Transcripts For CNBC Squawk On The Street 20240714

The president ripping into the ecb chief for pushing down the euro, saying it is unfair to the u. S. And as you just heard, beyond meats incredible run continues. Shares surging once again. Now up close to 700 since its debut. Facebook is up in the premarket after launching a new cryptocurrency called libra. The move is designed to expand the companys presence in ecommerce and Global Payments also creating a regulated subsidiary called colibra which will roll out a Crypto Wallet based on the libra currency. Earlier, we spoke about the differences between libra and bitcoin. If you want to compare libra with traditional cryptocurrencies, the first big difference is that typically cryptocurrencies have investment vehicles or, you know, Investment Assets rather than being great medium of exchange and this is really designed from the ground up to be a great medium of exchange, very high quality form of digital money that you can use for everyday payments and cross border payments, microtransactions and all kinds of different things. David marcus, long Time Facebook vet and not doing this alone, 27 partners. And most importantly pay pal, visa and mastercard. People are saying, they only put in theyre not fighting it, unlike the bigger banks that take more. I described this yesterday as being brilliant, because i think that this is a way to be able to show congress, government, were really trusted, were doing this nonprofit, there is 2. 6 billion people that are under banks. I thought they were going to buy pay pal. But instead theyre able to do it themselves. I think that it is going to take the heat off dont forget it will work even for the Check Cashing people who have no no. I dont want to i dont want to lets not dwell on the goody two shoes part of this talk about the actual business implications of it theyre going to make money for this eventually, the same way that venmo, that pay pal is starting to make money. This does seem to be in the handful of conversations that ive been able to have about it, they seem to have leapfrogged over some of the institutions and the banking world. Yes, this is cash over credit card right to digitization. And were all aware of Payment Companies that merged this year and there is the question, will that be a new wall of money coming at the payments disenfranchises those does it thats what the block chain is and thats why none of them are involved i keep trying to find flaws in it i cannot find the white paper, the white paper, reads something youre aware the executive branch i thought it was brilliant. If it wasnt marcus, i would question it. This is not a Charm Offensive it is something good. How about if you saw 2 billion people on the platform. They dont have enough money yet, but they will look, if you have one of those curren currencies, 48 of the world in currencies that are terrible thats what crypto is for. Which was to be able to deal with north korean currency deal with venezuelan currency. I think it is brilliant. I dont have any flies on it other than to say if youre real cynic, you can say, this is a way to be able to show congress, 2. 6 billion people trust us. I dont know what youre worried about with the privacy thing were mr. Privacy. Mrs. Privacy i think it is brilliant. Becky tried to get marcus to delineate what data is going to be looked at, by whom, what will be used to market to whom, and his point is that thats not it will besiloed from the core facebook operation. The opposite of what we think of facebook. Marcus is a very serious player. It is real, guys it is real to the point of if you i went to see with jamie dimon to a difficult part of tougher part of philadelphia, all that you saw were Check Cashing outfits, all the companies that take you i dont like to take credit cards them get like 2 , 3 , i cant do this, you cant do tassit as a merchant, this eliminates tremendous friction. Makes it so that in uganda, take uganda, they skipped the fixed asset fixed line telco and went right to the cell phone. Thats what this is about. It is brilliant. I think that in the end well see, you know, facebook is not just a force of taking your name and selling it, this is being as private as possible, or dan shulman from pay pal wouldnt have gotten behind it. The leibra block chain piece, it is block chain, it is very secure what seems to be capturing peoples attention this morning is not necessarily changing the face of facebook to become a friendlier you dont like that maybe that happens, maybe it doesnt. You got mark may who i know will join us later, and this report suggests it is the most one of the most well organized efforts by Global Consumer tech company yet. I did that yesterday. You did you were on the mad dash, you pointed all this out, mark ma haney saying this could be one of the most important initiat e initiatives in the history of the country. Yes, i said this yesterday. Says it today. I say it here, comes out there he gets paid millions, i get nothing. Get out your violin. Yes were so sorry look, the introduction to libra, zuckerberg, zuckerberg sounds like, yeah, hes almost biblical there is it works it is a good idea. They do have this network. We all did think it would be pay pal. And thats why pay pal has gone up from 80 to 117. And faang itself, since delrahims speech, facebook up 17 . That was the time to buy, and now can you imagine, people coming and saying, listen, i had no bank account, no one would lend me money, couldnt open an account, and then facebook came to see me. Facebook, the new jpmorgan, with no profit. Theyre also launching the colibra digital wallet for libra, available in messenger, whatsapp that will help the company. Do you think it will be used in cuba . Yes. Why because cuba cuba libra. It will be used in venezuela. All the countries like cuba, venezuela if this is going to be you dont think it is about institutional participation . More people. I think people feel that these currencies are going to start getting backing. I personally believe that this is not a currency, it is a de facto way that is backed up by a pool of money, that is to be able to make it so that your currency is not racked every minute for hard working people that did not want to find all of their money constantly debased by the venezuela government, by governments that are irresponsible. You make it sound like an international play. Yes. You dont think is u. S. Centric other than people of the lower rung of the income. I think the lower rung people will be in favor of it i think a lot of the critics in congress will say youre criticizing an institution that allowed me to have a bank account. Be careful who gets helped, who gets hurt if youre from zimbabwe and want to buy something in kurdistan, this works. Right it works large Financial Institutions may have been leapfrogged here. Can you believe an International Bank that does not take 2 . They charge you i told you the credit card reg in mexico, 42 . The disenfranchised will welcome Mark Zuckerberg as a savior. A great man. No statue for him. Speaking of money in general, stocks are set to open higher as the fed kicks off a twoday policy meeting and maybe lay the ground work for a rate cut meantime, the president reacts to draghi, news across the atlantic, tweeting this morning about mario draghi, Just Announced more stimulus could come, which immediately dropped the euro against the dollar making tune fairly easier for them to compete against the usa. They have been getting away with this for years, along with china and others although no real evidence today that draghis trying to manipulate his currency per se draghi is trying to say, you get your act together. I mean, geez, you got Deutsche Bank, what is Deutsche Bank . Stocks stop at zero there too. The government has to get involved santander is the biggest bank in europe other countries have done badly. It is true it debases the currency and i am surprised that the president doesnt go after you know i think the president is going to eventually go after german i think hell put they the bmw engine has to come in here, they got to tax that, hes going to go to the South Carolina plant, see what is really made there, he knows there are going to be hundreds of thousands of new cars, german cars coming from mexico. So you think we have the bandwidth to take on china, monitor mexico, send a thousand more troops to the middle east as iran is threatening to break this deal and launch tariffs on germany because of nato stuff . The tariffs on germany think, it makes me wonder why you would be positive at all about the market if it happens thats a significant break on growth got to be. That, if it happens, yes. You keep saying it is going to happen. I think hes worried, he wants nato he wants them to kick in for nato who thought that he would put 5 tariffs on mexico if they didnt stop the border . Who saw that just listening to you and saying, okay, if you say this is going to happen that would be look, i got to see, im leading him on this. I think im early. Okay. I was early in a lot of other stuff with this guy. True. Am i early calling the Nobel Peace Prize for zuckerberg completely. Still time. I do i do think that too early to buy zengia i think the germans will change their i was the ge ways he has not turned his guns on merkel why . I think is it because of the special friendship. Just turns the attention on twitter account, his twitter where is he still caught up on the fake news and the mueller hes got to move on hes boring the heck out of us remember when he was exciting. Prioritize would be nice. What is truly important to him, that might be