tv Squawk on the Street CNBC March 23, 2017 9:00am-11:01am EDT
17 seconds, jason. just long enough to thank you for being with us. >> appreciate it. >> by tomorrow we'll know. >> we'll know. >> maybe. >> we'll have an idea. >> maybe. >> we hope. >> jason, thank you. we'll see you soon. that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange. david faber's off. got some stability in the premarket on what is expected to be a big day on capitol hill. still no timing on a house health care vote, but lawmakers expressing more optimism about passage today. london is steady, parliament's back to work as the city responds to yesterday's terror attack. bonds once again 2.4, claims back above 250. roadmap begins with a vote on health care repeal.
does the gop have the votes? what does it mean for the agenda? starbucks howard schultz on with jim last night. and eight are arrested as isis claims responsibility. first up, wall street keeping an eye on wall street today. the president lobbying hard for the gop health reform bill ahead of a critical house vote. rules committee gavels last night without any timing. the house gop delaying a 9:00 a.m. meeting right now. it's going to be a long day. >> yeah. look, i think that the t.a.r.p. comparison if we remember t.a.r.p. goes down the first time and then looks like all heck breaks loose and then t.a.r.p. again. this is like a mini t.a.r.p. to me. i think they're going to have to come up with something. i'm looking at it from the corporate way because that's all i can really add. i know the hmos, the big public hmos so important to the system they don't want to be in this thing anymore. you may think that you could either vote yes for this ryan plan, or you can keep the obamacare, but i'm telling you that obamacare regardless of
what trump's saying. i'm looking at the companies, companies don't want to be involved. centene want to be involved is a very good company. if you don't have any competition, then -- >> you don't agree with the idea that it is in a way collapsing on itself? >> i agree with the idea that if you believe that the hmos that are publicly traded are integral to competition, which i've seen all my life as an employer and i've been an employer in other businesses, without that competition, then you can truly not afford to have health care without it wrecking your business. so you do need these players. and i'm not being political. i'm being someone who's employed 300 people, employed 50 people, employed 10 people. if you don't have competition, you just can't afford to do business. i think that people should recognize it's just a real way it works in the world. i wish it didn't. >> san tetelli's going to talk kevin brady later this
afternoon. some of the tweaks they're talking about, hospitalization, drugs, newborn care, the question is obviously it appeals to some of the freedom caucus. does it cost them moderate votes? >> i would imagine that does. i think that what people want is kind of a uniform policy that makes it so that some people can't -- you know, that hospitals get paid. if you remember before this what the issue was whether the hospitals were really bearing the brunt. and then once this passed, the hospitals stocks rallied. again, i want to come at it from the point of view of companies. i don't want people to think i'm being political. i'm just telling you the hospitals were the ones being stiffed and they were in trouble before this. drug companies people were concerned about maybe there was going to be a single payer and it didn't happen. drug companies rallied. so just keep in mind that the stocks tell you more than the -- than washington does. >> yes. goldman's out today. interesting you're hearing a little bit more of the spin. people understand the passage
whether it's the house or the senate, it's a long road still for health care. >> yes. >> will there be a point where the administration sets it aside to focus on tax reform? goldman has an idea. they'd be surprised if in fact it gets too murky they just don't bounce to another runway on taxes. >> that's what mitch mcconnell said yesterday and i've got to tell you -- senator mcconnell, i'm sorry. that would be the win-win so to speak. because it is so clear that tax reform is what drove a lot of the stock down. can i just say tax reform is filled with merck because border tax, no tax, individual versus nonindividual, all you want is repatriation because that was a simple one. take the money and run. please. >> how about yesterday's action and the stability today? >> i think yesterday was a win for the bulls. i always feel this is a very -- i understand ford by the way preannouncing. i understand this is very complicated because real life should never -- i should never
put real life behind stocks, but there was a terrible terrorist incident yesterday. and yet stocks shrugged that off. stoc stocks slugged off the idea the ten-year is still at 2.40. you could argue perhaps they benefitted from the idea that the house intelligence committee said there may be some truth to what president trump says about wiretaps. but most importantly oil went down from 70 cents to being down ten. these are all the components. i know wilfred frost went back and forth, he was saying some of the things i was saying last night which is if you just focus on the companies, you really would be using these dips as opportunities to buy because we've had far more companies with better than expected earnings. i don't want to get sidetracked here. and you have them every day. i mean, accensure, but again, the earnings, he earnings, earn.
pvh rather remarkable quarter. >> right. you mentioned nunes and adam schiff and manafort and the drip, drip on that. the president in "time" today with a fascinating interview. is that all still removed from -- for our concerns, for business concerns? >> not if comey, fbi chairman comey, he seems to have -- you know, the comey i knew when he was at the u.s. attorney's office, he was not a showman. i don't mean to be too derogatory here, but he says things if i were the head of the fbi i would be more tight lipped because i keep thinking about what happened with hillary clinton. you know, you had, wow, i'm really worried and then no. and will that be a replay here? a lot of people are saying to me this is going to be a replay of saturday night massacre which i only remember because i'm so darn old where president nixon decided everybody didn't like him was gone. so, i mean, be in mind that
would be the situation where it would impact the market. >> right. >> comey fired on saturday night, which i know that sounds outrageous except for those of us who were watching it unfold with nixon and said, well, this is the republic. the republic. >> yeah. let's touch base on the london story today. we want to bring you up to speed. isis did claim responsibility for the deadly terror attack in london. our william marks has the latest. >> eight arrests to individuals some way linked to this attack. prime minister theresa may speaking a few moments ago in the house of commons behind me said there was no particular intelligence that led to an increased threat level. let's have a lesson. >> the threat level to the uk has been set at severe, meaning attack is highly likely for some time. this is the second highest threat level.
the highest level, critical, means there is specific intelligence that an attack is imminent. as there is no such intelligence, the independent joint terrorism analysis center has decided that the threat level will not change in the light of yesterday's attack. >> prime minister theresa may saying the individual responsible for the attack yesterday was british born. he has historically been investigated by british's domestic security services, islamic state claiming over the last hour or so that he was a soldier for i.s. >> willem marx in london, we appreciate that very much. there will be a candle light vigil in trafalger square. >> by the way, we see just a conflate -- money with life, ford did preannounce to the
downside. i think that's important because a lot of people have been hanging their hat on the airlines and the autos being doing better. these are two key groups. the airlines kind of fell apart and now the auto companies. >> we're going to get up to speed. warning season is upon us. >> yes, it is. few and far away, mark fields they've been doing a good job but they've missed for multiple quarters. >> we'll get to con agra, a lot of retail calls today. pvh of course with jim last night, in addition to howard schultz sending the message as he gets ready to pass the ceo baton at starbucks, you'll want to hear what he told jim. also ahead of that vote on health reform, house ways and means committee chairman kevin brady making one more push. my favorite stat of the morning is the nasdaq's up five out of six, but it's down 35 points in
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welcome back. we're taking stock of ford's preannouncement here. looks like they're blaming three things essentially, jim. higher costs. >> right. >> including commodities, warranty, investments in emerging opportunities. we know what that means. lower volume on mostly fleet and then forex. >> yeah, this is kind of really a parade of horribles.
i noticed driving gm down. gm is getting rid of europe. ford has had problems in some of these if it's not latin america, then it's europe. and they go back and forth. they do trade and hedge on their materials, so that is interesting about the commodities because that may mean they got the commodities wrong. don't forget steel has risen in costs because of our tariffs in our country. emerging opportunities could always be positive because you don't know whether they're spending money to try to be in some markets they haven't been. nothing here about the f-150. nothing here about suvs, which are so lucrative. but i do want to point out that ford is only been indicative of ford. i think people really have to recognize that. we are pointing out that mark fields spent a lot of time with the president, that doesn't necessarily mean he shouldn't be on the assembly line. but ford has been such an underperformer in the group that you begin to question why can't they get it more right. now, they don't have enough china. gm moved into china very aggressively.
ford has not. if you want to sell all these stocks off of ford, then i will tell you that i'm not a huge fan of gm, but i would buy it. >> really? >> yes, i would. i would buy gm. >> cashin's been talking about some of the comments out of ally this week and last regarding auto financing and so forth. >> you know, i want to be clear that the only bubble that i see is in student loan. you can't afford to lose your car because you lose your job. even during 2008-2009 people gave up the keys to their house before they gave up their car. because when you give up your car, you give up your job. and you got to put dinner on the table. so let's not confuse things. student loan is just someone has to deal with that. that's obscene. that's keeping our whole country back. >> our phil lebeau joins us on the phone. phil, i know you've seen this. we were just talking about not a specific reference to demand, at least consumer demand.
