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tv   Squawk Box  CNBC  March 12, 2018 6:00am-9:00am EDT

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and an exit at goldman sachs sports we'll talk march madness tiger's return and a "squawk box" guest host, a potential bid for the carolina panthers it's monday, march 12th, 2018. my anniversary tomorrow. 20 years 20 years, yeah and "squawk box" begins right now. ♪ ♪ get ready get ready ♪ i'm gonna try to make me love me too ♪ >> announcer: live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernin and andrew ross sorkin. as joe mentioned it has been a strong mute.
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dow futures up by 91 points, s&p up by 7, and nasdaq up by 36 dow up by 100 points a gain of 3.3% nasdaq even stronger, 4.2% we'll see where we head as we get started. >> 440 points on friday. and look before the jobs number, it was -- middling >> the jobs report was everything that wall street wanted to see. very strong jobs with wages not going quite as anticipated we talk about how weird it is. you'd think we'd be cheering on raises but from wall street's p perspective, that increase coming slower. >> and charlie evans, second time those guys have been on "squawk box" on a friday there are some worries but 400 points on friday, evans on "squawk box," 400 points
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>> do you think that's the key to the markets? >> well, if we keep conditioning the fed, we'll have powell here if we get into a little dicey market action. or we'll have him on -- >> hold on, does he know the market report in advance >> i don't think he was here anyway he was dovish. no, he was even before the report changed >> but he is dovish. >> is he dovish? dovish let's take a look at what happened overnight in asia you're going to see that the nikkei closed up by 1.6% hang seng, 1.9%. stocks up by 0.58% and markets at trading dax in germany up 0.6% stocks flat in ftse in london higher in italy and spain. finally take a look at treasury
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yields ten-year treasury last week closed the week just under 2.9%. this morning, it's sitting at 2.901% andrew we've got a couple big stories to tell you about. dow chemical executive chairman andrew liveris stepping down from that role effective april 1. retires and this comes a dow chemical and jeff fettig is going to assume the rule as the company now known as dow and liveriswill remain on the board that broke into three companies in 2019. and that is big news in the chemical world he's had quite a tenure. quite a lot has happened over the past 14 years, all ending with this massive and somewhat disruptive breakup
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which is quite complicated separately, the ft reporting -- the ft reporting that the saudi aramco deal where the ipo may be delayed the ft reporting that the advisories are struggling with the $2 trillion evaluation at the earlier, all with the aramco, since the head line came out yesterday, we have a new ceo of aramco on cnbc from davos we came on and explained what he was saying that the company was ready. but the shareholder wasn't ready. part of the problem, the entire time, has been that these advisers came to nbs early on and said we could value it at $2 trillion and he worked backwards and said
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if we have $2 trillion what can we do? and that led to the fund and so on the idea that this is all going to happen in 2018 i think has been off the table at least for some time, nonetheless in deal news, intel reporting to reports that it could possibly buy broadcom. the chipmaker saying it's focused on previous accusations of doubt and this all comes as broadcom is making a full court press to buy qualcomm in that hostile deal but that potential tieup has come under a lot of pressure from regulators including se in sippious and we talked to the ceo a couple months ago about that original deal. a little surprised by "the wall street journal" head line as well
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>> you didn't mention -- did he tweet out -- >> he tweeted out it's not his announcement >> and i was on all day friday and on the shows and -- >> just ask him. >> well, you can read his tweet. but i think the more important -- >> did he e-mail did he not answer eye? . >> he has never told the board or anybody else that there's a time line that suggests he's leaving before the end of this year the board has never said that you need to leave by the end of this year or even plan to leave bit end of this year what happened was, in february, as they always do they had a board meeting where secession is the topic. and by the 150th anniversary of company. i don't think he'll be there in 2020 it's a function of this story that i think it's a strange
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forcing mechanism that may force him to announce a plan sooner than he wanted to. >> a plan for secession or departure? >> probably the two. or remain chairman >> who is leaking this where is this circulating? >> i don't think it was a leak i'm not going to go after the people who -- i just thought it was the way it was approached was not the smartest way to go >> somebody talked to somebody >> no, no, so what's been happening over the past couple of months, we've had lots of reports about "the new york times" had one kelly who was in here last week did a piece between the fight between harvey schwartz and david solomon -- >> they're a couple of guys ready to take over at anytime. they've got a whole cadre of men with no hair gary cohn may get involved, too. >> there's been a battle among
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the journalista. and when they would leave, will he leave will he ever leave and somebody tweeted me on friday -- the report was funny in that you actually read it carefully it said could leave as early as 2018 but could also change his mind. or could this -- it was like -- then someone e-mailed and said warren buffett should announce he could leave as soon as tomorrow but maybe in the next 20 years that's sort of where i put that story. >> i do think it's a function of all of this. because it's in the next year or two. >> i can't argue with you today because of my horoscope. >> what's it say >> it says i won't be able to convince you of anything. >> yif you ever want to control joe, get ahold of horrur
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horoscope. >> i do want to ask you you worked for jill, the editor of "the new york times" did you see she carries an obama ball around in her purse and takes it -- would objectively -- >> no i'll say this, in a time was i told -- >> to curry a favor with her you knew what she thought, right i wouldn't writeanything that she would thought agree with if she was my boss. come on, an obama doll in her purse. >> with legislators and -- >> i don't have a trump doll >> i think she did a very nice job of -- >> i don't know why she chose now to say that. >> she takes it out and says things are going to be okay. that is obscene. >> she never -- at least in my
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experience, i never felt -- like i said, i can't convince you that that's just -- anyway, let's go >> he's not defending it he's just saying he didn't know. >> and i don't >> you're not acknowledging that this is just unbelievable? >> i think it's an interesting choice but at the same time -- >> she's got a ring, too >> i think it's a new york city token. >> it's "the new york times. >> with an apostrophe or something. >> it was that symbol or something. >> let's go to the next piece of news reportedly, a new front-runner in the race to replace gary cohn as president trump's economic council. ian javers in washington who is this mystery person >> it's chris ladell who has been in the trump administration since day one reportedly
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considered to be the successor for gary cohn for national economic council it's nod clear if trump made this decision. but liddell is the ceo of gm and the strategic initiatives director in the white house. he's born in new zealand so he's a kiwi he's somebody who has relationships inside the white house, but also in the business community. and that is seen as a strong plus for that role you know, i talked to gary cohn on friday, guys, just briefly. and asked him if friday was his last day he said, no, it's not clear when gary cohn is actually leaving the white house. but simply said at some point in the next couple of weeks one of the things that's going on here is that goary cohn is trying to exert some influence in terms of who his successor might be but it's also clear that peter navarro, the trade czar at the white house is another competing
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candidate for the economic council job. navarro has been on the ascent for the push in the white house for tariffs. one of the things i'm told is coming next in terms of tariffs in trade is that the white house is pushing for legislation that would allow it to enact the president's reciprocal tariffs that's what he's been talking about from the stump or a while now. they would need legislation on capitol hill that would allow the united states to impose tariffs on any country or product that opposing countries have tariffs on. we could match a 25% tariff with a 25% tariff product by product. and countries would have a choice of loweri ining their taf and we could match theirs. i'm told they'd like authority to do that at the white house. >> thank you, eamon. >> liddell has been a friend of
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show nice guy >> although, you know, he hasn't step stepped out. >> you have that nightmare of navarro gaining more influence >> he's got no dolls in his -- >> okay. >> thank you separately, the white house has released president trump's policy proposals for school safety they include justice department assistance for firearms training of school personnel on a voluntary basis. strengthening adoption of extreme risk protection orders which allow law enforcement to remove weapons and a threat to expanding mental health programs. and talking about business, a letter published in "the new york times" also in a number of other places over the weekend from survivors of the shooting at stoneman douglas high school. what's fascinating about this letter, it thanks the business community.
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goes through a number of companies all who have made either policy changes in the way they sell guns or approach the issue. it's a thank you to them it's also a call for additional help, frankly. they are behind this march for our lives, timing of march 24th, and they're hoping that the business community steps up and helps them even more to pay for this that marching costs a lot of money as it happens. and they're doing that on their gofundme page. anyway, there you have it. let's take a closer look at the market joining us the chief of global political bank and thank you, both of you gentlemen for getting up early >> thank you >> anything change in your view after friday, steven >> i think it's very much all in unclear. we had 800,000 people join the labor force in february, so you got stronger growth without
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overheating the economy. so, this is exactly the kind of notion that we need to see that we have some encouragement of the labor force we have expansion of supply and demand together at a stronger rate and the rest of the world is doing dwight well at the same time >> we've had a princeton guy that we had on, alan krueger you know, i can't remember which side he was on, but whether it was the labor market was tight because the people not in participation, they're already gone, or it was already tight because they're not coming back. they're at 63. ke is a better number. >> inflation rate. >> yeah, at 63 that's up. what's possible? is 70 possible are the baby boomers really the demographic -- >> they stay in forever, all the people 25 to 50 who dropped out come back in force >> how many are there? the available workforce that we still have that can bring in without inflation how many are there?
