Skip to main content

tv   Squawk Box  CNBC  March 28, 2018 6:00am-9:00am EDT

6:00 am
it's wednesday, march 28, 2018 "squawk box" begins right now. 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. >> that's a nice shot. >> not that you could tell it from the background. >> wow >> our flag is gone. missing the flag there is the flag! >> did they just put that in in. >> they did. >> thank you for that. appreciate it. >> i could have one, too >> you can have one, too i'm not supposed to move i have to sit still for this i'm becky quick along with joe kernen and andrew ross sorkin. let's look at u.s. equity futures. we'll see red arrows again after a significant down day for the
6:01 am
markets, yesterday the markets lost almost 350 points the s&p was off by 55 points and the nasdaq was down by almost 3%, decline of over 210 points this morning red arrows again. >> there's a f.a.n.g. index that got crushed. >> yes >> or an etf 7% or something. >> right thanks to facebook >> facebook down almost $8 it turned around the day before. it was up a dollar after being down 7 or 8. it just renewed its drop it was like 504 billion market cap, it's like 440 now i was adding all those companies, they're shedding companies. they spun off ratheon and
6:02 am
lockheed pretty deep. i don't know why it's affecting -- it was widespread it wasn't privacy concerns at some of these other companies. it's momentum. they have gone so far. these other companies are not even in the same business. >> alphabet with google has a similar situation that shoe watch forev these issues, and oc regulators get involved. >> viewers are making requests for guests did you see who they wanted today? s sri kumar. the yield curve yesterday. >> most people want beyonce. >> no, they want sri sri says we're going back to 2%
6:03 am
which would mean a slower economy globally >> and because we have smart viewers. nobody believes there will be a recession until 2020 at least. >> right >> who knows >> in asia overnight, the nikkei closed down by 1.3%. stocks in hong kong off by 2.5%. the shanghai down by 1.4%. then this morning with the early trading we're seeing in europe, you will see red arrows across the board. the dax is down by 1.3%. treasury yields are something to watch yesterday and again today. look at the ten-year yielding 2.795%. couple stories to talk about this morning the biggest is saudi arabia making a very big get on solar the kingdom coming up with
6:04 am
softbank to create the world's biggest solar powered generation project. mohammed bin salman and masa son of softbank made an announcement about it last night in new york. >> this kind of project would never have been feasible without big vision we share with crown prince and us. the crown prince has already announced vision 2030. he has a great vision. and softbank, we have had a long-term vision these two visions come together. >> when done the project will provide saudi arabia with 200 gigawatts of solar energy. the world's total nuclear capacity is about 400 gigawatts. the project is expected to cost
6:05 am
about 2$200 briillion over the t couple of years. a big dinner last night with mbs, and lloyd blankfein comparing his period with mbs's beard. china says north korea is open to denuclearizing the korean peninsula there after both countries confirmed that kim jong-un visited beijing from sunday to wednesday. it is the first known trip for kim outside of north korea since he assumed power back in 2011. this comes ahead of kim's anticipated meeting with president trump planned for sometime in may. we should give you corporate news tesla defending its autopilot technology after federal investigators launched an investigation into a fatal crash involved in tesla model s suv.
6:06 am
unclear whether autopilot was used prior to the crash, but tesla says owners have driven the same stretch of highway using autopilot 85,000 times since 2015 with no accidents we'll keep our eyes on that. maybe talk to phil lebeau about that from the new york auto show >> that quote is today yesterday tesla down $25, down 8% i guess partly on this, but also kind of thrown in with other ones >> into tech land. >> into tech land. >> just from a momentum perspective, being a high flyer. >> 8%? it was $25 a lot of -- i don't know what any of this means necessarily. even some of the big media stocks, comcast having trouble staying above 33 >> yep
6:07 am
34 i'm not sure what any of it means. >> unsettling? >> are they aftershocks or preshocks? >> i'm hoping for aftershocks. >> are you sure? >> i promise you moody's downgrading tesla's debt further into junk status citing slipping production rates for the model 3. tesla shares are lower this morning. >> we only have so many of these flags. now i got one. >> i see >> i reserve mine. you can't have one >> i bet he can. >> i like to feel patriotic. >> at least not an american flag >> sure he can ready? >> thanks for my flag. >> no. no. >> can i get a flag, please? >> no. no only where it's appropriate. >> i need a patriotic flag
6:08 am
>> give andrew a flag. >> don't give him a flag no no flag. >> give him a flag >> stocks to watch today -- >> he's hurt okay you can share mine oh >> there you go. >> okay. >> thanks. >> doesn't feel right. i thought i would get the venezuelan flag. >> cuba. twitter is under pressure again. the stock fell more than 8% yesterday after noted short seller andrew left of citron research said he is betting against the company. this comes less than two months after he made a rare bullish call left said the about-face came as a result of the growing scrutiny surrounding social media >> they're obviously doing it. the senate wants to know to what extent it's being done we won't argue it's being done people woke up to the privacy issue last week.
6:09 am
it's been longstanding nobody cared about this. going forward i think at these multiples twitter becomes uninvestable until we see what happens and we see changes being made >> left says of all social media twitter is the most vulnerable to privacy regulation. lululemon's fourth quarter results topping forecasts. same-store sales rose 12% helped by a more than 40% jump in online sales and strong growth in europe and asia don't think i would have ever imagined i'm part of the revenu revenue. >> you have yoga pants >> not yoga pants. these are -- >> you're wearing lulu >> these are >> do a fashion show >> i'm not doing a fashion show.
6:10 am
>> are they stretchy >> get up from behind the desk so we can see -- >> they look like normal gray pants. they are stretchy. >> they're a little bit stretchy >> like jeans almost >> they look like jeans, but you can get by -- someone noticed. i think it was one of our fast money or half time report guys, they looked over and said are those lululemon? they are i would like to say i'm not embarrassed -- >> you admit it. >> i was just talking about lululemon. and these are -- they were ordered -- >> if nothing else, he's authentic. >> you wear weird -- you got all kinds of fashion choices you make >> i got sneakers going on >> it's rubbing off on me. >> good. >> thee were bought online, too. >> not by you. >> not by me >> how did you fit the credit
6:11 am
card into the computer >> mary duffy dictates what i do and this was a suggestion. good for mary. >> i'm actually looking forward to this healthcare conference now after this i was thinking i have to works for all day. i have to get out of here. >> stock alert this morning. shares of shire are popping in european trading right now takeda confirming they're making an approach to shire it is preliminary. no approach has yet been made to the board. >> let's get to d.c. the white house says it reached a new trade agreement with south korea and who knows more about it than kayla tausche. >> white house officials putting some detail behind that agreement in principle that the
6:12 am
white house talked about yesterday. much of this has already been put forth by the south korean government it is important for u.s. business in the deal you will see the 25% u.s. tariff on korean trucks that will remain until 2041. the deal will also remove duplicate regulation but does offer the korean side more governance options that it had been seeking as well it doubles the limit of u.s. auto imports into south korea. that limit was 25,000, which no auto manufacturer had been hitting, but nonetheless that gets doubled to 50,000, which senior administration officials said they expect auto manufacturers will start importing more vehicles into korea. one of the most important tenant force this deal tenants for this deal is what it does for the steel and aluminum
6:13 am
tariff this keeps the 10% aluminum tariff in place but replaces this steel tariff with a steel quota of 70% of the average steel that korea exported in the years 2015 through 2017. senior white house officials say that will represent a roughly 30% cut in volume for what korea exports to the u.s. in terms of steel. as for what that means for future negotiations with other countries seeking exemptions, a senior administration official said any current relief in one of these negotiations would require a strict quota to ensure that no country could become a country that allows for transshipment. it's important for the deal itself and for other deals moving forward no comment on nafta specifically which is the next deal that we will see finally on the news that china's foreign ministry announced on that visit to china north korea's leader, kim jong-un
6:14 am
pledging to denuclearize the peninsula. we're getting a tweet from president trump this morning he said through years and administrations everyone said peace and denuclearization of the korean peninsula was not even a small possibility now there's a good chance that kim jong-un will do what is right for his people and for humanity looking forward to our meeting the white house yesterday said preparation and planning is stull under w still under way for that meeting with no time or location set >> thank you very much for that. we'll talk more about trade with u.s. trade rep robert lighthizer that's at 8:30 a.m >> that is a convergence of consonants in his name, i will give you that. >> a lot going on.
6:15 am
>> need to buy a vowel >> where is vanna? >> we watch that now that's another thing >> what do you mean you watch that now >> every night >> do you do jeopardy and then wheel of fortune >> i like jeopardy better than wheel of fortune >> i can't do it either. i put the letters together that are there. >> living in a time capsule. i love pat so young and happening and funny. i love him i love her, too. nobody is surprised in tv land let's check the markets. joining us is kevin giddis from raymond james. and josh gelinsky. i've seen the articles, guys yesterday it was after the session, we may already be in a
6:16 am
bear market in stocks. we're in a correction but got well above 10% >> don't you have to be 20% below to be in a bear market >> yeah. they're saying this is the beginning profit social security to get to 20,000 i'm not ready to dismiss that. when you get 40% up, bear market, that is the official -- what you call it that's only a 50% retracement since november of 2016, right? >> so, as -- on behalf of the bond market we're happy to be backs as part of the conversation it's been a while. when you said bear market, i thought are we still talking about bonds being in a bear market now we're talking equities in a bad market not sure it's quite that time to panic. for the bond market this is a momentum trade caused bay series of missteps that has more
6:17 am
short-term effects than long-term effects. if we are going to talk about a bear market in equities, it's almost perfect for the bond market as it has been almost every march for the last three years. >> josh, it sounds like you're saying that the trade was a misstep. there was an interest rate increase there was inflation fears. there's facebook >> it was the march madness. sister jean is still dancing >> i like her. >> you have three big factors. the tariffs, fed rate hikes. you have facebook. facebook is a huge blunder but people just woke up. google is spying more on us than facebook is. you have to remember there's a lot of robo advisers, all of these traders they follow the 200-day moving average we have not hit the february 9th
6:18 am
retest until we break that threshold, i could not call it a bear market. this is still a bullish signal from february 9th to today >> do you think we go below 270? 260 on the ten-year? >> next move for the tens in particular would be crossing through 275, and from there it's pretty open until you get to 267, 268 if this trade continues, we can push it into mid 260s before hitting resistance in the bond market we went through a 50-day moving average quickly yesterday. it's possible that we could see a run back towards 260 between now and the next 60 days >> this time was really the time
6:19 am
we were going to see above 3%. we were on our way we weren't on our way? we're not in the bull market in bonds? >> average hourly earnings was the key catalyst of inflation where we thought now it's about to start the next two months worth of data put it back in a benign category tomorrow we will get core pce, a fed favorite even if you get a 0.2 increase that will take to you 1.6 on an annual year over year basis. far short of the fed's 2% bogey. while inflation is a great story to talk b the reality is it's not long lasting >> you heard one side of the aisle. first that you can't get to 3% because productivity and population growth, the tax cuts won't work then they started working. the latest complaint is you're doing this at a full economy
6:20 am
you're blowing out the deficit this is insane to be ramping up a 4% unemployment rate are we overheating if we're at 2.6? i don't understand where are the bond vigilantes that becky monitors? where are they do bond yields not go higher when there's global siynchronous growth >> it reaches a point. for the long end of the bond market it's always about the inflation story. if the inflation story is short-lived or has no momentum, rates will not go higher look at the auctions yesterday and the day before, there's still strong demand for u.s. treasuries, especially looking at them on a global basis. yields, while you think they are low, they were high against other currencies, other countries, even when you factor in the currency. to me, this is not a surprise to
6:21 am
those that do this every day >> josh, you have an s&p target foreye fo for year-end >> i'm still positive. >> to blso above where we are n? >> i think so. tax reform has not been fully realized until next year there's certain headwinds you have to be concerned about, but i wouldn't think -- i don't think much is stopping the bullish trade. you will have a melt up before you have a melt down we have not gotten to that heightened w eed euphoria stagee late '90s. we were getting close a couple months ago, but when your taxicab driver tells you to buy tesla, watch out >> that could have been the bitcoin moment they were not talking about tesla, but they were talking about bitcoin. >> was close >> not there yet >> no, that's a fringe element it's like your libertarian uncle
6:22 am
joe. >> yeah. >> i don't have any nieces or nephews. i might fit in there >> yeah. great uncle. >> frankie >> he wasn't referring to you. >> i don't have any nieces or nephews. i'm not cranky i'm in a good mood >> i would watch numbers coming out next quarter >> thank you, guys. when we come back, the opioid epidemic doesn't hit all starts equally we'll show which states it hits and the impact on the community. and later, scott gottlieb will be giving the keynote speech at the healthy forum later today.
