and we never heard from them again and i tried. is this kind of what you're expecting to see more or or are seeing more of >> you see it in front of the

scenes and behind the scenes in a lot of different ways. there's a lot of things going on right now in the market. one is the active managers are feeling compelled to express themselves because the activists have done it for so long you might see an invesco, some of these largest regular way active fund management companies that are getting involved. >> they've got to show their value, don't they as they sort of fight off the etf and the index guys. >> the activists, if you really think about it, we give them so much precedent and attention, but in terms of the actual amount of dollars managed, it's actually quite small, and when you think about it, they were effectively an outsourced function of the big asset managers, don't want to get involved in pick fights. they still don't want to get involved in public fights but they do want to express themselves and assert their power. the conclusion of the piece if you will, is that ceos truly have to understand and respond to their shareholders in ways

that they did not before >> you know, i wonder how the dual class share structure fits into all of this we've seen quite a number of companies go public and quite a number of them have adopted that structure, and i wonder how this idea that more investors are becoming more active, more vocal plays into the companies that decide that go that route. >> i think it's a very fair point. now, there has been some activism at companies with control structures, dual class it gets a little more difficult, but i think you're right, and if you have the ability to do it, then why not, and particularly from silicon valley, that's what we're seeing >> does this take power away from the activists, the brand name activists in a sense? i wonder because there aren't that many fights there are plenty of settlements at this point, but it used to be just a fight because your assets under management will go up. that's no longer the case. >> yes i think it both helps and hurts

them helps in that there are times where they can still be the tip of the spear and get support from the other holders, wellington and the bristol situation is a great example of this i think it can hurt where let's say you've been holding a stock for 12 years as a long only fund let's say you own 7% of that company for ableges, you should have some say and sway in that situation. >> so what's the reaction in the boardroom these days when you walk in, what are you telling these guys we've been hearing for years you've got to be more interactive with your shareholder base, you've got to have somebody designated on the board who really is going to speak to them. >> you're totally right. there is not a company we deal with -- we've got good relationships with our shareholders, a lot of them do, it's nonetheless a true change in mind-set to really listen and frankly in some ways you have to mediate your behavior, and be better at transmitting and telegraphing your actions ahead of time because if you don't, they will come after you utx and raytheon being a very prime example. >> dennis, you mentioned silicon valley, where i sit in san francisco there's a real

movement to move away from the vocalists, right the long-term stock exchange is moving forward, so you know, that goal is to reshape incentives for the next generation of public companies so they can focus on the long-term. so what do you say to a place like silicon valley and these entrepreneurs that are going public with already very big companies in these dual structures >> i think they have to really line up their goals with their shareholders, if you're going to be a long-term holder you really have to place those shares with people who are in it for the long-term. everyone says that when they're doing the underwriting process sometimes it's a bit of a, you know, false drama on stage, what really happens is the hedge funds come in and they trade in and out. i think shareholder selection and understanding how you are owned, and that's really the next frontier. we talk about it as humans owning, it's really even for active high conviction stock owners, the rise of factors and we can maybe talk about that the -- >> another time.

>> the rise of the factors as the method for selecting and choosing stocks is so important to understand, and most companies really don't understand how that works right now either so we've got a lot more learning to do. >> it's like cliff hanger. >> dennis, thank you still not used to saying -- it's been a while already >> you got to change. >> you're a banker, man. >> got to keep adapting. >> dennis berman. rick santelli is back, which means a grand new exchange after the break. rick, what are you watching today? >> you know, 195 and ten-year note yields we had a soft ism service sector we're going to tie it all up and address the issue of global e eaalafr preading, l te thbrk.

