good morning it is 8:00 a.m. at disney headquarters in burbank, california it's 11:00 on wall street, and "squawk alley" is live ♪ ♪ darling you got to let me know ♪ ♪ should i stay or should i go if you stay that you are mine ♪ ♪ i'll be here until the end of time ♪ ♪ so you got to let me know

>> good wednesday morning. welcome to "squawk alley." i'm carl kint nia with brett and morgan at the stock exchange rallies are not far from the fresh all-time highs let's talk about what's going on pay, bob. >> we're in a round trip situation. remember when we were martin luther king weekend? we're essentially back to where we were, 3,220, back down about 3%, home trip there and 3% or so and all the way back up to where we were prior to that. that's an important move here, round trip what's moving things let's call it faith, folks fanl in the markets. faith in the coronavirus containment is the most important thing. but there's also faith in the fed out there that they're going to save us faith in global stimulus, that that will save us as well. perhaps even more importantly faith that the global slowdown is only temporary. and what we are seeing with concern to some of these companies will essentially reverse. we have been highlighting what

companies have been saying the last several days. take a look, you talk about what's going on with nike and adidas, closing stores michael kors here talking about earnings hit as a result of the coronavirus. cafe pacif cathay pacific asking people to take six weeks off let's hope it's temporary and they're right on that. if you look at the hits, occasionally you get down days but for the most part, these are modest moves capri is moving to the up side actually today and even cathay is not bad news overall here there's a little over-bought conditions going on. look at microsoft, up 11% in the last several days. it is starting to look a little frothy look, a major mid-cap stock like that up 11%, that's getting a little bit on the overbought side. >> bob pisani, thank you

and now getting crushed this morning in bear market territory and following a run-up in its shares since the start of the year with us on where tesla goes is our own bob pisani and mike lebeau great to have you here i feel like if we're playing a drinking game this week -- >> i would be drunk. >> and it would be tesla and also electric vehicles not just tesla. >> and within the last ten minutes, mark royce, the president of general motors talking about their plans for electric vehicles had a statement. i was trying to call it up but i couldn't on this computer. my producer and i have been talking about this the statement was no other company can match us when it comes to technology, sustainability and electric vehicles gm feels they're as much a player in electric vehicles as tesla but i asked coo and she

said we are there, we're a player they're getting no credit at all. investors, when you mention electric vehicles, they give gm no credit at all it will be interesting to see how much more aggressive they become now, not that tesla had this run-up but the perception is, when it's electric vehicles it's tesla and, yeah, other people working on it but nothing to match. >> and up with the stock and then back down a little bit. we've been seeing wild gyrations. keep coming back to the same question, how much of this is fundamental? >> the fundamental big-picture story i think has the entrenched real true believers on both sides of it in place but what's been going on the last few weeks has been a complete fever that broke out in terms of momentum, in terms of real aggressive pushing of the stock. also from some mechanical courses, not just a short squeeze but stuff related to these options hedging and convertibles in other words, it got caught up to be a little mini market mania isolated in one stock.

but let's not call anything that is 200% above its 200-day moving average a bear market. >> i knew you were going to say that i knew it. >> this is strictly, something got hung way up high on a pole and it's just been clipped back a little bit the first time it hit $500 a share is 17 trading days ago we're giving back the insanity we've built up over the past couple of days by the way, for now. we don't know where it's going to close. >> we had beyond meat and zoom and some younger stocks than tesla making crazy moves last year and a little earlier. what is this really? if you're at home and you believe in tesla, i mean, it can't just be retail investors moving this stock, right but the valuation has gone way out there. you can say it's crazy or you can say it's not but it's still way out from where it was. >> no, absolutely, it's not just retail investors but hedge funds

and systematic traders who say i need to participate in this macrostock doing what it's doing. any mid-cap that's not in the s&p 500 and if it goes up, doesn't count against my benchmark. there's all kind of incentives to own and push it but there's a limit. yesterday $50 billion worth of this stock traded. that's a tremendous amount of influx of -- let's just say unsophisticated novice money turning around at high prices. >> tommy lee said one part funds and small part russell 1000. >> it's also a way to capture some side of upside. i remember in the '90s, charles schwab, the stock, was basically the entire financial services in the russell and it would go up in a mild way every day.

