tv Worldwide Exchange CNBC June 4, 2019 5:00am-6:00am EDT
trumping trump on tariffs. top you ar top five at 5:00, ne reports that republican lawmakers could look to block president trump on the mexican tariffs. that news coming as trump meets with theresa may as protesters take to the streets of london. will big tech bounce back today? the government eyeing possible crackdowns on many names that you know more pain at the mall. another big retailer reportedly exploring its options, including a possible restructuring and the streak comes to an end,
jeopar jeopardy's trump bowing out to may have been the best contestant "worldwide exchange" begins right now. ♪ morning, good even a afternoon evening. i'm brian sullivan all of those stories ahead and plus you're looking live at london where president trump is meeting with uk business leaders. we will take you there live in moments. but first, to our capital. and a major developing story out of capitol hill. there are new reports this morning that republican lawmakers could derail trump's tariffs on mexico. they are looking to block them and potentially take back control on trade nbc's tracie potts is live in d.c. with more on this developing story >> reporter: good morning. so the blowback on this one for the president is coming from inside his own party
the problem here, republicans like the idea of cracking down on illegal immigration, but they don't like the president's plan to impose this 5% escalating tariff on mexico to do it. they think that that will end up hurting american businesses and individual consumers as prices are raised to compensate so the problem is the president is doing this under the emergency declaration that he used to get money for the border wall so to stop it, republicans may have to push back that emergency declaration which would also cut the funding for the border wall and that is something that the president and the white house don't want to see. they think there is another way to get around it but right now, the president is at odds with his own party over these tariffs that he wants to impose to stop illegal immigration. >> trails city p >> tracie potts in d.c and there are reports that secretary of state mike pompeo will be meeting with a high level mexican delegation
tomorrow in washington thenews that mexico tariff could be trumped sending futures higher this morning. we are up triple digits on the dow right now. jim cramer tweeting earlier today, because somehow there is an earlier today, that this could also be the reason that the dow rose yesterday, talk about the possible pushback from congress did start to leak out into the markets let's dive into this and bril bring in bill stone from avalon advisers bill, you don't want to be a tariff or immigration expert but we'll pit yut you on the spt if we get the push back or signs that the mexico tariffs, call it the surprise of last week, are pulled back, one would assume that would be good news for the markets at least that is what the futures are suggesting >> i think it has to be. obviously it is a big thing down here in texas because of so much trade with mexico. but it is also a big thing because mexico, there is so much
two way trade. the thing we always talk about with china, it is mostly one way. it is them importing into the u.s. there isn't as going the other way. there is a lot of supply chains going both ways in terms of mexico so i do think that it would be a real relief not to mention -- it was kind of running a two front war right now. only haven one would certainly be preferable to the markets >> yeah, no tariffs or any kind of a resolution with mexico/or china would be a positive for equities or could the idea of a global slowdown still weigh on us >> certainly some amount because the china thing is certainly not over there is going to be at least some weighing. but the problem was that we're in a place where all of us are trying to figure out what is the worst case because we know tariffs are supposed to roll higher every month and so we try to figure out how bad it will get. you know, i said, well, i kind of think quote/unquote worst
case is chop 1 percentage point off of gdp that is a lot. so again, hopefully that is my worst case but i don't really know because no one knows exactly where it would layout if you get the mexico part to come off, you know, maybe you say your worst case is half of that, which is obviously preferable in terms of what the market is worried about in terms of teetering on some sort of recession or real significant global slowdown. >> and even if congress does what the reports say and they say, no, no, no, we're not doing these tariffs on mexico, the president could veto that and then of course you have to go back to to congress and see if they have the two-thirds vote to overright the veto either way, if the tariffs stuck, is there anyplace to hide in the u.s. equity market, any measure of safety? >> it is really hard because the stuff that has been holding in really well is primarily the interest rate sensitive. so you have tilts, t utilities, estate, staple, they look expensive to me relative
so now that the market is zoninged in on that and you look at the treasuries at 210 roughly on the 10 year, they look to have discounted a lot of bad news i'd probably rather lean into it and go toward the more cyclical side there are some of those sectors are pretty close like the energy sector that are essentially pretty much down to where they were on christmas eve again. or at least close to it. >> does energy look good to you? >> you know, i don't even want to go there. >> you're a texas guy, bill, come on. >> i know, it'skilling me. >> they are in your backyard >> we do think particularly high quality -- weed'd avoid some of the exploration production companies. but the integrated oils, the ones that aren't going anywhere, they certainly seem to have all been painted with the same brush. again, it makes me nervous because they just -- it seems like you can't get any good news out of that side
