Skip to main content

tv   Squawk Box  CNBC  May 17, 2016 6:00am-9:01am EDT

6:00 am
where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernin and andrew ross sorkin. check out the u.s. expect futures. big day for the markets surprisingly up by 1% for the dow by the end of the day. the dow futures up by 10 points. s&p up by a point, nasdaq up by 7. check out what happened overnight in asia. you'll see that the nikkei was up 1% as well. similar gain for the hang peng. but the shanghai composite down by a quarter point. biggest gainer looks to be the ftse up by .75%. the dax in germany up by 0.25%.
6:01 am
crude prices ended the day by 1.50. wti is up against another 16 cents to 47. 48. brent is down by three cents to 48.95. earnings just out now from home depot. the dow component posted a profit of 1.44 a share was eight cents above expectations. revenue also beat analysts' forecasts. the company also raised its four-year guidance to $6.27 a share. we're going to dig through the report -- >> i'm digging. >> -- with an analyst at this point. the stock is looking really strong today. that should help the dow to some extent. since it is in the dow. and i believe that is an all-time high. all-time high for home depot. and you're talk about a market
6:02 am
cap of closing in on $200 billion. and you know, we have still a young guy, energetic dude. started in his lifetime i don't think he was in his 20s when he started either. to create how many thousands of jobs. create $200 billion worth of shareholder value. it's just an amazing value. >> and craig meniere the chairman and ceo. pleased with a strong expected growth. broad base across the store. also talks about how this was made possible in a quarter mark by week-to-week demand spikes. it was caused by weather. they were saying the weather playing into their favor. >> we're seeing a lot of weather builder recently. it keeps changing. variable, cold. you know why it's cold? because it's warm. a variable morning, so it's
6:03 am
cold. can i just say one thing yesterday -- how many -- 20 years. i think there's 261 work days a year. every show has a take-away. a small one. could be a word, could be a sentence. >> what was the take-away? >> overvalued. everybody over the weekend said overvalued. even though it's a year later, you have all of this backing. it wasn't overvalued a year ago. now, it's overvalued. everybody is overvalued. goldman, overvalued. but here's -- what was significant about yesterday? >> well, in my view, apple up three points. the apple on the dow a year ago, idiots. at the high, $750 billion mark -- >> it didn't like that? >> well it should have. here's my only point, andrew. the dollar is no longer say headwind like it was. oil is no longer at 50. and finally, we've got the call
6:04 am
on apple and maybe that bottom -- >> you're calling that a bottom? >> i'm not calling that a bottom. yesterday, everybody is saying it's overvalued. they're trying to challenge the old highs. no one thought we were going up 200. we talked about it here, remember, with cramer. >> two this morning, with alison, they agree with you. we'll hear from them, they're more optimistic. >> more harbingers, little ho harbingers, maybe we find some time here. weird, though. utilities up 13%. anyway. >> if that's a forward looking indicator? >> backward maybe. we'll see. but obviously, 1.7 on the ten-year, it was 2.2 a year ago. you can believe the ten-year? i can't believe it either. m what are you thinking about, the comic we got on the show later?
6:05 am
>> "between two ferns." >> it's not the guy himself. >> not the -- >> it's the varietcreator. the creator, that guy. >> did you know him? >> no. >> this guy we're about to talk about is on the other side. we're doing whale watching. it some of the world ace biggest investors have unveiled the biggest regulatory filings. and george soros is cutting his uk stock holings about 37%. warning of a risk of another financial crisis for china's economy will have a hard landing. soros' firm disclosing a 2.1 million put option. he's in camp or in league with a whole number of people who have this field. >> he can still get new highs. >> we should also say the fund
6:06 am
also unwind exposures to commodities in dow chemical, penn virginia, kinder morgan and baker hughes. but soros, here's where he's bullish, 19 million share stake in barrick gold. a gold option. i was looking at you when i said some people -- >> but, the -- >> they probably talk to each other. >> they still talk to each other. we should say this is the first return to gold in three years. he once called the metal the ultimate bubble. in contrast to soros, john paulson a little bullish. slashing its investment in the gold trust by 17.4% to 4.8 million shares. this is the third time that paulson has reduced his stake in a year. maybe next time he walks past the set on the outside --
6:07 am
>> there's a huge s&p put that didn't work. your buddy, remember the puts he sold on the s&p and took in billions of dollars and the market never went below what -- but soros, a couple years ago. things go really fast. and i was thinking about it was like ten years ago. so it could have been -- i remember things like as you get older, you can remember your childhood, but you can't remember what happened yesterday. >> i'm with you. >> are you really? >> i have to tell you. >> that could be something else, you're going all over the place. >> yeah. >> huh? you haven't copped to it. >> i haven't. are we going to do this right now? >> i don't know, your ticker is safe. you cop to it -- you decide when to cop to it. >> yeah, like i get to decide
6:08 am
anything. >> i didn't tell anyone before, did i? no, thank you. >> surprise. >> other -- other -- >> don't get nervous about this. >> i'm nervous. >> you're always nervous. >> i live in fear. >> i'm just saying, my god, i'm pregnant, there you go. >> yea. >> are we going to do this today? >> apparently. >> it's just us. just us. >> i didn't know we're doing this. >> it's just us. >> enjoy another secret. >> it's wonderful. so happy. >> thank you. >> i love children. >> thank you. >> we have known, we just haven't shared it. because she hasn't shared it. it's a great thing, really is. >> it is. >> that may explain my -- >> well, you look -- >> you look up in the
6:09 am
dictionary, it's becky. >> thank you, guys. other well-known investors disclosing bets on individual names on the individual names in the latest. greenlighting capital adding in apple, yahoo, yelp and general motors. carl icahn, okay, you know, he's got to take care of himself, i i understand that, got to do what's best for him, selling outside of some stakes in the first quarter. just the way he used to talk about aapple and be able to just jettison the whole position -- >> he's said nice things about apple management. >> all right. the investor getting out of gannett, tegna, meant are graphics and hologic. also confirming what we knew about his position in apple. he sold his entire $4.8 billion
6:10 am
holding in the tech, and how much of a value it was, passing the bag off to the public. the billionaire added shares of xerox and aig. it is notable, he didn't buy into any new companies in the quarter. >> what does that mean, he's worried about the quarter? or he's holding out for the next big stake. also we should tell you that pershing square uping its stake in the whole foods brand. and bill ackman increased its shares in valeant and mondelez. and cutting his its stake. and i don't know if that's because of what he was doing. >> i mean, you had to -- i mean -- in it's obvious for anyone who could see beyond the
6:11 am
desk. >> i had people asking me -- >> she's putting food away. >> like jif fy pop. >> that's not exactly how it happened. >> we don't need details on how it happened. we have an idea. we have an idea. it was the first time in 15 years? >> oh, oh. >> yeah, it is. >> i'll prefer her to not you. >> it's okay. >> check on the markets this morning. home depot. up 32 now. it was up more. and then it was up when we first started, 11 or 12. now up 32 points. >> home depot.
6:12 am
>> that's right. home depot. a ten-year, 1.76. take a look at the dollar. the euro down to 1.13. against the yen, the yen has been down, 1.06. that doesn't look like brexit to me. but who nose. the gold treading water, had a great beginning to the year, that's for sure. up for one of the best performing asset classes for the year. the question now, is it headed back up to 1500, 1600? >> stocks kicking off the week strongly as joe mentioned with the broader markets each finishing about 1% higher yesterday. economic data changed this week's market course. joining us is alison dean she's a consultant at dean advisory. and karen kindrow.
6:13 am
i think you're both more optimistic. karen, you say all. black swans we've been watching could be surprises? >> that's right. the sentiment is pretty bearish. i think we're coming down to where the positioning is shaking it out. i'm not saying i'm predicting that but i'm saying if i had to be surprised or the market had to be surprised it's more likely to the upside than the downside. >> meaning oil price either stabilize and continue to grow. brexit doesn't happen? >> that's right. oil production as we know, through most of this year has been operating sort of at max capacity for many producers. not all. the not surprising how disruptions might create disruptions on prices. you also have the option, make brexit doesn't come to pass. maybe the british don't vote to
6:14 am
leave the referendum in june. and i think we know where the elections are going. a lot of the risk events -- >> we do know where the elections are going? >> i think we have some idea who the candidates are going to be but not where it's going to turn out. i think in the end, what we have say lot of certainty around what the downside could be. but less certainty on the upside. i think people also aren't looking at inflation. >> you're convinced that a brexit would cause a selloff? >> i am of the view. convince said hard because we're on a low conviction. i'm of the view that a brexit is pretty negative. it's pretty negative for britain. i think it's necessagatives bec they're all in the same boat. >> it seems to be kind of -- you know, they're trying to work through what is kind of an unwieldily economic system.
6:15 am
>> it is unwieldily. the british don't like to feel guilt. >> i'm sure they don't. i'm sure they don't. i just wonder -- i don't know, i just wonder whether in the long run you might even be able to -- i don't know, i i'm not a big eu -- >> what you're getting at the whole fabric of institutions is fraying at the seams here and there. many. other once related to trade have payments and fiscal union. >> they've either got to create a real union or give up on it. >> yeah, they've got to move forward. >> with the fiscal. because now, it's like, you know, like tape here, wire holding it together over here. rickety. >> it's rickety and fragile. they only do that after crisis. europeans move forward on crisis. >> maybe determining the next
6:16 am
step. >> alison, why do you look at things more optimistically than other people have been? >> i just think the second half of the year, earnings comparisons, going to be easier. what drives the market higher, it's positive earnings growth. we've had a challenging year for earnings comparisons because of weak energy prices because of the strong dollar. as those two reverse themselves i think you start seeing better comparisons. on top of it, we're starting to see more sustained and continuing improvement on the wage front. i think that will ultimately drive and increase spending. it's been a long time in coming and i think because we had judge a bad crisis years ago, that consumers need to be convinced it's sustainable. >> although savings rate has risen substantially, a lot of economists think that will continue to rise.
6:17 am
w why do you think consumers continue to spend? >> because i think you'll see people spending a little bit and continue to save. i don't think we're getting back to the pre-2008 type of spending on borrowed money. but i think you'll see people feeling more confident about the outlook. >> if that happens, it raises the question of whether the fed steps in and raises rates again. and that brings us back to this entire conundrum of what to do. is this market fairly valued at these levels, undervalued? >> the fed does it gradually which is my belief. i don't think they'll do anything in june. it's too soon. the recent round of economic data coming out was too mixed. but i do think the fed will start raising it but gradually. if they do it gradually, i don't think that creates too much of a multiple compression which is why i don't think we'll see the market expand. >> alison and karin, thank you
6:18 am
for being here today. we'll talk home depot, quarter results beating estimates. we'll do that with analysts next. a quick programming note, later this morning, we're joined by senator rob portman. he has been mentioned as a possible v.p. candidate for the donald. joining us at 7:30 a.m. eastern time. "squawk box" flurns just a moment. returns in just a moment.