key. Right now it is just a free for all. Would you go to musk and ask for his help musk . Elon musk twitter style that guy knew how to do twitter. The president was yesterday he double tweeted something by mistake. Then the f ar at the end, he doesnt spell check. He has to spell check and proofread. Who does his twitter he does, right that double hit he did yesterday, that was discouraging when we come back, emmy, grammy, oscar, tony award winner john legend. Fist, thou first, though, look at beyond meat opening at a record high. Crazy. Well talk about the bond rally and the tenyear threatening one handle today more squawk on the street from post nine in a minute. Pnc bank has technology to help make banking easier, like. A business borrowing solution to help get a little more space with a lot less mom. Or home insight, to search for a new house within your budget. Because, they really need their space. Pnc make today the day. Wanna take your xfi now you can with xfi advantage. Giving you enhanced performance and protection. When devices are connected to your homes wifi, theyre protected. Helping keep outsiders from getting inside. And if someone tries, well let you know. So you can stream, surf and game all you want, with confidence you can get coverage where you need it most. Thats xfi advantage. Make your xfi even better. Upgrade today. Call, click or visit a store. Shares of beyond meat set to open at a record high this morning. Now within striking distance of 200 up more than 660 from the ipo price which as we all know was 25 bucks on may 2nd. This has gotten out of control. Huge buyins if you short it, you cant borrow it. Last night, 6 00, they were buying stock up 15, up 20, thats a sign that the brokers cant deliver to the buyers. So they have to come in and just buy market and come in the next morning and you find out youre no longer short it, youre covered. I think a lot of people shorted this ahead of the june 20th tyson attack on beyond meat. Remember, tyson sold its beyond meat and june 20th at the analyst meeting, going to unveil something that they think could rival. But there is also talk that the rival will be a blend. They have chicken mcnuggets that are killer, apparently, Chicken Nuggets, excuse me they didnt understand how the market worked. Theyre being bought in. I remember being bought in on a bank i was short, and i was short it, like 11, 10. Then one night i saw some clown bought it at 18. I was the clown. I lost a fortune soon after seized back by the authorities. That wont happen with beyond meat beyond meat, while special, is not disspecial i do believe there are a lot of competitors that they have worked very hard to make so it is as tasty as others. Tyson will claim their is tasty. There will be a bakeoff. It does look, does feel look a burger. Has 11 plus billion dollar market value it is wrong it is wrong. It is wrong. Bigger than dominos today. Dominos is one of the great companies. This is a product of how wall street does know how to you know what it is . It is tilray tilray. We watch tilray, could short it, it was you remember the craziest at tilray i do. Down 250 points i did promise the results from the taste test. What do you have . Last week, bunch of 17yearold boys, at the house, six of them and other people, we cooked up regular burgers and beyond cheese, you can tell you can you can oh, yeah. You can see what it is a different color. You can tell it is different you have to do it blind. Nobody went nobody was going, oh, this is great i would say pretty much across the board everybody preferred a regular wow thats telling a lot of people hate cows now. And they think that cows are a major source of methane. Landfills and cows are the enemy of the environment and this is a way to get around it i told you i like the impossible, but impossible has gmos remember, from millennials, gmos stands for this will get me sick. A slurry of some kind, a lot of chemicals, like a lot of they hire an outfit like an iff and give it taste. The iff is would these taste like rice ca cakes without any additives . Little surprised, i thought it would be more leakike a burgr maybe it i was little no, i cooked them up. Didnt feel like a genos steak. Nice pen. Thank you like that . This is genos the peabased Chicken Nugget could be a home run. And i think that a youre laughing cryptocurrency block chain there is a block chain between when you take that beyond meat burger and you put it on the grill that is solidly block chain. Im looking forward to that peabased. You dont understand block chain. Block chain is a way to move a stock up so many if you look it up, it says move stock up. We got to cover beyond meat one way or another we cannot ignore it. Well get cramers mad dash, count down to the opening bell, another look at the premarket as were still in the fed waiting game today squawk on the street back in a moment of savings and service. Whoa. Travis in it made it. Its amazing. Oh is that traviss app . Its pretty cool, isnt it . Theres two of them. Theyre multiplying. No, guys, its me. See, im real. Im real he thinks hes real. Geico. Over 75 years of savings and service. I cowe can do theyour 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. Will transform not just the automobile, but mobility itself. An autonomousthinking vehicle protecting those inside and out. And its the mercedesbenz of today that will help us get there. The 2019 eclass, with innovations that will change the way we drive from this day forward. Visit your local mercedesbenz dealer for exceptional lease and financing offers. Mercedesbenz. The best or nothing. Welcome back to squawk on the street. Well get started with trading here in seven minutes on a rainy tuesday in new york city pinterest went public not that long ago. Are you a pinner . No. No one of our yes i do. I do i cover on clothes, tuscany, pintere pinterest, wade bush comes out and said, look, this is it, this is the great play. It is where the money is going to go. It is kind of a kinder gentler trustworthy social media platform ben silverman, young fellow. Very articulate young man. Hes got a platform where you can find out what you want, kind of crowd sourcing what you care about, and it is very high end, and fun. I do wish that they sent you fewer things they send me a lot of things. Why are you mentioning it this morning web bush recommended it it will go higher. This is all part of a move that is going to be ridiculous at a certain point, everything is being recommended. This is not this is one where it fell badly from this level, people thought that they, wow, look at that isnt that great we have a whole new thing going on here. People felt right here that they expected that the company would spend less but they feel it is time this is the time to be first mover. It is a goto market situation land and expand. Youre supposed to laugh those are things everybody says to get their stock up. Land and expand. Land and expand and go to Market Strategy. Go to Market Strategy and these are things that if you have you say block chain, david, you say land and expand. And say peabased Chicken Nuggets. That is so good so, anyway, yeah, it is up a lot but it will go higher. It is a social media platform that a lot of Companies Find is gentle they havent sold you out. I think it is the kind of a Procter Gamble kind of thing. Got it. Have you seen procter nelson peltz did good work there. David taylor has done a good job. And, david, watch for this for a lot of the companies that have gone public, nice things zoom doing very well chewy, chewy, chewy cocoa puffs, chewy is too high, but i like chewy. Hell keep talking and lkg. lta a break and then we will be back driverless cars. All ground personnel. Or trips to mars. 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. The opening bell in 90 seconds busy day as we talked about crypto and facebook. The fed decision comes tomorrow. The list of countries with negative yields at some part of the curve now, germany, japan, denmark,portugal, spain, ireland, switzerland. If youre anything other than a fiduciary that says you must keep your money many these countries, there is just it is easy to wire money by our bonds. This is when the treasury should be offloading bonds. Tremendous fed should be offloading bonds there is tremendous demand for heavens sake. The chinese arent selling much that i can tell. Though two year low yesterday. Holdings yes but theyre not dumping and wouldnt it be great if they dumped we need supply so bad. You just buy dollars, then buy treasuries, it has been going on forever. And the president should be a little smarter about, well, hes against the the president is a little sophisticated in what the fed could do i know some people say it might be tighter i am saying that there is tremendous demand for treasury tremendous and he should be sensitive to that the dollar is up 20 thats whats killing our earnings the dollar. A look at the opening bell and the s p 500. Cnbc real time exchange, big board, ibex corporation, industrial and Technology Conglomerate selling listing anniversary. Trup trupanion for cats and dogs. I did a pets index last night. And we spend so much money on pets were relatively uninsured it is a cash business. What a business to be in. Insurance. So expensive. It is not that nvidia had a lump on his leg and it was not cancerous we were celebrating. My guy needed surgery early on in his life some people go to the university of pennsylvania for surgery. The Health Care Coverage was so much better than our own, he wanted to sign up for it myself. Did you use teledoc. This is my dog, david faber. It covered 80 , no questions