>> i can imagine >> see you next hour >> let's send it over to mike santelli who will be singing a song >> it's being sung now morgan can tell you what the song is about. why i'm using under the boardwalk phrase is to look at earnings estimates the estimates for 2019 this is earnings growth forecast for the last several years you see each of these lines is a different year here's 2019. it has fallen underneath that boardwalk. that's 10% expected earnings growth started at 10% and decline close to the zero line not quite what's interesting is 2020 still holding up is that realist i can? maybe not. depending how the back half of the year goes. i go back to 2016, potential model for the way this year is going in a lot of respects look what happened in 2016 did you have a steep decline much like 2019 and then it flattened out. it plateaued the worst expected hoping the earnings plateau and not go off a cliff earnings reports next week >> valuation levels to support that are not too stretched at the moment >> very similar to 2016. about 17 times forward of course that pe is only as good as t

mike santelli has the market dashboard. >> and here is what we have coming up. first value capitulation and then sluggish transportation trader adulation and most favored nation i know that ultimate be able to come up with the theme here. i got a rhyming dictionary >> your asian creation >> there you go. so we'll get to value versus growth, freight volume, trader sentiment, refuggional stock market but first something from the survey this is the net percentage of respond geentss saying value stocks, so essentially after a very long period of most managers saying that it is time for value to start working better than growth, growth has outperformed too much, it seem like they have kind of given up. of course it cango below zero. but right now it seems that is a bit of a give up trade this is a russell 1,000 value index. and it has been on a steady k decline. value was compelling and only 1% of fund americmanags seeing an up side to global inflation. inflation would benefit cheaper stocks so whether there is a key inflection point, i don't know but definitely gett

not too far from the session highs at this moment the low was 151 points, so well off those lows mike santelli has today's dashboard. mike >> thanks very much. the cobbler's kids, you know what they say about them once bitten, twice shy a bit of caution by one reading that might be evaporating. we'll see. tortoise and the hare, pretty self explanatory which two groups that's about and goldilocks or the bear the cobbl er's kids, how they've underperformed s&p 500. historically, they've been the best stocks to own their productive, effectively, is the stock market. what you've seen here is the big guys of last year underperforming, black rock, t. rowe price pretty profound under performance. today some of them are bouncing. it's a little bit like when the energy stocks underperform the commodity. it's because the market either thinks it's not sustainable or these companies are not positioned to profit the way they were used to be able to profit healthily from this trend. flows are not that great fees are being compressed. they look fairly cheap if this rally has legs, these guys could be prime f

- or i'm sorry, $5.70, a 2.6% expected move >> kevin hincks, thanks for joining us let's go to mike santelli> if you can applaud, it's broad. that would be the market, the rally, that is, not today, but recently take a look at today's advancing and declining volume even at the lows of the day for the indexes, advancing and declining stocks, that is, even at the lows of the day was not terrible just about a 1-3, a little bit better than that looking on a longer-term basis, s&p 500 cumulative breadth when you really focus on is this is a new high yesterday as the stock market hit a new high. that's supportive. go back to last year you actually had the breath figures kind of rolling over before the market did, so that's one thing to watch right now breadth it supportive even if the small caps are not always cooperating. let's go to the nasdaq and bertha. >> thanks. we have a broad pullback today across all sectors, but big disappointing earnings were really part of the catalyst here on the down side align technology with its worst numbers in terms of one-day decline in 12 years. slow sales in c

. >> brian bellski, mike santelli, thank you both. >>> let's get a check of some of today's earningston of them today. apple leading the charge spotify and amd obviously not injoying the results of their dow has gone negative after an 85-point game at the open. back in a moment >>> a fed rate cut is in the cards wednesday. how should you play the next ndve fi out on tradingnation.cnbc.com more "squawk on the street" is coming up. >>> let's get to the cme group in chicago and get the santelli exchange rick. >> good morning. thank you, carl. like to welcome my guest professor ken rogof. let's get into it. you know, i have heard many reasons why the fed is going to do its first since 2008. the thing that jumps out is this covert beggar thy neighbor negotiation. central banks don't want to let other central banks create policies that let them get an edge central banks seem to be semi coordinated. do you agree with that do you think it's right for the u.s. fed to join that coalition of easers? >> i think it is right to adjust the interest rate a bit down now because there is no inflation.

