Skip to main content

tv   Squawk on the Street  CNBC  March 8, 2019 9:00am-11:00am EST

9:00 am
week yesterday, the dow closed down by over 200 points this came after we saw the jobs number coming in much weaker than had been anticipated. 20,000 jobs added for the month of february versus the 180,000 the street was expecting very quickly check out the ten-year note, yield on that also coming down a little bit this morning too, it looks like the fed may be put on hold for longer have a great weekend, everybody. see you next week. right now it is time for "squawk on the street. ♪ all the women >> good friday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber is back. david's exclusive with masa son. the jobs number 20k is the weakest in the year and a half we got weak china exports, weak german factory orders, europe is red. u.s. ten-year is the lowest
9:01 am
since january 4th. the february jobs number showing much weaker than expected job growth nonfarm payrolls up by 20,000, well short of the forecast, hurt in part by weakness in construction hiring. december and january figures were revised upwards the unemployment rate to 3.8 wage growth now up 3.4 year on year, biggest gain since 2009. people pointing out we had weak one offs in the past numbers like 15k, 18k, maybe this is one of these. >> i think so. we got an average number the numbers are so way off, 20,000 just doesn't jive. you got to take your cue not from what the government says, but the individual companies on retail, yesterday was -- richard glanty, remarkable man, cfo of costco, he said you got to throw out february february was bad weather everywhere then construction, it all comes clear, you got a government shutdown, problems with the way
9:02 am
chinese lunar new year is, you have the big stock and then the de -- we're done with destocking, whatever happened with china and tariffs government shutdown, there was so many oddities that i think -- i hate to asterisk anything, this number has to be asterisked it is nonsensical, frankly. >> okay. but what does it mean anyway >> i think -- >> it gets an asterisk and we move on, like the retail number from december? >> well, i think that we're seeing what happened -- the uncertainty was really palpable. i think that remember we just started realizing in february that the fed had really done a number of on us. we started -- consumer confidence because of the shutdown was bad endless conversation about the wall a lot of things froze in the consciousness of america >> net worth. >> very important. >> yeah. >> so i still think it is an oddity you don't have that kind of ratchet back you don't have every single day
9:03 am
in january be great and every single day in february be bad. that's what this number implies. >> step back for the last couple of days. the ecb changes its view on rate european growth, certain growth, european lack of, china export numbers and import numbers and everybody to your point wants to average january and february. >> that's what i want to do. >> we get this number. i don't know >> it is not a great number. jay powell wanted -- what did he really want when he was ratcheting up? make sure that the economy didn't overheat. well, that was mission accomplished, right? mission accomplished that's what he wanted. so when you do this, we have a lo lot of people come on air. they don't acknowledge the consequences of what he did with the rate hikes and what happened is that we have so much confusion, a bad confluence, the number is a light number i'm not denying that but we have -- i'm not saying we had a country shutdown in february but when i hear the great ceos, burlington say great company,
9:04 am
that's small but they missed big and blamed the weather. you can put together a pastiche of companies. >> february has beaten the expectation for jobs number in the past five years. >> right, but i think that, again, i'm not saying that. >> galanti is right. this is verying. a lot of misinterpretation that contributed to 3 to 4 basis points of cost lettuce could raise it more than that chicken. think about how little that wage hike meant to the bottom line. 3 to 4 basis points. i'm not talking about 3 to 4%. when you -- now they have another rate hike they put through for wages, $15 an hour, and, again, that's going to be three basis points i think we often -- i want the job -- i want the wages up
9:05 am
it is remarkable how little it hurts the bottom line. >> you don't think strong wages, slowing job growth is an uncomfortable number for the fed? >> no. i don't. i think the fed got what it wanted they wanted a slowdown we're paying the price we have to roll back some of the dates. some of the leadership really did not deserve to be where it went and we're in global route mode you wake up in the morning, don't you pretty much expect to see a story german economy going bad, italy in recession, look at the china numbers, those numbers were back to february of 2016. that was the year of the chinese growth you think when you listen to all -- i talked to so many retailers while flying, the rush to get out of china is so palpable that these talks should drag on for six months if you're a jingoist and the want to take -- >> global route mode. >> remember when -- >> can i do control alt delete to get out of that mode? >> no. >> shutting it off and turning it off again. >> i try that and kip getti ikeg
9:06 am
the blue screen of death ever go to the it guys, blue screen, and they say sorry. >> they say turn it off. >> i do think that when i look at this number it is a weak number, the president is going to do -- the president will be influenced by this to do something positive for the market again, the real smart guys in the trade talks say drag it out, drag it out. we got 10% of the business going to vietnam if we get -- by the way, the chinese guys are going right to vietnam. they need to get the -- this is going to sound -- president nixon will be rolling over in his grave, they have to get their high flung harbor bigger. >> now we got to dredge it that's the it is going to be the antidote to the trade problem because the vietnamese are working like 24 hours a day to take all the business from china. and by the way, no love lost between vietnam and china. huge war between vietnam and china after our. >> not a lot of love lost
9:07 am
between china and any -- >> you should be a gambler. >> let's keep it in asia move over a bit to japan, that is where masayoshi son is based. comes around this country sometimes, has a very nice home in woodside, california, near softbank's headquarters in the u.s. where-- >> he's in woodside? >> yeah. >> what zip code is that >> he has a series of -- meeting after meeting after meeting at the house from what i understand i was not at the house we did our interview in california at softbank's headquarters in san carlos, but we did get to sit down for the first time in many, many years while he does certainly do quarterly conference or investor calls, does a couple of interviews it would seem with print, he rarrarely if ever sits
9:08 am
down and does video or television interviews. that's four and a half years ago. so much has changed for softbank including, of course, the vision fund, the $100 billion fund in which they are using to invest in growth companies, not early stage investing necessarily, but private companies around the world, some public as well remember, they owned nvidia, some period of time. we talked a great deal about the future and his view of it, which led to a discussion about artificial intelligence which led to the overriding theme of all of his investing in the vision fund. take a listen. >> all of the companies that we have invested in the last year and a half with the vision fund, they're all ai-centric, okay
9:09 am
they're all using the power of ai for the evolution and they're fantastic companies. uber is having, you know, ipo maybe soon and -- >> pretty exciting summer most likely it sounds like. >> i was going to say when, but very soon. and seems to be. and the many companies going to have ipo in the next two or three years. >> what links the companies across the vision fund is ai >> that's the only -- >> developing and undergoing the benefit from or -- >> that's the only one thing that's the only one thing i'm focused on. >> even though it is across many different industries. >> right >> maybe autonomous driving. >> yes and construction with power of
9:10 am
ai, hotel with the power of ai, medical was the power of ai, you know, communication was the power of ai. >> how does wee work fit into that, the power of ai? >> so many people still think it is just a realistic sharing office. >> they buy real estate, lease it out and that's the -- >> that's not my view. my view is it is a working community. okay so facebook, when facebook came, people still did not understand the power of facebook. people thought just a bunch of photo and text and introducing people that's not the case. it is a community. it is a graph that you want to get throughout wework membership they can help each other they can -- from new york, from
9:11 am
boston, and meet and help each other among wework members and with the power of ai, can recommend, hey, by the way, you have -- if you are looking for design of the package, there is another member in the wework office next building and you may want to have a meeting at the next party on friday night >> yes beer parties on friday night we talked a lot more about wework, about uber, about arm, of course, 30 plus billion dollar deal they did at the softbank level, some of which transferred into the vision fund some say that masa is is the single most influential person when it comes to the development of technology in the world because he's got so many significant investments in these companies that forging new ground they say more than bezos or musk important for argument, but it does point to what he's been
9:12 am
able to create the last time we talked to him, yeah, huge holder of alibaba, owner of sprint, big wireless company in japan, but it changed dramatically in the four plus years since we last spoke to him in terms of influence and what he's doing >> you know, i listen to him, fist thing i think of is this man is not oriented toward u.p.s. and you have -- there are visionaries out in the west who are so constrained by eps, they can't do what they wanted to i saw last night airbnb bought hotel tonight. that will hurt their quarter but it is visionary. but they're private. he's running basically a private fund and he can make mistakes. no one is allowed to make a mistake. okta bought a company last night, one of the fastest growing companies, bought a company, the stock goes down people say some of the guidance -- no, in the public format, it is so dang russ eroud anything he has leeway like no --
9:13 am
>> a lot of leeway, where you mark these things is important he has to generate the 7% return to be the 40 billion, the 40 billion in preferred equity. has pressure on him. but, you're right, he's absolutely not thinking about quarter to quarter and we get into a lot more, of course, about his longer term thinking and why he is willing to take the risks he does. >> next couple of hours, we'll hear about -- >> we're going to hear a little bit more about wework, about the world he sees coming in terms of ai, and in terms of what it is going to do to society and jobs and talk about arm he's optimistic. he's optimistic. >> all right marc benioff says when this happens, we have to be ready for the people who are dislocated after the employment number. >> a big interview, big get. can't wait to hear more of david with masa son. a look at mark hanes and his call about the stock market bottom ten years ago this week also ahead, larry kudlow, the president chief economic adviser
9:14 am
on today's jobs number and china trade as futures remain in the red. don't go away. alpha seems more elusive today. is it because so many go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. partner with pgim. the global investment management businesses of prudential financial, inc.