asked. Thats very good. How about the mri with the dog . Is it easy how does a dog stay steady for 20 minutes with that noise you know what is taking it on the chin western union, down 2 or so are we going to start seeing old line financials, Payment Companies . Western union is on the firing line for this i do believe that they will very quickly come out and say this is not ready, plenty of time,s you always need western union. Western union is very much in the cross hairs of what this plan is about. Remember, it is only white paper format and mr. Ericsson is a very good ceo. The white paper is so compelling, it reads like a really good senior thesis. Your point about the white paper is it is not in effect yet, not like this is happening next year. 2020, soon enough look, david marcus, did you hear david, this morning, he was so not zuckerberg they put him out looked good. He talked good he was persuasive got up early. Gentlemanly, got up early wasnt wearing a hoodie. Didnt show any wasnt reading wasnt canned it was very impressive and, by the way, how distance ready they from facebook they try to be, like, hey, there is this out theyre like that company instagram. Where is we have all been wondering where sistrum is this is somewhere so not next where zuckerberg is, and you can see Maxine Waters calling him an saying you better speak to david marcus, he works with this outfit loosely in line with us and theyre providing cash, a system that does not use the check cash iing rate it is such a brilliant plan. If it were if you thought it was cynical, david, how dare you . I didnt say it was cynical im very curious to see when it actually happens, what the impact is going to be. Dan shulman, the ceo of pay pal, said to me, over and over again, the you have a cell phone, you have a bank you have a cell phone, you have a bank there isnt anyone now they have it. In china, you got ali pay they know every transaction thats the in china, they know everything you have to use a burner. Thats true they do know everything. Shes all powerful and a great man. And were fools. And theyre tough. They hang theyre for the long haul. Enough with them in the long haul this is a bank. Chinese giants. How is huawei doing there, chief . Sparky uhoh, hes going with sparky. I didnt sunshine him thats when he takes huaweis side. We know when you trot out joker, were in big trouble. Joker is extreme. When i go chowder head, it is over thats nuclear. I never heard that from you not uttered toward me. I hope never to. Alibaba up 1. 5 , not that much more than the market s p up less than 1 . It is a proxy for the trade war, it is not it is up about 18 year to date the reason i mention it, maggie woo is taking over a number of other responsibilities there tell me. Joe sigh will remain the executive vice chairman. Shes going to also take over investments, essentially, strategic investments, at the company. That is something joe sigh has been doing they said this on their official wee chat account so she president xi . No, maggie woo. Im making a joke. You cant do that shes probably really how many people in the party are in that team . Top level . On alibaba, what is Party Members everywhere there. The listing in hong kong, how much theyre going to actually sell there, how diluted it conceivably would be. Is it going to be 2 billion or 20 billion are they going to buy back a commensurate amount of stock or be dilutive . Is there going to be fundability between buying in hong kong and selling in the us u. S. . Thats something to keep in mind with alibaba thats a huge story. It is enormous offering theyll be making on the hong kong the whole hong kong story say huge story can i say the market is too hot. I just want to say ahead of the fed meeting, it is too hot i like facebook. Up 10 yesterday. Up again the market is too hot. Got to go it a fed meeting people are buying as if there is no fed meetmeeting are you crazy . Typical pattern before a decision, i guess. I think that give it a shot wait to see what they do dont just buy in research. The times does have a story that says after looking at the curve and job growth, and inflation, maybe they do have to say admit tomorrow that december was maybe too much yeah. December was a mistake. El president e, i dont mean the guy from President Trump was right to criticize, i think, when he was in the back of that cab, talking with stephanopoulos, holy cow a lot of this is due to the trade flames that he subsequently lit, right . The economy didnt need it. I have Union Pacific on tonight. We had such bad weather, that it is really difficult to tell, but numbers are coming down. By the way, trucking numbers are coming down. Remember we jb hunt downgrade. Brutal. The input costs are going down there is a terrific initiative by uber, uber freight, which is providing this they predicted this would happen and making it happen so when you see truck rates go down, that is a sign of the economy really is slowing. What do you make of the fa account that the french tenyear yield has gone down. Sweden too today. Goes negative for the first time. Look, if the if draghi says, listen, were going to debase, debase, debase, who needs money . Whatever it takes. Always been malcolm x with that fellow. By any means necessary. By any means necessary. Jb hunt, lennar and kbh inventories are still elevated going into summer. Lets see lets see. You got the rates incredibly low. You see some movement. Im not sure if thats a good call or not. I do think, again, the market is way too hot, going into a meeting where at this time he can disappoint by just by saying, hey, listen, were doing fine praise himself maybe back pat himself likes the strong dollar it will make the chinese stuff that were paying 25 more for less expensive. Landfills, how much of what yesterday was really incredible, spark was all upset. What was upset . People that make fireworks. Thats national security. People who want, like, Little Things that they inscribe come on, they can do that in mexico they better come up with somebody i said on mad money last night, there are companies that were really urgent that we use china, they got to get out what are they doing . China is im not seeing how your brain worked there waste manage, landfill, all the stuff that fills them up to all the stuff that we import from china that we dont need. Right i can be your translator. Do you have an mri . Yeah. Im in there it aint pretty. Not pretty. Is that what you say it is royal it is im saying your point is we dont need all that stuff. Thats exactly right. We need it but we need ourselves to make it i thought that was the point. Yes, we should be making it and if it is really necessary for national security, what do you think that in 1947, we relied on the soviet union to make things . Hey, lets get some missile p t parts sparky has a question your kids. Not my kids talking about the phone. We would like as long as we have privacy on our phones, little will frost, i think we wish all the parts were from here. It is just hard because they make some things more there. Thats why i said that apple could be the cross hairs of the president , just to prove a point. He sacrificed broadcom in a nanosecond just he gouged broadcom like bingo. I know. Now it is on to the german automakers. As long as Dollar General and dollar tree found ways to bring stuff that ends in a landfill away from china, david, thats how do you do that vietnam is not ready theyre also not taking a recycling anymore in china thats a huge issue. Been that way for a while. Everybody has big recycling programs i dont know what is happening. People hate landfills, methane, right back to Waste Management again. Millennials hate landfills, millennials like spicy spicy taste. Thats an International Flavor landfills and millennials like spicy millennials hate everything with a stock symbol. Im just a dollar sign represented by a man. I know that what is that . Why are we so amazed that all i care about is stocks and my dogs. Used to run a hedge fund. Every so often i like to look at the industry itself, it is worth mentioning, joe, ijim, remember hybrids . Duben and sweet started this thing, sold it to jpmorgan years later. Theyre closing the equity funds there. All right easy come, easy go this used to be a very big player wrote a letter yesterday, june 17th, to their investors, which they say we decided to refocus our business exclusively around Credit Strategies including the credit fund, multistrategy credit vehicle managed by a couple of guys since 2013. They were so big. Yeah. It is more they say investors want, exactly. Did they do this before President Trump tweeted that he had a very good telephone conversation with president xi the basic thought seems to be that clients sort of want to be more focused, they dont want the broader exposure of into equities. Thats like why Goldman Sachs did its thing yesterday. David, we well known name around for a long time. Still doing credit, but the tactical part of it. Maybe shrinkage President Trump tweet is really capturing the excitement of people talking about g20 still extended meeting next week, respected teams will begin talks prior to our meeting joe biden has higher poll ratings. We didnt say that last part was just my own interpretation. Since the first were getting of any powell for the stocks this does trump. The journalist piece quotes a white house official saying there was a 50 50 chance of a meeting. Waiting on schedule, chinese have not conformed anything, including this. President is out there. What a loss of faith of the president if he isnt doing it this is it right here right now. The general thinking is if there