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tv   Squawk Alley  CNBC  June 5, 2019 11:00am-12:00pm EDT

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♪ pump it ♪ louder ♪ pump it ♪ turn up the radio ♪ blast your stereo good wednesday morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan at post nine jon fortt live in las vegas from amazon's conference where he sat down with amazon worldwide ceo jeff wilkie and soon be joined by the svp of devices and services, david limp we look forward to that. fang names, mostly lower today as the fight against big tech continues. the house judiciary subcommittee says the leaders of major tech companies will be asked to testify on the hill. it comes as google, facebook and amazon are facing greater federal anti-trust scrutiny. joining us to discuss rbc lead
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analyst mark mahaney and at post nine, our commentator mike santoli. what do you do with something this specific where the risk/reward may be very large, but the time to get there is also very large. >> right i think the most immediate place the market is going to go is maybe it restrains the valuation of these companies it caps the valuations if you look last year at the highs in these stocks and pretty much they're all down 20% or so from their peaks, the valuations and the reason that they were sort of the go to for everybody for growth was that their growth long term was almost automatic and the platforms were impenetrable and those are the reasons they're under fire i do think that you can say if they can show continued earnings growth you count on that this is the kind of market you probably see a little bit of a reflex of rotation into big cap growth stocks like these, simply because, you know, growth in general is kind of challenged. very low yields.
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looking for steady cash flows. i don't think the market will handicap outcomes and figure out breakups and those values. it's just a little bit of a shadow that's going to be with us. >> mark, are you spending time doing exactly that >> i think santoli is right. i think there's going to be a limit on the multiples i think the peak multiple will probably be trimmed down let me put it this way, prior to cambridge gate the challenge that facebook had last year when it was uncovered, that stock was trading around 25 p/e multiple i'm not sure facebook can easily get back to there. i think the difference is like 22, 23 times earnings rather than 25. i think there will be a little overhang and by the way, the key point is, it's going to affect multiples. it will affect the p/e, won't effect the e won't see change in the top line growth rates for these companies, amazon, facebook and google because of regulation and i don't think you'll see material impact in terms of margins. already increased spend by these
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companies to comply with regulations and i don't think there's any new needle mover beyond that. we like the assets and facebook first. netflix second in part because they probably faced by far the least regulatory risk of any of these platforms. >> mike, the markets in the last couple days have been large part in rally because of the notion the fed may be more amenable to cutting rates if necessary before the year is out if you see something like that play out does that make the fang names and the big cap tech names that much more attractive once again as investorses hunt for yield and growth >> i don't know that that would be the first trade simply because so many other parts of the market that are much more cyclical are more depressed. i think that the precondition for this bounce we had yesterday was a lot of stocks down a lot, so i think that the snap back would probably be led by the stuff that kind of looks junkiest right now or needs more cyclical growth, whether it's depressed consumer discretionary or autos or something like that.