6:23 am
more "squawk box" coming up.
6:24 am
6:25 am
right now it's time for the executive edge we'll start with stocks to watch this morning
6:26 am
nike will be the nfl's exclusive supplier of uniforms and apparel for the foreseeable future the two signed a long-term contract extension for eight years. the new deal will start when nike's current contract expires in the year 2020 and restoration hardware's parent had earnings that beat forecast the company does say it expects to pivot back to growth later this year. and sonic's revenue fell short on a surprise decline in same-store sales the fast food chain blames bad weather and aggressive discounting by the competition that stock is off by 4.7%. i believe there were concerns about the outlook as well. coming up when we return, the china factor we'll talk to two experts about the tariff talks, kim jong-un's
6:27 am
surprise visit before that, here's yesterday's winners and losers when this bell rings... starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected.
6:28 am
that's the power of and. wow! record time.s. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital.
6:29 am
when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows...
6:30 am
...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... over 200 booking sites find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews. the lowest prices.
6:31 am
♪ welcome back you're watching "squawk box" from the nasdaq market site in times square good morning welcome back to "squawk box. let's look at the u.s. equity futures. this morning you see things have improved s&p is in positive territory nope never mine it's not you we you are talking about flat lines for the dow futures and the s&p futures after a big down day yesterday. the nasdaq right now is still indicated down by 14.5% after declining 3% yesterday want to bring you up to date on news just out. goldman sachs is cutting its iphone estimates it is reducing its march expectation and is making a larger reduction in its june
6:32 am
quarter unit shares of apple down about 60 cents. goldman sachs has been bearish on some of the outlook for what you can expect with sales. >> apple got crushed yesterday, too. >> they got crushed as part of the tech knelt domeltdown >> well below 900, on its way to a trillion >> it may be on its way. >> may or may not be. president trump out on twitter saying received message last night from xi jinping of china that his meeting with kim jong-un went well and that kim looks forward to his meeting with me. unfortunately maximum sanctions and pressure must be maintained at all costs joining us now to talk geopolitics and trade negotiations, we have two gurus with us, peter alexander, and
6:33 am
leland miller. he has a new read on the xchines economy. give us the read and i want to dive into what these meetings mean what the tariffs mean what xi for life means all of it. >> a lot of people coming out of 2017 saw this organic momentum china had its hard landing and now it's going to explode in the next two years what we're seeing is a good first quarter performance. there was not a poor economy but you saw weakness starting to creep in from having all systems go throughout 2017 capex softening. profits weakening. you had indications that the type of strength they pushed for all of 2017, it will not be there through 2018 >> is that something therefore that you think not only becomes an issue there, but then affects the rest of us >> this is not the type of thing that will creep outwards a lot of this has to do with the trade actions bouncing back and
6:34 am
forth between the two countries. you don't want to see a weakened chinese economy, that will not affect the u.s. economy too much >> are we overstating or understating this potential for a trade war or the impact of the tariffs? >> i think we've been here time and time again there's always the tit-for-tat a lot of rhetoric. is the rhetoric followed up with policy my personal belief is that the steps being taken by the trump administration are probably the right ones but probably a decade too late the amount of exports that drive -- >> then they can't be the right ones >> what do you mean by that? >> you say it's a decade too late >> the impact of having tariffs that would go on to export to the u.s. would have a lower impact on the chinese economy itself than the case ten years ago. it was ten years ago, in my
6:35 am
opinion, you started to see the issues cropping up right now that were already there. but for various reasons they were never really addressed. i will see exactly where things go once trump decides whether or not these tariffs will be implemented. >> do we believe xi will open up the chinese economy in a way -- >> that's absolutely going to happen, especially on financial services >> you have been saying that forever. >> what happened sense i last was on they already moved forward with opening up the securities market so you have rules that will come out. they are under public comment until april 8th. they mentioned the other day there would be a big discussion at the forum most people would argue right now because trump is coming in and saying we'll put in tariffs, that they would slow down the market opening, but they won't >> let me ask about big tech
6:36 am
we just dealt with the qualcomm deal we heard that apple had to effectively cohabitate with a chinese company for the icloud services these are not signs of an open econo economy. wlofrnlgts is te >> who is telling apple they have to do it? >> the government. >> if they are so dependant that they have to bend to the will of the chinese government, they should have thought about that before >> so now we blame the companies? >> these were decisions based on the market in that country i'm not blaming anybody. >> but the question is how open the chinese economy is, right? >> right >> is china ripping off american ip can you walk in as a company the
6:37 am
way you can in the united states, walk into china and do business i'm saying there are some signs of it on one side then other signs of it on another that maybe things are getting tougher. you're saying that it's the company's fault? >> i'm saying why not just say no if they're being told that they have to do this to continue in the market. >> so like when google said we're not doing business here. >> exactly >> you think okay, that's interesting, but then who is at fault there? >> why are we casting blame or fault. i'm trying to say most of the decisions i've seen in the 20 odd years i've been there have been firms that have been very tactical in thinking regarding china and have not thought out the repercussions overtime of what that may mean the chinese from what i have witnessed firsthand are typically far more willing to negotiate under strength if you say no in a situation, they will pull back. >> in the apple scenario, i
6:38 am
believe they did push back >> okay. >> they say they pushed back >> okay. >> they say they lost on the push back. >> all right >> implications -- do you have any idea about this broadcom qualcomm deal and whether things here will impact things there? >> it's a signal for what to come people look at 301, saying it's about the headline tariff. if it's 50 billion, it's not too much 100 billion, it's more the big thing is the investment protections they're putting in there's an argument they're not going far enough the focus will continue to be on this headline number investors want to see tariff numbers. but the investment protections will decide the u.s./china relationship and then the actions that china pushes back our way. >> what does xi for life mean? >> president xi was going to be the most important person in
6:39 am
china for his lifetime because of what happened in the party constitution back in october and november by formalizing this nothing really happened but it is odd timing because you're seeing an unnecessary formizatialization f this short-term it's probably bullish for investors, but in terms of political scandal and currency crisis down the road t will be harder to separate president xi from the chinese economy >> we'll have craig winter on. xi could be there 50 more years theoretically. >> but you should also look at who is underneath him. you have chan who has been very important. now vice president you have two reformers, and then leo hu who has been in the background forever they operated under the tutelage of the ultimate reformer in the '90s
6:40 am
>> but all are supporting xi >> but they're feeding up into him with their ideas so that second level is important to us. >> okay. gentlemen, thank you >> we didn't even get to kim jong-un and what that meeting means. >> we didn't did you join the sorkin deal -- the -- >> you got my sweater of the month? >> that's a -- >> that's a nice sweater >> thank you very much >> the gift that keeps on giving like a jelly of the month. is that a sorkin -- >> i don't think it is >> it looks like it. >> it's one of our models, i think. >> coming up -- i like the elbow patches. >> yeah. >> see coming up in the 8:00 hour, congressman jeb hensarling will talk tax where is my flag talking taxes, tariffs and regulating the banks. and cnbc's healthy returns
6:41 am
conference kicks off today and a rare interview with u.s. trade rep robert lighthizer. we will talk north korea and trade negotiations with china. stay tuned, you're watching "squawbok x. hello. let's go for a ride on a peloton. let's go grab a couple thousand friends and chase each other up a hill. let's go make a personal best, then beat it with your personal better than best. let's go bring the world's best instructors right to you. better
6:42 am
yet, let's go bring the entire new york studio - live. let's go anytime, anywhere, with anyone who's willing. and let's go do it all right here. ready to go? peloton.