>> no. and what stands out about this lower guidance is the reference to a higher cost in part due to investments in emerging opportunities. that is code, so to speak, for investment in autonomous drive vehicle, investment in electric vehicles and the huge investment that ford is making essentially going it alone separate from the rest of the industry in terms of saying we believe that the future comes to us eventually with autonomous drive vehicles and electric vehicles and we want to control our destiny there. that's a different playbook than you seeing from the other automakers who are taking much more of a collaborative effort when it comes to working with companies such as mobileye and saying, okay, what can we do, where is this technology coming from. ford has made big investments in terms of saying we want to develop a lot of the technology on our own. and this is what you get, guys, when you have these types of
investments. so i think that's one of the areas that's going to get a lot of attention from investors today. >> boy, phil, you're so right. i went out -- when i went out to silicon valley to see what ford was doing, you're so right, phil. they're trying to do it on their own, spending a fortune. the engagement numbers for them aren't as good as wamo, owned by alphabet google, the cost of these things and the cost of the chips is so high that you really even have 2,000 chips in a car, you know, you're talking about 2 million bytes, you're so right. it's so expensive, phil, unless you do it with a partner, i think. >> right. jim, the big concern is what happens if you do see a slowdown in consumer demand let's say here in the united states over the next three years? nobody's forecasting that, but if that comes, the united states is basically carrying the water for ford right now. this is where they're making their money. it's not like these guys are warning they're going to lose money this quarter. they're still making a lot of
money. but if the united states ever starts to really slow down, then you're going to see people say yikes can you afford to be making these types of investments. >> phil knows. phil knows more than the 8k. there we go. when i was out there the thing that really struck me was the amount of money you need to do autonomous vehicles. even, you know, google when they went in with wemo, they had this stock using other people's chips. they had to make their own chips. too expensive. had to bring the cost of the vehicle down. fiat has partnered with them which is google. >> what i hear you saying is ford at least is moving into a huge investment cycle regarding autonomy. >> yes. >> do you think most investors think of the industry that way yet? >> they ought to be. phil, the different ways to go about autonomous vehicles, phil, some guys doing it smarter than others, wouldn't you say? >> i would agree, jim.
they're not the only ones working with wamo. i think there is really two-prong approach here. there is the ford approach, go it your own. or there's the approach you see from a number of automakers including fiat, including general motors, which is we're going to do a lot of our investment and research on our own, but we're not going it completely alone. we can't afford that nor do we think that's probably the smartest way to go given how quickly this technology's developing. >> phil, last week one of the big questions of the day was who has the leverage right now on autonomy? is it a tech silicon valley story or a detroit big three story? >> i think it's tech silicon valley. they don't have all the answers.
it's not like they can develop vehicles on their own, nor do they want to develop vehicles on their own, but if you said who has the leverage i would say it errs on the side of the tech community and silicon valley. >> tough to compete with uber and tesla -- >> there is a stat, a statistic people have to recognize california department of motor vehicles keeps what's known as the engagement stat, which has how many times do you have to disengage and have a human take over. if you go and look at their website, you will see waymo is in the stratus fear in terms of getting this right. and everybody else is very, very low including ford. so ford's go it alone strategy, phil, may not even be working as well as waymo, which is all fiat. they have 100 vehicles they did in december. i think numbers were very good. >> you're not saying this is a tilting windmills where no matter how much money they plow in they can't keep up? >> i am saying that i think we could talk all we want about google and this ad situation
which i think will be resolved rather quickly by google, but the main thing to recognize is that waymo's figured it out. and driven in a waymo car, i've got to tell you, their cost, their disengagement, google will be an autonomous car play and a search company in three years. >> phil, we'll come back to you on this one. thanks for coming to the phone. our phil lebeau. we'll get cramer's mad dash and opening bell in a few minutes. futures, we'll see if they reflect any of the ford uncertainty. more "squawk on the street" from the nyse in a minute. ♪ ♪ ♪ ♪ ♪ ♪
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just about seven minutes until the opening bell. let's get jim's mad dash. call on fireeye. >> yes, our viewers love cyber security. who can blame them? it's an industry we can't find enough workers in cyber security because it's just so much penetration of all different enterprises. okay. fireeye which had been one off investigative after the incident, but they're trying to do far more than that. goes from sell to buy at goldman sachs. now, remember, this stock was at 54, it was down to 11. goldman rarely does that unless there's either an acceleration of earnings or who knows, but they also take down proofpoint hold to sell. i love talking to these guys because it's such a fluid area, proofpoint is e-mail security and they've had the run -- they run the table here because obviously lots of people know that e-mail has been a terrible
way they get in through e-mail and then they discover your whole system, or they publish your e-mails, which is always bad. so be aware that this got expensive according to goldman and fireeye got cheap. to go from sell to buy at fireeye without more intelligence about, you know, just looked like they're kind of saying bottom is a little better, getting a little more let's say distributed. but i would tell you look out. palo alto was defeated by cisco. i think cisco's got a soup to nuts offering. chuck robbins has made cyber security his number one claim to fame after john chambers. i really hesitate to go into any of these unless cisco's buying you. >> despite the move from sell to buy? >> yeah, look, can you get it to 15, 16? absolutely. could it be taken over? it probably should be. but i would say that you don't see sell to buy at goldman unless someone says, boy, we're going to look real bad with this sell on.
and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. ( ♪ ) i moved upstate because i was interested in building a career. i came to ibm to manage global clients and big data. but i found so much more. ( ♪ ) it's really a melting pot of activities and people. (applause, cheering) new york state is filled with bright minds like victoria's. to find the companies and talent of tomorrow, search for our page, jobsinnewyorkstate on linkedin.
you're watching cnbc "squawk on the street" live. busy day as we watch for the house vote on the gop health care reform bill. freedom caucus going to the white house around 11:30 a.m. eastern time. nothing really from yellen speaking at this community development conference. >> no. kind of purposely with nothing. now, there are people out there who constantly talk about a difficult notion, unless you've traded bonds, which is this notion that we have a flattening yield curve that the fed keeps raising rates and a flattening yield curve is nearly always associated with a recession. i want to warn people that if they're going to go into that frame of mind, just two weeks ago we were talking about 2.60 being armageddon. can we just step back? as someone who traded bonds for a living, 2.40, 2.60, don't sweat the program. if there's good business going on and we saw unemployment numbers strong, you will have rates go higher except for the fact that all this european money just keeps flooding europe
because they're in negative rates. i urge people to not make every single conclusion hinging on the ten-year. >> that's a great point. by the way, final ltro by the ecb today. one last push of this basically free money -- pretty good demand over there for it too. >> pvh is talking about one of their blinds being up 20%. this is clothing, people. retail over there is on fire. autos are very strong. property is very good. we got to start recognizing that they're just keeping their rates down because they are trying to out trade us. they are. they are the continent that is doing more right now to take share than anybody. if president trump were listening, which i know he was not because i see what he's watching. >> watching abc and nbc today, that's judging from his tweet. by the way, jim's point on uk retail, up 1.3 month on month as a clear beat. pound goes above $1.25. >> yeah. it's all happening over there.
