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tv   Squawk on the Street  CNBC  May 12, 2017 9:00am-11:01am EDT

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>> so they're going to cut it by 20%. >> we have seen that coke has made the bottles smaller. >> comes after a decade of super sizing. >> gum chewers? >> not so much. >> i like gummy type stuff but that's got ground up horse hooves in it. >> don't ask what's in it. that's what i have learned a long time ago. join us on monday. time for "squawk on the street." ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. premarket looks like how the week is shaping up. dow and s&p lower. nasdaq hanging on. got more retail pain from jc penney today and some combative tweets from the president. europe is mostly in the green and yields have come off as retail sales is a miss. core cpi falters at 1.9.
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the lowest since october of '15. the road map begins with a rough week for retail. nordstrom and penney are down this morning. >> nbc's lester holt sat down with president trump and we'll bring you the highlights on russia and more and plus the tweet storm this morning, threatening former fbi director comey. >> apple is taking aim at another all time high today and two analysts raising the price target. first up though, government data showing retail sales up 0.4 in april. the strongest gain in four months and nordstrom beat on revenue and comps are down 0.8. penney's swinging to the surprise profit, but revenue misses on a 3.5% decline in comps. jc penney is going to give its all time low run for the money today. >> what can i say? minus 3.5 comps. they did talk about how march and april improved from
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february. now, kohl's said the same thing. there was a lot of etf selling yesterday. really came off of macy's. ebitda, here 40 million down from 176 last year. there's no growth and it's really hard in an environment where there's companies growing so quickly. to say listen, i'm going to buy some jc penney so i see no reason to own it. i do feel that the big issue here is you have fine jewelry doing well. you have home doing well. but we know amazon moving in against home. sephora that's looking at your selfie best. it's a reason for being in again. that's what happened yesterday with macy's. what's the reason for being? why do we need penney? obviously if you work at penney, i like to shop at penney, but there's a lot of places in the world to shop at. we have too many places to shop at and that's really the take away. too many. >> some of the macro retail data, department stores down 3.7. >> i know. >> nonstore up 11.9.
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essentially amazon. >> look, this is your cell phone. i mean, this is just -- if you do want to shop. nordstrom's had this thing too. nordstrom is an amazing company. a really kind of sad conference call because they provide the best service. but it doesn't matter because your cell phone provides better service. >> it does. and your point about being very particular in what it is you want also seems to take away from the overall consent of a department store. >> yes. >> of going somewhere for a lot of your different needs potentially. even, you know, again the guys who -- they were saying that traffic is really not down that much. >> right. >> but people just come to get the one thing from the one store that they want after having researched it or perhaps even bought it on their phone or at least certainly preordered or know what the price going to be. then they leave. >> right. new generation doesn't want to waste any time at the mall. previously you listened to the piano playing in nordstrom.
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nordstrom, one of the things that bothered me about the call it was about what sold well and merchandise and what was good. we didn't get to shoes until like two-thirds of the way through. inste instead, it was talking about we have a rack next to the full -- full store, we do well. that does well. they were down 6.4% comp sale. >> big picture, what do you do if you're running one of these companies that really is much more of a 20th century company? >> that's where i'm going which is the big -- you're playing out with the hands behind your back. they don't have the artificial intelligence, they don't know what the customers want. >> don't have the data systems. not enough. not like amazon. >> amazon knows so much more about a customer. and nordstrom always was like you had that one-on-one relationship with your salesperson. well you have your one-on-one
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relationship with alexa. >> she is literally in your house. you're talking about fly wheel effects -- >> exactly. she's not really intrusive. i did sound off a bunch of alexa for those who were watching earlier and nordstrom, they don't know anything about their customer versus what amazon does. if they are so smart about their customer, and it doesn't matter. amazon knows so much more. it's so important. >> and so -- >> and sad. >> so the answer for these companies is? >> well, look, all of the -- they have 122 stores and they said they're all cash flow positive. >> right, by the way, macy's every one is profitable as well. they made $71 million in the quarter. >> as the generations get older, you look at the new generation that just frankly is outrunning these places and they know it. i mean, it's not like nordstrom is saying we're doing well.
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not with the minus 6 comp. it goes to minus comp. what if it goes to -- for heaven's sake what sears is doing. i don't mean to pick on sears, because i learned from eddie lampert that sears is much different and the fake media -- there's a lot of fake media. didn't trump -- working overtime. >> we'll talk about that. >> it doesn't matter. eddie -- i'm not picking on him. the fact is is that nordstrom is one of the great merchants of all time. >> the market cap of jc penney and sears added up together doesn't amount to a hill of beans. >> they have a lot of people working at the places. that's going to happen next. >> much more about employment -- >> about employment. >> than about market cap. >> as cuban alluded to yesterday. we'll hear from cuban later today -- >> powerful -- >> right. do a lot more than with a third fewer employees. >> the whole melissa lee show last night was fantastic and must watch.
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and with steve wynn stuff. >> cuban is cluing into the whole ai machine learning. >> you said he -- he had -- i keep on going out to california. i'm trying to learn. i go out there. >> i don't go there as much. you can learn here in new york too. >> so true. so true. i'm not -- i'm just saying that when you're out there, the people want to show you. like let me show you what we're working on. it's -- every case it's about not being as smart as the machines. the machines know more than the nordstrom brothers. the nordstrom brothers always knew what you wanted to wear and now these guy -- the machines have figured it out ahead of the nordstrom and they can charge less. it's a very devastating -- it's a very sad conference call. >> yeah. >> it's sad because they can't figure it out as well as amazon can. >> one last note on amazon. the journal today saying a big push into furniture is on its way. building these larger ware houses to store and ship bulky items like furniture. one of the fastest growing
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categories. >> maybe andrew leff will be bailed out. i had brad jacobs on earlier this week. that article mentioned xpo logistics and what jenkins is doing is providing that less than -- that sofa to you. ikea has already been doing this. but yes, i think when amazon does this, it is bad for williams & sonoma, bad for the home business of jc penney. it's going to be bad for macy's. it's going to be bad for everybody who sells furniture and xpl logistics can get it to your house because that's the last mile sender. they can put it -- you know, get it to your house and that used to be a difficult thing. you needed to rely on these department stores with the big trucks. >> you did. and the delivery times took forever. the time between when you bought a piece of furniture and it arrives is months oftentimes. not because of the delivery. because of the manufacturing. >> if i had you over for dinner,
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i would order amazon, bring the stuff to my house. and, you know, you would think that i had furniture. >> wayfair is down 6% in the premarket. >> well, it did have a pretty big run. now, andrew leff did indicate on the network that he was going to go golf while he waited for it to come down and so maybe he can finish the 70,000 holes that he was playing in the interim. happens to be fun. >> the president this morning adamantly denying that he has any business dealings with russia. this is what he told nbc's lester holt. >> -- sent a letter to lindsey graham, from one of the highly rated law firms in the country, that i have nothing to do with russia. i have no investments in russia. none whatsoever. i don't have property in russia. i built a great company, but i'm not involved with russia. >> and now we have more tweets
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from the president today. let's get to the white house and eamon javers. good morning. >> good morning, carl. the president is awake. he seems angry and he is tweeting this morning and i want to give you a couple of the tweets from the president of the united states just within the past few moments. including a threat to simply end the white house press briefings because his officials have struggled to get their stories straight during the course of the week this week. he wrote on twitter, as a very active president with lots of things happening it is not possible for my surrogates to stand at a podium with perfect accuracy. maybe the best thing to do would be to cancel all future press briefings and hand out written responses for the sake of accuracy. as far as an official that i just spoke to at the white house now is aware, the press briefing scheduled for today is still on. we'll see whether that stands throughout the rest of the day. then the two tweets which are getting the attention of the world this morning. one on james comey, the fbi director the president fired earlier this week. the president's tweeting, james comey better hope that there are no tapes of our conversations
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before he starts leaking to the press. when james clapper himself and virtually everyone else with knowledge of the witch-hunt says there's no collusion, when does it end? the president there suggesting it's possible he has a nixonian style taping session that may have taped himself and the fbi director and the fbi director affirmed for him that he was not under investigation. now just got off the phone with a former high ranking fbi official. i want to read to you some of the comments from that official just seconds ago reacting to the president's tweets here. because i think this is important. the fbi official saying, first, he started a war with the intelligence agencies and now he wants one with the fbi. this is not going to end well for this administration. he is out of control, referring to the president of the united states. the former fbi official says it's so out of the norm for him to even say that. this threatens the independence of the fbi and goes against core american values.
