still working 80 to 100 hour weeks. >> i try to keep up with this guy. >> gentlemen, thank you. >> thank you, both. >> thank you >> good to see you we're going to turn it over now to "squawk on the street." just spoke to cramer he'll be there "squawk on the street" coming up right now. ♪ ♪ everybody move your feet ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. futures look better than they have looked all week as microsoft comes through with solid earnings and hopes for a rate cut are back despite some confusion. europe is mixed. ten year, 205, the president resumes his criticism of the fed on twitter calling their thought process faulty road map, microsoft's monster quarter. cloud business up 39, driving

record sales for the most valuable company. and boeing's billions, it is taking a $5 billion hit in the second quarter due to the worldwide grounding of what was its best-selling plane ever. and rate cut optimism. stocks on track to open higher but on pace for worst week since may. microsoft on track to open at a record high, market cap above a trillion dollars quarterly results beat expectations on cloud strength here is nadella on last night's conference call. >> our commercial cloud business is the largest in the world, surpassing $38 billion in revenue for the year with growth margin expanding to 63%. i'm proud of what we have accomplished over the last 12 months, and i'm energized by the tremendous opportunity ahead every day we work alongside our customers to help them build their own digital capability, creating new businesses with them, innovating with them and earning their trust. >> cloud is a third of revenue and after at&t they had quite

the week. >> yeah. i did something i never do i listen to that conference call around 11:30 last night. and i shot him an email. subject line, bravo. and i'm out of superlatives, well done. i don't know what to say this is a gigantic company it deserves to be if there is a trillion dollar company, it deserves there wasn't -- when -- you got this amy hood, she's been the cfo, one of the best cfos in the world. people have to listen to this. this company is -- this man is a unassuming, humble man who has taken a company that was once great, turned it around, and is a powerhouse andy jassy, amazon web services, he's fabulous too. we have some executives in this country that if we don't start realizing, they are the people who are driving forces, doing things, that are amazing

you know, look, i know washington wants to break up some -- they should bring satya in you will hear how great america is. >> one of the names they're not talking about very often is microsoft. it does not get lumped in, even though it is the largest and resurgent back to being the most -- the largest company and therefore the largest technology company in terms of its market cap. it is not included in any discussion about regulatory or antitrust. having dealt with that 20 years ago. >> yeah. >> now it is just all about cloud. that's what it is about. and to your point, i mean, he pivoted the company to focus on this five years ago, whatever it was at this point. and the growth rate is just astounding >> there is a moment in the call, where -- to find anything wrong with this quarter is ridiculous, where the analyst says, do you want to still be in gaming xbox he goes we have the greatest gaming platform in the world we have the most gamers in the world, gaming is the future. and i'm thinking, linkedin

oh, my, was that brilliant gaming, brilliant. 360, office 360. i have a pc that is an office 360. tim cook, it is a darn good pc and you sit there and you -- this is a corporate -- you sit there and say, did they miss on anything nothing. and i am in awe of what this man has done i remember he said $18 billion for cloud an i was critical. i met him, he's wearing the black t-shirt, i was wearing the trademark brione i'm listening to the man and he's talking about educating people in second grade that's what he wants it talk about. stem who is this man. >> he came in with the benefit of low expectations. some classic headlines in the journal the day he was -- his position was announced and people did not think he was going to do much of anything.

>> the lowest, i think he came in and the big change was that you got to start thinking the clippers will put together a max player that was really the change there was a tone to him that is a tone you never hear out there. and it is a tone of -- a level of sweetness i'll use that word kindness he is not -- >> all right, all right. >> stop. >> enough. >> okay. and then - >> we're in the world of what have you done for me lately, great. or enough with -- >> the sing song of praise. >> how much can we extrapolate to large cap tech in general is this just a microsoft -- >> i thought you could you can lock pc. said the data center has too much capacity, you don't want to do that. i resent what you just said. >> i'm sorry >> i have every right, i have trashed every executive in america. i have every right i have asked people how they can live with themselves >> what can i tell you, you

trash them better than when you -- >> great fun when you're critical. >> you got a wall of shame, but not a hall of fame. >> retired but i want to ask you something, have you ever read that guy dalai lama, the short fellow, he talks about being happy. he pivoted the dalai lama pivoted big. >> i have high expectations. i would like to focus on -- >> when i met amy last time, she had a child, a child projected vomit on her corduroy jacket, how is that? >> so she's a great mother >> yes >> awesome. >> and great at goldman. i'm sorry, you know what, i got to go back, i realize, i got to go back and be cynical who can i trash? i have brian moynihan on, he was really good. i didn't mean to gush. i take it back you know, he's all right >> to your credit you have

talked about the power of azure for a long time. >> thank you. >> very positive on microsoft for a long time and nadella and you've been dead right what is amazing is the growth rate at azure in all seriousness is above that of aws. >> that's the point. you're so right. wow. you are so great you're going to have a great weekend. i like you >> i want people to understand how good he is. >> understood. does it deserve to trade any richer forward multiple than alphabet >> yes plus, there is no -- that i know of, known communists that work at microsoft he has peter thiel still has not named the known communist sympathizers, you know, he thinks there are some for china. this company, alphabet missed quarter after quarter. there is always one line ruth porat, i want them to make the quarter. they have great firepower. they had a cloud initiative that was not strong and they let these guys get ahead of them

it is a duopoly now. i had ginni rometty on with the fellow donovan from at&t and that was a very good conversation but literally, a few days later, the big cloud win was microsoft. and -- >> azure, we say cloud 39, azure 68 that's a crazy number on azure, even at the 68. >> incredible. you are talking -- not a lot of large numbers has caught up with them too not early days any longer. >> that's why -- >> google is trying to play catch up. >> these guys -- they float like a butterfly and they sting like a bee. and they are the go a-team now. >> does everybody get lifted by the enormous movement of -- >> i don't think they can. >> commercial opportunity to the cloud. >> i think that this -- it is not a share take

there is tremendous growth and benioff and -- look, you get the same story if you went to ryan at adobe, you get the same story from andy jassy. just a wholesale change. talking about the number you keep hearing about is 20% as we go over. that's the jim whitehurst number i don't know i don't want to do the read through. he said that one thing, there is still a little oversupply in data center. but i think the read through is that you just hope that jay powell doesn't hear it because, wow, business -- these are a lot of businesses using the product and 365 is very, very strong gaming, the king of gaming >> tough compare on gaming year over year. >> yes but this -- we never talk about linked linkedin >> 25%. >> that was an acquisition that may have been -- remember, broke

down in february 2016, waited for it to break down, benioff goes to get it and out of nowhere, satya gets it satya obviously applied competitor you think it is a black t-shirt thing. i may wear that this weekend at ozi fest. >> with the necktie, of course >> it will be hot. don't wear black. >> i got to be told -- i already got told i'm not allowed to wear my trademark suit. i've never been caught anywhere, including in bed with. >> without. >> yeah. i can't -- i don't know, it is my armor. >> i know it is. >> this is a good one. look at this this is a 200 count. >> no idea what -- >> this is a 200. >> like baby skin. >> butter, it is amazing. >> it is my strength and my confidence. >> let's quickly do boeing up in the premarket, despite these plans to take a charge of about $5 billion in the june quarter to compensate their customers affected by the max, company says the charge is related to estimates for potential concessions and other considerations to customers for