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>> it's not numbers like 100 million. it's nothing close to that >> what is it like >> a couple of million people. there are households that are two worker households, both lost jobs, one came back to the labor force. >> do we still have some frac left do you say, 4% unemployment doesn't seem that there's anybody left >> well, we've had five months at that rate the ability now to accelerate the labor force. eventually, we've been seeing this since 2016. there were a few years we were dropping the unemployment rate at 1% a year for a while now i think we're seeing it's being reinvigorated. that's going to give us more runway >> if we had seen the unemployment rate drop to a 3 level which some are anticipating will happen, are the markets perceiving it differently? >> yes even the wage data which are
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goosed by the one-time change in the minimum wage, the fact that we're not widely accelerating wages which still could come but we have more room before we do that, right that's the way this worked for the marketplace. i think you feel good about putting money to work or having money in the marketplace, a month before our earnings season which is going to show a strong economy and strong earnings results. >> the nasdaq hit a new high anybody else his new highs? >> i think it's increasingly looking like the february correction was a technical online that was designed by poorly designed vix products, risk parity liquidation and ctas getting whipsawed. are other markets going to hit highs? i think foreign markets have a little to catch up they'll continue to catch up towards the u.s. market. the weak dollar is definitely helping the u.s. market, which
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the earning number helped cause an additional move in the dollar down i think we're probably going to see that continue. that's going to be a tail wind for the u.s. markets as well. >> does the arm market or ten-year only care about inflation, if we do 300,000 a month doesn't that mean it's going to normalize because the market is cranking? >> i think we'll see the yield curve flatten. the amount of rate hikes priced which is about three hikes next year, only 1 1/2 hikes priced in. each of the successive years only a quarter of hikes priced in we're only pricing in about five more rate hikes total. answer also, i think you'll see the three to five year segment will sell off more but the ten-year note and 30-year note, may actually have hit a short-term peak here for a
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while, until, say, i don't know, after labor day. so, we'll see. the employment idea is an ideal report in every respect. you had a big increase in labor force participation, i don't think that is sustainable over the long term. maybe a little bit more labor force participation increase, but not -- i think it's probably overly optimistic to think that that can just go up massmassive. >> okay. either one ever you guys doing a bracket? >> a bracket >> for the final four. >> no. no >> markets are hard enough, joseph. >> we do both -- if do you auto check, i'm going to be unhappy >> why, because i beat you with auto check >> you didn't beat me. >> auto check is like buying the index. >> like buying the s&p what are you doing you have until thursday at noon. >> you know, we.dimensi dimensil
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on last week, they futsed with the index -- >> excuse me. >> futsed -- >> why would you use that word when it's so close >> i'm going to futs with the index. >> remember when that guy said the chicken? >> yeah, i do. it's going to happen with one consonant. and it's going to happen to you if you don't get it. a study coming out on a cholesterol drug over the weekend. and the companies are low-ending the price of thatdrug. details next
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these drugs were aimprove e appn 2018 because so many people have heart disease and high cholesterol. these drugs are successful at lowering levels of bad ldls or cholesterol. part of the reason is they weren't selling is because the price is high. the other reason why, we didn't yet have the data that we got over the weekend that show how well that lowering of ldl cholesterol translates into lowering heart attack, stroke and other issues the study, 18,000 patients people who recently had a heart event like a heart attack found it reduced the risk of having another event by 14% it also reduced the rate of the study in placebos seemingly that this drug could potentially save lives from people who have had heart attacks before amgen reported their data in the
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outcomes setting last year, they had a similar reduction of 15% but they didn't have that benefit of overall mortality people are saying this could bode well for regeneron. at the same time is regeneron and sanofi are considering on lowering the drug. >> how much? >> regardless of cholesterol level these drugs would be significant at 15% in in a trial. >> and the question is getting insurance companies to agree to pay for these things or benefit managers along the way >> that's right. that's been a big problem. even when doctors are prescribing these things oftentimes, insurers are refusing to pay for them with regeneron and sanofi
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talking about lowering the price. and amgen as well. it's coming down perversity of drug data, good data, the price comes down >> that would be lowering just for the insurance companies or lowering for anybody buying the drug >> well, i guess it depends. they're talking about the gross price which means not necessarily the list price but what they're discounting we'll see how that shakes out. a story capturing the world's attention, "the wall street journal" reporting that goldman sachs ceo could leave, could with an asterisk could leave by the end of the show we ask ed lloyd on the show in 2017 what they thought about leaving goldman sachs. >> you know, it's at my desk, maybe it's my way out. >> he wrote the book on goldman sachs money and power, how goldman sachs came to rule the world.
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we have a cnbc more importantly. that's a moniker for you, what do you make of the general story? >> well, guess what, news flash, he's going to leave goldman sachs at some point, whether it's this year or next year. i don't think it really matters. the succession has been set up, i think, i'm not convinced of that, by the way >> not convinced of which part >> i'm not convinced that it's going to be harvey or david. >> you mean marty. >> explain marty >> marty chavous, a computer scientist, he's not clearly as folliclely challenged as the others >> i was just looking up the picture. >> he's got way too much hair. >> is it receding? >> he's got hair >> no way. >> and he has japanese tattoos
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on his arm he's most ungoldman sachs-like but he's a very smart guy. >> what are the tattoos? >> japanese -- >> haiku or something. >> maybe a trader -- >> more of a banker? >> yes david solomon came from bear stearns which means he's not as thoroughbred as the rest of them which is important consideration at goldman sachs >> lloyd was a trader, right >> i mean, a goldman sachs guy >> lloyd was a lawyer. he came to goldman through the jay aaron acquisition. gold, silver harvey, as you know, has not really been out front as much. has not been in the media as
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nearly as much don't forget lloyd -- he was plucked -- remember the two johns? >> yes >> anointed him as potential successors and then out of the blue came lloyd. out of the blue choice is not impossible >> let me ask you a different question this company has been on a particular path. they've been trying to sort of shift to their business. does it shift any different way for these folks? >> i think what lloyd has been wrestling with for the past decade is whether the changes we've seen in the market have been cyclical or structural? right. i'm sure you heard this argument at morgan stanley, they decided they were structural and decided to get into the wealth management business at goldman sachs decided it was cyclical they're going to stick to their knitting and in this market, goldman sachs is once again make a lot of money and lloyd is going to be able to say, hey, our return is higher
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than anybody else. we're making money that's not clear it's working yet. we all know i think if the fed would allow goldman sachs that it needs to get bigger it needs to own a bank >> you can imagine him trying to stay a year longer or keep a chairman title >> absolutely to both. i think he likes his job he's very good at it and stocks at an all-time high, yes >> why would he leave at all >> because he's mortal >> well, jamie dimon, at jpmorgan, he's building an 80-story monument to himself he's not going anywhere. >> bob iger. >> bob iger is staying on. >> look, if he was seeing it now, he might be saying you
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know -- >> on my word, he's going to stay >> okay. >> thank you, sir. >> i really want to see the hair guy -- >> you've got so much already. >> he shouldn't be discriminated against because he has hair. >> he likes hair guys. >> exactly. >> doing well, right >> awesome coming up, a former omb director jim nussle says a dodd-frank rollback is a right move for whom? the nation's credit union. he recently met with president trump on that. here's a look as the s&p winners and losers we'll see if we can find any we're up about 400 points. let's begin.
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♪ do the hustle >> announcer: welcome back you're watching "squawk box," live from the nasdaq market site in times square. ♪ welcome back, everybody. lawmakers are expected to vote this week on rolling back dodd-frank banking restrictions. small banks and credit unions are hopeful that reform would give them a fighting chance against big banks. joining us credit union national association president and ceo jim nussle jim is also the former director of office management and budget. jim, thank you for being here
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today. >> good to be here, becky. >> great to see you. >> great to see you, too >> let's talk about this, this is reform a long time coming you've been working on this how long >> well, for over ten years. think of it this way this is the first piece of bipartisan legislation to pass the congress in who knows when this is actually republicans and democrats coming together equal. it's not one of those foe bipartisan ones. where you get a democrat and republican and you call it bipartisan this is the senate that statistic down and crafted the chance to first reform dodd-frank since it passed a lot of technical corrections, a lot of things to roll back to help loosen the grip of really one size fits all regulation on a lot of the smaller community financial institutions in the country. >> who specifically rolled this out? how large of a bank or how small of a bank do you have to be to qualify? >> yeah. first of all, it's for institutions under $250 billion.
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so there are some bigger ones in there. $250 billion, the largest credit union in the country, just north of $70 billion so these are for the smallest of the institutions in communities across the country banks, credit unions, mostly >> we've heard other banks clamoring raising their hands. banks like pnc saying include us, too. do you think they'll get wrapped into any of this >> i think there's going to be other opportunities for regulatory relief coming down the pike this sets up opportunity for the senate in particular to demonstrate that it can work, that it can actually pass legislation in a bipartisan way, working together without making it too political or making it just about messaging so, i think that this gives us an opportunity to give back to some -- what we used to call regular order around here. where, you know, members of congress would actually pass legislation that they crafted in committee. and actually held hearings on. and got information and data
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about. >> you met with the president about this what was his reaction? >> you know, we had a great meeting with the president he gave us, i think, just every indication that this was a priority for administration. we had a chance to talk to him about many of the challenges that we face, as smaller institutions we presented him with a study about how much this regulations have cost small credit unions over the last decade and it adds up to about $6.1 billion, per year, of added regulatory costs that make it difficult for us to lend out to communities, to our member depositor/owner. and that's the reason why it's so important to have a more common sense regulatory structure, not a one size fits all structure. >> jim, i remember, probably eight years ago at this point people saying if you were a bank that had less than a $1 billion,
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market capitalization, that you were going to be a takeover target because of this i wonder how much of the damage has already been done? >> there's no question that for small banks, a lot of the damage has been done. because they're takeover targets and because of their investest-owned model, there's no question that a lot of the smaller banks have gobbled up. we've seen that market share for the top 100 banks in the country go from 20 years ago go from 30% range now up to 75% of the market share is in the top 100 banks in the country credit unions have a different model. we're owned by our depositors. we're cooperative. and as a result of being cooperatively own and structure, not for profit, we don't have the same takeover m & a challenges that banks do ours are a lot more enduring as a result, they've faced these
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added costs and it's been a big drag on their ability to lend, there's no question we've been able to survive this a lot better than smaller banks have >> jim, it's great to see you today. thank you for joining us >> thanks for having me. >> come visit in new york. >> we'll do that >> right now, before the break, we have a special announcement, our tape producer dean and his wife randi welcomed a new skwaeker iris adaline is 8 pounds and 22 inches long. there they are >> beautiful baby. the mom, the baby, dean, everybody is happy and healthy >> almost 9 pounds >> congratulations, dean >> congratulations, dean >> he's awesome. also, we should mention that dean is responsible for our year je end bloopers reel. >> we're all trying to do our part coming up when we return,
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the ceo is going to be joining us, banking analyst mike mayo never one to shy away from telling us what he really thinks with the potential exit of goldman sachs' ceo lloyd blankfein. and later, kevin mccarthy to talk taxes and trade and president trump. stay tuned we'll be back here on "squawk box. play "do it like this"
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♪ here we go come on [ upbeat music plays throughout ]
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dinner in 5. when everything's connected, it's simple. easy. awesome. time now for "executive edge." we're getting new details on the drop box leslie picker joins us with more leslie, good morning >> that's right, drop box kicking off the marketing. $7 billion and $7.9 billion. that's on a fully diluted basis on apples to apples comparison, with the latest valuation which was $10 billion from 2014. and dropbox revealed that salesforce is purchasing about
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$100 million of the company's ipo through private placement. salesforce had invested previously in dropbox as well. dr dropbox insider plans to sell 36 million shares in the ipo between $16 and $18 apiece the offering is the biggest tech ipo since a year ago it kicks off the road show at underwriters offices today followed by lunches in new york and boston later this week dropbox shares will be listed on the nasdaq under dbx >> thank you, leslie soaring sky high, mechanis s made a public debut in 2016 with an initial price of 16 now, trading above 50. the ceo joins us next, as we head to break. here's a quick check of u.s.
