Transcripts For CNBC Squawk On The Street 20240714

Road map begins with bracing for the fed. Stocks near records, the market meltup continues as the president weighs demoting the fed chair, lets see what he does. Head winds for facebook, the tech giants cryptocurrency plan greeted by a wall of regulatory and data concerns in washington. And huawei ceo downplaying any revenue impact of a u. S. Ban on the company in an exclusive on cnbc. Federal reserve policymakers will conclude their two day meeting today. A policy statement will be issued at 2 00 eastern time. If the fed does not cut rates today, investors will look for indications it may do so later this year. Powell will hold his usual post meeting News Conference around 2 30 eastern well bring you live coverage obviously. Generally i would say, jim, consensus is no cut today. But maybe clearing the decks for as much as 50 next month i spoke with lance fritz last night, Union Pacific he said something very interesting, he said, listen, he supports tariffs in principle. But understands that please understand that everything is slower everybody is cutting back. And if you listen to him and you say, we got to monitor this, if you were powell. We have to monitor this. This is disconcerting and if we go to 10 , which is what i understand is going to happen on the 300 billion, we will be ready. But at the same time, i think he has to castigate at one point the president saying, the only reason we have to cut is because the president is does this tariff work. The president says we have this National Policy like europe, like, you know, draghi has National Policy. Chinese National Policy. This guy is insane hes not playing by the rules. Now, at what point does he say hes insane meaning i got to remove him this is a very odd moment. And when i hear the president , the president is directly threatening powell as if hes an employee as hes youre fired. Ive never seen anything like this it must be for powell, i think powell is a very reasoned person hes never seen anything like this nobody has ever seen anything like this. But if youre powell, youre not an employee. It is like na, na, na, na. Powell is insane. There is not the ability of the president to demote even a fed chair. Again this seems to be somewhat any other chair would need to go through standard confirmation process. I agree but constant grieving on the part of the president is not something were accustomed to seeing. No. If youre powell, at what point do you say, all right, im out of here, you want to do that stuff, you want to ridicule me sever si every single minute . You hope thats not going to drive him from office. Everybody else throws his hands up there is a lot of other vacancies. The president gave powell optionality with the xi phone call and giving the market a boost ahead of the decision. He should wait. Xi calls the president and says were concerned that things are deteriorating. Which is what he said ahead of buenos aires president does it. Goes to a meeting. President is president goes to the town halls, and there are people, even the farmers, soybean farmers, he polls positive with. The president is i dont believe for a minute that the polls we saw yesterday, this democrat wins, that democrat we saw that already last time. People with the base base doesnt take that call im in awe of the mans the love for the mans strategies even though i think that the soybean farmers probably have been hurt the most in the country. And theyre polling very pro trump. So i think trump feels way too empowered and almost hes going to get a good deal out of the chinese i think the fear on the other side is that youll eventually just accept a deal, say it is great, but it really wont be changed very much, a deal we might have gotten anytime along the way. I dont think he wants a deal i think he commits to people that the deal is bad and the tariffs are good if you end up being right, powell may be waits one. You got to figure out this will last a long time. This is a siege what is the difference . A siege is that the president thinks that tariffs are very good and the more you raise them, the more business comes back to this country which means the more the gdp goes up i want to distinguish between this is the alternate facts world of the president and we can sit here not alternate facts, theyre not true. Take u. S. Steel, we know what happened with steel tariffs over a year ago today, they guide below. Softer demand. Lower prices two blast furnaces here and one more in europe we decided, can we agree the tariffs are disinflationary . They are. They are not a lot of things are happening the way theyre supposed to. They are happening the way dan dama damico said former ceo of new corp. Very much in favor of tariffs and protecting the Steel Industry it is hard. The economy has slowed it has youre listening, youre calling for a continued, if not increase in the tensions with china. You also have continued to say you believe there is a real chance well put tariffs on automobiles coming from germany. Thats what theyre trying to they dont know how to do it it would be a you would expect growth will continue to slow especially if you actually get a trade war with europe. They dont know how to do the trade war with europe yet. Theyre concerned. Concern that they still are allies what are you doing . Nato. Nato. Yeah. The germans dont kick in. Look, i get i do my reporting, i hear things that are new and different. I know you do. I get the 10 on 300. You just do it and then if they are dont go to 25, go 10. Dont go 25, we go 10. On the full, on every chinese import yes, we get to 10 we start a 10, if they dont continue, if they continue to steal, we had the president of huawei, the ceo of huawei, you know what they think of huawei that it is a criminal enterprise you know, youre not theyre not talking about having the revenues cut theyre not talking about the revenues cut to 30 by 30 talking about the Company Going away. All of which leads us back to today and the fed and powell is living in a conventional world this guy is the president is playing with Nuclear Weapons and powell is playing with, like, you know, m14s. Powell hate when he goes to the weaponry. The president is the yankees and hes the toledo mud heads. Really . Yes thats whats so weird, if youre powell. Do you really quick, before we button this up, what would happen to stocks if powell were removed . Probably go up. You think they would go up . New guy who is going to replace powell look, if it is getting closer and closer. Why are we even doing what he doesnt realize is that you have to think the other way. Which is, oh, my, the president is saying why not and hell figure out a way the president is not saying i like him no matter what. Hes not talk about the independence of the fed. Saying the fed is independent, i love jay powell, how do we get him to be a fed member this is happening right now other i believe other president s have had their second term or ability to get it, im sure hes thinking of george h. W. Bush, for example hurt by the fed. Yes, i do think that. Trying to keep the fed from ruining his National Economic policy he loves draghi. Draghi is complicit with merkel. They love draghi they love draghi because what he did was figure out a we to steal a lot of our business and we want to steal it back. We want a dollar weaker, we need we still have i wish none of this were true i have Great Respect for the office the Federal Reserve and jay powell i think neither is shared with the president. Seems to be pretty obvious. Maybe the guy who is the grounds keeper at the bedminster one. Say again. Bedminster Trump National i know the president has a lot of respect for that man. Greens look good thats what its about, keeping the greens fast. Okay meantime, facebook and its new Libra Cryptocurrency facing a backlash from capitol hill House Financial Services chair Maxine Waters asking the company to Halt Development of libra until congress and regulators can review it. In a statement, she says, quote, with the announcement that it plans to create a cryptocurrency, facebook is continuing its unchecked expansion and extending its reach into the lives of its users. The market currently lacks a clear Regulatory Framework on day one look, were this is another one where you go over every single aspect, facebook did everything it could to say this is not facebook it is so arms length it may be one day, market will make some money. It is this institution to help a lot of people become become banked they didnt explain it well. Why not . It is hard to explain. I thought i said on the show that waters should love this because it is to help people who are unbanked constituents and the country unbanked this shows you the hatred of facebook it is incredible facebook is despised by democrats. Even though people say they lean toward democrats but i dont think they have a lot of friends in congress, period they dont. On either side of the aisle what made the point that this in many ways is going to be viewed should be viewed positively as a real olive branch or whatever you want to call it. It is really positive it is. They have time. It was a white paper not going to be like this thing is coming out tomorrow will be time for them to deal with any potential oversight or regulatory questions right the white paper didnt you think the white paper was hard to read . Yes it is a very complex, very complex strategy and umbrella they created it is about taking empower people who are not empowered i would have thought that this would be embraced. Well, Sheryl Sandberg just made a headline a few moments ago. Theyre taking down 1 million fake accounts a day. Her day. So that is not i dont know