and hey, our top story today is the global markets. stocks rallying late yesterday. in fact, the s&p hitting a record intraday high just in the final seconds of trading. the dow at this point, it is official, it's ended higher for 16 straight tuesdays. the blue chips index is up in each of the first four months of the year, and this is for the third consecutive year that this has happened. by the way, this is the best start to a year for the dow since 1998. the futures this morning, well, at this point, they are indicated slightly higher. dow futures up by just about 9 points, s&p futures up by 1 1/2 points. so, we'll see where we go from here, even though it's may 1st. >> look at a daily chart from yesterday. did you see it? >> it was pretty remarkable. >> all day, down, down -- >> down, down, and right at the end. >> boom, beautiful. pfizer was the problem yesterday, in the dow, right? let's go through lipitor. >> the list of -- >> 180 million, is that the number? >> yeah, yeah. lipitor, patent expiration in europe this time for lipitor.

>> yeah, we saw the earnings before the bell and it put pressure on the dow. >> down a couple of dollars. >> i think it was, the stock was down for like 3.33%? >> we don't have any wall street guys. none of them can come on now because they're all, all the ones that we always have on -- >> they were wrong. >> they were correction guys. >> all the worry guys. >> and can you imagine jeff klein coming on the show right now or one of those guys? they can't -- >> good friend of morgan stanley? >> adam parker. >> adam parker. >> nice call. >> the correction will come. >> we like adam. >> we do. but i can -- i mean, i can be dead wrong. i mean, that doesn't take any talent or skill or training, does it? >> no, but the market has defied what a lot of people thought would happen, based on the economic -- >> but -- >> you have to admit, it's been odd based on the economics -- >> not really. he always does that. and when he was here, everything he was saying why he'd be bearish, we'd say that's been

around for two years. >> bad, bad. >> but what you've been saying has been front and center for two years, europe, blah, blah, blah, all that stuff. it's so well known that the market must have discounted it. >> remember when i proposed we have a monkey stand in the corner and -- >> i know, a monkey would have done -- >> a little squawk monkey? >> right. i mean, kle morgan stanley's cl can lose money easily themselves, right? anybody can do that. what do you need to pay for advice for if you can -- i don't get it. anyway. >> let's go through the list of what's working and what performed the best in april. those sectors were telecom and utilities. telecom group had its best monthly gain since december of 2010. utilities sector turned in its strongest month since july of that same year. yesterday, tech was the story of the day, though. pay attention to this. apple led the way. shares were up almost 3% as the company came to market with the largest nonbank bond sale in history. the tech giant is looking for funding, return cash to shareholders. >> please pay attention.

please pay attention. >> pay attention! >> pay attention. is that -- don't do that. how long -- will the iphone still be the market leader when these bonds come due? >> no. >> i mean, would you think about buying these? >> no. so, there's two things. >> based on news. >> there's a couple good stories about why if you're apple and you have so much cash on your balance sheet do you actually do it this way. >> because they can't bring it back, but -- >> part of it's because they can't bring it back, part is because the cost of capital's so low. >> so low. >> part of it is because it will effect the share price -- >> apple was really hot when it first came out. then, there was a time when its very existence was questionable, before, you know, they had scully and then brought in the guy from national semi. so, how long are these? >> that's a good question. >> what's the maturity? do we have any idea --

>> i think they're at least five or ten-year bonds. >> they'll still be around to pay these off, right, for sure? >> as you know, we were talking about google now yesterday? i already want to swap this phone for the android. >> i heard you saying you were doing something up there. you were talking to it? >> i was talking to it. >> weren't you? >> yes. >> weren't you dictating? you were dick statating stuff fu to do. you're very organized. >> thank you. but who knows? >> you're switching. >> i haven't switched yet, but i'm saying unless they come up with something drastic, it might happen. >> three-year, five-year and ten-year debt. >> you're four switches ahead of becky, who's still got her keyboard -- >> no, my blackberry broke. this is the replacement they gave me. it's like an old blackberry. >> she's going backwards. >> the new one with the keyboard just came out. >> i'm waiting -- >> you're four operating systems ahead. >> you're on the same -- >> we're actually not ready for the operating system. >> you're one ahead. >> i'm so iphone 5. >> this is the replacement i got set back a couple generations.