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welcome back to "squawk box. you might not be familiar with the cloud services that nutanix
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offers but you probably recognize their clients, toyota, airbus, at&t panasonic and department of defense. and the company up 126% in the past six months. joining us, nutanix founder ceodirag hendai. he's scheduled to ring the opening bell coming in earlier. nutanix announced a deal to buy netsil just help -- for those uninitiated, help us understand exactly what the company does when people talk about your business it can be confusing to some. >> in the early years we said there's a lot of hardware in data centers in the on premise data centers how about making a pure software and running it on commodity servers like the way facebook,
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google, amazon and larger consumer cloud computing do, running their data centers we did that, we brought it to the masses, to the enterprises every couple of years we said, look, there's lots of couple of things in i.t. to be converted into software. let's make them into experiences, one click simplicity and so forth. building a cloud. >> give us a tangible example of that so we showed a couple of different companies. what does toyota do for you or pick a client you feel comfortable telling us about. >> if you think of, for example, jetblue, which is one of our customers right here, we're going to talk about them as well at the investor conference, they had a lot of equipment and i.t. was all about procuring and going in and integrating it altogether they go and say, look, what about we convert all of this into pure software and all you see is racks of servers? you have a standardized
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operating system running on standardized hardware. now you can relieve opex and cloudex. >> this is instead of running on aws or running on google cloud >> absolutely. in fact, our whole thesis is that the cloud is going to be hybrid, it will be here on prem or off prem. >> you're the on premises? >> for now we're building if you were to look at the iphone, we're building an icloud and make it invisible. the idea of the cloud, it's a thing and we have to make it an experience. >> whose lunch are you eating? >> a lot of the stodgy hardware companies that were basically building in the last 20, 25 years do not understand the new consumption model. infrastructure is two things, software defined, which is all about pure software running commodity servers and the idea of renting things from a public
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cloud. >> why don't you believe or do you worry when you wake up in the middle of the night, do you worry about amazon and aws or google cloud or microsoft azure effectively taking this type of business >> i think they are building large vertically integrated data centers. we are about dispersing the cloud and pure software. >> how much of that do you have to sell the client on? i assume at the same time google, amazon, microsoft are walking into the same businesses saying, no, no, no, you shouldn't be doing this, you need to put in our public cloud. >> also, i believe that a lot of us in the company believe that the laws of the land are about complying with regulations the laws of physics where a lot of the data is on the edge you're not going to back haul a lot of the data. you need to push computing to the edge with the software that we are actually building all of these large companies, you know, the ones you mentioned, they are building massively large data centers we think it's about miniature rising the cloud and pulling things back into large data. >> how much is about privatizing security in terms of the sale?
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when you go to a company you say, look, you shouldn't be putting in the public cloud. you need to keep some of it on premises how much of that is, you know what, i don't know if they can actually take care of you if there's a problem? >> the big one is economics. renting a hotel for five years when you know what that application looks like is expensive. as people see the bills coming from renting cloud they're saying, look, can i get all the benefits that i accrue in the renting model on premises as well. >> what is this deal going to do for you that you just announced? >> it's about network monitoring and security operations and how do you use machine learning and discoverables going on in the network. it's about building our full stack and network is one of the key things we focus on. >> thank you so much for coming in. >> thank you. >> congratulations we'll see you when you ring the bell. when we come back, lloyd bla blankfein is reportedly going to
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step down. we've heard a lot going ghaens in the wall street journal we'll be speaking with an analyst mike mayo if he is bullish on the stock if blankfein were not at the helm. and kevin mccarthy will be our guest coming up at 8:00 a.m. great, another dead end. sarge, i just got a tip that'll crack this case wide open! turns out the prints at the crime scene- awwwww...did mcgruffy wuffy get a tippy wippy? i'm serious! we gotta move fast before- who's a good boy? is him a good boy? erg...i'm just gonna go. oh, you wanna go outside? you gotta go tinky poo-poo? i already went, ok? in the bathroom! as long as people talk baby-talk to dogs, you can count on geico saving folks money. fifteen minutes could save you fifteen percent or more on car insurance. gglobal bonds, and high-dividend strategies. sure, these are investments. but they're not what people really invest in. what people really invest in,
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the end of an error and the report says lloyd blankfein may leave. >> playing defense president trump's tariff plan putting the defense industry in
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the cross hairs. your portfolio strategy is straight ahead. plus, sports meets business. "squawk box" guest and founder of fanatix, michael rubin, could be the next owner of the nfl's carolina panthers. details straight ahead as the second hour of "squawk box" begins right now ♪ ♪ live from the beating heart of business, new york city this is "squawk box. good morning welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site i'm andrew ross sorkin along with becky quick and joe kernen. dow looks like it would open up higher, 97 points right now. nasdaq up about 37.5 points and the s&p 500 looking to open about 7.5 points higher. we have some news to tell you about this morning dow dupont executive this morning, andrew livers,
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long-time guest stepping down from the company next month. he will retire on july 1st this is a 14 year tenure that began with dow chemical. jeff fedding is going to assume the role the company preparing to be broken up by the end of q1 of 2019 also intel responding to reports that it could possibly buy broadcom the chip maker is interested in integrating previous acquisitions on friday "the wall street journal" reported that intel was weighing a number of possible deals. that was not the headline that was taken away the headline was that it included broadcom and got a lot of investors and others into a bit of a frenzy. this all comes as broadcom is trying to buy qualcomm in a hostile deal and they're separately chasing a $44 billion
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takeover of nxp semiconductors cifius is in the middle of it. "black panther" dominating the box office crossing the $1 billion threshold in worldwide earnings. the total getting a boost from success in the first weekend in china where it earned $66.5 million. even in its fourth week open state side "black panther" earned $41 billion beating out a wrinkle in time. $100 million budget. the first time an african-american woman has directed such a big film let's get back to the broader markets. j.j.kenihan, chief market strategist is here christopher mahr, chairman, president and ceo of ocean first financial. guys, thank you both for being here today j.j. we saw some really good numbers on friday from the jobs report market took off and loved that,
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but how fragile is the situation? if we were to see labor costs go up, if there were additional things on tariff run, would that be a pull back or do you think the market is more comfortable >> well, let's be honest on friday if you had gone and asked them for a perfect rally, that would have been very little wage growth and basically a home run in terms of jobs created with all of that said, i actually think it's kind of bad that we're not getting the wage growth what do we have to do to get the wage growth. we've asked for interest rate hikes for so long. now that they look like they're definite, you know, in terms of looking at the probabilities, it's funny it's like someone who goes to get married, gets to the altar and says i don't want to get married. we've come all of this way, we've asked for it and the market is having trouble dealing with it. with all of the tariffs, let's face it. this administration has a history of making big statements and then being more pragmatic when it comes to implementing things
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we're seeing it again and part of it being nafta. the market is very fragile i think people forget what an amazing year 2017 was. 2018 is more normalized in terms of volatility. we're still at the lower end of the scale. i would expect us to have a higher year where we have vix between 16 and 20 and trade like a market has traded for years. >> return to normalization >> yes 2017 was the aberration. >> chris, let's talk a little bit about what you're hearing from your clients. you have a lot of businesses that are your clients, family owned businesses, small businesses what do you hear back in terms of labor >> we're hearing from all of our clients that it's becoming harder and harder to find broadly labor but then in certain specialties it's particularly tight they're using the phrase tight as a drum. building products company, great company, 100-year-old business they've resorted, this is a positive, to looking at opiate
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addiction recovery group to find an opportunity to bring people into the work force that are not in the work force today. when you look at prime aged males, that's where it's lowest, that's what people are going to do we need more participation friday's report looked like it showed a great sign for that but we need to do more. >> you talk about the extreme measures some of these companies are taking what do they say about raising wages? is that something they think would matter or help >> you know, raising wages is certainly one of the tools in the toolbox. it's really a jobs skills mismatch we're seeing more and more the kinds of jobs they need and the places they need them, they're not finding the people that need those qualifications a lot of it relates to our training system, the way we're educating people today to make sure they're ready for the jobs of today. >> what do they do, train people on the job if that's the case? >> often they do we have another customer who does machine shop work they've got very complex
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equipment and they have their manufacturer who has to come in on site to be able to train people you don't need to have a college degree to be very good at that but you do need to have algebra skills you need basic skills to be able to run that equipment. they lean on using a manufacturer in that case to do, you know, job training but we need to do more in our community college system. >> you also have a lot of clients who i'm guessing appreciated the tax cuts that came through and the certainty that that provides a little bit of push back from the tariffs. what do you hear from your clients just in terms of those who are willing to actually spend money. cap exis something we've been watching. >> great feeling of optimism out there. i'll give you one story about cap ex we have a customer i visited last week. they operate barges. doing great, full capacity even their back haul to the unused capacity is almost to 100% what they need to do next is to start building more barges their barges are highly technical so they cost 50 to $60
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million to put, you know, a new barge in the water that takes 18 months between order and delivery and then you need a couple of years to pay it back if you're that barge operator whose business is doing great, who has the capital to expand and you're launching into the news stories that we see about tariffs, infrastructure spending which is still an uncertainty, it's very hard to take your capital and say, i'm going to go in and invest in building that 50, $60 million barge when at the end of the day it may not pay off. >> we heard what j.j. said about how this administration tends to make big proclamations and backs out and is much more pragmatic do you think that's what's going to happen? >> absolutely. i think it's the uncertainty very few are not sure we'll see a full blown trade war it's an equal uncertainty about tariffs, the infrastructure spend, the fed they're sitting on the sidelines.