but i guess that is usually as they always say darkest before the dawn >> maybe the dawn is coming this trifl tariffs. bill stone, we appreciate it as always our tariff expert now. thank you very much. let's move now to europe and happening right now, president trump is meeting with theresa may and uk business leaders. after the meeting the president will head to 10 downing street for more private meetings with mrs. may day two of the president's visit though comes as protesters also fill the streets of london as always, we have team coverage for you. steve sedgwick is covering the protests but let's go out to 10 downing street what are trump and may expected to discuss >> as you mentioned with business leaders from some of the top u.s. firms downing street very keen to point out the scale, the scope, the depth of the economic partnership between the two countries with u.s. firms
employing a million people here, british firms employing a million people on your side of the atlantic but the conversations between the prime minister and the president later on today and some of the most senior advisers will no doubt focus on trade and the potential for bilateral trade agreement. and mrs. may just a few days away from normally resigning has not been able to get a brexit deal through parliament, but it looks like she is trying to position the uk for a strong trade deal with the united states, something of course that the president has spoken very warmly of in the past. in the last couple days we've also heard from secretary of state mike pompeo talking about the priority of a trade deal with the uk, but refusing to be drawn in an interview with our colleagues at euro news on whether the uk would get that deal ahead of the european union. of course that can't happen until brexit is finished not expecting that to happen until october 31 but as ever, with the situation here in westminster slightly fluid, that date is not yet set
in stone >> all right wi willem, thank you very much. and president trump's visit is coming as the protesters fill the streets of london. steve sedgwick is live with that side of the story. steve, what are they protesting? are they just protesting him >> no. i don't think so for one moment actually i think there are a lot of people who don't like his manner i think that they don't like a lot of his comments or policies. but from what i saw last year, and you have to remember this is a continuation of a process as well, july 2018, quarter of a million people in the streets of london, they were protesting about a whole host of global issues they don't like from nuclear disarmament to amnesty issues to immigration issues to foreign policy issues, to the middle east as well. homophobia, massage and made sou
name it. but i think there doctor is drift civil from the political establishment and people on the streets, but also him as a lightning rod, the trends that we're seeing we talk about populism and fragmentation in politics, the far left and far right coming more into the european mainstream with parties such as the afd, the lega as well. and national front with marine le pen in france as well the brexit party perhaps you could put in that bracket here in the uk. so all these shoves. and the president has come to magnify a lot of the concerns people seem to have as well. and i will mention what is going on behind me this is the trump baby blimp the same one that we saw flying over the streets of london last year it has been given permission to be up for two hours up to 100 feet but actually it is slightly windy, so i think that they are tempering the height of the 20 foot 6 meter glimpse as we speak. perhaps not getting it too high.
we don't want to get in the way of any air traffic over london including marine one and it was actually while the president was transferring yesterday from air force one to marine one that he managed to tweet the disparaging comments about the london mayor and of course it was the london mayor who gave permission for the blimp to be up again here in london we do believe that the president may well be driving past here between the business leaders meeting and the downing street meetings so far very, very limited amount of protesters. i'm expecting to get very busy in the next hour or so >> and judging by what we can see with everybody doing sort of like this, i'm holding my phone up, it does look like that is also just a big photo-op in london as well seems like everybody appears to be taking a picture and walking away >> i think you're right. and i'll be honest with you, i've covered a few protests over the years. i was there when weed that the poll tax riots, heyday riots, in
greece as well for a few trump protests and by and large, protests do not start early. they tend to start later on, they build up throughout the day as well. so fr from midday on is when it becomes more interesting you're right, there is a lot of press here and a lot of tourists so far not many protesters back to you. >> when i see steve sedgwick in that vest, i know you've got something interesting. thank you very much. so much to do as we roll on a busy tuesday fedex, huawei, mishandled delivery and a whole lot of finger pointing. the latest wild chapter ahead. and then apple unveiling host of upgrades and one long awaited hardware refresh but investors appear unimpressed. we'll take a closer look at the house of cook coming up. and later, $58,484, the one
we like drip coffee, layovers- -and waiting on hold. what we don't like is relying on fancy technology for help. snail mail! we were invited to a y2k party... uh, didn't that happen, like, 20 years ago? oh, look, karolyn, we've got a mathematician on our hands! check it out! now you can schedule a callback or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not. good morning 5:15 here on the east coast, the sun is rising just like they said it would. meantime you new details on the delivery snafu between fedex and huawei frank has the details.