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but, longer term, if we're in a low rate environment for a long time and this ratifies the idea that overall global growth is not going to be accelerating, i don't see a market that continues sort of marching ahead and remaining supported, somewhere in the general vicinity of the highs without these stocks being a big part of it i don't think it's going to be a wholesale rotation away from it. >> what's been your most recent downgrade of a major name? what was the framing for it? >> of a major name >> yeah. >> probably google a few years ago. we've been long and strong amazon, i'm sorry, more than a decade, and happy with that. long and strong for netflix for seven years and happy with that. facebook since about 12 months after the ipo we started off neutral and then when they proved mobile they could do mobile, we've been long and strong that. i'm pretty long-term oriented in the calls and i don't see on the
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four fang names, i don't think anything has really changed. i think in general the thesis has gotten stronger on those names over the last several years. if you liked them a couple years ago. the valuations in many cases have become more reasonable. look at amazon now, this thing is trading at like 15 times free cash flow for one of the leading platforms out there both across consumers and enterprises, retail, cloud and now advertising. i think it's one of the most compelling long term longs in the group. it's not a near term next 12 months not one of our top three picks if you're going to buy one stock, though, in tech i would argue it would be amazon if you a five-year outlook. >> i mean, just looking at charts here, netflix is flat going back to -- over a year ago now, 345 or so in may of '18 are you saying there are few opportunities to do better than that >> i hope there are better opportunities. i hope there's ways to do better than that. i'm trying to pick them at
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different spots. netflix was our top pick off that correction. i've made plenty of mistakes in these stocks no question about it, but i think the long-term thesis on netflix and i like netflix now, an overhang related to the new competitive offerings, i think there's still a path to $480 doubling in the stock in three years. i think they have pricing power and see revenue growth super strong content in the back half of the year and started off talking about regulatory risk. the only faang name that can say we have a competitive environment we're stepping into between now and the end of the year because of disney, because of apple, at&t, time warner and comcast. i do think however the netflix value proposition is compelling enough they can work through those competitive launches >> mike, is faang still key or critical as important i should say to the broader market as it
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was? >> it has been more important at times, i think there have been times when they were one decision stocks and no real doubt about the fundamental side of how much you pay for them i think what's interesting is the same type of logic that propelled faang where it got you could see them in a broader set of stocks in software, for example. obviously this question is about the cloud but if you look at salesforce, microsoft, adobe, and then extend it beyond that to visa, mastercard, there's this whole tier of stocks that seem to operate on a similar logic, which is, digital world, very, very strong, kind of entrenched networks or platforms, software based and no obvious competition at least in the immediate term and just kind of a volume through put type business that's where a lot of the market has depended on for a while now. >> yeah. we're hungry for top line growth no doubt about that. mark and mike, thanks. see you soon. >> thanks, carl. let's get out to jon fortt who is live in las vegas at
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amazon conference and spoke with a special guest. >> morgan, three years ago, jeff bezos appointed two ceos under him, andy jassi over aws and jeff wilke over the core amazon product and turned out to be physical stores including now whole foods. this is jeff's first broadcast interview since he got that ceo title. this conference is all about artificial intelligence and machine learning we talked about what that really means for driving amazon's business forward, increased personalization and even faster delivery times sub one day take a listen. >> we're going to see a.i. and machine learning embedded in all kinds of products. it makes personalization better. we launched enhancement to the ios app that lets you screen shot a fashion look you're interested in and find something on amazon that matches
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we have improvements to our forecasting service. robotics in the fcs to make the job safer and easier for people to do their work the work changes, but we have lots of people that we have hired into our fulfillment centers at the same time we added robots. >> is there a crazy idea, back 20 years ago when you were first building out this logistics operation, the idea of doing that was a crazy idea. ebay was doing the smart thing they didn't have all this infrastructure on the ground there is a crazy idea in the era of a.i. >> what i think is going to happen is the stuff we're doing for customers, all about big selection, really fast delivery speed and low prices is just going to get better through a.i. we've been improving delivery speed for years and just moved prime recently from two days to one day and we're going to keep improving the delivery speed across millions of items 10 million items are available for one day shipping
