good morning, everybody. welcome to "squawk box" here on cnbc. hope you had a great weekend, everybody. i'm becky quick along with joe kernen and andrew ross sorkin. joe mentioned the dow. the s&p 500 broke through with record closing highs. for the quarter, the dow jones industrial average rose 11%. that is worth noting the blue chip index has never finished a year in negative territory when the first quarter is up at least 8%. again, that was the best year in 15 years, the best first quarter for the dow industrials. transports had a rough end to march, but they still finished nearly 18% higher. the s&p rose by 10% while the nasdaq gained 8%. as for sector performance, you are looking at health care, consumer staples and utilities. they led the way. the laggers were tech and materials. and the best performing dow components. hp, american express, travelers, johnson & johnson and pfizer. u.s. equity futures this morning, if you've been keeping track of what's been happening, you're going to see right now

that those indexes are indicated slightly lower. dow futures down by about 15 points. s&p futures off by about 3 points. the major markets in europe are closed for easter monday. that's why we are lucky enough to see kate and brian hanging around with us this morning. we had some markets in asia that were closed, including hong kong and australia. andrew, things are open here and we are ready to go. >> we don't get a long enough weekend, i guess. >> but they have good friday off, too? >> they do get good friday off. they get christmas, they get boxing day, they get a lot of things going on. >> that sounds like something we could do here easter monday. it's easter monday here, too, isn't it? >> technically, it is. >> i keep getting all this e-mail from people, it's not april fools' day, it is joe biden day? what does that mean? >> somebody has your number, eh? >> i didn't know what they meant. >> there were a couple other april fools' day jokes out there we could talk about. i should say, by the way, it is

my mother's birthday today. >> happy birthday. >> we make jokes about that, but -- my mom's birthday is tomorrow, andrew. >> we can do multiple mother's day wishes. >> that's weird because she was born -- but her kids were -- never mind. her kid. her kid. >> being me. >> well, yeah. but she was the worn born on april -- >> and i am supposed to be the -- >> may have been a harbinger. >> warnings from washington yesterday promising to expand a nuclear weapons arsenal. on saturday, north korea warned that the korean peninsula was in a state of war. jim is in seoul today and joins us with the latest. jim, good morning on. >> good morning, appeared rue. it could well turn out to br more saber rattling, but i personally haven't sensed this much tension on the pa nil nins

la in some 20 years. north korea is apparently combat ready and pointing at south korea and u.s. targets now. both sides say they'll strike at the slightest provocation. kim jong unhas threatened preemptive nuclear strikes and that's unprecedented. though no experts we talked to here really believe kim has that capability. despite all of that, the life here in soeul seems surprisingly normal. things are moving naturally. but we're told that that is really masking an underlying anxiety shared by many south koreans that it's such a tense atmosphere that even a minor incident might trigger a conflict. or then again, it might not. it's korea. we just really don't know.

they've lived through many ba lidgeant threats in the aft. run sign i wanted to point out today, something saying you alluded to this in your lead, but it said in the same statement that it's going to pursue economic development. experts today are saying that is the signal, an important signal that north korea wants to engage again with south korea and not go to war. koreans may be dodging a bullet here. >> thank you for that. >> 28 years old. and he tortured animals.

i don't know what that means. probably not a good thing. in other global market news, china's factory activity rebounded in march as new orders were up sharply. but the rebound was slower than some expected, and that suggests headwinds remain for the world's second largest economy. and india's top court has dismissed novartis's attempt to win patent protection for a cancer drug. the decision is said to be a serious blow to the western pharmaceutical industry as the ruling likely affects several other countries and their brand ed drugs. the high court decision sets a benchmark for intellectual property disputes in india, as well. >> why don't we get a check on the markets. we showed you that futures were

a little weaker this morning. right now, dow futures down by less than 11 points fair value. and, again, this is coming after gains on friday with the s&p 500 finally pushing through to an all-time high by the close of the day, tend of the quarter. first day of the new quarter and we'll see where things are head. oil prices are down by 52 cents to 96.71. the ten-year note is yielding 1.68%. the dollar this morning, we've been watching the dollar/euro sokosly because of cyprus. the dollar is weaker against the euro. the dollar/yen is at 93.49. it's worth pointing out that in the first quarter, the yen was down 8.5% against the dollar. you can see right now, gold prices up by about $4.0 right at $1600 an ounce. >> in corporate news this morning, dell is warning it would be dangerous to take on a lot of debt and remain a public company, given its worsening profit outlook. the comments are a sign that the pcmaker used the proposals from

blackstone and carl icahn as fraught with risk. dell published a 274-page preliminary proxy statement on friday. i read all of it. >> did you see barons. >> here it is, not so fast, michael. the argument is that he's trying to steal the company. having spent time with the proxy over the weekend, i must say i've decided this entire bidding operation is a complete and utter charade. i don't know if you saw this in the proxy, blackstone, which nobody really understands why they're there to begin with because they sort of passed the first time, they are being paid to bid. >> wa do you mean being paid to bid? >> they only would agree to participate in the auction if dell would reimburse them up to $25 million of expenses as part of participating n auction. >> why would dell go along with that? >> because their view is, if we can get a better bid -- and when i say dell, not michael dell.

if they can get a separate bid that is a higher bid than the current michael dell silver lake bid or forces michael dell and silver lake to up their bid, they think $25 million is a good bargain. but at no time i remember when someone says, we want you to bid, they have never said we will bid only if you reim bus our expenses. >> roger alt pan was here, and he can't talk specifically about dell because he's advising the company on all of these things, but we did talk about what lee cooperman has said, about the buyout of a leverage idea not being something that's fair. and he said if you are very careful, there are some cases where it is and some cases where it isn't, but the company has to take pains to make sure it looks like they are doing their best. >> blackstone -- this is why i'm worried that blackstone may

never bid or there's something weird going on here. blackstone explicitly said we won't participate until you agree to do this. not only that, originally when they asked for $25 million, is that just out of pocket costs? by the way, their out of pocket can include morgan stanley and their advisers. they wanted to bill out their own time. so if you're steve swartzman, you could bill out $50,000 and call it a day. something reeks -- >> what is the rationale that it would be more risky as a public company rather than a private company? >> the rationale of it being more risky as a publicly traded company? >> they're saying it's fraught with risks. >> i don't understand. if it really is fraught with risk, why would you want to do it? why would you want to take it private? no one does things -- >> he's got to -- >> oh, no, no. the issue is he wants to lever the company, but beyond levering the company, they actually do plan on reinvesting significant money into the company, but they

want to invest more money in staff, r&d, tab ets -- >> and they don't think that would happen if -- >> well, i think the view is if it's a publicly traded company, the stock is going to get killed even more. i don't know. >> only because barons takes the opposite side of everything. >> they take the opposite. >> you see, i would think that -- >> michael dell wanted it so badly, he's not stupid, that i thought maybe he knows something. that's why icahn initially thought, if there's value here, i want in. >> there could be value in what michael dell wants to do, but it is a very risky proposition. what blackstone wants to do is probably a lot less risky. they want to break up the company, get rid of the financing on it. turn it into a service business and cross their fingers. but i can't make heads of tails of it. they also asked for an indemnity

as part of their bid to indemnify them from being sued. the whole thing is completely and utterly bizarre. these are things you don't traditionally see in transactions like this. a little morning commentary. i apologize. >> gratuitous nastiness is like tortious interference? >> yes. >> was he a roman emperor? >> we have a story about a modern day emperor, steve cohen. more trouble, though, for steve cohen -- >> do you know that guy, the steinburg? >> i met him once, years ago. prosecutors did charge michael steinburg with insider trading, two technology stocks that happened on friday. it wasn't a good friday for him. he was a senior sac employee and he's one of the most recent to be indicted in the government. >> do you know anything about

this? >> i do. >> are they trying to squeeze this guy from ratting out cohen? >> 120%, yes. matthew martoma was the last one that was arrested. and he -- i truly think either is not going to flip or doesn't think he has enough stuff to flip. the problem with trying to get people to flip is you can't just get them to say i will testify against steve cohen. once you've been arrested, you're a lousy witness. you're only a good witness if you have some kind of documentary evidence. you can say, yeah, i'd love to flip, but you're a lousy flipper unless you've got the goods. >> your word is no longer -- >> right. i think at this point they're playing the odds that maybe they can find someone. and michael steinburg is probably the closest. it's a much closer relationship than the matthew martoma

relationship. >> how much money has he got? >> oh, geez, i don't know. >> you have to idea smp. >> i have no idea, but i'm thinking could come close to $100 million. >> $3 million for bail. that probably wasn't hard to arrange. >> no. i think he was fine. >> but nobody liked to be let out on a friday morning in handcuffs, good friday. >> it might have been organized, by the way. >> the government said, you paid your fine, but don't think the whole thing is going away? >> oh, the no, no, this has been in the works for a very long time. >> they put him on sabbatical. >> right. in fact, for many, many months, michael sateenburg wteinburg wa a hotel because he didn't want to get arrested in his home in front of his children. >> but sap put him on leave back in november thinking that this was -- >> thinking there was a problem.

but they went on vacation to florida last week. and flew back and so he was home alone on friday. that's why i was, there was speculation that they knew this was coming and that it was different. he had spent the past couple months talking to all thinks friends about the last thing he wanted was to be arrested with his family there. so -- >> you would not -- i mean, if you found out something here, you wouldn't split would you? >> well, you know, you do write some cindiary e-mails which i've been saying. >> this makes me think that even a person who is very close to someone that squeezes on, they're ready to sing like a kaary. and i think you'd sing. >> no. i think you can trust him. >> i've got the key. >> you have sources and stuff that you don't rat out, right? >> yes. i always tell people, for this information i will -- >> i'm still going to watch it. >> cya a little? >> a little late.

