tv Squawk Alley CNBC June 4, 2019 11:00am-12:00pm EDT
"squawk alley" john ford the on assignment. a nice bounce today. dow is up almost 360 you got to go back to the middle of february to see a gain this big. early march, s&p back up above the 200 day. >> tech stocks are rebounding. including many of the fang names, though i would leave facebook out since they're trading more than 1% right now overall, all the major averages in the green >> all right fang stocks mostly higher, this morning a day after tanking and shedding almost $130 billion in market cap, sending alphabet into a bear market as anti-trust investigations weigh on shareholder sentiment, we have wedgewood partners portfolio manager and cio david wolf what a way to start the week how surprised were you by this latest chapter and what does it do to your models across the space? >> what a way to start the week.
kind of getting used to it these days as the typical monday in fang land but not a surprise if that some of these reports have been bubbling up obviously on friday, late friday, we got word that this is something may be brewing. look, it's hard to ignore the fact that these companies had benefitted a lot from a fairly loose regulatory environment over the years and the ability to leverage a lot of consumer data to drive their ad businesses so hard to ignore that not surprising the regulators are continuing to look into these situations ultimately, i think that this is going to take a long time to resolve. and some of the previous cases that we've seen, especially in the eu, they've ultimately not resulted in major fines or business model changes so, you know, things could certainly be different this time around but not a great news cycle this week not, you know, and there might be more to come.
but ultimately if you are willing. if you are a long-term investor, i think this is something that facebook and google and the other fang companies can get behind >> is there on the spectrum, though, of regulatory risks, which of the five letters in fang deserves the most worry >> yes so, you know one of the -- part of this is what's baked into the stock. now google has been one of the companies that has able to not be, certainly in the eu, they've been in the crosshairs but in the u.s., it's really the target has been on facebook. so from a new, new information perspective, alphabet is really the one that we're a little -- that there is new information to be concerned about but a lot of the data that google uses is not, is used within their platform and users know what they're doing, right when you do a search on google, you know that you are getting information and that information is being used to target ads.
now the other companies that tradeoff hasn't been as clear set. so i think that might be a part of the delineation is, is there consumer harm? that might be a little easier to prove on the facebook side than the google side. >> david, your portfolio is invest in apple, facebook, alphabet to name a few as an investor in these names, would this change, any of these headlines we've seen potential for regulatory risks ratcheting up would it change your stance on these companies? >> i think you have to look at each company independently facebook has been through the crosshairs of late when i think about apple, and if you look at the extreme of anti-trust and could alphabet be broken up. >> i'd take a page out of the old standard oil anti-trust back in the day alphabet shareholders might be crying all the way to the bank if they had to break it up i think there are some under valued properties there. but that's even an extreme thought.
then on apple, we've owned apple since 2005, you know, we have been through a lot of different things with apple over the years, but no doubt about it, these headlines, the prospect for regulatory overview, it's a wet blanket on the multiple. i think tim cook tried to get out in front of this yesterday in an interview saying they really don't have monopoly position in anything i think the exception to that is the app store that probably would be the focus of regulators i think it's a monopoly. i think it's very dominant it's a great asset for apple, but, again, it's just again a wet blanket. apple stocks have been flat now. at least in the 170s the first time it hit 170 is back in early november 2017. so, i don't know how much of this regulatory is baked into the price, probably not much right now, but apple at 13 times next year's earnings, you know, it's really not demanding at all.
>> well, david, i mean, the regulatory scrutiny is one thing. it's regulatory scrutiny over a part of apple's business we thought or maybe still believe was going to repla tis phone cycle as their main source of artillery, right that services would be the future so it's not where you want to see regulatory risks >> no, no, you are absolutely right. when you consider that apple has 1.4 billion device users over 900 iphone, over 100 million mac, 400 million ipads, in all that, all that developer information at wwdc yesterday was great for that but, yeah, you look at the ecosystem of apple on a global basis, it's gigantic and it's probably going to have this type of regulatory review and government officials, probably looking at it ongoing for years to come.