>> let's get to the opening bell and the s&p here at the bottom of your screen. it's pfizer this morning at the big board. pharmaceutical giant doing the honors. over at the nasdaq, amsterdog rescue celebrating national puppy day. jim, you and i have a vested interest -- >> we have two rescue dogs. i kicked them out of the bed last night. had i known it was puppy day, i got to apologize to bug and everest. i had no idea it was their holiday and they didn't tell me. >> that's a good opening bell right there. we'll watch to see how ford opens. we mentioned the preannouncement we got about 20 minutes ago looking for q-1 results. that will be below the prior quarter. >> yeah, i mean, again, i'm not saying that race, which is the symbol for ferrari, is the right call. talk about a sleeper ipo everybody hated at the time. i am saying that i want people to understand that there have
been multiple times that ford has fooled us and brought down an industry and then a few days later we say, oh, geez, that was my opportunity. i'm trying to shotgun that and say don't give up on that industry. >> if ford's not the broad tell then what would be for you? >> look, i do care about gm. i think people don't understand by gm getting out of europe, even when europe's coming back, you're going to be able to raise numbers at gm. that's what i think will happen. look, you don't have to -- someone's going to downgrade ford and probably have better chance to buy gm. but gm's got a very good yield especially against the sacred ten-year that rules. it rules. i mean, the ten-year's -- >> smartest market in the world. >> i'm waiting for the ten-year to reach in and pull my heart out. in a -- wow, holy cow, look at that. that just happened, the ten-year reached and pulled my heart out. >> jim cramer and the bond temple of doom. alphabet is below the 50-day for
the first time this year. this ad backlash from at&t. >> yeah, look, you got to remember also alphabet is doing some of their own channels. there's a lot of things going on at alphabet you could very easily say let's say tug of war, if you went on the five below conference call, i know you may think that's a microcosm, but it's today's wonderful microcosm, you realize how important alphabet is to the overall point of purchase situation involving e commerce. if you want to dump alphabet because of the moving average, you want to dump it because of att and johnson & johnson, let me just say i don't think you're going to -- i think you may regret it. >> really? >> yeah. couple of days you'll sort things out. i think alphabet, i do a lot of work with them and done a lot of business and work with them. >> sure. >> they have historically been smarter than the average bear.
>> yes. b of a does have a note, they say it may take a couple quarters to resolve. >> yeah. i think that is -- that's probably more of a lowball of what can happen. this company's very smart. remember, the cfo is ruth porat, say i'll take the porat side on that and spot you ten. >> yep. ruth porat is one tough customer. pvh is dragging everyone higher, vf corp., nike, ralph. >> wow, taking up a lot of ones it shouldn't. >> yeah. >> pvh made a move a few years ago, manny made a move to buy tommy hilfiger and calvin klein and wanted to veer away from a mall se naer olympic that could really hurt pvh. what happened? got trapped in a department
store mall scenario he saw coming doesn't get credit for. why not? a self-effacing gentleman, i had to drag it out of him about what a bull move it was to go to china and europe especially when europe is in a recession. he's like, i did well. manny, own it! own how right you were. he saw it coming. who else did? name me someone else who saw this coming? >> that's a tough one. it is a top gainer on the s&p. >> as it should be. >> this is what he told jim last night. take a listen. >> i don't know why the value of a manufacturing job that pays $60,000 is more valuable than an assistant store manager making $75,000 at one of these key retailers. i think it's really -- i couldn't be more passionate about how i think this is bad for the consumer, the american tax base. i think this is just ill founded. >> all right. he's obviously referring to the border tax. >> yeah. here what he's doing is making a comparison. this is not like the steel
industry where we or the auto industry where we lose the jobs, they get the jobs. what he's saying is if you put a border tax in it's going to wipe out a lot of retailers. hundreds of thousands of people work in retail. and what would be gained? we put looms back here? those are very low paying jobs. what he's saying is that the retail industry hangs in the fate because some are so weak and particularly could buy amazon this is not a zero sum game. he was saying president trump understands this. now, he did mention by the way president trump his clothing line made by pvh. >> oh, interesting. >> so it's not like -- he doesn't want to offend the president. >> sure. >> but i point manny chirico -- he has about 50% of the shirt and tie market. justice department should look at how much he makes those. of course i had a pvh tie on yesterday. >> this is page one of "usa today," regarding sears, eddie lampert cashes in as sears
cashes out. >> yeah, i did talk to manny about how sears does take down a lot of pvh. he pointed out that's on the website where you got to buy it first and then we'll ship to them. he did not point-blank say he will not ship to sears, but he said he had little to know exposure. the companies that are exposed right now i think are all kind of saying, geez, you know, maybe this is not necessarily the right retailer to be dealing with. >> right. >> going concern is that's an accounting firm that basically says don't deal with us. >> it is going to bring nike back after that stumble yesterday. >> well, you know, that would be incorrect and a terrible read, but that's okay. we have finish line coming up tomorrow. i'm not being facetious. nike's problems have to do with competition. pvh is not. calvin klein's doing quite well. tommy's doing quite well. nike may be oversold off the idea they're not doing as nearly as bad as people think.
please do not read pvh, that's europe doing quite well. europe is really driving the numbers. >> yeah. some calls on whole foods, ubs initiates a sell. dollar tree -- dollar general gets cut at cs to underperform. >> yeah, i get those. i mean, just let me say that on the five below call, i know again you think it's only 550 stores, who cares, but they have the latest. they're talking about possibility of an exception in the border tax for low dollar items. which would mean that you'd be selling dollar tree at the -- dollar tree was actually upgraded, dollar general. if you're selling this on the border tax, go read the five below call because it's telling you more than likely to be an exemption. everyone's following this very closely. the dollar tree and dollar general would be the $2 tree and $2 general if they aren't careful. most of those recreational equipment stores, not rei itself
but five below at first thought when i heard five below i said, geez, that's a limited clothing line. but, no, it's a teenage store that does quite well. >> we'll watch all of that. muted action overall aside from the retailers strength. dow -- financials doing okay. goldman's moderately in the green here. i wonder if people are just looking for some timing on the hill. >> i think we're trying to bide our time on the hca repeal and replace. i'll say that in particular because there were some notes out today about apple that were incredibly bullish and apple is biding its time. for apple to bide its time to say, listen, we're on hooks here, i do want to point out again that neither ford -- ford isn't a tell, and pvh isn't a tell. so ford is isolated to itself and pvh you can go buy many of these retailers because they're very oversold, but please have something else besides pvh because they're not giving you that kind of read. >> dow's up three.
let's get to bob pisani see wla what's moving. hey, bob. >> hi, carl. jim has it right as usual. everybody is biding their time. let's look at the sectors. and they're right, the retailers are leading here. you can thank of course pvh. five below is a big help as well. bank stocks and banks are having a big problem here. they're down about 8% for the month, but once in a while they'll pull back and you'll see some leadership in the middle of the day. that's what i mean by this rotation. tech's the big leadership group, down today but not much. energy has been down, a lot of the big names down in double digits here. i've noted the growing technical damage in the market. we're still just about 2% off in the s&p, but a lot of etfs are down significantly. so exploration production companies, some of the big energy companies down 17%, metals and mining have had a tough time, the steel stocks have had a tough time, regional
banks have had a particularly tough time. a lot of stuff is down in the mid teens right now. and retail of course a very tough time. retailers recent highs were back in november and december. and i'm talking about how been off of that. and you have to look at individual stocks. gets more real when you see the real damage on the individual level. so look at the bank stocks. this is since early march. zions, fifth third, huntington bank shares all down in the mid teens. even bank of america down 11% from its recent highs. the retailers i mentioned they hit all their recent highs back in november and december of last year. i'm taking those numbers. but look we're just talking four months here, gap, macy's, kohl's, target, all down 30% roughly on average. those are huge drops, practically every day. so why isn't the market down even more? well, it's because there's been leadership out there. there's been particular leadership in the tech stocks. we've been talking about -- jim talks about the semiconductors, micron's had a great month. other groups in this area, adobe and oracle have had a great
month. then you've got home builders and some consumer discretionary stocks like pulte and lennar. and then a more slight defensive tone and you get staples like dr pepper and food stocks doing well. there's enough leadership to hold things up overall, but as i mentioned a lot of technical damage in certain key sectors here. keep an eye on those health care names, particularly the managed medicare names, there's been a lot of damage in the molina and centene, and hospitals we've talked about, tennant, they're not doing much here. and this is another group that's had a lot of damage here. this is just this month. down on concerns they would be impacted by changes in the obamacare legislation or the repeal of the obamacare legislation. as i mentioned a lot of efforts to handicap this health care vote today. completely just informal vote on the floor of how this might
parse out here. if you get a pass on this, market would rally. this is the general consensus. the people i've talked to down here and on the trading desk. if you get a fail and leadership says we're going to keep trying and not move onto other things, that's a negative for the market. everyone agrees that would lead to some kind of decline in the market. and finally the third option we fail and we move onto tax reform, that would be a rally here. two out of three situations actually you get a modest rally at least. right now the dow down 12 points. waiting for that vote. guys, back to you. >> all right, bob, talk to you in a little bit. bob pisani. >> great rundown. >> rick santelli at the cme has a big interview coming up in a little bit. hey, rick. >> yes, i'll tell you what, it's just going to be an exciting day. i know some of what's going on gets a little messy, but, hey, that's the process. you know what fraternal twins are, right? i'm going to show you seven fraternal twins here in the form of charts. all these charts start on november 1st.