is that conducive to your willingness to share your money with them . It is absolutely incredible to me that they are that the facebook that we know the actual facebook just seems to be a screwup. But this thing is run by markets. Got the mastercard, visa and pay pal. Thats all you need. I know. It seems that when it comes to all these things, the unintended consequences, things well be talking about three years from now, look what they ended up doing with that. Who knew . Like creating i dont know. I dont know i thought this was good social media was supposed to be great for the planet. Now people argue otherwise. This is a bank under this new this plan, okay why is that bad . Why does Maxine Waters not want everyone to have a bank . Everyone needs their own bank. That whats pay pal does thats what this does. Im defending something facebook is doing can you imagine . Least popular position in the world. You take a lot of unpopular positions. Why not i like it i like adobe too. Well get to adobe. In an exclusive with huawei as well, his company grapples with the challenges surrounding this u. S. Ban and stay tuned for interview with Jeffrey Katzenberg and meg whitman live from cannes lions well take another look here at the futures. Coming off the best day in two weeks. Fed decision and just a matter of hours dont go away. [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. The ceo of huawei speaking exclusively to cnbc and downplaying the impact of the white houses ban on the company. Despite expecting 30 billion less in revenue for the year he says huaweis business is still strong in china. Deirdre bosa talks to him. Translator maybe even more they cant for all these years, american suppliers have contributed to huawei. If we do not buy from them when we can, that will be a blame on our conscience but however we are not to blame. Now there is a restriction on us to buy from them actually until today were still placing orders to american suppliers. They just those suppliers have to ask approval from washington if they get approval, we can still buy from them. If they dont get approval, we have to find other ways. Sounds like hes counting on exempti exemptions. Good luck track record so far is not in their favor. They dont want they dont want huawei to talk. They want huawei to die. This is unbelievable, the disconnect between this very kind gentleman, and the people in the administration, who regard they have documented lists of what huawei stole from this country, this country, this country. You talk to people in the communications business, in our country, they all agree, they like Samsung Samsung is being anointed behind the scenes because ericsson and nokia arent fast enough samsung is a friend. Theyre willing to make samsung even richer. However, i mean, the president has tied huaweis fadein with the broader talks over trade with china. Hes done that in answer to a number of questions. If we were to impose tariffs on the europeans, would they be willing to play along on huawei . Not yet not yet. Merkel is not willing to go there. They dont know how to deal with Merkel Merkel is wily and not behind the scenes playing ball. But they dont want to seemingly take on germany. They do not yet want to take on germany. They want to do this serially and really after the big victory in mexico, their debt company and that gentleman, i dont think they have that gentleman has any idea who hes dealing with thats the whole thing he keeps the long game the president is playing the short game always difficult to know what huawei has or has not done the first documentary i did on chinese cyber espionage, many years ago now, we cited nortel i had a gentleman from nortel who saw the chinese in their system years ago, many years ago. Nortel went bankrupt and out of business in part because allegations were that huawei had stolen their technology. Thats long time nortels technology was superior to nokia. Problem is that nokia and ericsson dropped the ball. And the price for their product is twice as great as huawei and it is half as good as rich mcginn was killing, except for the brazilian contract they thought that would come in. Holy cow, i remember that contract like it was yesterday didnt come in look, i just think that huawei should be more worried that gentleman seems to be very confident. The president doesnt like huawei the president , when he doesnt like it, he doesnt stop hes like a hes new. Hes different help me, david. Yeah. Hes like the terminator, i guess, is what youre trying to say. Hes relentless. Yes, like the terminator. Terminator one or two . I dont know 3,000 or the the one that ends with nuclear with the end of the world . Thats terminator one john yeah, no, no this is terminator two theyre all hiding in them. Were going to get a lot more with the exclusive with the huawei ceo come up in the next hour and the thoughts on the trade war, the relationship with google and a lot more. When we come back, well get cramers mad dash, count down to the opening bell here. Dow erased 90 of the losses from may and futures up again back in a moment through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Feel that . Thats the beat of global markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. As your life grows, so do your needs. And with bank of america and merrill, the benefits you get can grow, too. As a preferred rewards member, you can enjoy Priority Service and exclusive discounts. So your growing life can be more rewarding, too. What would you like the power to do . All right, lets get to mad dash we celebrate hump day as we like to call it here, middle of the week, wednesday. Adobe reports earnings, they were quite strong. Yes. We talked a lot look at this breakout dont you see this head and shoulders. You think it is shampoo. This thing is happening. It is happening what i like to do on adobe is go back a few years, the accretion of value has been nothing short of amazing over a period of time. Look. This has become a company that was, if you look at the longterm, this was a nonsass company, it was a on prem company, some subscriptions, it then the boldest man, he actually breaks ranks, and says im going software as service, going cloud. And initially you can see the little dip, right here, people say, wait a second, that may not work i believed him right then. Boom, this is for david, your kids, if you went to school right now, and you start elementary school, their own spark, get hook on spark, this great creative this is the golden age of creativity after that, you move to gravitate to all of the others people think this used to be just a document company. David, it is the most powerful Ecommerce Company out there other than dare i say sales force. And believe me, the stars are aligning sales force, maybe amazon, again, against, but not necessarily, these guys and microsoft. David, these guys submerge with microsoft and would be game, set match. This is the company that is pulling it all off they have a great ai thing you can draw with. I love these guys. I love them. I love them. I love them. 25 top line growth. Can you believe that . See how big this company is . This is not a Little Company this is not, you know, zendesk this is not ring central, david. We have an opening bell coming up we dont want to miss. Re. Onheh us on squawk t stet this is my headquarters. This is where i trade and manage my portfolio. Since i added futures, i have access to the oil markets. And gold markets. Ok. Im plugged into equities. Trade confirmed. And i have Global Access 24 7. Meaning, i can do what i need to do. Then i can focus on what i want to do. Visit your Online Broker today, to learn more. indistthat was awful. Tering why are you so good at this . Had a coach in high school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at td ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom mad skills. Education to take your trading to the next level. Only with td ameritrade. Youre watching squawk on the street, live from the Financial Capital of the world the opening bell in just over a minutes time. We await the fed decision and just about 4 1 2 hours we talked about china trade and huawei a ton of sale side calls you read tusa is on a roll taking unit by unit on ge all week long today. Today it is aviation. He continues to question the accounting of aviation i thought this last im a big tusa backer. You did work on the aviation cash flow. I believe it is being driven by strong passenger growth, higher engine authorization i dont think theyre making it up i think theyre being incredibly honest and tusa is really questioning about how the business is running off. I dont know im troubled yeah. Im troubled. I think their numbers are real theyre going to have to make payments of some kind. That was when it comes to jet engines. Do you know, when i think of people, i think from as a competitor, or other companies that supply, or the Big Companies, no one thinks that ge is an outlier or doing anything wrong. No one thinks that larry culp is hyping the company hes the ceo this is one i start saying, i think tusa made his point. He has nothing new well talk about that in a moment the opening bell, s p at the cnbc real time exchange. Big board, the treasurer of the commonwealth of australia. At the nasdaq, health equity, provider of Health Savings account. Tusas line, we see a pattern of numbers adjusted several different ways, distorting what we believe the company would look like as a fully loaded Public Company yeah. At the crux of what he is saying is that the Free Cash Flow isnt there. I think that is an argument that can certainly be made for powell i think the aviation accounting was never wrong. Okay. Look, i there is no