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our clients have the lowest level of debt they've had in years. they are very well positioned. they can make investments if they need to make them they need a little bit more certainty. as we get through 2018 and we get more certainty and clarity where the yield curve is, they may be able to make those decisions. >> j.j., what are you watching for this week? what's the big item, news piece? >> cpi came out after the last employment report. it was the most important number in the world for some reason now cpi comes out this week. you know, actually what i'm going to watch more importantly is housing starts. you saw this nice leap in january and single family homes particularly were up 9% last month. we'll see if we can match it this month because, you know, this point about optimism, i don't think there's a better guide to optimism than going out and spending money on a home and upgrading that way we'll see if that can continue if you see housing starts increasing along with the great
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numbers we're seeing in employment, to me that really is saying the ball continues to roll in the right direction although there may be some uncertainty about interest rates, what the market is going to do. that should help housing starts in my opinion because people want to get in before the interest hikes. >> we're sitting at 2.9% on the ten year has that done anything >> no. we have a couple of clients, both small home builders, family stuff, but also some national home builders who we're financing a project for them demand is very strong. the rate hikes that have happened so far, they push the ten year that's where the residential mortgages are indexed off. we've seen almost no drop in demand we went about $800 million last year we don't see any slack in demand for new loans. who knows if you get four, five, six rate hikes over the next few years, maybe that changes it, but i don't think the next rate hike or two or three is going to make much of a difference. >> chris, you're here to ring the closing bell today. >> we are. >> why is that
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>> we're 22 years now as a public company so we took this opportunity just crossed over $1 billion market cap we're proud of that. and so bringing a bunch of our employees in to celebrate and reward them for doing all of the hashed work to grow it. >> that's right. >> 7:00. >> time to wait around. >> practice? >> it's a difficult thing. i want to make sure i get it. >> i hope it's a big button. >> digital >> maybe a screen. >> yeah, i think it is a screen. it'll still look great. >> if you're early -- >> cold fingers. >> warm enough >> it's all about our employees. we have a whole bus of employees. i'm going back to get our employees. we're coming back in on a bus. exciting moment for them. >> chris, thank you for joining us. >> thank you >> chris maher and j.j. kennyhan >> could be the end of an era. lloyd blankfein planning to retire at the end of the year. banking analyst and a gentleman. mike mayo -- >> remember zach mayo, remember
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louis goss set jr. >> yeah. >> i actually ordered the song coming up. ♪ ♪ >> i knew it. >> does anyone look better in dress whites than richard gere >> no. >> president trump accepting kim jong-un's invitation brooking foreign policy mike o'hanlon will join us to discuss that stay tuned, you're watching "squawk box" on cnbc what is the power of pacific?
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♪ the lift is up where we belon ♪ ♪ where the eagles cry on a mountain high ♪ >> got it. "the wall street journal" reporting lloyd blankfein's year-end departure he responded and said "the wall street journal's" announcement, not mine i feel like huck finn listening to his own eulogy. that report may now turn out to be true given that it may push him to come up with a time line if they haven't already. mike mayo is here. he's a senior banking analyst at wells fargo. we welcome him to the table. what do you think is going on here >> well, let's just take a step back this week is the ten year anniversary of the end of bear
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stearns so i come bearing gifts. here is a bear stearns pen for you. >> lovely. lovely thank you. thank you. can we put this on ebay? what should we do with this? how much is this worth >> you tell me i'm not sure it works anymore. >> it doesn't work anymore. >> that may lower its value. >> it's struggling here. >> kind of symbolic. >> a coloring book >> so ten years ago we had bear stearns, then -- >> right. >> -- lehman, meryl, citigroup you could almost write a book about that. >> someone did, that i know. >> it's a good time to look at the stand alone investment bank, goldman sachs. today goldman sachs has a lot more to prove. look at the stock price. it's under performed in the last year look at trading. they had their worst quarter in a year since the financial crisis last year look at the strategy now you're going mass market consumer almost like from caviar to
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cheeseburgers. i have tips for ceo succession developmental length make transparent engage the board goldman, check, check, check on that but not have an article in the wall street journal making it look like a horse race between a couple of people one guy -- >> it's looked like a horse race for months there was a big piece that they actually cooperated with if you remember in the "times" between david solomon and harvey schwartz they have somehow embraced this horse race. >> some of these articles, david solomon, the investment banker, d.j.desol and harvey schwartz is a black belt in karate this happened after gary cohn, the ex-ceo left the white house. could you have more outsiders in the running or should they be in the running? >> you asked the question so what's the answer. >> we have five scenarios.
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number one would be david solomon for the decade he ran the investmentback goldman's revenues were down 10%. >> is he your top choice who's your top choice? >> let me finish. >>s unit when goldman was strong through the financial crisis. >> ex-cfo. >> option three is co-ceos. >> done that before. >> four ceos in the last century. we don't love that idea but they've done it before. >> okay. >> option four a year from now the ceo could be lloyd blankfein. >> right. >> under his tenure goldman stock is up 80% and the bank index is up 8% good run option five is an outsider that could be gary cohn. i don't like make this stuff up. we do a lot of research, but investors are sending us e-mail saying, yeah, gary cohn could be a good choice. >> do you think gary cohn would actually -- he'd go back >> fiduciary obligation to the
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board to at least consider all of the possibilities you can discard it and then you come back to harvey schwartz or david solomon. are there other outsiders? john winkle reed, should they look at him. stopgap measure, david vinyar. there are scenarios. >> let me ask you, mr. mayo, which one would you select right now? let's say lloyd, he's not doing it, but he announces right this second i'm done, i'm finished, i'm going to the beach and you are now the king of goldman sachs. you have to decide what to do. >> let me make it crystal clear, we are very bullish on goldman sachs regardless of who is ceo we think earnings exceed this year and next year we're not buying into the consumer strategy. we give them zero credit we don't care as long as it's lloyd blankfein, harvey -- >> i'm asking you to make a choice you come on the set often times trying to talk a ceo out of a
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company. which one do you choose? >> harvey schwartz, david solomon, only been a little over a year that they've been co-president i'd like to have a longer track record before we pick one over the other. >> if lloyd were to stay for a year or two, would you be happy with that? >> long as goldman's earnings pick up. if gold man has earnings like they did in the fourth quarter of last year, i'm not sure this is as much lloyd's decision as it would otherwise be. it's up to lloyd blankfein and the board to put better numbers on the board. >> do either of these two people, the front-runners, let's call them, do they change the strategy of the firm in your mind >> well, goldman was late to change its strategy. i mean, look at morgan stanley five or six years ago going into wealth management. we describe the pivot, they timely used the word pivot last september 12th, 2017, going from
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fix to fax but another part of the pivot like into mass market consumer lending with marcus, we haven't spoken to one investor that's owning goldman stocks because of mass market. david solomon, the smooth investment banker, the best rolodex in finance right now with large corporations. harvey schwartz, the person who can break down walls and get people working together and great risk management resource allocations. so there's strength in both but the picture's also incomplete. so a little more time would be ideal. >> you're normally not this poll particular i don't know if you're trying to get lunch with these guys. >> i gave you a bear stearns pen, come on. >> thank you for the pen thank you this morning final question for you this morning. if you could own any of the banks right now, you'd own which one? >> look, we are definitely owning goldman sachs. >> that's your topic >> citigroup coming the farthest. still recovering they show the biggest increase
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and return on equity this year goldman sachs still looks good. >> mike, thank you. >> thank you coming up, internet entrepreneur and friend of "squawk box," michael rubin has his sights set perhaps on buying a pro football team. he tells us after the break. later, playing defense how will steel and aluminum tariffs impact companies like boeing, lockheed martin and raytheon we will talk about those names anotr dex ou id heingrpsn just a bit. "squawk box" will be right back.
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there may be a new bidder for the carolina panthers. sources tell cnbc that michael rubin who owns the online sport retailer fanatix is interested in buying the team he's declined comment but is considered to be a serious potential bidder best known to nfl owners as fanatics runs the nfl online store. he currently owns a minority stake of the 76ers in the nba
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and the new jersey devils. forms values the panthers at $2.3 billion call hedge fund mogul david tepper is seen as a serious -- >> tepper. >> tepper is a steelers fan. >> pittsburgh. >> owns part of the steelers he'd have to give it up. >> he would. tiger woods is back and maybe ready to challenge for another major if you were watching yesterday on 17, 44 foot putt at val spar and finished tied for second behind paul casey i was watching it. tiger was leaving some of them short. he needed one on a par 5 he had a short putt to get 16 or 15 which would have got him to 9 under. then he would have needed one more birdie. he did it on 17 and then on 18
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he had a 38 foot putt which he actually did leave short. >> he still looks better. >> totally better. back hitting everything great his best outing since 2013 next up for tiger, the arnold palmer in which he's won like eight times or something he loves that course then remember the masters is just a month away. tiger's only 42 and he's got like a bionic back now it seems to work pretty well he's got this sticker driving iron these guys, it's a 450 yard hole and they hit an iron what >> that's why i like mini golf >> another -- >> that's right. >> all right when we come back, what we can expect when the president meets with north korea's kim jong-un a programming note a first on cnbc interview with canadian prime minister justin trudeau. that is at 2:10 p.m. eastern time we'll hear his thoughts on president trump's steel and
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tariffs and also the nafta negotiations where they stand. right now though as we head to a break, take a look at the u.s. equity futures dow futures up by 82 points. nasdaq up by 31, s&p up by 5 continuing some of the gains that we saw on friday. 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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good morning welcome back to cnbc we are live. saudi aramco may delay its highly anticipated ipo the ft saying they're arguing over the $2 trillion valuation and that it could be delayed until 2019 at the earliest new york, london and hong kong are in the running to land the aramco listing. >> did everyone hear about what happened in the jail at ritz carlton. mbs is on the way to the united states in the next week. it is a remarkable story about how -- talk about lack of
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transparency they actually talk about beating some of these people that some of these people were detained and then gave over billions of dollars and are now wearing ankle bracelets. we saw al walid on video but we don't know sort of how he was treated. he said he was treated well but they said all of his calls were monitored. everyone's -- it's really something. >> that doesn't surprise me. >> i think unfortunately it raises additional questions about investing in saudi >> right >> we talked about what saudi had and is there rule of law if you remember nps said to tom freedman or maybe tom freedman said in his column that was very pro saudi. if they're going to do this, they need to at the end of this come out and explain what actually happened. very interesting to see if that happens. >> tom's point largely was what mbs can do -- >> right. >> -- in terms of trying to moderate those stricter religious concerns there he's saying it's going way back
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historically for investors this is certainly something. also, let's talk about shares of product. they're up 15% in hong kong today. the italian luxury goods maker said it stemmed a slide in sales in the second half of last year and that it expects to see growth continue this year. that stock's up 15%. american express in the meantime plans to cut the fees that it charges retailers. the financial times is reporting at a presentation to investors that the company said its discount rate would drop six basis points to 2.37% this year. that would be the steepest decline in two decades the company's new ceo said he is willing to make conscious tradeoffs to try to get businesses to take amex cards. and some more strong reaction to president trump's tariff plan coming out this weekend with u.s. trade rep robert lightzinger meeting with envoys around europe and asia.