>> huawei has accused fedex of mishandling packages because changes to its internal protocols to comply with new u.s. government restrictions on huawei chinese authorities are investigating. a spokesperson for huawei says the packages from japan contained documents for visa applications for their employees to attend an event fedex apologized saying no external party asked for the packages to be diverted to the u.s. i reached out and both declined to comments. fedex previously said only about 2% of revenues come from u.s./china delivery, but an analyst estimates as much as 15% of revenues could come from the company's business in the asia pacific region and obviously china is a big player there back over to you >> certainly is. and mean time apple rolling out
a bunch of new and upgraded things yesterday like new operating systems for the phone, ipad, watch and mac. and they have a new version of apmaps and a pro computer that costs $6,000 smaller things as well but the market seemed underwhelmed apple shares are up. but let's you wrapped up with what apple said. elizabeth, more on ale changes >> that's right, a slew of new products and featured announced yesterday. the three hour event highlighting a few key themes in the business strategy right now. and the first one is services. we normally get a new operating system announcement at this software conference and we did hear of the new ios 13 yesterday. this includes a series of health related features and another key feature for apple right now and it looks to its strategy going forward and we also got the dark
mode designed for the low light environments, always less white on the screen there. meanwhile ipads, apple watch will get the new operating systems. it will include a notable absence for all the apple veterans out there, and that is itunes instead of the itunes app, there will now be separate apps for p podcasts, movies and music and another service is the new mac pro excicomputer, a $6,000 desktop computer not you including the $1,000 stand apple saying it is the most powerful desktop it has put out and mainly used for professional and creative users especially with that price tag and the other key theme coming out of the conference is of course privacy we heard about a new feature on the operating system where you can sign in with your apple i.d. rather than google or facebook and apple saying it won't track your personal information like
those other apps do. apple is trying to position itself as a privacy focused company. still unclear how that will play out with regulators and if it will be enough to convince them in light of all of these crackdowns that we're hearing about in the last few days >> and before i let you go, dive in more on that because we saw some of the antitrust stuff in europe what might we expect here in the united states? >> yeah, that's right. we're seeing kind of these reports that the doj and ftc will divide up how they take on different tech companies and what we've seen in europe is there has already been fines for the companies. the european commission is looking in to apple as it relates to a spotify complaint and we've already seen some big fines for alphabet, parent company of google, about $9 billion total already have been issued from the european commission so the question is if u.s. regulators will be looking to some of those cases that have
already been established here in europe and how that will factor into the u.s. market the sentiment overall is that the european fines haven't been enough to dent any of their bottom lines but as we saw from the stock performance yesterday, it looks like a u.s. fine or u.s. action could have a much bigger impact on the stocks. >> all right, elizabeth, thank you very much. see you soon on deck, yet another retailer may have to restructure. we'll give you the latest name in the retail wreck ahead. plus, could congress trump trump on tariffs reports the mexico tax may be off. so how did carmakers deal with all the chaos? we'll be joined live by former gm vice chairman bob lutz when "worldwide exchange" returns
thanks for joining us. stock futures are rebounding on the news that congress may potentially try to block the president's planned tariffs on mexico sending stock futures up across the board price of oil also a little bit on the move after dropping the last couple weeks. we have much more when we come back plus more on apple and whether antitrust fears are overblown or just getting started dow futures up nicely.
a tariff takedown and conflict in congress new reports republicans may try to block the president's planned mexico tax big government taking on big tech apple, amazon, google all in play as the u.s. may be eyeing in multipronged crackdown. and the perfect story for 35k 5:26 the morning 25 reasons why it is okay to pour yourself another cup this morning. thank you to being back with us.