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so obviously the president's tweets this morning stirring up a firestorm here in washington, d.c. we'll have to monitor developments carefully for the rest of the morning, guys. >> eamon, thank you. eamon javers at the white house. now, we have been through a heck of a week already. we have talked about the degree to which the market thinks this is a side show. >> right. >> when does that change, if at all? >> i still think maybe when earnings season is over and we're less focused on individual companies. because i think that we struggle to relate. i mean, there's a -- started a war with intel agencies i think of intel mobile. it's not about that. >> by the way, we'd all like to think of intel mobile ai. >> i'm using it as a metaphor. i look at the tweets. i try to relate them to the s&p 500, maybe you could do that. and then i relate them to the goldman upgraded tiffany. tiffany is going to go up, i can sit here and lament some of the
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tweets which i know i would not -- i'm not president, but there's a redefinition of what's presidential. but it doesn't factor in to, you know, why you should sell ge on the deutsche bank's -- >> downgrade. >> yeah. i mean, yeah. >> ge has not performed well this week. >> we have a new downgrade at deutsche. to a sell. >> yeah. that was a brutal -- a cash flow issue. you know, i wish you -- you can't relate that to comey. >> $28.40 on ge. >> kind of like, you know, there's like -- like where's the -- where's the nfl commissioner who says we have to stop this? >> where's the person who can explain how democratic processes and norms work to the man who is the chief executive of our country? that's what i'd like to know. he doesn't seem to have an understanding or an appreciation for simple democratic -- how a democracy works. sorry. >> well --
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>> i'll get -- >> speaking of salesforce.com -- >> yes, exactly. certainly this tweet does not close this chapter. a lot of people expect that comey will have a response of some kind. we'll see. when we come back, we'll talk some unilever. hear what the ceo told jim last night. take another look at the premarket. the dow going for its longest losing streak since the end of march. but the nasdaq trying to hang on for a gain for the week. back in a minute. ray's always b. last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques. remote moisture sensors use a reliable network to tell them when and where to water. so that farmers like ray can compete in big ways. china. oh ... he got there. that's the power of and.
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it's been almost three months since unilever rejected kraft heinz's takeover offer. major kraft shareholder warren buffett said it was not as hostile. here's how the ceo responded last night. >> in the end, our strategy in fact in investing is warren's strategy. >> right. >> my returns have been higher in the last eight years than warren's returns so i think it's better if he leaves us with what we know how to do well. [ laughter ] >> that was spicy, jim. >> yeah. that was -- whoa. speaking of salesforce -- >> but what returns is he talking about? the returns on his stock price? >> stock price, yes. what was really interesting was this man was indignant in his
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own kind of light way. meaning that he basically has -- he was saying, look i have much better brands. we're doing better than kraft heinz. i can't believe warren buffett did this. making it as if warren was really the driver. >> right. >> and that he took great offense to it. >> warren was not the driver. >> right. >> as we know. >> right. >> he was there. it was once he learned that it was potentially not friendly or it was going to be nasty, he was like, cut it out. put the brakes on it. then he came on our air with becky and talked about a language barrier. sorry. being one of the reasons why there may have been a miscommunication. which is ridiculous. language barrier. you know? >> multilingual of which he's better than everybody else in any language he sports there. but i think it was clear from his point of view, there was no meeting of the minds or no actual substantive discussion. you know the other side of this. and that does not -- they don't seem to be saying the same
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thing. but i'm with mr. polman. he wasn't even the least bit interested in selling but he was doing the strategic review before he said and it produced a lot of good results. >> right. yeah. you know -- >> he's up 30%. >> i continue to be fascinated by the failure of kraft heinz and in such a spectacular fashion and how quickly they folded. yet, i continue to hear different things from both camps in terms of what was said or done which goes to the lack of perhaps communication. but the kraft heinz side continues to believe in many ways that they did get a signal that indicated there was a willingness to engage. >> wow. >> whether polman obviously and others say that is far, far, far from the truth. it just -- it was such a misstep for kraft heinz and their strategy so much depends on their ability to continue to acquire. even this week, alex bearing in a written interview did indicate we can only be friendly in our
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future deals which of course i reported as well. but that makes it more difficult for kraft heinz. this was not an insignificant moment for them. polman said no way, no how. >> why isn't that stock at 80? the business is so bad, they have got the center of the store -- which they claim nobody goes to. unilever has the center of the store and they're kicking it. to me without a deal, this thing is a wasting asset. look at those brands. >> well, they may find one. they're considered to be excellent operators as we know, jim. >> excellent operators but the dogs won't eat it. i mean, that stuff that they sell to the millennials. this is the pantry. >> i'm having trouble with my dog eating too. maybe we can talk off line about that. >> my dog, last night -- they were ravenous. i try to give them the ligaments. try the ligaments. >> yeah. ligaments. >> stick with dog food. >> no. no. that's natural organic, chief, come on. anyway, i look at kraft heinz. i look at this pastiche of the
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brands and i say, they need to buy someone yesterday. or that stock is going to be at 80. >> is unilever ever going to buy anybody? >> the kensington acquisition and paul polman what he did with this dollar shave club, when he decided to take on gillette, i think he's eviscerating them. you know, he says, listen, when you go to buy gillette, you have to go and find somebody with a key, it's like going to jail. really expensive. i mean, he's magnificent. he's right down the block from us. 100 yards from us. in englewood cliffs. >> best foods building. >> hellmann's, look for the hellmann's, look for the best, man. >> we'll get the "mad dash" with jim in a moment. futures still mixed here with the nasdaq stronger than the dow or the s&p. back in a minute. hey, the future, what's her problem? apparently, i kept her up all night. she said the future freaks her out.
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♪ oh, man, it has been a long, interesting week for all of us. >> wow. >> you have been working hard as always. we have a "mad dash" to do. >> same with you. same with you. >> about 5 1/2 minutes before we get there. >> so last week when i was out of in cupertino, tim cook announced $1 million to help the manufacturing, and we know it's corning, from corning, new york.