disruptions. this is going to include product slowdown, increased cost, this is -- why is the stock up? >> i think that if any time you can contain and, by the way, i -- they have very smart cfos anytime you can contain a loss, they could have printed $10 billion. we just don't want open ended. this company is -- after initially not handling this right, and i think we all pretty much agree, feinberg, facebook had done that, feinberg in like i said, different, bring feinberg in, start quantifying things. >> there is still 100 lawsuits outstanding. >> yes there are. and typically the other day when david solomon was asked about reserves for 1 mdb, he didn't tell you exactly you tend to not want to put a number out dp tried to do that in the gulf. but i felt better about boeing

after this because i know that they're a conservative company entirely possible they're getting their arpz arouget i getting their arms around some i want to know what southwest has to say i want to know what -- >> they have the most of the airline -- airplanes >> american air had a great number because of others did not have enough routes they were able to raise rates. >> they had to reschedule a lot of things. >> yeah. this is a remarkable time because the airlines were doing poorly until the supermax. they all exploded higher boeing is a remarkable stock stocks are down for the year, so this is -- any quantity fiction is regarded as being positive. >> we'll watch that. the president once again on twitter today sounding off about the fed. we'll tell you what he said. another look at the premarket here, looking pretty good. shanghai coming off the best day

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stocks on track to open higher today yesterday's dovish comments boosted hopes that the fed will cut rates later this month s&p and the nasdaq still on pace for the worst week since may,

but earlier on "squawk," larry fink said people are still under invested in stocks take a listen. >> we saw people derisking still and i still believe as i said last quarter, i think this is going to be a mistake. people are underinvested in equities and i do believe with now the changes of tone in central bank behavior and starting to see corporate earnings coming in pretty well, you know, we still are constructive on the world. >> comes on a day where mike wilson, morgan stanley, again, says look for a 10% correction in the next three months. >> remember, mike put his money where his mouth is and i got to tell you, my mother always said don't put money near your mouth because it is dirty i think that larry was at his best today i think that larry is talking about the notion that if you're going to be a long term investor, you need long-term assets s&p 500. i felt very, very good because

he is a -- not a cynic, but you used the word earlier, skeptical. the money hasn't come in yet a great interview. can you get that can people get that on cnbc.com? it was -- you felt like, wait a second, morgan stanley is taking too short-term a perspective larry was very buffett-like this morning. and i felt great about it. i really did he's a man i admire greatly. >> some of the charge this week suggested you could slide back to 2950 and still call this a consolidation. do you agree with that >> i had a -- my friend carl did chart work this week on "mad money" and absolutely. >> wouldn't be a false breakout? >> that's exactly right. you say that, she said it could hold there, and people would come back in obviously if it doesn't, there is some substantial downside larry said, you know, we had pretty good earnings i'm saying, well, you know, we

had csx and union pacific. >> and ksu today. >> yes your interview with lance, again, people have to listen to that interview he was not baffled by the economy. he said that they can still do better the economy is down -- last time on brian moynihan, the economy is good but downshifted. everyone in this ilk understands if jay powell wants to get the economy back, a little bit, just takes out that last rate hike. but i thought that lance made me feel, again, well, okay, things aren't perfect but if we get -- then he mentions -- the trade tensions, it wasn't just china he had -- europe, japan. >> i was waiting for him to talk about luxembourg did he bring up luxembourg. >> mexico and canada. >> here is what moynihan told jim last night take a listen to this. >> the core thing is the united states economy is growing. is it growing slower than last year not so far reportedly, but expected to slow down because the first quarter is equivalent

to last year in the consumer is driving it. >> so still looking for a july cut. do you want the 50 -- >> no, no. 50 is panic filled i just want them to be able to -- oto appease our tweeting president a lot of -- larry fink was going over bulgarian rates my nephew, who writes my show, cliff mason, he has always said the king of bulgaria watches our rates very highly. good to be the king. we know that but larry fink mentioned bulgarian rates being well below ours and picked a country we don't think central bank president clinton always admired their central bank, oddly. he had a couple of calls with my nephew i do think when -- i was

listening, i said, oh, my, we have to take that rate there are .68. >> are we really talking about bulgarian rates? >> well, yeah, larry fink brought it up. >> what is the population of bulgaria >> what do i look like information please. >> yes >> i got this thing -- >> random facts -- >> i was going to go to this so infiltrated by chinese communists, google, i would -- i have in my head 7.1 million. >> still had ashford and simpson. >> ashford and simpson i saw them wow. >> when we,ba come back, cramers mad dash we still got to get to some calls on chipotle, philip morris, amex, crowd strike a ton of names to get to don't go away. pnc bank has technology to help make banking easier, like.. pnc easy lock,

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♪ happy friday, everybody. for some reason, we're all here today. i don't know what happened. >> all right, you're okay. you're dropping stuff. >> no, no. this is the crowd strike it is too high it is too high i can't -- blisters. i have blisters from this. david, 100%. 100% growth. more than 100% growth. you know, i can't touch that >> no. >> it is hotter than sunday. >> who are these guys? i feel like it is -- butch cassidy and the sun dance kid. who are these guys.

>> markets very recently anybody who bought and held on the ipo is happy -- >> this is beyond meat this is a great -- these are cybersecurity built for the new time z scaler, a company i like very much, it may not be as good as this this growth, not even -- 100 million, they're not a tiny company. >> this is a $14 billion market cap. >> i'm saying, the revenues that double don't touch that, david. just the third rail of stocks. >> i remember they were a very small company. their cto helped us with our work on chinese corporate espionage. >> that was one of the greatest stocks ever. >> small little mini dock. you can't say that about every dock you have to pick and choose. that was not one of my greatest. >> narvick was your best, house of cards has to go higher

that seems silly it has to. there are people who say what is the fastest growing company on earth. i want to own that that's how -- some managers that do that. bingo. crowd strike >> right here. >> yeah. >> not as though cybersecurity is -- >> oer >> oh, my, just getting worse and worse. they're calling it the new palo alto network >> by the way, we have medallia today. >> really noisy. won't hear a thing. >> four times oversubscribed i heard oversubscribe so many times on so many things that diabe didn't do well, but i'm told it is one of the better -- coming out of the box >> another gd art oostto the day. who are those guys >> who are those guys? opening bell coming up

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you're watching cnbc's "squawk on the street. we talked a bit about microsoft today, the fed commentary last night, the president i guess gold at 1450 yesterday, jim, is getting a lot of people's attention >> you say that. i'm getting so many questions

about gold and what's going on remember, bitcoin took the shine away from gold for a while, but i think there are people who are simply reacting to the idea that if the fed lowers rates at this time, that's foolish, there is also a lot of people who just trade momentum i've always felt gold is a good insurance policy for people. this is a dramatic move. >> so unnerved by williams, comes out, seems to say the neutral rate's half a point, the new york fed says it is not about july, it is about -- it is academic research. >> i was unnerved because i feel like brian moynihan, which is the industrial economy is not as strong the consumer is strong you do 25, take back that, and then wait. i want to see fewer csxs and more union pacifics. rates are going up for steel, a very interesting sign. rates for steel.