good tuesday morning here on cnbc or happy night, wherever in the world that you might be. let's get a check on some of the other top headlines including more on the devastating floods in the midwest and parts of oklahoma frances rivera has that >> fresh from a ten day recess, after month of delays, the house approved a multibillion-dollar disaster aid bill to puerto rico the ledges gagislation goes to o sign and mike pence will meet with volunteers at a food bank and will visit an area devastated by the recent flooding the governor of missouri shared these images after touring flood impacted areas there have been 28 reports of levee breaches across missouri an alarming revelation from
quest diagnostics. they said personal information of nearly 12 million patients may have been exposed. quest says the breach handed through a billing collection sven tore but lab results were not a part of the breach those are your headlines >> thank you very much and now let's get you caught up to speed on the top business headlines. frank holland has your executive recap. >> new this morning, gresh repofres reports that gop laurmg lawmakd block president trump from putting the tariff on mexico president trump has threatened to slap mexico with a 5% tariff on all imports coming into the u.s. starting next week. more trade news, the trump administration says that china is pursuing a blame game in its public statements in a weekend white paper. the u.s. trade representatives office and the u.s. treasury issued a joint statement
reiterating their view, that china's negotiators had back pedaled on important elements of a trade deal there have been no further talks scheduled between the two countries since those negotiations broke down last month. and st. louis fed james bullard said that an interest rate cut may be warranted soon he cited the potential impact of global trade tensions and weak u.s. inflation and coming up on "squawk box," an interview with charles evans and later this afternoon, even more coverage with richard clarida at 1:15 on "the exchange." and in the latest blow to retail, forever 21 is exploring restructuri restructuring. the company is in talks with apollo global management about raising debtor in possession funds to provide financing should it file for bankruptcy, that is according to a person familiar with the situation. forever 21 has 815 stores
nationwide, most located in malls where traffic has continued to fall. back over to you >> frank, thank you. let's get your macro markets set up futures are rising dow futures up about 144 points right now. reports that congress may try to block the planned escalating tariffs on mexico giving you a little green on the screen jim cramer tweeting this morning that could also be the reason the dow began to turn positive late in the day yesterday as reports of rumors sort of leaked on ultimate that congress may try to go after those tariffs. that news also moving bonds. in fact the ten year yield doing something it has not done in a long time, it is actually rising a bit this morning not making too much -- still a 2.11%, but it is up a couple ticks this morning we'll get more on this big story with the guy who called the down slide in moments and two names you probably really care about, also moving a little higher today. that is amazon and google. they dropped a couple percent
each yesterday on growing regulatory fears will the government go after one, both or them and apple about antitrust concerns the stocks fell 4%, 5%, 6% yesterday but as you see they are recovering apple up just under 1% and yesterday at one point the stock falling as much as 3%. it did recover a little bit late in the day all this after reuters said that the justice department has been given jurisdiction for a possible investigation of apple. all this, the company is really ground zero as well for the trade fight in china let's try to figure out what happens now with one of the world's most owned stocks. steve, a great pleasure to see you on "worldwide exchange." thanks for joining us. do you think the market maybe made too much about the regulatory concern yesterday or is maybe some of that worry and
skepticism warranted >> i think some of that worry is warranted. as you mentioned, apple is down a little bit yesterday google down 6% so i think relatively speaking that is probably right google and facebook are probably at horrific than apple apple had its worldwide developer conference yesterday and talked about new software features and privacy was a big theechl. so i think apple still is in a better position. the main issue is around the app store and whether developers should have to work with the app store, whether apple deserve as a 30% take that is probably where the focus will be. but at this point i think the stock has reacted probably about the way it should have it will take a long time to see if something plays out here. >> and you've got that and of course you've got -- you might have heard about it, the trade dispute with china where tens of millions of iphones are not only made but sold in china every year are the scales both weighted against apple stock right now,
steve? >> it does feel like there are a lot of headwinds for the company. this is not a great year for iphone sales to begin with and the company is kind of caught in the middle in china. its sales in china have been affected there are some signs that they are beginning to come back a little bit there, but down year over year pretty significantly and then there is the risk of more tariffs which could include iphones in the u.s that could result in iphone prices going up $100 to $150 we suggest maybe a 15% hit to earnings in that pace. so there is a lot of uncertainty here apple actually got up to about a market multiple at its peak, now it is back selling at a discounts. so he with think that it is pretty fairly priced here. >> and the average price target of analysts, are you at 200, but the average is even higher, 212, about 22% higher than the market is right now i know you can't comment on your competitors, but do you believe that there is going to be a wave potentially of downgrades? you are already at hold, most are at buy >> well, we'll see
the worst is probably over for apple. earnings momentum is bottoming so i don't think that it will get a lot worse unless the china trade war steps up another but on the fundamentals, i don't think that it will get too much worse. the problem is i don't think that it will get too much better either ones things from the developers conference was a lot of cool new feature, but very incremental. we are still waiting for that next big product from apple which looks like it could be smart glasses, but that could still be a year or two away. so i don't see a major catalyst for the stock to get much above $200 in the short term >> yeah, smart glasses, waef seen a few from other companies maybe not perform the way that they had hoped apple investors better not be hoping that the future of their investment is based on smart glasses. >> well, probably not. i think wearables still is underestimated by the market there is a lot of focus on apple services which is terrific, but we think wearables really could be the next growth driver. right now it is the watch.