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$200 million to foster glass innovation and glass production. when you look at this, it's the old days when they're doing fiber. corning is doing a lot of stuff. this is a great i think affirmation that we can make things in this country. like dow chemical announced last night we are doing advanced manufacturing in the country. we're not going to bring back the old manufacturing. we're not going to be glass blowing and doing that stuff. but this is a sign that cook gets it and corning gets it. >> don't forget, verizon a few weeks back when lowell mcadam and the ceo of corning joined me for verizon's new big order of fiber for their 5g rollout again from the north carolina plant they're going to be adding a lot of capacity to at corning. >> well, maybe these are feel good stories but you know what? these are jobs. and corning's going to benefit. i thought -- i think it was really interesting. corning has money, but apple wants this to be earmarked. i think it's a sen saxal -- sensational thing that apple is
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doing and if we maybe it so we have the best glass. for instance, for olad, they use samsung. would be better if they brought it back home, but not mine to choose. but i think this is a sign, boom, $200 million, corning, make the best glass. >> we have an opening bell a few minutes away. stay with us on "squawk on the street." a used car,
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talk to your advisor about a brighter financial future. the opening bell is brought to you by brighthouse financial. established by metlife. >> you're watching cnbc "squawk on the street" live from the financial capital of the world. the opening bell in just about 60 seconds. a lot happening both on the retail front as we get earnings from nordstrom and penney. some of the macro data was -- would you say disappointing, jim? >> i always find that this is kind of what we're looking at as did the animal spirit leave us? i thought that maybe after repeal and something that there might be a little more momentum. it's very difficult to figure out how strong or weak this economy is right now. it's also state by state. california is picking up. there's a very interesting -- a
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materials call yesterday. they're talking about california doing quite well. so you have a lot of mixed signals. >> yeah. we had some state by state gdp numbers yesterday. texas doing great. california. there's the opening bell and the s&p at the bottom of your screen. at the big board this morning, celebrating its ipo today gardner denver. manufacturer of flow control and compression equipment. we'll talk to the ceo later today. at the nasdaq it's altimmune. a biotech company. >> the deal that wilfred frost was talking about. it had some banking implications mostly from mastercard and visa. and the agriculture. it was the china deal announced. really out of nowhere. and worth the -- worthy of our attention because that's kind of a deal which says you know what? would anyone think that would be the first big deal out of the chute? i mean, visa and mastercard have been trying to get a little help
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there. al kelley was on visa saying this could happen. i know that things are going to get stronger. but it was rather amazing to kind of hear the cordiality in the country that was regarded as being a rogue to being a country that we made a deal with. i mean, i was kind of -- a lot of surprises from the administration. >> yeah. that deal is going to have access for the banks and the exports of the beef and chicken to china. >> this is real news. >> yes. >> that cap -- for real. this is anthony noto's greatest deal. anthony noto, the coo of twitter. i say, doesn't potus help you? he won't go there. i like he doesn't go there because one day if he -- if donald trump decides not to tweet you have an nfl deal. i think twitter's doing quite well versus snap. >> versus.
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>> really? >> yes. snap how are they going to get the billion that everyone thought. >> billion in revenues. >> everyone thought -- >> they'll get there, maybe not as soon. >> i thought this year they would get there. i thought they had it in the pipe. you know what, the idea of being short snap, long twitter was like in people's ears yesterday. >> yeah. twitter has had a little bit of a psychic rebound. >> yes, it does. >> you know? >> we have -- >> seemed to be more positive. >> we have more user growth for the first time in a long time. all the live video. >> yes. i think that -- you have got to stay -- i have to have it as my home page right now. if the president does cancel all future press briefings and does it all through twitter that's difficult not to have that focal point -- >> also on the "today" show this weekend with willie geist. >> is that true? interesting. >> could he come here monday morning. because we have a cordial
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relationship with him. >> people seem to be coming around to the view that benny hoff has. which is back to data. back to twitter. and data. cuban's been talking about it. that's why he got positive on it. i know another large investor who is interested in the story from that perspective. >> yes. artificial intelligence married to twitter could produce remarkable usage for clients. which is being used to trade a lot of different products. i don't even know if twitter knows that. that people are trading the obscure -- like an exchange. >> keep an eye on your customers which by the way is something you brought up eight months up. i don't know. >> i was trying to get benny hoff to buy twitter. >> didn't work. >> no. i try to get things done. you know, dick costolo -- >> dick costolo -- remember him? >> that never came together. that was in the formative stage,
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didn't come together. but since noto is there, you have a lot of deals. yes, do we miss adam bain? he was the face of it for a while and mr. dorsey he's made square into a power house. he's got that sarah fryer, the cfo, and the former cfo of goldman. sorry. i talk like my dad. he's like this stuff. i do think that what you have here is maybe dorsey can quit square. you have sarah fryer and dorsey spends his full-time -- >> i didn't know where you're going with that. >> on twitter. he does all the things that benny hoff wanted to do with it and then next thing you know you have a real platform. i want to be long twitter. i want to not be in snap until they demonstrate that they can have a little discipline on expenses. >> yes. >> which they didn't. i don't know if you saw the expense line there. >> you mean nonstock comp. >> yeah. nonstock comp. wow. geez, that's a great thing to be the i think king.
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>> 1.3. something like that. >> yeah. >> do we want to talk ge at all? it's had a pretty bad week, the stock down another 1.6% on the downgrade from deutsche bank. they go from the hold to the sell. >> sell. ge. >> to say it's overvalued. they do seem focused on weak earnings, quality, a wide gap between noncash and cash earnings. earnings quality pressures include the exclusion of nonoperating pension accounting, and ultra low tax rates. could cause a future earnings head wind. last time they came in pretty good except on the measurement of cash flow. people have said, you know, they're building inventory. it was more about adjustments given the calendar quarter it was as opposed to any real concern. >> many of the ceos i deal with the industrial -- they were just aghast that they had negative cash flow. that no matter what, timing
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issues, whatever. it's not what you do. i mean, you get these great institutions like a honeywell or united technologies, they're kind of like, whoa, how'd that happen? i think the analysts make you feel -- i don't say this myself. don't think that's true. but he makes you feel that the dividends are in question. that's the way i read this thing. ge's weak cash flow has become worse in recent quarters. he's making it sound like a continuum, not a one off. i'd love to hear from ge this is outright -- that would be terrific that jeff immelt said this is outright wrong. it's not like this. because that's what you need right now, a strong statement saying this guy is dead wrong. >> ge, sort of a barbell on the dow today. ge is the laggard. apple is the leader as b of a takes their target to 180. apple close -- at an all time high today. >> the apple b of a piece was terrific. you have to think of it as autos. start thinking of it as much
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bigger and then cash and then the goldman piece, wow. you know, this piece about the first $1,000 iphone can drive meaningful upside, $1,000 iphone. talking about a phone that is very interesting because one of the things that cook misjudged, they thought this form factor was the one that really would drive it home, but it's the plus and this is going to be a five incher. plus five incher. that's the cord cutter or the cord never that's what people are watching on. so these guys may have the phone that is just a dominant phone. samsung is going to -- is a very big company. can do a lot. but this $1,000 iphone piece, this is a piece that says the best times of apple may actually be ahead of it. >> right. >> i wonder what tony sag annettety is thinking of this right now. >> i don't know. >> bernstein -- the most critical boy i have ever seen. >> he does come on a lot. >> he does a lot of "halftime."
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>> which is good. he's a smart guy. guys, a couple of reports this morning on bloomberg and reuters that, you know, sprint and t-mo are in preliminary, early preliminary, possible talks. i can't really give you much there in terms of -- there's nothing substantive going on at this point in terms of a deal. but here's what you should be thinking about if you own either one of those or you have interest in wireless overall and the potential consolidation we have been talking about for so long. of all the possible deals this certainly is still the one 2 245 -- that has to be front and center. softbank has made no secret in the most recent conference from this week that he wants to engage with t-mo and its controlling shareholder deutsche telecom. so here's some things to think about when that finally does happen. what is deutsche telecom going to want? is masa son willing to eat
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humble pie? as good of a job as claure has done -- >> he's done a good job. >> you're still sub scale if you're sprint. think of the subscriber numbers when you compare them to verizon or at&t and the synergies from the deal are potentially massive. so there are a lot of reasons why you would want to pursue it. but how you do to meet one of the needs of deutsche telecom and it's my understanding they continue to want a significant presence here in the u.s. this is the best investment they have ever made. they want their guy to run it. that's john legere. by the way, i don't think masa would have a problem with that, neither would marcelo. >> marcelo has done a good job. >> yeah. >> he stepped away for last year. >> but he was a billionaire -- >> he was fired up. just because he's billionaire doesn't mean -- >> you're absolutely right. i don't know for sure. but the germans are going to want their guy to run it. really, do you think that john legere would not run the combined company, come on. >> i was creating false tension between us.