>> i remember that phone. >> it's so bad because trying to get to anything, trying to link to anything off of twitter to get to something, i've finally give up. >> go to the blog. >> go on the internet. >> it's impossible. >> i would, you know, smash that thing. >> i have to say, having this in my hands, it's really kind of pushing me towards i need to switch. >> now which one do you switch to? >> i don't know. >> iphone -- >> you know what, i haven't tried a google android. that might be too complicated. >> but the problem is now i have all these ipads and everything else that goes with an apple computer, so why would i switch? >> that's created the defensive mode. >> you know how to do the ipad and iphone -- >> why would i have to learn a whole different system when i can understand this one? >> i was walking up and -- >> you have the new one already. >> no, no, but i put google now on this. when i walked out the door, it pops up and says 13 minutes, light traffic. >> it did. >> and by the way, i didn't tell it i was going -- >> it only takes you 13 minutes to get here? >> yes. >> what time do you leave in the morning? my gosh!

>> but this was -- by the way, there is cops on the streets, so this was wrong. anyway. >> and it said nice shirt. >> and it said nice shirt. >> it doesn't always say that to you. >> it told me the weather. >> sometimes it doesn't say nice shirt it says "what are you thinking?" >> let's talk about shares of ibm this morning, getting a boost yesterday after the company announced a dividend increase and a share buyback. >> going up 200. >> not so bad. >> commodities were a big part of the april market story. gold prices fell about 8% during the mob, the biggest monthly drop since december of 2011 when it was much higher levels. the cboe gold index, which is a basket of gold stocks, oh, my word, plunged -- i know some guy who owns it -- plunged 20% during the month of april. hopefully, you're not on that. that is the worst monthly drop since october of 2008. as for oil, it's coming back. you can check out today that it is, well, $92.59, back above $90, it stuck there. while we are on the topic of the

broader markets, the ten-year note is coming back towards 1.7%, but still 1.67%. and the dollar, i don't know, we may have to wait a while for that 100 on the yen. it never happened. >> no. we were right there. >> we were close. >> 9.9. >> we never made it. then the euro, god knows why that's not at 100, but it's not. 1.32. >> three big stories for the market today, first up the adp report, then we have a fed decision and of course, we have corporate earnings that continue coming along. let's start with the central bank. the fomc's going to be wrapping up a two-day meeting with an announcement at 2:00 eastern time. the central bank is widely expected to maintain that monthly purchases of $85 billion a month in bonds. of course, you can catch the fed decision and the analysis right here on cnbc. okay, but before we hear from the fed, we're going to be getting the april adp report. that's due at 8:15 eastern time today. private payrolls, we should say, were seen rising about 155,000 last month, and mark zandi will

be joining us first on cnbc with the numbers and analysis. we should also say, mark zandi, who we love, though, is not going to become head of the fh -- >> fha -- >> you know where i'm going with this. the housing authority. >> the fannie and freddie people. the famous fannie and freddie. thank you. >> his name was on the list and maybe we can ask him a question or two about if he was in the process and what exactly happened behind the scenes. >> and if he resents carrying the water for the administration for five years and not getting the job. >> you can ask him that. >> i'll ask him that. then, i would have led with this as the most important news of the day, the issue of earnings. among the companies set to report before the opening bell, comcast. oh, these, too? merck, yeah. i'll mention those, too. merck, mastercard, cbs, viacom.

the adp reports. this might be more important than the jobs report on friday. and that's the comcast, right? >> that's right. >> say it loud and proud. >> comcastic? we'll see. ceo brian roberts is going to join us live at 7:15 eastern to talk about that. god, i hope they're good, now that i'm talking about him. we'll see. actually, i don't care whether they're good or not since i'm a journalist. the consummate journalist is the word i like to use. after the bell, we'll hear from facebook. the social network is expected to earn 13 cents a share on revenue of $1.8 billion. mobile, all about mobile and mobile advising growth, end user numbers and we'll talk more about facebook with barclays internet and media analyst at 6:40 eastern. right now, it's time for the global markets report. ross westgate is standing by in london. ross, good morning. >> hi, good morning to you, becky. not so global today with the markets report. as you know, it's the may day, may the 1st, so that means it's

international workers day, so plenty of, nearly all of europe's equity markets are closed for that today. the exception being the ftse, and then you've got sweden, denmark open and the aex as well. so, not our usual heat map. plenty of asian markets are shut apart from japan and australia and hong kong, so not a normal heat map because it wouldn't work. the ftse 100 today up 38 points, it was down earlier. this is interesting, we closed out the month of may and you can see we're weighted to the upside on the ftse 100. i want to show you the next chart because we've set a record yesterday as we go into today as well, and the ftse has made it 11 consecutive months of gains and it is the first time the ftse 100 has ever done that since its inception. now, it's not as old as you think. the ftse 100 started life back in 1984, but it's the first time we've ever had 11 consecutive months of gains. in that period, the ftse 100 up just under 21%. so, that's worth pointing out as we look at these record closes