were no meeting, the chances of a fourth round of tariffs was very high. Oh, yeah, definitely. A lot of companies starting to build that in. This is monumental, hes basically saying that there could be something going on, talks back on. We had lots of tweets from the president talking about really niceconversations with xi and were still in the midst of a trade war. So yeah, but theyre talking remember there was a huge belief that there may not even be a discussion yes remember, general xi is his good friend. There could be something happening here. Tenyear back to 206 now. Almost 207 got the trade thing in play, the fed thing inplay do we lose do we now have powell just saying hes monitoring and know more because of this possibility. How do you do anything before the g20 if youre powell. If youre powell . You have to monitor. Has to use the word concern and monitor. Dow up 340. Lets get to bob pisani. Two things moving the market, the president s tweet on meeting with president xi, also draghi too. A lot of people like to discount draghi look at what happened at 4 00 in the morning here were down, draghi comes out and starts talking very what would we say dovishly, bullish for the markets overall. We move up here. Here is the move up here, just the recent move up were less than 20 points from a new high on the s p 500. Look at the sectors that move. Today tends to be the trade related sectors. China stocks, mca ties, moving, we have metals and mining moving, semiconductors, trade related names. Lagging health care, a laggard all year, banks also of course on the low Interest Rates. Look at new highs. I keep waiting for new highs to break out. We dont see a lot of them yet the reason this is happening, small number, a small group of megacap stocks, the googles and amazons of the world have really been the forces powering the s p 500 to new highs you can have a lot of Companies Just below new highs, not quite making it there. Well see what happens everyone is obsessed with yont beyond meat. Were approaching close to a 11 billion market cap on beyond meat the question is where is it compared to Everything Else . It is on the lower end of the s p 500. Not in the s p 500 but it is just below 11 billion. Marathon oil is 11 billion. Comerica, one of the big super regional banks out there, 11 billion. This is twice as big as macys is, twice as big as nordstrom. This is a little silly in my estimation, but you can see the numbers here, well known companies now equal or dwarved on the size of that. Beyond meat went public at 25 that was on may 1st. Elsewhere, i think you should in the pay so much attention to beyond meat. Look at what the s p 500 is doing. And what is moving the s p 500 because thats what i care about. Thats what most people own. The s p 500. So were up 15 of the year. So on the 15 of the s p, what moved it forward what pushed this up this year . Look, microsoft is 9 of the gain in the s p 500. One company is 9 of the s p 500s 15 gain and my thanks, by the way, to david shrek, my friends over there for providing this information. Apple is another 5 of that 15 gain amazon is 5 facebook is 5 so four Companies Put this altogether, 8, 13, 6 24 of the gains of the s p 500 are four companies the other, 496 companies of the s p 500, well, theyre the other 76 . Why am i bringing this up . A small number of super cap stocks including, by the way, google, another 1 here, theyre the ones that really matter. Not beyond meat. Theyre the companies that are powering forward and the market is not going to go anywhere without these big tech names so thats why we watch these names and why theyre so important. Elsewhere, bank of america, merrill lynch, monthly survey of global fund managers, 230 around the world. This is widely watched as a contrarian indicator this is the most bearish they have been in a long time theyre into bonds, theyre into cash, theyre into utilities and theyre basically away from equities in the United States. Other than that, and also away from european equities the most crowded trade, long u. S. Treasuries and number two is Long Technology number three out there, distantly, long the dollar is a crowded trade. So what is the pain trade . The pain trade, the contrarian trade that would cause the most damage to all the people in this position, stay long stocks and stay short treasuries. Thats why a lot of people believe this is the most likely scenario well keep an eye on that. G guys, back to you. Thank you very much to the bond pits and watch the uturn in rates. Rick santelli at the cme in chicago. Good morning, rick. Absolutely, carl. Big uturn not only our fed, but mario draghi and the liquidity keeps playing louder and louder songs. Two day of bunds, around minus 32 basis points, unbelievable when you think about it, when you think about how many trillions of dollars of negative yields are washing in the globe and how banks and profits are almost next to impossible under those conditions it is such a vicious cycle dont understand why it continues. But you see the bund chart there. As carl was saying, lets look at the december 17 of twoyear note yields. On the lows around 181, thats the comp on a closing basis. I look at everything on a closing basis, which gives us this uturn. We move from 181 to 186, down to 184. Remember, needs to close under 183 to extend its cycle low yields not an intraday number if we look out at 5s and 10s, basically similar. Both have bounced to levels where theyre not going to or very close lets take 30year bonds, for example, 2. 53 the low cycle close. At the low, sitting right there, should it have taken that out october of 2016, 10s are 2. 07, trading right there now, down at 2. 01, 2. 02, getting close to 2 . Why do i stress the close . It is important as intraday is, your margins, what goes into the history books is the close finally, the dollar index, you can see where it is trading. It is roughly 3 quarters a cent away from april 25th high close at 98. 20 should we take that out . It extend backs to may of 17 and, of course, the president is not happy about the strength in the dollar or the weakness in the euro and finally euro finally after a wild ride today you see a twoday chart of the euro versus dollar, we want to pay close tension to 1 downtown 11 handle above 1. 12 back to you. Thank you very much Rick Santelli if you missed it a moment ago, the president s tweet, had a good phone conversation with president xi well have an extended meeting at the g20 in japan that was good for at least 150, maybe 200 points on the dow. Were back to 2926 dont go away. My experience with usaa has been excellent. They really appreciate the military family and it really shows. With all that usaa offers why go with anybody else . We know their rates are good, we know that theyre always going to take care of us. It was an instant savings and i should have changed a long time ago. It was funny because when we would call another insurance company, hey would say oh we cant beat usaa were the webber family. Were the tenneys were the hayles, and were usaa members for life. Get your usaa Auto Insurance quote today. Hard to find an asset class not in the green this morning. In fact, its the best 15 minutes for the dow and s p since early january. Were up 342, pretty good breath on the index back in a minute 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. Jim, whats on mad money tonight. How strong the economy is. Union pacific is on tonight great opportunity lance fritz ahead of the most important fed meeting because now he has to deal with it now has to wait. Things changing by the minute. So exciting. Mad money 6 00 p. M. Eastern time when we come back john legend from cannes in france. When a plan stops being a plan and gets set into motion. Todays merrill can help you get there with the people, tools, and personalized advice to help turn your ambitions into action. What would you like the power to do . Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Your daily dashboard from fidelity. A visual snapshot of your investments. Key portfolio events. All in one place. Because when its decision time. You need decision tech. Only from fidelity. Good Tuesday Morning welcome back to squawk on the street. New york stock exchange, what a morning. Futures were green on the open in the hopes of a fed cut now on the hopes of a trade deal as the president says he and xi will meet. We begin with taking tweets in stride. Stocks surging the president had a very good conversation with president xi thats not the only leader hes talking about, ripping into mario draghi as he clears the path for more stimulus. Facebook unveiling Cryptocurrency Libra, we have details. Emmy, grammy, oscar and tony award winner john legend is with us talking social media, his partnership with pampers and more i didnt know he won all of those. Thats going to be good we begin with the president s tweetstorm sending stocks surging this morning the president just writing, quote, had a very good telephone conversation with president xi of china we will be having an extended meeting next week at the g20 in japan. Our respective teams will begin talks prior to our meeting xi isnt the only leader President Trump is mentioning on twitter. Going after ecb chief mario draghi writing, quote, draghi announced more stimulus which could come, which immediately dropped the euro against the dollar making it unfairly easier for them to compete against the usa. They have been getting away with this for years along with china and others he also wrote European Markets rose on comments unfair to the u. S. Made today by mario d im going to call him mario d from now on. Look, its not every day you get the president tweeting like this about Central Bank Chiefs and currencies it sort of makes you wonder if the white house is going to use this as some sort of template to go after europe and others with tariffs for uncompetitive currency devaluations. I think it would be hard to do but dont put it past them we already know the Commerce Department is looking into this sort of thing about whether they can go harder than the Treasury Department has gone after currency devaluations. By all accounts, big mac index and valuation metrics, they are devalued but European Market at some point you could see tariffs on german automobiles, for example, would be a bad thing. This morning the market reacting the other way because of hope that, skt in fact, turmoil with china could be on the road to resolution thats why were up 1. 