9:15 am
your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.
9:16 am
futures weak, data around the world no good.
9:17 am
jobs number here in the u.s., speaking of all that, reaction out of the bond pits, to rick santelli at the cme. good morning, rick. >> good morning, carl. going to be fascinating when we see the stock market open up, how everything gets affected currently, currently, we now have two year -- down two on the day, down ten on the week. we have ten year down two on the day, down 13 basis points on the week 30 year bonds down one on the day, down ten on the week. double digit drops as we currently sit with reference to where we settled on friday do remember that 255 is the low close of the year for 10s. traded down as low as 260. let's look at ten-day chart of ten year i picked this. it is the whole cycle. you see intraday, traded as high as 276 high close for the year around 278. we were close. but it backs straight down to the bottom once again. if you open it up year to date, you see 255 low on the 3rd if we look overseas and know
9:18 am
mario draghi didn't help markets yesterday, the two-day of bunds, yes, you're not -- your screen isn't broken they traded four basis points, currently at 05, 06. back to june of 2016, quite enlightening even though right now where bunds sit at five basis points, would be the lowest close since around october of 2016 if you go back to june, you can see that june, july, august, september, they were negative. and this is is the big concern this is what traders are looking at, the relative value, not only we have our own pressure of slower economic growth pushing rates down, we have a lot of the rest of the globe under much more pressure and that pressure comes here one week of the dollar index, the bright spot. you see yesterday, that is the high going back 20 months to june of 2017 so, yes, we have given up some ground, but all things considered, they have a 97 handle after those numbers we saw, this is pretty good
9:19 am
carl, jim, david, back to you. >> thank you very much ten years ago this weekend, a legendary call was made that still resonates today, "squawk on the street" anchor mark ha e haines called the bottom of the stock market the haines bottom. take a listen. >> i'll step out on a limb here -- >> the big hold on, everyone >> i think we're at a bottom i really do. >> exchange went for a lot longer than that he talked about his methodology looking at percentage of s&p percentages and then preopen as i recall erin said might get a bounce today at least i'll give you credit, even for that mark said i think this one has actual legs. >> i used to go back to mark on e-mail and he would just send me an e-mail, 9 to 1. that's the -- used to call it the crescendo together he would say to me, jim, is it a
9:20 am
crescendo? i would say i think it is a crescendo, he would say no it is not a crescendo. he timed it. he didn't make a million calls mark did not give you a single call during the decline other than if there was trouble. combination of all his indices and fear and he made the calls. really gutsy call. no reason to make it that's what matters. he had no reason to make it. >> he wasn't off by a week or a month. pretty much right on the nose. >> i came on later that day and i said, look, when mark makes a call, he makes them very rarely. just a bet, cover your short, buy. that's how meaningful he -- look, so long, there is a lot of viewers who didn't know him now sadly, but he made a call, it was so not idle. never did that >> long way in the s&p >> sure have >> 666. >> you had the buy now we have a global route everything he said was --
9:21 am
>> mark, we miss you cramer's mad dash, opening bell in a few minutes don't go away. this is your invitation to exhilaration.
9:22 am
this is the invitation to lexus sales event. lease the 2019 is 300 for $329 a month for 36 months. now thru march 31st. experience amazing at your lexus dealer. first tattoo? yeah relax, amigo, it's gonna look ok. only ok? no worries boss, i'm one of the tattoo artists in the city. you mean one of the best tattoo artists in the city? right?
9:23 am
something like that... ya. uh, aren't you supposed to draw it first? stay in your lane, bro. just ok is not ok. especially when it comes to your network. at&t is america's best wireless network, according to america's biggest test. buy a new samsung galaxy s10 and get one free. welcome back to "squawk on the street." we'll get started with the final day of trading for this week, about 6 1/2 minutes or so from now. let's get to a mad ash
9:24 am
happy to be able to start and end the week here with you, doing the mad dash tilray >> first, very special mad dash. david faber, happy birthday mad dash. >> yes, thank you. not today, but, yes. >> i have to do it now i can't do the show sunday, i would be happy to do it to wish you a happy birthday one thing lacking, david, the whole way in the cannabis issue, anybody say they're overvalued it is time to go or don't have the scale? yes, jeffries comes out today and said initiates tilray with an underperform valuation too dependent on unclear medical outlook and says, look, the canopy is better, and aurora is better what happened? kronos is better this will cause a little panic in the cannabis group because what it basically says is it is not that big, may not be as big as people think. you have to have scale got to be a top player in canada people should read this report
9:25 am
because it puts in perspective you don't want this to be crypto >> right. >> and it can be >> back in september, couldn't short the stock as well because people who do so would have cost you -- the numbers were astronomical >> there will be supply coming, but it is an important report because it throws cold water on the gigantic market valuations that people have placed on the future constellation member gave -- they gave canopy $4 billion. canopy will be the winner, bruce linton, great interview with carl, ceo, this is going to be a coke/pepsi market. may be only two players. >> tilray, shares down over 7% at least right now get started with trading in a few minutes from now by the way, the opening bell followed by our live interview with economic adviser larry kudlow ♪
9:26 am
9:27 am
(butcher) we both know you're not just looking for pork chops. you're searching for something more... ...red-blooded. right this way. you thirst for adrenaline, you hunger for raw power. well, you've come to the right place. the road is yours, dig in. (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-
9:28 am
just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade. ♪ ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible. you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in 90 seconds on a busy friday with a jobs
9:29 am
number that came in way below expectations and aside from being on pace for the worst week of the year, we haven't had all three major indices go down every day of a full week since 2016 >> we're reaping what we sewed in that incredible run we had. if you go to the december bottom, i think it is natural to give up on things as we get closer to brexit, which i think is worrying people now marks did a fabulous piece about a steel mill in london -- in the uk, and i hate to say i don't know what kind of steel they make, but you don't want to -- if the tariffs go wrong, they'll close. we lost nine out of the top ten steel companies when things went wrong here i just think it is much more fragile. have to start talking about brexit as a real hit for a lot of companies' earnings.
9:30 am
>> big vote next week. >> very big. >> on brexit may telling parliament, just trying to remind them how historic next week could be. there is the opening bell here at the s&p 500, the cnbc real time exchange, at the big board it is citigroup, celebrating international women's day today. at the nasdaq, futu holdings, hong kong based online brokerage. >> i think it is great, this international women's day, can't talk about it enough i'm a guy. i've never seen a confluence of people, maybe because of certain issues that occurred that we won't talk about, i'm very proud to watch this, dad of a couple of daughters, it is different, it is different. sustainability, purpose-driven, we have to treat it more like a business story. >> there is a lot of enthusiasm about it this year. >> really great. >> david, to a little more masa before we bring in kudlow.
9:31 am
>> we have spent years talking about the future when it comes to artificial intelligence, robotics and automation, how many jobs will be replaced this is something that masa and i spent a good amount of time during our discussion as well talking about. the man who runs the vision fund is optimistic when it comes to discussing the future, that being many years from now, hard to say how many, where essentially the intelligence of machines will exceed our own he believes prices in this world that we're discussing will come down dramatically as machines take over doing the tasks that humans currently do. whether it is farming or so many other tasks. but he actually sees guys, you're going to kind of think this is interesting, it is becoming somewhat like the roman empire take a listen.