again on the s&p. the other thing is we had data today out of the uk also better than expected. manufacturing pmi just a shade below the expansion, actually. came in at 49.8. it was forecast at 48.5. remember, uk last week we learned narrowly missed a triple dip recession. this is the april data to suggest maybe the economy is turning a corner. we heard from the baveng of england's paul tucker in an interview suggesting the same thing. that's why gilt yields are higher. being sold off. yields are high, 1.7%, but it boosted the pound certainly against the dollar, one of the real out-performers for the last few weeks. and sterling/dollar over here, 1.5570, up near the session high at the moment, and there is far less expectation that we'll get in mervyn king's last meeting as governor of the bank of england next week any more quantitative

easing, although he has voted for that in the last two meetings. so, maybe there are signs here that things are getting a little better for the uk, and it's one of the few manufacturing pmis that we've seen an improvement in and better than expected. remember, we saw chinese pmis coming down a little weaker than we might have thought as well. so, that just pressured commodities. that's where we stand. as i say, a bit of a shortened market watch because of the may day holidays. back to you. >> may day. people say may day, may day. anyway, ross, thank you for that report. we'll talk a little bit about washington news and this catches you up on what we were talking about before when we mentioned mark zandi. president obama's expected to nominate venture capitalist and former wireless cable lobbyist tom wheeler to head the federal communications commission. the announcement is expected today. wheeler served as an informal adviser to president obama for the last couple years and went into the business after the helm of the cable association and wireless group ctia. meantime, i just got ahead of myself on the mark zandi stuff.

president obama is expected to nominate melvin watt to lead the fhfa, the regulator that oversees lending giants fannie mae and freddie mac. did i -- what did i say? he is a democrat from north carolina who served in the house for 20 years. he will replace edward dimarco, who was appointed by george w. bush. this is where you're supposed to say, honey, come watch "squawk" immediately, this is big. >> that's right. honey, get in here! dimarco's leaving! they're putting watt in, right? the fh? fh -- >> fhfa. >> all right in other political news it was a primary in massachusetts yesterday, apparently, setting up the race for the u.s. senate seat formerly held by john kerry. democratic u.s. representative ed markey, well known to anyone in telecom, and republican gabrielle gomez won their primaries. the two will now face off in a

special election on june 25th. senators up there are like -- remember, we had to deal with scott brown and of course, senator kennedy passed away, but yeah, seems like a revolving door. ed markey is a guy that we know. he's been on the show a million times. >> yeah, he has. he was first elected in 1976. gabriel gomez is somebody who made money in investment banking, a liberal republican, or at least he painted himself that way he painted himself as a liberal republican to beat off a conservative republican in the runoff. when we come back, the question of the day -- sell in may and go away? we will ask two men with money on the line. first, though, check out this video. things got a little squirrely last night in kansas. the jayhawks baseball team was taking on wichita state. a squirrel got loose in the infield during the top of the fourth. the runaway rodent wasn't going to be captured easily. the squirrel even tagged the

second base bag as he eluded the first two would-be captain yours. eventually, a player used his batting helmet to bring the rampaging squirrel into custody. the little critter was safely released into the parking lot. >> oh, good, where all the cars are.

welcome back, everybody. we've been watching the u.s. equity futures and even after the big gains of yesterday and for the month of april, you can see this morning green arrows again, modest gains at this point. the dow up about 8 points, the s&p futures up about 1 1/2. a lot of this will be influenced by the earnings today. we have a big beat for health services provider humana. they earned well above what the street had been looking for. the street was looking for $1.81 in terms of revenue. came in and beat the numbers that had been expected, too, and the company also raised its forecast for the year. the company says its various lines of business are performing better than it had expected. it's also seeing a lower-than-expected tax rate. it is may day, and there are workers' protests in a number of

countries. in greece, we should say, trains and ferries were canceled and hospital staff walked off the job. they are striking against austerity required by the country's foreign lenders. let's get the national weather forecast from the weather channel's jen -- should i pronounce it jen or not? carfagno? >> yeah, you would think i say it like lasagna, but we don't. we just say carcarfagno. >> you do? excellent. >> we do. i'm surprised they weren't protesting the weather in greece because we're talking snow. we're talking snow, not just in the mountains. we're talking snow across parts of the plains here. joe, take a look at this. it's a huge storm system. i had to measure the clouds because it stretches for 2,000 miles. really, the clouds stretch from the west coast all the way to canada. so, 2,000 miles worth of clouds, and underneath these clouds we've got rain and snow, and actually, some thunder and lightning, too. the snow is coming down, cheyenne, denver. you might expect it in those spots, but we have snow all the