>> yes >> rates for steel going down. >> well, anyway, that was out of sync with what i'm hearing >> the opening bell, the s&p 500, at the cnbc real time exchange consumer experience, celebrating its ipo today. we'll talk to the ceo when the stock opens. at the nasdaq, a medical education group in brazil also celebrating its ipo. >> brazil is a really -- people don't understand, their medical community, i've had the privilege, extraordinary people underestimate brazil is an amazing -- my grandfather -- i've been trying to get him for years now but that is an interesting ipo >> we mentioned kansas city southern earlier

but 164 beats by three cents revenue ahead as the transports could use more good news after this week. >> they need to keep -- they need the new nafta they are the main trunk line to bring in most of the autos being made and the factories that are being built in mexico for autos, particularly for the germans, extraordinary. that's the way you play nafta and has been and will always be given the fact they make cars more cheaply there and bring back cars. allison transmission goes to america and comes back ksu. >> your leader on the s&p. >> deserves to be. >> followed by microsoft and boeing, two of the companies we mentioned, jim, you said putting a cap on this number means a lot, even though the max is part of the growth engine for the next several years >> you got a strong cfo, a company, they didn't -- at the beginning, it could happen at the beginning, didn't get it

right. now they have it right there is an element -- remember, friday got to be careful, there is a 1207 cannonball there is a lot of better news today. conscious that with yesterday. netflix and very worried about csx, so much negativity, and then we got the fed comments, which then lifted the market gave back a little but what a setup for today we were talking about netflix yesterday. david, you mentioned, what have you done for me lately game. netflix was yesterday. >> it was yesterday. no -- there is a bit of follow through today to the downside, the stock is down at 1%. >> stock down 40 sellers aren't finished typically, that's what happened. >> as you might expect, a lot of head funds were long netflix. >> why >> why wouldn't they be? >> it was -- it was -- it was their annuity play >> did you ever look at your bill for netflix >> no.

>> did you ever realize there would be people who got it and say i got to rethink, rethink netflix. and it goes and you say who is watching do you have a little funny place where you -- >> yes, i'm not on there we got the kids. >> everybody has a face. >> you like that >> i do. remember i told you i called customer service at 2:30 at night just to test and i said, i'm looking for a movie that is about the soviets going from stalingrad to berlin and within seconds she said, well, you know, mr. cramer, we have one directed actually by stalin. i said, oh, i'll take it >> netflix and chill that sounds like a great friday night right there. >> statlin turned out to be quie a director boy, he did cast that well, churchill. >> there was a funny movie involving stalin. >> funny movie about a mass murderer

springtime for stalin? >> something stalin. it was funny i recommend it. >> really? >> yeah. uncle joe? uncle joe stalin >> yes, yes. >> i'll break out the vodka, we'll sit down and watch it. >> thank you death of stalin. >> death of stalin well, that's positive. >> all about, yeah, when stalin was going and khrushchev -- >> he didn't like ukraine, so he didn't let them have any food. there is a man that really had a game plan. >> yeah, yeah. >> you want to do chipotle quickly. evercore said as domino comps traffic goes flat, they're the last large cap quick service company growing traffic. >> right, north co. put a sell on it today. i spoke to brian nichol, but i spoke to jack har tongutung, th, they have accelerating store growth and people forget, what happened at chipotle some sort of airborne -- america

is a strange country taco bell was forgiven for -- jack in the box was forgiven so, i mean, we -- we have forgiven -- we can't even remember jack hartung sat there and bought share after share when it was down because he had conviction >> you said this in the past, 18 months, public sends to forget does that apply to boeing? >> wow -- >> 350 deaths. >> we discussed that on "mad money," our team and i don't think it does. because this has to do with whether -- like if american keeps saying they think they're not safe, they're going to -- they're doing so well against southwest, they can use it as a hostage, a hostage situation. >> you think it would be it is not a consumer company not like the people making decisions about buying boeing jets are -- >> we have historically forgotten crashes. i know this is horrible.

>> two providers of airplanes more or less >> airplane traffic is so much safer than driving i wish we had more information, i wish the pilots would come out and say how they feel. i don't know >> yeah. i think 18 months is too short on that one. i think people will be asking is it a -- >> have we done chewy? >> no. not yet. >> good quarter. good quarter. >> coming -- well off the host ipo highs. >> right and the revenues were good i do think a lot of people are wise you can speak to this, the ownership structure is not -- is suboptimal. >> is it i'm not familiar with -- >> they have petco and there is a -- the public doesn't own the big stake. but it was a good quarter. not -- not a crowd strike. there is good pin action off microsoft, more than i thought and it is a remarkable day

because it is almost like people are buying stocks that think there could be a break in trade talks too. when you watch fedex go up 6 points this week on nothing, people are speculating, i think that may be ill founded. but there is a -- >> given what we're hearing from reporting, not our own, though some is, it seems more likely it goes the other way. >> they had a phone call, we know this. the chinese have made their biggest soy purchase since april. >> that's very important >> and then kudlow reportedly meeting with tech executives on monday regarding huawei. so maybe the wheels are starting to turn. >> enyou' watch xilinx. xilinx, used to be run by -- i think that xilinx went down a lot because they made an acquisition that really doubled down on china and here we go this stock has just been red

hot, san jose company, what i like about it is that it came all the way back and has the most to lose from huawei so that's been the one as that goes up, that means that huawei talks are going well. so the soy thing, the president the other day was not happy. something must be at work here and -- or these stocks, all the china stocks i follow are doing very well today. again, that may be boeing too. >> yeah. absolutely >> the china stocks are doing quite well >> philip morris, pm, was the second biggest gainer on the s&p, 1500 yesterday. on earnings. second biggest gain everccordin. are staples the next huge play. >> do you know clorox hit a high clorox had a bad quarter think about that bad quarter. and hit a high there are people who like the raw costs coming down. philip morris, you did that unbelievable documentary on juul, i mean, they never stop

smoking over in europe interesting because the uk obviously they have much more of a smoking problem over there than we do because they caved to juul willingly with that horrible graphic, what is that junk in people's lungs i do feel that the -- when i see philip morris, it reminds me when you go to europe, the only time it is ever an advantage to have no hair, because, boy, i never have to shampoo so my hair stinks like cigarette smoke. i'm often called jason i've been confused with djimon jason so many times. >> there times you can flip around like hbo, show time, and you'll see jason statham. >> that hair, it works for me. >> always looks the same even though it is 20 years apart. >> remarkable man.