6:43 am
6:44 am
the recent federal budget deal including 4$4.6 billion to combat the opioid epidemic but is it enough to turn the tide of the nationwide crisis? let's bring in alex brill with aei, co-author on a new study on the cost of the crisis i've seen numbers all over the place about how much the crisis is costing the country what do your numbers toe >> there >> there's a couple ways to think about the costs, hospitalization costs, criminal justice costs, those estimates range from the high 70s up to 0 $90 billion a year in burdensome costs on the u.s. economy. when we add to that the values of the lives lost over 40,000 lives were lost in 2016 due to
6:45 am
opioid addictions. then the costs really skyrocket. the white house council of economic advisers had a report out last fall that put that total at over 5$500 billion a year >> the federal budget now putting in 4$4.5 billion for this sounds like a big number is that enough to get something done, make progress and try to slow things down >> i think it's a step in the right direction. that's not the first infusion of dollars from the federal government there have been other allocations in the last couple years of additional sums of that order of magnitude the key here when we think about trying to stem the tide, we want to think both about having resources available to provide treatment for those addicted as well as education, other activities like that to make sure people have access to the medical treatments that they need
6:46 am
ultimately we also need to think about how to make sure that physicians are prescribing less, both smaller doses, less frequent prescriptions, more appropriate prescriptions so people are less likely to get addicted in the first place. >> when you think about the cost of all of these issues, you do say that there is a geographic difference what does it mean for states and which states may be hardest hit by this? >> yeah. there's a real wide variation when we think about how this epidemic has affected different parts of the country this is the contribution of the work that my colleague scott ganz and i have put together we tried to allocate these costs by state and county. what we find in that result is on a per capita basis, places like the district of columbia, new hampshire, connecticut, these are leading states unfortunately for them in
6:47 am
non-mortality related costs. when we think about the total costs, adding in value of lost life, west virginia shoots to the top of the list along with d.c. and new hampshire there's certainly overlap between the two categories, but there's also some variations as well >> is that justification for really trying to target the resources on a geographic location >> i think that's right. both when we talk about federal dollars that are being deployed in the communities, we want to think carefully about where the epidemic is the worst. that could mean where the deaths are the highest but also other factors. and for local communities. this problem is not going to be solved solely out of washington, d.c. local communities will need to discover what the right solutions are for them to treat and prevent this epidemic from getting worse. they need to know as well where
6:48 am
they rank relative to their neighboring communities. >> alex, thank you it's good to see numbers like this because you done know if you're being effective if you can't measure these things this is a starting point for us. hopefully we can make some massive improvements appreciate your time >> thanks for having me on. when we come back, we go live to the new york auto show that's where phil lebeau is talking to top executives today. first is audi's americas president. first let's check on what's happening in the european markets. red arrows across the board. the dax has improved it was down by 1.3%, now down by 0.9% "squawk box" will be right back. nah. not gonna happen.
6:49 am
that's it. i'm calling kohler about their walk-in bath. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind.
6:50 am
call to save $500 off bath walls with your walk-in bath, or visit for more info.
6:51 am
yes or no?gin. do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.
6:52 am
welcome back to "squawk box. phil lebeau joins us from the new york auto show with a special guest. phil, good morning again. >> hey, joe. how are you? i'm bringing in scott kehoe who's the head of audi u.s.a big, big day in new york and a big night last night gorgeous green car behind us you unveiled it last night these are the one offs that really attract those buyers. >> i agree sonoma green 444 horsepower you know we launched the a5 a year ago the car has been selling out
6:53 am
we're excited to get the car here. >> i know the special cars do well a6, north american debut a lot of people sit there and look at sedans they say, is there really that strong pull for sedans still even on the luxury side? >> i'm with you. suvs are the name of the game. 50, 56% of the market. it's either zero or 100. there's a lot of markets for sedans this segment is still 200,000 vehicles we'd like to get our fair share, that's 20,000 vehicles the truth be told, sedans still do better than suvs, they drive better these are performance fun cars. >> your sedans you import from your plant over seas we need to slap a higher tariff on the vehicles coming in from europe how much of an increase in the tariff could you withstand before there's an impact where people will say, i'm not paying
6:54 am
that >> look, phil, i love these speculative questions but it's exactly that you and i know we've been navigating speculation for a long time now. we deal with the business of what's in front of us right now. what it is, we believe in free trade, we believe in competitiveness. make no mistake, 5audi and the entire group will brags for what comes our way. we deserve for free trade. that's what we fight for that's what we see happening. >> the other trade question is nafta, mexico. that's where you build your biggest selling vehicle, q5. it does very welcoming into the united states. if nafta is altered does it change the dynamics in terms of the attraction of the q5 >> that's a big speculation. we believe in nafta and trade agreemen agreements if you look at what nafta has done, it's moved cars.
6:55 am
we see what the president is saying if it needs to be modernized and be greater, that's great frankly, we're not involved in trade policies we set up our plants with the existing infrastructure as the government sets up make no mistake, we will compete and do what's right. scott skee who he. >> seems like we're talking about nafta more than the cars. >> exactly i regret that. >> one of these days guys, back to you. >> okay. thank you for that, phil we'll talk to you in just a little bit in the meantime, technology stocks selling off yesterday is it a sign of trouble in the sector or is the tech wreck a buying opportunity we're going to ask analysts in a moment. plus, u.s. striking a deal on trade with south korea in a rare interview with u.s. trade ghizesentative robert lither that's at 8:00 eastern time. squawk returns squawk returns just a lock in future prices,
6:56 am
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. i thwell wait. what did you meetthink about her? it's definitela new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital. when it comes to travel, i sweat the details.
6:57 am
late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... over 200 booking sites find you the lowt price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews. the lowest prices. today, the new new york is sparking innovation. you see it in the southern tier with companies that are developing powerful batteries that make everything from cell phones to rail cars more efficient. which helps improve every aspect of advanced rail technology. all with support from a highly-educated workforce and vocational job training. across new york state, we're building the new new york. to grow your business with us in new york state, visit
6:58 am
6:59 am
market alert after yesterday's slide, stocks looking weak again this morning. new this morning, china says north korea has agreed to talks about denuclearizing the korean peninsula. and the new york auto show rolls into town. >> watch out hello. whoa >> this year's theme, luxury we check in with the coo of bmw north america. buckle up and hold on tight as the second hour of "squawk box" begins right now
7:00 am
live from the beating heart of business, new york. this is "squawk box. good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. not that you'd guess it from looking behind us. i'm becky quick along with joe kernen and andrew ross sorkin. let's take a look at the u.s. equities this morning. weakness is continuing dow futures up by 47 points. right now we have some breaking news facebook making some changes to its data and privacy tools pe deidre bossa joins us. >> reporter: that's right. changes easier to find and deputy general counsel outlining the changes in a post saying, quote, the last week showed how much more week we need to do to
7:01 am
enforce our policies and we have heard loud and clear the privacy settings and other important tools are too hard to find and we must do more. now they include a redesign of the entire settings menu on mobile devices before, get this, it was spread across nearly 20 different screens. now they're going to be on a single page. also includes a new privacy short cuts menu and tools to find, down load and delete your facebook data including data facebook users have already shared there will be more changes to come facebook is facing blow after blow in the wake of the cambridge analytica data scandal from an ftc probe and potentially advertisers. now they're trying to reassure the company that it is listening and this shows the first concrete changes to the platform since the scandal broke. the question is, is it enough? some of these changes may serve to highlight how weak privacy
7:02 am
settings have been, becky, especially the one where they were spread across 20 screens. just now they're being put on one. >> deidre, it's a start. it's helpful to navigate that better also the idea that you can remove information that had been there previously i've struggled with this in the past when i tried to cancel my account at one point it never died no matter how hard i tried to get rid of things that's certainly a start it doesn't sound like facebook knows how many different parties actually took information and didn't delete it, as cambridge analytica did. we haven't heard any additional guidance on that and there's all of these other questions about things it doesn't look like we ever gave them access to or didn't realize we gave them access to things like if you were using an android phone, they were tracking every call you made and every text i would love to hear more disclosure from them about what was happening and how. those are the questions that just haven't been answered. >> i think a lot of people want
7:03 am
to know that and what the scandal has done has exposed a lot of that. you mentioned the android scraping there are privacy settings that didn't do anything since 2014 since they last changed their policies. >> really? >> this is a start but it took a crisis and a scandal the size of cambridge analytica to actually do this. you know, they have a big job to do they have to win back users trust. we've been looking at the stock and it's been brutal 80 billion in market cap over the last week and a half clearly they have a lot to do and -- >> deidre, help us with this i'm on facebook on iphone 10, x, whatever you want to call it do i need to download a new version of facebook to do this >> you may need to update the version. >> i don't even have an updated version available. no pending -- i'm trying to understand how this is all going to get rolled out.
7:04 am
do we know >> reporter: no, it does go live today. it's supposed to give you more visibility so it's going to make it easier. like that one example of, you know, privacy settings being spread across 20 different screens. that is just an enormous amount of labyrinth navigating users have to go through we'll be tracking this to see if users think this is a fix that works. this is going live now. >> here's the other question i'm curious because you're in the valley and we're not i have a sneaking suspicion, maybe i'm wrong generationally, that there's a whole group of people, not that they don't care about it, i've made the argument that they care about the political element and all of that, but that when it comes to other issues maybe they don't. now they'll say now i know and i'm okay with that i'm willing to make whatever that trade is. >> right i think that to that point a lot of people have stopped using facebook already it didn't really take the
7:05 am
scandal. they've moved on to things like instagram, snap. you think about how much we welcome technology here in the valley into our homes, right having echos in every room and giving amazon that kind of data. >> is this making people rethink that >> reporter: that's what i was going to say this is making people rethink all of that. that's why i think facebook is making these changes, because people want to know how they can protect that data better,where they might have been a little bit more lax on that this scandal is bringing to the surface what that data is actually doing to not just facebook but third party companies that may be using it for political use. >> does this have any impact on instagram? for example, does instagram track and do all of the things that facebook does or what's app? >> instagram and what's app takes different data you're not putting in your gender, your interests, your job, things like that. you're posting photos, but they do work with each other and there have been some concerns
7:06 am
brought up about what instagram is getting that may be the next phase of this people getting on facebook just to go on instagram isn't going to hurt -- you know, that's a plus for facebook but -- >> when you say people are getting off of facebook, do we think that 1% of people are getting off of facebook, 10 -- i know there's a delete facebook campaign going on, but what i don't really know is whether that's part of an echo chamber or whether that's really a mass movement. >> reporter: i think more the trend that we've seen is that the millennial generation is less than perhaps the older generation last week they were saying that he doesn't think that delete facebook has had any -- he said it's bad, but he said that it hasn't got any real traction we'll see over time. you compare it to something like delete uber which had a direct competitor like lyft, it's not that simple for facebook because
7:07 am
people are using instagram and what's app more specifically instagram. >> deidre, one point on all of this this is the focus on facebook and with good reasons, they're the ones at the center of the storm. a lot of questions they have not answered but, again, i think this brings up much larger concerns across what lots of technology companies have been doing. is the is there a sense that these other companies are trying to get ahead of what is eventually going to steam roll snem what about goi -- snem what about google, amazon >> i think there's a sense that, you know, you can't avoid some kind of new regulation the question is what does that regulation look like you look at the stock prices of twitter. it was down, what, 10% yesterday because scity citron research came out with they might have
7:08 am
the most concerning privacy kroelsd. everything twitter does is public everything users post is on a public platform. facebook is a little bit different whether it's open or closed there is a sense, particularly in the valley, with all social media companies that there's going to be some kind of blow back and there is going to be some kind of regulation. i think the big question and what a lot of folks here are grappling with is what does that regulation look like and how can it be put in place without coming at the expense of innovation. >> i'm on this privacy page right now on facebook and there's still limits to what you can control. who can see your friend requests you want it to be friends of friends or do you want it to be everyone you can't limit it to your friends or to no one i mean -- >> so, yeah, we'll hear that today. maybe, becky, yours is one of the first feedback they're supposed to be making it easier look for that privacy shortcut menu it's a complicated -- it's a
7:09 am
web. facebook, people have been on it for years and there's a lot of information. i mean, just -- i think about myself going back and looking at the sheer amount of data that i shared five years ago and what does that look like. what do i want to be out there that's a huge job for anyone to do if they can make it easier to do so, that's a start >> deidre, thank you very much let's get back to the overall markets right now. the futures are now positive mike santoli joins us on set and i wonder, mike, let's take a look at the futures. they were up, they still are i wonder, we've gone back and forth. did i -- did we -- use a george bush term. did we misunder estimate the complacency? >> yeah. i don't know if we completely didn't appreciate the level of complacency, but if we need to have as much of an over shoot as you got in january with the
7:10 am
exuberance, we probably didn't get there. 50% retracement since the move, we were up 40% that would put us bear market, 20%. >> yeah. i think the longer this goes on, i think you're going to hear the talk start up about it's actually kind of a bear market already. 60% of the stocks already are oversold already down 20% i think that's the way the debate's going to go whether the indexes get there or not, i think that a lot of fixation on the lower end of this range i don't think that -- it's not make or break. >> what about the ten year >> and the ten year. this is the story. the narrative keeps transitioning to something new in january you were able to scapegoat, 10 year yields going up above 10% that was the challenge then it was the flukey volatility changes, they sunk us that was thought to be set aside.