reason really culp has come out. Wherever there is weakness, culp has come out and said we have weakness where there are real problems, culp has said we have real problems times ten one thing that no one has ever questioned, is the accounting for aviation accounted for turbines in ways we cant swallow and turbine business is terrible because the whole country there is a great article today, lead story, new york is getting away from 2050 theyre going to be in new york times, Carbon Neutral saying sar n ining theyre not e turbines i wish they would call it turbine. Turbine is something that is we know thats like a hat. Yes, you call it that i speak their language. You speak philadelphia. I speak turbine this is a big point, culp, im saying culp is an honest h hahnemahaman wh is right about the cash flow and theyre questioning culps honesty. To your point about of a nation general, southwest does guide above for the year solid demand they extend the max cancellation through september 2nd. We have seen american lift ticket prices. Yes i thought it was interesting southwest hit 52 over the weekend. It should be higher. I think that this story about the boeing plane and how may not be strong enough, fiscal strength of pilots, that sounded like a do a crank of something manually that you might need to. Got to find out more about that. That does not seem got to get the full story there is phil around phil is around. Well hear from him later boeing got the first max orders since the crashes. From the owner of ba 200 737. Really unusual. It was a huge win, the stock immediately lifted wow. Surprised they got that. They needed something, they got something. Something bigger than anybody thought. I continue to believe the plane is going to be back. And southwest air should be higher the airlines have been terrible, except for united. And united i think is really munoz, has done a great job. Has done a great job easy comparisons what is the old line, planes before trains . I see the cast freight index, jim, down for a fifth month. I know. Year on year. I know this will sound ridiculous, but the weather is really playing havoc the weather is it is do you know lance fritz said to me last night, the ceo of Union Pacific, maybe he used Climate Change he said there is Climate Change. That in itself is like to get you on anticreationism. Most ceos in the of Major Companies believe there is Climate Change and are doing things to what hes saying is we have to start changing the way we do business because of Climate Change they have to find ways to make it so tracks arent under water all the time the weather was really bad the weather has been terrible in the country. Like switched. Were in a moment where trade is not trade and the weather are conspireing to make the numbers go down more than they would all the ag stuff that used to be shipped, thats off. We dont do that we dont ship soy anymore. We dont ship sand anymore because sand is local. We will ship oil as we drill more and more permian, because there is not enough pipeline ferc is a problem. Ferc is still a holdover from the previous regime. President hasnt had a chance to address ferc yet we are rolling back missioemn standards from powerer pla epla i interview all the ceos of the major utilities and theyre not they fear if they do what he wants and a democrat comes in, it will once again right back to what obama wanted. Theyre not going to change. To the point youre making about new york, you got different standards and different places including california and then new york as well that are going to be demanding certain things that are in complete opposition at least to what the administration is currently some of the turbine decline is related to renewables Companies Big clients are demand renewables. Google, demanding they all want no Carbon Footprint and this is something that geez, these executives eric lot of them are pretty sophisticated about Carbon Footprint theyre not going back to coal theyre not going back to coal theyre not. Every coal plant that comes up natural gas well, there is also abundance and then wind. Continued growth of alternatives renewables are real interesting is that tusa attacked ge, on renewables saying that even the renewable counting isnt any good. It is beginning to sound very much like the great white. Moby dick. Moby dick in. Yes, it is becoming moby dick call me tusa all right, so hes ahab yeah. Who is the whale . Ge. Ge is the kwhaewhale. An update from sprint and ge and mobile and dish. Some reporting yesterday from bloomberg indicating getting closer to a potential divestiture of their boost mobile business. To dish. My understanding is that continues to move forward. And perhaps you get something even as soon as the end of the week this is say very complex situation, though, not to be forgotten in terms of its complexity youre dealing both with significant potential divestiture and negotiating points that will go along with that youre also dealing with charlie irgan, somebody who watched him through many deals that did not happen, negotiating him in the easiest of times is not easy at all. In a situation where there is a fairly high level of complexity, where you have the department of justice looking over your shoulder saying, no, yes, no, that wont be good enough, one would imagine that while there is optimism in the tmobile camp, i continue to hear it, they will get something done near term, well see well see. Then, of course, you still got the question of the states themselves and including new york but others as well theyre opposing the deal on antitrust grounds. First hearing is going to be friday in the southern district. It is not about getting a temporary restraining order at this point to stop the deal. There youre going to have a status conference trial management, things of that nature nobody needs to get a tro at all for some time because even if you get doj approval, the fcc is already signaled its it is okay with the deal you still got the California Public Utility Commission probably not going to be ready to approve it until august so there is still time to go on this the near term focus is honest divestiture, boost and spectrum and whether dish is going to get it optimism seems to be the key word here. Hoping that they get something done in the next few days. But, man, charlie irgan, one tough man to deal with yeah, how about the fact that sprint is all the way back to where it was before that day, attorneys general going against them that deal i think will get done. You do . 5g. Starting to hear a few investors say maybe, just at this point, from the tmobile perspective, is it really worth doing . Really . Wondering. Ledger every day not saying much to us. The deal, the deal, not saying much what is he going to say other than the fact that the deal is going to close yeah. I think hes right. The president wants strong 5g, one of the main reasons why they want to shut down huawei they know that they got to catch up. They hit the right theme. No doubt that the 5g National Economic policy. You have thats what the president has. National Economic Policy and who is standing in his way. Fourth competitor, you dont are have to stand it up right away, they want the idea within a certain amount of time you really could have a formidable fourth competitor to what would be at t, verizon, combined maybe one that would lead in 5g, which would be what they want and thats why they think 5g is a military issue, too, by the way. All these things i say are true. I know you think that theyre insane, like it is some sort of there is no fighting in the war room scene of dr. Strange love but it is not that i am not sterling hayden, just so you know. I hope not. I hope not flfluoride. Yesterday, we had every Semiconductor Stock higher, every one of them, giving some back today have they put in a new low i think that theyre so deeply rooted in china, that they can give it back. Obviously the one i follow closely is nvidia. I follow lam research. Those were up the most, percentage wise. They somehow have become chinese. Big Chinese Business it is autonomous driving, it is artificial intelligence, it is crypto, which, of course, has gone down. It is gaming and because chinese gaming does matter, this stock has become linked with that then the big thing, this is why im bringing up nvidia, david, this is about the deal closing and whether there will be an olive branch, allowing the deal to close do you think it is a possibility . It is a possibility i dont know specifically. There has been a lot of concern, samper is the antitrust regulator. Thats been the key question here will they hold it up qualcomm and nxp may have been just its own situation sort of stood alone. Right. Well know better if in fact they do jensen huang, it was a lot of different products that if you look at if you look undo the product, youll see in the nvidia piece next to the melanox piece, and jensen huang tells me would favor this would the chinese cut their nose off to spite their face . I dont know. It is being watched closely. As you might imagine, any ceo is considering a deal in which there would have to be antitrust approval, whether as a seller or buyer, is going to think long and hard about it. This is the one if you want to know if you think the administration is not even focused on this, at all. They wont disapprove it. They wont approve it. Same with nx theyll hold it up . That would be so bad that would be very bad if they hold it up nvidia does not go up if they just do that yeah. Amazing what everyone is talking about, how broadcom all the way back almost to where it was before they had to short fall the group did get legs again but it is all because of the tweet. Not because of the fundamentals, which are just okay without china. Sure. Lets get to bob pisani with the dow up 65. Hey, bob. Hello, everybody. This is very indeterminate open. It should be given the runup we had and the anticipation on the fed meeting. Sectors, you see here, not too much going on overall here we have got banks, semiconductors, industrials doing a little bit better. Consumer discretionary stocks, energy stocks. A bit on the downside after a great runup the other day here you see, this is fairly indeterminate open overall here. This is one of the toughest setups for a fed meeting i can recall in a very, very long time just consider what has happened running into this thing. So we got a dovish European Central bank, widely commented on, we have a fed that is expected to be dovish or signal dovishness we have china trade talk optimism starting to get rather extreme at this point from the other side and then we have markets, 1 , from record highs. 