>> when he was in a car driving this way, that way. >> have you ever met him >> i have never met him. >> i think we have to get him on doesn't universal -- let's get jason on. >> icon is putting him on the board. he's everywhere. good transition. carl icahn is challenging for four board seats he needs 20% of holders to allow him to move forward with a consent, it will take a little time the earliest he can deliver is august 29th, 60 day waiting period or 60 days have to expire before then he can try to present 50.1% of the shares in favor of his directors who he is putting up there two of them are his guys, one already serves on another board and one is a 71-year-old former shell executives

curious to see how some of the proxy advisory services like iss will weigh in on that. this is not going to have any impact whatsoever on their ability to close the deal. they're going to close this deal in a couple of weeks. >> i know. the first time this has gone up is because of icahn, just down, down, down david, icahn has done a lot of work, i believe, also, in the buffett -- the high cost of money. >> he objected to the transaction, feels they should immediately try to sell the company itself it certainly is a distraction from management to be fighting with icahn >> direct attack on -- >> how likely it is that he's going to be able to get 20% let alone 50. >> you think he's just being a -- >> outstanding, not like a special meeting. he's been -- >> we need oil to go higher obviously because they did take down a lot of debt this is a rebuke of vicki hobb, the ceo, an uncomfortable

situation. uncomfortable. >> and there is vicki. we'll be watching as they get closer to the close and then it is the prove me period she doesn't have a lot of time in some i was. some s some say the window has closed on the deal and the fight she had with chevron and the price they paid was worth having done and the asset sales that are come issiing as well. >> so overpay is a permian too far. >> i think the president is watching he dwetweets, i like john willis first statement much better than his second his first statement is 100% correct. must stop with the crazy quantitative tightening. we're in a world competition and winning big. it is no thanks to the federal reserve. had they not acted so fast and so much we would be doing even better than we're doing right now. this is our chance to build unparalleled wealthand success for the u.s., growth which would

greatly reduce the percentage of debt don't blow it. >> geez, let up. winning. he's going to have the rate cut. don't rub it in jay powell's face anymore tactically i do think that there was a downshift, but most of the companies i talked to, mr. president, are saying it is because of your tariffs. people have forgotten the december hike. i haven't. that was a wrong hike. but i'm not hearing people blame the fed as much as they're blaming the tariffs. again, lance fritz, union pacific, the president did not watch that >> all right so we're back above 3k and dow is up 100. to seem why moa mody. >> stocks getting a lift those comments from williams and clarida as well. that dovish commentary we had four central banks this week cut interest rates, south africa, south korea, among others and the reaction overseas has been notable

i would point out the emerging market etf only up half a percent this week. the market is now looking ahead to the ecb policy meeting, where the probability of a deposit rate cut is rising with that, the meeting is next week let's dig into earnings as well. kansas city southern, the railroad giant beating on the top and bottom line and maintaining its full year guidance its chemicals and pet column shipme petroleum shipments did well out at least main railway stocks, kansas city southern has the most exposure to u.s./mexico trade. all three railway stocks had a pretty decent year here in 2019, led by norfolk southern, up about 32%. let's talk tech. microsoft trading at all time highs. it is also worth noting that the rebound we have seen in semiconductors from highs in april to may lows. it is rebounded here, it fell

about 20% from april to may. and since then the index rallied about 19%. yesterday, closing at its highest level since early may. index up half a percent, a number of earnings next week will give us an idea of whether that run can continue. on the international front, we have secretary pompeo visiting south america to talk immigration. taiwan among foreign policy experts is becoming a bigger focal point. lastly, the u.s./iran heated rhetoric, that continues to be a focal point for oil investors. that's why oil is higher in early trade. guys, back to you. >> thank you very much, seema mody to the bond pits, rick santelli at the cme in chicago. plenty to work with today, rick. >> yeah, oh, boy, yeah i'm kind of going on the music end of it. watching everybody do the moon walk here in the fed i'll tell you what, this is really everybody should ponder how the wonderful speeches float the balloons, they watch the market

markets, walk it back a little bit, transparency is wonderful look at two day of two year note yields they dropped yesterday and they moon walked back, brought them back up a little bit. they're not quite back up to where they were. and that really is the point there was damage done there. if this is the type of research the fed is working on, i don't think you need to be a rocket scientist to connect the dots. look at two-day of ten year notes, also recoup some of it. but in the all of it we know that's true because even though all maturity is up and down the curve are actually up in yield from those drops, they are down on the week 2s, 5s, 7s, 10s, 30s across the curve. let's open a ten year chart, back up to that fourth quarter in 2016. that's when we spent time under 2% since then, on a closing basis three sessions under 2%, you see them on the right side of the chart, july 2nd, 3rd, half day on july 4th. once we start to get under that level, and yesterday we were

knocking on the door but didn't get it on the close. that is really going to change the psychology a bit you already have historic positions that are long treasuries looking for yields to continue to move lower finally, the two day of the dollar index, here is the exception and it is really fascinating. dollar index did recoup all of it, which goes to tell me that the dollar index is kind of looking across the globe and all of the central banks that are stimulating, the ones that are hinting they're going to stimulate more and then, of course, we have la guard that will be coming at the ecb. i think the dollar is divining that even through all of that, the u.s. economy is probably the best place for your capital at least for the moment carl, jim, david, back to you. >> rick, thank you hollywood is making a big bet on 80s nostalgia more than 30 years after top gun, tom cruise is revivingebuty

got the sequel to terminator, the 1984 picture with arnold schwarzenegger the long running '80s show "cats" coming to the screen. another trailer that dropped we did ask on twitter where the excitement is. i think i got 2,000 responses. top gun, what would you say, top gun 70%. terminator, about 20 cats 10. >> wow. >> is that crazy >> that is crazy i can't wait for "top gun", that's paramount, that's bob bakish, right? "top gun". >> he's playing the same character? >> yes cruise yes. character who should have made colonel by now -- general by now and still a captain. >> that's ridiculous that's crazy one of the few actors that can actually -- looks almost the -- >> he looks good. >> i thought jack should have been played by a bigger man.

you know, "jack preacher". >> yes >> will this move, is there any chance -- this is a paramount movie, is there any chance this could bring us closer to viacom/cbs >> you're always going to look for some opportunity, aren't you in. >> it is ridiculous. it is like -- what is that frank, general franco still dead >> viacom/cbs is getting closer. >> oh, stop it. >> all i can give you. >> stop it. >> not saying any more. >> by the world series by what? by what? >> i don't -- no point in incremental tiny little -- let me wait and actually present something that people are going to care about. >> facts with the fact thing again. >> it is not off track they are moving ahead. they're getting closer >> dow is -- >> wells fargo gets a ceo, i will be right. >> that would be something >> dow is up 62.

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microsoft record high, trillion dollars market cap after that quarterly beep. look at the charge since nadella was named ceo. up almost 0% ow. 27. >> dow's up 57 we're back in a moment

what's on mad tonight? >> we have morgan brennan celebrating the man on the moon. and a bio monday it's ridiculous it's down this much the top quality financial tech at a discount. >> plus a div hike announced for next quarter >> i like it i am going torecommend it hard tonight. >> see you tonight shlts thank you, guys. have a great weekend i am going to do some power gardening, pound the heck out of those weeds. that's when i'm in zen mode. >> does his gardening in the evening. >> when we come back giant leap for mankind. we are live at the kennedy space center on this 50th anniversary of apollo 11 don't go away. to experience ourt advanced safety technology