look at the similarities. okay. a two-year note yield. now, grant it seems to be rolling over, i get it, we've hit important resistance. if you look at the 30-year, the other end of the curve, look at how similar. maybe various degrees of intensity on the correction based on history, but what you're supposed to garner from these charts is we've covered a lot of ground right below where we're trading yield on all maturities. that should act as shock absorbers after hitting what is very big resistance levels. now let's look at tens minus twos. there's a lot of talk about the flattening curve. and i get it, financials don't like it. but it isn't quite the flattest since november. there's one day right at the end of february. you see that little v where it was about two basis points tighter. so if you're really looking for this to see what happens when we get some more flattening against your favorite banking stocks, wait and see what happens when it trades 1.11. tens minus bunds, how similar.
to me this trade really coordinates and correlates with the dollar index a lot as you see on the next chart. and, jim, spot-on the last lrto. what does that mean? yeah, fireworks. i love fireworks on the fourth of july. i especially love the very end of it called the grand finale when everything's popping because in a way that's the ltro. okay. yes, things are going to look good. and their stocks are going to go up. but now the ball moves into the no fireworks in the sky. what's mario draghi going to do? is there going to be a taper tantrum in april? what's kuroda going to do? these are the big questions making the next two charts in my opinion big. look at the dollar/yen. now that is the weakest dollar since november. now, think the opposite. okay. because this really isn't a fraternal twin, this is a fraternal twin looking in the mirror, the euro versus the dollar, okay, so the strength on this chart is the euro. the weakness on the dollar. now, we're going to also in about, what, 11:15 eastern talk
to kevin brady. and i'm going to ask him some tough questions about what's going on not only with the potential vote tonight, but what may be happening with the border adjustment tax. carl, jim and spirit of david, back to you. >> good one, rick. we can't wait to hear from you in a little bit. do you think we're still there? are we still at a period where we're going to tantrum over lack of accommodation? >> look, all i know is that if europe doesn't start playing fair, it's not just germany. i mean europe's got to start playing fair. and this idea of negative interest rates is just to take our business. somehow we slam china, which i think china doesn't play fair at all. had nucor on, steel company, but the idea that europe's playing fair. europe is doing so well, but what do they have to do take all our business? i mean i really think this is just a travesty. i understand what happened with uk and the pound when they pulled out. >> yeah. >> but this is all about taking our business. and i don't know why people don't see it that way.
why? because they're our allies? everybody's our -- our trade friends, well, with friends like those, how about that? >> yes. you're not the only person who feels that way, i'll tell you that. >> that's true, but i was a little before everybody else. don't put me in a certain camp. >> when we come back, former hhs secretary kathleen sebelius, we'll get her take on the house vote looms regarding the gop health reform bill. market's going to bide its time down ten points. back in a moment.
at its annual shareholders meeting on wednesday starbucks announced plans to create more than 240,000 jobs around the world including 68,000 here in the u.s. the company's growth strategy includes opening 12,000 new stores globally by 2021 as howard schultz gets ready to hand the reins to kevin johnson. this is what he told jim about the company's future and performance last night on "mad money." >> despite the fact the stock is not up year over year, it's
probably been one of our best and strongest years in history. i think the second half of the year in terms of our comps and traffic will be much stronger than the first. and i think what we've done every year is really demonstrate we play the long game. and our shareholders have been rewarded in the past. they'll be rewarded again. and i think kevin's ability to lead the company into the future we could not be in better hands. >> you a fan of this transition? >> my travel trust owns it. actually, i think this is kind of a dual edge good. the problems howard is addressing have to do with technology and throughput. howard is now spending on the top part of the pyramid, which is the roastery and reserve, which is where the real added i'd say the big numbers for 2017 -- 2018, 2019 could be from. most important the stock is down because of the throughput of this problems with mobile. there was a recent piece out by one of the banks saying it's only going to have 2% growth this quarter. what howard said was in the
situations -- actually, kevin talked more, in the stores where they have solved the -- e mull rated the mobile mosh pit, same store comps are up big. they have a solution they can put it all in this quarter, but i would point out there are a heavy amount of people betting against starbucks fixing this problem. and what howard's basically saying is you're not going to be thinking about this problem a year from now. so i think you have a dip -- you have a dip as soon as they report this quarter which won't be that good. that will be the buying opportunity. i don't know how long that dip will last. >> you also tried to pin howard down on his political aspirations post starbucks. this is what he said. >> we must do more for our people that we serve the communities and we have a bigger responsibility, we can't wait for washington. we provided health insurance and equity in the form of stock options over 25 years ago way before the affordable care act. the only company in america providing a free four-year college tuition for our people. all these things i think are part and parcel with building
the kind of company that has a conscience. >> coincides what some call some op eds for him to do that, to run. >> i directly reference our friend jim stewart's piece about howard one run and that was his response. very similar response by the way marc benioff head of salesforce, both saying perhaps corporations can lead, business can lead. i know costco feels the same way. this is a remarkable company. the stock has been amazing except for this year. and again, my travel trust owns it and i do believe that you have to take a long -- just as he said, you play a long game with starbucks. if they're going to open those stores and hire all those people and people suddenly forget china is doing unbelievable. china is a very important market and will pass the united states in just a few years, i think. bet against howard, bet against ruth porat at google, have some fun. go right ahead. bet against the patriots. that's fine. >> i love it when you dare investors to. >> i want people to -- bet against howard and bet against ruth.
bet against all ceos known by their first name. that's aults been a real good one. >> we're going to get stop trading with jim in a moment. dow's in a tight range down 11. don't go away. you totanobody's hurt, new car. but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it. what are you supposed to do? drive three-quarters of a car? now if you had liberty mutual new car replacement™, you'd get your whole car back. i guess they don't want you driving around on three wheels. smart. with liberty mutual new car replacement™, we'll replace the full value of your car. liberty stands with you™. liberty mutual insurance. uh, yeah. what is?r, larry. the whole wheelie thing. what do you mean? i just got this baby to get around the plant floor.