6:19 am
6:20 am
6:21 am
♪ home depot reporting quarterly results just moments ago, beating on top and bottom line. trading on an all-time high. to blake down the numbers you're seeing equity research analyst at oppenheimer and company. when you get to the senior level, it's hey, i wear a tie. i get up in the morning. i look, if i see one i like, maybe i'll put one on. >> he has a jacket. >> he has a jacket. >> most important, it's a new shirt. >> it's a new shirt. >> you know what, mine doesn't necessarily wear a tie because he can. that's the point there, right? >> i always say it restricts the
6:22 am
blood flow to my head. >> so, you look at why people invest in a stock. for a while, if you had foreign exposure, it was great. suddenly, revenue growth with the strong dollar got tough. home depot almost -- you check off things you want in this current environment. that's the stock. what was the regular gain, 9%, nobody does 9%. >> that's exactly right. when i talk to our clients, that's what people are saying it's a well-run liquid play in the united states. >> on the united states. in housing, rebound, consumer, and whether there's a shortage of housing working off the housing bubble. i mean, it's got a lot of wind at its back and raising guidance, getting numbers and creating a new my. >> that's exactly right. >> are we going to hear the same thing from lowe's? >> it's going to be similar. lowe's reports tomorrow morning. we'll see a desentence decent
6:23 am
but not as well run. >> because. >> it's the not as well run. home depot commented about volatile weather. we'll see what lowe's says. but usually, home depot is better at capitalizing that. they merchandise their stores better. they move product around better. that may suggest there's a bigger spread between home depot and lowe's quarter. >> what's the difference between home depot, it's a retailer that you walk in and buy things but then macy's and kohl's and nordstroms. >> it's what they sell. >> it's same the same consumer. a brick and mortar place where you walk in and put your credit card and buy things. it's totally different than what we saw at macy's. we talked about this, there's no new fashion. >> there's plenty of new apparel. >> yes, it's new stuff but people want this stuff.
6:24 am
>> what stuff? shovels, drills? >> yes. >> in my mind there are pressures on the consumer, we talked about this. i think when that happens the consumer is more selective in where they spend. in one area where they're spending it's been the case for a while is home improvement. >> he led in the home supply tough and now there's a new guy after that. but there was international expansion but we look at it as purely domestic, don't we? >> that's right. home depot enjoys a big presence in canada and mexico. there's always a chance that they could open in another area. that's a ways off. this is very much a domestic housing play. >> can it be a $250 billion company instead of $170 billion it can go up another 50%? is there room to open superstores all across the united states still? are we seeing more, it's getting to the point where it's going to
6:25 am
be harder and harder to generate this kind of revenue growth? >> well, when i think about that i would say the answer is probably yes over time. but it's more a function of getting better and better productivity out of existing stores. when home depot does their conference call, i'm sure they'll talk about this, the big opportunity is the pro customers. they've served pro customers probably not as well as they serve individual customers. so i think about the productivity. relatively speaking, yes. >> amazon is in everything now. even going after the markets that p and g. >> weight of the product? >> it doesn't ship well, generally speaking. you need service. most people, if i'm going to home depot, i need people to tell me what to buy. >> what to buy and where to find
6:26 am
it. >> there's an immediacy, too. >> working in the yard on saturday or something broken in the house. >> you don't think five years from now, amazon isn't able to get it to you two hours later? that's the real shift takes place in retail. you'll be able to talk to it and say, i'm home, such and such broke. three hours later, this thing will winds up on your door step. >> that's what i'm saying, five, ten years, i worry most about it i joke with a couple younger guys who work with me, a lot younger than me. they buy everything online. >> it's a different -- i'm surprised how much i've shifted. i don't embrace change but i can't imagine -- >> dominos, am i going to order that, eight minutes later and a drone is going to bring me a pizza. >> you might want to belong to dominos. >> but amazon is compagoing to
6:27 am
deliver the meat eater's pizza to me. >> why does lowe's report the day after? why the day after? >> do you want to separate that for me? >> just from an optics perspective? >> i don't know the reason for that. it's been that way for a long time. these companies tend to report in the same time. >> it used to be retail, i covered for a long time, companies overlap and they actually did switch, but that's rare. >> all right, nice to see you, sir. >> we're out of time. >> i'll wear a tie next time. >> because you can. no one is going to say anything to him. >> if we run out of time do we say how are you, mr. sorkin? >> you got to wear a tie. when we come back -- when we
6:28 am
come back, rethinking the art of a deal. the group wants to improve the deal. the lead negotiator for the fbi. he will join us next. let's take a look at yesterday's s&p 500 winners and losers. ♪ my experience with usaa is awesome. homeowners insurance life insurance automobile insurance i spent 20 years active duty they still refer to me as "gunnery sergeant" when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and i'm a usaa member for life. usaa. we know what it means to serve. get an insurance quote and see why 92% of our members
6:29 am
plan to stay for life.
6:30 am
6:31 am
t-mobile is going big for small business. you'll never get charged data overages, ever. get your own 24 / 7 dedicated business account team. and with double the lte coverage in the last year you can get more done in more places. right now get 2 lines with 10 gigs each for just a $100 bucks. and for a limited time get a hot spot free, yeah free. switch your business to t-mobile@work today. ♪
6:32 am
welcome back. welcome back, welcome back. watching. that's 25 years old already. >> from the english dictionary. >> yeah. >> we all do it now, right? it's a totally different one. there's a couple different stocks to watch be activist corvex discloses a stake in pandora. it's now the largest shareholder of pandora saying its core business is profitable. but the shares are down 25% this year. lending club says it has received a grand jury subpoena from the justice department. a big piece in the "journal" on the front page.
6:33 am
the online ceo was ousted after an internal probe showed that the company falsified documents when selling a package of loans. on an s.e.c. saying a large number not doing business with the company at this point. time for the "executive edge," we're going to talk about why it's time to be emotional. chris voss is here with a back called "never split the difference negotiating as if your life depended on it." chris, whether it's a conversation with your spouse or whatever -- >> especially with your spouse. >> well, no, i'm suggesting that this conversation is relevant to lots of different people.
6:34 am
that's all i was trying to -- in all sorts of -- >> that's what i just heard. >> chris, though -- >> and we have to negotiate. and she's the mediator. here's the question, i want to go straight to specifics of how to do it. one of the things that you say in the book which i found fascinating is you actually want to get the other person to say no. you want them to answer no before you get them to yes. explain what that's about. >> yes, it scares people, they become nervous and distracted. and they're not listening to us. >> the whole goal of negotiation is to get them to say yes. sflt whole goal is to get them to say that's right. >> when you say no i don't understand. >> do you want to be a failure? >> no. >> no. >> see. you immediately focused on what i was going to say next. when i did that, your mind cleared. you felt relaxed.
6:35 am
you completely focused on that. >> every no iss an opportunity o overcome -- >> nos are something that you get around in the says business. it's getting the no that moves you forward. >> you're heading to a yes in other questions so you start with a no? >> you want an agreement. agreement is not necessarily through yes. because again, we're so used to being trapped by yes, so many calls on the phone says you want to make money? >> no. you're a scram artist. >> you say no, and try it. >> what is it about getting emotional during the negotiation? >> you don't want to cry during the negotiation? >> yeah. >> you can cry during the negotiation? >> you're supposed to have a passionate purpose as a ceo. what's the difference between passionate and emotion? >> so you'd like to see a ceo crying? i don't understand what you're
6:36 am
getting at. >> what's your passion or purpose? what drives you that's not emotion, that's passion. >> there are three things on top of mind that we need to keep in mind during negotiation, what are they? >> listen between the lines. they're not going to tell you directly but indirectly. let out no a little bit at a time. wherever you say no, let it out a little at a time. try to give you the option to come back to you. no is a dynamic you that got to master before you can master yes. >> reading between the lines. oftentimes, people take away what they want to take away. which is they hear something that they think sounds right to them. they don't hear the other side of it. >> that's why confirm that the other person says that's right. >> let's role play this. let's do this with someone asking for a raise. how does that work? if you want to go to your boss. >> to guarantee projects that are strategic to the company. >> how do i help you? >> as soon as i ask you, the
6:37 am
light bulb goes on in your head as i want to guarantee your future. it gives me visibility with the top echelons with the company. it's the same thing as a hostage negotiation, you want to make sure you come out of this alive. because now we've focused on the future. we collaborated on the future where we worked together and prosper. >> that's important to make sure both sides get out of this? >> where's is this going. >> care i ask about gender. men and women negotiate differently? >> i've got to tell you something, women mbas pick this up faster than the men do. there are more stories in the book by phenomenal successes by women negotiators than men? >> why? >> they are a little more wild to open up the conversation abea little less folcused. never be sure what you want if you want to take something better.
6:38 am
women tend to be open to more broader possibilities and as, it's got to be a collaborative process. they want to collaborate a little more quickly. >> when you have failed to get to that's right, not yes, but that's right. what do you think has been the great failure? >> well, then i haven't gotten enough feedback from you. because it's okay to get things wrong. it's actually an intentional skill. sometimes, i'll say something to you that i know i've repeated it wrong because you're going to give me more information. >> one last question, what happens if you think the other side is otherwise going to be obstinate. mean they go don't really want to negotiate with you? >> you don't want to make them a deal. part of this is gauging whether or not you want this person as a partner. because the sooner you cut off negotiations with someone you shouldn't be dealing with you have a chance to move on to a more profitable deal. >> let's say you think you have an impossible boss. i have a wonderful boss. >> thank you. >> let's say you have an
6:39 am
impossible boss. but an obstinate impossible partner sometimes, how do you deal with that? >> well, keep them talking. >> i do that every day. >> you got to be willing to repeat things from their perspective, though. the real insight is don't about afraid to say things just because they think they're true. >> don't be afraid to say things -- >> chris, thank you for coming in. >> thank you for having me. >> a hostage negotiator you can't just say i'm finished. if you don't like it, just go negotiate with someone else. you don't have that choice with hostage negotiation, you don't have that choice, do you? >> no, but you can produce it farther. >> if a bazaar in morocco --
6:40 am
>> there's a great monty python skit, if you give them a price, they'll haggle because they want to. voters in kentucky and oregon head to the polls. john harwood has the latest from the campaign trail. that's all ahead right here on "squawk box." the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t.