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♪ good friday morning. welcome back to "squawk on the

street." i'm carl quintanilla with leslie picker here at post nine great to have you. david faber at the new york stock exchange sara eisen has the morning off busy friday, especially for a summer friday. dow's up 75. we have gotten through some talk on microsoft and boeing and now we are going to get umish. >> our july read on university of michigan 98.4 we were looking for 98.9 and 99. a bit light. the rearview mirror is 98.2. 98.4 isn't bad when you consider in february we were 93.8 let's get to something more interesting. the five to ten-year inflation outlook moved from 2.3 this is very fascinating 2.3. if you look over this data for the last20 years, 2.3 is the low. we have been there several times. several times in this cycle. but it jumped up to 2.6, which

is the highest level it's been at basically all year. that was january that was may now, of course, it's once again. let's look at the one-year inflation. moved from 2.7 to 2.6. we want to monitor this as we see constant comments from fed reserve officials that seem to be pulling in one direction lately, and that of course is an easier direction back to you, carl. >> all right our roadmap starts with boeing's big hit. the company expecting a $5 billion fine in the fallout of its 737 max planes. we have the details. the age of as you're microsoft pushing the company to record highs. >> and another ipo making a debut. we will speak with the ceo of medalia. we will get to the opening trade when it happens. >> markets moving higher the s&p 500 and nasdaq on pace for the worst week since may

the twitter taking to twitter saying because of the faulty process we have, we pay higher interest rates from countries that are no match from us economically our interest costs are higher than other countries when they should be lower. correct. that sort of roughly matches what powell said earlier in the week, guys, that u.s. rates don't live on an island. they have to exist in a global financial system i'm imagine the tweets from the president. it's just more of the same from the president at this point. you could substitute a tweet from a week ago, a month ago even more than that, this kind of constant drum beat of criticism for the fed. >> interesting how this controversy surrounding interest

paymen rates is being roped in. we haven't seen it where people put a tie between the interest payments on our debt to important services like defense spending and so forth and how that will compare relative to where rates are if we don't solve this budget crisis in subsequent deficits. >> we will talk more about that this morning boeing is the other story. $5 billion charge due to the groundings of the max. phil lebeau with the latest on that good morning, phil. >> seldom has a $5 billion charge looked so good to investors. that's the reason why the shares of boeing are higher today there is some certainty behind how much the max will cost this company. while nobody like a $5 billion charge, it gives investors some certainty. that's why shares are moving higher today boeing announcing late yesterday they will take a charge due to the max, due to the concessions and accommodations to the airline and leasing companies that ordered this plane. they will reduce the q2 earnings next week by $5.6 billion.

all the analysts notes today say the same thing there is a little bit of certainty. morgan stanley says there is a tentative return to service target of early 4q which compares well to concerns that it might have been moved out to the first half of 2020 credit swi swe as you take a look at shares of boeing over the last three months, remember they will report their q2 earnings next wednesday morning. guys, again, the stock moving higher partially because people have a little bit of certainty about how much the max is going to cost boeing. >> yeah, that is often an occurrence, phil we saw this with facebook and the fine from the ftc. phil lebeau, thank you speaking of plans, the president meeting with ceos of major american airlines yesterday discussing discussing acquisitions that subsidies by qatar and the united arab emirates are costing jobs in the u.s.

eamon. >> that's right. the president holding a meeting with major airline ceos. not just american airlines ceos. also the qatar airline ceo was in the room yesterday. at issue is a dispute between u.s. carriers and the qatar airlines about exactly how many flights can come in the united states based on the open skies agreement. they feel that the qatar ownership take in an italian carrier violates at least the spirit of the rules. you see some of the ceos emerging from the meeting at the white house yesterday. what we don't know about this meeting is exactly where the president came down. did he side with the u.s. carriers or with the qataris meanwhile, doug parker, the ceo of american airlines, did talk to our intern out on the street in brute at heat yesterday trying to get comments here's what he had to say. >> talked to the president about

american jobs and the threat to american jobs from subsidized carriers from outside the united states being able to fly from europe into the united states. had a nice audience. i think we made a good impression. >> one thing i picked up on yesterday about this meeting was discontent among the american side of this some people very frustrated that the qataris were invited to this meeting saying they were shocked that he was allowed -- that the ceo was allowed to come to the meeting given that some people thought this was supposed to be a focus on the american airlines and jobs we will see if this leads to a renewable ener resolution to the dispute any time soon. >> thank you. let's get back to boeing and the reaction to their news yesterday. joining us at post nine, pulitzer prize-winning columnist jim stewart. happy friday to you. what do you make of the charge

as they put it on thursday >> well, i have been following the boeing thing now for months. it's a fascinating story this will definitely be a case study for harvard business school i understand the stock reaction. this is providing certainty. you have to look at this as one point in an arc of a story that is far from over to me as an investor, i don't know the stock obviously, but i have been troubled by management violating two key rules. one is underpromise and overdeliver, and two is get ahead of the press and regulators they have been on the opposite side of this from the beginning for reasons i'm puzzled by boeing had such a great reputation it's a great company they have had very strong management and they dropped this ball over and over again my question is, given what they first said about the software, given what they said about the plane, gethey said it had nothig do with the crashes, can we

believe now that 5.6 billion is going to be it i would like to think they overestimated a little bit here, but i don't frankly have that much confidence. >> then the uncertainty of when those planes get back in the air and how they are dealing with regulators and, you know, the effort to do that. >> that's a huge question. again they had consistently overestimated. they have been overoptimistic about when they are going to go back i am just very puzzled by that it worries me that upper management has not really ever understood the technical complexities, the issues here, how the problem surfaced in the first place, how the software interacts with other parts of the airplane you know, they played a prominent role it was self-regulation that whole era is coming to an end because of the way boeing has handled this and so there are going to be many more hurdles. where there used to be trust, there is skepticism on the part of the regulators. i think we have seen a sea

change and that is going to make it harder to get back in the air. >> "the times" quotes an aviation consultant saying this is consequence, it's not inconsequential for a company the size of boeing if it's not the regulatory risk, is it the order risk is it the margin risk? there are a number of things that could continue to hurt them in the years to come really. >> yeah, absolutely. and i think the customer relationships are going to be very important we already saw at the air show that airbus is rushing into the breach here and collecting orders there are only two major producers, and their relationship and their relationship of trust with the customers is vital to the future order flow of these companies. that means they have to keep the customers happy. i'm sure they will they understand them that makes me think they are going to be writing a lot of checks here. >> we will watch that. let's talk some ipos the wave of tech ipos strong

debuts average return 26% crowdstrike with the first earnings report on thursday. now up nearly 150% since the ipo. what does that mean for the sector's future returns? are you generally impressed with how the debut prints are going >> absolutely. over the last few years wall street has really honed their valuation techniques they are coming in at a sweetspot here to give the stock a pop. now, they haven't done a whole lot after that initial pop in most cases, and i think that's because we haven't had the data that's going to come in. with ipos you have the story and the numbers. and especially in the beginning, i think the story is more important. medalia is coming on let's figure out what they do, you say. that could work to the advantage of a company i think people assume -- i don't understand what they do. they must be doing something really fantastic i know people who still do not