but eventually it could be smart glasses and other kinds of health products. i should also mention that you were asking about the justice department and so forth. we had an interesting call with a professor who is one of the leaders in thinking about platform companies like apple and google and his argument was that while there is probably some justification for the government getting involved here, that breaking up the companies doesn't make sense because you are eliminating the network effects that really benefit consumers. his view is that you are better off trying to get these platforms to compete, that is maybe give google access to facebook's data and vice versa my concern is that the government may end up doing the wrong things even though perhaps they should be intervening >> that is really interesting and i have a feeling that that gentleman and yourself will be called on a lot because investors, they want to know, what is the risk here especially as you said it, around that app store. steve, 200 bucks and a hold rating, he has been right on that stock
thank very much. when we come back, trade tensions on capitol hill as discord is growing among republicans over the president's planned tariffs on mexican imports. former general motors vice chairman bob lutz will join us next and plus $58,484, the one number you need to know today as the "jeopardy" phenom james holzhauer bows out you're here to buy a used car, truck, suv.
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we have a major developing story out of capitol hill on this tuesday there are new reports this morning that republican lawmakers could look derail trump's tariffs on mexico. they are looking to potentially block them and maybe even take back control on trade to congress it is less than seven days until the united states will impose a new 5% tariff on all imports from mexico, a threat that washington says is designed to pressure that country to take action on controlling the flow migrants across border and the white house is doubling down commerce secretary wilbur ross in a statement yesterday saying, quote, today i met with mexico's minute stern of the economy to discuss bilateral trade and the united states upcoming plan on tariffs to mexican goods at 5% we also discussed next steps for the u.s./mexico/canada agreement. ireiterated the president's message that mexico needs to do more to help the u.s. address
immigration. this as top officials warn that the tariffs could negatively impact all 50 u.s. states. some companies are not simply waiting on the side lines. reuters is reporting that the ceo of volkswagen has already had a meeting with a u.s. trade representative about the tariffs. vw has the fourth biggest manufacturing presence in mexico among all the global automakers. no group of companies is more nervous about those tariffs on mexican imports than the auto companies. autos and auto parts are our number one import from south of the border and shares of lear, gm and others more than 10% in a month. but is there a chance that the market is overreacting we're pleased to welcome former gm vice chairman bob lutz. bob, great to see you again on this very busy morning thanks so much for joining us. if you were running lear or ford, what would you do, would you be looking to move those
supply chains here or would you simply try to wait it out and hope for the best? >> well, first of all, you can't move things fast that takes a year to 18 months to resource critical parts that you have invested in but what i would do and what i'm sure they are doing when you brush away all the hype and all the anxiety, they will wait to see what happens my guess is, if these tariffs will either not be imposed next week or if imposed will simply place more pressure on mexico to do something about stemming the tide from their side of the border, which is basically the president's agenda this has nothing to do with trade or protecting american jobs in the auto industry. this has everything do with using the threat of tariffs to get mexico to respond and do something on their end and if i were the ceo of a major
corporation, either automotive or components, i would sit there and wait it out and know that in my judgment the president knows what he's doing. >> you know, bob, you're there in michigan and i'm sure that sort of that tariff surprise friday when it came out reverb brats brated across your state more than any other was it holy you know what moment or was it we thought this might be coming and we'll be okay? >> no, i think it was probably a surprise for everybody we've neff really seen this linkage before we've never seen the threat of tariffs which affect an industry and another country used as a lever to achieve something else. in this case immigration control. so that is a new linkage this is somewhat unexpected. but i think that the automobile industry has surprises all the time