1 from record highs here. Just take a look at the s p 500. We had a mini meltup going on in the last several weeks here. Right here to that 1 high. Just off the 1 high we had it not on fundamentals, we had it on anticipation of trade talk optimism and we also had it on anticipation of dovish Central Banks which so far has been materializing. Thats why we have got this. The risk is very much to the downside now powell has to thread that needle in the middle, economy is strong, were vigilant, and we are ready to cut rates, or imply theyre ready to cut rates at a moments notice. Thats a very fine needle to thread and the market could go down very easily, just on a misplaced comment. How about fundamentals, how about commentary from corporations we havent talked about that a lot. Just what happened in the last couple of last 24 hours two Big Companies out making comments lazy boy had comments this morning here they had guidance earlier in the month here, basically saying things would be down stock has been down. They talked about concerns about tariffs and geopolitics. U. S. Steel, steel companies, new corp. , talking about softer demand out there overall as well as trade issues. The softer demand is on fundamental weakness, not just trade weakness more going on here than trade and tariffs. They had a tough time. Look at how the stocks reacted today. Lazy boy down. There was up, im sorry guidance early part of june they gave downward guidance, the stock has been down in the last few days u. S. Steel up a bit today. Dont kid yourself about what is going on here. This stock was almost 40 in the middle of last year. These steel stocks have essentially gone nowhere but down and essentially, very, very tied to the overall trade issue. Waiting for slack tomorrow thats a big story, right over here talking about it. One of the biggest ones this week, what were seeing here is continued upward revisions and some of the numbers for these ipos well keep an eye on that. The ipo continues. Back to you. Thank you to the bond pits as well, Rick Santelli at the cme in chicago. Good morning, rick. Good morning. Lots of fascinating trading in the fixed income space o, of course after the big uturn yesterday, intraday, 181, now it is hovering at 1. 89, up a couple of basis points the tenyear, one of the only coupons on the curve yesterday that actually made a new cycle low. Were not talking by much. One basis point. Look at the threeday chart there. You see 2. 06 is the settlement price. We traded down as close to 2 , 2. 01 and change f you open the chart up to may 1st, youll see what im talking about the steep drop in yields, then you see kind of that little bumpy part to the right. Well, 2. 06 yesterday 2. 07, basically twice. Very technically significant one basis point make all the difference in the world, all depends how your models and triggers work. But i would say this level continues to hold. Of course, today, will be a big day. If you look at threeday chart of bunds, they clipped off nearly minus 33 basis points yesterday. 32 and change to be exact. Now theyre minus 29 what is interesting is they had a 30year bund auction, yields went for about half what they did the last auction so these low yields are really going to continue to take a toll just look at the banking indices in europe. Finally, Mario Draghis drop here is a threeday of the euro. It recovered a bit, flirting with 112 but some damage done when many thought the euro could get up as high as 1. 14, carl, david, jim, back to you. Rick, thank you very much. Despite a strong economy, charitable donations fell last year by the most since the financial crisis on the heels of the new tax law. Americans gave just shy of 428 billion to charity in 2018 according to a new report by giving usa total contributions rose less than 1 from a year earlier, not enough to keep pace with inflation. And giving by individuals down by more than 3 after four straight years of growth maybe somewhat tied to this is bonuses. Nonproduction, private sector bonuses in q1 down 24 from the big boost we saw after the tax law. Just so many things happening all at once there. In that and salt, people keep talking salt as a reason want to look deep near the numb numbers if it is possible. Theyre paying more in taxes, chose to cut back on their thats what i keep hearing. And i would love to be able to quantify it. Ive not been able to. Were very charitable people. Really . Yes we are. I thought you had malice toward all and charity toward none. I think it is the other way around. House divided stands . Yes, it does. When we come back, a pair of heavy hitters at cannes lions, stay tuned for an interview of Jeffrey Katzenberg and meg whitman. Dow is up 42 back in a moment obviously, a huge week for facebook, 185 and change here. We take a look at the faang complex this morning dows up 53. W we will get stock trading with jim after a short break. R. Because a vision softly creeping left its seeds while i was sleeping and the vision that was planted in my brain still remains within the sound of silence in restless dreams i walked alone narrow streets of cobblestone when my eyes were stabbed by the flash of a neon light that split the night and touched the sound of silence mno kidding. Rd. But moving your internet and tv . Thats easy. Easy . easy . Easy. Because now xfinity lets you transfer your Service Online in just about a minute with a few simple steps. Really . Really. That was easy. Yup. Plus, with twohour appointment windows, its all on your schedule. Awesome. Now all you have to do is move. That thing. [ sigh ] introducing an easier way to move with xfinity. Its just another way were working to make your life simple, easy, awesome. Go to xfinity. Com moving to get started. Time for jim and stock trading. Positive note by goldman sachs. Netflix. Highlights where they continue to believe that new production, new and different original films will drive sales and that, therefore, its game on. And i dont want to disagree with this. I think its very positive and they continue to remain a buy. We havent heard a peep out of the netflix until now. I like it. Originals now nearly half of their amortized content spend. Now we are maybe a little less worried about disney plus i think they can coexist. Its going to be a lot of different bills people are paying. Still not lets see what the world looks like when disney is out. Buy roku. When you hear about that, you buy roku and roku is like heavily shorted. Not like beyond meat. Whats on mad tonight wicks, which is very much a part of this i have used wix to design a website. Part of this shopify, wix, adobe world where you can make your little enterprise look every bit as big as a fancy department store. And thats kind of what you use them for a restaurant, make it look like john george. You can say, oh, it looks like or san miguel yes, five michelin stars. Thats President Trump five michelin stars. I think it is only four. I think the Trump National is five jim, we will see you tonight. Mad money 6 00 p. M. Eastern. When we come back, Jerry Katzenberg and meg whitman at caanes lions the dow is up 58 dont go away. Rather than worry about how to pay for longterm care. Brighthouse smartcare℠ is a hybrid Life Insurance and longterm care product. It protects your family while providing longterm care coverage, should you need it. So you can explore all the Amazing Things ahead. Talk to your advisor about brighthouse smartcare. Brighthouse financial. Build for whats ahead℠ brighthouse financial. Mmm, exactly ug Liberty Mutual customizes your Car Insurance, so you only pay for what you need. Nice but uh, whats up with your partner . Oh we just spend all day telling everyone how we customize Car Insurance because no two people are alike, so. Limu gets a little confused when he sees another bird that looks exactly like him. Ya. Hell figure it out. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Good wednesday morning. Welcome back to squawk on the street. Sara eisen is with us from the cnbc evolve summit she will be talking with the former ceo of aetna. Meantime, a check on the major averages here. Typical waiting game ahead of the fed decision in about four hours. Our roadmap begins with that crucial fed rate decision. The market melt up continues as the president reportedly considers demoting his fed chair. Plus, is short form the future of streaming . Jeffrey katzenberg and meg whitman will join us from caanes in a few minutes. And facebooks cryp cryptocurrency plan facing data and regulatory concerns in washington first up, fed reserve policymakers will conclude their meeting today. If the fed does not cut rates today, investors will be looking for indications that it may do so later this year, potentially next month fed chair powell will host a postmeeting News Conference at 2 30 eastern time. We will bring you live coverage. Steve with us from washington on fed day. Steve, its been typically not kind to equity prices the past few sessions. Yeah, thats right. The fed doesnt like to move the markets with its statement it prefers to go in for a lot of debatable reasons with the Market Pricing in. But this is especially an interesting meeting, carl, where there is some probability out there right now, its down around 21 , that the Federal Reserve cuts rates this time but usually they go in, you know, when there is no rate cut expected its down around zero. Obviously, hopes are high among many that there is going to be a rate cut come july and we will see the teextent to which, if ty dont deliver the cut today, they signal a way that satisfies markets and especially equity markets. Steve, in terms of the likelihood of things we could get, there is different scenarios. One is they remove patience. One they change the dot plot somehow, maybe close qt early. Are we getting that granular yet . Yeah, the word patience is probably not long to the world it made its entry into the world in january it survived three meetings or six months or so it was not a long period of patience i think they downgrade the Economic Outlook you made an interesting comment, carl you said they changed the dot plot so the dot plot is not a function of policy as we understand it. They dont get together and decide what the dot plot is going to be. It should be the way its been told to us the result of the median forecast of 17 different e members. That is the problem, that its taken by the market as policy, but its actually just a derived number from the forecasts or the separate forecast of the fomc members. That said, no fed member in the march forecast, forecast to rate cut, is expected that some will with a very interesting question as to whether or not the median becomes a rate cut or just a few end up doing it. Steve, to what extent, if any, do you hear from the fed their response if we get one from powell to this relentless pressure from the president on him to cut rates or move back to quantitative easing . Its so unique, this situation i just wonder, is there an expectation of a continued response are they concerned about it undermining their credibility . They are certainly concerned about it undermining their credibility. They wish it wouldnt happen they certainly expected it to happen at some point when it initially happened it was kind of mild and they thought maybe they dodged a bullet i dont think they felt there would be this unrelenting pressure on the fed. And then you have this Extraordinary Development yesterday wherein response to a question, the president said well see, which ill tell you how different newspapers said it was mounting pressure. Another one said it was gathering pressure i wonder, david, if you would call it a direct threat to the Federal Reserve that if you do not cut rates, then i will consider or think about removing you. Yeah. Well, listen, it never stops i think there have been some expectation that perhaps it would come to an end, that powell but it just keeps going. We will follow it as part of this overall story, steve. I think it has to raise the bar for the fed to cut i think the fed has to think about its credibility and the idea that it will be seen as bending to the womens of the preside whims of the president and they believe thats hurtful to the feds ability to create policy steve, thank you. Of course, you will be joining us throughout. We will be there covering the press conference as well. Lets get to breaking news on the china trade negotiations. Caleb has that for us. We are getting information on the run of show that will take place before President Trump meets with president xi next week at the g20 and those talks that he said yesterday are going to start today ambassador robert lighthizer, the Top Trump Administration trade negotiator, is telling the committee he is going to have a phone call with his counterpart in china then he, secretary that mnuchin, the treshary secretary and chinese officials will have a meeting before the president since down with president xi he said its unclear when formal negotiations will restart, but the lines of communication are open and they are ready to continue this discussion guys all right a lot of headlines popping on that one we may come back to you. Meantime, lets get to julia borstein live from caanes with two special guests good morning. Good morning to you, carl its afternoon here. We have two of the biggest names here in caanes we have meg whitman, and Jeffrey Katzenberg, chairman who is getting a big award here in caanes thank you for joining us could be making big news here, announcing that your mobile Video Service is launching next april has just solidified major advertisers. Tell us about these ad deals and what it means for the company. We have an addsupported platform we announced six launch partners and our category exclusive partners png, google, ab, pepsi, walmart and broeg progressive. You did it. Tell us how much money you secured and what this says about your path to launch. We have secured about 100 million of advertising revenue against a budget of 150. We have 150 million of ad inventory to sell. As i said, we have done them in categories cpg is png insurance is progressive and so we have about two to three more categories to go. Of course, the studios, who are investors in our company, are also interested in buying advertising. So were trying to put this together but i think two to three more categories. So definitely unusual to have these ad deals locked insofar ahead of a product existing. Jeffrey, tell me how your conversations here around the premium video products that you are creating reflect all the other issues that people are talking about here such as brand safety, concerns about privacy, particular particularly when it comes to the digital duopoly, facebook and google. The cmo of p and g and is the sort of Gold Standard setter said it on stage with meg and i in which quibi represents for him a singular opportunity, one, to reach this millennial audience thats getting harder to find in a safe, well defined environment in which they can tell brand stories we have some great innovations around the way commercials will play within quibi. In the same way we have long form stories told in chapter, they can tell a oneminute story in four 15second chapters in in network tv you get 7 1 2 minutes in an hour, hulu 10 in an hour, quibi its in two minutes. He says if we have gotten it right for him as an advertiser, there is no better place to be and so having that endorsement, having him come in with us as well as these five other of the biggest most important brands in the globe is just a real boost. Do you see the challenges that facebook and google are dealing with both in terms of talk about regulation, people calling to break them up, privacy regulation, does that provide a bigger opportunity for you and your ad business i dont think so. I dont think anybody is talking about breaking up quibi yet. We are doing all right here. To be in the same sentence with google and facebook, we are already a winner here. I dont think so i think we are a very different flavor than them i think the issues that they are dealing with really are, you know, meg from the outset has said things around data, the use of data, the what do you call it animous on data is things she is taking a very, very conservative path to protect privacy. Our advertisers have responded and understood in the end, a great environment is valuable for them. I was going to say one of the things Mark Pritchard and the other cmos like, yes, we are a brand safe environment we curate everything that gets on the app it is during the lean forward on the go moments for the millennial audience, which is hard to reach, but also they are going to be cocreators of this platform they all know exactly what they would do if they had a chance to do a new streaming platform from the start, and they have been helping us make a great platform for advertisers as well as a great platform for consumers. You recently announced your pricing. 4. 99 for ads with the Subscription Service 7. 99 without adds a hair less than hue lu lieu how do you see it competing especially with a concept that has never existed before 75 of our customers will pick the 4. 99 supported its a low ad low. Our customers are millennials. And dollars matter to them but we give the opportunity, if you want the 7. 