know what salesforce does, okay? they think it's a great company. so the numbers are going to start to roll in if the story is good enough, the first earnings number, it's not going to matter that much. chewy is a company where i say the story is not quite that good i love that name, chewy. it's a fascinating company but it is a consumer products company and everybody knows what they do. and if they don't start showing some impressive revenue numbers there, and they are up against some big competition, petco, then the numbers are going to be more important to kmu which than to - >> you cover ipos for us we have gotten decent earnings report crowdstrike is a great example today, up sharply. also beyond meat's first report very well received to jim's point, it's not like they are making money. >> we say earnings report. in the case of these ipos oftentimes it's a misnomer because they are profitless. but there is a rule of thumb for

ipos, which is make sure you have your first quarter earnings in the bag meaning make sure you are not going to disappoint the investors who just acquired stock through the ipo and wrote it up to the upside. i think the question that should be on investors' mind is this idea of how much of the stock prices rise are momentum driven and how much of it is investors collective wisdom that the fundamentals are there and they actually see a future of this company and first quarter numbers or first quarter post-ipo numbers support that. it's hard to sustain these rises at these levels if it's purely momentum drink and it -- momentum driven and not a collective desire to own the company. >> i would agree with that eventually, it varies tremendously for the company i think largely because of the story. but investors will give some people a pass for years. amazon being a great example of

that others they start making demands. show us the beef, so to speak, very quickly and it's fascinating to me to see how investors kind of make those distinctions. >> have you thought about how much an investor should allocate to playing new issues? is it generally single digit percentage of your portfolio >> i don't think there is any hard and fast rule there i mean, i have noticed that some new phones are coming out making it easier for the average investor to get into this space. my own feeling is i wouldn't -- i don't think now is the time to do that. we had a run of great successes. that doesn't mean it's going to keep going it's like any other stock. what do you know or what do you believe or what do you feel your edge is over the market that you know something the market doesn't? and i think especially with ipos, that's very tough for the average investor. >> because it's everybody's new to it. jim, have a good weekend. >> you, too.

>> that's not going to be easy when we return microsoft is hitting a record high and it's sitting on top of the old market cap competition. it's a trillion dollar company we'll discuss the quarter next. and putting a man on the moon we will be live at the kennedy space center marking the 50th anniversary of the apollo 11 moon landing a look at the next 50 years in space is coming up on "squawk on thstete re." but we're also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. from the day you're born we never stop taking care of you.

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microsoft's moving higher on the earnings obviously from last night hitting nine straight quarters of double-digit annualized revenue growth. 12 in this case. john ford with a closer look at the results and some of these numbers out of azure >> i mean, growth is slowing on the one hand, but still pretty nice revenue about $1 billion above expectations gross margins improved by two points up to 69% so the theme here is cloud maturity maturity is a scary word for stocks with health valuations. microsoft seems to be maturing like j.lo, still looks good. office 365, linkedin turned in strong currency growth, 30%. meanwhile, the azure story is shifting to a consumption story. that's why we had microsoft

earlier this week talking about winning at&t communications cloud business this was also the end of the fizzle year. the forward-looking part is interesting. the ceo saying clout profitability should continue to be on the strong side the fiscal year with commercial crowd gross margins improving. microsoft is forecasting opex growth above 10% for fiscal 2020 so big investments continuing in artificial intelligence, for example. >> a market cap has been created as a result of movement to the cloud. it's extraordinary obviously, microsoft now over a trillion but you think of amazon web services and what that has meant to amazon's valuation. where are we in that transition, john >> i hate the innings analogy because i think everybody says early innings. it can't be early innings forever. i think we are in the middle of the game

more and more the language i'm hearing sounds like what i used to hear out of hp and dell in the services business, how they were talking about big deals with p and g, how it wasn't just about selling servers, it was about taking over their data center and infrastructure. now you have mega scale cloud providers talking about that same language when it comes to cloud. transformation is just an excuse, an opportunity to drink somebody else's milkshake. that's where we are i think. >> thank you. sticking with microsoft, etf spotlight, looking at etfs with large stakes in the company. what makes up these etfs. >> not only that it seems like the all-purpose core holding across a very wide group of etfs, not just technology i featured some here microsoft so big, it's more than 4% of the s&p 500. but there are 60 etfs that have at least a 5% position in microsoft.

so this shows microsoft along with the vanguard mega cap growth index that makes sense, right? that's clearly been microsoft's story for a very lng time. you see here mega cap growth is outperformed by a tremendous amount that's a really big number, eight percentage points over the s&p 500 over two years look at some of these stocks, these etfs that microsoft has a big presence in besides vanguard, almost 10% it's in every esg fund, right. this is sort of a sustainable growth esg fund, i shares. it's in low volatility funds and high momentum funds mtum it's calm and it's also running away to the upside and then of course dividend growth so essentially it can fit almost any strategy you can layer into an etf, guys >> enormous influence on a lot of different things owned by individuals, i guess, is fair to say, mike? >> without a doubt the indispensable stock at the

moment far beyond others. a trillion dollars there you go. >> benefiting a lot of portfolios today when we come back live at the kennedy space center morgan brennan with a look at what's coming up with "squawk on the street." >> hey, leslie 50 years ago from this launchpad 39 a apollo 11 blasted off to the moon today this site is leased by spacex, really speaking to the rise of commercial space after the break we will do a deeper dive into that erngemgi space startup ecosystem. is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. every day, invesco combines ideas with technology, data with inspiration, investors with solutions.

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♪ this is major tom to ground control ♪ ♪ i'm stepping through the door ♪ ♪ and i'm folding >> tomorrow marks the 50th anniversary of the apollo 11 moon landing morg morgan brennan live from the kennedy space center with a look at what space companies are going to be doing over the next

half century. >> reporter: that is a big question we talk a lot about so-called old space legacy companies like lockheed martin or boeing or north up grumman or arrow jet rocket also the billionaire-backed upstarts like spacex, for example, or blue origin. there is also this emerging venture capital-fueled startup ecosystem. take astrobot i can. it makes robotic landers it was born in carnegie mellon labs a decade ago. it flew under the radar until recently the ceo says they want it to be like a railroad to the moon. >> an opportunity to fly payloads to the surface of the moon, that's going to open the doors wide open to scientists and explorers and technology developers all over our country and all over the world to begin to understand the moon in much better ways and use the

resources and create the technologies necessary to live off another planetary body. >> reporter: so the company has almost $100 million in contracts, including recent pretty high-profile awards from nasa to land payloads on the moon and gather research there it currently has 22 employees, but is expanding that up to 60 over the next several months that's really just one example companies are working on everything from small rockets to 3d printing to moon mining to space habitats early stage investment firm space angels, which by the way invested in astrobotic has gone from a dozen privately funded space companies in 2009 to 476 today. perhaps more significantly, about 50 vc firms a decade in the world had a space investment in their portfolios. that's gone up to more than 600 today. gaze, we talk a lot about so-called tech unicorns. there are space unicorns in all

of these funding rounds now. one web, which has a manufacturing facility just a little ways away from here they are manufacturing small inexpensive satellites also rocket lab, which is doing small launches to orbit, including national security-related payloads. but really at the end of the day when we talk about commercial space you have to talk about spacex as well because they have really pioneered reusable rocket technology and really driven down and continue to drastically drive down the price to go to orbit, the price to go to space, and they have been on the forefront of this emerging new space economy. those lower costs are a big part of your being able to see all of these newer startups start to take root and really start to pull in funding as well. back over to you. >> morgan, thank you morgan brennan great stuff there. when we return possible market catalyst is quickly approaching as a debt limit deal stalls ncneld investors be coerd? "squawk on the street" will be