9:32 am
>> you know, roman empire, roman citizens, they were so rich, so rich that they didn't have to do jobs because they had many other people to support the roman citizens what did the roman citizens do did the roman citizens become all sad? they lost job and they lost things and did they have a sad life no, they enjoy they got the free wine, free bread, free bread and free entertainment, free music, free bath, water. so the society became so rich that they provide those basic income things that they needed
9:33 am
and what did they do they still discuss, still debate >> you and i will be relaxing and having a good time. >> good time, great time >> rest easy, jim. this is a man who is putting his money to work with these beliefs. he's truly an optimist, there are others who disagree with him vastly on it, including elon musk in terms of at least what ai really means when it comes. but if you want to talk about the capital that is going into the businesses that are going to this is the guy. >> i think -- >> he sees this all potentially in -- >> there could be a missile gap almost between the people who are not involved or letting --
9:34 am
>> basic income, i would refer people when the entire interview is available at noon to watch. will there be basic income, does there need to be and some comments were referring to that is a real possibility as well when as we talked about so often so many of the jobs that are now held by human beings will be held by machines. >> i've got to tell you, his investment in nvidia coincided with the decision to go all in, artificial intelligence, machine learning, and chips are faster than brains and chips teach other chips how to do things, and that is sky net. and what you're talking about is sky net. >> yeah. >> carl, next hour of "squawk on the street," we'll talk more about the fund itself, its operations, its relationship with its key investors including saudi arabia i don't want people to think we're not going to get to -- of running a $100 billion fund. >> as fascinating as all of this is and what it means for all of us in the years ahead. back to today's other big story,
9:35 am
job creation, grinded to a halt in february. labor department says nonfarm payrolls up 20k. that's the worst month since 2017 joining us over at reaction from the white house today, national economic council director larry kudlow great to have you back, good morning. >> good morning, carl. i was there in the roman empire, wasn't all that great. we should put -- have some perspective on it. >> yhelp us understand 20,000. how did this happen? >> i think it is a very flukey number it is interesting that 20,000 there, the household employment number from which unemployment comes was up 255, a great number the unemployment rate fell right .2 from 4 to 3.8 wages were up, actually a big wage number year on year, 3.4% look, i think you have timing issues with respect to the
9:36 am
government shutdown. winter, seasonal issues, very flukey i wouldn't pay attention to it to be honest with you. >> well, larry, it is jim. i want to -- i share your view i want to be able to defend the number as a way to be able to say there was weather and this time you got to take weather seriously. but i wonder, larry, at what point are some of these woes from overseas are we imported. i know we're going to import a lot from that deficit number but are we importing brexit, are we importing worries in germany, are we importing the issues that are hurting china? i don't want those to impact us. they don't necessarily reflect anything other than united states being more ascendant than they are >> look, that last point is an important point. we're the fastest growing economy in the world from the major economies. and you mentioned europe, the united states is buying goods. we are really the only source of
9:37 am
stimulus let's take europe, a big trading partner, we're buying -- we're importing their consumer goods, importing their capital goods. we're importing their manufacturing goods, and that's, you know, they need that demand. if it weren't for us, they would be in worse shape. probably negative across the board. they can keep throwing money at it, as mr. draghi is now more easy money lending to the banks. that's not going to do it. they have been doing this for years. they need changes in their labor regulations, they need lower marginal tax rates, et cetera, et cetera. we are the source of stimulus. we are the hottest economy in the world. and we are expensing, despite the silly, flukey number, we are on a roll and i'm going to say that the outlook for the american economy is still 3% growth plus. >> really, that's my question, larry. you called a silly flukey number, you don't believe it is
9:38 am
reflective of all of a slowdown in growth in. >> no. i don't think it is reflective of anything. except timing issues and scoring issues and eligibility issues and lousy winter seasonal issues again, this is all going to be revised up use three-month moving average, jobs are about 190,000 plus. look at the house hold survey. that's where the unemployment rate is coming from. that thing was up, if i have it right, 255,000 so your unemployment rate comes down from 4 to 3.8 and your wage numbers are up, i believe, .4%, 3.4% year on year. those are really, really big numbers. and, again, you may not see it in this month, monthly data is monthly data, a lot of noise, but the trend lines are so important, the biggest factor in the growth of jobs in the past year is, guess what, women
9:39 am
women have come back into the labor force. i don't know what the number is, 50 something percent 58% of the new entrants in the labor force from women, that's a big turn around from the last 15 or 16 years. as we discussed in this show, blue collar. blue collar employment, manufacturing, autos and so forth. fastest gains since the '80s and the blue collar wages are rising faster than the white collar wages, i'm not saying higher, i'm saying faster. these are great things and, by the way, one last number, i just want to put this in, the best number i've seen all week, productivity, output per hour, that is the ultimate growth driver in our economy at least, productivity is is up 1.8% for the last four quarters in 2018. that's a big number. because that thing had been flat zero or near zero for many years.
9:40 am
that tells you a number of things, okay i think that lower tax rates and deregulation is working. but it shows you that money is being invested, businesses are investing, new equipment, new campuses, new everything, new robots, you're talking about ai before, that's big number. 1.8% productivity growth changes the whole potential of the economy to grow. it is a terrific number. much more important than today's payroll number. >> so, larry, i like the women, that's important for the women's day. of course, participation is driven at what point can we say, things are good here, things have slowed down in china, down 20% in that -- for heaven's sake and remarkable number. at what point do you go to the president and say, listen, you know, we got plenty of time, don't have to hurry this, winning or lose iing. >> we have come a long way in those talks. i don't know we have new news to add. we are negotiating by phone and
9:41 am
teleconference the documents from two weeks ago advanced enormously. that's why the president is optimistic about the potential for a deal we're still looking at the structural issues, we're looking at the enforcement issues, we're looking at the commodity issues. i don't want to hang a timetable on this. lighthizer is is doing the best he can there may be a meeting in florida, mar-a-lago, between the two leaders, maybe late this month or early next month. nothing in cement. but a lot of talk about a meeting. they're moving along very nicely they're moving along very nicely and they're covering more ground than ever before and, look, jim, you're right, china's economy, two things going on here, one is the business cycle is lousy. the recent data is lousy the stock market has come back this year, but it had been performing very badly. but there is a long-term problem here china had been departing from its market base performs that
9:42 am
helped them grow in the '80s and '90s and early 2000s wi moving in the wrong direction, moving to a more authoritarian economy and political story. that's hurt them the direct investment has slowed down enormously and they had to fight to keep the yuan steady. now we have hurt them, i think president trump's negotiating strategy, tough, aggressive, tariffs are part of his strategy, so they have come to the negotiating table to talk about more things, more seriously than ever before so, you're right, we have them over a barrel. on the other hand, we would like a good deal, both countries should benefit, but i must say, as the president has said, and very serious, if we don't get a good deal for the united states and its workforce and its blue collar people, and its ranchers, and its technology, they got stuff -- if we don't get a good deal, then we won't get a good
9:43 am