it's just that gigantic. >> mark, when you see so many tech names down double digits over the past months, do you see buying opportunities here? >> i think so. if you are a longer-term investor, i think there is value here look at google and facebook alone, you are now trading at 15, 16 times earnings. this is in line with some of the consumer staples names and growing multiple times faster even with the slowdown in the business that we've seen at facebook and googsle lately, still growing that's 15, 20% top line trading at 15, 16 times gap earnings so i think there is a lot of value here again if are you a longer-term investor, i think the other thing you do is you look at how the reg ulatory issue versus played out but that the ftc here in the u.s. where nothing ultimately happened with google or the two relevant sets himments on the eu that
ultimately didn't change business practices and resulted in a combined fine of 4.4 billion very digestible by google i think if you are a longer-term investor, with the market cap losses yesterday, given the outcome if there is formal investigations are launched, you probably see this as an opportunity. >> it's safe to say fines in general are really not a material concern, right? it's all going to be pock clang? >> right >> it's more around the business model changes that could result in this. if we look at what the eu asked of goog to him change, ultimately, it didn't really have an impact the reason is, is that what google has been doing that some you know advertisers and businesses are concerned about say like yelp and some of these other companies that have been vocal, is yelp or google is trying to narrow down the search results and make them more refined. right? rather than you getting a link back of search result back with
20 you know results and good luck they're trying to refine that search there are going to be winners and losers in that process i think that ultimately, i don't see the consumer harm in that. i think that's ultimately what will be found out here you know in the future. >> well, david, thanks, for joining us today mark, stick around with us. we will turn to uber you are one of the analysts with initiated coverage stock is off the 1% high, wall street is initiating mostly bullish coverage overall you can see right there on the screen, citi and outlier, the neutral call i think bullish citi's analyst is with us. we will bring in town analyst john blacklidge. mark, why neutral? >> i love the fact i'm the outlier on that chart. >> do you really >> i had no idea what the readings will be i'm surprised. obviously, the market reception
to uber and lyft has not been great. i would agree at least one other analyst would have come out on the side of post-investors here. but, look, the big picture is we are very bullish on this category you know in a very short period of time. we are talking 65 billion in bookings globally for the ride sharing sector we think the business, this industry is well over 300 billion. that's our base case or even our bear case really so we're very bullish. i think the issue is what is baked into the stock what are expectations for the next year? which is accelerating revenue growth in the face of rising competition not just in the u.s. but in brazil and other countries. there are a lot of big country opportunities out there, japan, germany, where the regulators and the local authorities and even the citizens haven't been very receptive to these businesses their a lot that needs to be sorted out here. and i still am not sure that
those risks are fully reflected in the stock right now so that's, i think that this uber in particular has a lot to prove before they can command a premium. >> john, how are you thinking about the risk-reward here where uber is concerned? especially given the fact you have initiated coverage with an out perform rating and a $58 price target >> yeah, we think it's well positioned we think it rises and needs position well to grow. near term and long term, driven by positive secular trends one point of differentiation in our launch piece was the use of our proprietary survey data in the u.s. that we have been tracking ride sharing and food delivery for several years now and on the rise side, we'v noticed ramping, user penetration across all ages, really pronounced and fast-paced growest from younger demos also higher turf frequency
those are the two fundamental drivers of the ride's business so it gave us confidence in our forecast on the reit side in the u.s. we saw user participation trim since 2017 they have more numbers in the grub now and it bodes well longer term. we think those trends extends internationally we are seeing in the u.s. that's a part of the reason why we came out with the outperformance $58 price target. >> mark, i wonder if you make some claims, i'm quoting from a bunch of different sources, one is they can get ebita close. are either of those things false? >> i think the ebitda break everyone is a little aggressive. >> that looks like a 2023, 202003, maybe we're splitting hairs here >> that seems a little early the company is talking about ebitda losses elevated certainly through 2020 and certainly in
loss mode in 2021, well over a billion dollars in ebitda losses in 2021, break even 2022 seems a little early for us. especially the company is aggressively investing in ebikes, autonomous issues. one to three years old, early initiatives collectively are causing all of these losses, which feeds into your next point, which is i do agree with the second points, the rides business, the economics is probably more favorable than people thoughts early on it's hard to tell that because they don't break out profitably by segment but really the losses are being driven by eits, autonomous and other factors. while i might not have a buy on the stock, i very much believe in the unit economics of the core ride share business both for uber and lyft and most of the other players in the markets. >> john, i guess first public