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♪ i'm frank holland. your cnbc news update. a strong earthquake near the greek capital of athens causing residents to run into the streets in fear and firefighters to check for people trapped in elevators. the u.s. geological survey gave it a preliminary magnitude of 5.3. the quake struck at 2:13 p.m. lel time. a powerful bomb exploded outside the gates of kabul university killing at least eight people and hurting 33 more the blast also set two vehicles on fire, although it wasn't clear if the attack was carried out by a suicide bomber or remotely detonated. iran's foreign minister says he doesn't have any information from tehran about losing a drone. mohammad javad zarif was in new york when he made this comment

iran dismissed the u.s. allegations. representative ilhan omar returned to her district on thursday to a rousing reception. she was met with chants of welcome home, i wilhan a far cry from the chants heard at president trump's rally in north carolina back to you. d.c. lawmakers scrambling for a debt ceiling deal ahead of the august recess. with default remaining a potential clear risk for stocks. in a scathing new op-ed, the president of the committee for responsible federal budget rights, no budget on the brink of default it's a hell of a way to run a country. she joins us now from washington, d.c. to explain. first off, on this debt ceiling, ma weath maya, how much of a risk we would run into it and how much should people be focused on it in terms of a concern? >> i don't think we are going to hit the debt ceiling and i don't think we are going to default, but what i should be incredibly

clear on to do so would be the height of irresponsible. there is a lot of irresponsible things in washington these days, but setting off a massive weapon against our own economy and perhaps the global economy because members of congress can't agree on things is preposterously stupid. it's not where we as a great country should be. what i'm more concerned about at this point is we will raise the debt ceiling, but we will do so along irresponsible policies and actually make the situation worse. >> yeah, well, i mean, we have you on periodically, of course, to discuss the fact we are not being particularly responsible we are running a trillion dollars deficit this year. it's clear the tax cuts in no way are paying for themselves. defense spending all-time highs. do you ever think that perhaps

you are better off in a different profession >> such a sad question, and so profoundly true. i mean, i absolutely do in that i worry that we will not be able to fix this overall fiscal situation of this country until we bring our lawmakers together in a way that they are more willing to compromise, recognize that we are a country of differences, and that we are going to have to work those out, focus on the long-term health of the country instead of just short-term wins, and really good policy instead of politics that is a heavy lift to be quite frank, i am very honest about the ability of our country to get ahead of these problems right now that said -- >> don't you feel like it's going to take a crisis isn't that what it's going to be when we talk about long-term risks, people don't seem to be able to focus on them until it's right in front of their face. >> yeah, for sure. the model of change will either come from a crisis, which could come from so many things and would be so fool hardy to let

that happen when these things are benefiting our economy and allowing us to be strong and be a safe haven, or the optimistic one, political leadership. in the 2020 election, if somebody were to start talking about this issue in a responsible way and force it on the agenda, that would help. if members of congress stand up and say imnot make the situation worse, they've do this because it helps the economy we are very vulnerable right now. and morally, it's the right thing to do. you don't leave your country horribly indebted to the next generation but we hasn't seen signs of strong enough leadership yet so, yes, a crisis becomes the more likely thing that will push this, say interest rates going up if it goes up one percentage point, our interest payments increase by $190 billion a year. the reason i don't give it up, it's too morning to not care about. it's the foundation of our economy. we need to bring lawmakers and voters to understand why the

health of our country depends on a sustainable fiscal policy. >> you say in your op-ed we have never seen deficits this high when the economy is so strong. what happens if we run up the large deficits and see a significant recession or a large-scale war or something that does require significant spending how do these deficits play a role and what happens especially since we don't have a historical precedent for something like that >> that's exactly the right question it's not as though you feel the pain of a deficit every day like rising health care costs or high taxes. but high deficits leave us incredibly vulnerable for the changes that will come along when you look on the horizon of this country, we face, we know, a number of changes and challenges first when we go into the next recession our debt will be twice as high relative to the economy as it was when it we went into the recession of 2008. that weakened our fiscal policy response to recession,

potentially making it worse. it also means that if there is a national security threat we are not nearly as safe as we would be to respond. we have to borrow much of our financing from abroad, particularly from countries we aren't always aligned with we also know there are big changes to our economy structurally from globalization that's been going on for a while, but increasingly from technology we have not built a budget or economy that's ready to prepare for huge changes the pace of change is ever growing. it's immensely shortsighted we are pretending we cborrow our wt prosperity it's a risky economy going forward. >> you mentioned borrowing from abroad china still is the largest holder of our debt, but their holdings are down three months in a row the lowest since may of '17. i mean, what's the thinking about whether or not they would use that so-called nuclear option to dramatically cut their holdings >> yeah, that's exactly right,

which is that most people don't think that you are going to see a huge treasury dump from china per se because it would hurt them as much or more than it would hurt the u.s., but here is the situation. we are in a trade war with china. we have growing tensions about how to have our economies, technologies work together in a more productive way, and right now the biggest tool we're using is tariffs but if china were to switch and use the tool that they are our biggest lender outside of the u.s. and they can affect the prices in our markets, they have a potentially very strong weapon and in my mind this is a huge reminder that this country should not make itself so vulnerable as to be dependent on other to countries, particularly those that we are having tensions with, to lend us money for the basic operations of government so so many scenarios i don't think are likely, but if so there are warning signs in every single dashboard of this country and economy that we are making

dangerous choices as we go along. >> back to the debt ceiling itself trump and pelosi are nothing if not a wildcard in terms of their relationship, which is not particularly good. when should we really start to get concerned if there is not congressional action on the debt ceiling? >> well, i mean, it could be as soon as the next few weeks the problem, of course, is that we want to get it done before congress goes on recess, though i would point out to members of congress, don't go on recess if you haven't leifted the debt ceiling. it could be one to two months. if we get through some big moments where we get more revenue in, we may have more months to play with. but the point is we shouldn't be budgeting this way we jump from one crisis to the next keep in mind we don't have a budget in place for this huge country this year and we are on track not to have a budget for next year. instead of planning, laying out strategies, being smart and

thoughtful about the priorities we are making and how we are paying for them, we jump from one crisis to the other. the fat that we though we have a few weeks or months to deal with this debt ceiling means we have waited way too long. we should have lifted it before we got into this period of extraordinary measures which would have been months ago and we should have lifted it coupled with a plan to improve the debt. they will probably lift it along with a plan that will make the debt even worse. >> maya, thank you always appreciate it i bet you have never roun a credit card balance in the center for responsible budgeting. when we come back, the dow is up 64 trying to hold 3k here, although cramer's point is you could afford to lose some of this and still call it some co consolidation. an interview you do not want to miss sara is sitting down with boston's eric rosengren ahead of the big fed meeting the end of

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it's been 50 years since man n landed on the moon a handful of stocks have skyrocketed since the historic event. find out more on tradingnation.cnbc.com more "squawk on the street" is coming up.