6:41 am
6:42 am
6:43 am
♪ welcome back, everybody. right now it's time for the squawk planner. the april consumer index at 8:30 a.m. eastern time. epi has been expected to tick up slightly. and april earnings forecast after a rebound in march. 9:15, april production. john williams, dallas fed president ron lock hart and rob kaplan are all speak together. tjx, parent of t.j. maxx and homegoods reporting today. and john harwood joins us with a look at today's votes and
6:44 am
what it could mean for bernie sanders and hillary clinton. i finally got a pretty good idea of the way the democratic process works, john. i don't know, you know, it is funny that now we're talking about, you know, which convention is going to be more fun to watch. and more, you know, more conflict. but the remaining democratic contests are all you win proportion. so it doesn't matter how many states bernie sanders wins, she only needs 100-plus delegates. he would win all the states but she's still the nominees. which is weird for bernie's supporters, it looked rigged but it really isn't. just the way it works. >> he's going to do very well. we don't know if he's going to win california, we don't know if he's going to win kentucky today. that's a state that hillary
6:45 am
clinton spent some time. the fact that he's in kentucky it's an indication she's in the game. and she's trying to prevent a sinking boat. let's look at the national numbers. hillary clinton with a 14-point advantage over bernie sanders. 54% to 40 pus in the nbc survey monkey poll. but the really numbers are the general election numbers with hillary clinton with donald trump. hillary clinton 48%, donald trump at 45%. that's protelling the desire to get this over for democrats to get this over with. there's increasing pressure on bernie sanders to tone down his criticism to get out of the race. you've seen sanders adjust to that by talking about the importance of preventing donald trump from being elected. and i think that's sort of draining the interests among democrats in the primary race. it's not altogether gone, but it's a lot of the thrill has
6:46 am
gone out of that race now. >> that crazy general election numbers are just meaningless, i think, john. i know a lot of people like to say things like donald trump is not the nominee. i'm telling, the country is not going to elect a socialist. i don't care if it's 54/30. it would not happen, right? it would not happen. >> i'm not sure what your question is -- would they elect bernie -- >> i throw those numbers out. there's no way if bernie sanders runs for president. it reminds me like eugene mccarthy or john anderson. sort an idyllic viewpoint that young people have. is this our savior. in reality, it would never happen that the country would elect a socialist. >> i don't know what happens, i don't have any general election numbers on bernie sanders. >> the ones that he uses to
6:47 am
argue he would be a better nominee than hillary clinton. that's -- i don't put a lot of stock in those numbers. >> i don't need to be told she's a better nominee than bernie sanders. i don't care about any of those stupid -- >> i'm inclined to agree with you. some are some people in politics who don't agree. >> and they should take a vacation in venezuela and try to get health care or something. and then there's the veep thing which i'm just fascinated by on the trump side of things. rubio said absolutely not. kasich, there's no way kasich would say yes to that. otherwise, in the general election, people would think that his lips were moving and that's how you can tell he's lying with what he's said about trump. i don't see how those guys can be on the short list, rubio or kasich. are they really? >> i would not expect either one of those to end up running with donald trump. >> who's your pick if you had to -- >> for trump?
6:48 am
>> yeah, for trump. 2 to 1 odds or 1 to 2 odds for veep. who do you think? >> my strongest odds are with rick scott, the governor of florida. >> no kidding. >> he's somebody from the business world like donald trump. and he does have some governmental experience. >> well, he's got two terms. >> has trump has said, somebody to help pass his program. maybe somebody who has been in the congress. rick scott has not been in the congress. >> although he did say governor, too. >> liberals hate -- >> we talked to trump he said either somebody in congress or a governor he acknowledged, too. >> liberals hate him -- they hate him more than -- he may be at least perceived by the liberal media as being one of the most unpopular governors in the country. >> he's got the business covered. >> rick scott has sort of a controversial history. >> with his company.
6:49 am
>> with his company. >> he did get elected in florida twice. >> he did. all right. harwood. give me one more veep. >> for donald trump? >> yeah. >> jeff sessions, senator from alabama. >> yeah. >> interesting. okay, john. thank you. beale see you around. >> have a good one. >> i am not betting on that. >> either one? who's your guy? >> portman? >> i'm just saying. we've got to go. coming up crude trading at six-month highs and it's giving oil service a boost. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪
6:50 am
6:51 am
6:52 am
mountains, and conquered highways, and now much of that same advanced technology is found in the new audi a4. with one notable difference... the all-new audi a4, with available traffic jam assist.
6:53 am
welcome back to "squawk box." the price of oil up close to 20%. what's behind the surge and how long will it last? the director of the energy team at nasdaq omx. good morning to you. >> good morning. thank you for having me. >> goldman sachs was bearish. >> i think it will be choppy but will trend higher. >> how much higher? >> maybe $5 or so, not that much. >> so if you're playing this, not really much of a play to be had. >> i don't think so. i think too much of what's driven oil prices higher have been the supply outages and too many of them are temporary so
6:54 am
that supply will come back to market and then coupled with the situation in iran ramping up production, saudi arabia is not looking to cut back, i just don't see how oil prices could trend that much higher between now and the end of the year. >> that's the end of the year. play it out further, maybe 18 months or two years. >> in the medium term i'm more bullish and longer more bearish because of the nature of u.s. shale is very fast cycle, and it doesn't take that long to get that supply to market. in the medium term, i said i'm bullish because there have been so many cutbacks in investment in the u.s., so many layoffs, that i think it may take longer than people are expecting to get u.s. shale back online. in the long term i don't see the days of $100 oil back again. >> what do you think the real implications will be? >> i think saudi arabia is flexing their muscle saying not only do we have the biggest reserves but we are the lowest
6:55 am
cost producer, so we are going to try to monetize oil as much as possible and what's significant is not only did they change their oil minister but they completely rebranded that post so it's not just the oil ministry, it's the oil, minimers and resources ministry. i think they're going to try to monetize as much of their oil assets now which means producing more now because they don't really see the future in oil. >> do you think this is the right strategy? if you were them, if you were in charge of the country and your oil reserves? >> i think it makes sense, i do. >> part of me thinks it makes no sense, this idea of bringing it all forward seems crazy. >> they're still making money on every barrel they produce right now. they are the lowest cost producer in the world, $5 to $10 is their production cost. >> you think they're still in it to crush other producers and n maintain market share? >> i think that's a big part of it and the war with iran, the cold war with iran, if you will,
6:56 am
that's also a big part of it. it's not just about u.s. shale producers, it's about saudi arabia saying we don't want to carry the onus of cutting back production and allow other people to take market share. >> okay. tamar, thank you. >> thanks for having me. >> a method to the madness of bringing iran back into the global community. it almost -- i look at it that way that it sets up, you know, a viable competitor to saudi arabia which keeps them pumping, keeps oil low. maybe the president knew that during this iran deal. i can almost back it based on that and not all the other stuff. i wonder if that guy, if ben rhodes, thought of all of this. did he say that in this piece? >> he didn't say it in the piece, no. >> senator rob portman has been mentioned as a possible veep, will join us to talk trade, the economy, and his senate race in the buckeye state, ohio, for people who don't know the midwest even exists.
6:57 am
they may want the latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business.
6:58 am
6:59 am
shoshow me more like this.e. show me "previously watched." what's recommended for me. x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity.
7:00 am
stocks around world in rally mode. a rebound in apple and crude closing in on 50 bucks a barrel. uncertainty of an election year stall the markets? we'll debate that straight ahead. >> kentucky voters off to the races. donald trump marching toward officially becoming the official gop nominee. hillary clinton trying to stop the bern. one-on-one with ohio senator rob portman. he's on the short list as a potential running mate for mr. trump. will he say yes if asked? stick around to find out. tiger woods not ready to return to the pga just yet. the 14-time major champ dumps three balls in the water minutes after saying he believes he can win more majors on the tour.
7:01 am
the cringe worthy display just ahead. the second hour of "squawk box" begins right now. live from the beating heart of business, new york city. this is "squawk box." welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross-sorkin. all the way back to just up four points and t s&p is now actually negative. maybe it has something to do with oil. there's still some correlation there. when oil gets weak, sometimes you see the equity markets. we'll take a quick look. we had an analyst on talking about crude, or you can let this sink in, if you would like -- oh, no, finally, thank you. there's oil which was at $48. it has come down to be almost unchanged at $47.75.
7:02 am
>> let's get you caught up on our headlines. shares of home depot on the rise in the premarket trading. home depot earned $1.44 a share for the first quarter, 8 cents better than the street was expect iing. it also raised its full-year earnings in sales forecast and you could see that dow component is up by over 1.25%. earlier today up over 3%. we'll see how this trades as we head into the session. it's sitting just under a high, 137. >> 137 and change. >> ceo departicipated last week amid controversy and the company is under investigation by the justice department. linding club telling them that an outside auditor has found no other issues 673,000 outstanding loans. if a new poll is any indication britain may be staying in the european union. a survey done by "the daily telegraph" says support in the
7:03 am
eu is now 15 percentage points ahead of support for the brexit up four percentage points from just a month ago. and doing a little whale watching. the biggest investor perhaps george soros says he's increasing his bet against the s&p and cutting stocks by 37%, disclosing a 2.1 million share put option to attract the s&p. the fund continuing to unwind exposures to commodities, selling positions in dow chemical, penn virginia, kinder morgan, baker hughes and closing in etf tracking oil and gas exploration production companies. also soros bought, this is on the bullish side a 19 million share stake in barrick gold. his first return to gold in three years. that's in contrast, we should tell you, to gold, paulson
7:04 am
getting bearish, slashing its investment in the gold trust by 17% to 4.8 million shares. this is the third time paulson has reduce d his stake. >> all at a loss, right? >> he has not made money on this bet. >> other investors disclosing bets on individual names. greenlight capital added to its position in apple, yahoo! macy's. that would be, i imagine, averaging down, yelp and general motors. as of march 31st david einhorn owned 18 million shares of apple. >> i wish i did but i don't. i don't own 18 million shares of anything. >> home depot, i would have loved. right? >> i'm talking -- i'm talking about the 8.2 million shares because i could figure out even a $4 stock you'd be sitting here
7:05 am
talking to a chair. >> yeah? empty. >> crickets. >> you and becky. carl icahn selling out of stakes in the first quarter getting out of gannett, tegna, mentor graphics, hologic. the billionaire added shares of xerox and aig but didn't buy into any new companies. >> i'm going to look that company up as long as we're talking about it a lot. anyway. pershing square increasing restaurant brands, increased holdings in valiant, again, averaging down, and cut its stake in mondolay. >> corvex management a 10% stake in pandora and is urging the music site to explore a sale. shares are down 25% this year. corvex is the largest shareholder and pandora says its core business is profitable and long-term value for investors.
7:06 am
>> economic data and fed speak also on the docket at some point today. the april consumer price index will be out during our watch at 8:30 a.m. eastern. the headline cpi is expected to have ticked up slightly. and then we have april housing starts at the same time as well. and then at 9:15 april industrial production will cross the tape. and then san francisco fed president john williams, atlanta fed president dennis lockhart and dallas fed rod kaplan all are speaking today. >> markets on the move this morning, let's talk about it with stocks around the globe trending higher but a lot more volatility may be on the horizon as the coming presidential election hits the market. joe, i know you don't read the column. becky usually does. >> i like it. >> topic of today's column in "the new york times." thank you, guys, for putting it up on the screen there. election years are steeped in markets' least favorite thing. since 1928 in the eighth year of
7:07 am
a presidential term the stock market has been down 2.8%. however, every other year has been positive. so what does that say about an incumbent leaving? steve rece is here, global head of jpmorgjpmorgan's private ban. you look at the end of this year, from here to the end, what do you see? >> well, we're preparing and see a nice upside if you take a longer term view. i think earnings, we probably saw the worst in the first quarter but there is expectations that things will pick up by q3 and q4, oil prices stabilizing. >> you think things get better? >> through the summer there's a lot to do in certain sectors like health care, technology, consumer looks good to us. we saw that this morning and we're investing in dividend stocks at the ten-year treasury rates stay lower. >> do you look at this and say the economy does get paralyzed in years like this? and i say that, also, not just
7:08 am
the united states but across the world, i think, since 1980 showed that actually gdp in the year of a switch where it's a true switch, by the way, not where you have a candidate who may be up for election again -- by the way, when that happens, the economy is up even more, there's a view that gets manipulated but that gdp falls by 4.8% in total. >> so the key, is that causal or coincidental or looking back in data mining? is there a reason for it? we like to think about price. it really doesn't matter what really drives the issues is going in price, and so as chief investment officers we're thinking about investing not trading. and so what's the position? where are we likely to find real returns the next three to five years? what we're looking for, we want portfolios to be stable, the components, the more volatile they are, the better. it allows us to buy low and sell high. >> give us ideas what should be in the portfolio. >> what you want to look for is dislocation. around the world today, first of
7:09 am
all the elephant in the room are low interest rights, the negative real interest rates up to ten years. so people really have two choices. they can stay short and be safe and accept low returns and wait. the other choice is to accept volatility because they're going to own almost all equities including energy and emerging markets where the real dislocation is. that's likely to provide real returns. >> would you pick up a whole basket of energy companies? >> absolutely. >> it doesn't matter what? >> you always want to have what. we like in this case where you have a lot of dislocation it pays to have active managers. for example -- >> does it pay to have active -- that's been the big question in the past year and a half when it was suppose d to pay to have active managers. >> we don't want to get caught up in reseven si bias. a market that is priced to give us a 4% to 4.5% real, i don't want to own the average. i have to know where the pockets of value are. if i'm in energy and dislocation, there are a lot of mines in that field out there so we want to own things that are money good. >> you want to touch on it?