earnings for uber last week. one of the things that was an area of softness was latin america market which has been so key to this company. how are you assessing that >> yeah. i mean, that was a dd 1 end, sao paulo is one of the top markets. didi went in and was aggressive on pricing they told us it was a little more rational. >> that would be fine. we did work on the unit economics. we're seeing the rides business generates 45 cents profit per trip on average this year and it grows modestly over time so this narrative the rides business is a sloss wrong. i agree with milwaukee on the eits side when we did analysis we think they are losing $3 per trip this year the losses will decline overtime that i are expandsing in ge os, trying to get more market share,
et cetera. rides is that notion that it's a loss maker is wrong based on our work >> mark, one of the things you note in your report is determining whether autonomous vehicles represents an opportunity or a risk. >> yes >> how are you thinking about that >> first of all, thank you for reading the research i'm not sure many of our clients do but the issue is any new technology, you know, development like this, is it has the potential to bring in new competitors. right? so, in the case of autonomous, we've got chevy cruze google waymo really way ahead of uber and lyft and these other companies in terms of actually building the technology. >> but couldn't they be frieneme frienemees >> those companies could have talked about in the case of waymo their facing robo-tax service to compete head on i agree there is a possibility that changes we did see an announcement a few
weeks ago waymo is doing small testing with lyft. so there is a possibility that they partner, but for the most part right now, the leading avi technology developers are moechtdly pursue -- mostly pursuing a network strategy that can put them, make them a new competitor to uber and lyft. >> we'll leave it there for now. john blackledge, mark may, thanks, for joining us >> thank you when we come back, apple announcing new privacy features at the wwdc. of course, we will film you in, tell you what to expect on day two of that conference we will hear from former facebooked a record is and ftc commissioner mozee thompson. we are at 4:20, obviously best day early february for the dow ckn mite&p11th for the s ba ia nu be good while i'm gone.
ball. ball. ball. awww, who's a good boy? it's me. me, me, me. yuck, that's gross. you got to get that under control. [ dogs howling ] seriously? embrace the mischief. say "get pets tickets" into your x1 voice remote to see it in theaters. >> well, it's turning into one of the best days of the year up 418 on the do you, if we can get above 450 that would take you back to january 4th when we were up 700 points so it's a long way to go to get the best day of the year. but we're getting close. >> yeah. we have feds speaking, including comments from chair powell and trade talk and headlines where mexico and china tariffs are concerns and a lot of strategists coming out saying
that coming into today, we were very oversold from a technical standpoint, apple is trading higher, it's going into day two after making big announcements our josh lipton joins us with what we have learned what apple is trying to become. josh >> so morgan, one big theme in apple's big software show this year, privacy. new privacy features in ios 13, companies new mobile operating system for example, sign in with apple. that's a new log-in feature allowing users to sign into apps and websites with just their apple i.d., which isn't shared with these third parties, apple execs say that's a more secure log-in than the competition. >> all seen buttons like this, asking us to use a social account log in to get a more personalized experience with an app. now, this can be convenient but it also can come at the cost of your privacy
>> apple introduced a feature called location enhancement so you can share it to an app just once and tired to ask you again the next time it wants it. the company announced a new service for people who use certain security cameras at home, called home skit secure video. they will be able to have footage stored on apple servers in an encrypted format, pushing for investors is this, do consumers care about privacy as much as apple thinks they do will this focus on privacy at the end of the day help apple sell more hardware and services? i caught up with a tech annual list, she says it won't matter for all consumers. it will certainly matter for some, she says, specifically the kind of person apple appeals too to, very ar engaged about this issue. >> i'm wondering how developers may be stealing the thunder they normally get out of the
conference of the doj. >> listen, we saw those headlines, obviously, the broader concern for big tech the headlines we saw about the doj and google, the government really obviously has big tech causing more of a threat at this point, carl. i'm not sure how much of a concern that was to developers this is a show for app makers, their focus, the thousands of people behind me yesterday for those men and women it's about listen, can apple introduce a cool compelling operating system with new features that gets you to upgrade to it so they can show you the modern edge apps. we'll see how enthusiastic about what they heard yesterday. >> a fascinating week on multiple fronts for apple. our josh lipton out west when we come back, the president is overseas in london. as you know, talking trade deals from china to mexico to the uk we'll get the latest over there, the markets rallying a nice 413 point gain back above 278onhe&p ckft this. s