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we can't do that without a.i. >> there is a decreasing marginal return on that? once you're doing one day across the board, is it worth it to invest tens or hundreds of millions of dollars into getting it within a fraction of a day for your core prime consumer do i really need it that much faster am i going to be home? >> some stuff you might. if you're out of baby diapers, you might need them fast, faster than one day. >> okay. >> so prime now is the service that we offer that's really fast it's less than an hour if you need it that fast. it has a pretty broad selection of items that are available. we also have delivery from some of our whole food stores amazon fresh there are a bunch of services that are actually faster than one day and we think a lot more over time. >> more over time, guys. this is not the limit. sub one day, more services coming he had me on the diapers, of course it's been a while since i experienced blowouts as a father and yes, i would have
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appreciated faster diaper delivery that goes to show amazon continuing to try to push on these ideas and see what new business, what new demand they can create through artificial intelligence and explains why they've gathered this group here trying to create more of an ecosystem around that. >> fascinating comments on the delivery piece of this didn't actually really answer your question about the marginal impact here. presumably the fact that they've been bringing more of their business and future business in-house and making these investments into their transportation network they see a cost benefit to doing that i would imagine. how do some of the other entities like whole foods fit into the broader picture >> we see them starting to do two-hour delivery with whole foods. i think that's where the nuance is you heard wilkie talking about some products it makes sense to do sub one day, some it doesn't. versus just bundling them all
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into prime we're starting to see some of that with prime now. perhaps we'll see more he's talking about the specific services, more of those that involve sub one day. i expect to see a lot more experimentation around which products people need delivered that quickly >> jon, that's an incredible stuff. a lot more to come this hour as jon fortt is in las vegas. when we come back, presidential candidate bernie sanders joining walmart shareholder meeting this morning pushing for changes to worker pay we will get you details on that. jon will be joined by amazon's senior vice president david limp who oversees all of amazon as devices and services that includes alexa, includes the echo and the kindle. dow up 100 and the s&p briefly went red but up 5.5. moving is hard.
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it's all on your schedule. awesome. now all you have to do is move...that thing. [ sigh ] introducing an easier way to move with xfinity. it's just another way we're working to make your life simple, easy, awesome. go to to get started. . >> feeling the bern, senator bernie sanders set to confront walmart executives and shareholders this hour courtney regan joins us with details on what we might hear later on this hour. >> that's right. the walmart shareholder meeting will start in about 15 minutes from now senator bernie sanders has arrived. we understand there are protesters outside as well holding bernie 2020 signs and walmart $15 signs chanting what do we want, a board seat, when do we want it now. senator bernie sanders has been invited by an employee group to present a proposal filed by a walmart worker calling for
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hourly associates to have a seat on walmart's board the proposal wasn't in before the deadline to make it on to the official proxy but the company does allow anyone three minutes to present a proposal. doesn't have to be a shareholder. in his three minutes sanders will impress board members and family members to raise wages. he tweeted i know people on government benefits because the pay at walmart is that low and the waltons earn $25,000 a minute the average employee makes $25,000 a year my message is simple, pay your employees a living wage of $15 an hour. senator sanders has a history of lobbying big companies like walmart and amazon to pay higher wages. remember last year the senator introduced the stop walmart act to prevent corporations from doing stock buybacks unless they pay all workers at least $15 an hour walmart says if sanders attends and we know he is there now we hope he will approach his visit not as a campaign stop but constructive opportunity to learn about the may ways we're
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working to provide increased economic opportunity and benefits to our associates the proposal for the board seat for hourly associates that's not expected to pass the founding walton family does own a majority of the shares it's expected now to be a little bit more of an exciting meeting than we had originally thought back over to you >> yeah, courtney. one we will watch as this hour unfolds. i suspect we'll be seeing more of you for it. walmart has been in terms of the retail landscape on the forefront in terms of raising wages. i realize $11 an hour is lower than amazon at 15 or some of the other competitors, would you say they have been resistant to future increases if needed >> so resistant is a strong word i did ask in the beginning of april doug mcmillon exactly the question of if they decided that raising wages sort of on a broad scale is not the way to go and he basically said look, we've been doing a lot of things we did raise our wages pretty substantially a couple years