i mean, exchange rate movements alone can create far more than a 5% cost penalty. so if i were to say that certain transfer case which today coming from mexico is maybe -- maybe costs $100 so after the tariffs,it costs $105 or $107 well, they are probably absorbed some of that for a while and then try to pass on the rest but 5% swings in costs get absorbed by the system >> i like what you did there, you took a link to the linkage literally. so i guess that is the trillion dollar question, right which is let's say the tariffs come and they go up every -- nothing gets solve and now they are 15%, 20%, at what point is there a breaking point for the parts companies and for the consumer because let's be clear car prices have been going up a lot over the last decade because
of technology anyway would a 15% jump on a transmission destroy car sales in america >> no, i don't think that they would destroy car sales, but they would certainly slow them down and any cost increase to the consumer is not welcome at this point and you're quite right, i mean car prices have -- and especially suv prices have almost doubled in the last eight years or so. part of it is -- i don't think any of it is tariffs most of it is technology and a lot of the technology is mandated by federal requirements but, yeah, i think that we are on the cusp of getting an affordability with new cars. but when cars become more expensive, people resort to late model used cars. and late model used cars are not
produced in some used car factory. they are produced by the same automobile industry that sells new cars so if used cars are in high demand, the prices rise and then the owner of a used car has less of a step to a new car so somehow as long as you've got this enormous supply of used cars and a large population and cars that are not wearing out, but certainly getting older, the business is safe and besides, i don't think -- i don't think that we're looking at more tariffs because i don't think that president trump likes tariffs per se he is using tariffs to get what he wants out of other countries. >> and i think you're making a very important point because the market tends to be short sighted. we get a headline, we heart tariffs, everybody gets scared the price of a new ford f 150 can be $60,000 now if you getbah
screens. nobody says a worked about those things because you stretch out the automatic though loan. it is all about the monthly payment. do you think the market has overreacted to the trifariffs gn the fact that car prices have doubled in a decade? >> let me tell you this. the market always overreacts it always -- there is always some sort of news item, people don't bother to read belows hth headline and they start selling stocks for no reason and the smart money says let's wait and see how it plays out maybe we'll have a buying opportunity here in a week or so >> any sign that you see that the big suvs, pickups, the money makers of the gms and fords, that they are slowing down >> no, none whatsoever exempt that i think that texempt -- except that i think that the consumer is showing signs of sticker -- not sticker shock,
but sticker fatigue. and i think that we'll see a stable market at around 16.8 million for a little while now and it is certainly not going to go up to 17.2 or 17.5 or something like that. i think that the industry is acutely aware of the fact that pricing of new vehicles is getting to the point where it can become an issue. and your point about monthly payments, that is what people look at. they never look at the list price, they look at the monthly payments and we have a deal now where we have a situation now where thanks to leasing or thanks to 80 month paper, people never actually own the vehicle and you know, that is not good >> but your point is well taken. 6 60 grand plus for a pickup truck and we're worried about 5% good perspective as always bob, have a great day. >> thanks, you too let's find out what else you
will be talking about today besides $60,000 pickup trucks. >> i don't think that he will have sticker shock but i think some people are shocked that jennings' win streak is safe james holzhauer finally lost last night record holder ken jennings took to twitter to poke fun at holzhauer revving it as a rain of estruction. but the new champion, she almost has like a villain's back story. she is a 27-year-old librarian from whichchicago who wrote her masters thesis on "jeopardy. you can now enjoy your daily cup of coffee guilt free even if it is multiple cups. a new study claims that it is heart safe to drink up to 25 cups of coffee a day yes, 25. and good news just keeps coming for the caffeine media among us.
california officially gave its blessing to coffee yesterday not sure how that works, but it declared that the drink does not pose a significant cancer threat here is a question you have a teenage daughter. you will face this question eventually how old is too hold to be living at home with your parents? >> 12. >> too young there may be less stigma now than there used to be for people in their 20s living at home, but there is still a limit according to a new survey, respo respondents all agree that the magic number is 28, that is the age when it is too old to live with your parents and it becomes embeari em emembarrassing >> a generation ago, 28-year-olds had a family, were married, ben to war. hey mom, i have a girl coming over, can you and dad leave?