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it's time for cramer and stop trading. >> the love affair with the airlines ended right after warren buffett said he made that big buy. watch this call by rbc. norfolk southern hold to sell. the love affair with the rails could be running out of steam. why? because the principle cargo is coal. and natural gas has been so unnaturally low that the big coal cargoes did not come back. so i think norfolk southern is a great company, sells at 19 times earnings. but the efficiency savings not enough. people should read this note because what this note is saying is that this -- which james squires is a fabulous ceo, that maybe these have come too far too fast. that would be the transports, let's just say transports matter. >> all right. so i was going to say rails proxy for economic activity or -- >> no, i think people thought coal was going to come back and csx remember is up so big on the idea that maybe they can do a deal. there will be no more consolidation of the major
rails. there aren't enough of them. i just think that if it had been colder it would have been a good call. it was just unnaturally warm this year. >> it was. except for today. what's on mad tonight? >> it is so darn cold today. goldman sachs recently said ionis is a company you cannot own. basically questioned the whole model. i thought it was important to have dr. stanley crooke come on and perhaps rebut the call, did tremendous damage to the stock. i think people have to recognize there are two sides to every story. >> got a lot of work done this morning, jim. we'll be looking at you tonight. it's going to be exciting this afternoon. "mad money" 6:00 p.m. we'll get more on ford's guidance. that news weighing on the stock, although it's off the early lows. dow's down six.
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santoli at post nine of the new york stock exchange. sara and david are off today. markets off to a tiptoe of a start as we look to capitol hill for more specifics about the timing of a health care vote, ford preannouncing. a lot to watch. >> certainly. our roadmap starts with, as carl said, health care. the ahca bill making its way to the floor, will republicans secure enough votes to pass their repeal and replace plan? will they vote at all? >> ford falling on weak guidance warning profits may be lower than what the street was looking for. we'll dig through the numbers. >> and following the terror attack at uk parliament, british police making arrests overnight. >> we have economic data crossing the tape now. let's send it over to rick santelli, rickster. >> michelle, 592,000 is our february read on new home sales. it's up a whisker more than 6%. it represents the highest month over month rate annualized and seasonally adjusted of course since july of last year when we
had 622,000. and that was the best number since january of 2008. but nobody can dig deeper into housing and give us more insight than diana olick. diana, what'd you think of the number? >> well, it's a nice surprise, rick. look, we're up 6.1%. the street was only expecting about a 1% to 2% jump. and this comes after the existing homes yesterday was disappointing. why are new homes doing better? you have more demand on the high end and new homes are priced a lot higher. you also have so little supply on the existing end that you're getting more demand out in february. also, february is when these numbers are based on people out shopping and signing contracts in february, not closings. and february was the warmest in about 50 years. so that probably helped as well. you have less supply for new homes now, 5.4 months compared to 5.7 month supply in january. but again, it's people saying, look, they're not finding what they need in the existing home market, they're moving up to the new home market. we did see prices down a little
bit though on new homes. and that is a good sign because affordability has been weakening across new and existing home sales. so this is going to be a nice bump up for the builders. back to you guys. >> diana, thank you very much for that. back to our big story this morning, of course that's the drama in washington as congress votes on the gop health care plan. still very unclear which way the vote will go. and what time that vote might be. our kayla tausche is on capitol hill with the latest. hey, kayla. >> hey, carl. probably safer to say congress -- or the house intends to vote on that bill tonight. that was slatded for 6:30 this evening but i'm told it's a fluid situation as the schedule here on capitol hill gets reorganized due to some last-minute arm twisting that took place late last night. and continuing this morning with the president reportedly on the phone with several members trying to convince them to vote for this bill. of course he will be meeting with the house freedom caucus and the vice president at 11:30 this morning. and a meeting with the whole house republican conference has been pushed to after that meeting to see what they say and whether members of that freedom caucus will turn around.
if that vote is held tonight, here's how strategists are handicapping the passage of the bill. compass point says it's about 60% likelihood of passing today, but that rises to about 75% if you push the deadline through next week and up until the april recess. evercore says it's 70% between now and next week. and goldman says north of 50% today. but 75% if you give it a little more time. in that goldman note i want to pull out something that alec philips, the political economist, he said we would be surprised if congress has not begun debating tax reform by mid year even if it means to putting health care aside for later. said they shouldn't exactly imperil the rest of the president's pro growth agenda. on "squawk box," congressman of florida and member of house freedom caucus was asked exactly about what lay ahead for that economic agenda and here's what he said. >> i don't feel this is going to fail. you know, we're in the negotiation phase.
i got a message last night that mark meadows of the freedom caucus, the chairman of that, had a meeting with donald trump and that we're getting closer. so, you know, let this thing work out and play out. >> so we're in language parsing mode right now, guys. we want this to work. we hopefully get to a yes. i don't think this will fail. there seems to be enough room for compromise from members of that caucus, even as a few moderates have defected. but it really is the entirety of that freedom caucus they need to win over, carl, michelle, mike, if they want to secure this vote and secure it tonight. >> kayla, forgive me if you mentioned this. speaker has pushed his 11:30 weekly briefing down to 3:30 this afternoon. so we'll keep on top of that. we'll get a lot more this hour. kayla's going to be covering this all day long. we'll talk to former hhs secretary kathleen sebelius live in just a while. for more on market action with all eyes on washington, let's bring in art cashin, ubs director of floor operations joining us at post nine. so here we are. >> yes. >> drama day.
how are traders trying to process this? >> well, first as kayla said, the presumption is that it's going to happen after the close. so that will allow people to rethink and mute. if you're going to have to instantly react, here's the way the form chart goes. if they call for a vote early, that means they think they've got the votes and that's why you'll see a little bit of anticipation rally going into it. if they decide to postpone and not vote either tonight or whatever, they'll be a mild selloff because people say the votes still remain questionable. if they vote and have it voted down, there will be a more substantial selloff. and certainly if it votes and passes there will be a rally. so that's the way the form chart sits down here. >> is it obvious to state the reason we're hugging the flat line major averages because they're waiting to see what happens with this? >> absolutely. just as yesterday afternoon people were diverted by what
happened in london and the lack of details there. which is kind of amazing. we're used to the american press where the name of the perpetrator comes out instantly, et cetera. so they were diverted then. they remain slightly diverted now. that still continues to unwind. and obviously diverted by what's happening in washington. >> you know, art, if you look back to previous dates when basically all traders were focused on a given known event, whether it was the inauguration, whether it was the president's speech to congress, even the fed meeting, you know, the market has kind of sat back and waited. kind of wait for that moment to pass. and then it went onto in those cases pop or put up a little upside. in this case though we're coming off this position where you're down 1% today for the first time in a while, you've wobbled a little bit. what do you think the resumption of the trend is going to look like assuming we get through this? >> i think you're right. and one of the reasons as we went into the election, through the election, et cetera, they
discovered with this particular president surprises bring surprises. and they bring big reaction. so people aren't willing to make that kind of bet. now, where do i think we go from here? it all depends if they get it through. i mean, the president is one of the least pointed idealogs we've had. they think they're going to move. i would think looking at 65% chance quote/unquote positive moment. >> certainly his lbj moment. back to the uk attack, didn't see a lot of movement in response to that. maybe showing we're growing sadly -- to these things. wait to see what the polls in france say if you see more attacks like this does that help
marine le pen. there's a guy at goldman sachs put out a note saying it's not his base case scenario she wins, but sees a higher path to that probability than most of the market is pricing in at this point. is that something that maybe gets affected by what we saw in london yesterday? >> it certainly can. again, god forbid it depends if there were follow up. traders certainly will be watching that and playing into it. but again, we need some details. so far this looks like a one-off event, not necessarily a lone wolf. they did arrest seven other people. but doesn't look like a huge conspiracy yet. we'll watch to see where that is. >> art, we might be coming over to your post. don't go too far. thank you. art cashin. >> so as art was talking about, developing this morning british police making arrests following yesterday's terror attack which left at least four dead, 40 injured. cnbc's willem marx is in london
with the latest. >> some sad news about one of the dead from yesterday's attack, he's a utah man. we can now name him as kurt cochran here celebrating his 25th wedding anniversary with his wife. prime minister may speaking saying britain would not be cowed by terrorism and we've seen the number of injured from across the globe here as the casualty list has come out, people from ireland, greece, south korea, france and now we can confirm this one american dead. the british prime minister speaking to parliament talked about these raids and arrests overnight. we had eight total arrested, six separate addresses. let's have a listen to why the threat level has not been raised following this attack. >> the threat level to the uk has been set at severe, meaning attack is highly likely for some time. this is the second highest threat level. the highest level, critical,
means there is specific intelligence that an attack is imminent. as there is no such intelligence, the independent joint terrorism analysis center has decided that the threat level will not change in the light of yesterday's attack. >> prime minister theresa may and british police not wanting to name the suspect because their investigation is ongoing. however, she did say he was a british born man. and in the past he's been investigated by britain's domestic security services. now, in terms of the area around us here in westminster, michelle, the westminster bridge over which the attacker drove with his car mowing down pedestrians has recently been reopened. we'll zoom in and give you a sense of that. and, you know, the prime minister talking about a return to normal, something i can tell you is very, very normal is traffic on that bridge. you can see the red london buses lined up getting across that bridge. it's reopened in the last hour or so. the flags here in london may still be flying at half-mast, but this morning we've seen
thousands of people walking past on their way to work, tourists around us taking selfies and the british government back to business in the building behind me. >> yeah, all that traffic, willem, i mean those double-decker iconic buses certainly suggest the number of people that are in that spot on a daily basis. thanks so much. >> when we return, the gop health care bill heading to a vote, we think. its impact on health care stocks, trump's agenda and more. we'll be joined by former hhs secretary kathleen sebelius in a moment. plus, the man behind the president's regulatory strategy. we'll talk to former s.e.c. commissioner paul atkins as they're holding hearings on the current s.e.c. pick clayton. more "squawk on the street" in just a minute. so what else is new? how's your mother?