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ago, and we've added all of these employee benefits. when you look at the landscape and take pay and benefits together the average hourly worker makes $17.50 an hour. now, of course, benefits is not exactly straight out pay when we've asked walmart if they won't do it, they haven't said they won't, but they've been adding other incentives and yesterday announced those college programs for high schoolers to try to attract that cohort which is quite underrepresented at walmart. only 25,000, 1.5 million associates, are current high school students. >> courtney reagan thank you for putting it in perspective for us. >> when we come back the head of amazon services and devices, david limp, about the company's product pipeline, competition and more first, take a look at dow right now. up 84 points the s&p is also up fractionally five points as well. crude oil hitting the lowest level since january 17th after the weekly ei data swsho
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welcome back to "squawk alley. i'm jon fortt here in las vegas at amazon's first conference, artificial intelligence a big topic here a huge ecosystem of devices and services involved. we're talking devices and services, great to have dave limp, senior vice president of devices and services for amazon. if you're talking about the echo, alexa, tablets, ring doorbells you name it, it falls under you. want to talk about a.i. and the advancements that you're making but first, got to talk a little anti-trust all of this scrutiny going on going to change at all the way you're running the devices and services business? >> no. we've said this to you before, but first of all, welcome to remars our focus is invent on behalf of
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customers. if we keep our focus there and build cool things our customers love to earn and continue to earn their trust we think the outputs will speak for themselves we focus on that. >> how much has the conversation around privacy and people's wanting answers into the granularity of that and how a.i. fits, how much has that changed your process and the way you're thinking about how you're rolling these things out. >> customer trust is the oil of the amazon fly wheel, and so we think about it every day thinking about privacy as you think about the kinds of products that we're doing, whether it's a ring doorbell or it's an echo sitting in your kitchen, it has to be foundational to the product. it's not something you glom on later as an afterthought we think about it at the very up front when beginning to invent the product, we think about we're going to put these in our homes what do we think about privacy and trust. we build features into the
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products and services such that that's first and foremost and paramount. we're continuing to evolve that. it's not like you're going to get everything right day one as we learn from customers we'll add new features and services that build on that and add more privacy and trust as we go on. >> i'm curious about the business you've been talking about conversational a.i. and the advancements will allow people to talk more naturally to alexa. how does that translate into higher revenue for amazon? >> the first thing is to get customers to love the product. if you build a product the customers love and use, then good things usually come in consumer electronics when you do that for us, that's the first thing you want to do it happened with kindle. people loved it. we figured out how to build a book business around it. similarly the great thing about echo and alexa, is that customers love the product >> what are they buying more of because of that? >> i don't think they're necessarily buying more yet because of that.
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but they are doing certain things in digital that leads to buying more things specifically we've brought music back into the home again it atrophied in the home and now music subscription services, spotify, amazon music and now apple music starting last year are growing on echo and alexa. people are listening to audio books and so we have a business there. audible with a subscription services those are the early signs you start seeing that. in addition, people are buying more smart home products you see that a lot around here remars and the area of automation and a smart plug or light bulb or robotic vacuum, people are buying those more because it's easier to control with a voice interface. >> services and privacy. pl apple a couple days ago announced sign in with apple you have log in with amazon for a long time. apple's introducing this idea of privacy with that log in and not handing out people's elon mu-ma
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information and addresses. >> i think anything that advances the, you know, privacy for customers and gives them a more trusted environment i'm a big fan of as a consumer i don't know enough. it was announced on monday i don't know enough about that product to sort of weigh in on the specifics of it, but i think as you think about amazon and our credentials and being able to logon to amazon we've been doing that for 20 plus years and your credit card number, your address, which we ship your products too, that's san crow sink we have to build trust every day. any other person that's furthering that is great for the industry. >> arguably no company, no brand is more associated with consumer a.i. right now than amazon is. we're talking about apple and how that relationship has progressed it's been five years since the fire phone announcement. that didn't work out for amazon. it had a lot of a.i.