7:11 am
then it became facebook scrutiny, tariffs. now it's kind of well is there a trend change underway. are people trapped in the crowded trades what's interesting, even this week, the market has attempted to kind of quarantine facebook or alphabet. then yesterday it broke loose. no more ability -- two days ago microsoft's up 6%. yesterday it gives it back amazon mid morning, late morning yesterday was up 1%, kind of holding the whole market together and then it gives way, it's down 4% >> is that just momentum >> it's crowded trades kind of, well, this holding of mine and my large growth portfolio was down a lot i'm taking risk down, i own a lot of similar type stocks that's part of it. the other question, there's nothing to really pick up the slack when you have this bent market wide on tech. >> how much of this is end of
7:12 am
quarter, people trying to clean things up, limit losses, saying here's what i'm going to present. >> that's a big question right now. we don't really know it's an unusual circumstance the guys down on the floor were talking about it very unusual circumstance to have a three-day weekend after quarter end. easter's early good friday is a non-trading day. does that have a role. we don't really know on the other hand, we were talking about late january we peaked on january 26th. everyone said, this is month end rebalance. of course this is going to happen i think to the degree we don't think it's just mechanical factors, then the psychology gets to the point where we can get a little bit fearful enough that we get -- i still think this is this complex testing process that's going on. i don't think yesterday undid, you know, monday's rally, but it definitely dented the psychology you know, joe mentions the ten year slipping below 2.8. that was basically where the
7:13 am
market started to get some acceleration on the down side yesterday. the banks were for sale at that point and banks and tech go down together, the overall index is there. is the bond market saying that the economy doesn't have this momentum pickup we're expecting? i don't know if that's what it was or if it was a reflex risk aversion. >> okay. maybe these guys know. probably not joining us now, tom manning, president and ceo of putnam investment company and barry james, uh-oh, two first names. president and portfolio manager at james investment research tom, you think this is a time to buy, stocks are actually cheaper than they were a year ago? >> yeah, i think that's correct. stocks are definitely cheaper than where they were a year ago given the tax cuts that we've seen we definitely expected a retest of the bottoms right now that's what we're looking at it's company specific to a certain degree and those
7:14 am
companies that are suffering right now obviously are megacaps they're bringing everything else down with it the tariffs at the same time, creating additional market volatility so, you know, let's see what happens when we get through the end of the quarter and whether we're able to hold these lows. i think if we do, we're going to move a little bit higher from here. >> barry, you're not so sure >> well, what we see is a situation like yogi berra talked about. when you come to the fork in the road, take it, and i think the market participants are at that fork and they're wondering, which way do i go? i say don't chase. don't chase. don't be buying heavy on up days and don't be selling heavy on down days. use a counter punch. when the market is down, do some buying expect to be where we are for four or five months at least, somewhere in this type of cycle. don't be chasing it. >> what do you attribute this
7:15 am
to is it just a -- something that's going to happen and then we ascribe certain news events to it or is it really -- was it tariffs, was it the fed, tech? what's causing all of the increase in the vix and all of the sideways -- sideways -- we probably like sideways compared to what's been happening >> certainly we'd take sideways compared to what's happening what's happening here and 400 days and lack of market volatility we'd welcome that again. you never know what's going to take the markets down from certain levels as i say, this volatility has been created by a few stock specific events, particularly around facebook and digital advertising and the impact on that market. there are megacaps when those things move, they tend not to move in isolation. they take big swathes of the market down with them.
7:16 am
you combine that with the uncertainty and saber-rattling around tariffs, you have a cocktail for a move down in the market and i think that's what we're seeing there the economic underpinnings are still strongso we do think we'll recover and to his point, this may last for a while but we'll end the market higher than today. >> barry, do you have -- i mean, are you in the business of making s&p price target -- where do you think we'll be at the end of 2018? >> i tonight think we're going to be much higher than the highs that we've seen this year. >> not going to be 10% lower that would be saying something >> we might be 10% lower at some point in the year, but i think things will start to pull. one of the things we've done, the research we did with looking at tax cuts and the year before the tax cut the market does great. the year of the tax cut when you finally put in place, the market's done nothing in the last four times so this is just
7:17 am
normal but the next four years, hey, the tax cuts really take effect and they're very, very positive for stock. >> all right, gentlemen. thanks barry. >> thank you when we return, a tech wreck. fang stocks getting hit very hard this week, and this morning two analysts are out with cautious notes on apple iphone expectations we will talk all things tech with gene muenster right after this break stay tuned, you are watching "squawk box" on cnbc the cnbc healthy returns conference kicks off in just a few hours at the roosevelt hotel here in new york city. a gathering of top health care investors, ceos and research teams that are exploring innovations that will drive this sector to better health care in this hour, the president and ceo of the mayo clinic james knowsworthy talks about health care collaborations
7:18 am
and fda commissioner scott gottleib and vague venter will be our special guest coverage begins all day long right here on cnbc more "squawk box" after the break. you know what's awesome? gig-speed internet.
7:19 am
you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. show of hands. let's get started. who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade
7:20 am
the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. 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, and more downloads in seconds, not minutes. get fast internet and add phone and tv for only $34.90 more per month. comcast is building america's largest gig-speed network to give small businesses more. call 1-800-501-6000 today.
7:21 am
welcome back to "squawk box. another tech tumble. show you what's going on nasdaq down nearly 3%. joining us with his take on what the heck investors should be doing and considering during the sector's performance, gene munster, founder and managing partner at group ventures. good morning. >> good morning. meltdown we've talked about meltups this was the opposite. it feels like everybody was put in the same basket how are you feeling about it this morning, gene >> there are two baskets the big basket is around the fundamental secular shifts that are still great opportunities. this is around ai, robotics, artificial intelligence. i think these even though they're used a lot, i think these are fundamental areas that you can continue to invest in. companies like apple, tesla,
7:22 am
nvidia then there's the bucket of social you've talked a lot about it on the show this morning. i think there are fundamental issues around not only the privacy piece but also does the world actually need these platforms. i don't suspect that they're going to go away i see those buckets, that social bucket as a bucket of stocks that probably isn't going to do much on the up side over the next six to 12 months. >> because of regulations coming or because you think that everybody's going to hasht #deletefacebook? where do you ascribe all of this to >> i think that some of the policy changes that you're talking about today are going to impact some of the effectiveness of this advertising. as they continue to rein in the type of information that they can share with other third parties, that has an impact. obviously with twitter in terms
7:23 am
of licensing business, sales, in terms of facebook it's hard to see about what that means for some of the lift that advertisers are going to get i don't -- i'm old and so i don't think that there's going to be -- i don't fully understand the need for people to have facebook i don't think that there's going to be some huge aversion to instagram or facebook. i think that those platforms are going to be around forever, but i do think some of the lift that you're going to see because of some of these policy changes can impact the advertising effectiveness. one last piece is this whole narrative plays out around privacy and separately do we need these social platforms? we need to think for the first time is advertising on facebook a liability? you've seen a couple small advertisers, pep boys and m mozilla back off it's subtle things that make us think not that facebook is going to go down dramatically but think that the stock is going to be stuck in the mud for six to
7:24 am
twelve months. >> let's talk about google they get dragged into this conversation, sometimes not. they're collecting an awful lot of data as well. what are the implications there? >> well, google's potentially at risk obviously like you said, they're collecting a lot of data it's hard to see how that goes you think about the big picture, companies that are well-positioned will be apple on the privacy side google is -- has some exposure here the one piece that makes me comfortable about the google story is that the world can't live without google. we need their surge. that's different than facebook the world can't live without google to answer your question, i'm bracing for something negative to come out around how google uses their data and shares privacy in the next 6 to 12 months i think that could be negative for the stock in the next year it doesn't change the fundamental belief that they have large opportunities around surge, around maps and all of their other bets so i still am positive on the story longer term.
7:25 am
>> where do you put snap or twitter? >> they're in the ugly bucket right now. i think even below where facebook would be and i think in the case of snap, they have issues around social and privacy but they have a big competitive project is facebook keeps ripping off their features and is gaining more users on instagram stories. in terms of twitter, 14% of their revenue comes from the licensing business that grew at 18% last year licensing business is code for selling your data. and so that was the part that's -- >> really? >> -- the shiny part of the twitter story. >> can i ask you very quickly, gene there have been two firms that have come out and downgraded their estimates, sales for apple for the current quarter. goldman and rbc is one they're concerned that people aren't upgrading as had been anticipated for the first and second quarters of the year. what do you think about that
7:26 am
>> i think it's tone deaf. the reason is that they're missing the point. the point is not whether the iphone grows at 3%, is down by 3%, the point is that the iphone has become a stable business negative sentiment over the next few quarters, that came when they gave guidance this is rehashing some of the older news if apple can just keep their hardware business essentially flat when you think about it over a four quarter period and continue to grow services on top of that and do a share buy back which could have 4% to the stock every year, i think when you put all of that together you still get a stock that works the last piece, like we talked about earlier, is privacy is a huge part of what apple is doing. i expect them, i was at this event yesterday in chicago, they were heavy on that message i don't blame them that they see an opportunity still in good shape. >> yeah. >> gene, great to see you. thank you for helping us try to sort through some of this. talk to you soon >> thank you when we return, a brouhaha
7:27 am
at yankee stadium. why fans are buzzing about the beer in the bronx. squawk returns with that story and a lot more in just a minute. time now for today's aflac trivia question. what company developed gorilla glass? the answer when cnbc "squawk box" continues thanks, dad! break a leg! aflac?! not that kind of break. oooh! that had to hurt. aflac?! not that kind of hurt. yto help with our car paymentsst oand mortgage. aflac! perfect timing! see how aflac helps cover everyday expenses at
7:28 am
he gets the best deal on the perfect hotel by using. tripadvisor! that's because tripadvisor lets you start your trip on the right foot... by comparing prices from over 200 booking sites to find the right hotel for you at the lowest price. saving you up to 30%! you'll be bathing in savings! tripadvisor. check the latest reviews and lowest prices.