>> yeah, a little late. when we come back, we're going to start the quarter with a trip to the futures pit. stick around, squawk will be right back. there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

poib. u.s. equity futures down about 11 points indicated this morning. >> up 18% even after the declines we saw.

>> after everything we've heard about truck lines and i wasn't aware that they had some -- >> i didn't realize that, either. >> they beat the dow by 70% or something, the industrials. so even with the pullback, transportation -- >> an amazing first quarter. so if you start worrying too much about what this signals, if there's an economic slowdown coming, that's all in perspective. >> right. right. pullback a little because it had more pullback than it could handle. you know what's coming. >> summer driving season? >> it happens every year, yeah. summer driving season. >> making headlines, the usda is expecting the highest corn acreage since 1936. farmers plan to plant more than $97 acres of worn this year. prices are stronger after the drought last year. it left that grain in short supply and we know how much -- >> it was crazy last summer, about $7. >> and is animals eat a lot of

corn. >> and there's a lot in ethanol, too. >> you like -- >> i like corn. >> yeah. corn on the cob is awesome. >> if you grill it. >> love it grilled. charcoaled. >> getting ready for that. it's coming up, a couple months away. >> where do you do that? >> my hibachi. >> out on your deck? >> i don't have a deck. i open the window and do it outside. >> i hope that the takeout chinese is worth it. >> it is so good. >> you can go away on summer weekends. >> owes, that's right. you go west -- no, you go east, right? >> out to further lane, 100%. thanks. >> one road leads out there. >> that is the problem. >> you know why they like that? >> why don't you take a helicopter. >> all the fat cats take helicopters. >> let's get the national forecast from the weather channel's reynolds wolf.

reynolds, i was pleasantly surprised this weekend. it seemed to be warming up, but then i went to the gardens and nothing was in bloom. last year on st. patrick's day it was blooming. >> oh, it's a crash and burn this terms of expectations. the nation's capital, a lot of people going there hoping to see cherry blossoms and it hasn't happened because it's been so darn cold. you will have decent conditions at yankee stadium today for the sox and the yankees. should be interesting there. however, in boston later on today, expect the showers, 60 degrees. 63 in washington, 73 in atlanta. i have to till, minneapolis, the first pitch for, let's see, you have the twins, the tigers. they're going to have temperatures around 33 degrees. chilly for the first game there. out to the west, we see rain showers, 60 degrees. mild for you in cincinnati. in missoula, montana, 66

degrees. you're fishing for good weather, you're not going to get it in boston. minor delays expected there. orlando, same deal. salt lake city, expect the rain drops out at the airport. high, wasatch range, it's all going to be snow. back to you guys. >> reynolds, did you see this big piece in "the economist"? even hanson, the biggest -- the grand poubah, james hanson -- >> hanson, i think. >> acknowledging a 20-year hiatus, no increase in global temperature, at a stand still. quoting him, at a stand still for 20 years. no increase and they're going back there trying to figure out all those models where they correlate to with rising temperatures. they're trying to see what could have impacted, offset the co2. now they're looking for ways to explain that there hasn't been any warming in 20 years. but even hanson is -- i just wondered whether you saw that. >> i did see that.

>> you did see that. >> i did see that, indeed. >> did you vary it immediately because it doesn't fit into your climbing on board of this whole secular religion? i mean, it helps the weather channel to have this variability. i know that, right? >> absolutely. >> you guys sell this like we sell dshg like we sell market volatility. this would be bad for you. >> if it's not really warming. what did you see, 33 degrees for baseball? >> 33 degrees for the first pitch at target field in minneapolis, right. >> have you, like, fouled off a pitch when it's 33 degrees? do you know what that feels like? >> you know how it feels, splitters around your forearm when you jar it? >> horrible feeling. >> yes, it is. >> almost as bad as listening to hans job in musical form. oh, my gosh. >> thank you, reynolds, for playing along. >> bye, guys. >> what happened to these guys? they went the way of the

wiggles. >> they screw up and their voices change. >> i thought one of them splintered off. >> one of the hansons? >> they're still out there, i'm told. i mean, justin bieber is like a vacuum. he sucks all of the -- doesn't he? his underwear is always hanging out. >> i'm not a -- >> you know all about justin bieber. what is wrong with him? >> i don't know. there's something wrong with them, though. i don't know. >> i looked them up and they're still known for their best 1977 hit song um bop. >> what a segue. here it kooms. >> other news this morning, exxon mobil is continuing cleanup of a pooip pipeline spill that spewed hundreds of thousands of barrels of crude in

eric eric. >> the world's biggest banks scoring a major win in private libor lawsuits. is that like tortous -- >> tortus interference. >> on friday, they were accused of rigging global benchmark bench rates. the 16 banks, this had been considered the biggest legal threat that the banks faced in terms of investigations being pursued by regulators. now to the markets, bob iaccino, knowing you, i worry that you might just give a totally full report and then make us look bad because we didn't remember it

was april 1st. can we trust you to be -- we happen it's april 1st. no april fools' stuff, all right? >> i'm an italian from chicago and you just asked me if you could trust me. wa kind of sense does that make? >> yeah, you're right. in your heart of hearts, do you think the second quarter can live up to the first quart either for the equity markets? >> i don't. i turned -- let's call it bearish neutral about march 4th and i've watched the s&p rally. that doesn't really bother me that much. i still maintain that we're going to be low double digits, high single digits at the end of 2013. that's my opinion, they're telling me where the year is going to end up. having said that, stocks have the most interesting profile of anything i look at. there was a guest from bank of america on "worldwide exchange" that made a great point. we lost 50% in the market about 17 months and it took four years to get it back. you can sort of shrink that into more of a microview and say that

we can lose 10%, 20%, 30% in, say, 17 weeks and take about four or five months to get it back. that's the way the stocks work. they offered a more steady returns over a 100 years profile, but you have huge drawdowns in the meantime. that happens. i think we're going to see that again this year. having said that, i'm wrong on my call so far. i feel like in order for me to get long, i need to have a solid pullback and i need to get some of the weaker longs out of the market. those to me are the people that did window dressing at the end of the quarter, the people who sort of bought because they needed the buy and aren't keeping pace with the market them. >> maybe the one thing that becomes a little concerning is that the new cycle at this point, i would have to say is explaining why stocks are going up. now it's sort of in the news now that housing is much better, is much improved. and that makes the consumer feel better. we saw cyprus. that's such a -- you know, it's not italy, obviously. and then you've got the fed.

the fed is -- doesn't show any signs of the coming less accommodative. they seem totally convinced that they need to keep this coming or else the jobs start deteriorating again. so they feel totally justified to continue with this 85 billion. so those are all, like, positive things. six months ago, i would have had all negative things to give you. and now the new cycle seems like it is supporting higher stock prices which is probably bad. >> well, it is. i mean, the fed does need to keep doing it. the fed has to keep doing this because hedge funds are following the money and the fed is releasing the money. so you have to be long u.s. stocks if that's what your game is. that doesn't happen to be my game. i'm happy to be neutral stocks. i'm happy to be long gold. i'm happy to be short the euro. i'm happy to be short the yen and those are things that i can participate in. i have a different profile than a long roaming mutual fund or a hedge fund benchmarked to the

s&p. but they have to buy it. just for me, i need to get that pullback in order to get a pattern that allows me to buy it to trade it from the long side. i just can't do that yet. now, cyprus is interesting because somebody asked me after i said -- it was maybe two appearances ago. i said i can't be long the s&p. they said, well, what's going to cause the s&p to fall? i said the thing that scares me is i don't know what caused it to fall. then cyprus came out. i wouldn't have picked cyprus. that's like picking cleveland. i mean, it just doesn't make sense to me. when i can't see the risk, that's what keeps me out of the market. >> were you a fighter? was your nose ever broken. >> i was. it's been broken four times. >> whoa. >> it's cool looking, though. >> right. it's kind of cool looking. it fits my region. i mean, i'm not coming to you from los angeles. >> if you threaten someone, they're going to take you seriously, you know? >> i don't know.

considering my nose has been broken. >> yeah, but obviously you're putting it out there. >> he's not aphrase to get into a scuffle. >> no. i fought briefly. i lost. so i stopped. that is the way i trade. >> all right. thank you. you led with your nose. >> all right. it is pretty cool. when we come back, the second quarter begins today. we're getting ready for a week of major economic releases building up to friday's jobs report. but first, it is a washington tradition. you may have thought it was going to get canceled this year. it does not. the annual easter egg roll kicks off this morning at the white house. this is video from last year's event. people are expected to gather for live music, reading and easter egg rolling. this year, it includes jordan

sparks, the music group wanted, characters from sesame street and nascar's danica patrick. the theme for this year's event is be healthy, be active, be you. i know what you're thinking... transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles.