deal and you saw them walk away from north korea and just saying that's a moment, it could apply to trade, i'm not forecasting. i'm just saying it has got to be a good deal for the usa. >> and if it is not, larry, if you do walk, then what are we left with? tariffs go to 25 trade deficit continues to grow. budget deficit continues to rise 70%ier year on year. then what? >> i don't want to do what ifs because i'm not predicting we'll walk away. the president made it clear how tough a negotiator he can be the tariffs were one illustration of that and the north korean -- i call it directive, it is another. i'm not suggesting that's going to happen. i'm not here to announce that. i don't want anyone to misinterpret we are -- in the senior government, we're all optimistic but, again, our conditions have to be met. and they have to be big changes in the ip theft, you know this
9:44 am
issue as well as we do, in the force transfer technology, the ownership provisions, and in the enforcement provisions but having said that, carl, we have a lot of really good stuff on the table the documents are very good. i'm not here to reveal the details. but i'm saying we have come further than any time before and it is pretty good stuff. so i don't want to sound like a bear i'm a bull on it i'm saying if it doesn't measure up, and it goes to jim's point, if it doesn't measure up, united states will stick to its guns, believe me on that >> larry, carl mentioned the budget deficit you're on with us last friday, i did mention it, i like to get to it every other kudlow appearance 310 billion for first four months of the year, running close to that trillion dollar number in an economy that is strong, to your point, which makes people wonder what is going to happen
Check
9:45 am
if the economy weakens in terms of our ability to deal with that deficit if we're generating that much now >> did you say in an economy that is soft >> no, i said strong >> oh. thank you. no, no, thank you. i appreciate that. little ear trouble look, the budget is coming out next week, i believe, omb will publish the budget you'll see a study glide path towards lower deficits as a share of gdp and tough spending outline, 5% spend and reduction, domestic spending across the board, just what the doctor ordered. don't want government spending to interfere with economic growth so you'll see a pretty steady downward glide path. on this point, let me say even the cbo with which we generally disagree, i'm not breaking news here, they just published their
9:46 am
new numbers, you know, from the point of pretax cut to now, we have had about $7 trillion unexpected increase. $7 trillion over 10 years in terms of gdp and that kind of calculates to roughly 1.2, 1.3 trillion in additional revenue that's the cbo numbers these are all ten-year estimates, i apologize for that. what am i saying here? the tax cut was about 1.5 trillion scored. we have virtually paid for it, i guess 8 0% paid for it and that's by the cbo's own numbers, so our growth estimates as you can expect will be faster, they're closer to 2, we're sticking with 3. i think what we did was we borrowed in the short run to
9:47 am
milwauk make a great investment in the economy through tax cuts that is paying off growth productivity, higher wages. and now we will recoup that investment and the books are going to gradually look better and better as the share of gdp that's the way this thing should work and i think that's the way it is already working. >> larry, chinese foreign minister appeared to applaud why -- for filing their suit, should investors see huawei as a wild card in trade talks >> i don't want to get into any details on that one for sure the huawei issue is a complicated issue. it is really not a trade issue if you listen to lighthizer, we regard that more as a legal issue at least at the moment i know it is part of the overall landscape, carl, but i don't want to really comment on that there is a legal process that is going on it may enter into trade. i don't want to make any predictions. let me just set huawei aside for
9:48 am
the moment. >> okay. larry, appreciate the time as always. >> thank you >> we'll see you soon. larry kudlow, formerly of the roman empire, according to larry, always good to hear from him. thoughts, jim, as we bounced off the early session low? >> if this were happening at 2:00, i would say we're going to finish up because that's the kind of momentum i see on the upside of the bounce too early today to make that call this is very encouraging fridays do tend to bring in sellers later in the day let's wait, don't sit on your hands, constructive action versus the rest of the world. >> that was good stuff >> yeah. >> how did you feel about china after what larry said? >> how do i feel >> yeah. >> does it matter? >> of course it matters. but, to me, he's basically saying, we're getting a good deal or no deal. as opposed to a deal good deal or no deal >> but that's not new. they have been saying -- >> but --
9:49 am
>> the question is what is a good deal? >> larry is about intellectual property not about soybeans he used to be about soybeans, i thought. he understands we're ascendant used to talk about red china rising don't hear about that anymore. remember red china rising, king dollar. >> also used to be a free trader he says he still is is. >> i think he's moved. >> evolved in some areas, that's for sure dow down 140 s&p back to 2731 don't go away.
9:50 am
9:51 am
9:52 am
dow down 150 or so as most components are in the red. s&p, as we said, back around 2730 a lot goinon wh g itthe jobs number and trade we'll get "stop trading" with jim in a moment. we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility.
9:53 am
emerson. consider it solved. at&t provides edge-to-edge intelligence, covering virtually every part of your healthcare business. so that if she has a heart problem & the staff needs to know, they will & they'll drop everything can you take a look at her vitals? & share the data with other specialists yeah, i'm looking at them now. & they'll drop everything hey. & take care of this baby yeah, that procedure seems right. & that one too. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &.
9:54 am
& when your patient's tests come back... how business gets done is changing. energy, success, the face of entrepreneurship is changing. see how we're changing. at bankofthewest.com/change bank of the west. the bank for a changing world. energy is changing. transpotation is changing. at bank of the west we're helping our customers drive that change. with lower rates on a car loan when you use it for an electric vehicle. find out how much you could save. at bankofthewest.com/ev
9:55 am
jim what's on "mad" tonight? >> i love hearing about the future got wd-40. this all came because i have a squeaky door i love this company. it's a household name and i like the household names at a time when there seems to be such a global rout. wd-40 is not hurt. have a great weekend going back with larry kudlow, don't know this trade talk is dominant. and remember about ge. not done yet. >> speaking of trade, the president made some comments a few moments ago and references how trade talks are going and how it may impact the markets down the road. i'm not sure if the tape is
9:56 am
ready to roll, but if so, let's listen to the president. >> we're seeing wages rise more than they have at any time for a long, long time. wages are going up first time for many years i talked about it during the campaignp for over 20 years, so i'm happy about that the economy is very, very strong if you look at the stock market over the last few months, it's been great, and certainly since my election it's up getting close to 50%, the stock market, so we're obviously very happy with that. we will -- i think as soon as these trade deals are done, if they get done and we're working with china, we'll see what happens, but i think you're going to see a very big spike. a lot of people are waiting to see what happens with the china deal mexico and canada is done. we'll be submitting to congress very shortly, and that's a great deal for the united states so we're very happy about that, and i am now, as you know, going to alabama. some of you are joining me, but
9:57 am
i look forward to it i'll be meeting with governor ivey, the people of alabama got hit very hard by the tornadoes there. we're stopping there and then we're going to florida, and -- and we're going to do a lot of work we'll be working very hard [ inaudible question ] >> i feel very badly for paul manafort i feel it's been a very, very tough time for him if you notice both his lawyer, a highly respected man and a very highly respected judge, the judge, said there was no collusion with russia. this had nothing to do with collusion. there was no collusion it's a collusion hoax. it's a collusion witch hoax. i don't collude with, are so i just want to tell you that his lawyer went out of his way actually to make a statement last night no collusion with russia there was absolutely none. the judge, i mean, for whatever
9:58 am
reason, i was very onored by it, also made the statement that this had nothing to do with collusion with russia, so, you know, keep it going. let's go keep the hoax going. just a hoax. senator burr said there's no collusion. you look at devon nunes and the house intelligence committee, they said there's no collusion, and guess what, this is none what [ inaudible question ] >> well, it's a step i think you'll probably find out it averages out. the unemployment rate just went lower. we're down now to 3.8%, so we had very good news in that i think the big news really was that wages went up and that's great for the american worker. that's something people -- i don't know if they ever expected to see it. yeah >> mr. president, we're hearing rumblings from china that they are not really positive about a trade deal and perhaps it may not half where is that? >> well, i haven't heard that.