7:29 am
7:30 am
now the answer to today's aflac trivia question. what company developed gorilla glass? the answer, glassmaker corning, inc. ♪ ♪ good morning welcome back to "squawk box" right here on cnbc we're live at the nasdaq market center in times square mortgage apps rose 4.8%. new purchase applications and refinancing activity increased the average 30-year mortgage rate edged higher by one basis point during the week to 4.69% earnings out this morning, got them from walgreens. they came in 18 cents above estimates with profit of $1.73 a
7:31 am
share raising the full year forecast based on benefits of the new tax law. take a look at shares of tesla they are lower in the pre-market they have cut the automaker's rating by 1% there's a short fall in the production rate. tesla's model three has been a struggle and challenge for the company. >> look at where that is on the year chart >> back to the beginning >> yeah. >> made a full circle. now what >> technically >> yeah. i mean, i don't know anyway, now some -- some squawk booze news the new york yankees debuting a machine that can imprint images on beer foam. >> what? >> including the likenesses of some of their star players, but if you're dreaming of an aaron judge on a pilsner on opening day, they run afoul of major
7:32 am
league baseball's policies it won't be available at yankee stadium. >> can they use old guys who have retired here's the babe. >> yogi, something like that >> it is a special day here at cnbc we are presenting a one-day event at the roosevelt hotel in new york that's bringing together top health care investors. ceos and technologists trying to explore the innovations that will be driving better outcomes, financially and clinically meg tirrell joins us with more meg, good morning. >> reporter: good morning, becky. well, we're going to have a big day of news here at cnbc's first ever healthy returns conference. health care news kicking off the day for us japanese drug maker takita is looking to acquire shire up almost 19% in the pre-market trade. they had to express that interest they have until april 25th to
7:33 am
make an offer. there will be a lot of speculation here at the conference we'll be kicking off the conversation with fda commissioner scott gottlieb. beyond that, a lot of conversations about how health care is changing a lot of pressure to the system, of course from the amazon, jpmorgan, berkshire hathaway merger announced just recently a lot of biotech companies, especially the larger ones, under a lot of pressure. bioge biogen, celgene. industry consolidation, cigna, aetna, cvs we'll talk about the most cutting-edged technologies happening in medicine including gene editing, use of big data and joe is going to cap off our whole day with craig venter, pioneer in genetics. stay tuned to catchall of this back over to you. >> meg, thank you.
7:34 am
we are excited about this. >> i'm going to -- i only have a half hour i think with venter, meg, and it's all going to be about whether i can extend my life because human longevity is what -- so we're -- it's probably too late to get totally sequenced. >> gene sequenced? >> before 4:30 yeah, totally sequenced. >> maybe if you drop off a blood sample now, joe, they can do it by 4:30. >> you know what, you need the full scan, meg i've looked into it a lot at what's possible. it's pretty unbelievable, the type of diagnostic sort of tools when you combine genomics with this new imaging system that he has. i know you're familiar with it it's expensive, sorkin >> yeah? >> 20 grand? >> 20 grand. >> meg, it sees things -- you know -- >> i'll spot you >> we have the idea that if you look healthy, you are healthy. that's what he says. that's the antiquated notion
7:35 am
if you can look at things that aren't even going to be a problem for five or ten years, you can address those problems before it happens. i don't know how we're going to pay for it. >> dr. venter says everybody has something. >> right >> right right. do we want to know can we act it's a scary prospect that's really interesting i'm looking forward to it. >> false positives and false negatives and everything else. we've talked about that before i don't like either one. i don't want to think i have something that i don't have and i don't want to know about something i do. >> a false positive versus a false negative >> it's tough. false positive or false negative both bad both bad. >> one's worse. >> meg, thanks. among today's special guests that will be in attendance at the conference is joining us on set. the afore mentioned dr. john noseworthy it's great to see you. ceo of the mayo clinic. >> great to be here. >> there are three major areas that we're going to try to cover today. i would say one is consolidation, one is disruption
7:36 am
and innovation is a huge issue mayo clinic is known for finding innovation >> so much going on. there's a lot of consolidation it will drive higher quality mayo's been an innovator for a long time. it comes from all of those various situations research, software, all of those things happening with big data that we've heard about >> you wrote an op ed where you talked about innovation that you actually found in chinatown at one point in san francisco. >> sure. >> what happened >> things just come from your blind spots. that's where we want to work with these young companies and investors. where's it coming from you've seen the consolidation. you've touched on that the payers, the distributors, pharmacy benefit managers all
7:37 am
the way down to patients how do we remove some of those barriers to getting high quality health care. things are happening with all of the payers, united, aetna, now of course what's amazon going to do >> amazon, jpmorgan and berkshire hathaway teaming up and saying we're going to try to find a way, not only for our employees but something corporate america at large can find a solution to try and cut the growth that we've seen in health care costs. where do you think they might have some of the best ideas and best ways of tackling that >> well, you know, we've spoken with them and i think they're looking at this consolidation story. the whole health care vertical in fact, data driven answers and get that to patients how do you remove the intermediary steps
7:38 am
they say, no, no, no, we save a ton of money when it comes to medicare. >> all of these industries have matured and they're rather well done and very efficient but are they all necessary that's the key point can you go directly to the patient with some of these answers and some of these products that's a complex area. i don't think there are bad companies in there but in that space can that be simplified. >> it sounds like you think the answer is yes. >> i'm certain it's yes. americans deserve to have answers to their common and not so common problems that are data driven and direct to them. that's where we're going to go we embrace that. we're working with all of these groups to try to drive out that waste, which is huge parts, at least 1/3 of the cost of health care is that part of the space that adds no value. >> yeah, but there's waste and there's also people that are -- have a vested interest in keeping things the way they are and it's nice to be in the health care business when the
7:39 am
margins are fat and it's going to be tough to take it away from certain -- >> right i'm not singling out anyone whether it's doctors or middlemen or drug companies or any of them, but think about it. think about what you're making when it's growing at 10% a year, health care -- i don't know what inflation is now but when you try and take that away, which we have to do, there's going to be people that are resistant. >> this won't be easy, i agree, joe. this won't be easy ultimately the goal is to get to that place where patient care is -- there's access to it for everybody. access to real answers and then in the mayo clinic situation when there are tough diagnostic problems or complex procedures to be done, patients know where to go and get better outcomes. we'll get there. it's going to be a struggle. >> venter is going to be on later in the show and i've talked to him. he feels some push back with some of the things that he's doing because it will displace other people that have a vested interest in keeping things the way they are.
7:40 am
>> a great example - >> that are doing things differently now. if you change that, they're not going to be able to -- >> left out. >> you're a biologist or were. >> right right. >> we're all getting older you talked about predicting aging. there's great science there to remove, you know this, scenesencent cells they remove those cells from our body so we can live longer and have higher quality life it's an investment in each of these areas to drive to that better outcome. >> bezos, buffet and dimon are together have they called you has anyone from those groups said, hey, we want your advice on how to do this? >> yes. >> yes >> and and what are you exactly telling them what are they -- >> well, that was a call to me about what do i see and what could happen and i shared -- >> what does it look like? >> well, they're not sure yet. >> no, i know. if you were telling them exactly how to do it, you would tell
7:41 am
them what? >> i would tell them that consumers need to have information that's relevant to them at lower costs that's more accurate how do we get that to patients >> does transparency play a part in that? >> that's huge. >> i don't know how much i'm paying for something. >> transparency of costs and transparency. >> of outcomes >> of outcomes. >> for some things if i were to go to one place and get a scan versus another place, you're talking about thousands of dollars. >> some of those are prices as opposed to the true cost of getting -- again, we talked about this before. getting the right answer, you might have to invest to get the right answer but you want to get the right answer the first time so you know what it is and what you can do about it. this fragmentation of health care is what drives up all the costs. this activity that all these various groups are doing is to try to disrupt that fragmentation to get those high quality answers more quickly at lower costs. >> dr. noseworthy, want to thank you very much for joining us
7:42 am
today. we're excited about this conference and looking forward to everything that comes we will see you there later today. >> beer -- doctor, beer with reservatol. >> that's? >> it's a weird substance in red wine it lengthens the telomeres. >> does it work? how does it taste? >> i don't know. >> just drink red wine. >> you can get a yankee's face on the foam and have reservatol. >> that will make you live longer we have much more to come from the health conference today. thank you, doctor. coming up when we return, futures swinging wildly this morning. we're now pointing to a higher open the drivers, we will explain what is going on when we return. under the hood at the new york auto show bmw's north america ceo talks pricing power, luxury cars, china trade, nafta concerns and
7:43 am
more buckle up. "squawk box" at the new york auto show is coming up
7:44 am
7:45 am
7:46 am
up next, the auto show is in town this year the theme is luxury. i guess that makes sense phil lebeau, what's coming up? >> reporter: joe, it's always about luxury this year at the new york auto show, a lot of talk about suvs which makes it appropriate that i'm standing in front of the bmw x4 we'll talk about trade, so much more when "squawk box" returns i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. 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
7:47 am
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. that's it. i'm calling kohler about their walk-in bath. nah. not gonna happen. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind.
7:48 am
call to save $500 off bath walls with your walk-in bath, or visit for more info.
7:49 am
the auto show is in town and phil lebeau joins us right now he has more on what's been happening and a special guest. phil >> reporter: thank you, becky. bernhardt coon in front of the new x4 you just unveiled this last night. suvs are hotter than ever, correct? >> suvs are hotter than ever we've launched the brand-new x4. >> reporter: for the luxury segment, suvs make up half of the sales. it's not just about is he dance.