as you can see right there, the s&p is up 1.5% today the largest rail manufacturers crrc is making subway cars for boston and philadelphia but is owned by the chinese government, putting washington on red alert. we are live with the latest on the story, elon. >> reporter: well, morgan, this car will eventually be a part of the orange line for the boston t. there is a lot of controversy over it because the company that runs the factory is a chinese state-owned enterprise crrc. they make a kelston of the cars and ship them to the u.s. for final assembly eventually the
definition sign that tells you where you are going, that will be hooked up to this wire over here the company has only been in the u.s. four years, already it's become a major player. they have contracts in chicago, l.a., in addition to boston. that's over 2 billion in taxpayer funded projects >> crc understand united states is a growing market in this industry and also it is the third biggest industry globally. the united states is a market that provides the most fear of operation and the most full competition. >> critics of the company, including the u.s. 48 industry say the crc isn't playing by those rules. they get massive subsidies from beijing that allow us to undercut competitors on price. they raise the question of national security. they say china should not be
allowed to build u.s. critical infrastructure there is even a bill in washington that would ban the company from continuing to do business here in america but, guys, at the factory, crrc says they are creating u.s. jobs, hiring unionized workers and they have no intention of slowing down, back over to you >> ylan, i know there are a number of manufacturers who are they and i guess because of that who would stand to benefit and the fracture going to that company. >> reporter: this is the interesting thing, there are no known american companies that build passenger railcars a lot of the competitors are foreign owned as well, cao whkai is one as well they are not using as many competitors
manufacturing, this is all aassembly. what we have found is some of the interior paneling does come from china they use american suppliers in order to put the final touches on these cars. they say they require, by american regulations that requires 60 to 70% of the value of the car be made here in the u.s. >> certainly speaking to the globalized nature of the supply chains in manufacturing. ylan, thank you. stocks firmly in rally mode, obviously. european stocks are wrapping up their trading session in the green. the president in the uk speaking on tariffs and brexit hauwei we have beenwalk watching the scene on the street in london, hey, littleem. >> reporter: the weather is not keeping the protesters away. there were a few hundred of them outside downing street as the president crossed over, you could hear the boos and the
jeers president etty clearly n. terms of what he and prime minister may talked about, trade seems to be atop the agenda, saying he saw a potential with the uk teresa may pointing out that has to happen after brexit which is currently scheduled for october 31st hauwei came up in the conversation because the president said he expected there would be an agreement between the u.s. and the uk. he saw in the future there would be no limits on u.s. intelligence sharing with its long-standing british partner. in terms of brexit, he said that's something that should and will happen. prime minister may will no doubt be relieved to hear that, since she spent so much of her capital to get the deal over the finish line thus far has been able to do so. the successor will be making it happen one of the men run secretary boris johnson. he was given yet another public stamp of approval from the president saying he knows and likes into machine jon but he's not the only one,
obviously, standarding in with the chants >> willem marx thank you. here's what's happening at this hour virginia governor ralph northam will take up a package of gun control legislation. he said it is urgently needed to prevent killings like friday's mass shootings in virginia beach. paul manafort serving a federal prison sentence is expected to be transferred as early as this week to rikers island in new york city. he will most likely be held in solitary confinement while facing state fraud charges the new york district attorney obtained and indictment to ensure manafort would still face prison if president trump pardoned him. hungarian rescuers say the death toll from the sunken danube river has grown to ten after another body was recovered. two bodies were recovered on
monday 18 people, though, remain missing. seven were rescued. and wildfires continue to burn in the state of washington. more than 3500 acres have been burned as firefighters try to contain the flames, which are being fueled by heavy winds. evacuations have begun for nearby towns you are up to date that's the news update at this hour i'll send it back down to you, morgan >> sue herrera, thank you. when we come back, what an anti-trust battle could mean for facebook, former ftc commissioner and former facebook adviser joins us next and with big tech in the crosshairs tomorrow, don't miss exclusive interviews with two key amazon executi executives, jeff wilke and david limp we have more "squawkll" teth bak aey -driverless cars... -all ground personnel... ...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity
welcome back to"squawk alley," markets rallying with the dow up 432 points right now. dom chu is back with a quick look at what's moving. dom. >> the bull playing out as you expect it would with sectors leading the way higher tech having a big bounce back after big losses yesterday you have real estate activity. lack ards there. we are have you a dow session up highs around 430 points or so
the s&p you can see they're up huge as well and the nasdaq really helping to lead those gains. when we return other place to watch is what's happening year all with certain parts of the market small caps in particular, a big trade up 1.7% almost outpacing the broader s&p larger cap side of things. we will end on two key sectors, the transportation stocks as well as the semi conductors, both out performing the market in today's trade on a year-to-date basis we're keeping a close eye on trends, morgan, transports, back over to you. >> dom chu, thank you. mike santo totally -- santo joining. >> it's bidding on itself. one of my principles in these moves in markets is context is its own cat a list the dow is at 1,800 points in six weeks. you had the buying panic that
depressed yields to levels almost nobody foresaw so you really as i said in this piece yesterday, when the market works itself, you need incrementally bad news to keep pressuring it further. i think today you had that excuse with yields rising a little bit maybe some perception that fed officials are slightly more amenable to listen to what the market has to say about policy and perhaps some idea that the mexico tariffs might not be imposed or at least not for a long period of time. all of that can work together to say wow the rubber band was stretched very far it didn't snap now we are snapping back a bit >> i guess we had headlines that weren't so negative and certainly you can point to fed speak and chairman powell. but he wasn't particularly dovish then even in terms of some of these tariff headlines, you did have president trump in the uk today say, quote, i think it's more likely that tariffs go on and we'll probably be talking during the time the tariffs are on and they are going to be
paid it wasn't like these headlines were so positive you think you were oversold coming into today? >> extremely oversold, sentiment was very negative. it has been for several days right now. we also have this report that the senate is thinking about perhaps blocking the mexico route. we don't know if any of that is happening. i think it was enough to get people thinking, what if it's not some kind of a spiral of new trade barriers here. by the way, the s&p ultimately back to last thursday's levels we didn't exactly do anything beyond unwind a couple nervous days yesterday's news driven tech shakeout i think was interesting, too because that was a kind of a one off. it was not a part of the trade story principally. i think mostly what it did, it served to shake people out of those areas they thought were insulated and were hiding in >> that sometimes happens towards the end of a sell-off or at least before some kind of a bounce you have to have that idea that there is nowhere to hide before you get a sentiment shift.
>> now we have this debate about what powell said some are arguing he didn't say anymore, it will be up to the jobs number to give us a better picture about their intentions next what do you make of that also the idea when the fed does eventually pivot to a dovish stance, markets don't tend to behave well in the months to follow. >> right really what about the months up to that? all of that together, i agree that powell did not have a radical clang in tone. he definitely nodded in the direction of we're aware of what the markets are doing, reflects well, he didn't tuesday word patient, which some people thinks that no longer means with reon hold until further notice i agree, i don't think it ratified the market's view some july or september. >> a bond markets view the implied view of the bond markets is what i would say. >> mark santoli, thank you the dow is up 420. sessions highs are right near them for markets today >> the other big story as mike mentioned, is tech playing
defense against regulation as we got that flurry of headlines to start the week that pushed those stocks lower gloria boorstin looks at what an anti-facebook battle specifically look that's for facebook >> there are questions whether facebook could be broken up. they launched an anti-trust investigation. democrat jerrold nadler saying there is growing evidence that a handful of gate keepers have come to capture control over key arteries of online commerce, content and communication. this after reports the federal trade commission assumed oversight of anti-trust scrutiny of facebook in addition to its investigation into facebook's privacy violations, that is expected to result in a settlement up to $5 billion and more privacy oversight now, a number of analysts, though, are skeptical about the threat that it poses mark moheney saying it's the top
buy. raymond james saying, quote, we think it would be tougher to prove that it engaged in anti-competitive practices versus benefiting from network effects and continued innovation they say they are relatively low but it discuss warrant that investigations could create distractions and muddy strategic direction. facebook is not commenting on these developments just last week, mark zuckerberg responded to questions about anti-trust concerns saying they control less than 10% in the digital ad market. what zuckerberg does dominate, though, is control over facebook shares and he has drawn criticism and for that facing proposals from shareholders just last week for an independent chair and also called to eradicate the duo class shared structure. but, carl, those were not approved back over to you >> julia, thanks great setup