99 version i think your question is how do we know that people will sign up and pay. We wont know until we launch, but we have incredible content with a unique viewing experience thats mobile only, targeted to a use case that doesnt have this very high quality hollywood style content. So, you know, you never know until you launch we are encouraged by the informal feedback we have gotten we do user testing every single week with the app and there is some enthusiasm building. Since you set the stage almost two years ago, the landscape has changed. We have apple tv plus. You have disney plus getting ready to launch. Of course, you already have espn plus and were still anticipating that there will be launches from Nbc Universal with ads. Warnermedia is going to launch with ads, without ads. The landscape changes all the time is to making it harder or will to make it harder to continue to secure the highest Quality Content . Heres what id say all the folks you mentioned are doing long form living room oriented content we are doing quick bite content, short form everything on the app will be under ten minutes. There will be long form stories in chapters. These are quick bite contents for a different use case this isnt you get home at 7 00 and you start watching uibi. You are commuting, waiting for a starbucks coffee, at a Doctors Office we know people are watching 60 minutes a day. We are expanding that pie with a real alternative. Jeff, from your perspective, all the companies that invested launched their own services. Depending how you think about it from a subscriber standpoint are competing for subscriptions. How do you stay ahead of that . I have to say the wonderful thing about this, julie, is these partners have been supportive since day one they continue. They see this as incremental they dont see it as a zerosum game that we are competing i dont think anybody would suggest that the television ecosystem is competing with the music ecosystem. You know, what apple and spotif do in music you dont say instead of netflix or amazon or hulu its just a completely different use case our belief from day one is that there is about to be a third category, and that category is premium hollywood Quality Content, hollywood quality storytelling on the go on a mobile device. And so what happens, the battle in the living room for the Television Set and the disruption that is going on around that, again its amazing to step back and watch it. Thrilled we are not involved in it were in a white space that is our own to lose. And do you think that there will be other players that jump into this space, especially as all your investors launch their own verges of something thats more probably akin to a netflix or a hulu . Do you see them becoming listen, if we are successful here, and we believe we will be, therele most certainly be competition. Three Major Networks at first. There was netflix and these different competitors now. We will certainly have competition. We hope to be first. We hope to define the category and have a first mover advantage. So much consolidation in the space. There is speculation that more consolidation among the investors, how does that change things so far it hasnt. And i dont think there is anything that we see on the horizon right now that does anything other than, frankly, put more wind in our sail, whether its 5g thats coming on to this. The enthusiasm, and you have seen this the last four, six, eight weeks, julia, an avalanche of talent and projects and ideas. I feel like for six or eight months we were kind of pushing that bolder up the hill. It feels like we have gone to the other side of it now and this thing has taken off and the quality of talent and story stellers and filmmakers that everybody now wants to we were submitted 185 projects last week. And meg, just give us a sense of how the tell co is going to impact you. Remember, watching video today on your mobile is good i think 5g helps it be great i think naturally what 5g does is make video on your mobile more attractive than it is today. Of course, our offering will be great for the tellcos. They think it highlights their technology innovation. A lot of change coming. Meg whitman p Jeffrey Katzenberg, thank you for taking the time to join us here thank you for having us in the middle of your own personal hurricane. Windy here. Guys, back to you. All right windy but beautiful. Thank you. Lets get back to sara she is at the cnbc evolve summit right here in new york city. Not nearly as nice and caanes. Whats next on squawk in the street. Yeah, hi, good morning. We are here at the evolve conference at cnbc talking about corporate leadership one of the headliner speakers is mark bertlini, former ceo of aetna. He sold this company to cvs the end of last year, we will get an update the promise was it would help transform the way consumers get health care, but the stock is under pressure and skepticism has risen on wall street well be right back live from the evolve conference on cnbc with mark. My degree from snhu has helped me tremendously. The flexible class schedules allowed me to go to work full time, run my catering business and be a mom and parent. When i reached this accomplishment, it was like, its here, its happening, its now. We at Southern New Hampshire university are the ones who succeed. We are the ones who break through. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Welcome back to squawk on the street. Live today from cnbcs evolve conference its a look at corporate leadership and transforming businesses in lower manhattan. I am here with one of the featured speakers mark be bertolini, the former ceo of aetna, currently on the board of cvs health he got a very warm reception from the audience here even gave out his email address. We need an update on the cvs aetna deal and the status of the new company. Since that deal closed last november, the stock has lost about a third of its value what do you think has investors so concerned i think getting a better understanding of what it is the two companies are trying to put to the there was recently an Investor Conference this that i think answered those questions, like what do we intend to do and what do we think. I think thats a baseline. The next big step is, you know, executing against that. How do you envision the combined company when you made the deal with larry merlot, is it starting to look like what you had envisioned we are a ways away from that. This is a complex integration. The idea is how could we get closer to community, how could we create for individuals in the community easier access in their homes and in the community to care that is more effective, cheaper, and has higher value from a quality of life standpoint so that requires the term i like to use is place making how can we create in the community a place where people can gather to get what they need in the way of their health because what were seeing now with 60 of the American Public 400 away from a financial disaster and the next 24,000, health care is now pushing people to the limit. And if we can do it better, cheaper, and more conveniently in the community, then thats going to be a value to those consumers. So how do we use both the cvs assets and aetna assets in the community to bring more to the home and more and away from the medical Industrial Complex where the pricing arbitrage is so powerful and just doing infusion in the home. And cost . Yeah. Part of the concern is regulatory scrutiny. Putting under one roof the retail pharmacies, the pharmacy benefits managers, the Insurance Business i mean, how do you explain what we are going into it on a bipartisan basis and whether politicians will be looking into it its not how we finance health care. Its how we deliver it and unless we get that investment right, how we finance it, if we finance a bad investment, whether that be a car or a home or a business, then we are going to get a bad return we are not going to get what we expect so if we were to look at health care as an individual right and issue that we need to deal with, then how do we build it for me, for you versus building it for the average ideal person, the cover the mens fitness magazine. Some of the democratic hopefuls, elizabeth warren, bernie sanders, Kamala Harris have talked about medicare for all and getting rid of the private Insurance Industry is that realistic . I dont think it is number one, nobody has defined it if the government finances everything, we are not doing the right investment when you ask people about medicare for all, they cant answer the question. You say show me another country they are doing it, they point to the u. K. And canada. Those are not governmentpaid health care. They are government funded and Government Run Health Care and we have a system like that in the United States its called the v. A. Right now its not doing so well what does the model really look like is question number one. Question number two, how much will it cost again, if you finance, if you just finance a bad investment, you are going to get a bad result so vermont has backed away from it two months before they were going to implement the single payer program. Colorado passed it but couldnt afford it. And california they dont have a good track record. Right so you need a Public Private partnership which is how medicare runs. Medicare is single pair, people say. No, its not aetna has the first check written from medicare in 1965 from aetna to hartford hospital. We were the financial intermediary we set up the stps if you create the right Public Private partnership, how you finance it is irrelevant. Vice President Biden has talked about a solution where its just restoring the Affordable Care act. Where are you on that you pulled out of a lot of the exchanges. It didnt seem to work. It could have been solved a lot simple lar than what we created. If we would have reduced the age for medicare and means tested that difference between the current age, lets say 55 and 65, and allowed people to buy in, and we had allowed Medicaid Expansion to occur, we could have done exactly what the aca has done cheaper two systems that work from a financing standpoint and are structured and supported by the industry, right . We are the Financial Intermediaries for medicare and medicaid. This is going to be top of mind for voters going into 2020. What do you think will resonate most whose plan what ideas i think what people want to know is its going to be better. Cheaper and cheaper and so if you look at, for example, the amazon business model. What can i do to leverage my platform to meet an unmet customer need that is reliable, credible, and affordable thats the same problem in health care. The unmet need is, is you are waiting until im broken to fix me what can you do to help me live a healthy life this is what in a convenient way its what we did at the aetna. So the idea is not to