>> i have seen one technician refer to an eiffel tower pattern. it literally looks like the eiffel tower if you do a google search -- if anybody does a google search for should i, i think we had this built, just put in should i -- and the first reply, depending on your history, should i buy tesla stock? >> by the way, guys, i hear this a lot of times from average joes, retail investors, yeah, i like tesla because electric cars are coming keep in mind every prediction when it comes to electric vehicle sales has been off over the last ten years and i remember interviewing carlos ghosn when he said 10% of our sales worldwide will be electric vehicles by 2020. nissan is nowhere close to that now. he made that prediction back in 2015, 2016 when i had dinner with him. >> and it's not just electric vehicles either. we had this conversation longer term out over the horizon and it's self-driving cars we know elon musk has been

touting aggressively the idea of robo taxis and the like. we had adam jonas from morgan stanley on yesterday and he said it. >> anybody who has done any extensive work in this area, they will tell you we're nowhere close to seeing truly self-driving cars. and i don't mean a vehicle you can take your hands off the steering wheel when you're on a highway or for a short period of time that's not truly a self-driving car. a vehicle where you can see i'm at the stock exchange. pick me up and take me over to engle cliffs that's not coming for a long time the technology has to go really, really far it's complex. >> there's a scarce of individual companies if you have the big-picture view that petroleum is dead, the energy stocks have acted like that for a while that's a wasting asset what else are you going to buy with any market cap? and all of these sustainable mandate funds are raising all

kinds of money and esg funds it basically becomes kind of the one emblem of that big-picture thinking. >> right. >> phil, for a company like tesla in the position where it is now, just operationally strategically, what does a stock price this high all of a sudden do for you, either positive or negative >> on the positive side, certainly gives them -- i don't think -- look, i don't think tesla goes out and starts buying companies. first of all, it's not in elon musk's dna when i say buying company, i mean other automakers. will they buy robotics firms like they have from germany and other places absolutely they will but it gives them that flexibility if he wants to further diversify in terms of technology that they want to acquire. >> what's fascinating is it's not that long ago we were worried is tesla going to be able to make the payment because they had the convertible problem with a billion dollars i said yesterday the stock traded $50 billion, 160 bill market cap, there should be $5 billion of equity now.

>> yes. >> it would hardly be a hiccup and actually be material for the company's finances. >> i want to know if elon musk will now buy more shares if you look at tesla or spacex, he's already somebody who's bought, held, not sold or not sold unless he really had to a year ago he was talking about the loans he has with the stock and what wouldhappen if the share price fell below a certain point and he was forced to sell? i wonder if we now see that in reverse. >> i'm not sure. i don't think we have enough of a track record with elon musk to see he will buy this stock if it hits a certain level there's no way of knowing for sure. >> all right guys, thank you for a good conversation on tesla. >> fun to be here. >> mike and phil now disney, the big earnings story of the morning our julia boorstin sat down with ceo bob iger last night on those earnings result. julia? >> jon, the biggest headline was the faster-than-expected growth

of disney plus, surpassing analyst expectations of having between 20 million to 25 million subscribers reporting 28.6 million paying subscribers as of this week, nearing disney's expectations for 30 million subscribers within five years. bob pointing to underlying strength in these numbers. average revenue peruser, $5.50 and they did not lose subscribers afterthe show "the mandalorian" wrapped up. >> we are seeing very interest in disney channel shows and broad other things, pixar shorts and older disney shorts. clearly those brands, disney, pixar, marvel, national geographic and resonating and gives us the chance to focus on high-quality branded content for the service and less on volume we will continue to add.