we're watching ford this morning. the automaker giving some weak first quarter guidance that was well below estimates. our phil lebeau joined us as that news crossed the tape. he joins us now on camera. hey, phil. >> carl, right now ford executives are briefing wall street essentially what it's expecting for the first quarter and you mentioned it's well below expectations in terms of earnings guidance. about 20% lower than wall street was expecting. ford's guidance is for earnings per share between 30 and 35 cents a share. most on wall street, the consensus was for earnings of at least 45 cents a share. why? you got higher costs, and we'll talk about that in a little bit, especially investments in things like autonomous drive vehicles, electric vehicles, lower fleet
volume. and an unfavorable exchange rate in a number of areas around the world. that higher cost particularly when it comes to the investments in electric vehicles, autonomous drive vehicles, remember, it was just last quarter that ford announced it was spending a billion dollars to create an independent subsidiary buying argo artificial intelligence. now, that's not the reason for the guidance today, but that's an example of the higher cost that ford is seeing as it continues to invest in developing these vehicles for the future. by the way, as you take a look at shares of ford, down 8% this week. guys, it will be interesting to see how much of this carries over to the other auto stocks because you heard jim cramer talking last hour he believes, look, this is a ford specific issue in terms of its guidance for the first quarter. we're going to hop back onto this conference call that ford executives are having with analysts and we'll have more for you later on. >> all right. get on that, phil. thanks so much. bring us anything you hear. house republicans expected to hold an historic vote on their plan to repeal and replace
obamacare at some point today, but according to nbc news the gop may still not have the votes. and a new report from fbr says that a failure here could endanger more of the trump agenda including what is so important to the markets, tax reform. joining us now is the report's co-author fbr research analyst chris meakins, good to have you here. >> thanks. >> this goes against what we're hearing from reporters in washington saying if there's a failure on health care reform, there will be greater impetus on tax reform, why do you think that's not correct? >> i think people opposed to the health care reform, specifically the freedom caucus, will be rewarded for standing their ground and will not have to pay any real political price for pressing the president. and i think tax reform while some people think health care reform was easier, we believe the opposite. tax reform is more difficult because if you're going to make it large eli speaking budget
neutral, even with dynamic scoring, that means you're going to be giving stuff to people and you're going to be taking away stuff from people. and each of these members have local businesses that have allowed them to put campaign signs in their yards, and written them campaign checks. and so they're going to have to do something that hurts someone in their local community. and that could really make it difficult to get it done. >> chris, i ges there's also some confusion about to what degree the house in particular with its rules and trying to make sure this goes through reconciliation, meaning tax reform proposals, they're actually ham strung. in other words, does it for rules reasons get pushed into the 2018 fiscal budget? how is this all going to shake out with relatively constrained time to allow for all this? >> that's a great question. it depends on what they want to do with health care. if republicans if it fails tonight and the market, you know, reacts negatively tomorrow and house republicans say, you know what, we just can't get there, we're going to pass a fiscal year '18 budget. they could do that in the next month with new reconciliation
instructions on tax reform. so could they move on? they could. but they've been telling their base for the last six years that they were going to repeal the affordable care act. they're not going to be able to just walk away from this easily, which means that the government funding fight that's going to happen around april 28th when the funding expires, could really add in some of the affordable care act stuff and make this much more difficult. it has potential to be a really bumpy road over the next six weeks. >> chris, you know it's been pointed out, house has voted for repeal 50 times under the obama white house and now they're struggling to get this one done under trump. what does that say either about the past dynamics or current dynamics? >> it's easy to say you just support repealing something without worrying about what's next when you know a president is going to veto it. more than 60% of house republicans have never served in office with a republican president. so these people are learning to have to learn how to govern. speaker ryan, majority leader
mccarthy, wip -- all back benchers. it's easy to stand against something. it's more difficult to have to put in place a replacement. >> yeah, they actually have the ball now and have to actually run it down the field at this point. our colleague bertha coombs who covers the hospital stocks, the health insurers points out some of the hospital stocks are rebounding today as we look at the possibility that something doesn't happen tonight. tell me, who are the winners and losers here if this fails? >> if this fails, i think the winners are hospitals because things largely stay the status quo. do they still have issues with the long term trend toward movement, towards high deductible health pans and people not paying those deductibles. i think the medicaid exposed names, molinas, centenes potentially the world could benefit without your decrease and revenues could be in the medicaid system and i think one of the losers would be the
non-group health insurers, so the anthems of the world because they thought they were going to get more people in the nongroup market, not less under the republican plan. and that the risk pool was going to get better with changes republicans were looking to make when the reality is this thing fails, republicans are just going to try to let the law, especially the exchange marketplace self-destruct and then hope that democrats maybe come together to form some sort of bipartisan compromise in the future. >> yeah. so much to see in the next 24 hours. chris, thanks so much. chris meekins from fbr. when we come back, deregulation in the age of trump. former s.e.c. commissioner paul atkins is with us. take a look at stocks this morning. man, we talk about towing close to the flat line but the dow's up one point. back in a minute.
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kathleen sebelius. secretary, good to have you here. >> good morning. >> the latest news is that in order to please the freedom caucus, the hard right of the republican party, they're willing to -- speaker ryan is willing to say, okay, all those ten essential things that had to be covered in health care plan, we're going to get much looser about that. so insurance companies can create plans that are more flexible and potentially cheaper. i know that runs counter to what you guys wanted when you were in charge of health care reform, but in retrospect, do you wish you had done something like that? because the plans got so expensive. >> well, actually, what they're describing is the way the individual market has always looked. insurance companies could pick or choose what to offer to what group of people. that's where we will be once again. this is not freedom for individuals. it's really freedom for insurance companies. and consumers are pretty much left to try and guess what might
be in their policy. and unfortunately most people found out when they got sick, when they had an incident, even when they had a c-section that their policy didn't cover the benefits that they thought were there. so what we said in the affordable care act is this policy should look like what a worker would get in an employee policy, what are the package of benefits that are typically in a workers plan. again, hospital care, mental health coverage, substance abuse coverage, preventive care, maternity care, those are a typical package -- >> do you acknowledge that that is what made a lot of the plans very unaffordable and led people to make what was personally a decision to say, you know, i'd rather pay the penalty than pay the premium and then the very high deductibles? >> well, again, 12 million people again enrolled in these plans. for the first time people had
financial stability and health security. what we heard over and over again is that everybody, whether they're in an employee plan or marketplace, wants their out of pocket costs to go down. nothing in the republican bill will do that. if anything, they put more costs on consumers. and you talk about surprises, if you get a diagnosis and have a plan that doesn't cover hospital care, doesn't take you by ambulance, doesn't cover your prescription drugs, you are in very, very serious shape. you might as well not have insurance at all. >> secretary, probably a moot point with the given congress right here, but almost everyone acknowledges there are parts of the aca that could be improved, that could be tweaked. what would those be in your mind? what would be the priorities you would set if that were your effort? >> go after drug costs, which again, all americans say they want something done about. nothing in this republican plan deals with drug costs. go after out of pocket costs.