7:10 am
>> we select companies with strong balance sheets if you can find yield, that makes sense. more than energy are european dividend stocks. take a look at what dividend stocks did in the u.s. during the qe program. you'll see the same in europe, that's starting to happen but the outperformance gap in europe is pretty small. >> we actually like both of those. we like energy stocks in the united states and quality dividend stocks in europe. europe, when you think about it, the p.e. is lower and they're not at record profitability so they have two ways. we make money two ways in stocks, expand the multiple or increase earnings. in the united states we have a very high multiple and we have record high profits. >> do either of you want to take the george soros position that we're all in free fall? or maybe that's not the position, by the way. it's always a little unclear when you really read his filings what he's up to. >> first of all, that may be a trade not an investment, first thing. the second thing is he's taking the proceeds and doing something with it so he may like europe or emerging markets better than the
7:11 am
united states. so that's a shift which we would agree with. >> do you like the gold trade? >> i think there's modest upside in gold. i think there's a lot better risk-reward today in health care, technology, consumer and dividend stock. i prefer to buy more than gold. >> technology, do you want to follow not warren buffett but ted and tom into apple perhaps? >> well, i can't comment on specific names. there's a lot of dislocations through the first quarter earnings season where you had good stocks. there's a lot to do now. >> are you trying to avoid names? >> my compliancy won't let me. >> what about you? you're the ceo, you can talk names, right? >> i can. apple is in transition. what you're looking at here, quality growth stocks have been outperforming, people like mondolese, joe, you mentioned that earlier. the reason is revenue growth. so in the united states when you're at the top of your
7:12 am
earnings cycle you have to have top-line growth. it's hard to squeeze more earnings out of flat revenue so we want to have -- that's what's worked. we may get to a point where the p.e. on those stocks is too high and people will start rotating like the bank stocks so that's start iing to pop up, if you're price conscious investor, you're really start iing to look wheres the dislocation? where are the unloved stocks that i can own for three to five years and make better returns? >> and tech has the benefit of a more stable dollar so 60% is outside the u.s. they got hit last year. this year you'll see an acceleration. >> so, joe, if yesterday, the message was overvalued, these guys are sort of suggesting we'd be undervalued or at least not -- >> i like it. i like it. i'm dealing with i have so much for you. >> you have a lot for me? >> that's nerve-racking. >> on tegna. >> that's how you say it? >> i want to thank you, gentlemen. >> thank you very much. >> gannett spun off their tv stuff. >> yes. >> the publishing company kept
7:13 am
the gannett name. >> yes. the little baby company that's now for sale or not up for sale. >> the broadcast television and digital media divisions combined with some operations and named themselves tegna on june 29th, immediately got a lot of flak on twitter because it's such a stupid name. it honors the history of gannett by having the same letters as gannett. it's a jumble. tegna. a look at the real estate. the ceo of marcus, research and adviser service also join us after the break. senator rob portman, is he going to be the veep for the donald or a tough race for senate in ohio? he's from cincinnati a. good man.
7:14 am
7:15 am
7:16 am
welcome back this morning. news from the twitter sphere, twitter is shaking up its character limit. i'm very happy about this selfishly. the social media giant will stop counting photos and links towards the 140 character limit, who going up the 24 characters, it will give users a little bit of space to write some more, something the company has been experimenting with for some time now.
7:17 am
reports earlier this year say twitter was considering raising the limit to 10,000 characters but at least i don't know how often you do this, had the picture and all of a sudden you find out you have too many characters and then you have to go back and edit the tweet down and make it even tighter. they want more people putting up links to different things, make it more useful. they can do whatever they want. >> there's been backlash. >> they were going to put a book on it. >> people didn't like the heart thing they added. >> is it an arbitrary number? >> h it ttp:/ -- >> so it takes up to 24. i'm looking on at twitter right now and it's in your paper today
7:18 am
about the guy with all the money, the climate change fanatic although he's making money. very upset with him. >> you can't do because of an extra percent of co2 and there's a relative between this big money greeny, alarmist, and then these other people who have real world concerns about -- the unions have been a huge source of support. >> yes, i am. yes, i am. >> good luck. >> a clown. >> go with us. on health of the housing market out just over an hour from now.
7:19 am
what about the commercial side of the market, too? how the real estate is doing is president and ceo of the nation's largest brokerage firm focused on real estate. very quickly we did get home depot numbers out today. what are you seeing happening overall? >> good morning. it's great to be with you on the program. real estate is really in general and the residential market in particular reflecting the strength of the job market and the modest but steady growth in low inflation environment so the recovery in housing is now having a ripple effect in players like home depot, of course, and related types of companies and we're seeing the same thing on the commercial side mainly because the supply side of real estate has stayed very disciplined given the severity of the last recession
7:20 am
and the downturn and the supply side basically staying limited on both the housing construction, commercial construction at a time you're seeing steady job growth creating demand for both houses, apartments, and commercial properties on the ground. >> one of the things we've been talking about is the trouble th that retailers have had. how does that play out? i know the building there has been a little constrained but how do you add up both of those to supply and demand issues. >> look at the share of online sales versus retail sales growing at such a fast clib, the fastest growing segment of retail and the effect has been profound. many retailers have gone out of business or contract their footprint. the survivors have really reconfigured and given my
7:21 am
comments about the supply pullback and the years leading to the recession 150 million to 200 million square feet of retail, now we're constructing less than a third of that. so the amount of new space coming on, the rekconfiguration of tenants that have figured out how to take advantage of e-commerce and combine their strategy with the brick and mortar strategy has put us in a place where retailers are having a much healthier inventory to sell ratio, much more efficiency, profitability among basically brick and mortar retailers has improved dramatically overall, but then you have the middle market, really the department stores, examples like sears and penneys that continue to struggle and then convenience retailing, you have your grocery anchored centers, your drugstore anchored centers, where that's the day-to-day consumer based shopping destination is doing extremely well and a great
7:22 am
investment vehicle for a lot of investors. >> i know you just complete this had bi-annual survey you do with the largest real estate investors and found that optimism was at the highest level, even higher than in 2005 just before everything crashed. is this a leading or lagging indicator? >> it was a leading indicator, accurate in showing us there were concerns in the market in '06-'05 well before the turn. we saw optimism come back steadily after 2009-2010 and hit new peaks. in the last couple of quarters we've seen it pull back a little bit, not dramatically, still at levels that show a lot of confidence as an investment vehicle mainly because you have yields in the 5% to 7% range based on the type of real estate and the geographic market versus the alternative investment
7:23 am
whether it's the ten-year treasury and a low interest rate environment. that spread and that yield is generating a lot of interest and it's a little more grounded. in 2006 and 2007 we saw the investors start to get pessimistic before the economic indicators did. n now. >> thank you for your time. appreciate it. >> a positive attitude saying he can still beat jack nicklaus' major record. we'll have an update on his progression next. he has to beat people like jason day, though. i don't know if he's factored that into his calculus and juro and jordan spieth.
7:24 am
7:25 am
7:26 am
apple's latest move to gain ground in china, an early uber investor on tim cook's stake in the competition. "squawk alley" today cnbc. ♪ what would you say when we return you don't want to miss this, he's on the short list to be donald trump's running mate. we'll talk trade, the economy, and of course the race for the white house with senator rob portman right after the break.
7:27 am
and then the fashion world with andy and kate spade, fashion, accessories. take a look at u.s. equity futures this hour. tokyo-style ramen noodles.
7:28 am
freshly made in the japanese tradition, each batch is small. special. unique... every bowl blurring the line between food...and art. when you cook with incredible ingredients... you make incredible meals. fresh ingredients. step-by-step-recipes. delivered to your door. get your first two meals free
7:29 am
7:30 am
welcome back, everybody. among the stories that are front and center today we're just an hour away from some key economic reports. today we'll be getting the april consumer price index, also housing starts for the last month that comes at 8:30 eastern time. the wearable technology market continues to expand significantly. new figures from idc say 19.7 million devices shipped during the first quarter, up 67% from a year earlier. and google's parent alphabet has its own ride sharing program. the pilot program being tested in san francisco allows workers to hitch rides to or from work with the users of the company's popular ways navigation app. larry fink making a new suggestion for china speaking at
7:31 am
a forum in hong kong, saying the country needs to be more aggressive in its reforms if it wants to easily transition from export economy to transport driven economy saying the recent explosion in credit is not the correct way to reorient the economy. an update on summer redstone and the future of his media empire. reportedly he has the power to remove viacom's chief executive from the trust that will control his $40 billion media stake when he's no longer able to. he cannot, however, remove his daughter from the trust giving sherry redstone a more stable position on the seven-person trust that could help her gain more control at viacom. the holdings of the trust include cbs and paramount pictures among others. tiger woods paying a visit to the nation's capital on monday to promote his upcoppimi tournament. he took three shots over a water hazard from about 100 yards away and put all three balls into the
7:32 am
drink. it's been seven months since tiger has had his latest back surgery and he was asked the he same question about his health, when will he be back? >> i want to play. trust me, i want to. now whether i can or do, that's a different story. if i could tell you, i would. i can't, not yet. i'm still working. i'm still trying to get strong er. and still need to try and recover. >> and despite not winning a major since 2008, the 40-year-old woods believes he can beat jack nicklaus' record of 18 major titles. they play well when they're 40 up to a certain age. i think 48's the oldest major winner, something around there. it gets tougher physically. he's had all these back problems. that's one thing. and mentally, when tiger was the greatest golfer in the world, the toughest mentally, and who knows, the competition now, they are 20-year-olds, guys like
7:33 am
jason day, i don't know at this point you bet on him to win more majors in the next few years and tiger has to beat jason day, has to beat jordan spieth, mcilroy. >> how many majors does he have? >> i forget, he has 18 and has 14 or something. four more? he has to win a tournament, any tournament. he has to play in a tournament before he can do that. >> former vice president dan quayle weighed in on who he thought the presumptive gop nominee, donald trump, should pick for his second in command. >> the one i think would be a really good choice, not on too many people's lists right now, but he's substantive, has all the credentials, would be a good teammate for donald trump and that's rob portman from ohio. >> and the president has to go through ohio, doesn't he, and win that state. senator portman joins thus morning to talk about whether he'd take the job.