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will lamb marx joins us. >> reporter: we heard it was a frank discussion with the european trade commissioner and mr. light hauzer he warned of major market disruption that's nothing new he called it calm headed behavior from the u.s. mr. melstrom is speaking a few hundred feet from here they're not worried about trade and she added that protectionism is being added as a weapon to threaten and intimidate us she said the u.s. would not get the union to enter into any fresh trade agreement. she said mr. lighthauzer has had no clear guidelines for her on how that exemption could be won by the european side a lack of clarity here from the european commission in terms of what they're hearing from the u.s. trade rep
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>> all right willem, thank you. we'll see. just reading the journal piece on this. never a dull moment. with president trump accepting direct talks with north korea, our next guest will walk us through the next steps let's bring in michael o'hanlon, brookings institute foreign policy senior fellow also, co-director of the 21st century security and intelligence and, michael, you've been on a lot we've talked a lot about all of these things, but what was your reaction when you heard there was going to be big news on north korea and then when you saw what actually came about was it -- did it at least raise one eyebrow like wow >> good morning. well, no doubt you've got to raise eyebrows and raise skepticism i was encouraged the idea that we can even talk
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about talks is in my mind positive obviously you have to worry about a lot of ways these could go badly there has to be a lot of staff work in advance and president trump needs to think through the various ways in which he could be presented with a bad bargain. figure out how he's going to respond in advance there are at least two or three major ways we could wind up much worse off after certain kinds of failed negotiations or a bad deal, but i think that president trump's capable of that kind of preparation and there will be time for it. i'm hopeful on that. >> even with preparation you can end up with -- i mean, i don't -- we've talked about the iran deal before and, you know, i don't know what was possible and what the counter factual looks like they did a lot of staff work on that in advance. a lot of negotiations and it's still what we ended up with. it's all looked good i'm not sure that was the greatest outcome we could have hoped for. >> no, not the best outcome although better than sometimes
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alleged. you're right the bottom line here is we have to be extremely weary of a number of things one is that the talks completely break down and we're back to the war footing. another is that north korea tries to persuade us to completely break the alliance with south korea and say that's the only real reason they're nervous and the only real reason they need these nuclear weapons. if we pull these troops off the korean peninsula, they'll be happy to pull that off that's a dangerous reason and one of which china would love it in many ways we're going to potentially see the coalition divided. also, the north korean threat was there before north korea had nuclear weapons. it would continue after they denuclearize i don't think breaking the alliance would be smart. those are a couple of ways these talks could go badly again, i think president trump is going to be capable of preparing for those scenarios. the key is are we prepared to accept an interim deal that would stop short of complete denuclearization that's what we have to think through. what kind of imperfect first
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step can we contemplate what happened do we give for that. >> what do you mean, in terms of what we roll off if it's short denuclearization >> exactly right because i don't see north korea after 30 some years of developing a nuclear program really giving it up for anything short of u.s. and south korea breaking the alliance, which we're not going to do. therefore, the question is can we cap their nuclear program in the first instance in a verifiable way that will be more verifiable than the previous deals and not give them too much of a bargain, not sell the farm, you know, too thoroughly not give too high of a price or benefit for that kind of an imperfect first step that's going to be i think the real crux of the matter. >> i just wonder that now you've heard the latest that's maybe kim jong-un is actually interested in a peace treaty >> yes. >> i wonder, what would that say and what would it entail to make it actually more than just, you know, something that looks good on paper but doesn't really
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accomplish anything? >> right i favor that kind of a deal because as you know, we're still in a state of war. it's an armistice. it's not a negotiated end to the conflict therefore, we have to say what kinds of conditions. again, we can't break the alliance as a way to get the deal we could imagine an international peace enforcement along the dmz that will have swedes, swiss, chinese, russians, nato members and that kind of a force could essentially have the responsibility of monitoring both sides and giving north korea some added security that somehow it's not worried about a hypothetical south korean invasion that's the kind of thing we could do to get a peace deal if we could do that and still keep the alliance, i would be in favor of it. >> michael, is there any way this meeting wouldn't happen >> absolutely. if we start seeing north korean nuclear missile test, if we start seeing bad behavior
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against their own citizens if they make it clear the only way they would have a serious negotiation is in the event that we break the alliance. all of these things would be reason enough not to even have the talks in the first place. >> michael, we had ash carter on the show, the former defense secretary on friday, and he said it's very important that the u.s. makes sure that it really gets on the same page with japan and south korea in terms of what we walk in there north korea in his experience with the regime has often tried to separate us what does south korea even want at this point? i'm a little confused. >> first of all, ash carter is right. he's watched this very carefully for a long time. second, i agree with his 100%. south korea wants a datante. president moon is from the sort of more left of the south korean political spectrum the question is going to be not so much do we disagree oncor fundamental goals but what kind of inducements would south korea
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be prepared to give the north to get a process going and would south korea give away too much by way of renewed economic interaction or humanitarian aid or summitry. so it's going to be in those kinds of tactics where i think the potential for disagreement arises that's also i think what north korea is aware of. they will be looking for those opportunities. again, you have to sort of war game this out, so to speak, with two or three concerns, you know, very prominently in your mind well in advance. >> i'm already worried about the political nature of this and the poisonous political environment that we're in right now. i mean, it would be a clear win for trump, which would be the last thing a lot of people would want if it were to go well, so we're going to -- and -- but as a template for this i remember iran and that entire deal was used on -- depending on which
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side of the aisle you were on and the public, you don't even know what's real you don't know whether to think it's a good deal or not. that's going to happen again democrats are going to hate it no matter what happens some people, there are certain people that would rather have trump fail even if it means not dealing with north korea and then with the media, i don't know whether i'm going to believe necessarily how they report it either how do we know whether this is good or bad, what's going to happen >> this is where it's important that we have elder states men and women in this country who have been through it you've mentioned ash carter, bill perry, madeleine albright these are all democrats who i think would be very, very serious about the way they would assess any -- >> madeleine albright? she -- i haven't seen a positive word come out of her mouth about that foreign diplomacy of the current administration, not a single word. >> well, okay. listen to all of them and decide if you think that one of them is being completely parts at this san.
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i'd be surprised if that group of people winds up being partisan on a north korea deal because they've seen too much of the danger and down side if president trump can actually get a halfway decent deal, if nothing else there will be good disagreement among democrats, including myself some people will support, some peep won people won't i think the foreign policy people is so trans fixed on this threat and so concerned about diminishing it that if trump negotiates a fair deal, there will be a vigorous debate. >> can i get the news from cnn about this and how it's going? >> i'm not going to speak like that >> all right i'm not sure i may need to go online or something and look at from somewhere else anyway, michael, we'll see if they have time if stormy is around. thank you. >> appreciate it. coming up, a look at what's working in the defense sector. find out what names should be in your ptfioorol talk about that and much more right after the break. squawk is back in two. and the wolf huffed and puffed...
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welcome back to quack box. dow looks like it would open up higher 81 points higher nasdaq up 32 points.