we've got a lot coming up. >> iger telling me he doesn't feel threatened by the wave of new competitors launching this year because disney plus is such a unique product when it comes to hulu, which disney is folding into its direct-to-consumer segment, iger said will expand overseas as soon as next year. >> they will be not only investing more in fx branded produced content but using the fx library and other fx programming for hulu we think there are other opportunities in terms of content creation and content curation and content presentation from the companies that are assets for hulu so it becomes a more unique and even higher-quality destination. >> looking at analyst reactions, 74% of analysts have a buy rating on the stock. there are seven hold ratings and no sell ratings. we've seen four analysts increase their price targets on the stock since the earnings

results, all citing the strength of disney plus but barclays notes the stream of losses for next quarter in terms of impact on the bottom line are also bigger-than-expected, despite the faster-than-anticipated subscriber growth. guys, back to you. >> i want to get your take on another name i know you follow closely and that's also falling down 10% today and that's snap on the heels of those results. miss for average revenue peruser. what is your takeaway from the numbers we saw there and what it means for this company as it continues to try to do battle with the big behemoths google and facebook to gain market share? >> look, i think the interesting thing about snap is revenue did come in a hair lighter than expected but user growth was stronger than expected and that's why there's concern about a disconnect there i think what's interesting is snap needs to be able to show it can keep growing its user base there was a lot of concerns several quarters ago maybe

snap's user base was tapped out, wasn't going to keep expanding, especially after they redesigned the app and that drew some pushback from users. but i think what snap is really trying to do here is show it's a very different type of product than a facebook or even a youtube. they're really focusing on this premium content and intimate communication between close friends rather than broadcasting to lots of people. so i think there are signs of strength in the user base and the question is when you will see average revenue peruser catch up remember average revenue peruser, not just snap but all of the companies, is higher in the u.s. than other markets. i think expectations were high going into this quarter. >> stuff like arpu and subscriber numbers we're talking about with a lot of different kinds of companies julia, thank you for more on disney quarter and disney plus numbers, let's bring in tim mcnolan of ma

quarry and jessica reed ehrlich of bank of america good morning to both of you. tim, it looks like julia was just talking about the number of upgrades we are seeing disney post in earnings but the stock is down a couple percent this morning. i'm wondering, comcast did sort of the same thing. does this show hesitancy on the part of investors to stomach the investments in streaming as it perhaps affects the cost structure or subscriber losses in traditional businesses? >> disney's subscriber number i think blew most people away. it was an excellent number but there was a high expectation coming in. in the very near term, there are certainly cost issues. you knew about that. despite such a strong subscriber number, you know, disney was not able to be drawn on the question will they upgrade their forecast they're almost halfway to the lower end of their target in five years' time but the reason i think the stock is down today is probably that there are heavy costs in front

of us still. we've got difficult comparisons in the studio division and also in the parts division, particularly in china, of course that will lead to a 20% drop in operating income the next quarter. and ongoing investment costs of all of these things. there's still a lot to balance on this one and expectation was high coming in. >> jessica, is that your take as well, that it's the costs here, despite this dramatic performance of disney plus in the early days that has investors concerned? if you're an investor who's not concerned about that because bob iger has done pretty well with his investments one might argue in the past, is this an opportunity for you? >> our take is a little bit different. our view is the stock is weak today because of the outlook basically for media networks for the pay tv universe. the sub loss was 2% recorded but really 4 1/2% if you adjust the acc network. there's concern there's a model in transition. having said that, disney

surprised on the upside in many areas on their direct-to-consumer platforms, plural disney plus, $26.6 million is basically the upper end of their domestic sub target in five years. most flesic. hulu had nice growth but disney plus really surprised and they argue investors are looking through most of the costs and there's a concern about the long-term pay tv bundle. and we believe plan b for disney is have espn plus in place and ready to go. another big surprise i would just point out -- yes? >> go ahead, jessica. >> i was going to say another big positive surprise is the speed of the international rollout. so disney preannounced they were going to go into western europe a week earlier than originally planned. but the big news last night was how quick they're going into india.