mike santelli is here.oing to look at the recent rotation towards cyclical and riskier stocks away from the defensive names and things we think of as more stable. >> exactly this rotation almost everybody we talk to here thinks can and should happen, and we have seen evidence in the last several weeks. look at a couple of charts one-year basis of some -- two of these stable defensive quality type etfs. that would be the spl as well as qual, which is msci quality factors. essentially big stable companies. they have been the steadiest performers on a one-year basis that white line is the semiconductor index. and that has gone almost vertical recently until today. then down below sphb, that is a basket of more aggressive and faster moving stocks now look at the same four on a one-month basis and you can see the recent acceleration of the more aggressive. there is that semiconductors getting very overbought out, 15% in a one-month basis high beta up 5.5% leaving the others behind. the others are still participa

. >>> over to mike santelli for a second dashboard. >> mr.sman also a freshishen there are some elements of market activity that seem like they're getting a little bit overexcited. this is something called the dumb money confidence index, sentiment trader is a service, sentiment trader.com that tracks a multitude of market sentiment indicators, this one got to 80%. now, this is not a subjective determination of who is smart and who is dumb, it's looking at categories of traders and investors that have demonstrated good or bad market timing when they get too extreme this 80% level somewhat significant although we also were here back in april. so really only says that in the short term perhaps it's raising the risk that people have already gotten too much on the bullish side of the boat it's worth watching, especially given that we were talking just last segment about how maybe people are perceived to be underinvested. i think the people that are in the market have been riding this rally so this is one indicator that perhaps things have to cool

mike santelli is here.bably debt is the biggest issue. >> 6.8 billion net debt reduced. >> yeah. >> that's a pretty good number >> that's been the big piece of discipline and what they've been targeting for this year. on track for that is good. for stockholders, it's like what does that mean for the rest of the strategy >> maybe just the mention they would be looking at buying back stock. >> so they feel like they will get past this point where they have to focus on debt reduction and have some cash left over there's a lot of stuff outside the numbers now with at&t. it's a media company what's the strategy with the hbo streaming product, and really pay tv sub losses is a big story now. directv and -- >> if you knew the dividend was safe -- >> yes recover and qualify -- >> 6.3%, maybe some upside to the stock. they have great assets just depends on what you pay for assets and whether you can service the debt if you feel comfortable with that -- >> and they'll continue to earn it and cover it. it's not always

. >>> welcome back let's head over to mike sante i santelli. >> pursuing happiness, contessa.ll talk about the theme in a second one of the questions when the rally is going for a while, are investors getting too happy, too optimistic and too giddy and greedy not just yet the orange line is the number of bulls in the weekly minus the bears. this is the margin of bullishness right here what you see is it's up there. it's, obviously, well above where we were in december. but we were definitely higher back here towards the highs of early 2018 matter of fact, even last year higher so, i think the interpretation here is there are still room for investors professional and retail to get more invested before you have to worry that it's a major head wind for stocks >> one point where the bears are higher than the bulls? >> absolutely. now and then itp happens. usually a time when the market prepares to bottom because it is so hated and oversold. >> you're clear on the theme >> i am. pursuit of happiness >> the whole theme for the entire four dashboards they're all quotes from something

santelli. >> thanks, mike, you know, if you look at a micro view of ten-year notes over a three-day chart, youan see how compressed these ranges are getting. this is going to be the tenth day we've closed between 202 and 208. if you take a big view, if we drop ten basis points, that would take us back to november of 2016, so keep that in mind when you look at the next macro chart. this is a may $2,017 index hovering right there, right ready to pop out with history. rates low, and that's really going to be a bothersome effect to the fed now bertha, we couldn't stay in positive territory in the nasdaq. >> depends on what you're looking at there, rick we've got bio tech positive that led by earnings gainers, and small caps like mesa labs. that is helping to boost the small caps overall chips are mixed. that's what's keeping tech pretty much tamped down. we did get good numbers out of nxpi although the guidance was a little bit less than some folks had liked. we will be watching for amd earnings after the bell. amd expected to post earnings of $0.08 a share on revenues of about $1.52 billion. over