>> yeah, can i have the netflix password that is like now when you are in your 20s in some cultures they live with their parents their whole life >> all right frank. thank you. 28 >> not 12. >> both are wrong. bond market's pain may be your stock's gain. why the next guest could be right on the money again plus a big analyst call just crossing on one of the faang names. it is netflix. who is saying what netflix bulls may like it.
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♪ ♪ ♪ ♪ ♪ ♪ applebee's new loaded fajitas. now that's eatin' good in the neighborhood. welcome back we have a big analyst call just crossing on netflix literally moments ago. markets upgrading it on a buy, 25% up side to where netflix is right now the analyst there believes that netflix has built what they call an unstoppable lead in
subscription video streaming and that the margin opportunity is expanding takes becomes both content producer, distributor and retailer a 425 target we're at 329 so that is 25% -- my fingers, you know, sometimes the fingers don't work but here is the thing. that is 425. the all-time high on netflix, 423. so that call actually has it above its high technically i won't draw trend lines, won't do that to you, about you that would be a lot of up side going back above the all-time high if luke capital markets has it right. speaking of having it right, your next guest can puff out his chest a bit because remember a few weeks ago this guy said bond yields were likely to keep falling and he has of course n been right been a top story every day now he says the bond pain may be the stock market's gain. let's welcome back in mr. jeff
kilburg. you see what i did there, jeff, giving you the shout out you were right but what have you done for us lastly where are yields going now >> first, nice haircut you are looking dapper this morning. >> thank you >> you see the way the 10 year has come down to 2%, but if you look overseas, xwu s bund down . but i think the bigger picture, the market is dictating what the fed policy will be the market dictates the next path of rate movement. >> we are 2.1% right now a small tick up from yesterday where we were 2.06, 2.07, news that congress might try to roll back equity tariffs helping equity futures this morning. what is really in charge though? are bond yellields leading stocs or is the news leading bond yields which is leading stocks >> i think the fed is quite
happy, you see the long end of the curve come down. that has helped cushion the real estate market. 2018, the market was really beat up so now we have the cheaper money and that really has helped fuel the economy the last ten years so despite about the fact we have a ton of emotion and we saw the faang stocks get beaten up yesterday, i think this is a great opportunity to see some type of bounce up washed upware >> and if you are in the equity markets, the question is this, at what point -- if you're an investor and maybe if you're a little nervous about equities given everything that has gone on and you made a bunch of money in the last 5 to 10 years but looking at a bond yield of 2.1% and thinking how can i buy this when i can buy a large blue cap blue chip stock and get 2.5% to 3% on a dividend even if i'm worried about the equity prices, my time frame is 10 years, i'd rather have the cash flow than
worry about owning bonds >> i think even more to your point, look at these large multinational companies that really have been beat up by the tariffs conversation we're seeing them oversold so i think that you are right to be owning these at these levels. and interesting to see at what point does the plunge protection team come back in. we know president trump who will be rerunning in 2020 doesn't want no see the stock market negative for 2019. >> so when do you think that is, when does that team if you will come back into the markets >> i got 33 seconds. yes, the 2.1% is critical, but watch the u.s. dollar index. it didn't get above 98 for too long so look yoefrp seaoverseas, eem 50, up about 11% but the last one i'll give you, the tech sector. number one sector to own the last two years and it continues to reveal strength
president trump meeting with prime minister theresa may in london as lawmakers back home consider whether they will attempt to block his tariffs on mexico details straight ahead the nasdaq yesterday slipping into correction territory. regulators prepare antitrust probes for big tech companies. we'll show you the biggest market movers. plus new calls on uber, dozens of analysts preparing to initiate coverage on the ridesharing service on this tuesday, june 4, 2019.
"squawk box" begins right now. ♪ ♪ wake me up before you go go don't leave me hanging on like a yo-yo ♪ ♪ ♪ wake me up before you go go live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site? times square i'm becky quick along with joe kernen and andrew ross sorkin. let's take a look at the u.s. equity futures they are up about 160 points for the dow. s&p futures up by 17 and nasdaq up by almost 50 points this comes after a day where you once again saw the s&p and naz dick down, i think they have been down 86 the la of the last sessions some pretty major declines over the last six weeks or so the nasdaq at this point is in correction terri
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