means a grand new exchange after

welcome back, let's get over to the cme and rick santelli for the santelli exchange. rick, over to you. >> thank you you know, this morning we had some news, and the service sector, not manufacturing. i pay particularly close attention to that because of course manufacturing has much more invested in the game of uncertainty regarding trade and tariffs. however, think about it, you're going to have an electrician, a service sector, a plumber, the supplies whether they can get all the panels, what type of inventory and how the tariff game was played by their suppliers. i guess what i'm getting at, no matter how far you run, you can't run away from the issue ofs trade and tariff and their impact on various numbers we pay close attention to and uncertainty due to trade and

tariffs cwas also a boilerplate in this report even though 55.1 was equalled exactly two years ago in july of 2017 you have to go to october 2016 to find a smaller number. the reason i bring it up is that the rest of the globe is definitely exporting much weakness to the u.s., some of the trade issues are exporting uncertainty in many businesses not only manufacturing but at the end of the day, it was still a good report in so far as it was over 50 and pretty much every industry but one still reported growth. now, when i talk about global weakness spreading, i am actually talking about a real spread, and we can see the effects. let's go to the white board. this is a chart of ten-year note yields minus ten year bund yields which is minus 38 basis points, we're close to minus 40. this starts in october of 2018 the reason because in november of 2018 we reached the high, 280 basis points separated our tens

from the european german ten-year bund. you can see that has now diminished to 233. so the point is that we can actually see that the u.s. is slowing, but it's still by far the most vibrant economy, has the highest ten-year note yields of all the developed and large economies, but the difference between 280 and 233 does show us that as our economy is expanding, we're distancing ourselves from bund yields, and as we start to slow a little bit, not only are bund yields leading the way, just imagine if we go to minus 100 or minus 120 in bund yields, the ten-year has to follow, but the shrinkage of the spread does give us some insight, and finally there's two big numbers, we hit one of them. 233. the other big number is 243. happy birthday america, 243 years old tomorrow being independence day "squawk alley," gang, back to you. >> yes, happy birthday, america. rick santelli, thank you.

tomorrow, do not miss -- not tomorrow, friday do not miss nominee judy shelton right here with rick on friday for "squawk alley. a big interview you can catch in full a110 m.ast :3a. etern stay with us $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade. i went straight to ctca. after my mastectomy, i felt like part of my identity was being taken away. my team made me feel whole again. cancer treatment centers of america. appointments available now.

welcome back to "squawk alley," america's largest private employer walmart making a big bet on vr. the company partnering with virtual reality startup striver to train and promote its 1 pnts

5 million workers places them in scenarios such as handling an angry shopper or dealing with a disgruntled co-worker. joining us to discuss is derek belch. great to have you back on the show i remember back in september when you were rolling out rollis expansion of vr technology within walmart, you came on. i wonder in that time period, what have the results of this technology in training reaped, and can you quantify the effects of it? >> yeah, yeah, great question. so we did start that roll out to all of the retail environments at the end of 2019 and so far, so good. we've had almost a million associates go through different training modules doug milan in their earnings results a month ago referenced employee training as being one of the reasons their earnings are what they purpose so it's definitely something that we're seeing have a very positive

effect as it relates to placing employees in these simulation-based learning environments that virtual reality affords. it's been really cool. >> i find it really fascinating that you can basically run these environments, these simulations that are hinging on human interaction within virtual reality. it seems like it could have much bigger, broader impacts beyond walmart. are you speaking to other companies about this technology? >> yeah, so we have about 30 customers in the fortune 500 right now. so it's definitely as far as crossing the chasm, we're still on our way up here in the early adopter's phase. but we're seeing this catch on there's definitely product market fit for immersive learning as we call it you hit the nail on the head this is the real deal. this is very similar to pilots in a flight simulator, right and historically, we've trained employees or assessed employees via power points, videos, lectures and candidly, we don't know if

people are half asleep or engaged. so now with virtual reality we're able to put people through simulation-based learning, simulation-based training and simulation-based assessment and it's catching on by this time next year, if you're not doing something, you're behind in the fortune 500. this is the real deal. >> derek, as we talk about other customers, it strikes me this would be a very interesting technology for a company like amazon, particularly when you think about how many warehouses, fulfillment centers they have. have you talked to amazon, and if not, are you worried about them developing their own kind of technology like this? >> yeah, at this point, we honestly have talked to everybody. there isn't a company in the fortune 500 that we have not talked to in some way, shape or form we're not working with amazon currently. we have talked to them on and off and we'll see where that goes to be honest, i'm not really worried about anyone doing this themselves this is still the very early days of virtual reality.