rick santelli has the santelli exchange good morning, rick. >> good morning, mike.y guess before the independence day holiday. ira, we are at 194 in a ten-year, lowest yield since the fall of 2016, and italian ten-year yields are 30 basis points below us. so many who believe our rates are telling us our economy is weak need to rethink that. it may be on slim factor involved >> yeah, well, but everything is being made in europe now we go back to the draghi speech of the day before powell when he painted powell into a terrible corner and had to have president trump respond with that speech from - >> manipulating currencies >> well, draghi made it clear they are going to be easier for longer than people - >> now that we have christine lagarde, there is only one person that's actually like a federal employee in the eurozone, and that's the head of the ecb. they represent everything. now we have a quasi politician, not a banker in charge what do you think? >> worst pick i could imagine. >> it's not a done deal? >> no, because the interesting part is angela merkel recused

to keep a lookout for subtle selling pressure entering the market to rick santelli for a check of the bond market. >> thanks, mike. tell you what if you're a real market aficionado, the last three days, monitoring fixed income, interest rates, foreign exchange it's been wild. today a 30 year bond auction that was "d" as in dog and we have jay powell, two days, not challenging the notion of what the market has built in, which means we're likely getting an ease at the end of the month major rise in rates. three day chart of ten year note yields, now at one month highs tens minus twos, a spread, supposed to be slow moving, a three-day chart, moved a dozen basis points unheard of. and finally, this is a june 1st start to bunds, have gone from the minus mid 40s to close to minus 20 they've been in one month, also one month high 30 year bonds six-week high. what's going on? yield curve steepening and maybe the stimulus of our fed with global stimulus will get horsepower back into the marketplace. bertha, nasdaq melted a bit, going to try to get to unchanged in a few minutes left? >> we'll see, rick we did get an all-ti

of how corporate earnings come through, guys let's get out to rick santelli in chicago and look at the bond market rick >> thanks, mikeh bank earnings everybody seems to be "page six" attention to the yield curve if that's your variable to monitor profitability down the road of banks, well, it continues to flatten a bit today. look at a may 1st chart, third of july we had a nice bounce look at a two-day 30s. they're giving it up, down 5 two-year note is down 2. if you look overseas, a match with our ten year down 4 basis points, bund yields deteriorated down 4 points. the nasdaq is up a 5th of a's percent leading the pack bertha, how strong is it looking going into the last few minutes? >> it's the strongest of the day, and it's really built from the move up that we're seeing today in biotech and in chips. they're both up about 1% when you look at the biggest names in those sectors. and amd, texas instruments among the new highs among the chips, gillead leading on that deal with galapagos that has not necessarily been always the leadership. the fang names not contributing all that much. apple is apple is on pace to cl

santelli. "power lunch" is coming right back stay with us >>> oil down big today let's get to seema mody. >> crude oil prices hitting session lows secretary of state mike pompeo saying that the u.s. is ready to negotiate with iran on its missile program easing worries of a supply risk in response, we did see oil prices trade down nearly 4%. and then we had comments from the rbc analyst saying that let's take the comments and be cautious and oil may be overreacting to those comments from secretary pompeo a lot will rest on iran's response and a spokesperson for iran's mission saying that the missiles are absolutely and under no condition negotiable with any country. so that is pushing oil off its lows ending down 2.5%. >>> shares of dominos fell today. but what did the company say about talent and labor costs that caught our attention. kate rogers has the story. >> that's right. so domino's ceo did have a lot to say about talent on today's conference call. allison said there is steep competition for delivery drivers and the fact that there is record low unemployment coupled with competition from third party delivery services in both fast food and grocer

mike. tha thank you guys. >> the breaking economic numbers of the morning are a few minutes away and it is apple day we will be back. >>> welcome back to "squawk box" rick santelli june personal income up exactly the expected amount of .4 spending, up .3. spot on with expectations it subtle revixs sions in the reare mirror up .4%, on spending the opposite we went from up .4% to up .5%. if i look at real personal spending, up .2% deflat deflator up .1 we also lost a tenth from 1.5 last look to also 1.4. finally, if we look at the pce core deflator, it is up .2 on a month over month, year over year it is up 1.6 also .1 cooler than expectations on any pricing issue we are a smidge on the cool side. in terms of incoming spending we delivered exact expectation. i personally like when it country clubs a bit higher than spending though both numbers are positive no real response in the interest complex going into this on the bottom end of the closing range over the next two days, between 202 and 208 for tenure the dollar index about a one-fifth of a sent from fresh 26-month highs andrew back to you. >> thank you for that. steve liesman has his laptop out, crunching the