they have a huge advantage there because they own star, which is the dominant media company in that country, and hot starz direct-to-consumer platform. they will rebrand to disney plus hot starz and it's a huge advantage to have that in such a dominant media market position and it starts at the exact same time the cricket -- ipl cricket league starts, which is the biggest sportin india. so the bottom line to us is traditional media companies, disney in particular, have huge advantages in their branded ip, marketing platforms, libraries and also the fact they produced so much for existing networks. >> it does raise an interesting point about international. we've seen this in the netflix prism about whether investors will value international growth the way they value domestic growth does that story repeat at disney, tim? >> domestic had a great

advantage for years with the international growth i think they still have a long way to go on that and it will serve them well. it's such early days for disney now and maybe a little too early to predict on our side what the growth will be per country per reason in this country in the u.s. we know disney so well. the brand is well known globally how much will people subscribe to this service in other countries? what will the growth rate be it's just too early to say on that if we're bullish, we think they will have to raise their 60 million to 90 million global target quite soon. >> to what 60 to 90 to now? >> it could be double that in five years eventually. >> really? >> look, if they're at 28 already in three months -- >> i said that this morning, yes. >> i think there's a long way to go we don't have a forecast for international subs looking out that's the next batch of work to do but it's hard to predict at this point. >> here's the overarching theme i'm hearing from both of you in this conversation right now. and that is that at least near term we're talking about models and transitioning. it begs the question, jessica,

buy rating price target 168. what is the incentive for investors to buy in here versus wait a little longer >> disney has beat all expectations on their direct-to-consumer initiative, which is their key priority at the moment so the next big catalyst will be western europe at the end of march and, of course, india late march, a week after that, to be followed by other regions. in the meantime their underlying businesses are relatively -- underlying business. yes, there's china and the impact that we will see in shanghai and hong kong but the underlying numbers, you can see at walt disney world and disneyland, having opened "star wars" land, their bookings really are strong, double digit. so their businesses, again, i think are unique and running well. >> yeah, and with a couple more billion dollar movies under their belt this year so far,

their content and ip library still looking pretty strong. tim, jessica, thank you. as we've mentioned, don't forget about snap. those shares getting crushed after a big miss on revenue. stock trading down currently about 10% now. and reminder as we head to break, do not miss the special report on the coronavirus outbreak tonight at 7:00 p.m. eastern right here on cnbc n'gonyere. we're back in two. this piece is talking to me. yeah? so what do you see?

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getting some news on microsoft unit linkedin. julia has that for us in l.a. >> jon, the ceo of linked this is in for the past 11 years is stepping down and he will become executive chairman as of june 1. ryan salonky will become the next ceo and he's currently linked in to global's head of product and he will report directly to satya nadle. jeff wiener not only helped grow and scale linked this is in but there for the transition as it sold to microsoft. you see microsoft shares trading pretty much flat but interesting to see how linkedin worked to integrate microsoft and a skill for ekt canning professionals around the world back to you. we want to get to the house

subcommittee juul and other e-cigarette makers are on the hill for their conference before the cdc starts investigating all of those vape-related deaths. let's take a listen. >> isn't it true nicotine is addictive? >> yes, nicotine is addictive. >> mr. oberlander? >> it is addictive. >> mr. blunde? >> yes. >> mr. lofton? >> yes >> and isn't it true then that using the products each of your companies make, which contain nicotine, could lead to nicotine addiction? mr. causeway >> yes, nicotine is addictive. >> and your products could lead to nicotine addiction. >> mr. oberlander? >> yes, nicotine is adktive. >> and your product people use

that contain nicotine can cause people to become addicted? >> yes, ma'am. >> mr. lofton? >> yes. >> and nicotine -- do you agree with the medical studies that show that nicotine can have negative consequences for respiratory health and cause an increase in blood pressure, heart rate and lead to heart disease and harm brain development in young people? >> as part of our ptma, we will have all of our studies submitted to be reviewed. >> so have you seen the studies that show there are these issues that i just mentioned? >> i'm not familiar with the one you're referring to. >> you don't know. do you maintain that nicotine causes no health consequences in people then? >> no, nicotine is addictive and -- >> does it have health consequences >> it request cause harm. >> yes. >> mr. oberlander, did you hear

my question about the studies? what's your view. >> yes, i did. our scientific team have all of the literature -- >> would you agree nicotine could cause respiratory health issues, blood pressure, heart rate and brain development issues >> i said before, nicotine is addictive and tobacco products could cause harm. >> could they cause the harm i just talked about? >> i'm not familiar with that. >> i'm not in a position to corroborate or -- >> you don't know if it could cause those harms? >> nicotine can cause health issues -- >> nicotine can cause health issues but i'm not in a position to corroborate. >> what health issues do you think they can cause >> nicotine can raise your blood pressure it can cause headaches. >> but you don't really know about any other things >> i'm not aware of the study. >> even though you're the ceo of the company. >> mr. blonde?