we work closely with oculus and we take a lot of pride at strivr in the end-to-end solution while it's viable and ready, it's also really difficult to scale. so we do a lot of heavy lifting for our partners walmart being one of them. verizon, bmw we just do a lot of work for them up front while this technology is finding its legs to get to the point where computers, ipads, cell phones are right now as a useful tool in the enterprise. i'm not worried about anybody in the next 18 months or so doing this on their own but certainly we'll see as the ecosystem evolves where it goes from there. >> i'm interested, derek, in how you factor in the actual experience of people that put on these headsets i put on a number of them over the years. i'll be honest i find it disorienting, at least at first so how do you, i guess, help employees or help people that are being trained or being considered maybe for, you know,

a raise to get past that >> yeah, so this is an issue for sure that question always comes up in every demo hey, am i going to get sick? i'm good i don't need to put it on. i got sick last time i did this. this is how the brain works in your equilibrium if you are sitting or standing and put on a headset and you're on a roller coaster or running through an active shooter game, you'll get nauseous because your body is static but your brain thinks it's doing something else we take a lot of pride in making sure the experiences we build, along with some of the subtle things aren't going to lead to nausea as it relates to the viability of using this as a predictive tool, this is how the walmart use case came about with using this for assessments we're patent pending on what we call an engagement algorithm to see how engaged somebody is during a simulation. >> okay. >> and we tell our partners all the things we're working on

behind the scenes. walmart said, hey, we want to test that out. let's see if this would be a good use case for us >> derek belch, great to get an update from you. strivr founder and ceo >> thanks for having me. still to come, an executive departure. canopy growth shares were down but rebounding, up 1% today. "squawk alley" returns in less than three minutes

just watch out for the edibles. do them slow that's my advice >> how would you know? >> don't take too many at once >> how would you know that >> everybody knows, jim. everybody knows. >> that's your advice? >> that is that's my advice my public service announcement for the morning. shares of canopy growth are actually -- they had looked down after they announced the firing of the co-ceo bruce litany who joined the "squawk" crew this morning. aditi roy has more on the overall story for us from san francisco. aditi? >> hi, david a big development in the cannabis industry. but linton says he's not necessarily surprised by the move linton telling cnbc shortly after the news broke he did not voluntarily step down.

instead, he was terminated, he says linton founded the company in 2013, and it's now the world's most valuable publicly traded cannabis company his co-ceo becomes the sole ceo while the company searches for a replacement. linton says his firing came after constellation brands which owns roughly 35% of canopy nominated four out of seven directors to canopy's board last november linton told squawk box he didn't think the company's latest earnings factored into the decision to fire him >> you don't always mesh well with everybody in the playpen. probably what they're doing will be a better decision certainly not a great day for bruce. >> i also spoke with the second largest shareholder in canopy growth after constellation brands, murray goldman, who was let go back in november. he says he is delighted by the decision and he believes the company will likely stop making acquisitions and focus on financial discipline and increasing productivity and sales. back to you guys

>> thank you, aditi roy, in san francisco. >> just want to look at the mark markets. at session highs the s&p is up 18 2991 right now we're poised for a fresh record closes for both of those averages one hour left of trade that's going to do it for us here at "squawk alley. we'll send it to contessa and will for the closing bell. >> good afternoon. and welcome to the "closing bell." a special edition. i'm will fred frost at the stock exchange there's one hour left of this shortened trading day. the s&p 500 already made history with a record intraday high. we're covering all angles of the market as we count you down to the close early at 1:00 p.m. and contessa is here >> is that what makes it special or is it the 1:00 close. >> i'm contessa brewer in for sara eisen today welcome to the "closing bell." let's look at what's driving the action any close higher for the s&p would be enough to make a record and for the s&p, a close above