9:59 am
i think they are doing well. if it happened that way, we'll do even better we'll do well with or without a deal but you're telling me something i have not heard [ inaudible question ] >> yeah, sure, i'm confident, but if we don't make a very good deal for our country i wouldn't make a deal. if this isn't a great deal, i won't make a deal. [ inaudible question ] >> say it. >> are you ruling out a part for manafort >> i don't even discuss it the only one discussing it is you. i haven't discussed it i know that in watching and seeing you folks at night that michael cohen lied about the pardon that was a stone cold lie and he's lied about a lot of things, but when he lied about the pardon, that was really a lie, and he knew all about pardons. his lawyer said that they went to my lawyers and asked for pardons, and i can go a step above that, but i won't go do it now. [ inaudible question ]
10:00 am
>> why what? >> it's the most ridiculous suit i've ever seen bad lawyer i had a bad lawyer that happens [ inaudible question ] we'll make a comment later >> talk, up, up. you're competing with a helicopter, john are you certain that they will not be able to override your veto >> i think that it's going very well we're doing a great job. we're apprehending record numbers of people, 75,000 over the last short period of time. that's a lot of work, and with a wall we wouldn't have to do it i think we're doing fine in congress they understand it's an emergency. [ inaudible question ]
10:01 am
>> well, time will tell, but i have a feeling that our relationship with north korea, kim jong-un and myself, chairman kim, i think it's a very good one. i think it remains good. i would be surprised in a negative way if he did anything that was not per our understanding, but we'll see what happens look, when i came in understand the obama administration north korea was a disaster you were going to war, folks, whether you know it or not you were going to war. there was no talking there was testing. we didn't have our people back we didn't have our great hostages back. now we're getting the remains. we're doing a lot of things now. this was a disaster. i inherited a mess in many ways, the middle east i inherited a mess, and it's straightening out a lot. we're doing very well there. i inherited -- wait. wait
10:02 am
i inherited a mess with north korea and right now you have no testing. you have no nothing. let's see what happens, but i would be very disappointed if i saw testing. [ inaudible question ] >> i thought yesterday's vote by the house was disgraceful because it's become the democrats -- the democrats have become an anti-israel party. they have become an anti-jewish party, and i thought that vote was a disgrace and so does everybody else if you get an honest answer. if you get an honest answer from politicians, they thought it was a disgrace the democrats have become an anti-israel party. they have become an anti-jewish party, and that's too bad. i'm going to alabama >> that's the president making
10:03 am
comments about the jobs number this morning paul manafort's sentencing, china trade, even a prediction about what markets would do if a trade deal is consummated. our eamon javers at the white house with a wrap-up as well. >> i asked the president if 20,000 jobs is good enough for him and he said, well, it's a step the president saying ultimately he was happy with the wage numbers today and thinks the economy is good. also a little bit equivocal, as you pointed out, on the idea of progress on a china trade deal saying we'll do very well either way and saying that if it's not a good deal for the country, he won't make a deal with the chinese government so the president saying there in answer to a reporter's question he hadn't heard some of the rumors there's more skepticism about china trade deal progress but ultimately saying either way that the united states will be just fine. he's saying he's confident about a deal but not promising a deal and not suggesting what the tenor of that deal might be. carl >> the president and larry kudlow both out just after the market opened here
10:04 am
eamon, thank you for that. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at post nine at the new york stock exchange the market is looking for a fifth consecutive loss for all three major averages haven't done that in a couple of years, and it's where our road map begins today grinding to a near halt. the u.s.added a mere 20k jobs in february. major averages down after that miss >> it's international women's day. we're going to break down diversity on corporate boards. the numbers may shock you. >> plus, i'm going have more -- from my exclusive interpugh with softbank's masayoshi son hear what he has to say about where he's putting his money to work in china and around the world. >> we'll start with the jobs number our senior economics correspondent steve liesman has more on that good morning, steve. >> reporter: yeah, at 8:30 a.m., a hugely disappointed report of just 20,000 jobs created in february at 8:30 and one second, the beginning for a search for the reasons and the economic significance take a look. could it be the weather? could it be a snapback from high numbers in january
10:05 am
could it be gathering economic weakness, or maybe as larry kudlow used the official economic term, just very flukey. rdq said it's payback and noise and we take it seriously if march is weak, then we'll have to consider our view. here are the numbers they are talking about, just 20,000 it was an estimate of 180,000 plus december and january revised up 12,000 so that 300,000 plus number remains from january. average hourly wages very strong up 0.4% and unemployment rate plunging more than expected and the labor force articipation, ratcheted up in january and we held that level in february. here's the disappointment. construction and if you look at construction and leisure and hospitality, those two numbers think there might be some weather effect and there was snow or bad weather across during the survey week retail down as well. i think the fed will puzzle over these numbers and think about all the possible explanations, finding reassurance in the
10:06 am
decision to pause. fed chairman jay powell will likely wait for march and april to get a better feel as to whether there's real weakness in the job market or, sarah, is it just very flukey >> so clearly a lot of talk about that huge headline miss, steve, but what about the better waning growth. i mean, that was a really strong number. >> what's the read into that one? >> a bunch of economists point to that and say that's a better measure of what's going on of course, you have a decline in the workweek and that sometimes goes along with better wage growth so that could be one factor, but we've had this ratcheting up of wage growth into the plus 3% range year over year we've held on to that, and it's really the money that employers take out of their pocket and pay that might be the best sign of what's going on in the job market by the way, sara, you know what happened is you still -- and larry had this number right. at 190,000 for a three-month average so that's also still 90,000 or 100,000 more than say
10:07 am
the potential of the economy to grow its labor force. >> a lot riding on the march number now steve, thanks. >> it's a big number coming, that's right, yeah. >> top white house economic adviser larry kudlow joined us last hour, an here's what he had to say about today's jobs reports. >> i think you'll probably find out it averages out. the unemployment rate just went lower. we're down now to 3.8%, so we had very good news in that i think the big news really was that wages went up, and that's great for the american worker. that's something people -- i don't know if they ever expected to see it. >> even better larry kudlow's boss, president trump on the jobs report joining us now, diane swank, chief economist and tom dagnan the head of u.s. intrinsic value equities diane, how are you explaining the huge headline miss to your clients? >> i do look at the moving average. i think that's important, and also the underlying household
10:08 am
survey showed much better numbers, and i think that's really important as well there was the noise from the government shutdown and all of a sudden all of these workers that had been on part-time work because they are trying to make ends meet during the shutdown had fallen off and more so temporary unemployed fell off and more so from january which suggests the underlying trend is still very positive for the labor market also, really interesting to see where the strength and participation in among minorities, particularly 25 to 34-year-olds, mostly young women flowing their hat back in the ring and coming back to participate into the labor force. that's very important because a lot of those are also foreign born, hispanics and blacks in the united states also seeing an increase in their participation rate so i think the details on participation are very interesting as well. the average hourly earnings, i'm very encouraged by that, but i take it with a bit of a grain of salt as steve mention because hours work fell and also a small sample in the actual number. that's a little volatile, and i
10:09 am
think it's important to note that we haven't seen the step up in earnings when low wages have picked up and the low-wage jobs are seeing the biggest gains out there which is fabulous, but we're not seeing that trickle up we once saw in management and middle income wages, and that's because some major employers have actually cut their management pay as they have raised their entry level pay, and that's a very different dynamic from other expansions. >> tom, that's what we're getting from a lot of economists is that you can't read too much into one headline miss especially with a lot of the other indicators looking pretty solid. how then do you explain the market reaction, sharp selloff in stocks, the dollar, yields go lower? >> what i thought was most interesting was the lack of reaction this announcement came out, you know, pre-market the bond market didn't move and the equity market sold down prior to that, and if the only two numbers you had were the unemployment rate and wage growth and then you had to guess at what the payroll number is, you wouldn't have guessed
10:10 am
20,000, so it wouldn't surprise me if there's a revision along the way, and the other thing i think that we do see in the economy, one of the strong tenets of the economy right now is the consumer. >> you worried at all about the global sort of growth or lack thereof scenario mean, we got numbers from china on obviously exports and imports which were weak, and euro and the ecby reflects their concerns does that come back around to us >> i think it does europe has been weak for a long time i don't think that will change in the near term they have some structural issues, and i think the real thing right now if we can get something on trade with china, where the trade is positive, then i think that could really be strong for the second half, especially if china implements their own stimulus into their economy. >> diane, how does the fed take this morning's jobs number >> with a grain of salt, just like the rest of us. they look at the jocks number and they say the economy -- the trend is there they are still on solid pace, not strong but solid not as strong as last year but
10:11 am
soiled, and in march they step further to the sidelines i think you've seen that already in the speeches. we know the dot plot will go down and the fed will be sidelined the entire year and move into neutral and halt reductions in the roll-off of their balance sheet as well. the fed still has a lot of big decisions to make about what their toolbox would look like. talking about negative interest rates if the economy were to falter should it be all short term treasuries and include mortgage-backed securities and should include longer term treasuries and wouldthat be to much looking like we're monetizing our debt. all of those issues are going to come up in the next couple of weeks, and in the next several months and i don't think we'll have a resolution soon, but we will see the fed firmically -- even more firmly stuck to the shrines and be flexible and patient in march. >> we are going to hear from powell late tonight and, of course, on "60 minutes" sunday night. diane, you, as i i recall, did
10:12 am