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>> the question is, you know, if you're deutsche tele -- to enter a deal that's going to get knocked down by the department of justice. sprint promised you a lot of spectrum because that's what they got. they don't have a lot of money but they have a lot of spectrum so the structure here is very important. when they do finally get to the point of trying to see if they can figure something out on paper. how you structure it. how you pay a premium to a certain extent even though you allow the germans to consolidate this on their balance sheet. owning at least 42% let's call it of the combined company. a lot of things. not to mention getting it to the antitrust review. >> isn't it interesting that legere -- you can parse every word of this, gentlemen, he doesn't slam claure. you know, i asked him who's dumb, who's dumber, what do you think of sprint? yellow. you have to remember he's like magenta. yellow. he has nothing bad to say about them. the parent company of this network he slagged so horribly. he slagged us.
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slagged us is. but sprint, no. hey, you know? so you never know. but claure he tweets a lot about his family. i like that. i like his tweets. i try to learn -- i don't speak his language but he's really -- i like him. he should come on this show. i know that he -- he can sit there and legere can sit here. i don't know that would that would mean for spencer rascoff or gel -- but it would be remarkable. because the two guys are visionaries. both visionaries. >> yeah. changed the business, that's for sure. >> legere, has he weighed in yet? >> not yet. >> he watches the show religiously. among 72 other things. >> the dow is down 27. the ten year yield is lower on the week after that macro data this morning. let's get to bob pisani. >> that's hurting the banks the lower yield. mixed open here, but not surprisingly, retailers weak again. banks down. banks are down 2 or 3% this week. along with retailers. industrials, materials weak.
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tech the big leader. it's been the leader all week. they're the leader up about 1% for the week. april retail sales came out. it's a trend we've been talking about. you see department stores down 3.7% but online sales up about 12%. i like watching food and dining. those are bars and restaurants basically up 4%. furniture sales are good. no wonder amazon is looking to expand into furniture. sales are good there. it's encouraging to hear everyone talk about march and april improving a bit. you heard from the ceo, marv ellison over at jc penney this morning. we are pleased with our comp store sales from march and april. kohl's said the same thing. they're all reaffirming here's the problem. no one is believing the numbers for the full year anymore that's because you have this. you have jc penney. macy's. kohl's. nordstrom. all generally below expectations in terms of the same store sales. there's nordstrom rack which saw an increase. but you have to look at the numbers overall. and you will see great
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disappointment. that's ghie they keep taking the -- that's why they keep the taking numbers down. they have been taking jc penney's numbers down with 66 cents at the beginning of the year and now it's 48 cents. and that's going to come down into the following days so again these numbers don't mean a lot when they say we're reaffirming the numbers now. take a look at nordstrom store sales here. you can see something very interesting. it's true of course full price stores down 6.4%. nordstrom.com up 10.9%. there's the e-commerce doing better. but look carefully at nordstrom rack. well, the discounters are doing great. there's the big story there. nordstrom rack breaks into stores and nordstrom rack.com. the stores themselves are seeing the declines so even the discounters are having a tough time. nordstrom rack.com up 19% right now. take a look at the retail leaders for the year.
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there aren't many of them. give a shout-out to david berman who is often on with david. tiffany and amazon, he has been bearish for a while. ulta is a leader and walmart as well. one thing i want to point out about the retailers, great dividends right now. macy's 6.3%. is it safe we don't know. that's where it is right now. finally we have an ipo, gardner denver here. one of the big ipos of the year. big industrial player. compression equipment. priced below the range at 20, price talk 23 to 26, should open in about 45 minutes. right now the dow down 40 points. david, back to you. >> all right. thank you very much, mr. pisani. we have a crowd here for the ipo of gardner denver. by the end of this year, we could see a similar crowd for spotify. but not because it's going to go public in the traditional way through an ipo.
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but because it is going to list directly here at the new york stock exchange. that at least according to the people who are familiar with the situation. as has been reported previously, spotify is considering and is still currently focused on a direct listing. if that listing takes place which could be by the first quarter or by next year, it will take place here at the nyse. should be an interesting morning for what is of course by far the leader in the streaming of music services around the globe. stockholm based company with a significant presence right here in new york city. currently valued at least according to the last trade in the secondary market at $13 billion. they're not looking to raise capital. in fact, they're free cash flow positive. they're looking to create liquidity for the employees and for the early investors who want to sell. they're expecting to do it through the direct listing that will list right here at the
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nyse. perhaps before the end of the year. it's going to be an interesting process. s very similar to -- very similar to the public offerings. they don't have advisers. they'll haven education process for the potential buyers of those listed shares so essentially you'll have access to all of the same information you would. though won't necessarily be in the s-1 filing. it will still be available to you in very significant ways. i suppose they'll still ring a bell when that actually starts trading on that morning. but it is interesting to note. and a fascinating business, guys, spotify, 50 million subscribers. 44% top line growth over 3,000 employees. and when you look at that value versus pandora which we spent a lot of time talking about it's about seven times as big. >> wow. money could help pandora expand,
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but spotify is way ahead. >> spotify is so dominant, even versus apple. or amazon. or any of them at this point. really interesting. and will be an interesting company. they would hope i would expect it would trade on the peer multiple to the likes of a netflix as opposed to anything like a pandora. >> are you talking about faangs? >> we'll talk more about spotify. >> will they be raising money? >> no. they're not raising money. >> no. >> they have that much money? >> they're one of the best capitalized european private companies. right? >> they raised a convert for $1 billion, as i said they're generating cash. >> that's a fabulous story. >> losing money on a gaap basis but generating cash. they don't need to. by the way, neither does airbnb. they're generating cash. >> no. so many are doing so well. >> you don't need it as a capital raising opportunity.
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it doesn't mean you can't once your stock is listing but it's to create liquidity for the investors and the employees. >> a lot of companies they're regretting the visibility that you have as a public company. so you have to face that. >> can't imagine who you're talking about. >> geez, i don't know. i'm talking about -- no. yeah. >> okay. >> baptism by fire. >> yes, it's not easy. i don't feel for them. >> all right. >> they're rich. remember what lenin said, if the rich are unhappy it's their own fault. >> there you go. rick santelli, remember what lennon said. we'll send it over to you now at the cme group in chicago. >> what, which song are you guys referring to? listen, if you look at what's going on on the fixed income market for the week, carl nailed
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it. not only are tens down a bit. let's see. twos are down two basis points. tens are down one basis points. 30s are up two basis points and bunds are down one basis points. we had the highest grade auction, i try to be as objective was a d-plus for the two year on tuesday. so to me a lot of short presence that was not in the market. it was long presence that pushed steel's yields down. i think that has reversed. certainly gave up ground. a few minutes before the 8:30 eastern data. look at the intraday of tens. it started to get bid up around eight and it wasn't unique here. look at the intraday of bunds, the same set-up. i'm picking a one week of fives because threes, tens and 30s are new guys. i can't give you a one week chart because of the auction but
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the fives show how we came back to the 186 support level and except for the 30s holding up differently. year to date bund, tell you what it has a more aggressive pattern but keep in mind it's settled close to 20 basis points at the end of last year. we failed at 244 or we set -- where we settled last year. tens minus twos, since right before the election look at how much flatter it is. why is that? a little disappointing growth and potentially a fed for a variety of reasons that can't not normalize rates. finally, a couple of charts of the dollar index. it has the prominent 100. you see it on the chart beginning in april. that is such a huge level and it keeps backing away. not portraying a good frontier for those looking to be long. or for maybe higher yields. what's telling you which about what market. very fascinating. back to you. >> thank you, rick santelli. still to come, bloomingdale's ceo michael gould, we'll get his take on the
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road ahead for the retail industry. and the dow is down 28 points, ge is dragging it down. back in a moment. i love how usaa gives me the peace of mind and the security just like the marines did. at one point, i did change to a different company with car insurance, and i was not happy with the customer service. we have switched back over and we feel like we're back home now. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children, and that they can be protected. we're the williams family, and we're usaa members for life. call usaa today to talk about your insurance needs.