7:34 am
he's from the good part of ohio, down in the southwest part. you're not with all those snobs up in cleveland although they handed it to the reds yesterday, didn't they? >> that was embarrassing. i lost a bet on that one. >> i still love the reds. >> it's a rebuilding year, joe. >> it is. it is. >> at the bottom of the central division. >> i'd like to talk to you about a lot of things. if asked to serve, senator, you would, right? >> no. i'm happy doing what i'm doing. i have my own re-election, focused on ohio. >> if he asked you, i'm sure you would -- i mren, theean, there talking and cajoling. you would flat out say i'm not going to -- i'm not going to serve as vice president for you, mr. trump? you would guarantee me? >> i would say there are other great people out there and i have my own race in ohio. 2016 is an important year for
7:35 am
the senate majority. >> i thought you might tell me, like connie chung, whisper it to me. i want to ask you a bigger question. >> good try, joe. >> you do have a tough race in ohio, and i'm not sure i understand that. ohio you could count on as a red state and that's not the case anymore. >> president obama won it the last two times. john kasich is doing a great job. there are republicans elected statewide in ohio certainly and we intend to win the race. we're getting our message out there and that's what i'm doing. >> my analysis and, you know, this is more than a question, but the rise of donald trump, you can deny that it had anything to do with president obama but you'd be not facing reality, and the reason that the republican establishment has been rejected by so many voters is because after two incredible
7:36 am
midterms where the republicans, i mean, they won state legislatures, governorships, they won the house, they won the senate. the republicans were still unable to stop president obama in terms of the liberal agenda, growing the size of government, redistributi redistribution, food stamps, poverty -- all of these things happened even though you were there with the majority in congress. that's what spawned donald trump and i don't understand why you can't win ohio if people are that fed up with the obama administration. >> well, people are fed up. they're fed up with the weak economic growth and the middle class squeeze is very real. you talked about it on your show but wages are flat, even declining in the obama years and expenses are up. the biggest expense, health care. obamacare hasn't helped. it's made it worse. i agree there's a real opportunity here. the other one is over regulat n regulation. this is happening in ohio to the point electricity costs are
7:37 am
going up. it's another expense. we do have an opportunity to make sure people understand there is an alternative. a lot of the stuff you talked about, by the way, in terms of growing the size and scope of government, happened when the democrats had control because that was obamacare, the stimulus package, it was dodd frank. they had control of everything and steamrolled some stuff through. since then republicans have been able to push back on some things but he's been able to go around congress with executive orders and that's the thing we've been continuing to fight and have to continue to fight. >> so you finally endorsed donald trump but you weren't the first or the last to do it. what kind of republican is he, in your view? >> i said all along i was going to support the republican nominee and when donald trump won in indiana and john kasich dropped out, john and i are close. i was proud to support him. as soon as john decided not to run i did support donald trump because i think it's important we turn things around. i know hillary clinton is not going to do it. another four to eight years of the same economic disappointment
7:38 am
and the lack of leadership around the world and all the other things people are frustrated about. >> senator, about a year ago you said and criticized donald trump for banning muslims or his comments about banning muslims from entering the united states. you said, quote, i'm not a meat donald trump guy. has something changed for you? >> no. i don't think it was in that context that i said that. i think that was media folks saying aren't you and donald trump alike? i said i don't think people will confuse me with donald trump. i think he has good ideas in terms of the economy. we've talked about tax reform. he believes in this. he understands if we don't do something quickly we'll continue to lose more jobs, more investment. it's not about the boardroom. it's not about corporations leaving. it's about america getting hollowed out and that's important. i'm with him on some of these big issues but i'm also certainly not with another four to eight years of what we have now. >> senator, i guess we go back to what happened in red ohio,
7:39 am
you got the race of a lifetime against a democrat in ohio and you have in this country at the same time the rise of donald trump against establishment republicans you have a socialist that polls well with almost half the population. what happened? >> again, people are frustrated. i think in some respects donald trump and bernie sanders are different sides of the same coin and i get it. donald trump is going to be the change agent. hillary clinton the status quo. bernie sanders is not going to be in the mix. i think, therefore, he has a very good shot of winning ohio and the country. >> do you think paul ryan is making a mistake in terms of not endorsing him yet? >> he has to do what he has to do and i think he has some good points in terms of the policy differences and i think they'll work those out. the meeting last week went very well and paul came out it have saying he was encouraged. i think at some point we have to unify the alternative. you mentioned the muslim ban. i don't know how you implement that. i don't think it's right.
7:40 am
i don't think it's constitutional to have a religious test. i also have agreements and, again, am very concerned about the direction we're headed and i'm concerned if we don't get some change and actually shake things up -- i mentioned tax reform but regulatory relief, doing something to be tougher on china is really important. as you know i've led this effort to stop currency manipulation. i believe in that. those are the kinds of things that will turn things around in ohio. >> as a trade guy, you figure he's got these stances but he'll move on these and be in a negotiating position and it won't be the end of the world for global trade? >> i think he'll be in a negotiating position and i do think, again, we have to enforce the laws more stringently. we have to be sure that we are cracking down on unfair imports. the steel industry in ohio is in tough shape. why? in part the economy and the oil industry but mostly we have an unprecedented surge of imports coming in, a lot are being
7:41 am
dumped in our country. so we have to fight back. >> you are omb, trade rep, you were a congressman from the best part of ohio where you get a really solid upbringing. i know in cincinnati. now you're in the senate. who's more qualified than you to be vice president or who has anything close to those qualifications in your view? >> john kasich. >> would he say yes? you are buddies. would he say yes to trump? >> i don't know. i haven't put it to him. >> what's your gut feeling after all the nasty stuff they've said about each other? >> i don't know. that's john's decision but he is doing a good job as governor and i think he loves the job just as i love representing ohio and making things happen delivering results, working across the aisle. he's probably very happy where he is. there's lots of other choices out there, joe, and he won't have a hard time finding somebody good, and then we have to get on to actually turning things around and that includes some of the economic stuff we talked about.
7:42 am
we need to change policies on taxes, on trade, certainly what we're doing on regulations isn't working. it's making us less competitive and trading this incredibly weak economy. this is the first president i think in the modern history of america that's never seen 3% growth. >> if you get announced as the veep and you say yes and then as a friend from cincinnati that nopes y knows you personally, that's going to be on your conscience. >> joe, you would have been the first to know. after becky and maybe andrew. >> i have to ask you that question, i want to you react, if you would, a headline in politico with this headline -- >> are they still around? >> they are. portman and strickland fail what they call the trump test. in the year of outsiders, two consummate insiders, they're including you in this, of course, vying for critical senate seat argue over who's gone more washington. what do you make of that issue, the issue of who is an insider and who is an outsider and this
7:43 am
idea, you know, if europe the vp for donald trump you probably want to be an insider because he might need an insider. there's this broader feeling in the nation that we all want outsiders now because there's so much frustration with washington. >> what people want is for washington to start working, to work through the partisan gridlock. that's what i've done, as you know, not just here in the senate but in my career and i'm really proud of it. i'm running against the grain and i have been. i'm counter cultural, too much partisanship and not getting things done. this is why i'll be happy with my legislation on fighting the heroin and prescription drug gets passed by the president. i passed other things against my own leadership and against democrats including the obama administration taking on the currency manipulation issue and actually getting things done. that's what people want. i have a record of doing it.
7:44 am
my opponent, by the way, ted strickland, was in congress for 12 years, didn't pass a single bill. >> i like that. >> it's accurate. that's what people want. they want someone who is going to do the job they're hired to do. >> christie, what he would do to secretary clinton you might be too nice. >> it's the southwest hiohio thing, joe. >> good luck with that bill. it's really smart and is important stuff. really important work. >> thanks, guys, take care. >> we have kate spade and andy spade. they want to accessory you. revealing a new brand. we'll hear from them after a break. check out the price of oil now. wti crude at $47.57.
7:45 am
7:46 am
7:47 am
welcome back, everybody. after starting the kate spade handbag line out of their apartment and overseeing its evolution in a global lifestyle brand, kate and andy spade sold their company to the neiman marcus group and took a ten-year-long break from fashion's daily grind. now they are back at it.
7:48 am
kate and andy spade are starting up a new accessories line and they are here to tell us more about it and thank you both for being here. it's great to see you. >> thanks for having us. >> so we were just talking about it, just looking at your shoes, which are beautiful, kate. >> thank you. >> these are shoes and accessories, and why are you back in? >> when we sold the company in 2007, it was really to focus on our family. it was a grind. i had just had a baby. andy and i founded the company and brought on two partners. we were all having families. it was time to take a break. it was much-needed and it was a great luxury that i will forever remember it in joy. >> is it true michael kors asked you why are you putting your
7:49 am
hand back in the blender? >> it was the first day we announced we were starting frances valentine. he said, congratulations, but why would you put your hand back in the blender? i started laughing, that's perfect. oh, no, why did i? we're thrilled. it's great. >> andy, part of the reason you left or sold the business to begin with was you sat down and realized you had made 300 decisions in a day that wasn't even a very busy day. >> we were in eight categories, sunglasses, home wear, table top, they call it, i think, bed toppings. there are 18 categories and one day we had to go through all the categories. i was counting, all right, we've created a brand. we have a model for something, created stores in every country in the world and every category and i felt creatively we had completed our task. i wanted a new challenge. we just had our child and i think to your question earlier what i thought was important i
7:50 am
wanted to go back and create another thing. i felt starting something new is really interesting to me. >> maintaining an existing company -- >> over and over again, company? >> over and over again, we duplicated it over time. but it was difficult. we needed a break, quite frankly. >> so you when did it last time around, you cold, you liquidated your 401(k) which had about $30,000 in. in this time, you were able to self-fund yourself you don't have the pressure of investors at this time? >> it doesn't. i also think there is a lot of pressure, we're a conservative company by nature. i think it's our personality. i come from the midwest. the idea of recklessly spending money, even though it sounds like fun and fashion, it is a business. although the main focus for me was really creating. what the design aspect of it. that was what i missed the most.
7:51 am
although i do get involved with the business probably more so than people would like. but i feel like we really do -- we're still very lean. we brought back three of the original partners. and then the fourth partners is palo venturi who had worked with me and designed our previous company, kate spade with me for seven years. it was something that we had gone back and forth with. should we do something. we approached us. and i had taken too much time off. we approached her and then received a promotion prada. and it kind of worked out. it was perfect timing. i think my daughter is thrilled about it. >> is she 11 now? >> she's in 11. she's in fifth grade. in now, she can understand what you guys are doing. >> she is. she's seen andy because he never stopped. >> film. >> and the brand? >> and the brand. >> and if you have children,
7:52 am
your daughter shuts the door and doesn't allow you back into her room, like talking back, it's time to go to work. >> makes sense, makes sense. >> that was me, not totally there yet but she does -- in your case -- >> she's a lot smarter all of a sudden. >> then they come around, right? >> that's what i've been told. >> they hopefully come around at 22. >> at 22. >> how will you guys do things differently this time in terms whereof you're selling, your commerce is a big issue for you? >> yes, which is a little different than where we were when we left in 2007. i think now with frances valentine, we're definitely approaching the major department stores in the u.s. we're in japan, hong kong, new york and canada but we are
7:53 am
purposefully listing it to make sure we do it in that fashion. >> around the brand, one of the things with the kate spade firm, you created this -- there's this magical moment it became the hottest brand. everybody ran out to get it. it was a thing. what was it? and how do you re-create that? >> i think the product. i honestly do. i think you can do -- people can talk about advertising their brand. but i honestly believe, this time around, even the time before, it really has to be about design. i think i feel a little more confident this time around because of my experience. but i think it's more focused and i think the details and the quality are so important, it has to have an emotional tie. it has to have -- even if it's the simplest shoe, it has to have something that says i have to have you. i think i design from a modern, very modern but, you know, with a sense of charm.