way through nebraska. we're getting snow in minnesota. minneapolis just got under a winter storm warning and eventually changes over to snow later this afternoon. so, yes, we're talking spring snow. it's going to set records. we're going to be watching for snow falling on the order of 5 to 8 inches in denver, several inches of snow right across the plains, nebraska, kansas, iowa eventually gets into some of this snow and i've got a sleepy clicker this morning, so sorry for fymaps that are moving slowly. we've got 5 3 to 5 inches of snow, not just the latest record for some spots, but others, record-breaking snowfall. minneapolis, we've had five instances of snow up over about 2 inches, but we've never had more than 3 inches. and look at the forecast, 8 to 12 inches of snow in may. so, may 1st, nonetheless. snowfall big part of the story, but there will also be some cold air as well, so get ready for some record-breaking cold temperatures coming our way behind all of this snow, and even with the snowfall. minneapolis, we had the rain mixing with snow today. overnight tonight we still have that snow going on, about 1 to 3

inches. temperatures drop to the freezing mark and then 3 to 5 inches of snow falling for minneapolis tomorrow, may 2nd. joe, we'll send it back over to you. >> i think you should go with, from here on out, if your clicker doesn't work, it's frozen. your clicker was frozen. >> it's too cold. perfect. >> second coldest start to spring in history, although i will at least point out, unlike the people when we have a warm spring, they say, in history, i will point out that recorded history is like the blink of an eye, it's like a couple hundred years. >> it's true. >> but you know why -- >> records, on record. >> you know why it's been so cold and you know why there's been all this snow, i'm sure, jen. global warming. >> why do you think? >> no, global warming. i saw them doing back flips, the climate change. i saw them doing back flips trying to explain it. they go backwards and say, okay, let's try to deduce why this could be happening, assuming climate change is real, and they said that since there's less ice in the arctic and they said it's

the seventh smallest amount of ice, again, since satellite records were available, only the seventh smallest, but they said less ice means more water in the air and therefore there's more snow. i mean, they find a way to tie it back to actually because things are warmer. >> but there's also warmth somewhere else. there's always -- when there's extremes, it might be cold somewhere, it's going to be warm somewhere else and it's a big world, right? so it's not just what's happening here. >> but they don't point that out during our three warm summers in north america. they didn't point out how cold it was other places, or during when winter is particularly warm. they don't point out how cold it was in russia or elsewhere. anyway, jen. >> so, tomorrow when we talk, i'll have that all laid out for you, where else it is hot. >> just make sure that it all plays into the secular religion of -- i mean, let's stay on plan here. >> i have a more practical question. >> you do? >> spring skiing in colorado. we're flying through denver --

>> you can't do it because the bears come out of hibernation. they have to close down. >> they closed a month ago. >> we're going out to omaha for the weekend. i was thinking i've got a layover, maybe get an afternoon -- >> you could ski in omaha. it'd have to be cross country, though, i think. are there any hills? >> i was thinking a little downhill, because one of the flights is through denver. i thought we could take south -- >> i don't know if anything's open actually this late. >> i think they actually have to shut it down because of the bears coming out of hibernation. they don't want you -- >> who's going to come after me? >> another all-time hi, jen's gone, bye, jen, for the s&p 500. all three indices closed out april with gains. we don't know what christian is saying. we need someone new who hasn't been dead wrong, chief investment officer at global financial private capital in sarasota. and we'll give michael tyler a chance, chief investment officer at eastern bank. do me a favor, don't admit if months ago you say the market

needs to pull back to commit new money. where were you, chris? >> i would have thought that 50 points ago was about the high for the year, so -- >> 50 what, dow points or s&p points? >> on the s&p, s&p points. >> okay, but you were urging clients since october of last year, you were urging them to go ahead and buy all the way up to 50 points ago on the s&p? >> absolutely. and i think now it's just recycle what you're doing and change from, shall we say basic consumer staples to old tech. i think that makes a lot of sense. so, just the movement in the market between sectors. wash, repent, repeat cycle type thing. >> chris, where were you? >> i was -- >> okay, all right, i thought you were chris. never mind. i've never seen you guys before because we're getting all new guys because all the other ones we can't use anymore. michael, were you long since october? >> yeah, we've been bullish for