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of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. why did they stop playing? this should be -- >> this is our theme song? >> why is this not as popular as it was? it's still good. >> it's still stuck in my head, i'll give you that. >> it was a very popular song at

one time. >> it fell off the radar and it says "squawk box" to bring it back. >> this is five or six years old, this song. >> no. 1997 inspect is a year older. we were talking about how the dow had a great quarter, the best in years. this is 1997 is how old this is. older than you think. >> good morning and welcome back to "squawk box" here on cnbc. anybody that hasn't left because of that song. i wish i could leave. becky quick, andrew ross sorkin, making headlines, u.s. business and labor groups have reached an immigration deal. the agreement was reached between the head of the u.s. chamber of commerce and the president of the iflcio, which is those two guys to agree on anything, u.s. claim better of commerce and -- >> it's a big deal. >> wow. >> senator chuck humer acted as a mediator. their deal on a guest worker program removes a major hurdle

to a broad immigration overhaul and it clears the way for senate legislation to be introduced soon. >> we are heading into a busy week. that culminates with the jobs report on friday. but it's not too early to get a jump on things. we have the jobs report this friday, but big numbers every day leading up to that. steven whiting is the lead economist for the u.s. institutional equities business at citi investment research and analysis. and russell price is a senior economist at ameriprice financial. i was looking through the list of things. we have auto sales, ism, i think durable goods -- or durable goods orders on -- is tomorrow, is that the day? >> that's the retread of it. >> factory orders in february. okay. that's the components break down for factory orders. when we look at all these numbers coming through this week, people are wondering can the second quarter be anything like the first quarter was in terms of equities. a lot of it is going to depend

on the economic numbers. what are you guys expecting at least on these early numbers? >> continuation of the stronger trend. you know, it doesn't lift up again in some cases, for example, the ism data today, we were at 54, which is a reasonably good clip. we can perhaps exceed that in the second half of the year. it's not a particularly difficult time to jump up in the terms of the orders readings. >> but are we going to see the slump like in the past years? we've been concerned about caterpillar. are you guys worried about that at this point? >> just on the employment data. where you've seen a pronounced trend for three years. you've got the consider that we're going to have a home building season this year. so some of the weakening baug because there was a lack of construction related employment, that's going to be mitigated and the seasonals are learning for the pattern of the last three years. it's heavily weighted on what recent years' experience has done. we've had these terrible second

quarter periods or spring periods through weakness in employment. it's probably not as promouns announced. but there may be some. i would think it would be weaker than the full year, weaker than some of the other data. >> russell, do you agree with that? >> i think some of the strength we saw in the first quarter was large by because we were expecting weak performance because of the increase in consumer payroll taxes. at the beginning of march, we heard so much concern about the increase in the sequester taking $58 billion out of the economy, but yet at the end of the year, we took $125 billion out of the economy through higher taxation on the consumer. so when we go forward, we're likely to see in the second quarter, at least, a little bit of temperament in the pace of economic improvement. but then, too, start to improve a little bit in the second half of the year and then maybe decelerate again in the first half of 2014 as -- >> why slow down the first half? >> primarily because of the affordable care a act. there's a lot of new taxes.

they end an awful lot of uncertainty that's associated with the implementation of that act. so i think we'll see a moderate deceleration. 3% growth in the second half of year this year. >> but, steven, you bring up a really good point, that you think the jobs are going to be created, at least some by the housing sector this year, and that's a big change. >> well, that's the thing. there are all of these secular forces which aren't as good as they should be. we have a far from perfect fiscal picture. you had an epic housing downturn and lots of industries and cyclical activity are depressed. some of those things are bigger. i think we would be a bit more optimistic on 2014 and beyond because we're coming back from still depressed levels and many, many important ways for the u.s. economy. >> so you think it's for real. we've been arguing about whether housing has bottomed. there are some people that argue that the return is not all that strong.

>> well, it may not be as whole as we had seen in previous cycles. i think the character of the housing market has change. you're seeing investors take up a larger share of the housing market than first time buyers clearly. and it's probably going to stay that way for a while. credit is quite tiered. at the lows, we were selling one new home for americans -- annually. it's an improvement, still. >> if you look towards friday's job number, what is your expectation? >> did 210,000 in the private sector, 200,000 in nonfarm payrolls. steven was just talking about housing. last year, housing created about 50,000 net new jobs. this year, we're expecting about 200,000 net new jobs from the construction sector. so i think it will start to pick smup speed as some of those people that were previously in the industry and left come back into the industry.

so i think that that will prolong -- i think that's good that we haven't seen any chart jump in new housing construction, although we've seen a strong improvement. it's better that they can prolong this cycle that can be played out over years to help the economy over a long period of time raerchb create another bubble. >> russell, guys, thanks for coming in this morning. coming up, a must-read for anyone on wall street or in washington. politico's morning money, ben white is going to join us next. the stories you need to know this morning when squawk returns. hey, so i just switched my car insurance to state farm. saved like $480 bucks. that's a lot of money. i know, right? wait...you have a car? yeah, an suv. [ male announcer ] switch and you could save $480 bucks with state farm. departure. hertz gold plus rewards also offers ereturn--

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welcome back. ben white, politico's chief economic correspondent, good morning, ben. >> good morning, andrew. how is it? >> i think i owe you a happy birthday. >> yeah, one day. >> yesterday. and happy birthday to your mom. >> thank you. >> which was listed, i believe, in mike allen's politico. i don't think you listed in this morning's politico or on friday. am i wrong? >> i don't tout my own birthday. although i did say on friday i would say sunday night off. so thanks to dave clark for taking the reigns on sunday night so i could have a normal morning's sleep for once. >> i was going to ask you about one of the lead stories about the sequester and the lack of impact. are you in d.c. for the egg contest at the white house? >> yeah. i'm going to go roll eggs with tifrt if lady right after this. no. i head back to new york after this. i think that sequester story is interesting in that we've

basically seen in the airline industry very little impact. the white house warned a lot about big, long lines at airports, airline delays. this is the stuff that people worried about the sequester would impact them in their personal lives. it hasn't happened. at least it hasn't happened yet. my thinking is, if we have have these cuts at least in impact, we hit it in may, hit it in the summer, we're standing firm, we want the dollar in spending cuts for every dollar increase in the debt ceiling to a trillion dollars. how are democrats going to fight that if we cut 58 billion in a year and see in impact from it? i think this limited impact means we have a more scary debt ceiling strike than a lot of people thought we were going to have. >> i agree with you. but what i'm worried about is not that the white house thought it would be a huge impact, but we had a number of economists who suggested it might not hit the market immediately, but when it comes to numbers over the

next two and three months, we might finally see it. have we decided we're not going to see that, either? >> yo. i don't think we've decided that. i think we'll get some furlough notices this friday from the pentagon. you might see more headlines creeping in that maybe this is having some more impact. in terms of a knock on gdp growth or any of those things, it's too early to say whether we've taken that 1% off. it does show up in consumer confidence numbers, in some of the sentiment numbers. they've been weaker than they might have been. but there's no giant impact. we're not falling off any cliff. we're not seeing a lot of day-to-day economic impact. but so far, the bark was a lot worse than the bite and i think it undermine tess white house argument that we can't cut spending a lot more. >> yeah. given our future obligations, how far you want to total them up, there's a lot of numbers around, but some of them are 70 trillion, whatever it is. if cutting this 3% wasn't

even -- whatever it comes out to. people have different numbers for it. but if it had hurt and if we really did feel it, what would that say about our ability to do the big things we need to do? i mean, maybe this is a good sign. i mean, we've got to do a lot more. maybe it's good that it shows that we can do this without it being that painful because we've got a lot more work to do. >> right. and the work we have to do is on the longer terms, debt, social security, medicare, medicaid. >> but we know even over the past five years -- >> yeah. it's discretionary. >> i was saying if you would go over to that egg hunt in a bunny outfit -- you're like 6'2", right? >> 6'4". >> you would make a really good harvey, although he was invisible. how cold is it? is it 30 degrees down -- >> no, it's in the 50s. it's not freezing cold. and i know you think this indicates that global warming isn't real. >> no, no, no.

you're sure? it's a 20-year hiatus, then. >> i heard that earlier. >> did you read it in "the economist"? >> no. i heard you talking about it earlier. >> they are scrambling, the true believers. but no cherry blossoms are out, right? >> no the. cherry blossoms are out. >> oh, they are. >> while you're in the nation's capital, it was in morning money and politico last week, it was a "new york times" story. and the feelings about jamie dimon in washington. the piece suggested that his relationships in washington have become so troubled board members and others that are worried about how the bank is going to deal with regulators. what is your sense of what is going on in washington and where jpmorgan stands in all this. >> i think his star is waning significantly in d.c. there are folks not as comfortable as being associated with dimon and jp morgan.

his not coming to that last whale meeting wasn't particularly helpful. >> i thought he wasn't called. >> he wasn't called, but the real question is why wasn't he called? i don't think things necessarily happen by accident. there were folks in d.c. who were very surprised by that. there were many that said, look, this is my bank, this is my call. but i think the larger question and picture is right, that there is concern that jpmorgan has run into these regulatory problems recently under jamie dimon's watch and had this big blow up with the wale and -- >> how big a deal, though? you remember where lloyd blankfein and -- >> no, they're not in that camp. he can always rehabilitate. this is just a bad couple of news cycles. i don't think there's a sense that he's in trouble, that

there's going to be a coup on the board to bring him down or anything like that. the shareholders are happy, the stock has done well, the bank is in good shape. but he was a rock star in d.c. he's not a rock star in d.c. right now. >> thank you. >> thank you for waking waking. #. >> this is the middle of the day for me. >> see you soon. >> thank you exhibition coming up, we'll head to the chairs and talk some march madness. that's next.