8 on the s p. The other important tweet for the market having taken place not even 30 minutes ago from the president when he said he has had a good conversation with xi of china and they will have a meeting at the g20. That represents progress. Were 11 days into the g20 and this is the first time were hearing theres actually a meeting on the agenda at g20. Theres nothing officially scheduled. Right but thats the clearest indication yet, the fact their teams are going to be talking. Its progress. Its better than just waking up to nationalistic headlines out of china going after the u. S. And angry tweets from President Trump about how china is not willing to make a deal. Just saying, we are looking for some confirmation from the other side this is actually going to happen. Keep that in mind. Takes two to tango. Certainly when it comes to this president. Policy makei kick off twoday meeting, rates come tomorrow at 2 00 exclusive results from cnbc fed survey steve, although all these surveys are quickly out of date. Carl, you know the best way to overperform, carl no. Yes, you do its to underpromise. Underpromise. This group, our panelist expect nothing, zero, zilch from stocks this year in fact, they have come in and predicted the end of the year s p below where we are today especially given this news and they dont expect much from next year, just 2952. What happens to the tenyear yield. Guess what were under that, too. Over that here 204 currently. We expect a little bit of a rise here i do want to point out from the january survey how much weve come down, 60 basis points out of the tenyear compared to where we were in january here is the economic forecast, not much expected from the economy. Coming down from 3 to 2. 2, thats the expectation for this year cpi unchanged 1. 9. Unemployment pretty much unchanged, 3. 7 . Here are the fed expectations for the meeting and rers of the year 67 say a rate cut this year thats a big change, by the way, from the last survey 22 say they will be on hold 11 say there will actually be a rate hike. Average cuts among everybody but taking a look at just this group here, those that say theres going to be a rate cut, they expect two cuts. Now, lets go on the calendar to a potential cut if they dont cut at this meeting. Now, maybe i can take since this news reported the question mark off the meeting here trump xi meet at g20. Maybe they do meet maybe x this out, no new china tariffs. Jobs for june would be critical. If thats weak, point the way to a cut. Gdp Second Quarter four days before the meeting over my Left Shoulder thats when the fed meets that would be the road to a cut, sarah, if, again, we have a 30 probability going into this meeting there is a cut tomorrow, sarah. Wonder if mario draghi going even easier this morning paves the way for the same. It certainly helps. It makes it difficult for the fed certainly to go higher they could stay on hold but certainly its part of what is in the calculus for the Federal Reserve. Especially, by the way, i think more important than whether or not draghi goes up or down is the european economy weaken. Thats something with great concern for Federal Reserve. Stay with us, if you would, steve. We want to broaden out the conversation, bring in Morgan Stanley ahead of markets, rashir good morning what are your expectations for the fed tomorrow i dont think the feds will cut tomorrow to be honest, i dont see a case for a rate cut thats a more important point. The fact is the real interest rate, fed fund is half a percent currently. Put that in the big picture, thats about as low as it has been in americas postwar history. So with a funds rate of half a percent, do we really want lower rates at this time when the economy, yes, a lot of sentiment surveys are weakened but the overall economy is still growing close to what is the new trend of around 2 so i dont see the case for a rate cut just now. Steve, whats the case for a rate cut well, i will tell you, youve been a journalist for a long time like i have you know the old rule if you can think of a story today, you ought to do it today and not wait for tomorrow . If the fed believes that it ought to eventually cut rates, cut rates in july, why wouldnt it do it today i do want to reflect what rucheiris saying from the survey ill send it to you and you can read it online a group of economists. This group of economists and fund managers, they have reversed their opinion of what they thought the fed would do. They thought the next one would be a hike. They have done so very reluctantly following the market, following the headlines. They are a lot like ruchir they do not see the case what they see is a slowdown in the economy, a federate still stimulated as far as they are concerned. What did ruchir quote, half percent rate they dont see the cut there but they still think what the feds will do. Ruchir, your firm put out a list of hard data that is concerning and reaffirms more bears than consensus view, rail traffic, retailer earnings, adm, mfp, pmis, durable, oil demand, the hard data is not missing entirely. Listen, im on the investing side, so of course very different views that we have here but my own sort of feeling is this we are now in the tenth year of this economic expansion. To me it just sounds surprising we want more and more stimulus thats the really big point i want to make here. Weve had a lot of stimulus in the cycle. In the tenth year we still want more stimulus, thats a real problem. I think what were overlooking is the negative effect that these real rates have had on productivity, on the economy thats the oped i wrote this weekend for the New York Times basically making the case there that just look at the productivity numbers, that they are following in line with lower Interest Rates weve seen a big increase in the number of zombie firms in this country. Its, in fact, 16 of listed companies to Zombie Companies compared to 2 a couple of decades ago. Weve seen much greater concentration of the Big Companies that facilitated by low Interest Rates, so i dont think we create enough attention to what is the downside of having these lower rates and constant stimulus and focus far too much on just rolling out the stimulus at the slightest sign of trouble im interested in what constitute a zombie company, what financial metrics youre using there. I assume its one that can stay in business because rates are so low, so its not actually going to be forced out of business but give me a little bit more there. Its about the fact if you look at ebit, a in terms of how much its earning, just enough to make its Interest Payments. Thats really what it is the bank of International Settlements defined this as three years what exactly is a zombie company, and its basically companies where the profitability is so low, just the Interest Payments they are able to make good on. By the way, guys, bloomberg headline here that xi has agreed to meet with the president this is quoting Chinese State media. We now have that from both sides purchase confirmation at session highs. Thats important for what you asked earlier, which is the idea that the economy was going to slow was baked in, i want to say, late last year, maybe even earlier than that. Everybody expected that. Its the trade and tariff that turned garden variety slowdown into something more worrisome. Now you have to ask yourself, put yourself in the shoes of a fed policymaker. What do you do if that threat goes away and you have buoyant stock market, financial conditions will be easing in that context if the forecasters are right in our panel here, that 2. 2 growth and you have a forecast, you say the potential is 1. 