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capabilities working i think you said that differentiation was the issue there. it wasn't differentiated enough. i wonder how that relates to other products you're working on i look at amazon in the tablet category, apple's $250 ipad is the number one selling tablet on amazon number two is the $80 fire tablet and then three or four, two more $250 ipads. are you as differentiated as you want to be in tablets. >> i think our tablet business has done great it's different than where apple and others focus we focus on entertainment and focus on a product that's great for families with our kids edition of our tablets i think, you know, roughly last q4 one out of every three tablets sold in the u.s. was an amazon tablet. that's an amazing business and one we continue to invest in and we're really excited about. >> i'm trying to figure out how -- what business to compare alexa to it seems like a search business
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if say google mostly monetizing search by selling its own product. is that the way to think about alexa's role in amazon's business is its getting people's intent and pointing them towards things within amazon they want to purchase? >> i think the long-term goal was to try to invent the star trek computer. i grew up watching it and loved it and it was a lot more innocent than you might make it out to be. can we invent that computer. we loved watching it the science had moved up enough and you see it a lot here we thought we had a shot at it. it's going to take us years if not decades more to get to the shining star that is that star trek computer. but we think we can do it. if you have that in your house or in your car or in your conference room, you're going to find all sorts of things to do it some amazon will invent and help amazon but much more will help developers there's 90,000 plus skills, hundreds of thousands of developers building around alexa
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right now. five years ago said oh, there's going to be a new developer ecosystem that's not about an operating system, that's not about applications, but about this skills in the clouds, you would have laughed at me here it is around us right here. >> all around us here at remars. lots of a.i. thanks for the conversation. dave limp at amazon. back to you. >> love it, jon. thank you. meantime european markets set to close with the president soon to touch down in ireland after commemorating the 75th anniversary of d-day on the coast of the uk. let's get to willem marx >> thanks so much. the president spent the morning with other european leaders down in the port city of portsmouth where they were celebrating commemorating the 75th anniversary of the d-day landings many of those aircraft launched from the city of portsmouth. he's arriving here in a few
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minutes time meeting with the prime minister for around a half hour in a building a few hundred yards from where we're standing now and no doubt focused on issues like trade. we had a chance to talk to the irish finance minister today and he told us the economy is particularly vulnerable to trade shocks and they have a huge partnership with the u.s. that's very important to them a good result for these talks from his perspective was that president trump would reiterate u.s. support tore investment in the irish economy and vice versa. as you can hear they're firing up marine one behind me in preparation for the president's arrival. he will spend the night about 30 miles southwest here on the coast his own golf resort, doonbeg, before traveling back to normandy for further commemorations tomorrow, morgan? >> thank you let's get over to sue herera for an update. >> hello, everyone here's what's happening at this hour china launching a rocket from a mobile platform at sea for the very first time sending five
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commercial satellites and two others containing experimental technology into space. it blasted off in the yellow sea. form scot peterson appearing in court charged with ten counts of nenls and one of perjury following an investigation into the parkland shooting which killed 17 and injured 17 more. he is being held on $102,000 bond the fda approving the first drug to treat episodic cluster headaches. the drug is called em galty and manufactured by eli lilly and used to treat migraines. it is an injectable treatment that cost $6900 a year gretchen carlson is stepping down as board chairwoman of the miss america organization. she said in a statement she has helped make the organization more relevant but her leadership
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was criticized by many state organizations. you're up to date. that's the news update this hour back downtown to you >> thank you very much. when we come back we're going to hear from former ftc chairman william covach itch dow, bunch of air pockets today, up 147
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. welcome back to "squawk alley. big tech companies stepping up their lobbying efforts as government scrutiny continues to
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increase aditi roy joins us with more details on what they've been spending their money on. aditi? >> hi, morgan. over the last decade big tech companies have spiked their lobbying spending as they face increasing government scrutiny take alphabet, google spent $4 million on lobbying but things started to shift around 2011 and 2012 as the company started facing more regulatory heat. ten years later the company spent $21 million on lobbying, 500% increase. that may not seem like a lo the compared to the cash hoards of big technology companies it is significant in the world of political lobbying that number catapulted alphabet to the top of the list amazon among the top five ep spenders according to the center for responsive politics and facebook made the top 20 those three each spent in the double digits on lobbying followed by microsoft which