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it may be april 1st but march madness is the name of the game. joining us brian schactman. brian sits with us. >> i was in first place after the first day of the pool. >> i was briefly in first. for a while i stayed at third for a long time. i have nobody. i have louisville in the final but i don't have them winning. >> i have louisville winning but i have no chance. and i think you have indiana. >> what about you? >> i didn't even play because i might lose. >> you have no interest? >> right. >> it's still fun. i think college basketball is tough. but how can you argue? wichita state -- >> my daughter's team. had them all the way to the

final four. >> legitimately. >> legitimately. she had duke to win but wichita state to go to final four. i don't know if they can match up against louisville. >> syracuse hall of fame coach. michigan. the fab five. you remember the fab five, andrew? it's been 20 years since they've been there. they were absolutely unbelievable. of course everyone is talking about it. we're not going to show what happened to kevin ware. he broke both bones in his legs. it was absolutely horrific. >> you were watch something you went back and watch. >> we saw it live and then replayed it. >> 20-year-old kids to pick up and finish that the way they did is unbelievable. >> duke player hit a

three-pointer. they were really trying hard to come back. i watched him. and i said what is is happening? jim nance didn't see it. then the three louisville players were on the ground. russ smith was crying. they all went back. they didn't know when they were doing the replay it was going to look like that. >> i'm not going to demo it. it was a simple movement like that. >> it breaks my heart for him. >> you see -- i think it was a marquette guy. fell on his head. from above the rim, 260-guy fell on the marquette guy. there has been amazing stuff. >> the story lines in the final four are really compelling this year. and we will see what happens. >> i can't believe syracuse amped it up after getting killed

by louisville in the final. >> i think louisville is going to win.

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a new month and new quarter. stocks closing out the first quarter of 2013. at or near 15-year highs. where is the market headed next? we preview the second quarter and tell you where you should put your money to work. south korea vowing a swift response if attacked. we will get the latest from seoul. find out which stocks are moving on in our bracket challenge as the second hour of "squawk box" begins right now.

good morning, everybody. welcome back to "squawk box" on cnbc. we've been watching the futures. they are just below fair value this morning. if you take a look those dow futures are down 4.5 points below fair value. s&p is down one point after finishing friday at a new all-time high. this is the first trading day. a pipeline spill in arkansas. it caused thauds to be spilled. the incident escalated. >> and michael stein berg charged with insider trading. he entered a plea of not guilty.

it generated $1.4 million in profits. apple has been denied a trademark for its ipad mini. u.s. patent office told apple in a letter it had not made a strong enough case to support that phrase. ipad mini. >> just the mini. just calling it an ipad mini or what part of that? >> i guess. owning that phrase. >> they can't own an ipad maxi. that's been used before. >> you used that before. >> the last time i had an original joke i don't remember when that was. you were definitely not on the show. i use a lot of stuff again and ain.ain. it's a start of the new quarter and a week away from earnings season.

founding partner solomon. you are a baseball fan, yankees fan? >> i am a yankees fan. i'm going to the opening game this afternoon. >> i thought it would be cricket. >> no, no, no. my number one sport what we call football and you call soccer. >> but you adopted the yankees. >> when they were bad. i moved here 23 years ago. >> i think they're not going to do that well. i said they couldn't lose 90 games this year. that's different. >> all right. >> it's almost possible my team can lose 90 games. >> pittsburgh. >> let's get that out of the way

right now. >> we are family. okay. so my question to everyone has been after this first quarter are you optimistic we'll have three more quarters for economic growth and market activity, john? >> i think they anticipated the stronger economy that the numbers are showing. friday's number, people were out. consumer spending puts us on track for 3% or better for gdp. the first quarter is going to be quite strong. >> no spring swoon this year? >> we'll see about that.

i think jobs are key. >> what do you think? >> i think it's going to be hard to say to make 11% each quarter. >> you've done it before. maybe not 11. >> up 44%. we are entering bipartisanship in washington. i have been out here saying the lack of bipartisan ship has caused companies to hold back on spending and job hiring. i think the market got it in the first quarter. you will see a lot of signs that people are trying to figure out how to work together. we have 18 months until the next midterm elections. i feel there could be significant progress made

surrounding the budget. >> do you think people just decided they don't care what happens? >> we have been hearing about the same thing for four years. the known knowns. we know europe is a mess and we know there is no way out. how long can we talk about it being an issue? cyprus, which was a blip as it turns out more than anything else. everybody jumped all over that. sunday night i was jammed with e-mails. the market was going to crater monday morning. >> you called that earlier. you were right. >> oh, i thought it was a big nothing. >> i don't know. they thought there would be runs. >> there's a reason for that.

there's no trade between germany and cyprus. a lot between germany and itly and germany and spain. they're not going to do the same thing they would do in cyprus because that would hurt the german economy. >> they did cyprus because they could do cyprus. 0.2% of gdp. it was primarily russian money. they have to convince people it's a one off. we have capital controls now for who knows how long. you couldn't do it on a country like spain or portugal or ireland. so you think we are heading into less acrimony in d.c.? do you think the the president will start arguing with entitlements? >> he said he would in some

substances. >> do you think republicans will put any more revenue on the table? >> i do. >> i don't think we'll get tax reform for exactly that reason. everyone says it should be lower rates, broader base. but the president wants broader base and higher rates. and i don't see him backing down. and the republicans have to go along with immigration reform. the last election results told them that. >> that's right. >> and closing down the government, it happened under clinton. it was a losing strategy for the republicans. >> listen, i'm not making a partisan comment here. i say there is a lot of reason why people should be working together. this is not an imminent election. >> i don't want to work together too much, though.

which side is going to work with the other side. >> look what they are doing. they are working on tax reform. these are guys on opposite parts of the house, opposite parts of the legislature working together to try to figure out how to get something done on tax reform. you will makes are here for real positive movement. i'm saying the market is anticipating there's a higher probability that it gets done. people much more focused on domestic policy now than they are than europe and china. >> how do you correlate the series of new highs we have seen in the averages right after the sequester wasn't fixed. it had no effect? wasn't it a positive we saw we could cut a little bit and it wasn't going to kill us. >> i don't think we know about the sequester. what is it, $85 million?

>> $40 billion in actual spending. >> it's a rounding error. we'll see some effect. we have to wait in line longer at the airports. >> may not get patted down next time. is that okay? >> i look forward to that. that's why i travel so much. >> what is going to take us to the next level do you think? >> i actually think the market has to mark some time at some point. even if the economy gets better, think how far we have come. for the third year in a row we are where we thought we would be at the end of the year pretty much at the end of the first quarter. the rest of the year has been a mark in time. that has been the passion in the

markets. if you can tell me they are here to stay forever, we can use those discount rates and say the market should be a third higher than it currently is. i think it is factual and getting higher discount rates because the fed can't buy equity. a record share of profits in gdp and say the margin will widen further the economy is going 4% normal. is that going to accelerate to 6%? probably not. so the market looks reasonably valued and i think it will slowly grow over time. new money gets put to work. >> well, it's the first quarter we have had equity inflows since first quarter 2011. we have gone this far. there is definitely a lid on

unbridled exeberation. >> e-mail us at squawk@cnbc.com. tensions mounting higher at the korean peninsula. north korea said it has entered a state of war. how it may affect the global markets when we return. ♪ ♪ ♪ ♪ ♪ the new blackberry z10. with time shift and blackberry balance. built to keep you moving. see it in action at blackberry.com/z10