a long time and for the simple reason, frankly, that there isn't a whole lot of other exciting alternatives. equities are better values and have been for quite some time, so we've been looking for around 1,600 to 1,650 on the s&p for the year. >> all right. so, do you still say that there could be a correction at any time? some people think, and i was reading -- i don't know whether you guys follow paulsen, he comes on all the time, not hank or pat, but jim paulsen, who says we've seen in that little bit of a pullback, we saw 3%, 3.5% in the last couple weeks before these new highs, that there had been enough rotation and enough churning going on to where that actually represented a near-term correction. do you guys buy that or do you think we're getting close to a top? i'll go back to you, chris. >> absolutely. i think that's totally correct. i mean, you look at pfizer and philip morris, you'll see that -- >> ibm. >> -- consumer staples, you know, they sort of are really marginal as far as further up

side is concerned. but what you've seen is a rotation. as i said, all tech and defense companies, unloved and unwanted areas look attractive right now. >> are you out of bonds or you still have a fixed income component? >> very small fixed income component, short duration. i think you need to -- it may be two, three, four years before we see interest rates come up, but nobody wants to be caught leaning the wrong way. >> yeah, how about you, michael? >> i think that chris is right. i think that there's a significant rotation going on. it's noteworthy that the leaders in the market this year have been the defensive companies, not the industrials, not the technology companies, and the reason that that's the case is simply because they have dividends and good dividends. so, as people have been staying out of bonds and moving into equities, they've been looking for the yield. that's very good for those companies, but we may very well take a pause through the summer until the economy is strong enough to give the growth

companies a leg up. noteworthy that the companies that did well yesterday in the growth areas are companies like apple and ibm that have had some dividend and buyback news. >> okay. thanks, michael. chris, thank you as well. it's confounding to try to figure that out. i had to do this radio thing, o so -- >> monday night, right? >> i did it last night, but, and i try to formulate my thoughts on what i think is going on. and with the market at these levels now, if you're worried about bond yields going back up, you would be worried about the market. but is it possible that inflation is so that we're in a japanese situation where we'll have to try really hard to get inflation going? the fed has to try to get inflation going and the fed has to -- so, the fed is justified to stay this loose and there's nothing to worry about near term because neither unemployment nor inflation is going to get anywhere near their targets any

time soon, so -- >> but depending where you are on the cycle in japan, if that's right, equities are not a great gamble either. >> i knoewsion but why would the markets be doing so well with such tepid growth here, 2%, and with all the revenue misses -- >> and relatively speaking, it's the best asset class. >> but you'd have to be confident it was going to stay that way for a while. if you're sure -- like, we've been sure fixed income is not the place to be. if you were so sure it was going to turn around and people would exit the bond market immediately, you would have to worry a little bit. >> i want to hire the squawk monkey. i think that's basically -- >> that might be, might explain a little bit -- >> yeah, but see, you wanted to bring the monkey in here. >> yes. i think we should have a squawk monkey. >> remember what happened to that poor woman who had the chimp? >> that's true. >> is that what you want? you didn't learn anything from that? >> michael jackson had a chimp. >> that -- that's what you're -- did you see what his -- >> that's my rationalization. >> his last few years of life, the chimp didn't help him out, i don't think. anyway. anyway, when we come back,

we're going to talk about why one regulator is suggesting some new trading fees. >> bubbles. >> we have -- i knew it was a "b," i was thinking bobo. cftc's bart chilton will be making his case right after this. but first, as we head to break, look at yesterday's "winners & losers." >> may day! >> may day! >> may day, what the hell is that? >> may day, that's the russian new year! changing the world is exhausting business.

with the innovating and the transforming and the revolutionizing. it's enough to make you forget that you're flying five hundred miles an hour on a chair that just became a bed. you see, we're doing some changing of our own. ah, we can talk about it later. we're putting the wonder back into air travel, one innovation at a time. the new american is arriving.

it's lots of things. all waking up. ♪ becoming part of the global phenomenon we call the internet of everything. ♪ trees will talk to networks will talk to scientists about climate change. cars will talk to road sensors will talk to stoplights about traffic efficiency. the ambulance will talk to patient records will talk to doctors about saving lives. it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. the next big thing? we're going to wake the world up. ♪ and watch, with eyes wide, as it gets to work. ♪ cisco. tomorrow starts here.