now let's get to the cme group in chicago rick santelli with the santaelli exchange. >> my guest today is mark sobel, a long-time former treasury and international monetary veteran he has had responsibilities with currencies currently the u.s. chair of the official monetary financial institution forum. it's a london-based think tank he is a senior advisor of csi s.

you have written op-eds of late discussing that topic. is dollar intervention going to occur? it hasn't occurred in the u.s. since march 2011 we know that president trump is in favor of a weaker dollar. your thoughts? >> one cannot predict what's going to happen in this white house, but i have argued that intervention is not a prudent or a wise idea. the imf, the g7, the g20 economists agree that the primary rationale for intervention would be to counter disorderly market conditions i don't see disorderly market conditions currency volatility measures are low. liquidity is good. bid offer spreads of fine. so i don't see it there. now, sometimes people focus on miss alignments and what not but there again i don't see very serious misalignments. if you look at a real trade weighted graph of the dollar, it

was very, very high in 1985. way out of line. it was way out of line in 2002, but much less so than 1985 now it's not that far out of line other assessments of misalignments would say the dollar is overvalued, the euro slightly undervalued the r&b and other major currencies are in line. >> so, mark, let me interrupt you there. basically, what we're really, in your opinion, discussing is unhappiness regarding the level of various currencies, whether it's the dollar, the euro whatever you want. so to that end we all know that monetary policy, the movement of interest rates and the interest rate differential, have an affect on the currency, obviously. do you think that there are governments that think their export commission like the eurozone and germany in particular, like china or like japan, although japan is a reserve -- a flight to safety

currency, do they like to weaken their currencies isn't the notion that helps their export market that is going on, to some extent, wouldn't you agree >> so right now i would say it's the white house that's unhappy about currency levels. when i look at the european economy i see a weak economy, low growth, persistent undershooting of inflation, unhealthy banks, negative yields so i would say there is a case for monetary accommodation within the eurozone. now, clearly that is going to have an impact on exchange rates. exchange rates are part of the monetary policy transmission effect. >> mark, mark, so in a way, in a way we're looking at the wrong dynamic. maybe it's not manipulation. but the end result is the same in france their two-year note is

approaching minus 70 basis points the two-year note in europe is already very close to minus 80 basis points and they are talking the ecb about more stimulus. christine lagarde most likely will carry the stimulus torch. what i'm kg is while implementing policy to try to address the weakness, it's going to push the currency lower exacerbating the president's unhappiness with a strong dollar. >> i agree with you that the european monetary policy accommodation could have an impact of somewhat weakening the euro hopefully, it would also help contribute to a healthier eurozone economy i think monetary policy in europe is overburdened i think companies with fiscal space in europe should use it and act more vigorously to strengthen banks and take other measures to support the european economy. as i said, this would help

de-burden monetary policy in high view. >> i thank you for your thoughts viewers, i will continue this with the santelli exchange in about an hour. david, back to you. >> thank you, rick. now time to send it over to john ford for a look at what's coming up on "squawk alley." >> david, palmer lucky is the co-founder ofopoulos vr and big proponent of using silicon valley smarts to help the u.s. government, the military, a.i. and cloud. what does he think of his jedi stuff? we will find out on sidewalk "s alley. johnson & johnson is a baby company. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms,

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the oil fields giant posted profits that matched forecasts, sales were better than expected, but north american revenues did fall from the same time last year it was made up by international growth it helped to offset that a bit also, we're watching shares of american express lower by about 2.5%, over 2.7 million shares of volume so far. the credit card and financial services company also posting better than expected results, helped along by better than expected consumer spending patterns it also said it's raising its quarterly dividend to 43 cents a quarter from 39 cents starting next quarter remember, those shares of amex have already gained 31% year-to-date and we'll end on shares of kansas citi southern, up nearly 2.5%, on 700,000 shares of volume the rail operator posted sales helped along by better cost management that helped to offset some slowing growth in transportation volumes. we're watching those pretty closely. kansas city southern is viewed as a barometer on trade with

mexico a big extensive rail network nearly half of its sales are generated down there as well as we talk about the earnings picture as city southern, one of those transports we look at as a gauge of economic activity >> what a week for the transports meanwhile, the chevy corvette getting a long, expected makeover our phil lebeau joins us this morning with a look at the new car. hi again, phil >> reporter: hey, carl it was a fun night last night in us t tusten, california, where they took the wraps off the new mid-engine corvette. they have moved the engine for the first time ever from the front of the car, now it is positioned from the driver and the passengercabin but what really got a lot of attention last night, guys, is the fact that the starting price will be under $60,000. as you take a look at shares of general motors, you should point out for a number of years, people have said, the corvette

can't really compete with the super cars, whether it's ferrari or porsche, bose thoecause those mid-engine vehicles allow greater performance and power when you put that engine behind the driver seat. now you have that with the corvette they expect deliveries to begin in the fourth quarter. and guys, they're already up and taking reservations and deposits, something they typically do not do with a new vehicle. typically in the past, raise your hand, tell the dealer you want to buy one. in this case, you can actually go in and put down a deposit >> pretty good-looking car there, phil. did you give it a ride do you have a sense for it >> reporter: no, not yet not yet. i was like a lot of people i sat there and i said, wow, that looks fun i want to take that for a ride, but i can't. nobody could last night. a select few will be able to you'll start to see that here over the next couple of months guys, they're expanding production at the bowling green, kentucky, plant that builds all corvettes, adding a second

shift. they expect sales to be very strong >> that red color, i tell you what how is consumer demand right now for, you know, these two-seater kind of sports cars? is this something that a lot of people in america are interested in buying these days, phil >> reporter: oh, there's still a strong market there, leslie. the current 'vet sales, they're down around 9,000 vehicles and down relative to where they've been in previous years, but that's because so many people, they have generations of these vehicles where they bought them over the years they've been waiting for this. you're going to see a big pop in corvette sales, i predict, over the next year as more people either traditional 'vet owners or those who want this midengine super move into that market. >> phil, gas mileage what do we get >> reporter: you're getting about 495 horsepower, is what you're getting but because of where that engine

is now going to be placed behind the driver, you're going to eventually see greater power, greater performance. we're really hitting the limit with the engine in the front of the corvette in terms of how much you could do with that vehicle the law of physics start to kick in that's why they said, all right, let's go up against ferrari and porsche, lamborghini on a very high end we will show people that we can give you the best bang for your buck when it comes to a sports car. >> all right we love to see some muscle thanks, phil, on the new corvette when we come back, we'll hear from legendary tech investor, tim draper, get his thoughts on crypto, facebook, the ipo boom and a lot more putting a man on the moon, marking 50 years from the landing of apollo 11 go back to the kennedy space center and talk about the next 50 years in space. "squawk alley" starts in a moment dow's up 33.

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good morning it's 11:00 a.m. at the kennedy space center in florida. it's 11:00 a.m. on wall street and "squawk alley" is live ♪

♪ good friday morning. welcome to "squawk alley." i'm carl quintanilla with jon fortt at post nine of the new york stock exchange. morgan brennan is in florida at the kennedy space center as we commemorate the 50th anniversary of the apollo moon landing a lot from morgan later on in the hour we're going to watch medallia opening now as we're getting not just new issues as well as primary prints of new issues earlier in the day what a day for ipos. >> it is, indeed and this i