8, youre above potential growth if thats going to be the forecast, its very hard to make a case for easing in the case of that if its just garden variety slowdown. But, steve, if the fed really does pay very close attention to the markets, you have the bond market already pricing in a few cuts this year, you have the stock market 1 away from a record high, which you could argue is due partly to the fact theres an expectation for a fed cut. So what does the fed do with that kind of Market Information . I think it has to ease the market a away from very aggressive stance again. I go back to commentary in the fed survey where a lot of people think the market is well ahead of where the fed is and well ahead of where the data are. I think thats a really interest way to think about it. The fed has some ability to control this its interesting, in several interviews ive done, they did not take the opportunity to talk the market down. Well see how powell hams this tomorrow. Steve liesman, ruchir sharma, thank you very much. When we come back, digital play, facebook unveiling crypto plans. Well break down what is signaling to the street and its now rival bitcoin. Do not miss tentime grammy award winner john legend on building a brand, social media, plus his partnership with p g. We got that with the dow up 312. Dont go away. Driverless cars. All ground personnel. Somebody has a stinky booty 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. But were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. Facebook unveiling its highly anticipated Cryptocurrency Libra today set to launch in the first half of next year. The Company Creates a regulated subsidiary called colibra roll out Crypto Wallet based on the libra currency joined squawk to talk about libra and other cryptos like bitcoin. If you want to compare libra with traditional cryptocurrencies the first thing, typically cryptocurrencies are assets for exchanged. This is designed from the dproupd up to be a grade medium of exchange, a high form of digital money you can use for every day payments, crossborder payments, microtransactions and all different things. Joining us to discuss, Senior Analyst mark may and jeffrey senior tech analyst brent phil were hearing words like watershed. You say could be one of the most well organized efforts by a Global Consumer tech company yet. Its an ambitious effort for sure i absolutely agree with what david marcus said. Its different from what weve seen other cryptocurrencies. Its stable, reduce volatility a lot of fortune 500 Companies Part of the association that will be backing this it does feel much less speculative and much more trying to build a real life substitute asset here, currency, for remittance payments, for merch a ant transaction and the like it fits into facebooks wheelhouse they are playing the long game here its not about commerce on day one but about trying to build the community and really matching consumers with businesses in a different way than whats existed in the past and ultimately trying to close the loop with the ad business that facebook has built its entire enterprise on it is a watershed moment. Brent, your First Impressions . The stock has moved 6 in the last two days. I think its exciting. I guess were a little less excited near term. Obviously its going to take time to ramp clearly theres a way to help engagement in emerging markets transactionally payments is one of the Biggest Challenges for consumers online i would note today it is pretty seamless you can go on instagram and with two clicks of your thumb, you can effectively be connected to paypal and buy dozens of goods in a nanosecond. There are existing ways to trans a transact today well see how this plays out a lot of hype going into it and stocks into it were more excited about the core ad business we continue to see retailer stampeding to instagram as roi is off the charges relative to other means. Were positive on facebook, a little less excited about what this initiative is. To brents question, it does raise the question had you it moves the needle for engagement, revenues, investor growth, all the things investors care about for facebook stock. Sure. While there may be a couple of clicks, and its pretty easy to transact on facebook today, a lot of whats happening in the future are microtransactions these are small transactions paypal, visa, mastercard and other payment processors have minimum processing fees for these small transactions that make it really not very profitable for all the players involved. What kind of transactions transactions could be anything from buying a pair of sneakers to buying Digital Goods you show on messaging app that are Digital Goods. Everything from physical to Digital Goods. The problem is the Payment Processing fees for these microtransactions that are 40 and below tend to really eat into a meaningful amount of the profitability. So its a friction point i think libra by charging less than a penny for a transaction can really bring down transaction costs and really drive a lot of adoption, not just for consumers, but for all the other businesses involved in these transactions online. You work for a large Financial Institute that relies to a certain extent on sending money all over the globe and managing treasury for a lot of corporations im trying to understand here and i know a lot of investors are, even though its a white paper and wont be out for a while, the service, who gets hurt and who gets helped is it something that will leapfrog Financial Institutions and their abilities. I think the role of banks in this particular effort, and others that come behind it, not every company, amazon may or may not be a member of libra there may be other similar entities formed over the years the role of banks in these organizations is still a bit unclear. Certainly for libra reserve, holding hard assets, will need to be trading, theres going to be some role for banks im certain large global banks like citi, maybe its citi, maybe its not, will be part of this before the launch and will benefit as a result of that. There are going to be winners and losers and yet to be seen. Brent, given the companys history of Data Security and privacy, why wouldnt adoption be challenged, at least on the consumer side . Exactly this is why i think out of the gate its going to be really slow weve got all these issues facing them right now and effectively trying to introduce a new way to transact. Its going to take time. I think facebook is gaining the truth back in the consumers youre seeing in the data, the user count again, to your point, i completely agree if you look at the rule, it takes three times to get it right. Microsoft has proved this over the last 20 years. It could be from 2023, 2025 before this really starts to take off so again, i dont think investors should start to put this in their model and say this is going to drive x, y, z. I think this is going to be a very slow uptake so im a little less excited again, versus what some of these watershed comments that have been made about how big this is. Im excited. We like facebook but we like it for other reasons. Finally, mark, i wonder if we could put it all into perspective around the fact facebook is really under regulatory microscope. Ftc, antitrust, multibillion dollar fine. They are getting into a nonregulated, whole new business of creating cryptocurrency, possibly threatening International Systems and central banks. Are they thumbing their nose at the regulators. While it might be largely underregulated today, based on what they are saying, they assume that changes. They are under the assumption there will be a Regulatory Regime that they will have to operate under. Because of that, like present said, this will probably take a little while to build out. Thats okay. They are playing the long game what i like, not unlike amazon getting into the cloud business, they are early, they are paving the way, and they are not backing down from the regulatory hurdles that may exist in their own business or other businesses other companies that have had microsoft and others that have had these concerns in the past seemed to have retrenched what i like is facebook is addressing these concerns head on and continuing to innovate. I think this is actually showing how seriously they are taking privacy concerns in the market by setting up these separate organizations, bringing in partners, and having a bit of an arms length relationship with the data that may exist in these markets. So i like the fact they are taking it head on and they are continuing to innovate, not backing down. A big part of the conversation is would they be gunshy on defensive growth measures. We dont want to see that we dont want to see that. Brent, mark, thank you guys very much. As we head to break, how about an update of shares higher again this morning, pulling back a bit but approaching 200 per share. At that price, this company would have a market cap of over 12 billion making it the same size or larger than Companies Like viacom, tiffany, under armour just to name a view do squawk on the street will be right back pnc make today the day. The flexible class schedules d me tremendously. 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. German market way up due to draghi, very unfair. Again, he always trolls jay powell on day one or day two of a fed meeting. Also pointed out over the past two years, for example, dax down 3 , s p up 20 . Hes talking about today, hes got a point. I think what hes getting at, they are going toward easier stimulati stimulative. Something he wants for u. S. We have a strong stock market a tighter fit. The pressure on jay powell as if he wasnt watching enough. President is watching the dax. Hes watching cnbc today, i think thats obvious. Were happy to have him im sure hell be happy about our next segment, etf spotlight, ibb higher again, best since early january. Had the big deal with pfizer as well s p outperformed s p 500 over the last week ibb pace for its fourth day in the last five. Celgene, gilead, all the cash on the balance sheet, still hasnt done a big deal. Amgen one of the bigger holdings as well. When we return, hundreds of Companies Heading to the hill pleading against new tariffs were going to talk to a ceo set to testify before the ustr dont miss Award Winning singer songwriter john legend alive from cannes lion with the dow 313. Is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. Every day, invesco combines ideas with technology, data with inspiration, investors with solutions. Because the possibilities of life and investing are greater when we come together. Good morning, everyone im sue herera here is your cnbc update at this hour a powerful earthquake with a magnitude of 6. 