do a breaks fix warranty operation, but to really do a program where, on the example i like to use, and you probably are too young, trip tix from aaa they circle the attractions. You bring the bag home you go, oh my god, we are going on vacation. We do that for health care, what are the things that work for me and the life i want to lead and how does health get out of the way of the life i want to lead. Has the Trump Administration done anything to move the system forward or backward . No. I think its stalled and its only worsening the Health Care Costs are breaking the back of our economy. And so this is obviously going to be top of mind . It should be. I think if you look at people looking at things like reverse mortgages, et cetera, they are looking at it because they are one deductible away from having a huge financial problem. Finally, i just want to end where i began on cvs and how this is a company trying to transform this individually. There has been some uncertainty lately with unprecedented hearings in washington from a federal judge, judge leon, looking at the doj approval of this merger. Do you expect there to be any hiccups there . After having been through the humana transaction, you know, i that got reject the. Yeah, year over year take any bets on the doj and the judge. Thats to be seen. Legitimate concern . I think the judge will do what he needs to do. Year over year make any bets on that, nor do i do any predictions. Good to hear from you former ceo of aetna. Currently on the board of cvs health carl, back to you. Great stuff see you again. When we come back huawei pushing back cnbc sitting down for a rare and exclusive interview with the ceo of huawei. And a check on the major rinchs averages as we wait for the t hrsstatement in 3 1 2ou goyou covered all day here on cnbc dont goway. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Good morning im sue herera here is your cnbc news update. Hope hicks arriving for her closeddoor meeting with the hughes jim cramer. Hicks held key positions in President Trumps campaign and administration the white house telling the committee the president will assert executive privilege over that interview. An independent u. N. Report in the killing of saudi journalist Jamal Khashoggi said there is credible evidence to warrant further investigation into the possible role of Saudi Crown Prince mohammad bin salman the report stated there was no conclusion as to guilt and a saudi minister called the report baseless. Israeli Prime Minister netanyahu attending israels Largest Military drill in years with thousands of troops simulating a war with the hezbollah militia. It comes amid growing tensions in the persian gulf. Americans gave less that charity in 2018 than the previous year. According to giving usa, individual giving dropped by 3. 4 after increasing four skiff years. You are up to date thats the news update this hour back to you, david. Thank you sue. It is one of the most talked about and Controversial Companies in the world huawei currently blacklisted by the Trump Administration we spoke exclusively with the companys founder and ceo at huaweis headquarters in china. Reporter for a company trying to prove to the world its becoming more transparent and trying to win over the trust of governments, huaweis ceo and founder ren zhengfei was very unforthcoming. He not only played down the effect of a 30 billion hit on revenue this year, but he refused to lay out any kind of strategy to as to how huawei could recover. When i pointed out what happens to huawei is important for global trade and the chinese economy, he replied that he sees huawei simply as small as a sesame icy seed. When i pointed out their revenue last year was bigger than that of alibaba, he turned it around on them and said that they should step up translator then we should ask alibaba and tencent to work harder so they can step in to make more contribution toss the country. We dont have pressure on our shoulder i think this issue is a test for us if we weather the storm, we will get stronger so what doesnt kill you will get you stronger in china, we say the phoenix will rise from the fire and the bird that doesnt get killed by the fire is a phoenix. And we believe this big fire will address this issue at our hand. Reporter he also wouldnt entertain the idea of setting up an autonomous subsidiary outside of china and beyond the reach of chinese law to alleviate many of the concerns that the company is facing regarding its relationship with the government. Translator we have plenty of subsidiaries outside of china in every country. We abide by local laws and regulations. We have subsidiaries across 170 countries around the world and they are independent subsidiaries, but setting up those subsidiaries is not trying to prove to politicians. Instead, its to fully comply with laws, regulations, and the laws of the u. N. And International Laws so those subsidiaries abide by local laws and regulations i do not have any intention to prove to politicians reporter so nothing to prove, he says, guys but here he is talking to us and defending the security of his company. Back to you. Deidre bosa with the founder and ceo of huawei trying to argue they are less significant than they are. They are chinas Biggest Technology company. They are very important very interesting to hear from him though, carl i mean, they are sort of on a, trying to sort of make their case, certainly here in the u. S. Importantly so not sure that they have a lot of believers in the Trump Administration obviously, we talk so often in terms of 5g, how it is viewed by the administration as not just an economic goal or a potentially a threat, but also National Security as well. As lighthizer testifies on the hill about this topic, we will keep an eye on that. Dow is up 30 s p is slightly red. Carl, we are watching right now shares of Oil Companies as well as oil itself, they are seeing a spike still lower on the day this is on the heels of weekly Inventory Data from the u. S. Government showing a draw of 3. 1 Million Barrels of crude the expectations for the analysts 1. 25 Million Barrels. A larger than expected reduction in crude stockpiles in past week in the United States again, oil is lower on the day you can see that bit of a spike there. We are also watching shares of energy stocks. Energyrelated companies they have now spiked to their session highs as well as oil prices have moved. One of the big etfs, xle moving to the highs in the session. We will keep a close eye on oil. Back to you. Don, thanks very much. When we return, congresswoman Maxine Waters of california asking facebook to hit pause on the development of that newly unveiled cryptocurrency we will tell you why and what it might mean for the social media giant. Quk t see ctiessawonhetrtonnu in a moment. Dont go away. Markets relatively muted today as we await the fed decision later this afternoon. Of course, powells presser. Brian levette, senior director of investment strategy, and stan stovall. Guys, good to see you. Expecting fireworks today . No, i am not expecting fireworks. I mean, what the fed has accomplished just in june alone is an easier financial conditions environment so what was decision concerting in may is that the dollar strengthened the yield curve had flattened, even inverted tenthree, and simply sager with going to go at a more moderate pace or were going to adjust as necessary has helped to ease financial conditions so that has been positive for markets. That extends the cycle because of that not expecting fireworks. You think they codify that today . I think if there are fireworks they happen after the press conference to see what kind of response the president will have. But i think the 64,000 question for me is, if they cut rates in july, why . You know, what is it that they are that afraid of thats going to cause them to do it but for today, you know, i think the thought is that, no, they just remove a word and say we are going to continue to monitor the data. You have been constructive on equities for the year . Yes. Any reason to change your view up or down . No. If anything, the feds about face on rates is a very positive sign i mean, we have talked about this before, carl. Any time we have corrected or had volatility in these markets, its been the result of policy thats too tight in a still slow growth world with really no inflation anywhere and so i would view what the Federal Reserve did last year as a policy mistake multiple Interest Rate hikes when the stimulus was never going lead to higher Sustainable Growth now we are dealing with the lag effects of that. It came through in may, tighter financial conditions and they are backing off. How much does powell take into account the continuing tensions with china and what may develop there negatively or positively i think the way he views it is through what the kurpcurrenc doing. If you see a flight to quality amid greater uncertainty on trade and the dollar continues to strengthen,thats going to slow Economic Activity and thats going to be a big headwind to u. S. Corporate earnings so the fed is going to focus on their mandate of 2 inflation. If we go too far down a path on a trade battle and leads to a flight to quality and a stronger dollar, thats not price stability. Thats going to be disinflaegsary and the fed will have to respond to that. Up 6 , sam, in two weeks. So are we pricing in some disappointment, risk of disappointment yes history would actually agree with that. We had the third stronger year to date performance through the end of april history said watch out for digestion in may we got it. History said of the five best since world war ii, we were up 100 of the time in june well, you can add this one to that as well what about the remainder of the sell in may period, july through october . Down 80 of the time so basically it would imply we are going to be going through mapping out the design on Charlie Browns shirt, i like to say, basically seeing an ungulation summer lull is your view . I do. I think so but i think there is still a lot of concern that will be out there, but i think it will work its way through by the traditionally seasonally optimistic November December period and heading into the president ial election year. Does this white house lend any can anybody use cycle theory given this president . No, but i think what we can focus on are the fundamentals of the economy where inflation isnt have where valuations are. If you are a longer term investor, regardless of what your views are on seasonality, we are in an environment where growth is okay inflation is benign. Policy is accommodative. Valuations are not that excessive given the inflation environment. What does that mean not excessive . You are trading at a 19 times trailing earnings compared to a longterm average of 16. 