suggest that the cut may cut rather than hike and that was before powell's reinvestment are you still of the same mind >> that was for 2020 and i still am i do think the risk of recession is high for 2020 and i'm not as optimistic even if we get a trade deal with china that -- the weakness preceded the trade weakness and their ability to stimulate is not as strong as it once was when you jail people for taking on debt in the private sector, they don't take it on as quickly when you put it out there again. >> tom, actually chinese stocks fell almost 4.5% overnight they had a trade number that showed exports dropped 20%, so they are clearly feeling this. the question is how much -- how vulnerable are we in the u.s. coming on a week when things really change, worse week of the year so far for stocks >> this year was such a turn in sentiment where everything was positive and we finally hit a negative week. if anything i look at this as an opportunity and where the market is trading i think the world we've moved to is a slow growth economy so if
10:13 am
we have 2% growth in the u.s. economy and that is maybe our long-term trend. >> how about 3% growth. >> for real growth. >> kudlow says we're still looking at 3% plus. >> i'm very skeptical about that, and what i'm saying is the -- the u.s. extry market doesn't need, that and in this rate environment you can have lower growth and maybe steadier growth and that's why the recession. i think people will keep pushing it farther and farther out. >> tom and diane, thank you for joining us on a jobs day. >> thank you >> thank you >> well, speaking of jobs, it was a center of one of -- one of the key themes that i discussed yesterday in a long sit-down interview with masayoshi son, the man who runs the fund that invests in uber and we work, slack, so many of the other growth companies, many of which may actually have ipos in the not too distant future
10:14 am
the vision fund has occupied a lot of people's attention over the last year or so. of course, some key investors including saudi arabia and abu dhabi, softbank itself a key investor as well 40% or roughly $40 billion of the money in that $100 billion fund actually has a 7% preferred return it's preferred equity and gets a 7% return which would seem to put some pressure on the fund to perform obviously far above that so far they seem to. they sold a stake in flip cart walmart, of course, buying that company overall, and nvidia trade. they bought stock at so 5. they collared it at 218 and sold it, therefore, booking a large profit, but i did ask mr. son whether he can keep it up given that 7% target he's got to hit every single year. >> our return on equity is
10:15 am
tremendously good, you know. much better than simple teens of the returns. >> the s&p you save you've had a 44% irr since 2000 is that accurate >> yeah, something like that, yes. >> you think you can maintain that kind of rate of return? >> so far so good. so far so good i'm competing with my own track record, so so far vision fund return is within that range. >> why are you so willing to take so much risk and have been even though you had what people would describe as a near death experience so to speak 19 years ago? >> because i'm a believer. i am definitely a believer of the technology some people don't like technology as an investment
10:16 am
thesis i love, i believe in the technology >> i mean, you've said that you want softbank to be the company that makes the most contribution to human evolution. >> yes. >> that's a pretty big statement. >> you believe you can actually fulfill that >> i would like to make it happen >> how. >> by empowering the new forces coming the new young entrepreneurs, in my view they are jedi, okay. the young jedi coming out of school, and they start, you know, learning how to fly, and some of them already jumping to fly. >> the young jedi, says mr. son in talking about some of the investors or i should say the
10:17 am
ceos and founders that he's investing with when i referred to a near death experience, by the way, there was a time when he was actually very briefly the wealthiest man in the world, the top of the dotcom boom only to find himself on the other side of it soon after, but that hasn't stopped him from taking risk at all as you heard because he says he's a believer in the power of technology, and that is where he goes every single time in terms of his investments. >> how did the vision fund become such a big powerful force in global silicon valley how did it become so powerful? >> i mean, the money is obviously the key, and his ability to attract that capital. now, obviously one of his big investors is the private investment fund of saudi arabia, both on the equity side and the preferred equity side in the fund itself, but that $100 billion number seemed ridiculous when he sort of said i want to launch a $100 billion fund and
10:18 am
then he made it reality. people don't forget, of course, this is a man who invested 20 million into what was then a young jedi jack ma only to have it worth, i don't know where that investment is in their books, 130 billion at sbarngs a and i'm talking about the continued stake in alibaba many people say he may be the single most important in terms of -- person in terms of where technology goes given how many hands he has in so many different companies. >> looking forward to a lot more from your interview. great to get his thoughts. when we come back, more from david's conversation with softbank's masa son. hear what he said about china and investing around the world. plus, it's international women's day. we'll break down the lack of diversity on corporate boards. some new information for you "squawk on the street" will be right back the dow is down 17 is.
10:19 am
10:20 am
10:21 am
tame for our etf spotlight
10:22 am
and bob pisani taking a look at how stocks are trading amid this tough war. >> appears the chinese are having just a tough time with trade and tariffs as we are. chinese import and export date a.r.-for february was way below expectations chinese markets are down overnight but the fact is china is among the best performing markets in the world in 2019 the shanghai exchange is up 20% even with today's 4% decline that's twice the performance of the s&p 500 year to date and also outperforming europe as well you can own china through many different etfs, but you've got to be very careful here. they are not all the same. you get different performances four largest china etfs have returns varying from 11% year to date to 28% year to date that's a very, very big difference, so why do you hit such a variance? has to do with where they trade and what is in them. the fxi is the largest china etf out there and it only liz stocks on the hong kong exchange. those are big state-owned
10:23 am
enterprises. the embassy china etf is the second largest it lists stocks in hong kong and on mainland china as well and also on u.s.-based china stocks like alibaba alibaba trades only here on the new york stock exchange. you've got to get the mchi to get that the crane shares china internet etf has internet related stocks. that trade everywhere that the chinese stocks trade the china internet includes the u.s.-listed shares, what we call the "n" shares go on china mainland stocks that some people want, the ashar is the choice it holds the 300 largest and most liquid stocks in what we call the a-shares or mainland market the big global index providers like msci have recently been increase their weighting off china mainland stocks in their indices, and that means if you own any kind of international fund in the future, you'll be owning more china stocks in the future as well that's been, of course, a big, big push by the chinese to get
10:24 am
into more of the international indexes recently. >> when you look at the market declines this week, every day a down day how much do you think it has to do with the uncertainty over the u.s./china trade deal or is there something else >> a different narrative remember what was going on off the bottoms of december 24 we had the tailwinds of number one, the fed pivot, if you want to call it that, and we had the you will tailwinds of the belief there would be a trade deal. the narrative is very different now. we're dealing with a real headwind on the global slowdown. we saw the chinese economic numbers were very weak, and the chinese political meetings this week very clearly indicated that even if you dealt with the trade issues, they have got very broad problems this year that they are trying to deal with. that's why they are so aggressive in the stimulus program. the ecb did not help yesterday i mean, that was a pretty shocking cut to the growth forecast 1.7% to the year and now they are down to 1.1.
10:25 am
usually you dress by a third of the% and that was a pretty growth prospect. those were significant headwinds that we're dealing with right now so the bold case is the tariffs come off which will help earnings a bit and how do you get earnings up with the global growth slowdown? >> bob, thanks bob pisani. >> pleasure. when we come back, we'll have more from my exclusive interview with softbank chairman masa son he's quoted as saying there's no one on the planet in a better position to influence the next wave of technology than you. not bezos, not musk but you, and in part because of the risk you're willing to take, the money you have at your dispose al and a lot of other things do you agree with that >> i'm just a small startup. >> oh, come on and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes
10:26 am
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'm not really a, i thought wall street guy.ns. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade
10:27 am
10:28 am
>> capping international women's day though not so much in the board room we've got little data showing progress and when it comes to female representation on company boards and perhaps more shock, a significant number of consumer companies that rely on disproportionately female buyers have absolutely zero female board members. names you know like trip adviser, skechers, lacroix heroes how it all breaks down. of the russell 3,000 accord being to equilar and cnbc a total of 457 companies actually have zero women on their boards, a slight improvement from 2016 when 738 such companies had zero female representation. and if you're looking at consumer-facing companies which we really wanted to see considering that women report that they make up 81% of daily spending decisions on consumers goods in america, 31% of those companies have no female board members. again, tiny improvement from two years ago, and in many of these
10:29 am
cases it really goes beyond the board level. skechers, for instance, nine board directors and no women and the executive management team will also have no women. we asked why and got no comment. national beverage corp, the company behind the popular lacroix soda, all male board, five out of five and all male management team, ten out of ten. trip adviser said a female board member recently stepped down trip advisers main tans the development of a workforce inclusive of our boards. j&j fruit, all male board and all male management team of seven says, quote, we're fortunate to have several women in management at executive level positions who make tremendous contribution, not only in their respective areas of expertise but also in their unique understanding of women as core target consumers, and that's the point. the bottom line it is surprising given data on how board room diversity leads to higher
10:30 am
returns and reflects the broader population, and for consumer companies in particular, their core customer, the number of companies with no women, guys, is stunningly high the data really surprised us here. >> just jaw-dropping numbers that you just showed a moment ago. fits the pattern that progress is beggs better than no progress i guess, right >> progress is better than no progress i don't understand where the lack of incentive is the number of studies on roe and better risk management decisions is so high, not to mention the fact that if you're going to speak to your core consumer, 80% of spending decisions made by women, maybe you should have some women advising your company. >> atrocious. >> that's weird. >> none. you can't find anybody >> and that's being generous. >> it's a pipeline possible. >> what does that mean. >> it means that they don't have enough women in senior management positions or out there who become director, not that they are against it.