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dolled out $9.5 million, apple just under $7 million. the top issues for alphabet, regulating of on-line advertising and competition issues in on-line advertising. >> thank you. big tech facing growing pressure with regulatory and anti-trust scrutiny in washington joining us on the phone former ftc chairman bill kovacic who oversaw the agency when facebook's consent decree about how it tracked and shared user data was crafted thanks for joining us today. given your long history as a regulator, are you surprised to see all of these big names, be it facebook or amazon, apple, or alphabet, coming under fierce scrutiny right now. >> i'm expecting it because the amount of political scrutiny of the ftc and department of justice has been so intense. they've been called terribly inadequate, if not cowardly in
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some ways, so it's not surprising to see the agencies responding by undertaking investigations in this area. >> what should be the proper role of regulators in the tech industry >> i think to make sure that certain basic rules of fair competition are applied. to play the role of a referee in the sporting match where the match is necessarily going to involve a certain amount of roughness, but not to intervene all the time because people don't go to the match to watch the referees >> we had tim cook was on cbs yesterday, apple's ceo, and one of the arguments he made about this notion of apple, he first of all, he batted down the idea that apple would be a monopoly one of the things he said some would argue if you're selling a good you can't have a product that competes with that good and likening that conversation to walmart and saying there's decades of u.s. law here whether it's apple or some of
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these other companies would you actually expect there to be an anti-trust case and for them to get broken up? >> break up is extremely difficult to accomplish, but having a case would not be surprising at all. in many ways, both the department of justice and ftc are being told that their legitimacy as agencies depends on taking action and not simply being observers in the process i would expect the announcement of the investigations will lead to some kind of intervention, but a breakup is especially difficult to obtain under u.s. competition law. the law tends to favor large defendants in this area, so i would expect some form of intervention, probably not breakup. >> bill, you know, we've been following the kind of agreement that might come between or be forged between facebook and the ftc. your general view is that fines won't do it. how do business practices need to change in the form, in the
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case of facebook specifically? >> i think a large fine will be an important symbolic step, even though a big fine isn't necessarily going to change the way the firms behave i think what's going to be important a in looking at the resolution between the ftc and facebook is, the nature of the commitments the ftc gets about changes in behavior, changes in which the firm is allowed to gather and use information about its users, the strength of those kinds of commitments that will make the difference. but the fine will be one step in seeking to demonstrate the seriousness of the ftc in this area, but also to accompany that with settlement terms that mandate a change in behavior >> do you think the argument that zuckerberg should be held personally responsible for behavior has been overplayed is that too simplistic a solution >> i think it is too simplistic
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a solution it's not unusual for the ftc and its consumer protection matters to include individuals in its cases. the more important thing is, what kinds of terms come out of the settlement that mandate changes in the way thatfaceboo behaves. i'm much more interested in the changes in the business model than the specific identification of the ceo or other leading executives it's the nature of the commitments to change behave and the way in which those will be monitored and enforced >> yeah. that enforced part to me seems really key here because you can make promises or try to enact changes but how do you think that methodology should be implemented to measure the effect of the changes? >> i think the ftc is going to have to be more deeply involved than it was in the previous settlement in some ways the ftc contracted out the business of oversight by having a third party in this
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case price waterhouse coopers do the oversight and the auditing i think the ftc itself is going to be -- have to be much more deeply involved in the ru deep observation of whether or not the specific commitments in the settlement are effective the last time the ftc depended very much on having this external review by a third party, i think the ftc has to do that by itself in the current settlement. >> finally, bill, i wondered, do you think the ftc and some of these agencies are craving oversight responsibility or do they see this whole thing as intractable, a third rail and would prefer not to have anything to do with it >> i think that the oversight responsibility becomes onerous in this respect. neither agency is keen on being the kind of day-to-day overseer and regulator we see in areas such as electricity and in
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communications in earlier days they don't want to be that kind of day to day oversight institution. they don't look forward to that kind of responsibility but i think in many ways their effectiveness as agencies depends on taking a more robust role than they've taken in the past to do anything short of that could easily lead in the direction of legislation that creates a new institution that will exercise more traditional day-to-day regulatory oversight. >> bill kovacic, thanks for joining us with your insights, former ftc chairman. thank you. >> thank you as we go to break, take a look at shares of salesforce nice gain up almost 3.5% company revenue grew 24 led by service cloud. crossing a billion in revenue for the first time we'll talk about that. first rick santelli what are you watching today >> i'm watching the yield curve have many different moves all in one session and, of course, waiting for mexico and the u.s.