>> nicotine is addictive and can cause harm. >> i find it fascinating nobody wants to talk about what the harm is. respiratory problems, heart problems, blood pressure, and brain development problems in young people do you know about those harms? >> i have no reason to doubt those studies. >> thank you. >> nicotine is addictive and we put all of the warning labels on our product -- >> i understand that do you think it causes the harms we talked about? >> we will lead that up to the ptma. >> you will not commit to that either when you say nicotine is addictive, i don't think a lot of young people understand what that means in terms of health consequences mr. nitivocov i was really moved about what you said about your grandmother. my mother died of lung cancer at age 54 from smoking, which she started doing when she was under 21 i'm sure she knew it was

addictive but i am sure she had no idea. i think people think e-cigarettes, sure, they're addictive, but they're not going to cause the same harm as cigarettes in fact, we don't really know. i want to ask you another yes-or-no question maybe you'll answer it do you agree with the cdc there's no completely safe tobacco product, including e-cigarettes, mr. krausway >> yes. >> in oberlander >> no tobacco product is safe. >> including your e-cigarettes. >> yes. >> yes, i agree. >> mr. lofton? >> all tobacco products carry risk. >> one last question, do you all agree there's a youth vaping epidemic in this country and people under 21 should not be using e-cigarettes, including your products? >> i completely agree. >> mr. oberlander? >> yes. >> mr. blonde? >> absolutely. >> mr. lofton? >> i agree.

>> what did you want to say? >> one youth vaping is too many. >> thank you thank you very much. i appreciate all of you and now i recognize mr. guthrie for five minutes. >> good to see you all here. >> that's house energy and commerce subcommittee, chair dianna degette with the ceos of juul and others confirming what the surgeon general told you a couple generations ago, and that is nicotine is addictive we will see to the degree which the ceos try to argue if you're going to deliver nicotine, it's better to do it with an e-cigarette. clearly none of them have any argument that's will stand an argument it should be used by those under 21 we will monitor that. >> and it's also worth noting tonight at 12:01 a.m. you have the partial trump administration ban on flavored e-cigarettes taking effect here in the u.s. as well. big week in general. a lot of eyes focused on this

industry and how it all continues to play out. in the meantime european markets just closing seema mody has the breakdown. >> busy day, morgan. european stocks closing at the high of the day but retail disruptions stemming from the coronavirus. adidas closing a significant number of stores in china and said, quote, we're currently experiencing a negative impact on our operations in china however, at this point in time it's too early to assess the magnitude of this impact those comments sharing shares down in today's session. and spotify reported a jump in monthly active users to 271 million, which came in above expectations however, average revenue of users for paid subscription business fell 5% the ceo telling investors 2020 will be an investor year as the company doubled down in content, specifically podcasts. and they are acquiring "the ringer" founded by espn commentator bill simmons the transaction was not

disclosed. but it's worth noting you look at the long-term chart since 2018, spotify shares basically flat jon, back to you. >> it seema, thank you we will stay there at headquarters and get a news update from sue herera. >> hello, jon. hello, everybody here's what's happening at this hour iranian leader ayatollah kamani said president trump's middle east plan will not outlive the president. it was his first remarks since it was unveiled last week, predicting the plan will fall apart. two planes carrying american evacuees from wuhan, china, launded in california. 350 americans pr evacuated as a result of the coronavirus outbreak one will now continue on to miramar station in san diego the passengers will be quarantined for 14 days. russian president putin receiving the diplomatic credentials of 2 newly appointed ambassadors to moscow, including

u.s. ambassador john sullivan. in his address following the ceremony, he wished them good luck a blockbuster trade in baseball in a salary dump the boston red sox trading outfielder mookie betts and pitcher david price to the los angeles dodgers for outfielder alex verdugo. the red sox will receive a minor league picture from the minnesota twins. the twins will receive pitcher kenta maeda from the dodgers got all of that? that's the news update we're doing this it's baseball. carl, i will send it back downtown to you. >> thank you, sue. after the break, an indictment of tesla's run-up from ralph nader, as that stock is down 12%. but stocks overall close to session highs, up 13% on the dow. and etfs are commission-f. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk

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watch out, tesla believers that's the warning from ralph nader saying when the stock market implodes, it will have been started by the surge in tesla. joining us on the news line this morning is ralph nader himself ralph, it is good to have you back good morning. >> good morning. >> we always love talking to you. we know you made your name on auto safety, but why weigh in to stock valuations like this >> like i said, my comments are not tied to the product. tesla's been a great innovator it's taken on the stagnation of the big auto companies it moved to electric cars and respects environmental

consequences, although the batteries have to be disposed of i'm talking about the price of the tesla stock. it's totally a nose bleed territory. just think, tesla sold less than 400,000 vehicles last year, and it's valuation is greater than the combined valuation of volkswagen and general motors, which sold 18 million cars profitably last year so that tells you that there's a lot of speculation going on, a lot of short selling, a lot of short covering and i think the securities and exchange commission should pay attention to the protection of investors here and look in to see whether there's insider trading, potential market manipulation or even the ability to clear the transaction because elon musk's $900 million bonus is tied to $100 billion capitalization of the company. that is not a healthy conflict

of interest. he's overpromising and underdelivering. >> you can't just comp ott ae oe air and make allegations like that without something in the direction of evidence. why would you say something like that without some sort of proof? >> i'm looking for an inquiry because of the gyrations of the stock, the heavy speculation it's casino capitalism, which is what "business week" called this kind of behavior years ago in a cover story. we're talking about the need to find out more information. he is overpromising, underdelivering. he throws caution to the wind when he talks to stock market analysts we need more information this is the bubble on a bigger bubble we have now the price-earnings ratio of nasdaq is 28. the standard and poors ratio is 25 that's getting a little fearful.

that's getting a little speculative. we have to pay attention not just the tesla stock but rising speculation that's way beyond fundamentals here. fundamentals will always bring a stock market down. unfortunately institutional investors, individual investors pay the price. that's my concern. >> ralph, is this really a call on the stock market or is it a call on tesla? since january 22, when you tweeted tesla stock is up more than 35%, so that wouldn't have been a good time for people at least who are playing the market to sell. is this really about an overall market that you think is overvalued and just happened to point to tesla in this case as a symbol of it >> that's correct. i think the market is getting overvalued we are seeing strange situations where google comes in under expectations, facebook comes under expectations and the market keeps searching the usual signals.

i think analysts like jpmorgan chase, they always tell investors what to buy, but they never warn them what to sell they will say buy this stock at 10, it's great when the stock starts going down to four, three, two, they never issue a sell order there's a lot of recklessness here and a lot of refusal to face up to fundamentals. >> well, ralph, i will say there are quite a number of analysts that will come out and put underperform ratings or sell ratings on stocks. we talk about downgrades as well as upgrades on a daily basis in terms of wall street and names like tesla, for example, where we haveseen a flurry in the last couple of days. i want to go back to the idea of the stock market bubble though is it just valuations for you? how are you looking at and assessing that why are you so concerned about that and the ripple effect it could potentially have on consumers on main street america? >> well, i always have been concerned about investor

protection over the years there have been frauds, there have been collapses of corporations on the back of investors. the big institutional investors like fidelity are not asserting themselves the way they should in terms of requiring the chairman of the board and ceo roles to be split. you can see from the boeing example, there wasn't enough supervision by the institutional investors to the role of the border directors about accelerating production of the 737 max. those things lead to product defects. they lead to bad decisions so we need a major look in congress, by the way, about the state of investor protection, and the laxness of the securities and exchange commission >> ralph, if you're going to start being a stock analyst now, what is the fair price for tesla? >> i think tesla has just got to