7:54 am
so i think that in itself is kind of attractive. i mean, you know -- >> well, you always thought, today it's ten years later. we have ten years' experience. i think more and more confidence. i think we're more secure. it's hard to create that magic. i think we're trying to do it again. we don't know if it will happen. i think the timing was interesting then. it went 30 million people in the category. if you counteds i could tell you five. timing of the product. and i think we had a great price point there. there were things happening at that time that worked which we're trying to duplicate, of course. >> you worked with shinola and parker. >> yes, i learned a lot with those experiences. i've actually learned a lot about social media. about business. a lot of things we've picked up over the years that are going to add value to the new company. >> andy and kate, we appreciate you coming in.
7:55 am
we've got earnings from tjx companies set to be released. the first stock index was created over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks. cleans so well, it keeps your underwear cleaner. so could wear them a second day. charmin ultra strong. it's 4 times stronger, and you can use up to 4 times less. enjoy the go with charmin.
7:56 am
7:57 am
♪ (charge music) you wouldn't hire an organist without hearing them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck.
7:58 am
7:59 am
8:00 am
earnings alert, home depot beats the street and raises its guidance for the full year. up next, tjx, is the retail overblown? it's your money, your vote. heading to the polls. how much there the economy play in the election? we'll ask greg hubbert. and this is not your
8:01 am
father's stand-up. comedian scott opperman laughing all the way to the bank. he's going to join us straight ahead. ♪ >> announcer: live from the most powerful city in the world, new york, this is "squawk box." ♪ welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernin along with becky quick and andrew ross sorkin. baby makes four. we're counting down to the two big economicals at 8:30. i don't want to get controversial i remember when poor hillary said personal. anyway, we're excited. the consumer price index, analysis headlines coming, expected to rise by 0.3%. futures are negative, in despite
8:02 am
of home depot, who had pretty good numbers. oil is up. the market had a good session yesterday, giving back a little bit so far. this morning after trading up 30 points or so earlier. we'll see what's happening at 4:00. later today, nobody knows. let's go to other top stories we're paying attention to. home depot posted better than expected earnings. the retaileral raising the four-profit sales forecast. taking a look at shares down marginally. you look at that graph, you think to yourself -- >> you'd be very happy. >> the stock was up better than 3% based on really good numbers that beat the street by a long shot. what happened. george soros is increasing his debt against the s&p now. he's also cutting his u.s. stock holdings by 37%. the investor buying back into
8:03 am
gold. perhaps he's bearish on where the world is headed. u.s. corporate buybacks are 20% higher in q1 than the total. the s&p reporting makes it a start of 2016 potentially one of the best quarters ever for share buybacks, potentially, one of the worst when it comes to spending. we talk as how in an election year, oftentimes, people don't like to spend. >> a new election is every two years -- >> we have elections every for years, we do. let's tell you about other stocks, lending club issuing a letter to investors assuring themselves enhanced oversight and documentation. the company says an outauditor has found no other issues among its 770,000 outstanding loans. the ceo made a document falsifying loans.
8:04 am
and sin jenyngenta taken ov chemchina. and pandora media is being urged to explore a sale by hedge fund corvex management. it it's includes a 9.9% stake in the online company. and office depot, with the takeover by larger riseral staples was called off last week. stock under sharp pressure on that move. twitter is adding debra lee to the board. and vodafone reporting core profit growth for the first time since 2008. the world's second largest mobile carrier says it plans to spend more than previously expected to try and improve its networks. apple supplies in taiwan are
8:05 am
ramping. companies are recruiting staff to build the iphone 7 series. taiwan's economic daily news said that fox tron and tron closing that out. and may need more. those reports with the likely release date of iphone 7 in september. and other tech news, amazon expanding its restaurant delivery service in manhattan today. prime members can order food delivery from one of new york's 350 restaurants. it won't mark up prices. it's going to take is seamless. take a look at ma that looks
8:06 am
like. grub hub. >> is grub hub related to stub hub? >> it is not. it's seams. >> it's scalable. >> it is scalable. all across the country. >> is it the cloud. >> seamless is delivery service in new york city. grub hub owns it. but grub hub is national -- the national brand is grub hub. they bought seamless. but every major investment bank, company in new york city uses seamless oftentimes to deliver food. i'm just giving you the back story. in dallas today. it was already available in chicago, l.a. and portland. larry fink has a suggestion for china, speaking at a forum today. fink also saying that the recent explosion in credit is not the correct way to re-orient the
8:07 am
economy. aig cutting its hedge fund exposure in half by the end of 2017, down from $11 billion at the end of last year. as of the beginning of may, aig submitted redemption notices for $4.1 billion. that's right, $4.1 billion. they're aiming to re-invest the money in investment grade corporate bonds and investment mortgage loans. aig executive vice president and chief v officer doug deshield is with us. it's been way too long. good to see you. >> way too long. this is a great opportunity. i always wanted to do a sports talk show radio. being a finance guy, i want to transition to sports. >> let's talk a bit about what you're doing at aig. you've been checking things out for over a year, trying to determine what money is making sense and what's not. why this massive redemption and this change in policy? >> you have to understand why, you have to put it in perspective. we have a $350 billion balance
8:08 am
sheet. it's the riskiest 3% of our investments. you have to understand why do we invest in hedge funds? the thesis behind the hedge fund investing is we wanted equity-like returns with lower volatility and uncorrelated with financial markets. if you look over the long term, a ten-year period, it delivered that promise. we had high returns, relatively low volatility and limited correlation. in finance, all good things come to an end. because it attracts money. and more money coming in dilutes down the opportunity. so when you look at the returns over a shorter period of time, like the previous three years, you started to see this gradual trend that's consistent with what was going on in the marketplace of more capital coming into the hedge fund community and of course the returns came down and that promise of high expected returns, lower volatility just wasn't there. we needed to rethink exactly what we were doing. >> plus, you were paying big bucks. the 2 and 20. 2% and 20% of the profits. is it worth it? >> look, i have absolutely no
8:09 am
problem paying excellent compensation for xlenexcellence. the problem is when you basically pay excellent compensation for mediocrity. identifying people who are deserving the excellent compensation, that's fantastic. if somebody makes me a whole lot of money, i believe they should get rich. if somebody is making passive investments for me in an environment that's crowded, i don't need to pay excellent compensation. the challenge really is, people come to me and say how could you be getting out of hedge funds and going into bonds? look at the yield on bonds. with bonds we know the what the expected return is. when i buy a bond, the yield is 2%. with the hedge funds there's the illusion of potential. it looks like i made eight. in reality, probably the expected returns are not that much higher than the expected returns on bonds. >> here's where it's been interesting. in a world of low interest rates, low returns, insurance
8:10 am
companies, pension funds in particular have been under massive amounts of strain and pressure to try and come up with something like 7% to 8% returns which is what most of them need to be able to pay off for their expected payouts that will come due some day. >> that's not really true. i mean -- >> maybe not in aig's case. >> even in the insurance industry. if you think about what we do, there's two issues there. the liabilities that we have on our balance sheet, if managed properly and priced properly, we have the investment portfolio that will pay off those liabilities. we don't need to stretch for returns. >> i don't you feel confident with the correct pricing. >> right. >> the issue really has become about competitiveness prospectively. if i'm at a 2% rate environment and i have the traditional staples of insurance company investing are yielding 2. what can i charge my consumer? then it becomes a price of how do i participate those low yields to the pricing of the insurance? >> because other idiots are out there not underwriting properly. >> and not participating the fact that the rate environment
8:11 am
and return environment might be 2 or 3 or 4 and the price of insurance has to go up. if everybody is thinking they can generate investments. the price will not be right. it's the competitive pressure prospectively that you have to think about about future returns, not retrospectively. >> do you think size is an enemy for the hedge fund guys? >> of course. >> is that the problem? >> let's put numbers on here. in the late '90s, the size of the hedge fund world was roughly 300 billion. today the size of the hedge fund world is 3 trillion. >> where do you find? right. >> 3 trillion. think about the return they are trying to generate, roughly 6%. 6% of 3 trillion is the size of the industry, not that long ago. every year the hedge fund world needs to make returns, roughly equal to the size of the assets it managed a decade ago. that's just not possible. >> doug, you said at the beginning of the interview, everything that works doesn't last on wall street.
8:12 am
what's the new hedge fund or the new way you can get ahead? >> it's interesting, the most interesting thing i see that's happened is the regulation of the banks. and the banks have been getting out of a lot of assets as a result of the regulation, which actually make a lot of sense for insurance companies. in fact, insurance companies have fairly long liquidity. we have a lot of liabilities that don't pay out for long periods of time in the future and a lot of the lending product the banks traditionally originated makes sense on the balance sheet of an insurance company and less sense on the balance sheet of the banks. there's opportunities there. traditionally, insurance companies have been about originating liabilities and picking up the phone to buy assets. >> there's a need to basically think about originating your liabilities and working and partnering with the banks who from a capital perspective need to participate those off their balance sheets. >> we had richard fisher. >> last week. >> i don't know whether you
8:13 am
watched. you know what would be great, zero interest rates. i'd like to keep them there forever. think about how great the world would be. $100 an hour minimum wage, do that and make college free for everybody. we should do all these things except then you have to think about it and what might happen. there are some problems with zero interest rates and one of the things fisher brought up was if you're an insurance company and you've got these liabilities in the future, like matching things to a zero return makes it really difficult, not to mention savers. this is tough, isn't it? >> you're absolutely right. if i was faced with a zero interest rate environment. >> sounds great. >> you know what i would do? >> what. >> raise my prices. >> you can't when competitors are lowering and writing bad insurance which is why people are asking questions. >> basically chickens would come home to roost. would you rather -- >> a cheap policy doesn't always do you well when buying insurance. >> something will happen someday, isn't it? >> in the experiment of negative
8:14 am
interest rates is the extreme case. we'll see how that experiment plays out. >> how's it going? >> japan certainly hasn't been working out very well. and the other interesting thing is the changes that the central bankers have had to do. all of us always thought if we had negative interest rates, you know what we would do? go into the bank and ask for a bag of cash. many of the banks and central banks are restricting your ability to walk into a bank and take a bag of cash, which is a dangerous precedent. you always had a put where you could demand your deposit and take paper currency to avoid the negative rate phenomena. that's a challenging proposition for bankers to deal with. >> doug, come back. i feel like we have a lot of things to dig into. >> great to see you, sir. >> thank you very much. >> is the american capitalism, is it in crisis? the new book, makers and takers, we're with the author in just a moment.