5. So that could be expected at the, you know, we have been longer in this cycle but if you consider what the earnings yield on stocks is, which is closer to 5 in an Interest Rate world of 2, that tells us stocks are still cheap to bonds cycles dont usually end with no inflation and accommodate a fed and stocks cleheap to wonds. I have seen tables when the fed starts a cutting cycle, you dont buy tech necessarily you buy things Like Health Care absolutely. Those sectors have the best average price change, frequency of beating the market are Consumer Discretionary staples stick with the consume because they are feeling optimistic. We are going to hedge our bets and gravitate to the more defensive areas. We will see what happens in a few hours. Thanks for coming in brian and sam. When we come back, facebooks Digital Currency announcement drawing immediate backlash from some members of congress we will give you the details neck ne nex. T. Some members of congress we will give you the details next backlash from some Members Congress we will give you the details next we will see what happens in a othere is a 2 trillion piee of the auto market wall street isnt tapping into found out more more squawk on street is coming up geico makes it easy to get help when you need it. With licensed agents available 24 7. Its not just easy. Its havingawalrusingoal easy roooaaaar its a walrus ridiculous yes nice save, big guy good job duncan way to go [chanting] its not just easy. Its geico easy. Oh, duncan. Stay up. No sleepies. Maxine waters taking on facebook after they unveiled libra. More on that story david, not a lot of love for libra here on capitol hill Maxine Waters is the head of the House Financial Services committee, and she is calling for a moratorium on the cryptocurrency until congress has a chance to weigh in and ask questions. She said that facebooks expansion has been unchecked the Crypto Market lacks clear Regulatory Frameworks and this is a wakeup call for anyone worried about privacy and National Security. Now, both waters and the ranking republican on the committee, representative patrick mchenry, are calling on facebook executives to testify. Meanwhile, over in the Senate Democrat rusty warner says that this issue is fundamentally about trust. Interesting that facebook has tried to bring about a number of other partners im willing to listen to their proposal but what i heard virtually uniformly from commentary this morning, here is a company that has lost the majority of Americans Trust about their ability to keep visibility data private already. The idea that we will turn over Financial Data to that company, they have an uphill effort meanwhile, his colleague shar brown said facebook is too big, too powerful, and libra is too risky. Thank you. Watching that story for us today. Can you see muted Market Action . S p within a point on the flat line. Yeah, Facebook Though not participating. As is faang, really. Nice rally in that spot. The announcement, including the white paper of libra, stock down 6 john has a look at whats coming up on squawk thsquawk alley. I have a stock participating adobe after strong earnings. It is up better than 4 today. The guide was a little light you wouldnt know it from the way the stock is responding. We have the ceo mi ucongp exclusively on squawk alley. Of your investments. Key portfolio events. All in one place. Because when its decision time. You need decision tech. Only from fidelity. Man stand up if you are a First Generation College student. Stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. The world in which we live equally distributes talent. But it doesnt equally distribute opportunity, and paths are not always the same. Im so proud of you, dad man i will tell you this, Southern New Hampshire university can change the whole trajectory of your life. Welcome back to squawk on the street. Im dominic chu. Stocks just about flat with the major indices hovering on both sides of unchanged, but one of the key sectors were watching today is the financials and why . Because of that big fed Interest Rate decision coming up later on this afternoon the s p just about flat right now, but the financial sector, one of the better performers today alongside energy, materials one of the big laggards one of the reasons why with Interest Rates very much in focus, the financials are big, especially the regional banks. They are leading to the upside regional banks like huntington bancshares, citizens financial you can throw m and t and fifth third in there as well all moving to the upside as Interest Rates generally tick a little higher that financial trade for one to watch. I will send it back downtown to you guys at the New York Stock Exchange dom, thank you very much San Francisco is moving to ban ecigarettes our aditi roy joins us with all those details. Reporter hi carl, San Franciscos supervisors have voted unanimously tuesday to ban the sale of ecigarettes in the city this would be the first vote of its kind in the country. The measure still faces, though, a final vote, and the mayors approval ecigarette giant juul is based in sf and opposes the measure. In a statement, they say the pro hi hi bigs will not effectively address underaged use and will leave cigarettes on shelves as the only choice for adult smokers. The company is supporting a competing proposal which would limit sales to minors. The board of supervisors also signaled its support for a different measure which would prohibit the sale, manufacture, and distribution of ecigarettes on City Property juuls announced it has purchased a downtown Sf Office Building to accommodate its growing staff. Thats one way the company can partially work around that particular measure back to you guys Fascinating Development in a hometown business really, juul in San Francisco thank you very much for that watching the markets here, which is a typical game we play in the hours ahead, especially in a fed meeting as fraught as this one with issues that go way beyond Interest Rates. Yeah, there we are doing absolutely nothing as we await the commentary and the decision from the fomc, which we will be covering very closely as you might imagine, carl. Im also curious to see whether certainly there will be questions how strong will powell be in terms of responding to this continued pressure from the president on him its a lot of side show. Steve actually said that if in fact they were to cut, theyll have to actually give more reasons because there will be concerns about their credibility. Stan fisher just over the weekend said he didnt think the december hike would have happened at all had it not been for the job owning by the president. I was thinking weve seen powell get a little bit tough on this question in interviews like on 60 minutes a couple of months ago. I wonder what the chances are of him backing that up live this afternoon. To your point he has said he does not believe that he can be removed, and that appears to be at least the case based on the reporting weve seen in terms of this idea of demoting him, but it is an important point and one that well be watching for. Cannot miss that decision at 2 00 and the presser at 2 30 squawk alley is coming up next with the ceo of adobe after reporting results, so stay with us i consulted with your grandmothers doctor. We can do the screening at her house. Hi. This is the man thats going to check your eyes grandma. Cognizant ai solutions are helping Healthcare Companies advance diagnostics and prevent blindness in patients with diabetes. Everything looks good. You have beautiful eyes. Rather than worry about how to pay for longterm care. Brighthouse smartcare℠ is a hybrid Life Insurance and longterm care product. It protects your family while providing longterm care coverage, should you need it. So you can explore all the Amazing Things ahead. Talk to your advisor about brighthouse smartcare. Brighthouse financial. Build for whats ahead℠ good morning, its 8 00 a. M. At adobe headquarters. Its 11 00 a. M. On wall street, and squawk alley is live good wednesday morning, welcome to squawk alley. Im carl keequintanilla with moa brennan whos back watching the fed decision this afternoon, the markets were going to start with facebook and an exclusive story from the verge, its titled bodies in seats. Our next guest spoke with several of facebooks contractors at its worst performing content moderation site in north america breaking nondisclosure agreements those workers told of abuse, fear, severe uncleanliness and even death. Take a listen. At what point did it become clear to you that you werent going to be helping businesses on