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all right, apple above 155. we'll talk about that and more when we get "stop trading" with jim.
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time for cramer and "stop trading." >> a retailer that's weak, but not because of sales. dick's overstated its earnings a computational error, by more than $23 million. i think that's kind of shocking. a lot of shock waves there because dick's is very well run outfit and the ceo was on the other day. so just be aware that that's not because of shockingly weak sales but because of the errors. >> what's on tonight? >> we have a trian related company on. then we have massimo which i think has done some things that are good but you can't. and tableau data back. it's an exciting show. holy cow, man, artificial intelligence. you know, intel has that ad about the simulation.
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remember, brian krzanich said there was a 50% chance that i was a simulation. i liked brian because of that. >> we'll take the under. see you tonight, jim. when we come back, former deputy ag paul mcnulty on the fallout of the firing of james comey. ♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five,
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♪ good friday morning. welcome back to "squawk on the street," i'm carl quintanilla with dave faber. apple at an all time high, but some retail woes. the downgrade of ge, a miss on core inflation helping to bring the dow down about 0.1%. >> our road map starts with retail in ruins. jc penney and nordstrom both getting slammed this morning. we'll talk to the former chairman and ceo of bloomingdale's. president trump talking about the dismissal of comey to lester holt and now he's
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threatening the former director. plus, gardner denver holdings going public and the ceo will join us this hour. busy morning for data. let's get to rick santelli. >> yes, our preliminary read for may, university of michigan sentiment. if we look at 97.7 is the number that follows the full read last month at 97.0, it's the second best read depending on how it holds up when it becomes final of 2017. the best was january at 98.5 which was the best going all the way back to '04. quickly let's touch on something. 2.6 is the one year expectation on inflation. it's interesting because, you know, that basically is right around the high levels we have seen. but if you go to the other spectrum five to ten year outlook for inflation that dropped down to 2.3 in 2.4. it's only a tenth, but now it matches the cycle low on the metric going back to the end of last year. december of 2016. we continue to see yields drifting a little bit.
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they're down on the week. as carl pointed out. i'll tell you something that's picking up horsepower. dollar index going more negative. carl back to you. >> we'll come back to you in a bit. meanwhile, the retail wreck continues. courtney reagan is digging through a bunch of numbers. >> hi, good morning. the investors have little patience this week. it's still all leading to substantial stock drops. jc penney rounding out the department store earnings reports this morning adding to the disappointing sales trends. revenues missed and comps fell 3.5% and the analysts expected a 0.6% decline there. earnings did report 6 cents per share much better than the 21 cent loss that the street expected. like kohl's sales picked up in march and april and women's apparel began to improve and jc penney is reit rating the full
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year forecast arnss that leaves a lot of ground to make up. the shares are down 9% below $5 per share. after the bell, they missed on comparable sales like jc penney. and many thing that nordstrom is the better bet, the stock is still getting hit. maybe some of it is collateral damage. on the call, the president of nordstrom talked about how they noted a quarter of the business is done online and 80% of the shoppers shop online and in the store and they start in the store. they say by the way, the stores are cash flow positive. nordstrom says that one third of the shoppers actually shop at both concepts. which may bode well for tj maxx and ross stores. in addition to walmart, target, many others next week. so the wreck may continue next week. carl? >> all right, courtney, thank you very much. joining us this morning is
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former bloomingdale ceo, dave gould. >> nice to be back with you, carl. >> so we're back in this conversation about -- i don't know. existential threats at least to the department store, to the wholesale model of merchandising. does this week's numbers tell us anything different? >> no. i don't think it's a surprise at all. i think that when all retail gets lumped together i think that's a problem. you know, go back to last week or so. disney came out with their earnings. they were up better i think than 4% in the parks. the theater business was way up. as was said earlier on your show, apple's all time high. i was walking down here. i go by the apple store on 58th street. i mean, it's just hopping and it's 9:30 in the morning. you walk down madison avenue, there's louis vuitton with a pop-up shop for jeff koonce
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merchandise that's exciting. i think the fact of the matter is it keeps on saying more and more that there are people doing very well. i mean, take a look at gucci. they were not doing well two years ago. they report 48% ahead in the march period. keiring reports over 37% ahead. the vuitton business is plus 15 in the u.s., mid teens. a lot of good business is happening but it's about an experience. it is about merchandise. i think that it started to go on such. but the key thing when talking about stores and whatever it's about the merchandise. it isn't about cutting more expenses. as nordstrom said the stores are cash flow positive. even the stores that showed weak sales showed decent profits. maybe down a little, but decent profits. but it is about merchandise. it's about exciting the customer. and i hate to say it, but i'm of the belief that the department
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store model is broken. it is broken at the moment. >> broken model, mike, and where does that leave a company like macy's with more than 800 stores? so you mentioned some premium brands, great locations. you can still actually kind of dazzle the customer but if you're kind of across the board in good malls and bad, et cetera, or if you're nordstrom with half as many stores what does it mean to make the experience better? you're still kind of fighting for customers' time and money all the time. >> well, it is about merchandise. it is about exciting the customer, about engagement. the reason i think the model is broken is i'm a passionate believer and i have been for a number of years that the model that works in europe to a larger degree which has many more concessions in the store is a better model than the model of the department stores in the united states. where the buyers are buying the merchandise. and i think if you looked at some of the stores in the united states, the spread between what
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the store is picking up or dropping in their own businesses that they're doing versus what the concessions are doing, in some cases it's more than 10 or 11 percentage points. if it's a concession in the store, the merchandise is more exciting, number one. there's more excitement in that merchandise. that's more value in that merchandise. and the flow of the merchandise, the flow of the merchandise which is a key to retail. people forget about that. but the key to retail is freshness and newness. and that is is not going to happen by the department stores buying the bulk of the merchandise themselves. i'll give you an example. this morning i saw several of the reports, macy's, sax, one of the toughest businesses was beauty. look at sephora and ulta.
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ulta's market cap is $4 billion more than macy's and nordstrom's put together. that's mind boggling. >> mike, the department stores -- the merchandising, the selling merchandise you have to receive it. you have to tag it. you have to sell it. you've got to receive returns. i mean, that's incredibly expensive. it's a lot harder than running a hair salon. >> i don't think ulta is a hair salon, it's a beauty shop, it has a lot of beauty. take a look at the people who are in there, l'oreal and estee lauder is going in there. same thing with sephora. one of the reasons i think that nordstrom's is a little better positioned than most others they have a service mindset and certainly a better perception of service than most other people. i think we forget about that. as the business gets tougher and tougher, what are the only variable expenses that the can department store can deal with is the salespeople on the floor so it's a catch 22.
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the business gets tough. i have less people on the floor. i do more and more business online i have less people on the floor. >> do you think for department store chains moving into e-commerce has proven to be a cannibalizing move that they're eating their own foot? >> well, to some degree, but nordstrom's showed 80% of their customers buy online and in the store. the customer who is buying more than one channel in the department store is spending three to five times than someone who is buying in only one channel. and the fact of the matter is, amazon is there. you better be there. it doesn't mean that you have to ruin the rest of your business. terrible phrase that lyndon johnson said you have to walk and chew gum at the same time. yes, you have to be in the online business. you have to be there. the customer wants to be there. but the experience in the store, what the store has is what online doesn't have.
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the store has the experience of sight, of smell, of hearing and social interaction. and what shopping about is not about buying more merchandise. it is about a social interaction. it's about being stimulated by newness and the stores can do that. they're not doing it for the most part right now. but they can do it. >> yeah. you're talking about entertainment essentially, right? i'm thinking of a quote -- i think it was the starbucks executive a couple of weeks said that the future of all retail, brick and mortar retail is going to involve some level of disneyification, of entertaining people. >> well, i think that's what life is about. i saw -- well, i guess in the paper two days ago in the times and the food section, new hudson mall in the hudson yards they're opening up. they're going to open up 25 different food operations. restaurants. marketplaces. bistros. some european, some american. i mean, that is what it's about. now, that may be a little bit more expensive than having
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another clothing store, but the world doesn't need another clothing store. it needs a balance. i do believe that that excitement, that energy that it creates is what's important. department stores have that opportunity. now a department store today is very different than the department store of 40 years ago that had appliances and sporting goods and books and records and all the things that my kids wouldn't know existed, but it still has this opportunity to create an excitement. you know, i have said many, many times, people have been going to the markets since the time of the greeks. i don't think that's going to stop. but how do you make it exciting? you know, everyone talks about the internet. but it's only about 8.5 to 9% of the business. even if that doubles over the next seven years, ten years, what's it going to be? 20%? so you have 80% that's going to be done in brick and mortar it's how you make it exciting. how does it become an experience that people like, like going to tj or going through home depot or going to the disney store.
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>> yeah. people are paying a lot of attention to the tipping point of when e-commerce takes a certain amount of the category and what happens after that. mike, it's been a heck of a week on your beat so to speak. good to see you again. >> nice to see you. >> thank you. michael. >> my pleasure. president trump going on a tweet rant this morning and one threatening former fbi director james comey. eamon javers is outside the white house to run down all of the different tweets we've got this morning. eamon, take it away. >> good morning, david. the president is clearly frustrated and grappling with the fallout from his decision to fire fbi director james comey earlier this week. one of the problems that he's facing politically this week is his own white house aides' inability to get their stories straight on two fronts. one is when the president made the decision to fire comey and two is exactly why he made that decision. we have been getting conflicting information about that. the president today expressing some frustration with the press, demanding answers from white house press secretary from the
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white house podium. here's what he's tweeting this morning. as a very active president with lots of things happening, it is not possible for my surrogates to stand at podium with perfect accuracy. maybe the best thing to do would be to cancel all future press briefings and hand out written responses for the sake of accuracy. david, i can tell you that i have talked to aides here at the white house. they say as far as they know, today's press briefing is still on. and i asked them if sean spicer would be the person giving the briefing today given that we have toggled back and forth on that this week and they say, well, sean spicer is the person listed on the schedule right now. so we'll wait and see what happens later on in the day. two other tweets that are getting some attention this morning. one saying that james comey better hope that there are no tapes of our conversations before he starts leaking to the press. suggesting that he has some kind of nixonian taping system here at the white house or possibly does. the president tweeted when james clapper the former director of national intelligence and
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virtually everyone else with knowledge of the witch-hunt said there's no collusion, when does it end? that prompted intense reaction among the former fbi fraternity here in washington. i can tell you i spoke with the former high ranking fbi official right after the tweets broke. here's what he told me. the former official saying, first, the president started a war with the intelligence agencies and now he wants one with the fbi. this is not going to end well for this administration. the former official went on to say, he is out of control, referring to the president of the united states. it is so out of the norm for him to even say that. this threatens the independence of the fbi and goes against core american values. guys, i can also tell you i have asked the white house for their comments on the president's tweets this morning and they have said what's become a standard line, which is that the tweets speak for themselves. back over to you. >> see if that's the response today, eamon. while i have you, anthony noto, coo of twitter responded to the
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presidential brief by saying, may i suggest questions submitted and answered via twitter. a perfect record and we distribute to the world not just those with the television. and then as an aside, the a.p. running with this headline from a trump lawyer that tax returns from the past ten years show no income of any type from russian sources with few exceptions. >> yeah. that's one we have to follow-up on and get more reporting, carl. no income of any kind from russian sources and then he says with few exceptions. is that -- does that mean that there are some exceptions and that there is in fact some income of any kind from russi russian -- we have to parse that and see what the lawyer is saying. the president is suggesting that he has law firms in downtown washington working on this, sending certified letters and see what income he's reporting from the russian officials if that's the case and what that means. and as for the person from twitter suggesting that the president do his press conferences on twitter, that
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would be a very good idea for twitter, i suppose, but not necessarily for those of us at the white house. my answer to that would be self-serving. >> that sort of sums up the reaction it's getting this morning. good to see you. eamon javers in washington. when we return a lot more on the fallout from the firing of the former fbi director. we'll talk to former ag paul mcnulty. the dow is down 25. so beautiful. what shall we call you? tom! name it tom! studies show that toms have the highest average earning potential over their professional lifetime. see? uh, it's a girl. congratulations! two of my girls are toms. i work for ally, finances are my thing. you know, i'm gonna go give birth real quick and then we'll talk, ok? nice baby. let's go. here comes tom #5! nothing, stops us from doing right by our customers. ally. do it right. whoo! look out.
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g-7 finance ministers and central bank governors are more and our ylan mui is there. >> i asked them how they planned to defend the administration's america first trade policy to his counterparts overseas. >> we're excited about the u.s. trade policies. i think you probably saw last night we made an announcement of a hundred day economic plan with the chinese. i think we're very happy. >> so he spoke about that agreement between the united states and china to try to increase market access particularly for agricultural products and financial services. trade is not officially part of the agenda here in barr, but the issue is likely to come up with
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the one-on-one meetings that they're having with one another. secretary mnuchin is expected to meet with germany's minister and i spoke with schauble this morning about what his message might be. >> we need a strong united states, united states to lead the global economy and global politics on a sustainable way. the united states is still to most -- still the most important political and economic power. and the best alliance for europe. >> we are expecting a readout of the meeting after it's over. guys, we'll bring you the latest as soon as we have it. back to you. >> thank you very much. as we take a break, look at shares of apple this morning. and corning, the glass maker was awarded that $200 million investment from apple's new advanced manufacturing fund. money's going to support corning's efforts to advance state of the art glass processing. that's a new all time high.
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dow on pace for the first negative weekly close in a month
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as the retail carnage continues and the markets grapple with the comey overhang. joining us is a chief investment officer and the chief investment officer at oppenheimer funds here at post 9. guys, thanks for being here. krishna, you know, we have been looking at this market it is still for 13 days we have been in extremely narrow range. we're trying to figure out the difference between being resilient and complacent to what else is going on. what's your read? >> i think resilient is a word i would use. underlying economic strength is pretty good. we are seeing signs of slowing down. if that persists we'll get the fireworks we have been waiting for. i hope that doesn't happen, but that's what we're waiting for. the upside to some extent is contained because you don't really have any significant policy stimulus coming to us from anywhere. >> and jack in the absence of that as a potential catalyst, you know, bond market is really the yields are not running away to the upside. we have a little bit of a sober report on inflation today.
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are the markets suggesting to us that we're kind of stilling that 2% economy without much of a view of getting out of it? >> yes, that's the sense. i think you have got that piece of it and then of course you've got a huge amount of liquidity coming in from the central banks. a lot of people think that since the fed has stopped the balance sheet expansion in 2014 they're not buying, but they're buying. $30 billion a month. so i do as long as those programs continue that's a nice offset to this, you know, what we'll see slow growth economy. >> i guess, krishna, you can kind of fall back on the idea that the corporate economy continues to do well. corporate credit looks to be in great shape. but the valuations fall. so where would you go within the market that's going to capitalize on what's going right? >> well, we still believe that international and emerging markets offer a much better value than the u.s. valuations are high and we don't see the future acceleration in
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growth in the u.s. doesn't mean emerging market in europe is without risk. it's actually a meaningful risk. we see signs in china that are somewhat worry some. >> is that because of what happened in france or because they're earlier in the cycle? >> they're earlier in the cycle. i think china continues to provide a significant amount of fiscal stimulus. they're tightening monetary policy. and european economy has been surprising for almost a year and half. >> right. what are you expecting from u.s. then if your favorites are overseas? >> i think the u.s. is really a 2% economy and the current levels are where we are going to be. you know, 5 or 6% growth is probably where we end up. if everything works out right. >> over 12 months? >> over 12 months, yes. >> jack, is it that? to paraphrase goldman is flat still the new up? >> i think in many respects it is. i think that u.s. dollar continues to decline here as the
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fed drags its feet. and that certainly would favor foreign assets to nominated -- to other currencies. what's surprising though is we're not seeing commodities move. and that i would like to see a little follow through there to suggest some of this wealth overseas. >> well, jack, you know, not to throw in a fresh worry into the mix, but you have seen some concern overnight that chinese yields curve inverting a little bit. are we on watch for something out of left field like that? >> yeah. i did see some charts on that this morning. it is certainly a possibility although i will say the chinese like many other fiscal authorities are not as concerned about debt these days. certainly not as they are here at home. and, you know, that could eventually come back to bite them and the rest of the world if all of a sudden, investors wake up and say, you know what, we don't want to invest in countries that have an overhang
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of that much debt. >> yeah. the all of a sudden is always the scary piece of it. got to leave it there, guys. thank you, jack and krishna. >> thank you. when we return, the president speaking out on why he fired fbi director jim comey. in an exclusive interview with nbc's lester holt. >> but regardless of recommendation, i was going to fire comey knowing there was no good time to do it. and in fact, when i decided to just do it i said to myself, i said, you know, this russia thing, with trump and with russian is a made-up story. it's an excuse by the democrats for having lost an election. >> we'll discuss the legality behind the dismissal and more with former deputy ag, paul mcnulty.
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can we at least analyze customer traffic? can we push the offer online? legacy technology can handcuff any company. but "yes" is here. you're saying the new app will go live monday? yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes. so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. some build walls to keep people out. but these are walls that welcome you in. within these walls, california's educators create safe places for every student to learn and grow. where teachers open minds to history... unleash creativity... and show our kids the future.
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some build walls to divide us. but the california teachers association knows these are walls that bring us together. because quality public schools build a better california for all of us. good morning. i'm sue herera. here's your cnbc news update this hour. a powerful bomb struck in
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pakistan southwestern providence, killing 25 people. the assassination attempt targeting the convoy of the deputy leader of the senate who was slightly wounded. the islamic state taking responsibility for that attack. treasury secretary steven mnuchin arriving for the g-7 finance minister's meeting in italy. he is due to explain the plan to cut business taxes and regulation and his push for more balanced trading relationships. turkey's president says he expects his forthcoming trip to the united states will constitute a new milestone for the relations between the two nations and nato allies. erdogan says he hopes the talks with president trump would convince him to stop arming syrian kurdish rebels who turkey considers terrorists. a fire hazard has prompted the recall of 23,000 carrier and bryant brand heat pumps used for heating and cooling homes. they were sold at sears stores
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and hvac stores nationwide. now back downtown to you, carl. >> thank you very much, sue herera. got an opening on gardner denver opening a few moments ago. the flow control and compression equipment manufacturer pricing below the range of 20. right now as you can take a shot of post 8, up about 6%. 21.15. we'll watch that and talk to the cove in a few minutes. in the meantime, the president telling lester holt yesterday he discussed the russian investigation with now ousted james comey. take a listen. >> during the phone call he said it and during another phone call he said it. >> who -- >> he said it once at dinner and then he said it twice during phone calls. >> did you call him? >> in one case i called him, one case he called me. >> did you ask him am i under investigation? >> i said, yes. if it's possible will you let me know, am i under investigation,
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he said i'm not under investigation. >> but he's given sworn testimony there's an ongoing investigation into the trump campaign and possible collusion with the russian government. you were the center piece of the trump campaign, so was he being truthful -- >> i know that i'm not under investigation. me personally. i'm not talking about campaigns. i'm not talking about anything else. i'm not under investigation. >> the president tweets this morning that comey better hope there are no tapes quote/unquote of our conversations before he starts leaking to the press. joining us this morning former deputy attorney general paul mcnulty. he's now the president of grove city college in pennsylvania. >> thank you, carl. >> all we can do is guess about what the president and comey said to each other until or if comey ever speaks, but mccabe yesterday did say it is not standard bureau practice to tell someone they're not the subject of an investigation in a q&a with feinstein. what would it mean if he did say
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that? >> well, there are times when the fbi, and the justice department, more the justice department than the fbi actually, you know, responds to questions from individuals about the nature of an investigation in relation to them. so it's -- i have experienced that to some extent. you know, you'll have different words we use. sometimes we talk about subjects and targets and so forth. so we can only speculate as to what that conversation might have been about. and whether or not, you know, the former director comey was being more precise with his language. it's just hard to say. >> very hard to say. and we're obviously caught in a cyclone of speculation right now. there's the added issue of the motivation for the president's decision. as we have said repeatedly, the president can fire the fbi
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director any time he wants. comey said that in his own letter to fbi staff. does it matter to you or should it matter to all of us whether he had already made up his mind, whether he was waiting for a recommendation? whether the recommendation as huckabee sanders said yesterday simply affirmed what he had already decided? how much of that matters? >> well, i think it matters less when you look at what deputy attorney general rod rosenstein actually said, but it does -- i suppose give us more insight into as why now versus another time. you know, the fbi director and the president have to be able to work together. i witnessed a very good relationship between president bush and director bob muller. they had a very strong respect for each other and i think that's important for the country's interests. they're talking on a regular basis about national security threats and the fbi director
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does the briefings. so, you know, there are relationship and trust and other dynamics that go into that that are important. and again, we are all kind of reading and listening to these things about what the president's thinking has been over time. but when he called on the deputy attorney general to actually put his thoughts into writing i think that from my perspective was a very significant thing because it's a person who's directly supervising the director of the fbi who is making, you know, his own assessment of the situation. >> the bureau of course has a storied history as regards to trust between the bureau and the executive branch. you can go back to hoover of course and clinton, sessions and all of that. how worried are you about that trust being permanently damaged here, at least in the short to medium term? >> well, there are great people
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at the fbi who are agents who have worked for decades become managers and leaders there. they're strong professionals. i just worked with them for so many years, seeing how dedicated they are to go about doing their work and how in many ways they're unaffected by all of the politics and the talk that goes on and have the capability day after day of doing what they have to do. so we all have to be hopeful about that part of it. we have to be hopeful about the fbi continuing its professionalism in its day to day work and that they're overseen by career prosecutors who have a similar mindset. and the white house is removed from this because you know the fbi is -- has an independence and it reports to the department of justice. and that relationship i talked
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about before is really one that was just more about the president being briefed by the fbi director but there's no real contact otherwise between the -- you know, the two offices and so it should be something that we can all look to with some hopefulness about the professionalism of the bureau. >> we certainly hope we get more clarity on what's happened in the next few days and weeks. paul, i want you to stay on the line and get some reaction, the president's investments in russia. we'll go to eamon javers at the white house. eamon? >> carl. that's right. the associated press is reporting they have been told by president trump's lawyers that they have reviewed ten years of the president's tax returns. they do not reflect any income of any type from russian sources, with some exceptions. the lawyers did not release copies of the trump tax returns so the associated press can't independently verify this.
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here's what they say they're being told in the letter. the letter says there's no equity investment by russia or debt owed by trump to russian lenders. it reflects 2013 income from the miss universe pageant held in russia. and now the white house is saying that the trump asked his lawyers for this letter following a request from republican senator graham of south carolina who's heading up one of the committees on capitol hill that's investigating this swirl of russian influence into the election last year. we should note that in his interview with lester holt of nbc news last night the president certified a letter to the lawyer unnamed who sent questions to capitol hill about his own interests and russian money. this is an attempt to clear up any questions about trump investment from russia. back over to you. >> all right. eamon, thank you for that. eamon javers. paul, obviously, the president's tax returns are an issue that go
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back a ways. a lot of his supporters say really irrelevant and that you take the president at his word. waiting for audit to finish before he can release the hard copy. does this answer enough questions that you might have at least for now? >> well, the issue of investments and whether or not there are conflicts of interest is something that's been looked at and talked about for quite some time. that will continue to be until there is i think a general sense of satisfaction that there's -- you know, the kind of transparency that we have come to understand in the way that the government operates. i haven't followed it closely the sort of current standing on how that's going to play out. but i do think that transparency for political officials has been an important part of strengthening public trust. >> paul, we'll see what -- how
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those headlines are adjusted by the market. appreciate your time very much. paul mcnulty, former deputy attorney general and the president of the grove city college. we sat down with the executive producer of hbo's "veep", frank rich. here's why he thinks the president might not serve a full term. >> i've always felt with trump -- this is totally a theory and it's probably half baked and may well be wrong, but part of me feels he doesn't really love the job. he doesn't really want to do the job. what's incredibly lazy about doing the job. he can't even -- it's hard to get him out of mar-a-lago let alone how to figure out how to pass a law and my feeling is he likes adulation. he likes public acclaim. if it turns dark for him or depressing for him, he might find a way to slither out of it. some way he can claim victory and leave.
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>> coming up in the next hour, he talks about the race between netflix and hbo. the dow is down 39 points. more "squawk on the street" straight ahead. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
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growth stocks are leading the way this year. but is that a sign economic optimism may be fading? we'll discuss at tradingnation.cnbc.com. more "squawk on the street" coming up.
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the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc. let's get right out to the cme group in chicago. rick santelli is there with the santelli exchange. >> good morning, mike. thank you, i'd like to welcome the last guest of the week, peter, thank you for taking the time. >> thanks for having me, rick. >> so retail sales, cpi yesterday's ppi, the revisions. michigan. give me your view on the data and maybe a whiff of yesterday's ppi mixed in. >> i think the retail sales were
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about in line. march was a little better and net-net taken together, not much together. the inflation numbers i think continue to be an interesting story. you have the deflation, you have services inflation. one's off setting the other, but on the consumer side net-net around 2% of range and the fed has their short term rate at 0.75. negative interest rates still a remain clear story here. >> all right. now, you know since you brought that up, many analysts are really into europe. that's the place. everything about europe is better. after macron's elected there's talk of billions of dollars -- billions of euros going back on the inflow side. i guess my comment is, macron doesn't seem to potentially be -- reform is going to be difficult. europe still has negative rates. way out the curve. none of that matters anymore? >> well, yeah. with macron we'll see what parliament's going to look like in june. and, you know, on paper he says,
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yeah, let's cut taxes and reform labor so that should matter. 2% growth in europe is mediocre on an absolute basis, but great for them. ecb policy's completely disconnected from the rebound we have seen. and the problem that europe faces is draghi himself with the bubble he created in the bond market. and the inevitable unwinding of that as he extracts himself from qe and negative interest rates. >> you know, i loved reading the papers today. a lot of talk about the current accounts surplus, you know, germany runs a lot of surplus, surpluses are pretty big. you have german elections coming up. you have a lot of issues here. i don't know, am i reading too much between the lines here? it seems to me that the playing field is getting set for germany to have much more pressure to open up the purse strings. is that just going to give mario draghi more runway and keep him from doing what he is should be
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doing? >> i don't think the germans are going to succumb to that sort of pressure. a surplus or a deficit is a by-product of what you import and what you export and what your policies are. it's more of a symptom than what the administration here makes it seem like it's a disease. so i think germany is just going to continue to do what they do. yeah, well, their idea of cutting their surplus is by cutting taxes and yeah, can that help the eurozone, maybe. but anybody looking to that as a savior for faster growth i think is looking in the wrong places. >> peter, always interesting to hear your opinions and observations. thank you for taking the time. mike santoli, back to you. >> thank you, rick and peter. when we come back, gardner denver just opening for trading today after the ipo. we'll speak to the ceo coming up next. we're on to you, diabetes. time's up, insufficient prenatal care. and administrative paperwork... your days of drowning people are numbered. same goes for you, budget overruns.
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gardner denver back at the new york stock exchange. it opens for trading today after going private. joining us is gardner denver's ceo. congrats on being a public company again. flow control, compression systems, industrial business very important. energy business very important.
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over a billion in revenues from energy, that's come down considerably. do you believe there's a rebound? >> first of all, thank you for having me here. you know, during the private ownership times, we transform our company. yes, we play in the energy segment. we're highly diversified. very uniquely to us is during the downtown of the energy, we made a lot of investments, investing in new machinery, in a lot of capital, open up our service centers and, more important, we invested in innovation. so, as the market is ramping up and picking up again in the onshore oil and gas exploration market, we are extremely well positioned to capture outside market. >> because the revenues have
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been coming down, will that be reversed in 2017? >> the energy segment, in the way -- >> overall for the entire company, given the references you just referenced? >> that's exactly the plan. that's right. we have double-digit organic growth in the first quarter with tremendous order momentum. we are very well positioned to deliver a very good momentum year in 2017 and 2018. it's not only the energy segment but medical and finance that are positioned well. >> what are the implications right now for whatever row opposed policies there are, whether it be renegotiated trade agreements or any incentives to invest more in domestic production? >> i think we're very well positioned for any wide range of policies that may come. one, in terms of the trade policies, for the most part, at
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the same time we have invested tremendously in the u.s. and accelerated incremental, head count investments are going in the u.s. as well as asia pacific as well. we have a very good land from a global perspective on how we are infusing investments in our company. >> how would you characterize the industrial economy in the world right now? >> the you know, we have seen really great products. a lot of our products, what we do is toward energy efficiency. our products are mission critical control in nature where there's high cost to failure but relatively low to the overall system. our products are not only mission critical but are saving a lot of energy to our customers, whether this is on the food and beverage company, where the main compressors in those rooms, our technology today can save upwards of 56% energy consumption. it reduces dramatically the energy that gets consumed in the manufacturing as well as waste
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water treatment facilities. >> you were with data hur. >> that's right. >> improving operations, been a greatly stock. is that a similar approach you think you would take here? >> that's a great question. i mean, we play in a highly fragmented market. we generate $1 billion in revenue and operate in $17 billion highly fragmented market. $2 billion in revenue, $25 billion highly fragmented market. we generate great cash. in 2016 and even '15, 94% free cash flow conversion. absolutely. we're primed for being inquisitive and consolidating the case. >> and a delevering exercise. vicente, thank you for joining us. >> thank you for having me. >> vicente reynal of the newly public, once again, gardner denver. >> quick look at stocks. morning weakness seeing the dow down 45. much more ahead. stay with us. on.
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outside is dick's sporting goods, computation error resulted in an overstatement. they issued a weak first quarter profit outlook. they are expected to report quarterly results before the bell next tuesday. shares up about 12% over the course of the past year. certainly another retailer to watch. that does it for "squawk on the street." now let's send it back to the team for the start of "squawk alley." >> thank you very much, dominic chiu. it's 11:00 am on wall street. "squawk alley" is live.

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