>> welcome welcome back, everybody. we have been watching the futures. just below fair value. dow is down 2.5. nasdaq is actually indicated slightly above fair value. we're also keeping an eye on shares of tesla motors. the company saying it's going to be profitable on the gap and nongap basis thanks to better than expected sales of model s. south korea president telling her top military commanders to set aside politics and respond strongly to any north korean attack. good day, jim. >> it could turn out this is nothing more than saber rattling

i haven't seen this much tension in 20 years. they are reportedly combat ready and pointing at both south korean and u.s. targets. both sides, north and south, say they will strike at the slightest provocation. and north korea's leader kim jong-un atlanta preemptive strikes. many experts saying they don't believe kim has that capability. south koreans do see kim jong-un as the boy who cried wolf. they lived through these belligerent things before. one side getting a lot of attention is last night's statement by north korea saying that the country would pursue its nuclear arms program. but at the same time it's going

to also work on its economic development. experts today are saying that's a signal that north korea really wants to engage with south korea and not go to war. in the end korea could dodge a bull et today. but north and south are on a knife's edge. our next guest thinks pretty much all the market fundamentals that he sees he likes right now. joining us from houston is lee partridge. jeff solomon here for the remainder of the show as well. lee, when you start looking at what things have been setting up for, we had this question around the table, whether you can expect to see markets like this for the remainder of the year, what do you think? >> welsh i think the results we have seen from november 15th until now have largely been due to relief rally when we saw the

fiscal cliff not being a major issue in 2015. and the sequestration has been handled pretty nicely. now, it's important that take into account that the markets have been highly correlated with the amount of fed stimulus that's been put on the table. big picture wise it is a pauf thing. up 16% for the year. world averages up a little bit under that. but if you take away that stimulus, we're still dealing with a hefty debt to gdp still hanging over our heads. nonetheless, for the rest of 2013 we think the earnings momentum on the table, consumer behavior this, kind of disregard for some of the payroll tax increases. it seems to be setting the groundwork for a continuation of a strong equity market where we will finish the year. this is the important thing. we will finish the year at or

above where we are today. >> if you're saying we end it where we are today that's very different than saying we're going to power ahead. do you expect we will keep marking time and tread water or do you think the equities will continue to outperform? >> i think they will continue to outperform but i don't think that's saying a whole lot. the rustle 2,000 was up 10%. yield is up 25%. so we have had tremendous performance in the market year to date. now, we think it's reasonable based on where valuations are started. to expect that kind of return for the latter half of the year is unrealistic.

frankly, this is a great opportunity for people to look at what their overall risk posture is in their portfolios. the market is giving an opportunity to rebalance. not to say we're bearish on equities. but we have come a long way in a short amount of time. >> john, i get the sense that you are of the same opinion. you don't think there's necessarily a lot more room to run. let me ask both of you. but if you saw a pull back. if the market comes down 1% 2,%, 3%, are you telling people to buy into the pullbacks? lee, we'll start with you. >> not really. we're a precarious state. i hate to go back to what we looked like in 2011 and 12012. but you had a strong effect in both years. we rallied through the april/may time frame. that classic adage of going away

would have been advice as we hit the summer months. i agree. there's nothing knew about the crisis that's going on in europe and the debt levels relative to gdp. but when there's a dearth of news stories that becomes the focus. there's a retraction in the amount of risk-seeking appetite there is. and equity markets continuing down a downward paths. >> so you would wait for a bigger pull back? >> i would say 10% to 15% would be the fact attitude we are looking for. >> that would be a great pull back. >> how would we get it? >> we are waiting for that against the fiscal cliff. >> so many people feel they have missed, they have missed, they have missed. >> we went into sequester and didn't blink or cyprus and

didn't blink. we haven't seen this risk-on/risk-off surge anymore. that left a lot of people in the sideline. that's why they do come in. >> once a year. we're good for 5 to 10. >> people think have i missed my best opportunity? >> i think they have. >> so this is your best opportunity? >> you have to be measured about it and unemotional. if you're underinvested you have to put a little bit of money to work now. and you do it dollar cost averaging still a great way. i'm not a great market timer. we got the front end of trends. in particular we should talk about. like the reindustrialization of america that are going to happen. so you have to be involved. >> jeff and john, we'll talk more about this.

you're staying the rest of the program. thank you for being with us. >> thank you, becky. >> coming up, consumer not feeling the cold thing. march temperatures and early easter keeping folks out of the stores. what's been a pretty gloomy spring so far. r. revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in,

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welcome back, everybody. comments or questions, e-mail us or @squawkcnbc up next, what traders will be watching in the weeks and months ahead. and get this, google is a stock to watch this morning. the company rolling out a beta version of google knows. they have assembled a huge library which they call the the google aroma base. the company says this offers the sharpest olfactory experience available. wake up, everybody. we'll talk more about this story. more stalks to watch ahead. [ male announcer ] they say that hard work

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welcome welcome back to "squawk

box". a proefpl from michael dell and partners is the best they have had. it would be dangerous to take on debt and remain a public company, which is what blackstone group will do. we will see what ultimately happens as the shop continues. walmart is using gasoline now as a lure to get more people to use gift and credit cards. gift card companies will get a 10 cent per gallon discount. 15 cents if they use a credit card. the promotion through july 7th. two economic reports are ahead today as the new month gets under way. the monthly manufacturing index from march is expected to show a slight decline from february to mark were construction spending supposed to increase 30.9%. andrew, we've been keeping an eye on currency. euro entering a four-month low following news out of cyprus.

buying pressure on the yen leading to a brief dip in the u.s. dollar. joining me is david wu at bank of america. and gary keselowski standing by at the cme. people say it might go to 100. >> it's not going to happen today or this week. '94 i think the dollar/yen was at major technical support level. it is sending the bell ringing. most importantly, i think there's probably room for disappointment. the market is priced a lot, a lot, a lot. we think it's between 30, 50 billion. the market price 5 to 10-year sector by the boj.

so the point here is given these markets move so quickly, given most of the macro investor from this one trade this year there's probably a little room for disappointment. >> is there any negatives to this for the united states? it seems all good. if japan were to come out of the 20-year doldrums it would be nice to have the training partner we have. we got scared because we thought they would take over the world. it would be nice to have a solid trading partner, wouldn't it? >> in their tempt to try to reinvent themselves is the fed. with that said, they will be trying to gain competitiveness at the expense of their training partners, including the united states. >> i see that. it would be nice if they were on more solid ground. i could almost make the same case for the euro.

a lot of countries will never be able to pay back their debts with the euro where it is. it seems an on obvious long-term short on the euro. we have the best economy. it's the currency. it's king dollar. i will let them export so they can be better trading partners. >> you're absolutely right. the only thing that can change the euro say much weaker euro. they need to get back on its feet. that has to benefit everyone around the world, including the united states. >> gary, what do you make of this? how do you play the markets near term? >> i'm feeling they're going to do devaluing of the yen.

don't forget japan imports everything so they can manufacture. right now we're seeing a little bit of sunshine over there. but this is to be expected. everybody started shorting the yen. we have seen it bounce back and forth. we have seen the flight to safety so to speak. once this cyprus situation came about, everybody was going to the u.s. dollar. they were going to the japanese yen. like you were saying earlier, we haven't seen these lows in quite some time. i don't believe they're done in europe yet. i believe the 1.20 on the euro is probably the target by the end of summer that everybody is going to be looking at. >> yeah. and it still doesn't seem cheap. >> we know our trade deficit has

helped when the dollar doesn't get too strong. are we ready domestically for the baton to be passed to our domestic economy where we no longer need a weak dollar. can we let the dollar go where it needs to go and make that up with housing and consumer? >> well, we don't have an active intervention policy. but we still have qe. japan is going to qe. the u.s. is qeing 85 billion and up. i think 10% rise in the dollar would be mostly beneficial tore the u.s. because our reindustrialization that jeff referred to before has been low energy prices. it's not being driven on labor market competitiveness. so, yes, i think we could take a

bit of a dollar appreciation and the u.s. would be healthier relative to the rest of the world. which is the least ugly. and in that sense it is probably some of the australian dollar, canadian dollar is what we should be looking at for better currency gains. >> you made that point earlier. >> i did. i think it's very real we could go through a reindustrialation here in america. >> even if the dollar isn't the cause. >> just use natural gas annan example. they are thinking of opening a chemical plant here in the united states. come on. this is the united states we're talking about. japan is coming here because our prices are better here. we just bought an investment bank. it's all about the natural resource supply chain. our view is very solid. for the next 10 years america

could very well be energy dependent. we want to be at the fro of the chain. half x, job creation in some of the good old-fashioned industrial economy in the middle part of america is very real. that's probably more important in my mind than short-term currencies. >> environmental regulation. you have to get it through environmentally. that's the hardest thing. >> not in texas. actually in job growth, they have shown the most ground growth purchase louisiana, texas, you have a try men douse amount of energy production going on. i don't think the green lobly is particularly strong in texas. >> we have to say good-bye to david wu. thanks, david. and keselowski.