7:50 am
>> the volume market is already 65%. the premiere market is getting 65%. we are participating in the year of the x for bmw. >> you know president trump is threatening to put higher tariffs on vehicles built in germany, imported into the u.s. which would obviously impact your sedan sales how much of an increase in the potential change of tariff could you withstand before you feel the pain where customers say, you know what, i'm not going to buy a german made automobile >> phil, i'm not a politics. what i'd like to say is we feel in a very strong position. we have spartanburg. we export 70%. sell 30% here. i have to say we feel in a very, very good position. >> so even though there could be changes with the german tariffs for those vehicles built there as well as with nafta, you think that spartanburg gives you a little bit of a protection, if you will, in terms of the fact
7:51 am
that that's where you build all of your vehicles >> we built spartanburg 25 years ago. it's the biggest factory we have globally i feel we are in a very good position in comparison i don't know how to describe it. >> you have the factory beginning production you'll move the three series down there any chance that you might see bmw adding another factory here in the u.s. or do you say spartanburg is as big as it is, i can't see us adding another plant? >> mexico, to answer that question, yes, 2019. globally we're going to sell and produce globally spartanburg itself is something which we currently focus on. i'm not aware of any plans to have a second factory at this moment in time, but who knows. >> reporter: bernhardt kuhnt, as he's smiling because the demand for luxury suvs stronger than ever, not just here at bmw but you talk with all of the luxury manufacturers, they're all seeing it.
7:52 am
guys, back to you. >> thank you for that. coming up when we return, fda commissioner dr. scott gottlieb going to join us at the cnbc healthy conference. "squawk box" newsmaker, robert lighthizer is going to join us the president's trade agenda, tariffs and so much more you're watching squawk right here on cnbc you know what's awesome? gig-speed internet.
7:53 am
7:54 am
you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. ♪ ♪
7:55 am
take a look at some stocks this morning lululemon, love that company the estimation are better than expected the sales forecast. >> that's it >> they have it. >> yes
7:56 am
>> sonic i feel better. >> it's drinks blue drinks. >> it's below consensus. >> yeah. yeah wrote them in cheap. >> financial services committee. will be here on set.
7:57 am
>> scott gottlieb. >> stay tuned, you are watching "squawk box.
7:58 am
♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony. what are you working forward to?
7:59 am
but prevagen helps your brain with an ingredient synchrony. originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.
8:00 am
a makeover as the social media looks to recover from that massive data scandal >> breaking news >> the pact with south korea it's minutes away. >> last sour apple analysts slash expectations. >> "squawk box" begins right now. >> live from the most powerful city in the world, new york, this is "squawk box." good morning and welcome back
8:01 am
let's get a check on the markets. the futures right now have turned positive. up about 77 points you had 800 points it's a down day. this is what we do now down 80 points it's over. >> make it today. >> you take the call. >> the highs are going down. if you draw a little
8:02 am
>> take the insurance there. >> facebook having new privacy making it easier for that. we have 20 pages >> facing a lot. >> goldman sachs cutting the forecast sales the price target on the stock. weaker than expected
8:03 am
meantime rbc reducing its iphone unit expectations as well. silts' a different calculation going into it. >> the white house says it has reached a new trade agreement with south korea the pack opens to more u.s. autos in exchange for relief on the steel tariffs that president trump announced last week. the agreement also includes concessions by south korea on currency evaluations in the next half hour we'll talk about the new agreement with our u.s. trade representative robert lighthizer. house financial services committee negotiating with the senate democrats warning that bipartisan efforts to put forth in the senate will be jeopardized if the committee pushes for more reform
8:04 am
joining us is jeff hensarling. great to see you this morning. a number of headlines. politico says hensarling's last stand blocking the banking bill. similar headline the american banker, is this jeff hensarling's last stand. is this your last stand. >> at 5'6" i didn't know i could stand against anything we are simply as the house trying to negotiate bipartisan bills with the senate. and so this bill that the senate came forward with, which i'm very happy they came forward with anything, it's a bucket of bipartisan bills guess what we have a bucket of bipartisan bills in the house as well, many of which don't even touch dodd-frank and a third of which either halved unanimously or by voice vote, serving registration requirements for small m&a brokers, bills that have to do with the on ramp for starbucks,
8:05 am
404b so we have a lot of bills that we think, you know, it's a home run it can, to mix metaphors, move the needle on economic growth. i'm kind of surprised because last i read in the constitution there were two houses of congress and if people haven't read the constitution recently, maybe they'll remember schoolhouse rocks and -- ♪ >> "the wall street journal" opined we're not a potted plant. this is conservative ideology, no these are bipartisan bills so this is what we've done in the house. the most important thing we've done is i think we have a 3% tax code now 3% growth tax code but we don't have a 3% financial regulatory structure. in the house we've been working for months and we've passed almost 100 bills well, i look for those that have the strongest bipartisan support and that's about 1/3 of them. >>en, what you're saying sounds like two different things.
8:06 am
on the one hand you're saying these are unanimously supported. on the other hand it's not a 3% regulation bill. which one is it? are you looking for broad bases to say the house has issues that we've been able to be bipartisan on >> both. i wouldn't put forth the legislation if i didn't think it could move forward the growth needle on the other hand we're not trying to poison the well. this is the way congress operates you get a bill out of the senate, you get a bill out of the house, you negotiate your differences. it would be one thing. i would understand the argument if the democrats were saying hensarling is bringing forth republican bills many have democrat sponsors, co-sponsors. >> negotiations. >> ore wise the bill that the senate passed which is on the speaker's desk is going to remain on the speaker's desk until and unless they negotiate.
8:07 am
maxine waters negotiated for half the bills again, this is -- somebody needs to explain to me why they can't accept this legislation. >> that sounds totally reasonable my guess would be the senate would come back and say, hey, we barely cobbled this group together if we go back, we risk losing it what do you say to that? >> i believe this sets a floor but it shouldn't set the ceiling. again, otherwise, i don't know what i tell my house members why do you bother to sell up and rubber stamp what the senate does we've got an opportunity to put some pro growth measures in that are bipartisan in the senate. >> let me ask you separately, what's your take on the budget >> i think we still have huge problems i'm glad we have a 3% growth economy instead of a 1.6 we are on a spending trajectory that continues to be unsustainable.
8:08 am
there's a lot of things that can help there's one answer reform, current entitlement for future generations. >> final banking question for me, the role of the finance industry as it relates toguns, gun control. one of the things you saw last week was citigroup come out and say they were going to stop doing business with retailers based on certain criteria around the sale of guns i'm curious, have you thought about that what you think about that. i know i've even heard potential retribution against financial firms. take those steps in the same way that delta was treated in georgia. what do you think? >> well, i still fight for a free society and a free society corporate entity is allowed to have their own corporate culture and they're going to have to go with their cultures. >> right. >> those are decisions that they have to make that is separate and apart from a very, very serious issue, what do we do about school safety
8:09 am
i say that, i have two kids in school in dallas today, profound debate about the second amendment but, you know, they're going to have to deal with -- >> do you think it's fair for corporations or banking institutions to try to think through some of these issues and come up with steps in the same way that dick's or walmart or other retailers do is that something -- is that something that you are supportive of? >> again, i am supportive in a free society of a corporation having their own culture and making those decisions, but they are going to have to live the results. >> because of market price >> if they choose to boycott the company because they don't appreciate the corporate culture, again, that's part of living in a free society. >> can we talk about climate change do you just pick things that are important? >> no, he runs the -- he's a banking guy. the banks are taking -- >> where was your column today what happened? i thought tuesday was -- >> tuesday was yesterday.
8:10 am
>> is today wednesday? >> there was an entire column yesterday. >> you're back on -- okay. all right. advocacy. >> not advocacy. there's a lot of people -- >> you're a social lawyer. >> there's a lot of people thinking about -- >> we need social lawyers. he wasn't thinking about it when he sat down. i guarantee it he's like, what? >> what about climate change are you -- where are you on that >> come on virtually every major ceo in america right now in the banking sector and others are talking and thinking they all have task forces and internal working groups who are thinking about the issue of guns and what the relationship should be with them. >> the latest was john paul stevens yesterday is what you should -- 97 years old he wrote "let's repeal the second amendment." and some people think that doesn't help the case of gun control people because it sort of cat comes out of the bag. >> at least he was honest. >> at least he was honest. the left says, oh, holy crap,
8:11 am
now this person is actually saying what the -- if you say that, then that's going to energize the right immensely so that's -- >> let me just say, i think that all of the efforts that have been made thus far revolve around taking it from 18 to 21 years old. four times more -- hold on there's four times -- the rate is four times higher forpeople who are 18 to 20 than it is -- >> i know. >> bump stocks is another. >> bump stocks is an issue. >> i know. >> large cartridges and background checks. i don't think those are completely unreasonable things to consider. >> yesterday it was a lead editorial piece from a former supreme court justice that said let's repeal the second amendment. that's what the parkland students should focus on so i'm just saying and -- >> is he saying that as a constitutionally clean way of doing it. >> there's a way of repealing it what do you need, 2/3 -- >> very high bar to repeal an
8:12 am
amendment. >> at least he's honest. >> i know. and climate change >> i want to be clear that i have not made that suggestion. >> i'm not saying that you did. >> every suggestion i give goes around the banking world and corporate world. it's around age -- >> i know. you wrote your first piece. >> let's not forget mental health. >> mental health is a big issue. >> very big issue here. >> harder one for the financial sector to figure out. >> mr. chairman, thank you for your time. >> thank you for having me. when we come back, we've been talking about it all week the cnbc healthy returns conference which kicks off in the next few minutes fda commissioner dr. scott gottlieb will be speaking but first he will join us ght ri here that's right after this break. stay tuned, you are watching "squawk box" on cnbc and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure.
8:13 am
building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential.
8:14 am
8:15 am
all right. welcome back to "squawk box," everybody. we've been watching the futures this morning we started off in the red, moved into the green and now we have continued to fuel those gains. of course, what happens in the morning has not been indicative of what will happen by the end of the session you see the dow futures indicated up by triple digits. i know people are sick of hearing triple digits. it is a move of almost 100
8:16 am
points by the dow. s&p up by 10 and nasdaq up by 23 this comes after a day of steep losses we'll see what happens in the next hour and 15 minutes as we get closer to the opening bell. cnbc's healthy returns conference getting underway at the roosevelt hotel. joining us is the morning's keynote speaker, fda commissioner dr. scott gottlieb. thank you for being here >> thanks for having me. >> you know, i don't want to front run your speech too much, but what do you plan to say today? >> we're going to talk about some of the things that we're working on at fda, some of our policy priorities, things we're doing ashtd tobacco regulation, trying to bring down the price of drugs and bring competition into the market. a lot of the policies that we've advanced and are going to be advancing to create incentives for new drug innovation and try to advance areas like gene therapy. we see a lot of opportunities to make the improvements in human health. >> we've talked to you about some of these initiatives.