♪ ♪ tonight we are young

♪ so let's set the world on fire ♪ good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. we're all here as we begin may. it's may 1st, and you know what may 5th is. >> cinco de mayo! >> yes. and you know all the places have -- >> coronas. >> mexican food and the most wonderful time of the year. >> for a fan of -- >> for a fan of mexican food. >> like you. >> like me, yeah. u.s. equity futures still indicating a positive open after it took the entire session yesterday to finally turn positive, and then we did see a new high in the s&p. early trading in europe, really interesting in france. it's weird to be -- is it open? >> no. isn't it -- >> may day. probably isn't. >> it's probably not. >> like the french need an excuse not to work.

and then in great britain, up a little bit. and you saw the other one, positive in germany as well. andrew. got bart coming up here. >> we've got bart. >> i know. >> we've got bart. he's here, looks great, as always. >> i think we should play bond music for him. >> bart chilton, the commissioner is no stranger to pushing the envelope. this morning he's doing that right here with an announcement on a topic many have tried to propose, transaction fees on futures and swaps. i don't know if he's going to make friends or not this morning, but we're going to find out. bart chilton joins us now. so, we've got the music for you, bart. how are you? >> i'm great, guys. i'm not in this business to make friends. >> no. >> that may be bad for me, but hopefully, good for -- >> you're the villain. >> let's talk about this. you want to add a transaction fee on derivatives and swaps. i should also say, if you haven't read the "wall street journal," i want to talk about it in a second, there's an

article about speedy traders trying to exploit a loophole. this is going on at the chicago mercantile exchange. and i imagine that what you're proposing might actually impact something like this. >> yeah, good for you, exactly. our fine furry friends, the cheetahs. but on the transaction fee, this is a fee that's been proposed by four different administrations, republicans and democrats alike, yet nobody's ever really put pen to paper in the executive branch and sent something serious forward to congress. all the other federal regulators are funded by a transaction fee. so, today, and in talking about it here for the first time, i am going to go ahead and lay out something specific. we dug in deep to the econom econometrics of it. if we placed just 0.06 of a cent on every transaction and only

transactions for speculative trading, not for the end users, not for folks with skin in the game, we could fund $300 million a year, which is what our agency needs to look after these, as buffett says, the financial weapons of mass destruction and to get after what is really an unprecedented level of malfeasance in the financial sector, so i'm hopeful going forward. >> bart, is this effort more raising money for your agency or is it an effort to stop effectively what you like to affectionately call the cheet s cheetahs? >> well, i think it has a double purpose here because, you know, there are so many trades going on at lightning speed. they're scooping up microdollars in milliseconds, happening 24/7/365, that maybe it will make them more thoughtful about the trades they're making. i've been sounding this alarm on your show and a lot of places for, you know, three years now, and i want to keep them in the market. i think they're important to the market, but i'm not so sure that they aren't just a new version

of the floor trader and the new middle man. and if they're only holding liquidity for two or three seconds and they're really not, we're not transferring any risk, i'm not so sure that that's as valuable to markets as it once was. >> what's the impact? if you add the transaction fee, there are going to be people who are going to cry bloody murder and say, look, this is going to impact liquidity, liquidity is the life blood of the market, and i imagine one of the reasons we have not seen this actually come to a real bill in a meaningful way is that argument. >> well, two things. one, again, nobody in the executive branch -- i mean, they've put it in the budgets. again, this is republicans and democrats administrations going all the way back to the first president bush. they've just never put anything in paper that was serious. so, i think mine is serious. i've done, as i say, done some research on it and will still work on, so i think -- >> have you researched the impact? what would be the impact both on high-speed traders and as we talk about the end user, so if

i'm an airline, for example, and i'm trying to hedge my risk on oil prices, for example. >> well, what they will say initially is exactly what you suggested, andrew. they'll scream bloody murder, that it's going to impact liquidity, that markets will migrate to someplace else. i'm not so sure. again, we're talking about 0.06 of a penny. all the other regulators have it and it takes place in many countries around the world, but i think it's a deeper question as to whether or not we're going to have appropriate oversight for the populous. i mean, we don't have $100 million that we need to look over swaps, which are hundreds of trillions of dollars and cause the economic calamity, so we need the resources. and you guys report every day about the malfeasance going on in the financial sector, so we need the enforcement people to actually do the job. so, i think this is a twofer. but the reason i put out the proposal is because -- or i'm

putting it out later today -- is because nobody's ever put pen to paper, and that's important to get a proposal moving. it will get shot at. that's okay. i want to move the ball forward and that's what ultimately is important. >> right. let me ask you while i've got you here about twitter. you saw what happened last week with the erroneous "ap" report about the president, and you saw the impact on the markets. and we've also had a larger conversation over the past week and a half about disclosure and what the s.e.c. is doing around companies putting out news over twitter. what's your view? >> well, i think it's really sort of puts it on our radar, andrew, puts this whole issue of social networks and marketing on our radar. they've always been separate for us, and we've assumed, i think, that the social network is really more of a marketing tool for businesses. but if there is a company that's a registrant, somebody that's trading, whether or not it's in the equities world or the futures world, and somebody hacks in and, say, produces something bogus before an