again, the affordable care act limited what people could spend in deductibles and out of pocket costs. i think that needs to be taken down even further. but that requires some more help from government. and clearly there is too big a cliff between those who get some subsidies, have the government pay a portion of their plan, and those who don't. that could also be accommodated by changing that subsidy curve. so the final thing i think would be more competition in the marketplace. and the kind of plan that the republicans have put forward with the stability fund, that is basically the risk pool that they refuse to fund in the affordable care act. i think it's a good idea. i think stabilizing a very young market makes a lot of sense and will encourage more companies to actually play in the market. so those four things are very doable without taking away insurance from 24 million americans. and that's really what's on the table. higher costs, less coverage and
lots of people lose their coverage. >> it sounds like cbo's not going to be a help on that number, at least not today. i wonder this move, these tweaks to eliminate some of the minimum benefits required, is that a fruitful area of discussion in your view? and does that in any way put it in jeopardy in the senate regarding reconciliation? >> well, i'm not an expert on the, you know, intricacies of the reconciliation rule, but from what i understand that would be a substantive move and would not be allowed in reconciliation. but again, i'm much more worried about at the end of the day if that's where the republicans choose to go once again paring way down what people buy when they buy something called health insurance. i think a lot of consumers will find themselves in deep trouble. medical bankruptcies have fallen dramatically under the affordable care act.
more people are insured than ever before, but this really takes a big step back to the old kind of cowboy market where you're pretty much on your own. if you're young, if you're healthy, if you're wealthy, you're going to be just fine. if you're older, if you have -- >> what about the ability to -- this may be putting the cart before the horse because we haven't even had tonight's vote yet, but the plan if they ever get to it was to eventually for individuals who are buying on the individual market, which is very, very small, if they could buy in a national market rather than in just their home state hence making the risk pool bigger and therefore reducing premiums. is that something you would support? >> well, again, there are seven states right now, again, insurance is regulated at the state level, not at the federal level. there are seven states that allow companies to set up cross state plans, not a single company has done that. because in health insurance you're not buying a toaster or a microwave. you are buying actually a network of doctors and hospitals
and pharmacies, a local group of health care providers who then provide your services. so alabama companies have a lot of difficulty setting up a network in california. kansas companies can't set up a network in connecticut. so it's an interesting idea. it doesn't work. it hasn't been taken up by the market. companies can file plans in every state that they want, but they need a local network of doctors. i don't want to go to connecticut to see my doctor. i want to go to kansas. >> yeah, i guess the assumption is that the market would eventually work that out if it were actually a free market. madame secretary, thanks so much for joining us. we really appreciate it on this pivotal day when we wait u wait to see if they actually do indeed vote on this bill. secretary sebelius. >> good to be with you. thanks. >> let's send it to sue herera with your cnbc news update at this hour. good morning, sue. >> good morning, mike. here's what's happening at this
hour everybody. the house set to vote on the gop health care plan later today. last night speaker paul ryan meeting with a group of moderate republicans in the speaker's office. president trump will meet with members of the freedom caucus later this morning. members of britain's parliament observing a minute of silence this morning to remember those killed in the terror attack yesterday. british police have carried out raids and arrested eight people in connection with the attack, which killed five people including the attacker. israeli police say they have arrested a 19-year-old israeli jewish man as a primary suspect in a string of bomb threats targeting community centers here in the u.s. targeting israeli and american citizenship. and u.s. wins first world baseball classic title. u.s. pricher marcus strohman was named mvp after taking a no-hitter all the way into the seventh inning. you're up to date everybody. that's the cnbc news update.
mike, back downtown to you. >> an american pitcher pitches for a canadian team beat puerto rico. >> exactly. got it. >> that's why a lot of po-- >> michelle, you've got the baseball thing down. there you go. >> that's it. thank you, sue. >> see you later. when we come back, deregulation in focus. the man behind the president's regulatory strategy, former s.e.c. commissioner paul atkins, he's going to join us after a quick break. stay with us. finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management.
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a full counterterrorism investigation is underway in the london attacks after yesterday's attack in which four were killed, 40 injured. nbc's ali aruozi joining us. >> it was a brazen attack. attacker plowed his car through westminster bridge behind me, knocking people down, crashed his car on a fence near the
perimeter of parliament. from there made his way a short distance to the gates of parliament where he attacked a policeman, stabbing him to death. he was then shot and killed by armed policemen on the grounds ov of westminster palace. we're getting a lot of details from the attack that happened a little over 24 hours ago. we have learned that one of the victims in the attack was an american man from utah who's been named as kurt cochran. he was here on his 21st anniversary with his wife. his wife was amongst the injured. we've also learned more about the attacker, prime minister theresa may was speaking this morning. she said she thinks it was a lone attacker, that he was known to the police forces but he hasn't been named yet. he was on the radar of the security forces here, but they said he was a peripheral figure and he wasn't part of a wider security sweep. he was known for violent extremism, but they didn't have any intelligence on him that he was planning to plot any sort of
a thing like happened yesterday. there are also a series of raids overnight, carl, here in london and in birmingham, which is in the west midlands of the country. the police raided some six addresses, arresting some eight people. we don't know if they're connected to the attacker yesterday, but this is all part of a broader operation to determine exactly what happened here to see if the attacker had any associates, what motivated him and how he planned for this horrifying attack that took place in london that's left this city in shock. but i've got to tell you, carl, londoners here are shocked, they're returning back to a semblance of normality in a city that's no stranger to terrorism, carl. >> indeed, ali. and the world's thoughts are with your city today. ali arouzi in london this morning. and back to washington, confirmation is underway for the
president's pick to head s.e.c. clayton was asked why companies are not going public as often anymore. this is what he said. >> my view of the world is i'd like to see more companies going public here so more people have a chance to participate in that growth as investors. >> and they're not doing it, again, just to crystallize that. they're not doing it because -- >> they're not doing it for a variety of reasons including that it's too costly at this stage to become a public company. >> for more on clayton and financial regulation under the trump white house we're joined by the former s.e.c. commissioner ceo of potomac advisors, thank you for joining us again. clayton knows capital markets backwards and forwards, what do you think of his take about the slowdown in companies going public? >> oh, he's exactly right on. i mean, he's been a participant as a lawyer in a number of public offerings including the
largest ipo ever. but if you look at the state of our public markets, it is, you know, not what it once was 20 years ago there were twice as many companies that were listed on the stock exchanges as there are today. and if you look at 20 years ago that was a heyday of ipo trend and there were some 700 odd companies that went public in 1996. last year was a little bit over a hundred. so there are huge changes in the marketplace since then. and it really comes down to like jay was talking about, it comes down to the costs and fear of litigation and those sorts of things which keep people out of the marketplace. >> he mentions the cost of going public. he also mentions the robust nature of private markets. which do you think -- where is on that balance which is the stronger dynamic? >> well, they're both. i mean, obviously the private markets are a lot bigger than they were 20 years ago. there's a lot of money sloshing around there. but at the same time, you know,
in the private markets people are looking for exit strategies, of course, once private equity has been in there for and helped the company grow, the public markets used to be a really viable opportunity for that. now not so much anymore. and you even have large companies say uber or some others who don't even need to go to the public markets at all because they can effectively tan into the private market. so what does all that mean? that just means that there's less opportunity for other people to participate in some of the growth opportunities with new companies, emerging growth companies and those sorts of things. >> paul, in terms of what broad subject areas this s.e.c. might address, there's been some talk that even regulation at ms which big set of rules how stock orders are handled and we here at the new york stock exchange tremendous impact in the business that that might actually be revisited. is that one area you think has