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s&p 500 opening 5.5 points higher. we have talked about how president trump's steel tariffs could impact car owners and brewers. another is the defense industry. joining us to share her thoughts on what's working in that sector and tariffs and president trump's wish list is jeffries analyst sheila kayalu. thank for being here today. >> thanks, becky very interesting things. you had boeing and some of the defense stocks really under pressure when tariffs were announced. obviously you're talking about an administration that wants to spend some money on defense. how do you separate the two issues and try and figure out where the winners and losers are? >> i think defense spending has been more positive and the budget could grow double digits this year. long-term fiscal '19 budget proposes a growth rate in terms of the tariffs, a lot of the costs will be passed through to the customer at the end of the day we don't see raw materials significantly impacting margins
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for the defense suppliers. at the end of the day defense is a technology game and so customers will buy based on technology and their installed base so we don't see a big impact. >> where do our u.s. companies kind of fall in terms of technology and advancement where do they place around the globe? >> it depends. in some areas we've been very successful in terms of fighter programs, space we've lost some share to russia and china. so we think at the end of the day whether north korea peace treaties happen or come through, the u.s. will continue spending on defense because they'll require investment given what china and russia have been successful with. >> what due think of northrop grummo grummond you updated that stock. >> we were you graded northrop last month we favor it for three reasons. we think they have the top revenue growth of its peers. we're forecasting 10% growth
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rate through 2020. the average peergroup is 9%. we think averages have bottomed. third, they recently did a deal with orbital to grow the cost will be greater than the street forecast. there's big revenue synergy as well in the long term with big defense contracts. >> you like raytheon as well >> we do likeraytheon. raytheon is our growth play. northrop is a defensive stock. the growth is more concrete. the b-21 and f-35 gives more leverage to the u.s. budget. raytheon is 35% of sales international. they benefit from more tactical spending, nickel defense spending. >> go ahead. go ahead >> you also like lydos that's a combination of a couple of things that are happening here >> lydos is -- yeah, we like
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lydos. it's more of a federal i.t. services name so it's under the radar versus northrop and raytheon $10 billion in sales we like it because organic growth is just about to turn for the company. they did a deal they stated buying lockheed martin services a year and a half ago. mostly we think it's a free cash flow and capital deployment. it has a 7% free cash flow we think they're set to do another acquisition or potentially buy back 50% of shares in 20 years. >> i have a totally random question i don't know if you heard what elon musk said when he was at south by southwest and talking about going to mars. space is increasingly the place to be. are any of these guys spending real money or be the beneficiary of what elon or jeff bezos is doing? >> hard to know this is a lot of classified business so you don't see the line items in the budget northrop is a big classified
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play with 25% sales. >> 25% is space. >> classified. >> classified. you have no idea what they're doing? >> yeah. it's a black box which is a complaint a lot of investors have it's not the b-21. we see how much the government is spending. >> do you think elon musk is correct in thinking we could be sending something to mars, shipping it to mars as recent bely as next year? >> he's very interested in the plan. >> is that a polite way of saying no? >> i think the defense contractors will hold off on that and focus on more, you know, defensive plays in space yeah. >> would you buy spacex if spacex were available as a public company >> there are small caps we cover such as aero jet and orbital. there are stocks that have similar investor interest so
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spacex would probably see the same. >> thank you. >> no problem. thanks, becky. coming up, the co-founder of the wing on the rise of social roking spaces designed for women. we're not all familiar with social rowing places but these are designed for co-working. i'm reading. i'm what's his name. that interview is next >> i'm an anchorman. i read check out the futures at this hour "squawk box" will be right back. running a small business is demanding. and that's why small business owners need more. like internet that's up to the challenge. the gig-speed network from comcast business gives you more. with speeds up to 20 times faster than the average. that means powering more devices, more video conferencing,
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just like this, joe. >> co working together we have the co-founder of the wing members only of co-working and community spaces for women an antidote of the bro culture the wing raised $32 million of funding led by we work, the
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co-working industry leader good morning to you. >> good morning. thanks for having me. >> tell us a little bit about people talk about co-working, what that really means in practice, day-to-day basis. >> day-to-day basis, hundreds of women on their laptops taking meetings with each other, hiring each other, starting businesses together it's really a professional ecosystem that we've built at the wing. >> how much of it is individual offices? how much of it is carols as we call them, desks or cubes. how much of it is hanging out on a couch? >> the wing is a little bit different than some of the traditional co-working spaces. it's more the hanging out on the couch. open floor plan work space we do have some private offices but mostly it feels sort of like a college library. you see people who are, you know, instead of working on their thesis or paper, they're working on starting the next big startup. >> can i ask you about the business model a lot of people have questions
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about this business model. they say this is actually just real estate. it's really ultimately at its base real estate real estate without locking people in. you know, right now with the economy humming as well as it is, that's terrific. what happens in a downturn >> you know, the thing that the wing offers which is, again, i think different than the traditional co-working space is really a community we also offer, you know, incredible programming we have christian ammann poor to speak, dianne feinstein, hillary clinton. we also offer technology we have a digital membership portal that connects us with each other really women need the wing to be able to start businesses and it's vital to their economic advancement. >> whattest it cost? if we had a startup, let's say we've got three or four people and we want to get a membership at the wing, what's the price tag per month? >> it's $215 a month, 250 for
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all access which means you can use all of the wing locations and we're growing like weeds, as they say, and, yeah, that's per person. >> and am i locked in? >> yes it's a year-long commitment so you're there for the year and we really believe that that gets buy in from our members. it's not just a sort of, you know, a place that they're going to use for a month and leave they really take care of it and see it as, you know, an extension of their home and they're a stakeholder. >> and long term for you, how many of these do you -- how quickly are you going to expand? >> well, we're expanding very quickly. we're going to be at four in a year of launching so that's a quick scale. we're going to west coast next and we're going outside the u.s. after that >> okay. we appreciate it thanks so much congratulations. >> thank you thank you. good to see you. >> you bet. when we come back, house majority leader kevin mccarthy will join us that's coming up at the top of the hour take a look at the futures this
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morning. they've been higher although not as high as they've been. dofurew tus indicated up by 57 points s&p futures up by 3.5 and the nasdaq up by about 30. "squawk box" will be right back. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital. - anncr: as you grow older, -your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate!
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market alert futures up big this morning as the bulls look to keep their run
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alive. a "squawk box" newsmaker house majority leader kevin mccarthy joins us to talk trade, taxes and rolling back banking rules. plus, a brand-new $10 million competition announced today. the task develop real life avitars. peter diamondis joins us live as the final hour of "squawk box" begins right now ♪ ♪ live from the most powerful city in the world, new york. this is "squawk box. >> good morning and welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. dow futures up by 66 points. s&p up by 5 and nasdaq up by 31. this comes after an 800 point
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gain to the dow last week most of that coming on friday then there are treasury yields and we've been sitting at a pretty steady yield, 2.9%. let's get you to some top stories. andrew liveris stepping down from dowdupont jeff zetting will assume the role once that split happens, jim fitterling will lead it. dropbox filing for an ipo of 36 million shares with an expected range between 16 and $18 a share. this values the company at more than $7 billion. that's the top end of the range. intel saying it's now focused on integrating previous acquisitions casting some doubt in trolling. a little bit of the idea posited
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in the wall street journal on friday report there that intel was weighing a number of possible deals including a bid to buy broad com. making a full-court press to buy qualcomm in a deal qualcomm separately chasing $44 billion of a takeover of nxp semiconductors most of all, cifius looking at the broadcom/qualcomm situation. okay this gentleman is going to be a true renaissance man let's get to washington. the senate expected to vote on rolling back dodd-frank regulations. house majority leader joining us now. in thinking about -- lead er mccarthy, good to see you and great to have you on set since the last time we spoke, the most recent thing that we saw, that jobs number with no inflation 313.
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pretty amazing we had the selloff it's stabilized. we're getting a look at the tax plan and seeing some of the effects of that and all of the commentary on both sides of the aisle. on one side it's the greatest thing that ever happened and the other side employees are getting crumbs and buy backs and now we have a mid-term election coming up where i'm not sure how to handicap that. scott walker became a democrat the guy who got rid of the unions in wisconsin, now seems like he's lost his nerve or is reading the tea leaves that say democrats are making gains what do you want to start with then there's north korea. >> let's start with what a difference a new administration makes. what we did, we went after the regulatio regulations. the tax bill you're seeing the ram any if i ca -- ramifications of the tax bill
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the job numbers were great look at the participation rate when the last administration left the participation rate was 62.7%, the lowest it's been since 1978 you have the 800,000 reentering the work force you also have skilled labor. you have not seen those numbers since 1984 so, yes, that plan -- >> you think voters will tie the jobs number to the trump administration and republicans do you think that's -- you think that it will be tied to the tax reform >> i think it will be. tax reform passed, it was upside down not one democrat voted for it. nancy said it was armageddon, crumbs now it's reversed itself because people have seen the outcome of it modern history says the party in power, meaning that has the white house, normally loses 29 seats. only two times in modern history was that different, 2002 and won't repeat after 9/11. 1988 bill clinton was president he was impeached he was supposed to lose seats.
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lost five in the house and broke even in the senate. >> do you think that's what happens this time? >> yeah. he had six quarters of economic growth the republicans had done a shutdown schumer had a shutdown and the republicans actually won that. they were shutting down for no other reason he kind of try angulated when you look at what president trump did, those are things americans care about the democrats wouldn't stand for it the dividing thing what if the democrats were successful you know what you would get. you would get nancy pelosi as speaker. more importantly, what did they roll out last week as we were rolling out the great numbers? they were going to roll back the tax cuts and put tax increases in that's their plan. i just don't think that sells. >> does the special elections in pennsylvania, is that a forerunner of things to come or is that a one off based on the candidates >> what's interesting is they've had five special elections already. if that was the case, why weren't the last five a forerunner for that. republicans have won all of them georgia was really the best
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indicator of one because trump only won that by less than 2%. by 1.8 it was an open primary we ran 17 candidates, they ran one. they did an amazing job. what you want to look at are women and college graduates. college graduates made up 38% of the electorate and donald trump won by 3 points. up 43% in the next election. >> i'm going to -- we're going to work on this together, andrew, this. >> andrew's writing notes. >> i have 100 questions here >> i'm going to help with you. it's been positive with a jobs number like that and an economy that the president should have 60% approval rating. dallas is 40 or something. >> yeah rchltsz you are said to
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be president trump's favorite guy in congress so that means that you're comfortable with him and how he governs andrew would like to know how do you compartmentalize that. how do you separate him from the policy, tweets, whatever scandal you want to deal with. i don't want to go over the current ones are you comfortable backing the character of -- how's that, andrew >> i have some business questions. >> you ask me all the time things. >> if we're there, if we're there just in character, con stit t stit two want. chuck todd calls him a -- >> is president trump any different than the candidate that he ran for? >> that's not the question the question is -- >> i know what your question is.