earnings report or something, it could really impact markets. so, i think we need to insure that we have supersized cyber security at trading firms. now, whether or not that means a regulation, i'm not down with that yet, but it's certainly an area of concern. we talked about it yesterday in a meeting and i look forward to having more conversations. in a month or so, we're going to put out a concept release that deals with a myriad of things, and that will be one of them. >> are you a fan of the s.e.c.'s guidance that companies can disclose material information over a social network like twitter as opposed to necessarily over a business wire or pr newswire, for example? >> i'm okay with it if they have the supersized cyber security. i just, i don't want somebody making a decision about whether or not they spend money on television commercials, pardon, or whether or not they spend it on security that could impact all markets. so, i just think as long as their priorities are correct and they're not reckless in their cyber security, that maybe it's okay. >> but that sounds like a very difficult rule to write, bart. >> yeah, and again, becky, i

mean, i'm not 100% sure that it requires a rule. i don't want to be overzealous here and overreact to it, which is why we had a meeting and discussed this yesterday. but we will put out a concept release, as i was saying, some time in the next month or so. it will have this, i believe, as part of a myriad of things with regard to technology, but it certainly put the issue on our radar, and that's important. so, it's one of the small silver lines in sort of a horrible circumstance. >> okay, bart chilton, thank you for joining us and i want to comment that i like -- i think those are new glasses for you, and i like them. >> thank you. thank you. and i got joe's memo on the tie, so we're down with that, too. >> yeah. looking nice. >> thank you. >> see you soon. when we come back, facebook is set to post quarterly results after the bell today. we're going to talk street expectations. and then later on "squawk," the council of foreign relations president is going to be joining us. also, we have marty feldstein. he'll be joining us as well.

plus, comcast ceo brian roberts is talking earnings and outlook. then erskine bowles with the latest on the debt fight. stay with us. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good.

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welcome back, everybody. facebook is going to be releasing results after the bell today. joining us right now is anthony diclementee, an internet and media analyst at barclays. anthony, what are you looking for in the numbers? i know your price target is just about right where the stock is right now, $28. so, you basically think the

stock's fairly valued. what do you expect to hear from them? >> hey, becky. i think this stock is priced for a bit of an acceleration in ad revenue. so, if you think about the advertising growth last quarter, it was about 43% ex-fx, so we're looking for 46% this quarter, given you didn't have mobile advertising this time last year. so, i think investors will be focused on ad revenue growth rate and even within that ad number, the mobile monetization rate. and so, specifically in terms of dollars of mobile advertising, we're looking for i think $330 million. and you know, i think that's around the bogey. if you're below that, there will be questions about the trajectory of mobile monetization. if you're above that, i think investors would receive that well. >> you know, the street has tended to be pretty tough on facebook and it has expected a lot. is this a situation where you worry that the expectations are high or do you think that this is coming in a little bit lighter, that the expectations have come down somewhat over the last several quarters? >> yeah, i think that the key

here for facebook is that in order to fulfill where the stock is -- what the stock is priced for in terms of these very, you know, very fully priced multiples, i think facebook needs to grow its ecosystem. there's this notion on the internet of having a suite of products and services that link together. and you know, what i'm looking for from facebook is products and services or evidence that facebook has remain integrated the app world, the app ecosystem. there's been talk about facebook home, which is their android product which hopes to, you know, through your cover page be able to link facebook to many of your apps. and so, you know, i think that investors are looking for that, because if this is just kind of an advertising portal, then we really, you know, really need to wonder, is that going to be able to fulfill the trajectory of the company over the next few years. >> you point out that the com score numbers show how people are using it, at least in terms

of a computer, is starting to plateau a little bit, but it's really the mobile usage where you see all the potential for growth. what do they have to do to make advertising work there? >> yeah. well, look, i cover advertising, so i talk to cmos about the effectiveness of the facebook ads. and clearly, there's a mixed reaction. the right rail, the static display ads are probably viewed as much less effective than mobile ads in your news feed and perhaps some of their newer products. so, i think further evidence that the return on investment for markers and advertisers is improving for those ads, and it's not impacting engage, it's not bothering users enough that your daily active use, particularly for younger cohorts, is impacted. i think that's key. and you know, there is skepticism that i hear from investors. are younger people using facebook as much? are there competitor social networks out there? and i think my view on that is that internationally, facebook is still very big, and certainly in the u.s. on mobile products,