any role in this whole debate over public companies and fewer of them? >> possibly. i mean, as far as, you know, whether or not the s.e.c. will address it, it was adopted a dozen years ago. basically it's really skewed the marketplace. it atomizes the liquidity across a whole different venues. rather than let the investors and market participants decide where to trade, the government basically has prescribed a certain rule. so i think it's time to re-examine nms and see, you know, how things can be changed in order to increase the dynamism of the marketplace. >> there have been a push by environmentalists that companies should be acknowledging in their reports what the risk to their profits were due to coming climate change. do you think that would continue under him if he were approved? >> well, a lot of those things are very problematic, very
speculative. i know there's been a move along those lines, but we have a rule about materiality, whether respect to disclosures in the marketplace and by public companies and i think we need to stick to that. so materiality is the basic watch word. and i don't think to undermine that is the right way to go. >> if we can go back to the whole issue robustness of private markets, i mean, when we talk about uber, airbnb, do you think that they would be public today if it weren't so costly to go public? >> maybe. i mean, as we were saying there's a lot of money in the private markets that they can tap into. and if it's less costly for them, but there are a lot of things that companies have traditionally liked about the public markets. in fact, you can have them, you know, stock that's able to be given out to your employees that they can then trade and those sorts of things. so there's an attraction to the public markets. but when you weigh the costs and
the benefits, obviously a lot of companies including very successful ones decide to stay private rather than go public. >> finally, clayton's been asked about potential conflicts. of course he was a key player in the financial crisis of '07 and '08. and this is an ongoing issue with various nominees and people named to positions, how much of their professional experience inhibits their ability to do a public job, paul. how would you assess clayton's ability to do this? >> well, you know, we have government ethics rules that prescribe what should be done. and so he just like other people in the past, mary jo white and other former chairman, arthur leavitt for whom i worked and others, and i in fact, you know, had to recuse myself from various things that i had participated in while in the private sector. so that's normal and to be expected. if you're going to have somebody who knows about the marketplace, who knows how things work and then is able to, you know, help
guide a government agency like this, that's inevitable. but i think he's taking the appropriate steps with the office of government ethics there to tell them what the rules are. so i think this is normal. and it's a sign of the way our system works. >> yep. big job. obviously the markets care a lot about it. it's good to get your insight, paul. we appreciate it as always. thanks. >> thank you very much. >> paul atkins. as we head to break, look at shares of accenture. stock's down almost 4%. the biggest percentage decliner on the s&p. seeing some strength in financials, dow's up 28. we're back in a minute. yes? please repeat the objective. ♪
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right from the alert. wow, i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade. welcome back. let's send it right over to rick santelli in chicago for "the santelli exchange." good morning, rick. >> well, thank you very much. good morning. today is a big day, actually tonight, because it certainly
looks as though the house will have its first significant vote, of course since the elections that put all three branches of government under the r for republican. it's going to be a biggie. and that's why i think it's important on a day like today to ask a question about foreign exchange markets. what exactly is moving the dollar? now, we've talked and answered that question at least from my perspective on the stock market already. i think that knowing why markets move is just huge for one very good reason, because if a market moves and you're not exactly sure why, when conditions change you may not be exactly able to strategize what's the next move. so when it comes to stocks, if your notion is that everything that's occurred since november 8th is because of donald trump, if for example this vote doesn't pass, that would have a certain outcome. if you think it's because hillary clinton would have been less business friendly, that changes things. when it comes to the dollar, i personally think of course politics have an effect on the
dollar. i think it had an effect on the dollar on the way up. but i think on the way down it's much more complicated scenario with many more channels flowing. i really do think central banks and their policy and the morphing of that policy is huge. you know, i like to use the term guns hot because that also answers the question in large part as to what's moving and why. guns hot is the market that's proactive, that everybody else reacts to. i don't think the dollar on the way down the last three or four weeks is guns hot. i think the euro, i think the pound, i think the yen are guns hot. now, while i'm speaking look at some november charts of the euro versus the dollar. you know, we talked about how 1.07, 1.08 was critical. we've basically gotten there. look at the dollar/yen, big move not in favor of the dollar. and of course the pound versus the dollar, nowhere near the intensity of the other two charts. but considering all the questions that are going to be opened up regarding triggering
article 50 on the 29th of this month, it doesn't look too bad. and when you dig even deeper into this, you know, when it comes to mario draghi today, is it the last tltro, basically a lot of free free money or cheap money thrown. it's going to have a positive effect on the economy, but it may be the last one. things are changing in europe, especially with negative rates becoming less and the damage potentially still lingering but also less. and finally, there's a binary aspect to this. i'm not crazy. ultimately, like t.a.r.p., i think the vote is going to affect all markets. and if it isn't a positive vote, u.s. of the u.s. markets negati negatively. but one thing we didn't learn with t.a.r.p. is markets are fickle, and no matter what a vote is, markets are really to vote big because they fire ready, aim, but they get their sea legs back. michelle, back to you. >> whoever said you were crazy,
rick? nobody. thanks, rick p.m. see you later. jon fortt has a look at what's coming up on "squawk alley." good morning, michelle. youtube under pressure from advertisers who don't want their content displayed next to controversial content. we will dig into that. also, republicans on the hill trying to whip up votes ahead of this health care vote tonight. what are the implications for your investments? all that and more coming up on "squawk alley." ♪ can i get some help. watch his head. ♪ i'm so happy. ♪
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welcome back to "squawk on the street." i'm dominic chu. the major averages are all hovering close to break even right now. real estate and financials the day's best-performing s&p 500 groups. regional banks are helping the financials move higher. you've got names like huntington banc shares, suntrust and regions financial all more than a percent higher. regional bank, up about a percent or so. if these gains hold, it could end the losing streak. regional banks been the focus over the last week or two. >> at least they're bouncing finally. macy's ceo tony lundgren is stepping into the role of executive chairman as macy's and other retailers continue to struggle, of course. courtney reagan has more on this
transition. hi, courtney. >> hi. good morning, mike. today on his 65th birthday, terry lundgren's tenure as macy's ceo comes to a close. while shares have been under pressure recently, their stock increased 100% under lundgren and sales grew 67%, helping a lift from the 2005 acquisition of may department stores. now, 55-year-old jeff gennette moves into the "c" suite. he's been in macy's his entire career, starting in 1983. he was elevated to president three years ago, part of the succession planning, gennette, like lundgren, is a merchant at his core. and while everyone i speak to say he's reeight for the job, cp sales have been down eight straight quarters, the department stores are closing 100 stores and shares have shed 56% in the last two years. starboard value recently exited its stake in the retailer. gennette still thinks the stores are relevant, calling them
pillars of the community but notes the challenges making them contemporary. so, part of his plan includes designating areas of the store for clearance, simplifying coupon promotions, open shoe selling, more hands-on beauty testing and more shop-in-shops. but macy's isn't in the trouble sears is in, so not surprisingly, we're beginning to hear after sears's risk assessment questioning its survival, reports surfacing of vendors reducing merchandise and shipment, also requesting faster payment from sears. i spoke with former kmart treasurer yesterday and says they haven't put anything on the table except things that provide negative exposures for vendors. back to you. >> thank you, courtney. >> thanks. >> it's been great joining you today. thanks for having me. when they come back, the gop health care bill headed to a vote, we think. republican congressman kevin brady's going to join rickster. much more straight ahead.
unit. reuters reported on friday that the bank's board of directors was set to decide in april whether to go ahead with this ipo. we have reached out to credit suisse for a comment. we have not yet heard back, but we will tell you when we do. the stock is about 1% higher year to date. now it's time to send it over to the crew at "squawk alley." over to you guys. >> all right, dom. thank you very much. it is 8:00 a.m. at alphabet headquarters out west, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ good thursday morning. welcome to "squawk alley."