10:31 am
>> incredible. speaking of lacroix as sara says, the owner of the brand national beverage with a big earnings miss after the bell p.stocks obviously cratering down 22.5% the ompany's chairman and ceo apologizes for the performance in his statement which says, quote, we're truly sorry for these quotes negligence nor mismanagement nor woeful acts of god were not the reasons. much of this was the result of injustice. >> i read the story and still don't quite understand t.sara, i go to you on this. >> i don't understand it, injustice with their consumers not wanting to buy less. >> zero context that i've seen so far. >> this is what happens when you have all male board and all men management, you get nonsense. >> well, they are being sfanked for it today with a fifth of the market cap getting sliced off. >> it was injustice, we'll tell. >> you talk about injustice. >> let's get to sue herera and the news update this morning good morning, carl. >> you go, sara.
10:32 am
there you go here's what's happening at this hour, everyone british prime minister theresa may is warning lawmakers if they reject her divorce deal next week britain may never leave the european union they are due to vote on tuesday. >> back it and at uk will leave the european union reject it and no one knows what will happen. we may not leave the eu for many months we may leave without the protections that the deal provides we may never low of at all >> meantime, much of venezuela is still without electricity this morning amid the country's worst ever power outage. president nicolas maduro ordered schools and all government entities closed and told businesses not to open the blackout struck the capital at the peak of thursday's evening rush hour. and spacex's new capsule is returning to earth this morning ending its first test flight with the old-fashioned splashdown you remember those it marks the first time in 50
10:33 am
years that a capsule designed for astronauts returned from space by dropping down into the atlantic >> and that is the news update this hour. guys, i'll send it back downtown to you david? >> okay. and i will take it, sue. thank you very much. of course, this morning we've been sharing excerpts from an interview that i conducted yesterday with softbank's masayoshi son, the man who began softbank years ago, of course. the idea for the name, by the way, was bank of software. he began his career real in the 1980s and sort of came to prominence through the dotcom boom through investments there and softbank itself became a very high-flying stock only to reverse dramatically when all or many of those underlying assets also reversed dramatically at that point, but since then, well, he's become even more relevant than ever having launched the $100 billion fund, a fund that invests in well
10:34 am
venture companies typically, later stage, so it invests early with uber. they invested and are the largest single investor in irish but it was a bit later similar with we work where they own roughly $8 billion of that company's equity and a slew of other companies as well. we talked a good deal about how he chooses to invest and what makes a good investment. take a listen. >> we make the investment t decision, okay we have 100 of the committee members and we have contractural rights, and we're exercising of that, but, of course, they were the believer of my first vision and the dream, okay, so we have to respect that. so we communicate with them
10:35 am
quite often. they support us very well. we are very happy and satisfied with the relationship. i would like to own that, but actual investment decisions and -- and activities with the companies. >> in the case of we work, you seemed to indicate they did have a case in saying slow down. >> to some extent. there's a contractural limit that beyond $3 billion per portfolio company there is a consent that we have to get. >> i see. >> but after $3 billion, okay, we have 100% right to have sole decision-making between our investment committee which is 100% softbank members. >> now you've spoken about starting another vision fund. >> well, it's too early.
10:36 am
we still have money -- a lot of money. >> yeah. where are you in terms vest -- i think you're at 100 or 98.6 billion how much has been invested >> we've invested probably $70 billion or so. $65 billion or $70 billion, around that range, but we have the banks who are wishing to support us for extending, you know, leverage because of the value of our asset has grown and many of them are having ipo with a mature value so that the banks are willing to support us. >> so you'll have -- you conceivably you'll have access to even more capital beyond $100 billion with that kind of financing based on the asset increase. >> yes, yes, exactly >> when do you see being done? do you have a sense of when you'll have finished investing
10:37 am
from whatever capital is available? >> well, we have to see. we have to see how many more exciting opportunities comes at what pace, but whenever the fund one investment is done, there are lots of interest that i am receiving that they would like to invest into our next investments. >> you think you could do it again, raise another $100 billion fund >> i wouldn't say what is the size, but i'm -- i'm getting a lot of inbound call that they would like to come into our new investor into us. >> there's been some criticism that you buy things at softbank and then transfer them to the vision fund at an inflated valuation. how do you respond to people who say that >> that is not -- that is totally not the case. >> okay. >> there's a fact that the group of the companies that we have
10:38 am
incubated because the vision fund was -- took some, you know, eight months, nine months to prepare, during that time i warehoused an invest out of softbank balance sheet and then transfer when the timing became ready, the group of assets that we transferred, after we transfer the value appreciation is tremendous, so there may be one or two assets that we reduce the value of the fair market value of the company, but the vast majority and as a total package it is big return on investment, and you asked our investors, they are extremely happy with the return on investment. >> around the world, of course, i've asked you about a couple of what are u.s. companiesat this
10:39 am
point, but in china you've been very active. >> yeah, china. >> and a number of others. you just did a deal this week with grab, i think it was. >> yeah, yes. >> these are enormous numbers you're putting out there. >> yeah, evenly dd alone, we're investing $1.6 billion as the additional investment to our earlier round, so we've put maybe twice and this is maybe the third round that we are investing, and -- and just for additional, you know, injection of capital ourself one ticket is $1.6 billion or something. >> but they are consuming a lot of capital these companies but they are not making money. the ride handling business is not profitable. >> but they are growing so quickly, so the imagine take rate is 20% or more, so it's actually very reasonable, very profitable business. >> and within softbank itself, just in terms of the leadership. >> yes. >> how do you see it you know, there's been some
10:40 am
reporting of clashes of personality between marcello and rajiv. is the that true >> no, no, no. >> do you welcome, that and is that a positive thing in that way? >> no, no, they are good guys and good friends and good partners of course, once in a while there's a difference in opinion, but me and them and between them or other management, but, you know, always good to have a little bit of healthy competition or tension because that way we work harder, you know for any organization, any family members, but they are both very good partners and, you know, happy -- >> so you're happy with the team that you have in place right now? >> of course, of course. >> that was masa son i didn't effectively introduce what we began discuss when we started running that clip which was the saudis, $45 billion of
10:41 am
the $100 billion is from the private investment fund of saudi arabia, of course. and there has been reports of pushback on some investments that masa son wanted to make and that they said too much, for example we work a perfect example, and he did indicate and i'm not sure that this has been reported previously, that they do have a contractural ability on investments above $3 billion to say we don't like that. he said 100% of the decision-making is his but they do have that right that's interesting because on we work because it's been reported and he confirmed that he wanted to invest a lot more than they ended up they are already over 8 billion but was held back by some of his partners in the fund who clearly have the right to say don't have that much exposh tour that one name. >> not hearing much jitters about slowing global growth. >> no. >> some more about generational
10:42 am
technological change. >> right that's really all he's thinking about. those kinds of concerns quarter to quarter or even year to year, carl, are not part of the way he seems to think this is a man who does have a 300-year plan and talks about it in a serious way, and so, yeah he's thinking longer term to the fully interconnected future, arm holdings, of course, the single largest deal ever when they bought it at a 47% premium a number of years ago. thinks chips will be in every single thing, fully interconnected, growth of the artificial intelligence which will power machines to exceed the intelligence of human beings, robots all over the place. >> right, right. >> and he wants to be a part of it. >> where does we work fit into that >> we're -- i think we have more on it later. >> okay. >> so you can listen, but he doesn't see it as a real estate company. he sees it as a community that's only growing and they can use a. to make sure everyone is
10:43 am
connected so that the accountant can do for the startup there and do this and that and have algorithms that benefits everybody and benefit on a revenue basis from creating this community. >> not the way we think of we work. >> not at all. >> incredible. >> not at all. >> puts buffet's time horizon to shame in some cases. >> it does. >> a lot more from david and masa son watch shares of tilray jeffries begins coverage with an underperform rating. tilray has arguably inferior positioning compared to the peers. major averages, still trying to get above 2730 don't go anywhere. for just $39.00 ? yup that's what we do. and you guarantee they'll get there? yup that's great! i have two sets. you know ship sticks only ships golf clubs? right? honey are we there yet?