>> he's not related to dennis, is he? >> i don't know. if he was, would you -- >> i like dennis. >> he should admit it. >> he's not saying anything. >> i think we lost him. it's okay. >> when we come back, spring has sprung but not for what it means for your portfolio after this. and more on the google story. we do know. stick around for those who haven't figured it out yet. squawk will be back. (announcer) at scottrade, our clients trade and invest

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you see green arrows. dow up 11.5 points. s&p up just over half a point. this comes after the last trading day of the week and the quarter on thursday when the s&p pushed to the highest level it's been at. this is a bit of a turnaround. andrew? let's talk weather and a little retail with an early easter and bitter cold spring temps in the midwest and east. they have had significant head winds. the ceo of and chief resource officer joins us now with more. good morning to you. >> good morning. >> was this past weekend a good shopping weekend? i know the season hasn't been great. >> keep in mind you only had saturday given most stores were closed on sunday. temperatures are 20 to 40 degrees below where they are.

it's hard to sell the spring merchandise so a lot of it is discounted now. >> let's go through the winners. they have sort of mounted a comeback, which is the gap. >> i think what's happened to gap, merchandise is on track. yes, they have color but also basics. style is right. price are compelling. it really has improved. and designer advisers they have for each ground made them current and relevant. >> you have urban outfitters and mays where's. what's going on there? >> the founder has come back and reinvigorated the company. the designs have been of the moment. in addition, the increased investment in omni channel, the omni channel initiative is a big focus of the future. >> shall i even ask about jcp? is there anything good to be said this morning about them?

>> where's the traffic? the only key thing, watch the traffic numbers. we're not seeing it there. we are still seeing traffic at macy's and tjxx. >> is there a way for them to find their footing? >> they are getting eg back to that. >> are the stores better inside now that they have been reimagining. >> some of the stores are redone. the need the whole store to be done. so it's taking a while. you think it gets back object track or a disaster in the making? >> it's a slow turn back. this is going to be multimedical years. >> you're so delight. how abercrombie and fitch. >> yeah. cross-instruction sure view is in place. abercrombie and cost structure haven't typically been in the

same process. europe stabilizing. metrics are in place. >> what's cross structure with you. >> they are probably going to cut expenses. i think on the next be conference call you're going to hear of produced expenses. that will be good for margins and profits? >> where do it come out from, marketing? >> it would come from corporate headquarters, store plans they will put in place that they are going to cut back. >> remember the ceo -- >> fragrances. you ever walk by on an abercrombie? >> when you walk by the store, there's a new service goggle knows started.

it's probab >> they spray almost every half hour. maybe they can reduce the number of times they stray in the store. >> your under dog is php. >> 2013 is the transition year to proved for improved growth. it is $2 billion in revenue. there's product that needs to be fixed. so let them fix knit 13. manny will do a terrific job. >> we like manning. >> we do too. >> who is the loser in all of this besides jcp? we say that almost every day now. >> you have companies struggling. wet seal has had a hard time competing against the fast fashion retailers. you want to seehe discounters

really improved. and some of the apparel manufacturers begin to get back on track. we have seen maidenforms of the world having a tough time working through their issue. >> j. crew, i know it's a private company. when you look at what's going on. >> is that working? is that buyout two or three years from now, is mickey tkrerb her going to make a fortune? >> i think he will go public again at some point. they have madewell as the growth vehicle. i think they come back. >> thank you for joining us this morning. >> thank you. still to come, opening day for major league baseball. new york yankees taking on the boston red sox. we will speak to larry blue chino. beating their state rivals 8-2. nfl's phraur of the year, j.j.

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stocks stocks to watch this morning as we're rehashing the designated hitter if you can believe that. i'm till p.o.'d. stupid rule. and you're an american league fan. >> so much strategy even a brit could figure it out. >> it's so much better. when you see them play and the american league has to play with other designated hitters, the games are better. more running, more strategy. tesla motors said sales of model s exceeded its targets and saying the first quarter will be profitable on both gap and nongap basis. i think apple should test that. there should be an apple car. >> better chance that google buys tesla. >> really? >> google could make it --

>> self-driving. >> even more important, they can make it smell like a new car forever with this google knows technology. we will talk about that. >> big advance. >> it's really lighting up the headlines. >> you guys are no fun. >> no fun? >> whatever. >> it's april 1st. >> i'm not ruining it. >> it's called joe biden day now. metro pcs shareholders to block an april 12th vote. biogen $54,900 a year for its new drug. that is below the $60,000 for

rival drug. ebay upgraded to buy from hold at canaccord genuity. when did they change it? i know it's a canadian firm. ebay has a stable growth engine. and the pay pal unit will provide -- >> there's a lot of people worried about the pay pal unit. the lower margins on the expansion of the pay pal program, they want to put these devices in stores. it is not nearly as good as you can get online. our monday "squawk box" money madness. last week's hroupbd two header. we tabulated your votes at squawk cnbc show page. in the battle between bank of america and intel, b of a won.

in the facebook and google, facebook won with 57%. more people think there's an up side. today's matchup is going to be hitting a consumer tech against an industrial heavyweight. it is apple versus g.e. for the third spot in our favorite four. vote now on facebook. who are you voting for? >> what were they last year? >> i think they just moved the astros. >> they couldn't just move the astros because there's five in each league. >> what are we talking about? >> baseball. don't concern yourself. >> no, no, no. >> the viewer doesn't know what we were talking about. >> we were talking about

designated hitter, how we didn't like the designated hitter rule. what happened? was milwaukee in last year? >> yes. >> nobody moved. >> houston was in the american league. >> houston was in the national league. they just moved them over. >> well, then -- all right. we've got to figure this out. >> it's going to take a little time. still to come on "squawk box", north korea. a threat or is it just theater? what it means for your money. >> we're going to find out which areas of the country are seeing sales bloom while others wilt. [ penélope ] i found the best cafe in the world.

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the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪ the bulls call for an encore. the dow coming off its best quarter since 1998. raising the roof. times emerging that this spring could be a good one for the real estate market. and play ball. major league baseball starting

another were season. >> strike. >> arch rivals new york and boston will face off in the bronx. before heading to the stadium, the president of the boston red sox will make a stop on our set. the final hour of "squawk box" starts right now. nobody likes the designated hitter on the set right now. they thought it would be more offense. but instead you get these big fat guys that can't run. you put a pinch-runner after they get a single. >> in your 40s. stupid. anyway, i want to talk to the red sox who is a designated hitter. they got a lot of mileage out of the designated hitter in boston.

welcome back to "squawk box". it is opening day here on cnbc. we are first in business worldwide. big that's important. >> we have already talked about the compound fracture of kevin ware. do you know how hard it was? i knew it would be hard for duke to win. because they were shook. they're not playing, right? >> took all the energy. it was real emotional. amazing to watch. the whole tournament has been awesome. >> jeffrey solomon, john riding

who adopted a lot of our customs here in this country, which is nice. >> two decades? >> 24 years now. the governor on walking dead lost his accent. >> i'm not caught up. stop. can't you lose your accent? >> i don't know what else you're going to say. >> i'm not going to say anything else. >> it's unfair. >> it's going to be great. he may bring cast members. darryl was on walking dead. >> bring zombies. >> talking dead. dell we've been talking

about all morning. comments are a sign that it is fraught with risk. dell say 274 preliminary proxy statement. >> i read all 274. i did. >> oh, man. >> i think it's ridiculous what's going on. this is the most tragic situation. i no longer believe michael dell was trying to sell this company. >> you know the elite eight. you read 274 pages of the dell proxy? >> skim. think about that statement, though. it scares me. >> there's money on the line. >> good for you. >> i'm reporting on it. >> all right. more trouble for sac capital.

prosecutors charge michael stein berg on friday. handcuffs. led out of his apartment. the government's long-running probe as they are closing in. >> did you see the future of tv on friday morning? the only video of him being handcuffed, a reporter took out their iphone and videotaped the whole thing. no one else was standing there at the time. fascinating little video to watch. >> toys "r" us withdrawing plans to go public. saying tough market conditions and a change in leadership. >> he came in here, used to show off all of his big christmas

gifts. >> is he leaving? >> yes. >> going back to sitcom, f troop. >> we are playing close attention to the country's leaders. they promise to expand a nuclear weapons arsenal. they warned the peninsula is in a state of war. we have reporting from seoul. >> it could turn out this is nothing more than saber rattling. missiles and artillery are reportedly combat ready and now pointing at south korea and u.s. targets. both sides, north and south, say they will strike at the slightest provocation. and they have even threatened

preefplive strikes. it's unprecedented. many say they don't believe kim has that capability. they see him as the boy who cried wolf. they have lived through many of these belligerent times before. one side getting a lot of attention is last night's statement by north korea's bureau saying that the country would pursue its nuclear arms program. at the same time it's going to also work on its economic development. experts say that's a signal that north korea wants to engage again with south korea and not go to war. >> right now let's get to the

markets. recap the market returns for the first quarter. it rose 11% for the quarter. the transports had a rough end to march as we talked about the last few weeks. it finished up 18% higher. the nasdaq 8%. as for the sector performance, health care, consumer staples and utilities led the way. u.s. equities future this morning had been in the red but they turned things around. dow futures up 2.5 points. s&p down less than a point. some markets in asia were closed. staying on the theme of markets and baseball, the bars for earnings in gdp growth are

relatively low. darryl cronk is chief investment officer at wells fargo. you say despite all these gains the bar is set relatively low. >> i think the gains will continue. when you look at business investment is healthy if not robust. auto sales are strong. fund mentally individual and institutional investors are still underweight equities. it is still a great place to put your money. >> we see cyprus not actually making the markets take a pause. people have been waiting for those things saying maybe you get a bull back of 5% or 10% and then i can jump in.