come down to earth here in terms of information i know there are a lot of tesla fans, and it relates to the product. this isn't about the product this is about the huge evaluations and the conflicts of interest and compensation at tesla. you don't want to have an over-promising, very excitable ceo who's going to get $900 million if the valuation for a certain period of time of tesla is over $100 billion, which is bigger than volkswagen, that sells 10 million cars or more profitably so there isn't even a pe here. i think we really have got to focus on tesla but only as a symptom, an extreme symptom of the valuations on the s&p and nasdaq that are heading towards 30 pe. that is not a stable situation >> ralph, you've gone from tesla

to boeing to analyst ratings can you tie this all together for us what are you really aiming at here in your criticism of whether it's this market, the economy or government oversight of the market? >> well, what i'm focusing on is accountability accountability by the stock analysts, and not going haywire and not issuing adequate warnings accountability by boards of directors that are often trophy boards or crony boards of directors. accountability to investors is key. it usually translates from financial collapses into product defects into very dangerous situations in terms of environmental impacts. and i think we need to take a holistic look here and point out the companies that are going the right thing like patagonia or interface corporation of atlanta, companies that are trying to do the right thing and other companies like the fossil fuel industry that is totally

unaccountable to the climate disruption necessities of the world. >> ralph, stock price aside, do you think tesla is making the industry better? >> yes, i think, look, it has advanced electric vehicles it is into solar energy. but elon musk has got to slow down in terms of his verbal puffy, as they used to say in the ftc marketing. he can get in trouble if he overpromises/underdelivers with the sec, even the sleepy sec, he can get in deep trouble here. >> ralph, finally, you mentioned congress just a few moments ago. i want to get your thoughts on the state of the union since so many different topics were covered and so many different pieces of legislation were raised. >> well, it's the state of the trump speech that's what it was i think nancy pelosi called it a

manifesto of mistruths he was very much cherry picking in terms of his indicators and he didn't pay any attention to climate disruption he boosted fossil fuels. he didn't pay any attention to consumer rip-offs on the grounds every day by shutting down the consumer financial protection bureau for all practical purposes he didn't say how many efforts his administration have proceeded against labor, freezing the minimum wage at $7.25 an hour federal, and opposing union rights and in many ways, sugar coating the decline of manufacturing jobs under his watch in the last three years. >> i think manufacturing jobs have actually grown, but nonetheless, it's always great to get your thoughts, ralph. ralph nader. >> thank you very much now, let's get to cme and

rick santelli with the santelli exchange >> that was an interesting interview, you guys. listen, over the last couple days and if not weeks between iranian issues and, of course, coronavirus, we have seen markets with a lot of two-way moves that are very difficult to predict. what i like to concentrate on is fast falling, fed fund futures fleeking message let's look at a one-week chart of june fed fund futures and realize as the price goes up, the possibility of easing goes up and as it goes down, it diminishes at its apex two days ago, at the worst of the coronavirus when the markets were under pressure, that percentage was over 60% and as it started to fall before 50 yesterday, slightly above 40 today, below 40 in the high 30s, that message is clear, there's nothing wrong with the fed fund futures contracts.

what's wrong is trying to interpret what they're saying. and every one of those percentages was correct. for the nanosecond the snapshot was taken. there are still contracts looking for ease as you go down the road but as you roll forward, reality does hit. finally, it certainly seems elementary that the fed sherlocks rates with the lower future with a 70% solution how does that work if you look at q4 what you would find is the treasury issued $330 billion in supply. and in that period, the fed's balance sheet increased over $220 billion quick math shows the 70% there was somewhat instrumental in keeping rates down after listening to mr. nader, of course, there are times where people actually like some magic hand to come down and peg things, whether it's interest

rates or quantitative easing to keep interest rates low. whether it's the right or wrong approach, we all need to be cognizant tat half-life of continuing that type of qe wb fleeting finally over the last several days our index is surging once again. this comes after a time at the end of last week where it certainly seemed like the dollar was out of vogue and eurocurrency with low volatility would be on the receiving end of those capital flows but it wasn't meant to be as you look at a year-to-date chart, if thedollar index closed here, it would sure be a new high close for 2020 and certainly looks like it's gaining momentum, not losing it s back to you. >> rick santelli, thank you. coming up -- micro chip shares getting boost this morning after getting beat on the top and bottom lines for the quarter. the ceo joins us next to break down tseho earnings and coronavirus impact on its business and when you open a new brokerage account, your cash is automatically invested at a great rate.