8 struck off the coast of japan according to japans meteorological agency. That quake hit 353 miles northeast of the island of honchu issuing a tsunami up to 3. 3 high off the coast of the main island hong kongs leader carrie lam apologized for an extradition bill that set off massive protests she indicated it was unlikely to be revived she also said she will not step down. I personally have to shoulder much of the responsibility this has led to controversies and anxieties in society for this i offer my most sincere apology to all people of hong kong. Here at home former Trump Campaign manager Paul Manafort has been transferred to a correctional facility in new york but will remain in federal custody while he faces state fraud charges. He was expected to be held at Rikers Island but his lawyers raised concerns about his health and safety if he were to be held there. You are up to date thats the news update at this hour david, ill send it back downtown to you. Thank you, sue. President trump saying today that he had a good conversation with chinas president xi ahead of next weeks g20 meeting. But with still no trade deal at this point, wilbur ross said the president is perfectly happy to move forward with additional tariffs. This, of course, as hundreds of u. S. Companies are testifying in washington, d. C. , pleading against the imposition of new tariffs. Joining us founder and ceo of strider sports, set to testify thursday nice to have you your Company Makes bicycles. My understanding is virtually every bicycle made is now made in china is that correct . Thats right. We make bikes for kids, very little kids in particular, 2 to 5 years old. But yeah, pretty much the entire bike industry moved to china, and that was a couple decades ago. So we are somewhat at their mercy right now. There simply are no other places to source bicycles right now were looking at some of the video. I like balance bikes you see kids on them whats it going to mean for kids and parents when they go to buy them if tariffs go into effect well, theres there really isnt much choice but to increase price so you know, were going to see a drop in business for sure in the United States market fewer kids are going to get bicycles you know we see just the price increase on our product as having an effect but then theres that cumulative effect when budgets are hit across the board, when families are dealing with price increases on not just the bike for their child but for many of their products for the family, then the bike becomes less and less of a priority so we see that well be a pretty dramatic impact on the number of kids who get bicycles. We feel that, you know, a kid getting a bicycle is pretty important milestone and experience they need to have. Totally agree then they become obsessed with them and refuse to go inside because all they want to do is hang out with the bikes outside. Bri ryan, why do bikes have to be made in china . Well, they can be made other places, but the problem is theres no support infrastructure left anywhere else anymore it has all moved and it was decades ago. To try and Start Building anywhere else is going to take years of just Infrastructure Investment so the trouble is for a small business, if youre trying to make investment to build infrastructure elsewhere, but in the meantime youre having to survive on your one and only option for production in china and youre being hit with tariffs there, youre getting impacted financially on both front. So thats where the real difficulty comes in. Were going to suffer financially trying to move, and were going to suffer financially staying. So were just kind of stuck in the middle right now and so i mean, i support the idea that weve got to improve trade relationships and get our intellectual property protected. Its a real problem in many areas of the world we do business global. Its a major struggle for us dealing with knockoffs and conterfeits. At the same time you dont want to kill the business while trying to improve the situation for the business and so weve got to have some Better Solutions than what we currently have with these tariffs. If you were going to realign your supply chain, either to another company, china or the states, in what industry do you think youd be looking for capacity who would have to give up some capacity to make bikes for you boy, you know, thats a good question our bikes use all sorts of theres steel foundries, aluminum extruders, plastic injection molding. You name it, there are a lot of components that go into building a bicycle, even the packaging and everything lots of industries are going to have to get involved you know, china has been sup a major part of the world supply chain that there just isnt that much capacity elsewhere. Its going to take some time, like years, to build that back and if youre paying tariffs to survive in the meantime, you dont have the money to invest in the infrastructure in new locations either so thats where i think weve got to be smart about this i think we also have to pick our battles, too theres some commodity items that can be kind of sourced from anywhere right now you know, if youve got a widget and you can buy it from europe or china or mexico or the u. S. Or wherever right now and youre just choosing china because its a little bit cheaper right now, when a tariff goes in place, all those other choices seem more logical and more financially beneficial if you dont have another option, if there simply is no other option, you cant redirect a purchase order, than youre really stuck i think theres a difference between branded products, companies that are really establishing a brand, where they have invested years and years into the development of the product and exact processes that deliver quality time and again that people trust in versus commodity where its just a widget and, you know, im not looking for it to be a big part of my life looking for a cheap item that i can buy from anywhere. Theres a big difference there those commodity items can be moved to new factories in short order. But branded products, it takes a long time to get to that quality and consistency and quantity levels that brands are pumping out. Brands cant move quickly. I grew up with schwinn. They dont make them in the u. S. Anymore either no. No i mean, like its 90 some percent of the bikes are all in china. We have a radio flyer. Mr. Mcfarland, we do appreciate you taking time with us, thank you. You bet thank you. Dont take away the kids bikes. When we come back, winner, singer songwriter actor john legend about his pamper brand, building a social media empire and where hes investing right now. You dont want to miss that interview. It cinsomg up on squawk on the street. Dow back up, highs near 344. Lets talk. We have a pretty good relationship. Youve done a lot of good for the world. But i feel like you have the potential to do so much more. Are you working for all of us, or just a few of us . Can we build ai without bias . Ai that fights bias . Ai that helps us see the bias in ourselves . We need tech that helps people understand each other. That understands my business. Dear tech, dear tech, dear tech, dear tech, lets champion data rights as human rights. Lets use blockchain to help reduce poverty. Lets develop new solutions with the help of quantum technology. Lets show girls that stem isnt just a boys club. Lets make a difference in peoples lives. Lets do it all. Together. Lets expect more from technology. Lets put smart to work. That have made the rx crathe leading luxury suvogy of all time. Lease the 2019 rx 350 for 399 month for 36 months. Experience amazing at your lexus dealer. All eyes on the fed meeting, onsttest se ragiays it could be back to the highs. Catch that interview on cnbc. Com more squawk on the street coming up. Welcome back to squawk on the street. Dow up on word trump and xi meeting at g20. Julia sitting down with e. G. O. T. Winner john legend. Thanks for joining us in addition to a tentime grammy with winner, youre an entrepreneur. Yes. Tell us why youre here. Lve this is our rose weve been doing Cabernet Sauvignon and some sparkling, too, sparkling white and sparkling rose. What led you to launch a wine business youre so entrenched in the music business, entertainment business, why wine i love the wine business. I felt like wine and my music went well together my fans would tell me that so many fans would tell me they have a glass of wine and listen to my albums it felt like there was some chemistry between the two and i felt like i should take advantage of that. So i was looking for a partner to work with, and we found Raymond Vineyards based in napa valley, started working with them, developing the wines, lve. Its been so much fun to do it. One thing people dont realize about you, before you became a musician you worked at boston consulting. For three years. How did that experience influence your approach to entrepreneurship and working in these businesses. I think it helps you have Better Business acumen, ask the right questions, hire the right people, understand how to interact with other Business People you know, its not the traditional route to becoming a musician but i think it served me well. Did it serve your approach to the actual Music Industry itself so many pieces of it, recording, touring, streaming Music Services how did that influence your music career all in all, i think it raised the bar for me for the type of people i want to work with it was such a high quality of colleagues and peers i would work with there. It made me realize these are the kinds of people i want to surround myself with, even in the music business, which may not be known for that. Highquality, intelligent people people had are nimble, conscious