10:44 am
umph! ship sticks. that hurt.
10:45 am
a handful of eye-yielding stocks are crushing the market this year. find out which names have more room to run on tradingnation.cnbc.com more "squawk on the street" is straight ahead (vo) we're carvana,
10:46 am
the company who invented car vending machines and buying a car 100% online. now we've created a brand new way for you to sell your car. whether it's a few years old or dinosaur old, we want to buy your car. so go to carvana and enter your license plate, answer a few questions, and our techno-wizardry calculates your car's value and gives you a real offer in seconds. when you're ready, we'll come to you, pay you on the spot, and pick up your car. that's it. so ditch the old way of selling your car and say hello to the new way... at carvana. stocks cutting their losses down now of 2 points let's go over to the cme group
10:47 am
in chicago rick santelli at the santelli exchange hi, rick. >> good morning and thank you. you know, i like to start off where she left off, and that's we're now down less than 100 points in the dow. that is impressive when i was on "squawk box" this morning and the numbers were hitting the wires, there was no doubt in my mind that if you consider the timing, and we'll get into that in a mind regarding how things have evolved, this soft employment report, an anomaly or what, traders will be trading first, selling, digging, studying later and that was the case. the worst case, obviously the markets can still do whatever over the rest of the session, but it is impressive now, on timing, there's very little doubt that the last week or so has dented a little bit of the confidence now, if you take a step back, you can say, you know, we dropped 20% at the end of last year we made up pretty much all of that and here we sit there was a time when 2% or 3% from all-time highs especially with respect to the dow jones
10:48 am
industrial average, but maybe the best way to think about this is first of all how many people, analysts, economists have heard in the last couple of months, an employment report and indicating and that captures a glimpse of how the markets move and many will understand that most of the employment report is actually leading or coincident indicators in a normal labor report, the one area that's really a lagging indicator is actually the unemployment rate. now in this case i'm not sure if that is telling good news is bad news or good news is bad news because the employment rate was pretty good. the other issue jobs was not betting on this is good news wages, participation rate, and back to timing let's go with that this is end of cycle and watching these report and seeing 300 and then seeing 20 is very disarming and
10:49 am
really more accentuates the take risk off, trim risk mode that we are in but in the end, this was another issue on "squawk." somebody asked me what the fed is going to do in other feds and previous feds and different points in the cycle they already had a plan in place so you had to think about that in a different way. my sense is that this fed is doing the same thing as doing traders. thinking about it and trying to do it and figure out what it means at the time that it's occurring but in the end if you don't have a foregone conclusion as to your next action, traders best bet is just to think about it, study it and trade what the data says. sara, back to you. >> all right, rick, thank you. now let's send it over to morgan brennan with a look at what's coming up in the next hour on "squawk alley. good morning, morgan. >> hey, sara, a tidal wave of funding continues to pour into the startup space. two ways we're going to tackle this today the first, that big wide-ranging
10:50 am
interview with softbank masa son by david faber the second, it is international women's day, and we're going to talk about where all of those dollars have been flowing or perhaps more accurately not flowing. we're going to dig into the eye-popping data around the vc p we have an all-star panel who are looking to close that.
10:51 am
your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.
10:52 am
10:53 am
more new yorkers are considering a move to florida not just for sunshine but for taxes and are facing a roadblock. state tax collectors robert frank has a story on the arms race between state auditors and wealthy new yorkers headed for the exits. >> reporter: new york state audits 3,000 people a year who move to change tax residency after the new tax law, the audits will be more common and a lot more aggressive. new york collected $1 billion from residents changing tax residency, many to florida, between 2013 and 2017. abouthalf those audited lost the average amount collected was 144,000. tax lawyers say the audit rate for high income earners relocating is now 100% the myth is that as long as
10:54 am
you're in florida for 183 days, you're legal but auditors focus on domicile, proving the permanent principal home is in florida, that includes pets. make sure your dog stays in florida and is kennelled when you travel your prized possessions should all be in florida along with your dentist, your country club, charities, and even your food. >> what they're looking for, they want the refrigerator in the new york apartment to have a can of beer, whatever else the person may want, a soda a. on the other hand, the refrigerator in florida should look like thanksgiving. >> reporter: that he go subpoena cell phone records to see exactly where calls and texts originate and tracks your social media. that's created a new cottage industry of apps that allow users to track location and travel days, make sure they're complying. the largest tax residency app
10:55 am
says its business jumped 50% last year after the new tax law. now, for its part, the new york state department of taxation and finance declined to comment on its specific audit techniques or program but said that, quote, ensuring taxpayers pay their fair share is a top priority, therefore our nonresident audit program continues to be very active, meaning they will find you and your dog guys, back to you. >> wow, robert so interesting i just figured out my tax liability this year without the deduction, it is brutal. i don't blame them trying to leave. >> many don't realize, even when you leave, you probably will pay income tax for the year you leave, the auditor have been tough about defining domicile, it is a subjective measure if new york state tax collectors say we think you haven't moved and cut your ties to new york enough, they can charge you that
10:56 am
income tax even when you leave, they still got you, at least for a year or two. >> they're also leaving for estate tax as well, there isn't one in florida, new york has a significant one if you are a very wealthy person as a private equity or hedge fund which is probably the people we're talking about. >> such a great point. the cpas i talked to and accountants say that's the golden ticket. maybe you pay a year or two in income tax after you leave, but the golden ticket is to get that in writing from new york state saying you don't have to pay the estate taxes if you're worth 50 or $100 million, not paying that 60% new york state estate tax is worth it >> yeah. you can figure out ways around that too robert, thank you. >> that's true >> robert frank. sara, i don't know if i'm going to be on your show, but looking forward to watching even if i'm not. >> we have a lot to digest from your interview. >> we still may have more of that whal
10:57 am
what else is coming up? >> some important guests, some of the most powerful women in corporate america and on wall street coming up on "closing bell," including the ceo of williams sonoma. a lot of women rocking in their fields, and talk jobs as well. great lineup today on "closing bell." all week long, especially today. >> good. i like it. any men at all >> i'll invite you, and let wilfred and mike be there too on the desk >> thank you >> if you deem it appropriate, we trust you, sara >> i will limit their talking time. >> you always do that. >> true. >> "squawk alley" is next. don't miss masa son on uber. his interview with david, the dow cut losses in half
10:58 am
if you're turning 65, you're probably learning about medicare and supplemental insurance. medicare is great, but it doesn't cover everything - only about 80% of your part b medicare costs, which means you may have to pay for the rest. that's where medicare supplement insurance comes in: to help pay for some of what medicare doesn't. learn how an aarp medicare supplement insurance plan, insured by united healthcare insurance company might be the right choice for you. a free decision guide is a great place to start. call today to request yours. so what makes an aarp medicare supplement plan unique? well, these are the only medicare supplement plans
10:59 am
endorsed by aarp and that's because they meet aarp's high standards of quality and service. you're also getting the great features that any medicare supplement plan provides. for example, with any medicare supplement plan you may choose any doctor or hospital that accepts medicare patients. you can even visit a specialist. with this type of plan, there are no networks or referrals needed. also, a medicare supplement plan goes with you when you travel anywhere in the u.s. a free decision guide will provide a breakdown of aarp medicare supplement plans, and help you determine the plan that works best for your needs and budget. call today to request yours. let's recap. there are 3 key things you should keep in mind. one: if you're turning 65, you may be eligible for medicare - but it only covers about 80% of your medicare part b costs. a medicare supplement plan may help pay for some of the rest.
11:00 am
two: this type of plan allows you to keep your doctor - as long as he or she accepts medicare patients. and three: these are the only medicare supplement plans endorsed by aarp. learn more about why you should choose an aarp medicare supplement plan. call today for a free guide. good morning it is 1:00 a.m. at softbank headquarters in tokyo, 11:00 a.m. on wall street. "squawk alley" is live ♪

90 Views

info Stream Only

Uploaded by TV Archive on