8:17 am
looking more broadly at your tenure in the time that you've been commissioner at the fda, some people thought you were going to be very pro pharma. what's happened is you have tackled inefficiencies that you have seen as a doctor and as someone who worked at the fda in the past how did you lay out your path and mission for what you plan to do at the fda? >> well, i think we're pro public health. i came in there and there were certain areas i wanted to work on where i wanted to set out an agenda we wanted to address drug pricing issues, competition to market, we wanted to address the crisis of opioid addiction i wanted to advance policies that would enable areas of new policies like gene therapy we saw a lot of opportunity from that my approach to coming into the agency was to work very closely with the career professionals in the agency and let the ideas come from the staff on how we would advance those areas. i tried to focus some energy on areas that i thought we should be focused on from a leadership
8:18 am
standpoint, from an agency stand point but i really worked closely with the professionals in the agency to come up with the discrete ideas on how we would advance those initiatives. >> where have you run into walls that maybe were a little more complicated than you anticipated? where have you hit issues that you thought, okay, we should be able to make progress on this and maybe run into roadblocks you hadn't anticipated >> well, look, i think we made progress on everything we set out to do. i feel really good on what we've been able to accomplish. everything is a little bit more difficult than you might anticipate advancing policy in a political process is always a challenge and so you have to clear policies if we want to -- for example, on what we did on tobacco, that requires us to promulgate new regulations. they need to clear new agencies, the office of management and budget i need to get support on capitol hill for what we're doing. the policy making process is a complicated process. i think coming into the agency, i had been there twice before.
8:19 am
i worked with three different fda commissioners so i had some insight into how that process worked and how to work that process to get things done but i feel really good about what we've been able to do i think we've made progress in everything we've set out to do we have a lot left to do. >> commissioner gottlieb, we were joined by john noseworthy he talked about how much disruption is happening in thet. we talked about jpmorgan, berkshire hathaway and amazon teaming up to tackle the cost curve. are there things you think government could do to help on that fronts, too >> well, i think, you know, the consolidation on the provider space is different than the consolidation on the medical product space. there is consolidation on the medical technology space we're seeing a lot of new, disruptive innovations pretty virtuous cycle even as you see consolidation. you do see new companies
8:20 am
entering the space on the services side i think some of the consolidation is concerning you see consolidation on the provider's space that's something you and i have talked about in the past where you're seeing a lot of these large capitated networks grow up in certain areas where i think they're going to have pricing leverage and be able to drive up pricing rather than drive it down at the end of the day, all health care delivery is local and local markets become consolidated, then you basically have monopolies in the marketplace. that is a concern as a longer term trend some of that is becoming unwound now with some of the policies that are being promulgated by my colleagues at the agency that runs the medicare program. i think everyone is cognizant and have concerns over it. >> doctors say the reason they had to get together was because there was so much red tape to get through with things like obama care and health care insurers you could no longer be a doctor. you can't be a doctor in a small office anymore you need to consolidate with
8:21 am
other doctors just to be able to keep up with some of those things and to make it cost efficient to handle all of that bureaucracy. >> well, i think that's part of it, but i think there's another trend that was at work and still is at work in some corners which is that the financial risk for providing health care in this country is being transferred onto the doctors. >> right >> previously was born by the employers and federal government now we see those entities trying to transfer more of the financial risk onto the providers themselves in order to take risk, they need to be large. they need to back stop themselves, have cash reserves that's another reason why you saw very large consolidations. that does create some concerns for me as a physician and a policy maker as well obviously not directly in my purview right now as fda commissioner, but something i've written about in the past. >> in terms of consolidation, that's focusing on the very end of the market when you start talking about the doctors
8:22 am
consolidating. what about a cvs/aetna deal, does that concern you on those levels >> we've raised concerns i raised concerns recently in a speech that i gave about the consolidation in the supply chain when you see the pbms consolidating and asserting leverage they're contracting with the drug companies is making it hard for the generic companies to get access to the doses they need in order to run the studies they need to come to the market that's thwarting competition that we expect to be taking place in the marketplace when you see this consolidation, it does open a door to some of the gains that we see being played in the marketplace that's having the unintended consequence of thwarting the consequences so that is a concern of ours we're going to be taking some steps to try to address that we don't have direct purview we have something to say about it we're going to be speaking to the pbms about it. >> breaking news concerning the pharmacy benefits managers i want to thank you very much for your time. we're going to be listening as you kick things off at the health care conference for us. thank you, scott.
8:23 am
>> thanks a lot. thanks for having me. when we come back in the next half hour, we're going to be talking to dr. craig venter and by the way, make sure to tune in to cnbc all day for coverage of the big event on air and on all right. when we come back, facebook's sex scene, new -- >> what do i have back there >> where's my flag >> oh, my god. sexy new enemy and why they're boycotting the social media platform details next and coming up in the next half hour, rare interview you won't want to miss we'll speak to u.s. trade representative robert lighthizer, first on cnbc. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.
8:24 am
cme group - how the world advances. ♪ ♪ ♪ wake up early, o. ♪ slap on some cologne ♪ i'm 85 and i wanna go home ♪ ♪ just got a job ♪ as a lifeguard in savannah ♪ ♪ i'm 85 and i wanna go home ♪ ♪ dropping sick beats, they call me dj nana ♪ ♪ 85 and i wanna go don't get mad. get e*trade, kiddo.
8:25 am
8:26 am
welcome back to "squawk box" this morning take a look at the futures show you what's going on this morning. we do have some green arrows looks like the market dow woul open up 100 points higher, nasdaq 12.5% higher and s&p 500 opening 9 points. a big half hour still to come first up, breaking economic news, and then a rare interview with u.s. trade representative robert lighthizer. plus, you want to live forever guess what, craig venter is working to decode death. he'll join us on set ahead of
8:27 am
cnbc's health y conference w! re. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital. (indistthat was awful.tering) why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level.
8:28 am
only with td ameritrade. you or joints. something for your heart... but do you take something for your brain. with an ingredient originally found in jellyfish, prevagen is the number one selling brain-health supplement in drug stores nationwide. prevagen. the name to remember.
8:29 am
we are just seconds away
8:30 am
from the third read on fourth quarter gdp. dow looks like it's going to open up 106 points higher. nasdaq up 8 points and the s&p 500 up about 10 points show you the ten year real quick. looking right now at the ten year at 2.773. our good friend rick santelli is standing by. third look at fourth quarter gdp. 2.9. whisker away at 3% last look was 2.5. we're expecting 2.7, we end up with 2.9 consumption jumped up from 3.8 to 4%. price index, 2.3 that's rear-view mirror and expectations on match equally. the personal consumption he can pen did i tur quarter over quarter. up 1.9 also same as our last look
8:31 am
how about the trade balance, which is a did he have if i sit for the month of february. minus 75.4 billion pretty much a lateral move from 75.3, a subtle revision. it was released at the same number this time -- excuse me, i'm off. 75.4 this time minus 70.4 last time that moves up to 75.3. now it's almost lateral. what's unique about minus 75 and change is, boy, you have to go a long way back. these last two numbers are among the biggest trade deficits going back in the way back machine all the way to looks to me like right around summer of 2008. summer of 2008 wholesale inventories also a number that's out, up 1.1. double expectations and it is 1/10 better than an upward revision last look, i like seeing the
8:32 am
inventories number up. we're making more widgets. exactly what the demand and sales figures are. yet to see pre-opening equities are higher yesterday was a big day. it was not number 23 sessions in a row that we closed in the 280s that run stopped at 22 we're now at 277 what does that mean for yields many traders think, hey, you broke the congestion to the down side they'll probably go with that down side yield, up side price momentum joe, back to you >> yeah, fine. what does that mean? what does that mean? >> for a while 295 is going to be locked and loaded as the high yield close. >> why why? tell me -- read the message of the markets for me what is that -- it shouldn't be -- that should not -- >> the message of the market is even as distorted and well kept by central banks as long maturities are, they're reflecting a little bit less growth than we might have been expecting considering how 2017 looked and i think on the inflation front whether you look
8:33 am
at thebreak evens or wage numbers, it's not as pressurized as some had thought not too long ago and at the expense of supply, joe, i traded bonds for a long time. sometimes supply and deficits seem so easy but sometimes the road to connect the dots to actually how yields move is a whole different story. >> yeah, as we've been -- we've been imbalanced for five years looking for 3%. >> all right, rick got to run special guest here u.s. and south korea reaching a trade agreement. joining us first on cnbc u.s. trade representative robert lighthizer thank you very much for coming on "squawk box" this morning pleasure to see you. >> thank you for having me it's a pleasure to be here >> tell us about the -- before we get political because, you know, we hear that tariffs don't work and threats don't work and suddenly these things seem to be happening once in a while.
8:34 am
is this good news, this deal with south korea, this trade deal what's it do >> i think it's very good news for the american people. i think it's good for korea as well i guess i would say you have to think of this as really three agreements that are independent but that define a relationship so the first is chorus, which we're continuing and i'll come back to that the second is the steel agreement. so the koreans have agreed to cut their steel shipments from their average shipments over the last three years by 30%. this is very, very important to american steel makers. a lot of people believe, and i think i agree with them, that korea is part of the problem on steel. they import a lot of chinese steel and export a lot of steel to the united states so that's part of it the third part is this issue of currency where the united states and korea are wrapping up an agreement which i think is very important, very historic agreement. as you know, we start from the
8:35 am
proposition we want stable currency, secretary mu chnuchin talked about that. we move to this agreement which provides for transparency and it provides for an agreement not to have competitive evaluation. then there's a whole process that really puts teeth into it now if i can go back to horus. what is chorus the president's view has been, and i agree with it, it has not been particularly good for the united states. we've had increases for trade deficits and really not substantial increases in sales it started to change last year really because of what i call the trump effect people wanting to buy more from the united states to get trade deficits down. we've done a number of things in this agreement the biggest of which is, one, we've agreed that we're not going to have a phaseout of a 25% small truck tariff in 20 more years this is very important the koreans don't ship trucks to the united states right now, and
8:36 am
the reason they don't is because of this tariff if we're going to start next year they would have seen massive truck shipment that's put off for two decades on the issue of automobiles, right now there's a 25,000 per manufacturer limit during which you can use u.s. safety standards. we're increase that go to 50,000 that gives the economy of scale. in addition, we're getting rid of a lot of the other barriers that our manufacturers have seen to actual sales in korea so we're changing the way we're going to look at the environmental standards, the way we're going to look at cafe standards, the way they're using customs to keep our products out. there ace a who there's a whole variety of things in that area. then there's a third area, which is customs and implementation improvements in that one significant improvement is our pharmaceutical manufacturers are going to be able to get the benefit of innovative drug
8:37 am
pricing in korea, something that they've been precluded from. so i guess i'd say all three of these are very important i think they're very historic when taken together, and we're very proud of them, both at ustr and the treasury >> ambassador, how many cars do we send over there now do we send 25,000 over do they want our cars? is doubling the limit matter if we're not sending over even 25,000 right now >> this is really a good question right now one of the problems with the 25,000, it is so small that the manufacturers don't really put a lot of emphasis on it so we've sold up to about 13,000 there is a view that the manufacturers have that with a bigger number they'll do better, but it's really important to focus on the fact that there are impediments. we have gotten rid of those impediments.
8:38 am
it was difficult to bring in parts to service the cars, but we've gotten rid of that it was difficult to bring cars in because there were customs problems there were certification verification of origin problems. there were a whole score of problems that we've taken on and we think we're going to make real improvement it's not going to go to 50,000 per manufacturer immediately, but i think it's going to get way above 25 i think we're talking in the not too distant future of billions of dollars in additional sales i would say that other countries do sell in there we have the kind of product that they'll buy. >> this is great for obviously to do this with south korea. now what are the chances that the stuff we're doing with china here, that is much criticized by certain people with the approach to taking a tougher stance there. is it possible that it bears fruit? china is not south korea, south
8:39 am
korea is not china is it possible that something positive with a trade deal with china could come from avoiding tariffs that they're talking about right now? >> well, it certainly is important. i mean, china is a far more significant relationship and geopolitical relationship. let's take a step back we have $375 billion trade deficit in goods with china. that is unsustainable. they're almost half of our total profit how did they arrive at that? some of it's economic activity a lot of it is non-economic activity it's, for example, forcing technology transfer. it is forcing people tolicense technology at less than economic turn state capitalism that is to say buying up u.s. technology and buying the state and it's in fact cyber theft so the president asked us to take a look at this back in august we did a very thorough study
8:40 am
thousands and thousands of pages. we had a hearing put out a report which i commend all of your readers. it's about 200 pages it's a very thorough analysis of this we have to remember that technology is an american competitive advantage and it is the future of our economy. so we had to do something. so what does the president do? he decided to do something in a measured way he did it in a very appropriate way. we studied what the costs are. we put the minimum value we could. we had an algorithm. those same people decided it was a $50 billion at least cost from part of what we determined we had a process where there were largely high tech and then we'll go through a 60-day period where we'll give the public a chance to comment on the good and bad things >> okay. >> now to get to your question, yes, i think there is hope
8:41 am
we have two different systems. one with capitalism and one market driven. there will be a certain amount of tension between the two, but i think it's very possible that we could end up over a series of -- over many years and over a series of difficulties working our way to a good place. this is the beginning of that process. >> same question for nafta navarro was on cnbc a couple of days ago and said it's possible that there might be good things happening with nafta and the deal we might strike do you see any body language there to confirm that, what navarro said >> i'm hopeful first of all, remind ourselves that that relationship is $1.2 trillion in trade. it is a huge relationship. very complicated relationship, and it really has been very bad for the united states. good for some sectors, but not good overall so we're trying to rebalance we're trying to modernize.
8:42 am
i guess at this point i'd say i'm hopeful. i think we are making progress i think that all three parties want to move forward we have a short window because of elections and things beyond our control that if there's a real effort made to try to close out and to compromise and do some of the things we all know we should do, i'm optimistic we can get something done in principle in the next little bit. >> final question, is the south korea deal, is that open ended or is it -- is there a time schedule on that >> no. because we are not going back to congress, we have to do the legal framework that already exists that's a framework that is open ended that allows the president the right on 180 day notice to get out of the agreement if it's not working. it is an open-ended agreement. >> it is but you won't do that with nafta, that's part of the problem? >> we will not do that with nafta. i would say it's not part of the problem, it's part of the beauty
8:43 am
of the improvement. >> oh, okay. >> we're going to be in a position where we periodically look at whether or not -- this is in everyone's interest. there's no law, no tax everything tends to be term limited, sunseted. it's something that requires people to evaluate i think that's a positive thing. >> mr. ambassador, very quickly. in much of the news coverage that comes out of washington you're painted as somebody who is very hard liner when it comes to negotiations for all of these issues is that a fair representation, do you think >> i don't quite know what a hard liner is. i know the issues. i've worried about them for a long time. i have similar views to the president. i've written on these issues for decades. i hope i'm a fair, you know, tough negotiator and representative of the united states that certainly is my objective. >> who's worse, you or navarro >> who's worse >> who's better? >> that depends on whose mother you're talking to? >> that was a rhetorical
8:44 am
question. >> i understand. >> what do you do if you throw bolton into the mix? >> all right bolton's got the stash. >> thank you for having me it was a pleasure to be here. >> we would really like to see you again if that -- when that makes sense for you, mr. ambassador thank you. >> thank you very much. when we come back, what would a modern day fountain of youth look like? we're going to talk to dr. venter about human longevity and cnbc's big healthy returns conference today we're back with the doctor right after this whoooo.
8:45 am
when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly...
8:46 am over 200 booking sites find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews. the lowest prices.
8:47 am
the cnbc healthy returns conference about to get underway joining us now ahead of the big event, legendary genomics pioneer craig venter he is one of the first scientists to sequence the human genome and so many other things. he's co-founder and head of synthetic genomics i don't know how long we could talk, me and you we could talk forever. we could talk about actually taking and chemically synthesizing a genome and putting it into bacteria that -- >> that's creating life. you've done that. >> we did that in 2010. >> which vitalism, which is the idea that there's a life force behind everything has been
8:48 am
around for 500 years and it's still around it's impossible to put to rest, but we're getting closer and closer to equating chemistry or at least biochemistry in life itself. >> we think we tried to kill vitalism for the last time but a lot of people have thought that. so it's sort of bringing religion into science, there has to be something magic or special to it other than the chemistry is not special enough. >> on a more practical level, you have come into a new area of medicine that could be amazing but has all kinds of social implications because we're going to live longer and we've got a lot to talk about today at the conference if everybody lives until 115, it almost seems like it exacerbates our health care problems if you don't have a chronic disease, you don't spend as much money. >> getting people to be 115 as a population would be a big deal because only about 10% make it
8:49 am
into their 90s now if you make it to your 50s and you're a male, 40% won't make it to 74. if you're a female, 28% won't make it to 74. so we have a long way to go to get to 115. >> but in terms -- one of the things that we're going to talk about today, i mean primarily since we only have a half hour, is the ability to use genomics combined with imaging to find diseases five or ten years before they would be symptomatic, right >> yeah. yeah we're trying to change it from sick care to health care and make it preventive, make it predictable and my own case is an example i had elevated psas increasing over 20 years. i had biopsies i had the best of medical care and was told i didn't have prostate cancer. >> right >> going into the health nucleus with our new mri and our post processing calculations, i was told by my team i had a very
8:50 am
high grade prostate cancer and if i didn't have it removed or treated right away, it would metastasize and five years is 28%. >> and that was not you because they found it in the found i in the vas deference >> not to the point where you could handle >> the traditional system is you seemed healthy and looked healthy. we did a few tests that misses the under line, the other, i guess genesis of some chronic disease. you can do with heart disease or diabetes and what else >> any of the big killers? >> alzheimer's people don't see care until they have symptoms. >> how early does it make sense to do any of these tests >> the geno, start at birth.
8:51 am
there is lives that you can safe just by knowing the genetic codes. 18 is a good time. overall baseline of the mri and your own control for the rest of your life and every thing you measure from them on gets compared back to that baseline >> 18. >> verses the average of the u.s. population. we'll have a half hour and anybody that did not buy a ticket, now they're going and kicking themselves >> at >> you can watch we'll see you. >> believe me, i am going to eat oatmeal and fruits or something. >> be sure to cnbc all day for the big event on air and on >> when we come back, jim cramer will join us live from the healthy return conference, stick around, "squawk" right after
8:52 am
this break lawn weeds to rest. draw the line. with roundup for lawns, there is no better way to kill lawn weeds to the root without harming a single blade of grass. it's a great day to be a lawn. draw the line with roundup. trusted for over 40 years. ♪ ♪ that i served. of the fact i was a c130 mechanic in the corps, so i'm not happy unless my hands are dirty. between running a business
8:53 am
and four kids, we're busy. auto insurance, homeowner's insurance, life insurance policies. knowing that usaa will always have my back... that's just one less thing you have to worry about. i couldn't imagine going anywhere else. they're like a friend of the family. we are the cochran family, and we'll be usaa members for life. save by bundling usaa home and auto insurance. get a quote today.
8:54 am
welcome back everybody, let's get down to roosevelt's hotel in new york city
8:55 am
jim cramer, a lot of binterviews give us a tease of what you want to hear? >> i want to hear the healthcare portion of the economy did become so big and why it is going so much faster than gdp. this is what everyone of the panel is thinking about. this is not what jeff bezos and jaime dimon and warren buffett is thinking about. the trio have become the underneath talks of what's happening here who knowswhat bezos really wants? >> i am going to try to find out >> the disruption process is the focus. jim, thank you, that's something we are trying to figure out. we'll be watching it all day right here on cnbc in the meantime, we are counting down to the opening bell a final check of the markets coming up. right now, ndaasq is still under pressure but the dow and s&p is higher
8:56 am
this is a tomato you can track from farm, to pot, to jar, to table. and serve with confidence that it's safe. this is a diamond you can follow from mine to finger, and trust it never fell into the wrong hands. ♪ ♪ this is a shipment transferred two hundred times, transparently tracked from port to port. this is the ibm blockchain, built for smarter business. built to run on the ibm cloud.
8:57 am
today, smart planning is helping the new new york rise higher than ever. as the world leader in unmanned aerial systems, we're attracting the world's best talent to central new york. and turning the airport into a first-class transportation hub. all while growing urban areas into vibrant places to live and work. across new york state, we're building the new new york.
8:58 am
to grow your business with us in new york state, visit okay, folks, facebook has a sexy new enemy and this time it is playboy the adult magazine says it will exit facebook and deactivate its account. data scandal, playboy's chief officer and son of hughes
8:59 am
heffner. >> playboy is mad that they are not allowed to show off more >> i think it is a combination of both. we are seeing this story multiple times a day >> i think play book is mad at the election i know his son was pretty mad out there. >> this is the first time advertisers have to think is there a downsize or a risk of advertising on facebook. >> whether it is a privacy argument or a putin rigged, hacking the election >> if regulator come into change, what facebook or other social company are allowed to do and information that's allowed to collect >> i know, it thought it had nothing to do with putin and it
9:00 am
has to do not knowing all alopg they have been taking your data and selling it >> i don't think they know what's been done with it >> all right, that does it for us today >> it does >> i will make sure -- >> for us, not for you >> lucky healthy returns i cannot remember the last time i worked 14 hours. make sure you join us tomorrow, "squawk on the street" is next ♪ >> good wednesday morning, i am carl quintanilla and mike santoli from the new york stock exchange and cramer is with us in new york. big line out there the worst day for fang in about three years. europe is mixed and hong kong iis down about


info Stream Only

Uploaded by TV Archive on