about 370 days on a 10% or correction. that's actually pretty typical. that's not that long for the rally itself. we know corrections don't happen like clock work. they need to be news oriented events. when you look at the markets, we just closed the first quarter. we be haven't seen in some of the sick cals, commodities participate in the risk rally. most of this has come on the back of the united states, particularly large cap and most from japan. >> you think the large caps will

have a tougher time. >> we remain tactically overweight. we like the emerging market sessions. we think the evaluations are attractive as well. >> do you think they have come a little too far too fast or that's just part of the equation? >> you are starting to get money flow. we're still a little more cautious on some of the financials and some of the industrials. >> what's your take on the commodities market? because that hasn't participated in the risk rallies yet this year. we have been a little surprised we have more attraction in commodities. >> yeah. commodities have decoupled from this whole risk rally, which i think is interesting.

part of it on the back of a stronger dollar. i actually think we break down the s&p earnings. and you look at only 22% of earnings come from europe. only about 5% from japan. so the stronger dollar, while a headwind for earnings and commodities, we actually think when you look at what's happening with buyback programs it will more thanoff set the strong dollar. we're not overweight yet but we think we're entering a little bit of time if we could pick up growth the emerging markets that would be fundamentally very strong. >> you say that the s&p has probably seen the gains for the year at this point. >> we just had a 10% quarter.

difficult tphepbdz are a big part on return these days. they are outfielding the 10-year treasury. so still support that. it's a sign of better things to come on the economy. no one has a 3% plus. maybe there is more. there's the commodities side. you would be exposed commodities exposure where they had been so correlated. >> you will see that in mlps. anything that's yield oriented particularly around energy. >> you're not a market guy anyway. >> no. we market prices. we want to know what the market prices are telling us.

>> do you ever seen any strategists or economists get it right? >> the economists ignore the message. there's more wisdom out there in all the economic models. >> rubini. don't tell me the stocks are cheaper. they have no idea. >> one of the interesting things -- >> she was looking at -- >> you're saying broad economics. >> yeah. >> who was the other one? david rosenberg. 8,000 or 9,000. alerian couldn't have been more

wrong. >> if you look at the uses of cash in the s&p 500 companies, there's four predominant. difficult deposition. we had a record year last year. kpgs have increascertainly the environment for additional capital and private equity and corporate balance sheets all make sense. buybacks on pace. $133 billion. and cap ex. the durable goods number. it is up 31% in q1 annualized. so cap x dividends, activity all uses of cash flows. very strong. >> my 30% pick, if you go forward a couple of months from 2012, i'm there.

either go back a couple or -- >> right. >> i'm there. >> i gave you points for that before. >> you gave andrew points for cyprus. i was the first one who told you that. i said if you look back. >> november i got it. you give me 15 months and i'm more than right. >> i'm the first one that pointed that out to you. you need to push the time period back a little. >> or forward. >> be proud. be proud, joe. >> i'm saying it loud. somebody has to in contrast to those four people i mentioned. thank you. coming up, want to know what stocks are generating the most buzz? our next guest has a very interesting answer when we return.

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welcome welcome back to "squawk box". sharing under the radar investment ideas. ceo joins us with some of those ideas. also, we should note that you were one -- you were with the twins at the inception of facebook. and you got a payout? you did okay. >> i did okay. >> part of the seed money? >> i boot strapped before. >> really? >> yeah. me and my co-founder put our savings in in 2007 and 2008. >> this site really allows hedge fund managers and others to discuss stocks in terms of what they're doing. is that the best way to explain what's going on. >> yeah. it's an online community for

investors. engage in conversation on a large scale. >> let's go through some of the ideas. lululemon, what's going on there? we know what's going on with the pants. >> it's interesting. before the whole see-through pants news -- >> which he believe is going to be great for the men's business. >> and it's not just me. fay landry said it's a blip on the radar screen. >> we notice there have been a string of shorts on lululemon, some of which became before this latest news. much is driven on just valuations. this is a stock that trades somewhere between 30 and 40 times earnings. at least with the most recent, a lot of new stores they're introducing are not generating sales per square foot they're used to seeing.

historically on the 2,000 sales per square foot range. >> there's always some variance. we had five shorts come out the last couple of months. >> it's very straightforward. we have this reciprocity. you have to share research of your own. >> so not just paying to get access. >> we leave the choice whether they were to pay or share research. we can track returns.

it allows us to rank our members. it's kind of neat. >> this guy has had good ideas in the past. >> members can review each other's ideas. part of the feedback process. >> five guys go on the site, see this idea, all decide they're going in at one time? >> so there's nothing wrong with five people going in at one time. collusion is a legal thing. simple cure is disclosure. they do that on their own. we build a very transparent platform. everyone has an incentive to put their best foot forward. >> how often do you see people post something and you see huge in huge right after.

>> once in a while we will see big movement. usually for small cap names. for lululemon, 10 billion market cap, you're not going to see subzero. >> another one on the list, bed, bath & beyond. >> so bed bath, the guy likes to stop a lot. he thinks it's just fallen more thaeupbt should. it's going to fall in the same way best buy fell to amazon. with the shopping experience at bed bath, you want to go there. it's more tactile. they have also sun some price matching. >> the buy, are they still

involved -- are they really doing stuff? i've been reading about them -- >> all the time. >> they're out late at night. the wink el vie were here. wink el vie were there. i'm worrying they could be the kardashai. >> i wouldn't worry about that. >> i'm not worried. are they still happy? do they have seed money? >> i think they're looking for -- >> are they getting enough sleep? they're here, they're there. >> i don't live with them enough. >> were you out last night late? >> i actually watched the game last night. >> i want to see that. don't tell me.

>> you didn't see talking dead or walking dead? >> no. >> you like all the sex. >> it's not really about that. >> time for a commercial break. >> you're a good sport. >> first our greenroom is turning to the bull pen this morning. let's go to the camera room. both men will make the walk to our set when we return. i know what you're thinking...

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welcome back, welcome back, everybody. it is the first trading day of the quarter. s&p 500 finishing the first quarter by finally breaking through. joining us is rick santelli who joins us from chicago. steve liesman on set. steve, you've been doing figuring trying to figure out who got things wrong? >> if you take the two main thrusts of economic policy, little doubt they're working across purposes. i think what we will see is who

has it wrong. let's take a look at the difference. gdp, john said 3%. i'm seeing tracking of 3.5. i don't know what your tracking is. no argument. >> no argument. >> here's the thing. the most aggressive is expanding the balance sheet $85 billion a month. the fiscal side, that's where actual spending cuts will be, probably in the $45 billion range. fed policy aimed at reducing unemployment. that's the trigger. fiscal policy aimed at reducing the deficit. along the way, the estimate is, of most commitments, that reducing government spending will reduce jobs. by almost 800,000. so my question is this. does the federal reserve have it wrong and should it not be aimed at unemployment? or should the fiscal side adopt an unemployment target. don't cut spending, don't raise

taxes as long as unemployment is above 6.5%. >> it's not hurting the economy. but i don't think the $80 million hurts. i think we have real traction. low mortgage rates helped on housing. real traction in the economy the fed could start throttling back. they won't. >> i think it makes total sense to me. if we have to get off the jump of fiscal spending the easy way is to go to the methadone clinic and get easy money. that's where we are. >> the most important thing is bringing down the the unemployment rate. then you have a government that decides to cut spending and is

willing to accept the consensus 750,000 fewer jobs and a rise in the unemployment rate. >> it's a scare tactic they will do all these horrible damaging things. >> let's get your opinion on this too. >> well, it's pretty easy. government spending initially, you do lose jobs. but the reason you lose jobs is because it's never been about reaching shangri la. it's about the private sector taking over and the government spending really doesn't work. as far as fiscal and monetary

policy being at odds, i think they're both odd, period. we talk about reform but we never reform anything. we'll look at the paper today. static versus dynamic tax policy. they're just getting around to that. i rest my case. >> when we look at the second quarter, it's first trading day. we have had a lot of discussion about whether the market can continue the gains, what are your thoughts on that? >> welsh i think over the holidays, they talk to relatives and friends that aren't involved in the day to day ongoing of the of the marketplace. did you talk to anybody who was talking about the records of the dow and the s&p? allow it to be transferred to a select few hedge funds. and the game goes on.

do i think it will continue? absolutely i do. is it the way it ought to be? i can't tell. you know, is it 95% economy or 50% economy? i do know one thing. if freight is normalized and the average mortgage goes up 6%, 7%, securitization gets reborn like "star trek", do you think housing could survive that? if it can't, we're all chasing our tails. >> i think this is a conversation we're going to have to continue. rick, thank you. steve, thank you. guys, we'll pick up where we left off tomorrow. >> okay. coming up, open house in squawk land. housing, what's selling, what's not and what this tells us about the u.s. economy. first, put me in, coach. it's one of the fiercest rivalries in all of sports. yankees and red sox. the two starting head to head in the bronx today. welcome to the new new york state.