of whats going on in the world. Conscious of new developments and the way the business is evolving. Speaking of the way the business is evolving, theres a huge rise of streaming music. Yes. Spotify, apple music. How does that influence you in the way youre creating music or marketing it or distributing it . Its changed everything when it comes to how people receive and listen to music. The good side is people are listening to more music than ever before. Of course, you know, the business is kind of stumbled and tried to figure how to monetize that were coming into our own where everybody figuring out this can be a lucrative area for us as musicians. We just have to make the most of it it does change the way you think about releases, singles verse albums it changes a lot of the kind of traditional thinking versus when were releasing cds. So more singles. Yeah. I think its more of a singledriven thing. Its more of just thinking about the experience of listening to things on streaming platforms versus listening to individual cds. You have to think about the way the consumer is going to receive the music more now. Now, you also have a big entertainment business and you just signed a new deal with abc studios. Yes. We have all these streamers here what made you decide to go with a traditional broadcast network . Well, we didnt sign with the network itself, we signed with abc studios which allows us to sell to all kinds of platforms of course disney owns it and they will have plenty of places to distribute the cob tent we create there but it can be distributed elsewhere as well. Also worth noting you have a movie with netflix. Yes. Whats it like working on all these new platforms including the new digital ones for us the content is the most important we care the most my company get lifted film company, started with two good friends and weve been creating content for years now and selling it to all kinds of platforms, hbo, netflix, to the networks for us the content is the most important thing. We focus on working with great writers, great directors, working with great actors and coming up with great content and finding the right home for that content and getting it out to the people. Now, i have to ask you about the advertising story here Procter Gamble is here, we just into to their chief operating office and they are excited to announce a Big Partnership with you what is your relationship with Procter Gamble be Going Forward . Were going to create branded content. Weve been doing a lot in the past already i worked with them on pampers. Thats been a lot of fun were going to announce a new collaboration with me and them for sk 2 as well were going to work with several other brands and develop some content together some of it will be more kind of social messages, some will be more product driven. It will be really cool. Speaking of social messages, one of the things youre talking about here is your nonprofit focused on formerly incarcerated people to get into entrepreneurship. Yes. What is that connection and why are you focused on entrepreneurship for that community. We started with an Organization Called free america, addressing this issue of mass incarceration, freeing away more people, changing the laws, changing the way we vote so that were more mindful of criminal justice reform. One of the issues we came across as we talked with a lot of formerly incarcerated people is its really hard to start up your own business, really hard to get a job, really hard to reintegrate back into the society, into the economy. A lot of entrepreneurs were being stifled by that. We wanted to give them the opportunity to see their businesses through, see their ideas through and give them support, so we partnered with bank of america and with new profit to give them advice, give them funding, give them access to our networks to help them make the most of their ideas and help them employ people, help them contribute to society and community. We were just talking before you came on air about social media. Talking about twitter, your wife Chrissy Teigen is here on a twitter event. Shes the mayor of twitter. You use twitter, particularly when it comes to your social justice issues you tweeted about the antiabortion laws that laws the gone into effect in several states including georgia why did you decide to weigh in on that issue and what do you hope to accomplish with that well, i care about freedom. And i think its important for women to have equality in our society. And the only way they can, among other things, is to have control over their bodies and when and with whom they decide to have a child. And if they dont have that basic freedom, its hard for women to be free in any other realm. So i care about that issue im proud of the fact that my wife and i have two wonderful kids, but it was a choice that we made together and i feel like every couple, every individual, every woman should be able to decide that for themselves and not have the state regulate their reproductive system. Its interesting, weve had a lot of different Entertainment Companies weigh in in alignment with you on this shall do you think thats going to force change, either in the legislature or in terms of the way the state thinks about these types of things . I hope it does. And atlanta is a thriving metropolis so many businesses are located there in that area so many Media Companies are creating content there and shooting the content there and i think a lot of them are putting pressure on the governor to say, you all need to reconsider where youre going, taking the state backwards, when you could be, you know, you know, theyve always claimed to be the new south and be kind of on the forefront of all of these great businesses and great technologies and all of these other things, but you cant move the state backwards in that area and expect it to be a state of the new south and modernity and progressiveness. Here in cannes, we see the logos of the social media giants everywhere in addition to twitter, you said you used facebook. How important are these different social platforms, for you to communicate with your fans and even get feedback from your fans . I dont individually use facebook, but use it with my team to spark discussions. There are certain platforms that are better for things than others so facebook, we use it to do a lot of our discussions around free america and have people engaged with each other and that so each of the platforms, i think, makes sense for different reasons. So were careful about where we choose to pose certain things, because theyll be more effective in certain platforms but youre an Instagram User yourself myself and twitter for sure thank you so much, john legend, multigrammy winner and many other entrepreneur titles as well. I really appreciate you joining us thanks for having me and guys, back over to you julia, thank you. Julia boorstin yeah, on the french riviera, always nice to be there. Session highs here in rainy new york lets get a look at whats coming up on squawk alley. Yeah, wish i were there innovation, regulation, privacy. Cnbc surveyed dozens of the Top Technology executives in corporate america. Got a read on what they really think is impornt l give you a flavor for that coming up on squawk alley. What do you look for when you trade . I want free access to research. Yep, td ameritrades got that. Free access to every platform. Yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. No hidden fees. No platform fees. No trade minimums. And yes, its all at one low price. Td ameritrade. 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. President trump very active on twitter this morning, going after ecb chief mario draghi for promising more stimulus. Tweeted about the german dax, saying its way up due to stimulus remarks from mario draghi very unfair to the United States also went after him for making the euro weaker against the dollar, saying its unfair for them to compete. Mario draghi is speaking at that ecb conference in portugal, responding to the president s tweets lets listen in. We have our mandate our mandate is price stability defined as a rate of inflation which is close or below 2 over the medium term. I just said a moment ago that we are ready to use all the instruments that are necessary to fulfill this mediciandate and we dont target the exchang rate thank you. We dont target the Exchange Rate was a nod to President Trump criticizing draghi for saying were going to do more stimulus and weakening the euro, that that was on purpose to weaken the euro to make it unfair to compete with the u. S so draghi defending himself. Is that stan fisher former Federal Reserve vice chairman its a powerhouse lineup, mark carney, bank of england governor nobody invited me to portugal. I would have followed it up and said, you know, does President Trump have the authority to put tariffs on if countries do devalue their currencies and the answer is, he does, but it would be majorly hypocritical, because the Federal Reserve has also embarked on a ton of stimulative policies with or without the intention of weakening the dollar right and obviously, trump is encouraging further stimulative policies, very upset about what he calls quantitative tightening the question is, how much does j. Powell actually change his stance and tone tomorrow are we going to not hear a patient fed and transitory inflation or hear something more like were flexible, watching Downside Risks and ready to react if needed. That would be a lot more draghiish and the president would be a lot more hay thppwi him. Squawk alley starts in a moment through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence