tv Squawk on the Street CNBC March 9, 2018 9:00am-11:00am EST
came in, futures spiked. the jobs never came in stronger than expected. a gain of 20,000 or so hourly wage gain up by zero. as a result, stocks are off to the races. futures up 200 points. that does it for us today. make sure you join us on monday. right now it is "squawk on the street." ♪ good morning and welcome to "squawk on the street," i am david faber and jim cramer and scott is here with us tonight. we'll have a live interview with steven mnuchin on the president on steel and aluminum imports
getti getting thoughts on jobs this morning. you heard becki take a look at futures again, they are up sharply. european markets, let's see how things are fairing at this moment over seas, half our since we got those numbers we are in the green and not significant gains but all positive for the morning the 10-yr note yield is a key when we get these jobs number. we are right at 2.9% theres a look at wti and brent crude. let's get right to it this morning. it starts with jobs, jobs, jobs. it is hitting its strongest pace in a year and a half futures pointing to a future open the president agreeing to meet north kor north korea's leader, kim jong-un. the eu is promising counter
measures to respond to the new white house's tariffs on steel and aluminum imports unemployment rate did hold steady of 4.1% more people did enter the labor force. hourly earnings edge higher. sounds like we always go back to that now we are right back where we were on the 10-yr exactly of that time. >> if you listen to conference calls, most of the companies that i listen to had to put in wage increases just because there is simply not enough workers. >> they're talking about area in the country where the unemployment rate is 1.5%.
wages have to go up and yesterday's kroger's call where it is one of the worst calls of the year >> that was not good >> you do not talk about the nca even if you are joe kernen bracketology, after the stock have been crushed -- >> you got to keep our eyes on the ball and keep the message contained so you go year over year to unwages and 2.9 to 2.6 this tells you that the market over reacted a month ago. this is confirmation that we got over our skis on this inflation, no >> you know on the 10-yr, there is a couple of things in the
jobs report that i want to put this is the first manufacturing jobs and 31,000 added. first is health care and over 19,000 i see health care run away and inflation and jobs growth. manufacturing, how about that? >> what about retail >> 50,000. >> what is that, amazon buildings. >> warehouse or workers? >> i certainly believe it because it is not the mall >> they say general merchandise stores is up 18,000 and clothing stores >> how is that possible? >> i don't know. >> i always say -- trust the process. >> we are talking about the liquidation of the toys r' us now. that's not a surprise per se i thought it is something of a surprise if they liquidate we know they been having a
difficult time 30,000 jobs added. >> you are not seeing any jobs growth except for amazon and those jobs are not high pay. >> apparently you are. unless this is a one time only >> everything about this report is down. >> we'll get to those in a moment possibility of talks between north korea and the u.s. >> does this clear the way though the markets continue -- >> it is friday and it is early and i hate these zooming openings >> is there a lot to justify though >> yeah, they have not held. usually you open big and between 10 and 10:30, it is interesting the banks, the interest rates are not going up but the banks are going up >> yesterday they were going down a little bit.
>> well, we have been up for a third week >> we are dealing with the tariffs as well. >> i think it is not soft tax. i think it sounded soft but there are countries -- they're going to be up next week >> is it a proclamation or an executive order? >> it is more of a doctrine. >> you don't think the bark was a little bit worse than the bite when it came down yesterday. the whole world slumps first canada and mexico will be exempt, hopefully we'll r re-negotiate what i think matters is the steel companies -- it is a safe
for the steel company. i don't think people understand it they're constantly closing factories and this may give them new light. >> right, price increases do result to the end user of whatever products that's being used for >> i did a piece last night. >> they just are the biggest users. >> they are. >> they are fairly large employers as well. >> they're very big. they're just the losers, there is no two ways about it. there is two factories coming from mexico. there is a bmw factory and there is a mercedes factory coming online the cost of the workers, they'll have to do more than negotiations it is too hard to compete. >> you are saying you cannot own gm because of this
>> the competition of a tesla piece. i don't know if you saw it there is just too many cars coming out in that world >> that was insane >> autos >> who sells and with clhinese cars in america? >> volvo, they dosome of those in china and parts there is not a lot of actual chinese cars >> the word got out around 1:30. you saw the market rallied when it looked like the increases for steel would not be so great given the fact that other countries who were allies still be allowed to dump but they're not allowed to dump and came down targeting china the message gets a little c--
>> it did. >> i mean the bigger picture is still one that has to be concerning in terms of the possibility that this is a squirmish that leads to another. >> trump made a bet that's not going to happen and it is going to end up being whiskey. >> ygoing to be what >> you know they talked about liquor and even got the wrong states i am just saying you are targeting harley which some what -- goldman targeted harley this morning >> it was whiskey and blue jeans and harleys. >> there you go. that's who they are really after? i got to tell you, we should
tariff all over the place. >> first, it is blue jeans and you move on from there >> smooth hawley we have not gotten there yet >> no, we have not i thought president mckinly was mentioned. >> i had mentioned mckinly the day before the open door policy, the last deal -- >> you are bringing mckinly back into the discourse >> the last good china policy that we had was mckinly. i was hoping the president would go do that but he spent more on other issues >> this is an incredible day now we need to talk about north korea because president trump accepting kim jong-un's invitation to discuss the nuclear program. cayla tausche is joining us now.
>> now the fact that the president has accepted an invitation from north korea which the white house says the time and the location which is still being worked out of course, it is setting the tone and it is historic and unprecedented and it is all the more surprising considering the no hole bars of the nature of the insults of the two leaders have been lobbying at each other over the last year the pentagon was caught unaware and the secretary of state was in africa and within the state department, you have an absence for a nominee for the ambassador ship to south korea and you had the chief's mind on north korea who had recently resigned. no president has ever taken before and a senior official said the president did because there was an overture from the country. the president took into his own
hands, he accepted the meeting personally from the south korean on voi who delivered that message. he came to the delive deliverinm on a big subject that's the first time he set foot in the briefing room and want people to pay attention to what he's announcing because it was so historic. this is a very interesting development that has not been socialized with capitol hill an they're taking it with a big grain of salt. this is corey gardner, the price of such a meeting should be verifiable and irreversible.
negotiations as of yesterday were far off how quickly things change. back to you. >> cayla, thank you very much. >> this is being played on various sides as either a diplomatic coupe by the president or the president being played by a guy who's looking for any form of legitimacy and merely standing next to a u.s. president or sit ng tting in the room as the u.s. president >> i think the asian market is saying it is -- i think if you watched yesterday's show, you would saw this thing coming. >> with the nobel prize? >> what did i tell you is th this is how you do it. >> you are amazing >> i do believe that >> i will say this this is the kind of thing if you wanted to win the nobel prize.
>> does the lack of process concerns you at all whether it is on the tariffs or something >> what do you think this is >> there is no process >> don't trust this process. >> there was no real process in "the apprentice. >> that's comforting >> coming up we'll be speaking with a man who's apart of the big process, secretary mnuchin, we'll hear what he has to say on tariffs and steel and aluminum robert nardelli is going to join us on his reaction on those t tarif tariffs. we are looking higher and we got a lot more on "squawk on the street" coming right up from post 9 you're still here? we're voya! we stay with you to and through retirement. i get that voya is with me through retirement,
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>> i think we'll hit the bottom, i really do. >> what we call the haines bottom the s&p 500 posted a 300% gain it is funny, jim and scott, when we go back to that day, we all remembered it well it was 666 or something like that the fear -- people were saying, paper money is no good anymore >> atms. there was a level of panic and so when you think here haines there, you got to remember the atmosphere of the time >> for those who follow haines as someone i follow mark. my first meeting with mark was when i sent his a blistering e-mail of a call he had made what happened is that's exactly the point. it was then for a long period
where he made no -- and stopped. when i say going out of a limb -- he did not make those calls. >> right >> it was like that. these were not -- he did not make the call like a lot of people come on not as much anymore. this is it, this is it and it was not it no, this is it there was none of that it is becoming fashionable to make a call, right but mark made the right call i wonder if you would thought when we make the call at 666 that the bull market would still be raging over the last year bull markets are still on. >> the bull market is so on. would you have thought that? >> no. i just think it is pronounced dead that's the best thing that it happened there was a 19% correction when
our debt was downgraded. >> yes, s&p. that's right >> that was the second worse day. if the downgrade of the debt occurs, therefore, the u.s. is going to be insolvent and that was the big decline. >> the haines calling the bottom those were the two moments that i remember >> we celebrate them every year. >> this year with the 10-yr anniversary, this week was bersteins and we'll be celebrating the 10-yr answer re anniversary as we move towards the pact >> i know what they are. i am just wondering -- >> all right, up next, he's going to have his "mad dash" as
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trading here on a friday the last trading day of the week just because they don't know you want to talk a little win. >> this stock has been going up since the board is changed they settled last night of this, harris curtis an old friend of mine says this gives optionalty. what does it mean? mma. is it going to be mgm? we have good numbers more important for win than a loss in vegas is happening >> i think wynn is going to be bought >> they split the company? >> have you heard? >> that's one way to go. you know you cover a lot, remember the old days when the casinos, they use to buy and they use to emerge >> there were a lot of
consolidations and wynn was part of it. >> there would not be any trusts this is happening. >> really. >> you are going to want to stay tuned because contessa brewer got the ceo coming up on "power lunch," maddox stay tuned for that. we'll have tmnuchin joining us a lot to weigh in this morning we have not started talking stocks >> we are busy getting the nobel izpre. >> oh my god, that again, we'll be back after this obvious.
we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪ you are watching cnbc, "squawk on the street," we are live from the capitol hill of the world. still digesting a job report of 13,000 net jobs were created in february it does appear of the early
going, the market is going to be higher not that big response in the market yet >> a couple of bases point >> wage, everyone thought that wage were going to build what's interesting is how many companies have given some of the money, the rebate to workers remember it was just for buy backs. >> the evidence is a lot of it is going to end up and most of the majority will end up in buy backs and evidence there are wage increases for sure bonuses and wage increases >> yesterday the president said 4.2 million people have gotten bonuses as a result of the tax law already. >> that's a lot. >> you cannot be cynical about that maybe that helps spend money in retail and maybe we have jobs on that >> yesterday, kroger's >> you hear the applause here at
nyc by the way, we get to the opening bell here at the big board, it is the tori burch foundation, they'll be doing the honor right now >> all right, we'll be watching today, what's the key to this market as we get started with trading. >> once again, today we have a note of amazon fly wheel from ubs. it is feeding on itself and it is amazon web services that's continually making more money than people think. it is a jargon lowest costs and fastest grower. as challenger, google cloud but amazon hard to stop
>> they went to 1760 on the target >> you are pretty good auctione auctioneer i was impressed. >> you should do it professionally there >> do you got 1850 or how about 19 this is an absurd game we can keep raising price targets. >> you have to do ominous negatives? >> i just ask a simple question. is that what you want? >> i want to hear the exact date of which amazon is going to stop going up >> i have to tell you that it is going to stop going up when netflix stops going up >> piper, he raised price target of netflix and mentioning yesterday was a down day for the
stoc stocks >> well, there has been very few. >> know where the down dates i don't remember that one. just go up and up. as they keep finding more oil. >> there really was not any. >> i find it amazing they choose to make a comment. it had not gone up in the last 24 hours david, it is almost like if you were ga analyst and it has not gone up. like john lynch today had a negative piece that's an evergreen story now. >> many people believe that was an in advisable acquisition. i am using your language, you are rubbing off on me. >> well, it was, was it in
retrospect >> it is a terrible buy. expectations they're going to take on the actual -- >> that's very right >> ge, they go up for a couple of days. >> some right now. >> now, you have to slab it back down it is whack it ge. bankers use ge company >> you said the key is when steven toobin wears a tie. >> he does not wear a tie. >> he's a vest, he likes wearing a vest >> the fact that that man does not wear a tie >> i like to be a little more formal >> you guys follow a lot and the halftime is tesla. it is down a little bit today. >> adam jhonas had to reiterate
his equal weight -- the stock is down a little bit this morning >> i thought what's interesting is his thesis once again as it rallies it is a good opportunity to sell and not mentioning there was turnovers yesterday. did you see the chief of kel kelly -- >> they do that? they have that department? they have had a lot before we get ourselves into trouble do they need chief of accounting officer? >> i think everybody knew where we were going. they have a lot of executive turn over, have they not elon musk and the president. >> the chief of the bears. >> when the president meeting with rocket man, everything is fictional. it is all fictional. it is like the truman show
challenges of development of 5 gs and talking about what their point is and broadcom today is an important -- the board of directors made up of all american citizens and by the way, we'll spend a lot of money in rnd jim, they're going to keep on trying the cfius investigation that's taken place is quite serious >> anybody who i spoken to can weigh in believes there will be action taken in some respect by cfius to stop the deal the question is will it have an effect >> we got to go to the white house. >> all right we'll get back to some of those other movers this morning. let's deal with the ig bebiggese this morning, 314,000 jobs were added in february. the unemployment rate is holding steady joining us now to discuss the
job report and steel/tariffs, mark, it is nice to have you back on the program. thank you f . >> thank you for having me >> i think we are extremely excited of the numbers that came out over 300,000 jobs created is a big boost and a upward revisions of january and the summer of big boost, if you look at the wage inflation of about a half percent above cpi it is a long time that we faced stagnation in this country so seeing the climb is good. >> yeah, private sector is hiring also significantly pretty much average, three month's averages -- compares to the 2017 average of 180,000 things are moving in the right direction but of course, the
question is always is can you keep it up and what signs do you look for to indicate that'll be the case >> i heard y'all talking a few minutes ago about reality since this tax reform package was signed we are now up to 4.4 million workers in america who have received either a bonus or wage increase and 432 companies who we are keeping track of who are making those announcements that does not include small private companies who we don't get public story announcements that's an incredible number so far. we think that momentum is going to continue to keep up we think there is plenty of room for this economy continue to grow i still remain some what -- that not one democrat was able to support the tax relief package but it is having an increase >> marc, this is jim cramer, i thought it is interesting to see that manufacturing is growing
faster than health care. where are these manufacturing jobs coming from and do you think they'll be boosted substantially by what happened yesterday? >> we are excited to see the manufacturing numbers up as well as construction numbers. the two is combined is 92 thousands if i am correct over the month of february, that's a big boost of the sector. part of this is the regulatory relief we talked about that a lot that the significant before the tax relief package was the roll back and regulatory burden that was here of the preadministration, manufacturing is the place that has seen the biggest benefit from that sort of relief is provided >> marc, are you surprise of the unemployment rate given how strong the report was of where it has been 4.1? >> 4.1% is the lowest it whahas
been in 17 years that compensates for keeping the 4.1% for not going lower we are excited to see participation rate going backup. coming backup is an encouraging sign >> marc, we usually bring you onto talk about the legislative agenda and your relationship with congress. you are doing well, though, stepping in for gary cohn and others >> gary cohn's shoes is to big for me to fill but i slept at holiday inn express last night >> yesterday's announcement on tariffs, what's the response and is it a concern to you and so many republicans certainly do not seen perhaps in lock steps with the president on the decision to go to tariffs on aluminum and steel >> the president hosted dozens of meeting here mostly with republican members, we heard
them out and the president heard them out let's keep in mind that the president works close with chairman brady and speaker ryan, during the campaign what the president wanted to do for the american workers and believed that we were getting cheated and protect the jobs here in the midwest. many of our fellow republicans did not support even though the leadership it does not come to a price to us that this a place we'll go a different way. again, tax reform and regulatory relief and health care policy, it does not draw too much of a surprise for my part >> does it concern you at all or at least the possibility of not importing soybean of $14 billion certainly -- and a couple of senate seats or whether it is harley davidson or bourbon or
levi's a levi's, are you going to deal with a lot of angry congress people >> i think i deal with them quite often. that's not too different the reality is nobody denies that china has abused the rules in the past and they taken advantage of the american workers. there is different theories of ways to address that some that argue free trade argument that says at the end of the day if china is suppressing its own people and canno cannot -- that's their harm and not one we should worry about. if you go to the midwest and see workers in america are getting displaced out of jobs, we do have a concern and a national security concern, if you are not able to produce steel and aluminum that's important to our defense infrastructure, that's a big deal these are things we need to balance. we hope there are not retaliations but there are a lot of countries across the nation that china is having the same impact and we are the ones
that's taking action >> now, wilbur ross, and now i am going to ask you to put on your rex tillerson ha's hat >> there seems to be some concerns how there how hastily how all this came together, why is this a good idea? >> the reality is we had a poor relation with north korea for quite some time and they continue to accelerate their nuclear weapons. they fired more than a dozen missiles and tests, something needs to change. what's changed is the president brought leadership and we need to rally on a resistance in north korea put maximum pressure on north korea nikki haley is our ambassador
and helped or peace with north korea. we have said that we'll continue to keep maximum pressure on and we think it is having an impact and we think this president's policy is heading into the right direction. >> does kim deserve zitting in t in -- sitting in the room with the u.s. president given all that he's done >> we cannot ignore the fact that he's a murderous dictator but at the same time, we have to protect america. we think this is something that we welcome this development and we think it is brought on because of this significant pressure that we have applied with the international committee in north korea, we'll keep the pressure on. we are not relieving the maximum pressure at this time. yes, this is an appropriate step >> marc short, thank you >> if you were a baseball player, you would play virtually every position on the feel,
legislative director of the white house. >> thank you for having me >> a five-tool player. he's covering a lot of positions there. >> phillies can use someone that plays every position >> they could. >> they can use a lot of people to play positions and not everyone >> it is early in the trading sessions, let's get to bob, he's on the floor >> he had to bring up the phillies >> from the market's point of view, this is a perfect job report what the futures did at 8:30 we moved right up for good reasons. we had a good jobs growth. it was above expectations and average hourly earnings was strong look at this straight up here, we were 2738 in the futures you see what the market said
that tells you it is about perfect. in terms of sectors here and banks are doing okay and they are leading and tech have been a big leader and energy have not that's leading industrials lacking just a little bit. where are we we are addressing everything right now, tariffs and we got jobs and north korea global growth is a positive for the stock market earnings, record still, numbers are still at records if they go through with that. that's a big positive. north korea talks, this is the major geo political tank, just talks, who knows how is going to end up inflation, let's call it one side, the jury is still out on this tariffs still overall a negative, although here the outcomes are rather uncertain. overall more positives than negatives and that's why the market keeps on holding up
this is the one month anniversary of those crazy sw g swings we had. february 9th and february 5th and 6th, the conviction moves from 17 to 50 and dow swings 1600 points range, remember all that i have been talking to a dozen market makers and people involved, several things that's happening the market was over bought we had the big inflation fears from the jobs report and february 2nd, s&p 500 dropped 50 points and we had unwhining on short volatility long stocks where we had momentum traders and vix traders and etns unwound, that was a major problem. i think it is worth to take a look at this more carefully by the scc. we had some circuit breakers brought in
maybe that should be looked at whether it should be tweaked a little bit and i think it is worth looking into the need for volatility products the scc commissioner did a nice speech the other day, did we need all of these in verse and leverage products. right now the dow is up 132 points >> back to you, david. >> i will take it. >> the bond report rick santelli is standing there. >> good morning. markets are moving in the right direction. it really is kind a lot of side ways action. you are looking at the white noises if you are only looking at the settlements it is in the 270s. today's chart shows you it is 21st of february you had the high yield close of 2018 everyone though it is a young year
that's 295 handful of basis points away from that level. also, keep in mind we settled at 286 yesterday and 286 last week. so it is easy to see that we are now up on the date and the week and maybe we'll break out of that range if you go back a year and a half and almost two years the treasury complex have been pretty much telling you where it wants to go. move higher rates and consolida consolidating. it is doing it again and it is going to build on that because that's what the pattern is doing. the trends are your friends and patterns are apart of friends. if you look at 10-yr and bund, this is fascinating. 225 base points apart. we were at 198 mario graghi is going to phase
this one out look at valentine's day, what's going on regarding to the dollar index. if you look at the lows were 8860 we come a long way two days of the year verses the dollar looks horrible, does it it did not be fair you put the chart on and it is mostly side ways. it is down a bit on the week. last week 123.17. let's see. jim, david, judge, back to you. >> you got it right. well done. thank you, rick. we will have an interview with the treasury secretary. steven mnuchin will join us talking tariffs, the economy and a lot more. we'll be right back.
we will be right back with stock trading from jim. say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.
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if it takes out 219.70 you will see another wave of the smh. another wave of buying because it does make machinery you need for pretty much everything. >> we have been on this one for quite some time. >> what do we have on the show >> we have talking about stock that is red hot, controversial. we're doing it on the birthday and yours. >> our executive producer is a young man. >> happy birthday. >> soon. you have a great weekend. you will be with us in san francisco with people you will not believe. >> they have never done it. >> i won't really like it. >> you will be jealous. >> take me with you. >> if you come with me i will see my daughter tomorrow, too. have a great trip. >> coming up we will have the white house tariff plan in focus. treasury secretary steven
street. rick santelli live on the cme floor. wholesale trade sales, the sales side january final down 1.1. this follows up 0.8 and certainly not going to help our gdp when that gets filtered through. on the inventory side it's a january number, as well. it's not the final january number and that was up 0.8. a little better than expected. not a lot of reaction on this but we were still holding the 2.90 level after closing ten days in a row in the 280s, five basis points away from the highest yield close of 2018. david, back to you. >> rick santelli, thank you. good morning to everybody. welcome back. we are live here from post nine about a half hour into trading in the session. you can take a look at how we
are doing off of the strongjob numbers up on all major averages. most in line on all major averages, as well. let's get to our road map. it does begin with the jobs number. we had a surge in hiring. that is the strongest pace in a year and a half. we will have a look at what it means for the state of the economy, the fed and your money. >> plus martin shkreli sentencing. found guilty of defrauding investors. we will take you live to the courthouse. treasury secretary steven mnuchin will join us here what he has to say about trump's tariffs, trades, jobs report and a lot more. so as david said u.s. stocks strongly in the green. the dow is up triple digits. let's bring in chief account strategi strategist. david kelly from jp morgan. so blockbuster jobs report.
wage growth okay but not scary like we saw a month ago. gold locks for this market. >> there is a number of issues. one is the average hourly earnings came down. wage inflation which remember set off this whole market debacle in february. if that would have been a number that would have been higher i think the market would have been sloppy today. you have had a lot of people come in off the sidelines. the participation rate was super positive and that's a sign that there is less pressure on the labor market than we thought before. >> david, the market overreacted last month, plain and simple. >> it did. well, it did and we thought that there was a weather effect last month and the data came out this morning showed that weather was unusually good during february and that caused the wages to pop a bit. we are not surprised to see the
wage pressure come off. i think we are still on the same track of a typer labor market. productivity is not strong. so i think we are still looking at unemployment rate coming down by the end of the year. i think the feds are on track to keep tightening. >> we are seeing yields rise today even if the consensus is we overreacted to an overly strong wage report a month ago. the whole effect of rising interest rates is there. >> think about this. when you have 700,000 people now entering the labor market looking for jobs. that means that they believe there is something out here for them. so this is a sign of confidence among workers and consumers. i think that's a positive thing. companies are hiring more workers. every way you slice it this is good news. while i generally agree with david i think this is a sign of better economic growth and that is probably why you are seeing
slightly higher yields. >> and you are not frightened by the rise in yields >> if this continues to escalate at a massive pace. in our work we did a report about a month ago. the yields can go up until about 3.5% before the market gets indigestion. we also agree that the fed probably moves four times this year and i think the market takes that okay. >> because this is because rates are rising for the right reason. confirmed today by this very strong number that rates are going up for the right reason and as long as they don't get out of control and there is no reason to believe by virtue of what the wage number was that they are that the fed doesn't -- we don't have to talk about five rate hikes, do we? >> this is like a -- healthy but not too fast. i think that is what this economy is. i think we will see a pop to about three percent growth. we keep rolling on.
this economy seems incapable of producing scary inflation. that is positive for both stocks and bonds. >> how about the retail numbers? did the stocks foreshadow? >> i think we under estimated that the tax cuts are not fully appreciated for the average american family getting $1,500 to $2,000. when you consider what is left over after people pay for taxes and rent this is a lot of extra discretionary spending. these retailers are so beaten up that they have gotten a big pop on this and i think they will continue to do well. >> you would still go into them here at this point >> do i think that surprises to the upside that they will continue to do well? i think they will. >> you stay with what is
working. tech, small caps doing well because of trade fears perhaps are those places to keep putting money. >> i think banks will continue to do well. credit performance is great. interest rates are rising. all of that is very positive for banks. >> how do you trade based on -- what do you recommend based on what happened with trade in the last week? ultimately a big watering down. what is the net-net? >> i think the net-net is this. we will have a worst trade deficit next year and the year afterwards. we are ballooning. the dollar is still too high. tariffs we won't implement that much. i think there is a big i implication which is the dollar has to come down. we should plan on a lower dollar and if it happens it says these numbers are greater in the u.s.
economy but i think will be overweight based on where the dollar is going. >> got it. thank you, gentlemen. good to see you this morning. >> another big story out of washington is president trump's agreeing to meet with the north korean leader er kim jong-un at talks about de-nuclearization. >> the initial focus has been on how historic and surprising the meeting is and how high the stakes are. now the talk is about what is actually on the table here. vice president mike pence who was in the oval office with the president yesterday when he received and accepted the invitation for a meeting with north korea said the north koreans are coming to the table despite the united states making zero concessions. and in close coordination we have consistently increased the pressure on the kim regime. the president has said for a while now that it is open to talks with north korea but it
was unclear exactly what nature those would take. just yesterday speaking in africa the secretary of state rex tillerson said if those happen there would be talks about talks but that any negotiations over the nuclear program were still very far off. listen. >> i don't know yet until we are able to meet ourselves face-to-face with representatives of north korea whether the conditions are right to even begin thinking about negotiations. >> reporter: this is a decision that the president made here at the white house yesterday in the moment, on the spot, on the fly. the white house then saying the date and time of those meetings are still to be determined but they will happen by the end of may. back to you. >> thank you very much. coming up, black stone vice chairman is with us. we'll get his take on today's blowout jobs report and much, much more. you are looking at a live shot
of the brooklyn courthouse. little more than an hour from now. we are expecting sentencing for the so-called farmer bro. later you won't want to miss treasury secretary steven mnuchin. squawk on e re wl thstetilbe right back. don't go away. well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all.
well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
♪ president trump formally announcing import tariffs on steel and aluminum, a move he says will protect american jobs. president saying he supports such tariff flexibility. >> america will remain open to modifying or removing the tariffs for individual nations as long as we can agree on a way to ensure that their products no longer threaten our security. so i have put ambassador, great gentleman, in charge of negotiating with countries that seek alternative. >> our next guest says it seems the president wants a trade war
promising that america will win despite history which suggests otherwise. joining us now is jim stewart. it's friday when jim is here. you got to spend about a week on this one given the initial announcement unexpected as it was from the president last week. what does history tell us? >> this has been fascinating. usually you bring up the word tariff at a party. everybody like please. suddenly it is the hottest topic around. i was wondering what trade wars did he have in mind. the worst trade war generally considered to be triggered by the smooth act. made the depression worst. people argue that fuel the rise of fascist parties in europe by cutting off germany from trading partners. looking back one lesson stands out is that the real winners are countries that do not get into the trade war because once you
have a trade war going on the participants have to turn elsewhere. if all canadian u.s. trade wars the british empire always was the winner because canada had to turn back to britain. soviet russia was the big winner. they were completely excluded after the czar was overthrown. countries like italy had to turn back to russia. those commercial ties are still going on. it's very surprising sometimes you end up helping your enemy. >> to be clear we are at no smooth and that was thousands of products that we put tariffs on. the fear is what if we keep ratcheting up? >> i think trump's comments that we heard suggest we are not there yet i think the benign view is he is using this as a bargaining chip and broughter effort to acquire leverage.
history suggests the minute you start tying tariff issues to nontariff matters as he has hinted threatening to reduce commitments to europe which happened in the '60s that has not worked. people get very upset about it and angry. i was talking to jim cramer earlier this week. here is a really wild scenario. he uses tariff leverage to put more pressure on north korea. north korea caves in and gets rid of nuclear weapons. trump wins nobel peace prize. he shares it with the president of south korea and everybody is happy. that's the wild one. they don't work out that way. >> i can't believe you spent 30 seconds on it again here. you talk about the history of trade wars being unkind. the trump history if you want to talk about the trump history of negotiating, this is how he does it. this is his style.
who is to say this is nothing more than a negotiating tactic. you have threatened to push them against the ropes and throw a couple of punches. at the end of the day they are going to come back with terms that are more appealing to the united states. >> we don't know yet exactly how this is going to be handled. certainly the rhetoric is very protectionist. the rhetoric from his advisers is protectionist. another lesson from history is if there is a huge imbalance the wealthy country wins. the big example was france and italy. france crushed italy. italy got rid of them and begged france not to retaliate. the italian economy suffered tremendously. in bilateral negotiations we have tremendous leverage. most people think we have tremendous leverage with canada and mexico. here is what we do not have a
lot of leverage. that is the european union and probably china, as well. >> my question was about china specifically because so much does appear to be aimed with china. there are these shipments, they throw it all over the planet and it does contribute significantly to lowering the price and/or is reworked in some way. >> you can't just look at individual country things because china is such a player in the global economy. it would be very dangerous, i think, for us to really go to trade war with china. it's too big. >> we have for 30 years given them lots of carrots. you can join the wto before you're ready. you are going to be able to do these things with the assumption that they would stop subsidizing their state-owned enterprises. they would eventually have more democracy and not less of it. there would be resperocity. we would be able to invest in their country the way their
companies can invest in our country. we haven't gotten anywhere. the core issue here really is that everybody is quite frustrated including the european union about china. >> there is immense frustration with china. you are absolutely right that many of those things have not budged considerably. there is a way of attacking those through multi lateral negotiations which china has been making offers that haven't been pursued. secondly, to say we haven't gotten anything is a mistake. if you look at chinese trade, had money that american companies are making out of china, despite all of these hurdles, appal is the key. >> there is a lot of money being made in china. >> to be continued for sure. >> thanks for having me. >> coming up next our next hour
treasury secretary -- i'm so excited i'm saying it too quickly. steven mnuchin. i do pronounce his last name properly. he will talk about the tariffs that jim was talking about and a lot of other things including the very strong jobs number this morning. pharmer broback in court today. >> reporter: it's the conclusion of nearly three-year long saga in the trial of martin shkreli. he was arrested at the end of 2015 and charged with eight counts including securities fraud related to three schemes the government said he perpetrated in related to two
former hedge funds he ran. in august he was convicted of two counts of securities fraud and one count of conspiracy to commit fraud in thereat he illegally controlled the shares. the judge here has ruled his losses amounted to more than $10 million. she ordered him to forfeit more than $7 million including potentially the wutang clan alb album. investors asked for sentence of 12 to 18 months. the government prosecutors have asked for prison sentence of no shorter than 15 years. he has been in prison for the last six months. we will bring you all the news from the sentencing hearing that starts at 11:00 a.m. back over to you. >> quite a spread of possibilities. thanks so much. the impact of tariffs on the auto industry, the u.s. consumer and more.
former ceo of home depot and chrysler will join us. take another look at stocks at this hour in the wake of the jobs report. they are in positive territory. dow is higher by 214 points. gains of nearly 1%. squawk on the street back right after this. this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.
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trump's trade policy having an impact. >> there are lots of places in the market where we are seeing ripple effects of trade policy, tariffs, proposals and the like. as things progress on steel and aluminum two parts of the exchange market will be a huge focus and that is those investments and assets tied to canada and mexico. even more so as the trump administration focuses on renegotiating parts of the north american free trade agreement. two of the more well known etfs got around $2.9 billion in assets. there is also the mexico cap
fund ticker eww. it has just shy of a billion dollars in assets. the bigger picture prospects for baskets in light of nafta they are a big driver but currencies will be key in the markets. yesterday's headlines led to extension of shorter term negative momentum for the u.s. dollar relative to the canadian dollar and mexican peso. the gains were a big driver of those positive moves in canadian and mexican stock exchange traded funds which go up in value when the currencies go up in value. one quick way to see how much impact there is on a particularly geographically focussed fund is to make sure there are currency hedged versions of the same funds. there are much smaller and very tiny versions of the country funds that use derivatives to keep fund performance tied to underlying stock movements abroad rather than currency
effects themselves. as long as trade talks continue between america and other countries many funds and those associated with them where we do see that debate over the headlines play out. back over to you guys. >> thank you. when we come back we have a deep dive into market impact of today's jobs report and tariffs. and less than an hour from now treasury secretary steven mnuchin will be with us. squawk on the street will be right back.
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meeting with the north korean leader. he said it will take some weeks to arrange the timing for that meeting. >> president trump said for sometime that he was open for talks and he would be willing to meet with kim jong-un when conditions were right and time was right. more than 280,000 residences and businesses are without power throughout the northeast two days after a second nor'easter and utility officials say it could be days before power is fully restored. and serena williams is back. she made her season's debut at a tournament in palm springs after giving birth to a baby girl in september. she was victorious winning in straight sets. i will send it back downtown to you, david.
we are about an hour into trading right now this after the market has had a little bit of time to digest. you can see we are actually up over the last half hour where we started the session at least at 10:00. gains being made on all major averages. >> today marks nine years since our former colleague called the market bottom. back to present day volatility it's top on the agenda and joining us now with his market insight is black stone's vice chair of private wealth solutions. welcome back. >> thanks. good to be here. >> we said our late colleague and beloved one called the bottom nine years ago. you think we would still be going in this bull market today? >> i think we are still in a bull market. this is going to end up being the longest bull market probably
in the post war period. >> so about ten days ago in your note the headline reads more trouble for u.s. equity markets ahead. you still feel that way or do you need to change that based on the jobs report today and the benign wage number >> i'm always looking for what could side track that. there are a couple things that are worth worrying about. one is the fed is going to be more aggressive in this positive growth environment and we'll probably see four rate hikes this year. the second is that the budget deficit is going to be fairly large this year probably pushing towards $1 trillion and that's going to put pressure on the bond market so i think interest rates are going to rise.
it will be longer term rates. so the combination of fed heightening and higher rates are not good news for the market. >> if they rise for the so-called right reason or rise at a gradual clip rather than a blast off hire that's not such a bad thing. you expect the economy to keep doing very well, earnings to continue to come in well. some people still think that estimates in the numbers are still too low based on the tax law. all of those would be positive for this stock market to continue rising, no? >> reporte >> all those things are positive and i have a basically positive outlook for the year. i'm just saying that there are some negatives out there and investors today are youyouuephoc and think number can go wrong. that makes the market vulnerable to any adverse piece of news. >> i'm a little confused.
you said that you thought this could be the longest bull market post war and you sound a little bearish to me. what is the bottom line what you think about the markets here. >> basically positive on the outlook. i just think the market is vulnerable to periodic corrections such as the one we had in february. and i think we're going to have several more of those. so i think the volatility of the market will be maintained but the volatility means not only upside but down side. i think some negatives i mentioned could produce a down side. i think we are in a gradual uptrend but i don't think we are going straight up. >> how would you take the news of a trade war if one -- if what the tariffs escalate into that the north korea conversations, how do you factor all of those major stories into the way you
view the market? >> a trade war would be a profound negative. an agreement with north korea where they suspend their nuclear weapons development program would be a positive. but remember the north korean thoughts could go badly. that could be an outcome there. so don't assume just because trump and kim jong-un get together that it will be a positive outcome. what i'm saying is that with investors as positive as they are, almost any piece of bad news could make the market vulnerable to a correction. but as i said at the outset the basic trend line which is positive will continue. >> one of the core questions we have been asking since we saw the wage data a little more than a month ago that frighten the
market about what the fed might do about interest rates is how much do you pay for future earnings we saw multiple compression in that selloff even as earnings rise what are you willing to pay for next year and the year after at this point? >> right now i'm using $160 for standard and poorz earnings for 2018 and $170 for 2019. and on that basis the multiple of the market right now is about 17 or 18. and that's not excessive. this is very different from what we experienced in 1999-2000 or 2008. >> i don't know. maybe we will call this the byron bump. market is up 240 now as you continue to be positive. how long do you think the bull market does last for what inning are we in?
>> well, maybe we are in the seventh. bear markets usually anticipate recessions. i don't see a recession occurring until 2020 at the earliest. >> wow. >> but yet you do think that investors are in your word, word,uephoric and would remain in that stage. >> i think some things will come along the way that will change that. you never know what they are going to be until they occur but i try to cite a couple of them. rising interest rates, more aggressive fed are two that come to my mind but the other unexpected developments could change thatue foria to concern pretty much overnight. >> see how it all develops.
we appreciate your time as always. be well, enjoy the weekend and we'll see you soon. >> great. byron wein. a big interview. win resorts announcing it will pay universal entertainment $2.6 billion making a five-year lawsuit go away. trial was set to begin in april over forcibly redeeming universal's azure 20% stake in the company at a discount. here is the big news. contessa brewer is in las vegas and will be speaking with matt madx in his first television interview. you won't want to miss it. when we come back tariffs are of course taking center stage. we will speak with the former ceo of chrysler and home depot. coming up on squawk alley a huge interview you won't want to miss. steven mnuchin is with us and you're looking at a live shot of the brooklyn courthouse where
welcome back. dow is at the highs of the day plus 250 points off the very strong jobs report. 313,000 jobs. the wage number not too strong. market clearly liking that. the s&p 500 good for one percent today. all three major averages at this hour are above or right at 1 p.m. >> the nasdaq composite hitting a fresh all time high for the first time since january 26, 2018. president trump making his
steel, tariffs and alum income tariffs official. a look at the real cost of these kafrs and corporate winners and losers. >> the administration says no matter how the tariff plan shakes out it shouldn't be a big deal for steel and aluminum customers. the potential inflationary impact from tariffs is adding fuel to an already heated situation according to a recent goldman sachs note. the firm studied several industries, machinery, autos and building products to see how they would fair. goldman sachs says higher input costs could either compress margins or reduce volumes. auto makers would need to reduce demand to account for higher input prices. or they would have to eat higher costs in their margins. goldman estimates that could cost ford and gm about a billion dollars each out of 2017 income.
in the machinery space goldman says that caterpillar should do better. they may have a tougher time because customers have consolidated. among building products manufacturers goldman says ao smith and lennox should have stronger pricing power even though steel makes up about ten percent of costs. the firm says whirlpool products are more kmaudatized. it is important to note that the study was conducted ahead of trump's announcement in february and assumes a 24% tariff rate while authors believe findings are largely the same. they note that the specific details of the tariff plan are, of course, still in flux. >> and also this report was done before we knew about possible exclusions. >> exactly. >> thanks. for more on the president's
tariffs joining us on the cnbc news line is bob nardelli. he ran ge's power systems. currently the ceo. good morning. what do you think of this tariff situation? is it detrimental to trade you have had so many roles in the past where you have seen international trade up close and personal. what do you think net/net of what is happening over the last week >> good morning. it's -- i think this is yet another bold move by our president. we shouldn't be surprised by it. i think the market is probably overreacted to it. but we have seen these type of moves and regulation roll backs, better corporate tax. we saw the income tax change. we saw the repatriotuation of funds. a big hunk will pay considerable amount of interest on the
national debt. i think this is a move towards fair trade in trying to balance trade particularly with china. i think the modification on canada and mexico was thoughtfully done. i would think about as an inverted triangle where the consumer is on the bottom. the consumer will pay possibly a modest amount as a result of this. we saw where tariffs went on washer machines and it hardly effected the market. we saw whirlpool. i know the comment was just made. my understanding through my friends at the big boxes, whirlpool raised their price on washing machine. if you go to the middle of the triangle, chrysler, ford, gm they will pay a little more because the volume is larger. the real penalty will go on the provider, the steel manufacturer and again on the comments that were just made if you're buying
steel offshore you will get a higher penalty. if you start to convert towards domestic supply where there is capacity and it should create more jobs, better gdp, the bigger the gdp going to 3 or 3.5 will contribute significantly to paying down interest on the debt. i think i am still pretty positive about the economy and positive about this move as an attempt -- >> you are not worried about retaliation. what we hear is what if this starts this it for tat process of ratcheting up and we get retaliation from trading partners that ends up hurting the u.s. economy. >> it will hurt them. we heard from some people the other day particularly in retail.
if they raise prices on those products there are alternates and they might be more domestic supply or moving more of that product. and i think the way the tariffs are set up if you bring products on shore or if you are producing components and bringing them offshore my understanding and we need to get clarity on it is that this is really on the raw material of alum incoiincome an steel. i think some of the people had it right. there will be an impact on the consumer. >> scott walker has a question for you. >> i can't imagine -- i can't imagine and maybe i'm just flat wrong, that if you were still running home depot but especially if you were running chrysler that you would have the same response that you do this
morning. what would you say to that >> i am looking through those lenses. if i'm at chrysler my option ality is what? either to accept the 25% tariff on steel coming into the country or start to move it to domestic. let's think about this for a moment. the advantage of moving to domestic, think about the reduction in working capital where you aren't paying 30 days for floating steel. so your inventory because of supply chains will be shorter. the inventory you have to carry, the working capital that is out layed should offset some of the other financial issues. i am trying to be broad and trying to wear my businessman's hat yet i still am. i think for the country this is yet another bold move by the president who is not getting sucked into the swamp but
bringing the swamp with him. we haven't seen that in eight years. >> thanks for calling in. bob nardelli. >> thank you. send it over to john ford with a look at what is coming up on "squawk treasury secretary is g to be with us. but following up on that interview, we've got a conversation with a big steel importer, robert miller of mlnk-usa he's not in favor of the tariffs. we'll see what he has to say about the secretary's comments coming up on "squawk alley." you know what's awesome? gig-speed internet.
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all right. let's get over to the cme group in chicago and rick santelli who has the "santelli exchange." >> good morning. thank you. i'd like to welcome ed ed lazier. this was a really big jobs report welcome. listen, i guess the best place to start is the notion that the 2.9 we saw last month is now gone that was revised to 2.8. so if my memory is right, the
last time we had a 2.9 is the summer of 2009 so what we're looking at is a 2.6. and the markets, you know, rates went up. stocks went up was it the last report was it really breaking that, you know, 2.9 level that made everyone so nervous or was it the notion that the rest of the report wasn't strong that wage components stuck out what's your thought? >> yeah. i think it's the latter. you know, i wasn't particularly upset by it. i think that when you see an aberration in one month you don't get too nervous about it this one seems more in line with what we've been used to. and the other thing that we talk about last time, rick, i just mention it again, is that i don't worry about wage growth to the extent that it affects reflex productivity because if it's productive, it's not inflationary if you net out the productivity growth, even though it hasn't been great, if you net that out, we're still not seeing wage
inflation that's anywhere near the 2% level that the fed would be worried about so i don't think that's a particularly big deal. just coming back to what you said earlier this morning, i was watching you when the numbers came out i think you made an important point and one i want to pick up on and that is that there are still people out there who can come back to work. you mentioned the young men, obviously. people 25 to 34 years old. we are still seeing jobs that are about 1.5 million below where we should be based on previous numbers we still have room to grow and the fact that we created over 200,000 jobs over the past three months tells you that we're growing at rates faster than population which tells you that we're not back to the peak yet >> you know, and i like the fact that you want to drill down on that particular point. i couldn't agree more. as a matter of fact, if you look at the cycle low for labor force participation, it was 62.3 in the fall of 2015 today it was 63.
many would say .7, no biggy. i particularly think it's huge not only in the number but huge in what it represents. it represents an issue that was defined incorrectly by central bankers especially those in this country. they never thought that that pool of 97 billion people -- million people that, is now 95.5 million people because we put over a million back into the labor force, that's a wonderful thing! >> i agree completely. and i would say that i'm a little uncomfortable with the fed's current language about what's going on there. i believe as just said that back in 2012, in fact, i remember giving a talk at the jackson hole fed conference and saying that i thought this was going to come back, that we were essentially still in a cyclical low and that we would come back mostly from that it wasn't structural the one aspect that i think is structural and cannot be fixed
by monetary policy, again, is the point that you made earlier this morning and that is when you look at young men 25 to 34, these are not people who have been in the steel industry for 20 years and lost their jobs as a result of a recession. these are people that don't have the appropriate training to go into the labor force in the first place. i think that's where the structural problem is. >> i completely get that we need to bring back some programs like, you know, apprenticeships in business but not always look towards the government ed, we're out of time. i have to go thank you. david faber, back to you >> okay. thank you, mr. santelli. moments from now trade tariffs, the economy, a lot more to talk to treasury secretary stephen mnuchin about. he'll be with us on set. and sentencing is about to get under way for shkreli. a g owdewashunr y. don't go away. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient.
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