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let me give my answer though okay so if you're questioning did his character change no the american public knew this going in does that mean somebody has to agree with somebody 100% of the time no, we're separate but co-equal. there are many times i have private discussions with the president. i disagree you don't go on the air and have these different parts. i think from this president's point of view if he sits back, it wasn't some university, it was harvard. harvard did a study to look at what were the reports on tv. 90% of what cnn reported were negati negative some things he does are not proper. >> if your child said that or your child was listening to that. >> i would not want my child to say that. >> would you want your child to hear that? >> no. no you would not want that. there is a time and place for everything that you want to do. >> so you're saying to him privately or publicly right now, don't do that. >> the one thing i've always said
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i look at it from every perspective. this man is no difference than what he ran in and that's what the american people voted for. are there things that i've watched him improve since he's been in the job on those things you're concerned about, yes. from the same point you're going to pick that part off, but you're not going to spend any time or criticizing him for dealing with north korea differently. what's the outcome how many lives is that going to save maybe i don't want my children to hear those words but i definitely don't want my children to see any missiles coming from north korea here maybe his personality was different. i've watched those personalities in the past that said all the right things and north korea is still developing a weapon. maybe that helped make us stop. >> i have a handful of business questions for you. >> oh, good. >> qualcomm in your state, we talked about it this morning broadcom wants to buy it >> yes. >> cifius is in the middle of it broadcom may become a u.s. company. are you in favor >> let's go to history broadcom started as a company in
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america. >> right. >> they only left because of our tax policy when we introduced our bill they said they were coming back to america because of that. >> yes. >> they are an american company. cifius should look at it as having a deal. >> there's a big question about employees in your state, whether 12,000 employees are going to keep or lose their jobs. >> if broadcom is coming back to america, they're going to domicile in america, they're adding $9 billion a year >> you would tell the cifius people to get out of the way >> they usually come together, wants a deal to see if the deal is proper. i would like to see the free market work. that's the part i love and then government should look at is this a safe movement for them to go forward. >> other big story in the paper today, nbs, leader of saudi arabia coming to the united states in the next week and a half the report suggests that there were a number of people, all those detainees at the ritz
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carlton were treated rather terrib terribly potentially abused. money taken from them. should the u.s. government be in business, some people say in bed with saudi >> you raised that question. what have they done? they've given women the right to drive. america should always stand on human rights we should always be that place we should raise that question. we should push them to do better in that process. so i see some movement going in the right direction. so why should you shun them? you should have the accountability. >> you want transparency around that process >> yes, of course i want transparency why wouldn't you want transparency >> i would suggest transparency is a good thing. >> all right we're together. >> curious where you are my final question, gary cohn is out. >> yes. >> gary did a great job. i thank gary for serving >> do you wish he had stayed
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you had a view on tariffs which, by the way, i think was a little bit at odds with where the president was initially, more than a little bit. >> i believe in free trade i think this is a point too. the president on tariffs has been the same way he has been for 30years. we've had a lot of discussions this is where he listens he watches the end where he released it. he put the exemption he's listening to the differences of opinion and finding common ground. if you work in the white house, it's going to be different gary did a great job to think no one is replaceable, come on. everybody's replaceable. >> what's your take on chris fidel. >> i love him. he's done a great job. >> highlighting some of the turnover we've seen -- >> this president is different, he works 24/7. >> no, it's an axios piece, i
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think, but it said that while a lot of those around the president are being blindsided, supposedly he has shaken off the yolk of general kelly and he's being himself. is there a danger to just not having -- this is what i felt. they serve at his leisure anyway does it matter if he's not consulting with them every step of the way does he need a consensus on everything he does i'm not sure that's important. we elected him president. >> he doesn't need consensus he needs input. >> are the people around him marginalized are the ones who push back -- >> the first answer to your question, does he have enough good people around him >> yes. >> he would probably tell you no it's not because he's trying no one has waited this long to
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get confirmations out of this senate it takes 1200 positions to get confirmed after a new swearing in of a president. democrats are taking 30 hours on the lowest of offices. i was sitting with secretary devos this weekend she doesn't have a legal counsel. all that is doing is hurting america. all they're striving to do is deny the ability for someone to continue to govern i think the election is over and we should actually move forward. so that's a real problem on all of these confirmations and it's slowing everything up. he doesn't have everybody that he needs that's the only reason you have to question each person in the white house is more magnified. >> you know nothing about mueller? the opening of "saturday night live" this week showed it was a takeoff on the bachelor. it was mueller basically conceding we're not going to -- >> six year. >> yeah, conceding probably not going to get collusion for you. >> because there's nothing -- >> what about then does he move
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on to obstruction of justus tis where there's no crime but you try to cover up -- >> i think he started with trying to do that to be honest with you my concern is if he would take the politics out of it, i want to make sure my government is honest, accountable. that's why i think there should be a special counsel, a second one. when you look at what christopher steele, this came out the last couple of days in ""the new yorker,"" he said he knew the dnc and twas paying foe dossier. you don't have a regular court there. you don't have somebody on the other side fighting back they said in the application they did not know. they put an asterisk their first argument they made of why that was of great concern to me. not on a political basis butas an american of what the power
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is if you ever want to talk about transparency, i'm concerned about saudi arabia i'm more concerned about my own government's ability and protecting americans. >> you mentioned betsy devos she was on "60 minutes" last night. >> i didn't get to see it. >> there was an exchange she purposefully doesn't go to under performing schools does that make sense to you? >> i didn't hear the question. i know betsy devos i've seen betsy devos. this is a woman who's put her whole life into the idea of improving education for kids and especially in underperforming schools. i don't know the contents. >> the other question i was going to ask you, it seems like the president has backtracked a bit on his plan to raise the age for certain types of sales of guns at one point it seemed like they were going to raise it to 21 for ar-15 style weapons.
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it seems like that's no longer -- >> the president would say that's fake. >> to do that? >> he's pushed on that what you really want to look at, look at what congress has done we have a fixed nick problem the national incident criminal background check if you look at that shooting in texas, there's no way he ever should have had a weapon what happened, he was dishonorably discharged for abusing his wife two offenses why he should not have had a weapon. we passed that sitting in the senate tomorrow we'll do stop school violence the author is the former sheriff of jacksonville. then when you look at what transpired in florida, five months prior to that shooting that individual, cree, puts on youtube i want to be a professional school shooter. they called the tip line of the
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fbi. the fbi doesn't call youtube or find him then a couple of months later his own family member called and said, i'm concerned. the cruelty to animals then the fbi goes in and looks up nicolas cruz. these are a couple of months before they also saidthis and they still closed out the case >> that worries me is that because the fbi is over worked because there are so many people making threats like this >> that is why we had them last week judiciary committee still brings in another the best thing -- what about if somebody is prohibited from buying a gun and then goes and tries. why isn't there a warning sign to local police? >> what do you make of what certain companies have done or
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said >> they are in business. what i would like to do is solve knew >> he's retiring.
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>> they have confirmed more. >> he's stepping down. we don't know. >> number one thing i want to happen, i want to keep a majority of nancy maine lows si. >> you saw the swing state mansion looks like -- >> senate looks good because the senate doesn't have every senator up
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in congress -- >> history is running against us i believe it's fundamentally different. >> some of the swing states, they may like that tax bill. there's not a single democrat that voted for it. >> it was a mistake on the democratic party. >> there's nothing that's not political now. i said the north korea thing, i guarantee you there's people that don't want that to work they're just begging for us not to denuke north korea just so trump doesn't get a win. >> we have to make sure -- i mean, look, north korea is closer than they've ever been before they've got a nuclear weapon, bim to be able to get here i think the real concern is why you have to move forward now, we don't have as much time as we had in the past. >> okay. >> we can't make a mistake nobody should play politics. >> the president just tweeted and i just -- andrew, this is the worst tweet i've ever seen you're not going to believe -- no, kidding. secretary of commerce wilbur ross will be speaking with representatives of the european union about eliminating the
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large tariffs and barriers that they use against the united states, not fair to our farmers and manufacturers. that would be crazy if something came out of this tariff stuff, too. i ask you that off camera. is all of this planned the things that have worked out, do you think it's all been planned? has there been some horseshoe -- >> if this was all planned it would have gone a lot smoother. >> it's amazing that some of the ser ren dip at this, some of the stuff that seems positive out of what seems like chaos. >> when he went to iran, everyone else that was running and had all the professional teams, had been elected before, had family members he heard a voice others were not listening to and others didn't believe it think back you had romney and ryan from wisconsin and michigan. >> right the dream ticket. >> they didn't win either state. trump won both of them so i think he's very intuitive
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tariffs, it's where he's always been he gave wilbur ross, the commerce secretary the right on products this plays into nafta. he's in the middle of trying to get nafta. remember, where do we get most of our steel from, canada? it plays into that to get a stronger negotiation a lot of his expertise is about negotiation. i think he's moving it many subjects at a time. >> bracket >> my wrbracket has never won. >> who's going to win? >> the thing i love about this one, there isn't one set that could go this could be anybody. >> i may have to pick a team that i hate which i don't want to do. begins with a v. anyway -- but they're good yeah, they are leader mccarthy, thank you. >> thanks for having me on. >> thank you, sir. coming back --
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>> >> you did? >> to infinity and beyond. elon musk says his space ship will be ready for shortrs t ipto mars by next year. the out of this world prediction when we come back. you are watching "squawk box" on cnbc is the monolithic view of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.
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take a look at the futures this morning positive territory dow up by about 48 points. s&p futures up by 3.5. the nasdaq looks like it would open up by just over 24 points media, technology and a trip to mars big buzz from the closely followed south by southwest festival is next stay tuned you are watching "squawk box" on cnbc whoooo.
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♪ ♪ good morning welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square among the stories front and center, elon musk making a surprise appearance at south by southwest. musk made a prediction that mars spacex spaceship would be ready for short flights by the end of 2019 did hedge a little bit saying such a time line might be a little optimistic. said we will have self-driving cars in a meaningful way by the end of 2019 and made a little
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joke when he was asked who inspired him did you hear his answer? kanye west he was kind of -- none of you guys are laughing. >> tesla. >> how do you know it was a zbloek kanye can inspire -- >> i think he was joking. >> that's not nice >> there was a lot of laughter in the room at the time. >> all right >> my guess is he would say tesla is who inspired him since that's who he named his company after. >> inspiring. also at south by southwest, media companies were pulling out all the stops to try to connect with attendees julia boorstin was there with the branded experiences that were bigger than ever. i keep hearing hbo has won south by southwest. >> reporter: that's absolutely true now this year, as every year, med ka companies are flocking here to austin with instagramable experiences to help their content stick out from the clutter and the company that stuck out more than any
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other, hbo pulled out all the stops with a west world park that was far more elaborate, insular to the show than anything we have ever seen attendees given hats enter the two-acre town of sweet water to talk with 60 actors who never break character. they can play cards, share bourbon, bake beans, witness interactions including a shootout and find clues about the upcoming season. hbo says the investment for the roughly 4,000 people who will pass through is worth it a lot of our hosts here are armed with guns but our guests are armed with cameras so they're out here instagraming, live streaming you know, really helping us extend the reach >> it's not just premium cable warner brothers promoting steven spielberg's upcoming ready player one created the world, that film and invited fans to play a vr fan.