apple, amazon rebounding facebook off the low of the session, questions remain about its future when it comes to regulation, joining us is the formish ftc commissioner and adviser to facebook, mozell thompson and bruce melman, mozell, let me ask with you if you think the needle moves this week as a result of these headlines that we got yesterday? >> well, i think the market couldn't overreact right now what we have is a clearance agreement between the ftc and the doj and that's just more of a sort of a possession arrow. then, what comes next is a longer process if there is an investigation of any of these companies, it's going to take a long time to not only get facts but also to define what the market is and the new law might have to be in this area in order for them to correct any problems that they
see. so it's going to take a while. >> first, that's a great way to frame it what would you be looking for and what are you telling clients about the next sign post to figure out where this is all going? >> well, look, scrutiny of tech has arrived. some call it the tech lash it's going to be long lasting. it's, it is worrisome for tech that it's where the populist left meets the populist right. some combination of big is bad some unhappiness on the left, particularly with facebook regarding russian election interference in 2016 on the right whether or not there is bias in the algorithms or people who decide what gets to stay up or what is taken down one would remember it was five years plus that microsoft investigation eight years of at&t, nine years standard oil, 12 years ibm these can be very distracting, very expensive and very challenging for tech companies >> mozelle am i right to think
we potentially missed a step here, of course, you had everything going on with these anti-trust agencies. you also have the house judiciary committee launching an anti-trust investigation and what about regulating data and privacy on the big larger issues that have largely gone unchecked until now. >> i do think that's likely to happen that you are likely to see some movement in terms of data and you will see that with the ftc with regards to the consent order. so that i think you will see only movement on i think that's separate and apart from what you see, what the people are talking about in terms of anti-trust and competition. especially when you start talking about a breakup remedy, which is really an anti-trust remedy >> bruce, how should we think about the divisions i guess that has been made. you've got the ftc getting jurisdiction over facebook, also over amazon, but the doj over
alphabet and also apple. what should investors read between the lines there in terms of those divisions >> it's for a libertarian like myself, it's a bit like the five crime families splitting up jurisdiction in old manhattan. honestly, my worry would be not that they've divided it up, but how many folks, how many jurisdictions are taking a look at tech when privacy on anti-trust on content and liability, it's foreign and domestic federal and local and state. it's policy makers in the house and in the senate. republicans and democrats are meeting as well as regulators and lawmakers, there is a whole multi-front war here that tech has to or these big platforms have to deal with. >> yeah, bruce, that's a curious question in general, who are clients most fearful of ftc, doj state ag in someone else >> good question i would imagine doj is probably the scariest because they tend to bring the we're going to
break you up cases, but, it also depends on the issue, that the worst thing that could happen would be new laws that outlaw what might be allowed. josh holly, a republican freshman senator from missouri has asked the question, why should there be a facebook whatsoever he was pretty aggressive against google and facebook as a state ag he's clearly brought that aggressiveness towards those two companies here to walk >> mozelle in terms of the laws on the books right now around anti-trust, looking at these different companies and the different segments within the companies that could potentially be investigated, where would the strongest case be? >> well, it's really hard to say. one of the things that's important to recognize is none of this is happening in isolation. there is some context here the ftc in february just announced that they were putting together an internal task force to really look at high-technology and whether have
examined correctly what's happening in competition so that says to me that they're trying to think about not only are the laws and regulations they have adequate but whether they need something else or their interpretation has to be different. that takes a while but it's a really important step, because what i've seen, at least since the time i have been at the commission is that the market in terms of technology is very different than it was even five, ten years ago. so that's an important question. so, when you think about that, you have to think about what the law could be, then you have to think about the fact finding you need to have to bring a case then you have to bring a case. then you have to actually win the case then you have to actually have a remedy okay so that's a pretty long process. and the one wild card sort of here is that we're in an interesting political environment and you are coming up to an election year i have pretty good confidence in the anti-trust professionals that are trying to find what the