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to get together on tariffs and talk to jeb hensarling, former chairman of the financial council with regard to the house, we'll talk about everything tif aarfsnd what it may mean for future prices after the break.
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i'm scott wapner a look at what's coming up on the half financial marktime rep. what happens if the fed doesn't do what it wants the calls growing louder after a dreadful adp report.
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what all of it means for your money. our call of the day is a jim favorite he sold roku weeks ago but is he about to get back in now he's going to tell us. john and pete on the case for unusual activity and what they found as well. we'll do it at noon. carl, we're 15 away and we will see you then >> all right scott, thanks. let's get to the cme group and get the santelli exchange. >> i'll get it right this time former chair of the house finance committee jeff hensarling, let's get into it. thank you for joining me what do you think about the u.s. mexico meeting this afternoon regarding the tariffs. should they be implemented and why is a tariff used to address an immigration issue you've been in government. what's your take >> well, i think there is a great concern that the president is using non-trade tariffs for -- or rather a trade tariff
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for a non-trade issue. the mexican peso has depreciated about 3%, 5% immediately wouldn't be a big hit, but to a texan like me and other folks, this could really upset the apple cart i think the president is now getting some blowback from his own party. whether or not it will reach critical mass i don't know the mexicans would like to take care of this. >> being in government you were head of a very important chair of an important committee. at the end of the day, the federal government is taxed with all issues regarding borders and immigration. why is it that congress has forced the president to use these strange methods to get their attention on immigration issues is it that congress just doesn't like the president or is there take on what's coming over the border just doesn't raise a priority issue with them? >> well, i think that the
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presidential election starts earlier every election cycle and regardless of what you think about the impeachment case, whatever side you are on that, it's very hard to work with a president when you're trying to impeach him. then again for decades, both parties, democrats and republicans both, have issued more and more power to the executive branch and they shouldn't be surprised when the executive branch uses the powers that they gave them and the president, the administration, may use those powers in ways that congress may not have intended and may not like, but the bottom line is congress gave them those powers. >> yeah. but the bleed through goes both ways that's the irony here. while congress is pretending they're the executive branch the executive branch is sort of pretending it's congress whether the last administration or this administration, you know, executive orders aren't uncommon, but the use and the areas they're being applied are. your final half minute, so until we get through the election cycle, all these festering
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issues, just continue at bay and there's no need to address them? your final thought >> well, there is a need to address them and there will have to be some vote on the debt ceiling and the spending bill where a lot of legislative matters get crammed into one no way to run a railroad you fit on an important point and that is are we seeing three co-equal branches of government anymore. as we see to some extent an erosion of legislative power that has been yielded to the executive branch and particularly, the bureaucracies and the administration that act without accountability and act without facing elections this is a problem. >> i totally agree we'll have you back when we get more answers on tariffs. carl, back to you. >> rick, thank you very much live shot here of the president landing in ireland where he is expected to have more state visits before, obviously, the commemoration of d-day on the 75th anniversary
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we will await the president's exit from air force one. interesting week it's been, of course, as yhe had that press conference with prime minister may, news making interview with piers morgan to china to his service or lack of service during the vietnam war so we'll keep our eye for any more developments later on this morning. in the meantime, walmart's ceo is making some comments at the annual meeting, doug mcmillan saying the federal minimum wage is lagging behind $7.25 an hour and that congress should take steps to address that. asking congress to, "put a thoughtful plan in place to raise it." we're going to talk more about that bernie sanders, of course, inside that meeting with his own proposal he's ready to speak any minute we'lgethl t at to you. dow is up 120. "squawk alley" is back moment. s? they don't give two and a half stars to just anybody. here you go. what's this? it's your piano.