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abc is here to drive viewers to replicate owe roseanne." with growing competition from netflix, amazon and hulu, these media giants are seizing the opportunity of turning the influencers who are here in austin and south by into evangelists for their brands guys, back over to you. >> okay. thank you for that report. i wish i was there looks very cool. they spent millions of dollars, by the way i don't know how much money overall to make that happen. joining us to talk all things media and technology from south by southwest, guy is a venture capitalist who launched his tech career at apple and worked with steve jobs marketing the original mac computer did you end up going out to see this hbo west world extravaganza >> listen, that's a half day commitment
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it takes a long time to get out there and back >> so i am taking that as a no >> that's a no, yes. yes. anybody who has a half day to kill at south by southwest is probably not someone you want on your show. >> fair enough though i think i saw elon musk out there so i think we'd take him. nonetheless, your big highlight being out there this weekend >> the big highlight is generally speaking the level of enthusiasm for new products, new services just the pace of this. south by southwest is by far my favorite conference to attend. >> because >> because it's full of optimism it's full of dreamers. lower case d upper case d, too, actually, and it's people who are trying to change the world and not everybody's trying to simulate the world. they're trying to change the world. >> guy, you've spent a lot of time and been quite successful on social media. >> yes. >> social media at all of the companies, whether it be
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facebook, twitter, google have come under a lot of criticism recently how do you see social media changing or do you >> it's definitely -- it used to be sort of a neutral platform that you do good, you do bad with it, but now the emphasis seems to be doing bad with it or at least that's the perception i think a lot of the good is understated because of some of the flagrant bad stuff that's happening. it's a very complex problem. there's the idea of throwing ai at it, of throwing people at it. you know, trying to separate out the fake news, but fundamentally the issue may be that we have to train this generation to discern fake news from real news and it's also a case where i think many people now believe fake news equals what you don't agree with and if people go with that attitude, fake news is what i don't agree with, google,
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facebook, linked-in, all of them, they can't fix that problem. that's a mental problem. >> guy, we've got to run you were a long-time evangelist at apple what do you think of apple right now? >> you know, just looking at the numbers, how can you argue with the results? i just hope that they're working on something that will make people like me want to abandon mcintosh and go to the next thing because that's the test. >> okay. guy, we're going to leave it there. sounds like you are having fun out there. wish we were with you. good to see you. thanks coming up, more on the intersection of politics and the economy. we'll talk tax cuts, jobs and much more with a couple of opposing viewpoints. stay tuned you're watching "squawk box" on cnbc
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welcome back, everybody. the february jobs report lifting stocks despite some lingering trade uncertainty. joining us is alex grill resident fellow at the american enterprise institute and jared bernstein at the center of budget and policy priorities gentlemen, welcome to both of you. alex, earlier this morning we had j.j.kinehan on he said they could not have written a better script. what did you think about it all? >> phenomenal number in terms of
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job creation unemployment rate, another phenomenal number. our unemployment rate is stuck, stuck at 4.1 last time it was five months in a row look back to 2012 and it was double the rate it is today. so we're seeing an economy near full employment with numbers that are really surprising this late in the cycle. >> jared, going through those numbers, i said it was the perfect script for wall street main street may still be saying where's the wage growth? that's the one number that was weaker wall street likes it because it says inflation is slower than anticipated. what does main street about it >> precisely what you said where is the wage growth that you associate with such tight labor markets. typically when you have persistently tight job markets the bargaining power is nudged up a bit they' are able to press a bit ad they can get and keep the
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workers that they need we haven't seen the wage workers. i think one important point of that gets you to the federal reserve which was embedded and implicit in your comments. there seems to be more room to run in this job market than i think many people expected and that would probably put some pressure against the normalization campaign over at the fed. i guess i'll close with one thought here and that's that i think what's happening here is this very tight labor market is pulling people into the labor force and helping to expand that room to run. >> alex, we had another guest this morning who has clients, has small businesses, family businesses as clients and what he's hearing back from his clients is that they're having a really hard time finding qualified people they're looking into other places, alternative places where they weren't looking to hire before people who have opioid addictions, people in recovery people who they may be able to bring in and train in some of those places is that kind of a new
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phenomenon >> it's a normal characteristic i think of a labor market -- this tight it is going to get harder to find workers with the right skills in the right places if the economy is drawing workers into the labor market, as jared suggests, and i think that he's right, those workers may be coming in without the exact skills that arenecessary to do today's jobs you raise the opioid crisis issue. definitely, i think, a headwind, a big concern and a lot of markets. i've done some work trying to identify where those costs fall, and that's one of the things in certain industries that's making things a little bit more difficult. but i think that the general impression overall is correct. i mean, i see it i think a lot of us see it as we go about our daily business that the labor market's tight we see help wanted ads often in lots of places. >> gentlemen, we'll have to leave the conversation there but we'll see you again soon to go over this one more time.
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>> coming up when we return, the race to make real life avitars do well and you could win a $10 million x prize. the man behind it, peter diamondis. he'll join us after the break. hey. pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass.
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for details on the $10 million competition. let's welcome peter diamondis founder and chairman of the x prize foundation for years, peter, you know there's squatters with websites. i have -- i'm squatting on andrew ross sorkin's avitar. if we ever have one of these things, that's going to be -- i've got you and a figure of you is already paid for. that's who i'm going to be that's who my avitar is going to be explain this i've often asked -- >> social media, please tell me there's something in the future that i can be excited about that doesn't involve social media to have an avitar or robot 100 kilometers where you are and to control it to send into a natural disaster or something, that's the prize, isn't it >> it is good morning from beautiful south by southwest in austin good to see you again. we're announcing today a $10 million competition being funded by alnippon airways.
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ana. what a team needs to do is build a robotic avitar that i can put on a pair of vr goggles and uber my senses and my absolutes into that avitar at a distance. so, for example, if there's a nuclear power plant having a meltdown, i can send an expert in there to turn the right knob, shut it down or if there's someone who's ill and you don't have the right physician there, you can send an expert from a distance to go and examine that patient, see what's going on we've got skype, we've got full-time which is just video. this is about actually putting all of your senses so as you look around, you know, with your suit on, the robot's looking around as you move your arms, walk around, the robot's moving around it's about the future of travel. >> that's interesting. and it's from simple complex tasks. i immediately thought of there's
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some surgical robotic instruments now that work like this already and i was wondering, is that the eventual goal, to get an avitar that could do something as sophisticated as surgery at a discrete location? >> yeah, that's the end play, right? as with every x prize, we're starting with version 0.9. this is the first demonstrated we're looking for hundreds, if not thousands of teams from silicon valley, shenzhen, israel, to around the planet by the way, anyone who's interested in preregistering can go to xprize.org to learn more about it eventually i imagine we're going to have wherever the right person's capability and mind set, a surgeon who's an expert in one part of the world could develop another one to go after.
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i could be in austin or be back in sunny santa monica doing this broadcast with you. >> if this is true, we could buy real estate in warmer climbs because no one's going to live up here anymore. >> there's some milestones each year teams that are making progress get a million and then 8 million total in 2021, how does that work >> yeah. yeah, so we have $10 million of money from ana, alapon airways how do they disrupt themselves what's the future of travel? and having a company, you know, an airline ask that question was amazing, right so we're offering their money, 10 million bucks there's a million dollar milestone in 2019, a million dollar milestone in 2020 and $8 million for the final. basically trying to drive the team forward so that they can actually deliver greater and
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greater capability this is a great science fiction forward like the original i'm sorry xprize get teams around the world jumping into this. combining ai, virtual reality. computer buddy venter is going to be at our health care conference if you can deliver digital genetic information over some type of pipe, you can essentially send someone across space, right that's going to be your next prize. >> well, i think craig's idea that we talked about it on longevity of the company that i cofounded, you can send a robot i can device and it is amazing life at the speed of light have fun with him.
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we are living at the most ama amazing time ever. >> we got the spaceship headed up to mars to find the life to send it back we found out itself by southwest today, too it is all coming together, peter. anyway, thanks >> elon's funding our global learning x prize which we love we are testing with 2100 students on android app to teach the kids, it is the best time to be alive >> it is amazing >> join us at xprize.org >> thank you, except for the political environment in this country. thank you, peter normally someone would say i have your avatar >> on becky's. >> sorry >> that opens up a lot weird comments, too. >> you know what, let's go to break. >> yeah.
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>> how about jim cramer? >> i will take cramer, too >> jim cramer live on the west coast. don't miss our "healthy returns" conference, it is cong umip on march 28thme, stay tuned, you a watching "squawk on the street" on cnbc. cfa institute. take a deeeep breath in... and... exhale... aflac! and a gentle wave-like motion... liberate your spine... aflac! and reach, toes blossoming... not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. so he had your back? yup in just one day, we process, approve and pay. one day pay. only from aflac
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we have one to two fires a day and when you respond together and you put your lives on the line, you do have to surround yourself with experts. and for us the expert in gas and electric is pg&e. we run about 2,500/2,800 fire calls a year and on almost every one of those calls pg&e is responding to that call as well. and so when we show up to a fire and pg&e shows up with us it makes a tremendous team during a moment of crisis. i rely on them, the firefighters in this department rely on them, and so we have to practice safety everyday. utilizing pg&e's talent and expertise in that area trains our firefighters on the gas or electric aspect of a fire and when we have an emergency situation we are going to be much more skilled and prepared to mitigate that emergency for all concerned. the things we do every single day that puts ourselves in harm's way, and to have a partner that is so skilled at what they do is indispensable, and i couldn't ask for a better partner.
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welcome back to "squawk box. let's get to jim cramer is joining us now from san francisco. where are we going, jim? interesting stuff out there and interesting stuff with the jobs report and the overall market. here we go >> yeah, this is the strongest sector out here. the clouds were the most important. i think industrials took a backseat because of the tariffs rates did not go up as we would have expected. i am glad i am out of here because it is taxed. that's what's driving thiring ts >> you got the chip that's suddenly excited as media for fox now. >> the leader of micron knows
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more going to a $100 price. i would say you get an upward movement this is the group to watch and own. i would prefer the semiconductor to the cloud stocks. we are seeing owl of this here there is not anything that holds a candle to those kinds of stocks right now >> you can win the bracket if you pick the event winner, will you pick with villenueva >> i have to pick him. i think that something is going to come out of the east. >> i may have to although i really don't want to because they hurt me so badly this time. >> i am in such agreement. >> you cannot go usc or arizona. it is not going to work for you.
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>> anyway, thanks, jim >> we'll see you they got the shaft later today, don't miss the first with canada prime minister with justin trudeau, you can watch that on "power lunch" at 2:00 p.m. eastern. banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.
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a final check on the market this morning we have been in the green. s&p futures is up 2.5 and nasdaq up on 21 and the 10-yr note looks like it is yielding, 2.894% and bouncing back around 2.9% i believe -- >> we are about to go to "squawk on the street. before we do that, we have some breaking news to bring you right now. of the succession race of goldman sack, david solomon, being named of the president and ceo of the company one of the other successor is going to be stepping down from goldman sachs. the wall street journal reporting that on friday still unclear when a succession will ultimately happ

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