8:15 am
i'm here at the td ameritrade trader offices.
8:16 am
steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.
8:17 am
our next guest is out with a new book called "makers and takers" the rise of finance and the fall of american business. in it she argues that capital is broken and the wall
8:18 am
streetization, if you will, of the business world. is irana foroohar. >> i wild hold it up in front of me. >> a great excerpt with a fantastic cover. >> it's out right now, just this weekend. >> explain what you mean by all this. >> if you think about what market capitalism was set up to do, adam smith's idea, you take everybody's savings and funnel it through financial institutions into new businesses which hire people and grow the economy. that's how it's supposed to work. if you look at the numbers now, that's been changing over the last 40 years. so today there's really deep academic research that shows about only 15% of money flowing out of financial institutions ends up as new business investment. the rest of it is basically in a closed loop of trading, of existing assets. >> this is the rent if you will.
8:19 am
>> the rent. you know, it's a fraction of the money of our savings actually is getting invested in new businesses. i think that's one of the biggest unexplained causes of slower growth, really. >> what happened? why is that the case? >> you know, there's not one thing, it's 40 years of policy changes. bipartisan policy changes i would add. this gets blamed on reagan era, deregulation, the rise of wall street in the '80s. that's part of it. basically since interest rates were deregulated under the carter era, you could argue there had been a slow series of shifts, deregulation under clinton, changes in the way corporate compensation was paid out that led to the stock buy-back boom that we see now which increases short termism in the markets. there's not one silver bullet. now have a financial sector that creates 4% of all job in the country but takes 25% of corporate profits. >> how do you know it's the regulation that causes people not to lend. >> i would argue that's only happened at the tail end post-financial crisis.
8:20 am
there's a lot of problems with dodd frank. this phenomena has been happening for 40 years. if you look at the rise of finance as a percentage of the economy and new businesses, you can make a line, new business growth starts to flatten out and fall post-'80s. there's a problem with entrepreneurship associated with all of this. >> this is the rise of bernie sanders, i would imagine. >> i think this book explains both trump and sanders in a way. people look out and they see wages have been flat across the boards since the early 1990s. >> right. >> working class white men, the trump votership hasn't gotten a raise in real term since 1968. sanders and trump are different sides of the same coin in that sense, the establishment model for a lot of people is not working and that's why we're seeing populism. >> is it that capitalism doesn't work or -- >> i think capitalism is great. it's crony capitalism. what we have now is not what capitalism was supposed to be. adam smith's time, small,
8:21 am
midsize family owned businesses. >> what induces and allows the crony capitalism? and i still think it's the regulation and deregulation. >> i think money politics is a big part of that. if you look at who the top lobbyists in the country are, industry by industry, the financial sector basically flips off with big pharma every year. so there's just -- the wall street/washington corridor is no joke. >> and it's on the other side with unions. >> is this is a bipartisan thing. i'm not blaming the right for this. >> the first thing you bring up, too much deregulation, too much corporate involvement. and then i have to induce you to say oh, yeah, there are the other side of things. that's a "time" magazine approach to this, i think. >> if you read my book, it goes much deeper than that. there are problems with business education, the way we're teaching corporate leaders to think about the world of industry, basically finances the core curriculum and mba programs. there's very little focus on industry. i grew up in indiana in a small
8:22 am
rust belt town. my dad runs a small manufacturing business. we need to focus on the makers and the people that are really growing jobs and creating business. >> you have to figure out how to do that in a global worm where labor is cheaper everywhere else. maybe you don't want the trump approach with tariffs and america first and xenophobia and everything else. maybe you don't want the notion that we just let what's happens with free trade, globalization, we let it happen and come what may. >> for sure. that's a big part of this. the conversation about trade right now is very much a part of this conversation. the establishment system. the system allows 40 years, really isn't working well. >> we do know there's basic tenets of capitalism that are essential. when crony capitalism gets in the way or when governments try to jigger some of the edges of capitalism, that can ruin the entire process. >> listen, i think capitalism is the greatest way of creating wealth ever in history. you have to make it work. >> how do you make it work? that's the question.
8:23 am
>> it's already working. >> it isn't working. the current system is not working very well. >> come on, guys -- >> better than the alt enative. >> 2% economy, $4 trillion. hello. >> the quality of life in capitalistic countries versus socialistic countries. >> we're not arguing for socialism. >> you're saying capitalism is not working. >> that's right. >> tens of millions of people from abject poverty to middle class. >> this is an argument i'm actually not arguing for. i think capitalism is a great system but i think we need to tweak the rules to make it work better fob everybody. >> maybe you need to tweak the rules so there's fewer rules where actual capitalism can flourish. >> to answer your question, andrew, i think we need to look at the tax code. it has to subsidize savings rather than debt. that would be a great place to start. >> maybe allow corporations to -- >> check it out, everybody "makers and takers." >> thank you. still to come, breaking
8:24 am
economic news, a consumer price index and housing starts just minutes away. we'll bring you the numbers and the instant market reaction. how's it going watson? welcome to the bank. hello tom mccabe. executive from dbs bank. i am keeping busy assisting your relationship managers. how so? i can read over a thousand research reports every day, to help you keep abreast of market movements and to help your relationship managers give better advice. that's great. today's fast moving markets make it hard to keep up. but together we can stay one step ahead. we make a great team, watson.
8:25 am
8:26 am
coming up, when we return, we have the consumer price index, the housing starts, numbers and instant reaction. that's next. we'll be joined by former bush council of economic advisers, chairman glen hubbard, get his take at the intersection of the
8:27 am
economy and this year's election. you're watching cnbc, first in business worldwide.
8:28 am
8:29 am
8:30 am
♪ i bid my life on you welcome back, everybody. we're just a few seconds away from the consumer price index and housing starts. let's get right to rick santelli. >> lots of data, up 6.6% on april starts. that's up 1.172 million. of course, that's a little bit less than we were looking for. the reason it looks so big is because last month was made to look much smaller. down 8.8. now down at 9.4. permits, the glimpse into the future, up 3.6%. that's wls a little light for the same reasons, although it's coming from a negative, a little bit less negative, minus 7.3. released at 7.7. buckle up. heart medicine ready? up 0.4 on april's cpi, up 0.4.
8:31 am
wow. if you strip out the important food and energy, up 0.2%. we were expecting up 0.3. we were expecting warm. it was warmer. 0.2 on the core is what we were looking for. the everybody is glued to the year-over-year cpi. that's ex-food and energy core. that was up 2.1. that's about right with expectations. but here's why it's fascinating. it's coming off at 2.2. that was last month, unrevised. 2.3 was february. 2.3 was the highest year core rate of change since september of '08. we back up from that just a little bit. but nonetheless, it's something that is going to be debated because, of course, with virtually no growth we're seeing some pricing pressures. obviously it's the service side. so it's something to keep in mind. interest rates started to move higher yesterday. i don't know if it was the oil or the equities but one thing i could say, some of the buying
8:32 am
last week ran out of gas. the big dell deal might price today. maybe there's hedging activity involved in that. we'll monitor all that for you. back to the game. andrew, how's it going this morning? >> it's going well. thank you, rickster. while you were talking there was a heated debate of some sort that we got to find out about. steve liesman and diana olick join is us now to break down the numbers and a distinction between april and march. >> we were arguing the numbers yearover yea year-over-year. there's been concern out there about overheating in the multifamily apartment market. you know, we're still well below historical averages. i will point that out. we're selling new homes at two-thirds the rate we should. talk to the home builders. why rm you putting up more homes? the answer is we've got higher costs for regulation. we have higher costs for land, labor, everything. and they're also focusing on the
8:33 am
high end of the market right now. what we really need is the starter homes. steve, i know you've been talking a lot about health in the housing market but we're not seeing it really on that low end entry level starter home which we so desperately need right now. because inventory is so low. we want to see the builders put up more lower priced homes. >> when i look back at the way housing has played havoc with the u.s. economy, when i go back to the savings and loan crisis, go to the financial crisis of this country, i don't know what the right level is. if you want to hold out this -- and i don't though you do this -- if getting where we were before is where we want to get, i don't know if i agree with that. >> never said that. >> what was the peak, 2.5? i'd like moderation in here and i want people who want to buy houses to be able to get them. i want there to be supply and i warrant what i'm getting now, housing contributing to overall macro economic growth. all that, to me, is good stuff.
8:34 am
>> but you get out there on the street and talk to those entry level buyers and millennials are aging up into that range where they want to buy homes. they get out in the existing home market. they can't find anything to buy. prices are increasing more than they have been lately because of that tight supply, not because of demand. they look to new homes. they can't find starter homes. >> everybody says the cool millennials want to live in the city. >> we've done stories about how millennials age up and start to have babies, they want to move to the suburbs. they like the more urbanized suburbs. >> rick did point out this number of 0.4 being up. that looks like it was all energy. this is something that's going to be talked about a bit on the streetlight today. do we have an inflation issue? i see 3.4% month-over-month increase in energy prices here. when i look at everything else, housing shelter, it's up a
8:35 am
little bit, 0.3%. other stuff is down interestingly enough. new and used motor vehicles, down 0.2. household furnishing operations down 0.4. apparel down 0.3 after a big decline last month of 1 about the 1%. so i'm not seeing across the board concerns about inflation but we don't have time to discuss this. i will tell you, airline fares, i thought were supposed to go down. they went up 1.1%. for reasons unclear. it was a 1% decline the prior month. i don't know you walk away with a huge concern about the inflation number even though the top line was 0.4%. you're still 2.1% year over year. >> the treasury yields moved up, the knee jerk reaction from the market. >> as a one-time change in the inflation because of energy. what are you looking at, joe? >> nothing. bump for joy. >> can we announce it in the 8:00 hour. >> celebrities are getting
8:36 am
pregnant. they have four examples of people with the baby bumps. just no reason i'm bringing that up. it's in the paper. are you giving becky the thumbs up, too? >> thanks, steve. and diana. joining us now, glenn hubbard, the dean of columbia university's business school and former council of economic adviser's chair under george w. bush. are you an establishment republican, glenn? where do you fit in just so we know what we're dealing with anymore. >> i don't know anymore. i would say yes, an establishment republican the way that's used today. >> you've watched this election and i'm -- a lot of establishment republicans are still telling me, hey, it was a pl plurality. unfortunately he got more votes now than romney.