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to see it in theaters. presidential candidate bernie sanders making some remarks at the wait a minute shareholders meeting let's listen in. >> for introducing this resolution and it states, and i quote, resolved, shareholders of walmart urge the board to adopt the policy of promoting significant representation of employee perspectives among corporate decision makers by requiring that the initial list of candidates from which new nominees are chosen by the nominated and governance committee include hourly associates the policy should provide that any third party consultant ask the furnish and initial list
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will be requested to include such candidates, end of quote, end of resolution. madam chair, the issue that we are dealing with today is pretty simple walmart is the largest private employer in america, and it's owned by the walton family, the wealthiest family in the united states, worth approximately $175 billion and yet, despite the incredible wealth of its owner, walmart pays many of its employees starvation wages, wages that are so low that many of these employees are forced to rely on government programs like food stamps, medicaid, and public housing in order to survive. frankly, the american people are sick and tired of subsidizing the greed of some of the largest and most profitable corporations in this country. they are also outraged by the grotesque level of income and
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wealth inequality in america as demonstrated by the ceo of walmart making a thousand times more than the average walmart employee last year, walmart made nearly $10 billion in profit. it paid its ceo over $20 million in compensation, and it has authorized $20 billion in stock buybacks which will benefit its wealthiest stockholders. surely, with all of that, walmart can afford to pay its employees a living wage of at least $15 an hour. and that is not a radical idea because many of walmart's -- >> senator bernie sanders, of course, presidential hopeful with a proposal at the walmart shareholder meeting to increase worker pay to $15, the minimum to $15 an hour and give hourly employees a seat on the board as we pointed out several times, walmart's raised wages twice
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since 2016 >> yeah, and the walton family does have a controlling stake in terms of shares, so this is not widely expected to be voted into being. might be why a company is trading up and shares are trade upg more than 1% right now but certainly calling a lot of attention to this idea of workers' rights, minimum wage, the debate we've seen brewing there and the role that companies are playing in employees' daily activities. >> we'll keep our eye for more headlines out of that shareholder meeting. as we go to break. dow is up 125, even with oil sub 51 nus.e back in less than three mite johnson & johnson is a baby company. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life.
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learn more about why you should choose an aarp medicare supplement plan. call today for a free guide. as we did dip into the red briefly on the s&p and the nasdaq but managed to get it back and then some, a close to session highs dow up 142 >> absolutely and utilities and real estate are leading the way higher but you are also seeing tech stocks up 1% in the s&p as well, continuing that bounce that we've seen so far this week and of course john having such great interviews with amazon out in vegas as well >> yeah, guys, quite a bit of insight into how amazon is
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framing a.i. i was surprised to hear dave say that the business behind alexa hasn't fleshed out yet it's really about building loyalty. >> fantastic stuff, john we look forward to having you back we're going to keep our eye on the walmart meeting, on oil at $50.93 let's get to the judge >> carl, thanks, i'm scott wapner as today's ugly jobs reading another sign the fed needs to cut interest rates as soon as possible stocks rising the past two days on those very hopes. what happens to your money if it doesn't happen it's 12:00 noon, this is "the halftime report. >> announcer: in two weeks, we find out if the fed will make a move the market is already taking sides and so is the halftime investment committee if they make a move, what will it mean for stocks the s&p and dow are 5% off their highs. the nasdaq, down more than 8%. the russell,


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