right answers are. but what they're seeing out there is a lot of people talking about what they think the right answer is. and defining a panoply of different problems >> investors have a hard enough time figuring out if the business problems are working. thank you for coming back. mozelle and bruce. >> thank you >> as we head to break check out shares of fox, down 7%, getting posted better-than-expected results, but lower d.c. outlook for the year that stock down double digits over the past three months but first, rick santelli what are you watching today? >> i'm waumpbing you -- i'm watching you it looks like a little steepening is starting to happen with may have the clue as to whether the bottom is in place the key to that is 1175. wh ds atatoeth mean? you have to tune in after the
break. >> shhh, sorry, i didn't catch that. i said ask how soon they can be here right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering? look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪
here's what's coming up on "the halftime report" at the top of the hour. today we're discussing this turn around tuesday, whether it's something to build on or just a one-day event. plus the street gets uber bullish on uber. our josh brown already owns it as you may know. is it time for you to buy it and we are calling it a bank brawl, two well-respected analysts on that side of that trade, one sounding the alarm bells, they are both here onset to debate that
all coming up at noon. carl, we're about ten away and we'll see you then >> all right, busy day, scott. let's get over to the cme group in the meantime, get the santelli exchange. morning again, rick. >> good morning, carl. so, yesterday's low closed for ten-year no yields was 2.07. just keep that in the back of your mind. 1175 a.d., that's when leonardo de pisa, i don't know why he ended up with the name fibinacci, but that's where he was born, in the city famous for the leaning tower of pisa but the fibinacci sequence of numbers has magical effects and chartists have been enamored with it since i've been trading in the late '70s so, take the summation, zero and one is one, one and one is two, two and one is three ad infinitum but the magic of it is how different combinations are constant and give you important ways that nature expands and contracts or markets retrace so you take any
back-to-back period, in this case, i took three and five, take three divided by five and get 4.6, take another, 89 divided by 144, any two in a row, you get basically the bigger the number, it basically approaches 0.62. and if you skip one, so instead of doing 3 divided by 5, you do 3, skip one, divided by 8, you get 0.375, go to 233, 0.319 so the bigger the numbers, the bigger retracings, here's where the magic comes in, folks. all right. the double bottom, 2012, 2016, i round out, we'll call it 135 right? so here's what happens we have 135 down here, you have 234 down there or 225 to 230 on top and as you subtract these numbers, i rounded it out, it wasn't quite, so 3.25, 190 basis
points between the high and the low, 325 minus the 72 basis points which comes from the 190 times 1 fib ratio, take 190 takes the second fib ratio, you get 117 so the numbers you end up with are 253, which happens to be right about here and 208, which pretty much was yesterday's low. now, remember when we had the double tap at 3.25%, what i said on tv, it was basically that this is a top. i wasn't sure if it was the top. the same goes for this fibonacci bottom i'm not saying it is a bottom but at the very least, we should start consolidating the bounce right now gives it credibility but maybe even more important, should that not hold on a weekly close, the daily, important weekly, then you have a lot of room to go a lot lower "squawk on the street" and "squawk alley" gangs, i think they're all next to each other right now, back to you
>> "squawk alley," rick, you know what else is magic? your charts. >> it's chicago. we got the squawk part right >> well, we're squawking over here thank you. we're going to stay on top of this morning's big rally take a look at the dow right now. right near session highs, up 423 points, best one-day gain since february s&p, since juaanry we got more "squawk alley" after this break if you are a first generation college student. stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. the world in which we live equally distributes talent. but it doesn't equally distribute opportunity, and paths are not always the same. i'm so proud of you, dad! man: i will tell you this, southern new hampshire university can change the whole trajectory of your life.
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there's a look at f.a.n.g., obviously huge play after yesterday's headlines and then today, powell headlines, the president, obviously, uber >> yeah. >> crazy news flow >> big reversal on facebook. also semis rallying big today with the stocks up 3%. >> let's get to the judge, see what the afternoon brings and the half >> i'm scott wapner. tech in tatters, tariffs on the table, a titan turns to treasuries, that hardly sounds like a great environment for stocks or is it? it's 12:00 noon, this is "the halftime report." >> announcer: big fed names weigh in on the next move as stocks stage a bounceback. financials are leading the way, up big but today, one widely followed voice in the sector says, buyer beware plus, a wave of analysts are telling investors, grab uber "the halftime report" with scott wapner begins right now. >> good to have you with