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welcome welcome back. it's opening day for major league baseball. brian schactman joins us with a special guest. brian? >> larry lucchino, ceo of the boston red sox. we have been talking off camera a little baseball. yankees. >> reds. >> white sox. 1983. >> wow. >> andrew, don't tell me you

don't have a team? >> wilson. >> pirates. >> it's opening day today. 12 games. we want to start with the sort of big picture of the game. great tv money. great stars. trout and harper. forbes came out. on the other side, houston astros. $25 million payroll. the highest payroll is over 213 billion with the dodgers. where is the the became right now? >> i think it's in a pretty good place. nothing is perfect. but there's extraordinary competitive balance, probably the best we have ever had. the commissioner has been leading the large for a long time. i think a lot of clubs have a legitimate chance to send this year. so that's the first. in terms of the drug situation, we have the toughest drug

regulation in all of professional sports thanks to the leadership of the commissioner. again, it's not perfect but a whole lot better than 10, 15 years ago. if you compare it to what it was 15, 20 years ago, i think you will see real signs of progress on both major issues in baseball. >> we talked about having to open up their books. and here in the u.s. we do not. and can you talk a little bit about profitability. with all these this is money with revenue sharing. can every team make money? >> i think every time has a chance to make money if they run the operation right. they are relatively small businesses compared to what you deal with every day. we have to hit on all cylinders. we have to market it right. the experience has got to be good.

if you have a chance to compete given the competitive balance, yeah, teams have a chance to make money. but a lot of clubs do not. >> the big difference in the money compared to the english premier league is they have relegation. if you finish the bottom of your division you're down to aaa. in the u.s. you have a franchise. so even if you lose you make money because you're still going to be there next year. >> which you will be play paw tuckett. >> we actually talked about stealing a few ideas from the leagues. i don't think it would work in baseball. it. >> makes for great end of season gains. >> it sure does. it makes the bottom end exciting as well as the top end. >> i would be playing in high school at this point. curious, how do you make the business sustainable for small market teams?

>> revenue sharing has been the largest value to the small market clubs. and i think astute planning and drafting and selection, again, the people who are better at operations will do better. tampa bay is a relatively small market. they have had no trouble being in the postseason in recent years. pittsburgh ishas had a lot more trouble in the last 20 years. >> neil is trying to get things in shape there. >> i think there are bright signs for the pirates. i think there's an opportunity. it's easier if you have the financial wherewithal that some of the largest clubs happen. more and more clubs have the financial wherewithalment cable television and some of the changes in television in recent years leveled the playing field. not just the yankees and red sox in a high priced neighborhood.

>> has anyone in the last 10 years brought up the dh with the american league? >> i have from time to time. i talked to the commissioner a little bit about it. it's an interesting dilemma. people debate it all the time. you were debating it earlier. >> it's not a debate for joe. >> if you look at the rules of baseball, rule one it is a game played by two teams, nine players each. so in one league we play with 10. i think the debate was good for a long time. i like the separation of the leagues. >> i like when they have to play. i think the games are better. >> well, you're a cincinnati fan. >> the union, they don't want to give up the jobs.

when you are break it down, those are 30 jobs they would have to relinquish and they don't want to. >> that's been my understanding. there have been some clubs in baseball that have been on a management side unsure whether we want it or don't want it. i'm in the american league. i've been in the national league. i do have a slight preference for non-dh. >> there's so much more going on with the managers. >> it was not high intellectual achievement. >> '79 pirates put kenta left field. it's still epic in my mind. if you have a d.h. you don't have to deal with that. >> what's the state up in boston

right now. >> we believe in statistical analysis. we believe in spending a lot of time, money, effort in that domain. we have a strong view about traditional observational scouting. sometimes it's guns or butter, one way or the other. we prefer to have two lenses. >> scout overrule -- >> we have a general manager whose job it is to bring the two together and ultimately make -- blend them to make a decision. so i'm not sure i can say one prevails over the other all the time. i bring a more traditional approach than some other guys. >> billy bean says he believes in the data more now than he did 10 years ago. >> billy is a big squawk fan too. >> we've talked about it three

times. >> he's a joe fan. >> he is a joe fan. >> he's the one. >> quickly, yankees and red sox transformational struggles. you being under dog. >> we love that. the idea that the press picks us to be fourth or fifth. the toronto blue jays, rays, everybody else's teams. those are the favorites. it's nice. we like to consider ourselves under dogs. it's kind of a nice -- it's different. and we like it. we can surprise a few people this year. >> i'm glad they exist. i am. neither team is my team. i just love watching. >> thank you. you can have an american league team too, joe. >> pick one. >> thank you. >> yeah. ceo boston red sox.

housing season has arrived. in addition to opening day. jed is chief economist and has only been a couple weeks since we saw you last time. you live in the best city where housing is going crazy. at this point there's no doubt that we're in -- is it too much to say a sweet spot? >> right now we're seeing lots of demand from buyers. the big question, though, is what's going to happen on the supply side. we're seeing very little inventory and lots of investors competing for the few homes that are available. >> i wonder every time we talk about it we wonder what happens if the fed ever normalizes things. do you think the training wheels can come off? >> if rates went up two full points which is more than anyone is expect to go see the next year or so, that would still leave buying considerably

cheaper than renting. so there's still some room for rates to rise without cutting back on the housing recovery. what would change is fewer people refinance. that's because it only depends where rates are today relative to the rate you've got already. that would slow down if rates go up. >> what happens when -- i know inventory is already pretty low. but what happens with when this -- the appreciation we have seen in most markets get to the point where people aren't under water anymore. wouldn't that ease the inventory situation? >> rising price should add to inventory in two days. to help get above water. but more people decide they have enough appreciation it is going to sell. price bottomed only a year ago. so people are still waiting. they also encourage more new construction. that also adds inventory. >> sat least that's goodin venue

tore. it will take away the distressed inventory. you will not get the foreclosures coming along because people were strategically defaulting because they were under water. so i think that's a healthy development. it is telling us people underestimated where the housing market will go in terms of construction activity. and i think it's going to add more in jobs. i'm curious your take on that. >> i think that's a key point. we're seeing increasing sales is important in the past year. but the bigger shift is the shift from distressed sales, for closures and short sales to conventional sales. that's been very strong. last month we heard on the other hand that foreclosures went up a little bit. but that's about more homes moving through the process not becoming delinquent.

foreclosure market overall will continue shrinking. >> see you later. >> thanks very much. coming up, the second quarter stocks with jim cramer. and the big winners in college hoops. first, check out shares of american yeared by the chief executive officer and the share holders will be receiving $18.20 per share in cash. that's a 13% premium over the most recent closing price. i imagine there are debates about dell, but maybe debates about this one, too. back after this. the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades you open an account.

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welcome back to "squawk box." check out the shares of mobile technology provider vringo. the stock is moving this morning against zte. another in a series of suits. >> that's a volatile stock. followed by vringo. they won a case against google last year that developed some of this new technology. >> look at the moves on that.

>> the centibites. let's go to jim cramer at the new york stock exchange. you know, jim, i go back and forth. i thought big east overrated and now it will be louisville possibly. i thought the big ten, these guys really are good. did you take louisville? >> yes. louisville all of the way and now they're playing with another added spur and what happened is very haunting and not for children to look at. >> no, it's not. unfortunately, we saw it live and didn't really know what we were in for at that point. >> what do you make of -- it's april 1st and i don't know if you tried the new cent technology. i called up some lagerfeld and it smelled just like the -- just like the cologne. >> it's realistic and the

beyonce -- i'm giving the beyons toe women today. >> really. >> what i'm doing is i'm just emailing. >> are we going to -- you know what else i'm taking credit for, jim? getting my 30%. i'm going back to october 2011 to the present. i'm lengthening the year, and i've got 4,000 points on the dow. 4,000 on 10,600. >> joe, have you noticed the new assault on the bulls? it's now too old. the bull market is too old. the same people who never recognized it's a bull market are now putting it in sunrise senior living and this kind of thing just keeps going on. >> right. so if i send you some -- dracar, what's your thing if i send you some? >> what? >> cologne? >> all i really want is old spice. >> briabercrombie & fitch.

>> you wear old spice or nothing at all. >> if you want to send me those irish spring sports things that you wash your body with. >> now you're talking or the powerade smell that comes from that ad. that could be an eau or something. >> carl always smells good, and so does faber. >> the first stock of the day and then we're going to check the best performing dow stocks in the first quarter and we'll do that now as we head to break. we'll do that now right after this.

the stock of the day is a small market cap name that's a big mover. silver resources. the company selling 25% of its assets and the shares are rising on the news. >> we should thank our guest host. we being give him a last word, but there's really not a lot of time. you have a thought. just give us the last thought in the ipo market. >> the second quarter. i think it will add supply to the markets and there will be a