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welcome back to "squawk alley. they anticipate no supply chain issues due to the coronavirus outbreak joining us now to discuss microchip founder and ceo. great to have you here good to see you. >> good to see you, too. >> stock is up 5% right now. you beat on the top and bottom line after raising guidance twice in the course of five weeks. lot of focus, though, on the current quarter and what all of

this potential impact from coronavirus could mean we certainly heard from a number of companies, just in recent days i know you addressed it on the call how are you assessing that situation and what happens if workers can't get back to factories as quickly as anticipated and this goes on for longer than expected >> well, there are two sides of coronavirus. one is the impact on supply chains and the other is the impact on our customers. our supply chain from china is fairly small most of our products is really built outside of china we're not really expecting a major issue from the supply chain from china the second one is the impact on our customers. so you can take an example of one customer, for example, huawei, who got permission from the chinese government to end

their holiday earlier and they came back to work on february 3rd, and immediately we got large orders and they're expediting product to get that within the quarter and we're expecting that other chinese customers, as they come back to work, they will do similar. so we think it's going to be all right, unless the virus really explodes beyond belief. >> last time you and i spoke in december, you were calling a bottom in terms of inventories and what that meant for microchip heading into 2020. is there any kind of risk that coronavirus or even the effects that corona virus has on the chinese economy, given phase one trade deal could change your take on that >> well, you know, any effect coronavirus may have is going to be very transitory we remember sars from years ago.

we don't think it will change the fundamentals of the electronics industry and with a very low six of the largest of our industry if you take coronavirus issue out, this would be the best setup that i have seen how well positioned microchip is in about two decades. yes, coronavirus really shows some risks, but i think it will be very transitory. >> how this might affect business, yes, in china, but outside of china, at least the next few weeks and months, there have been a couple of companies backing out, for example, of mobile world congress in barcelona, which is coming up in a couple of weeks. i wonder if beyond the travel restrictions that you put in your own workforce a couple of

weeks ago, if there's any further consideration of travel restrictions, of limiting types of travel using video conferencing instead of traveling now or not. >> well, we're doing all of that we have canceled all the training sessions and sales meetings and all that for the month of february and then we're taking a week at a time as information becomes available. we may push out things for ma h march. meeting where the largest number of people are gathering, that creates a risk factor and so we're limiting travel. we have done that and will continue to do so, but it's not hurting the supply chain nor the customer demand. >> and certainly not the stock either, with shares up 5% today on the heels of those earnings steve sanghi, thank you for joining us today. >> thank you very much let's get a check on this morning's rally. p,w is up 319.

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casper cutting its ipo price after losing its unicorn status. >> i would also point to there's already a publicly traded direct comparable on the market listed in the nasdaq. stocks trading down 5% in sympathy right now that name is profitable. revenue grew 66% year on year in the last quarter versus casper, revenue growing at 24% interesting to see how this all plays out. certainly investors have something to compare this to. >> so many mattress companies. >> yes meantime, earnings wise, it's been a busy day, busy night tonight with qualcomm. how things look in greater china. in the morning, twitter, estee

lauder and others all building to the jobs number friday, adp at 291, way above 158. we'll get benchmarks revisions probably to the down side but macro and corporate news continues. >> every time you say yum i think of -- >> let's get to the judge. >> i'm scott wapner. resilient stock market strikes again, new records in reach even as some wonder how much is really left in this rally? it's 12:00 noon and this is "the halftime report. how to position your portfolio in this red-hot rally. tech taking leadership again stocks fueling this group right now and names you want to own. shares of slack up double digits in the past week, and the stock just got a bullish call. should you get in now? and qualcomm and