8:37 am
what's wrong with the republican party? >> i think the real question, i'm just an economist, not a politician. the real questions as i see it are people are frustrated about slow growth and a lack of economic inclusion. >> why? what's causing it? and is the -- i mean, the answer for these people that are disillusioned wasn't all policy wonk like jeb bush. it wasn't a charismatic young senator like marco rubio. it wasn't a fire brand conservative like ted cruz. it was donald trump. >> well, i think what mr. trump did successfully is tap into a fear about growth and anxiety about where we're going and anxiety that washington doesn't work. whether he's the right vessel for that anger, i leave up to political commentators. underlying economic trends are real. >> if you had run, what would you be running on? and how would all these people that are feeling this way on the left as well with the people that are, you know, feeling the
8:38 am
burn, what policy changes do we need to get back to 3% with wage gains and with participation rate that goes up. and is it even possible in a global world? >> i think it is possible. i think the ingredients are pretty simple. we have to focus on what we know solves the problem and what actually works. i would put in that fundamental tax reform, top to bottom regulatory reform and real policies for inclusion. a big increase in the earned income tax credit, wage subsidies to really make work pay. we can do these things. we know they work. we know there are compromises that are possible out there. whether any of the actual candidates get to something like that is anybody's guess. that's what would work. >> the -- how important is completely unfettered oborders n terms of trade, free movement of capital in and out? no tariffs, you know, no
8:39 am
restrictions on who can buy, mergers and acquisitions go both ways across the entire planet. how important is that? >> i think it's very important. i think trade is a very big deal for the country, not just because it provides more choice and cheaper goods for people, but because it also can raise productivity growth. the issue, though, is how, whether it's competition from trade or competition at home, how do you cushion people who lose? that's a story about wage subsidies, training programs but trade is absolutely the right answer. it's also in our security interest as a nation. >> would you be -- if asked to serve again in a republican administration would you be part of the trump administration, if he were to win? >> i think it depends on the agenda. i'm just an economist. it depends on what the policies are. the right policies for the country are growth and inclusion. i'm not yet hearing that from any of the candidates on either side. >> what do you mean inclusion?
8:40 am
>> really expanding support for work, not putting people on the dole but giving them a chance to work and earn more money from doing so. >> right. sounds good. the devil is in the details, i guess. >> we had an author on, who wrote the book "makers and takers" who talked about the financialization, if you will, on how much money has gone not to the to the companies themselves. >> capitalism is the greatest engine for growth that we've had. it's more than capital. it's really about what kind of system promotes innovation. and i think the concern might be that the financial sector had gotten too big, relative to other innovative sectors. finance is still very important in the american economy. and i think politicians who
8:41 am
demonize capitalism are demonizing growth and living standards. it's a dangerous road to go down. >> capitalism has grown to be a bigger percentage, because of more regulation or because of less regulation? i think we need more regulation, you know? we have dodd frank, we have sarbanes oxley. we have the fed at zero. i think we need more government involvement. that will fix capitalism, don't you think, glenn? >> no, i don't. but i think what we really need is not a debate over more or less but over whether the regulation we have makes sense. things like sun setting, a top-to-bottom presidential commission to look at what we have. we've created a lot of complexity across the state and federal level. again, not hearing about it in the campaign. >> if you get smart, well intentioned people who can tweak things -- it's always worked in
8:42 am
the past. kidding, glenn. we'll see what happens. we live in interesting times. >> definitely. >> will you endorse trump someday or not? >> i think an endorsement from an economist one way or another is not worth a lot. >> you're the ones that know how to fix everything. who's going to fix it better? trump or hillary? >> right now i haven't heard serious ideas from either one to be honest. >> you're a bernie guy. thanks, glenn. okay. coming up, the new comedy economy, all jokes aside, comedians ditching traditional cable while standup specials on netflix, hulu are at the core of the universe. we talk to emmy winning comedian scott ackerman. why are you deleting these photos?
8:43 am
because my teeth are yellow. why don't you use a whitening toothpaste?
8:44 am
i'm afraid it's bad for my teeth. try crest 3d white. crest 3d white diamond strong toothpaste and rinse... ...gently whiten... ...and fortify weak spots. use together for 2 times stronger enamel. crest 3d white.
8:45 am
welcome back to "squawk box." we have tjx reporting better than expected earnings and revenue. the shares as a result are up sharply, up 4%. this is not what we saw with most of the mainstream anchor mall-type companies. tjx, better than expected results. >> we'll talk a bit about comedy, the digital streaming of comedy is changing the standup industry as we know it, how comedians brand themselves, how they grow an audience, cultivate jokes. comedian scott aukerman is here, he's the executive producer of "bagillion dollar properties."
8:46 am
it debuted in march. his funny or die web series with zack galifianakis. i never can pronounce that. >> thank you for being here. >> my pleasure. >> the digital world changed your life? >> it has. when i started out in the '90s there were a few ways to become popular. you had to be on "the tonight show." now it's meaningless. no one cares. there's so many talk shows out there, who cares if you're on one. you had to get a sitcom and get a strong ten-minute act that could translate that a sitcom like "roseanne," "seinfeld" or "ray ramon knoo."
8:47 am
now i'm on a sold out tour across the country and no one has heard of me. >> the 2 million a month, what did it take to get there? >> i started seven years ago. i'd get about 2,000 listens a week. i've done it consistently. i put it out once or twice a week. >> do you make money? was there a tipping point you make money or is this a leader to get you the bookings? >> it started out as a loss leader. i started a p eed out as a podc. we were laughed out of major, major brands saying why would we ever advertise on a podcast? and now we can all make really good livings off of it because advertisers have noticed that people really listen to podcasts and they have really devoted niche listenership.
8:48 am
people are aiming for niche audiences in a way we have never seen before in comedy. >> how big do you have to be. >> if you get 30,000 listens aweek, we can get an advertiser interested in it. >> we go back to the comment about the "today" show -- >> "tonight show." >> getting on a big show like that doesn't move the needle anymore. >> it doesn't move the needle anymore. it used to be if you did a standup set, if johnny called you over to the couch, you would tour forever, have a really solid headlining career going in the clubs. and now because there's just so much entertainment out there, it really doesn't matter if you're on one of those shows or not. >> is that a reflection of "the tonight show" or the club scene? >> the club scene has died down a little bit but it's more of a -- there's so much entertainment out there now which is great for comedians because now you can get a show but not everyone is watching that show anymore.
8:49 am
it used to be if you had a sitcom out there, there would be 30 million people watching your show. now we can put out my show, my talk show that i host, "comedy bang-bang," you know, maybe 100,000 people will watch it every week. those people are super devoted to it. >> what's going to happen to comedy central? how important is comedy central in your leif these days? >> i think it's great. kent alterman just took over there. there will always be the gate keepers and these defendant nst people go to. i know people who turn on comedy central and leave it on all day. there are newer things popping up that have niche audiences. it's a small network, see so. they're willing to spend money. >> i asked before we came on, most underrated comedian? we talk about amy schumer.
8:50 am
>> everyone talks about amy schumer. how can she be underrated. >> i said not her. give us the names of -- >> everyone knows amy schumer, keon peal. there's paul f. shows but peopl thompkins, lauren lapkis, incredible person, one of the funniest people i've ever seen. these are people who don't mean a lot to the public at large yet. >> but they will. >> not only will they, but they have an incredibly devoted audience right now, like myself we're on a tour right now. and i'm playing to thousands of people at night and no one really knows who i am outside of those people. >> i want to ask real quick because we have to go, the idea -- it's still a touring business though. >> uh-huh. >> the economics haven't shifted online. >> no, i could stay home. i tour for fun. i could stay home and do my podcast and still make a comfortable living at it. it's so strange to be able to put something out for free on the internet and so many people listen to it.
8:51 am
>> the bookers at fallon just messaged me. i told them no. you have no interest. you don't want to go on. >> no, nope, of course i would go on -- >> oh, okay. >> you told them, well -- >> shoot. >> you should not be representing me in this matter. >> okay. i just wondered. from what he's saying -- >> i would still go on but still doing a standup on fallon doesn't mean what it used to mean. you want to go on fallon? >> i love fallon. >> just tell him. just be honest with him. >> we're going to talk about the fed. >> we're going to get you on colbert now. i do want someone to watch me. i'd rather be on fallon. coming up jim cramer will join us live from the new york stock exchange. we'll get his take on the day's top stories next. first, as we head to break take a look at the futures. they've come down with a lot of the news we've seen, s&p futures off by 5.5. stay tuned, you are watching
8:52 am
"squawk box" here on cnbc. you wouldn't take medicine without checking the side effects. hey honey. huh. the good news is my hypertension is gone. so why would you invest without checking brokercheck? check your broker with brokercheck.
8:53 am
8:54 am
let's get down to the new york stock exchange. jim cramer joins us now. your words were ringing in my ears when i was watching the market yesterday, jim.
8:55 am
it always seems to do that, doesn't it? if you feel like it can't go up and it just seems to go up sometimes. >> yeah, i mean, look, oil turned up. and that brings out people who want to buy retail stocks. a lot of these retail stocks ran. that's why home depot's down a little bit, i think. people wants to bring out everything that shouldn't go up. airlines, i know phil lebeau was talking about the capacity coming down with delta, so the airlines go up. all the industrials go up. and it's just by rope, there's no real volume. there's no algorithm. you very rarely see a stock other than valeant that trades as size. it's not a joke, there's just a big basket called stocks and the basket goes up when it all goes up. >> huh. still trying to figure out -- i'm like doing the ben franklin close. oil i'm not that scared of now, dollar i'm not that afraid of, what if apple has really bottomed? that's the one thing in the last year we've had to deal with
8:56 am
apple going down from those levels. and it's a dow component. and it was just almost symbolic. maybe that's finally -- >> 40 straight points. we haven't had any downgrades yet. there are a lot of people who hate it that are recommending it, i think they've been waiting for it to go up. i wouldn't be surprised if they start cooling on it. reading a lot of pieces on the iphone 7 there's no interest. i think that's amazing we don't even know what it looks like but they've declared it dead on arrival. that's good for people who own the stock because you need to get the so-called bulls to downgrade it. by the way maybe it was buffett's secretary that liked apple. maybe it was someone who bought apple by mistake. honestly, the hatred for apple extends to every single level. so these analyst who is have buys, and they almost all have buys, they have to downgrade it for it to bottom. it cannot bottom with these buys. >> her tax rate is awful high though, and i think he should just pay her a million dollars a year. >> i think omaha bought it and
8:57 am
shoved it into berkshire's account. maybe it was td ameritrade. tenderly wasn't buffett. he hated it. >> all right. we'll see you in a few. >> yeah. >> coming up, we'll have some of this morning's big stock movers. stay tuned. you're watching "squawk box" on cnbc where comedians come. recently, a 1954 mercedes-benz grand prix race car made history when it sold for a record price of just under $30 million. and now, another mercedes-benz makes history selling at just over $30,000. ♪ and to think this one actually has a surround-sound stereo. the 2016 cla. lease the cla250 for $299 a month at your local
8:58 am
mercedes-benz dealer. mercedes-benz. the best or nothing. gomery and abigail higgins had... ...a tree that bore the most rare and magical fruit. which provided for their every financial need. and then, in one blinding blink of an eye, their tree had given its last. but with their raymond james financial advisor, they had prepared for even the unthinkable. and they danced. see what a raymond james advisor can do for you. years ago, i was starring in a allergic to other opening - slash - closing night it hit me: hats for cats. everyone said i was crazy. when i went online. i got my domain, from godaddy. now these things are fee-ly-in' outta here. got a crazy idea you think you can turn into a success?
8:59 am
we know you can and we've got a domain for you. go you. godaddy.
9:00 am
that does it for us. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futu futures giving back some of yesterday's big gain, a lot of news setting the table today. home depot crushing estimates. some new valuation estimates on youtube. we'll get to all of that. europe's mixed at this hour. oil's steady, but watch bond yields today. cpi comes in with the hottest number in three years. roadmap begins with oil hitting a seven-month high while the market keeps a close eye on saudi arabia as well as service disruptions. >> home depot reports better than expd


info Stream Only

Uploaded by TV Archive on