facebook is still early days, so it might be too early to tell. we'll definitely be looking for engagement metrics both in the u.s. and internationally. >> anthony, what's the time horizon when you think about this stock? if you bought this thing at $38, this has been dead money to you. you know, to the extent that you think, you know what, i'm just going to drop this and find something better, how long do you think it will take, if it gets there at all -- and i don't want to suggest one way or the other -- that we get back to at least the ipo price? >> yeah, i mean, i'm equal weight, right? because i think that when you look at facebook as compared to other players in the ecosystem, like a google, you know, which trades in the mid-teens on earnings, there's a very high hurdle for facebook to, again, expand its ecosystem. i'm thinking horizontally. it's not just purely advertising as an app. you know, really kind of being integral to your experience on your iphone or your android phone. will facebook be able to do that? will it be able to penetrate into ecommerce, into payments

noorks immedia into media? i think you need that for the stock. i think you need facebook to expand beyond advertising for this stock to really work into, as you said, into the high 30s. >> okay. anthony, thanks for joining us. >> okay, thanks, guys. coming up, two big stories of this morning. we've got earnings and themorni. we've got earnings and the economy. we'll talk corporate results with comcast chairman and ceo our boss brian roberts. plus, jobs, the fed, and global economy. and our guest host of the morning, he's in the "squawk" green room right now council on foreign relations, richard haass, he's going to join us at the top of the hour. ♪ ♪ the new blackberry z10 with blackberry hub and flick typing. built to keep you moving.

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we're back in the chair. i want to talk about something serious. >> go for it. >> you hear, home prices yesterday. i was excited. 9.3%. wow, i'm a homeowner, i'm making money. you know, the equity's coming back where good times are rolling. did you see this chart? did you see this triple dip that we've been into here? so with the 9% gain, do you know how much we're down from the peak? did you see? >> 30%. >> we're still down 30% from the peak. >> pretty lousy. >> we went up, we have bounced off -- it's right there. the first chart there.

>> got a ways to go. >> i think our guests -- we've had guests who say it's a lousy recovery, and others who have said it's a strong recovery. if you're measuring from the top -- >> we've come up a few other times, there have been false starts. >> we had the tax credit back in 2009 and 2010, when that ended, he said you saw a real selloff. up until that point you saw prices in san francisco that jumped 20%, came back down after these temporary fixes and kind of -- >> it's been too slow. >> not just too slow, we're still down a third from where we were -- we haven't got -- >> if you bought a home in 2006, you are still 30% under water. >> people bought it, you can't tell them it was alice in wonderland. it's still 30% less than the average house was worth -- >> i bought it in 2004, i'm sure i'm still down from. >> 2008, no i'm sorry, 2006/2007. i don't know. a story about socialism,

france, and yahoo. we should say yahoo's a partner of cnbc's. this is a story -- they were trying to buy a company from france telecom, the minister, the french minister apparently tries to block says i won't let you sell one of france's best start-ups, you don't know what you're doing. >> and they tried to come back and say they could only buy a minority. >> yahoo's out. i should say the minister's spokesman now says they don't oppose a deal as long as it is a win/win partnership at 50/50. what does that mean? >> europe had a start-up? >> well, that's the most remarkable part about it. >> it really is. because you cannot -- there are no entrepreneurs in europe. >> they wouldn't allow them -- somebody else to buy a yogurt company. >> that's right. >> there was a start-up in europe. >> there was. >> when we come back, we have much to come on the show today.

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sell in may and go away. not on your life. stocks logging six straight months of gains. why this month may be no different or maybe it would be. >> earnings from the mother ship. comcast quarterly results are out and we have the chairman and ceo to talk about the company's performance and the future of media. and we bring you a disrupter who has started a media movement on the web. owners of sites like s.p. nation and the verge, talks about the rapidly expanding business and how they plan to make money as the second hour of "squawk box" starts right now.

good morning and welcome to "squawk box," i'm andrew ross sorkin. take a look at the futures to see how things are setting up, which are probably going to change. dow jones, looks like it'll open up about ten points higher. let's get to you very briefly through the morning headlines. let's go to merck. >> merck is 85 cents a share, and that's six cents ahead of expectations. but for the year, the company sees 3.45 to 3.55, which is below the 3.63 estimate. they're beat by 6 cents already and they're going to miss by at least eight cents. so you would seem to think that second, third and fourth quarter won't be as good. the revenue number was below expectations. it was 10.7 billion versus 11.09

billion. so at least the revenue number is a little bit light. i don't know how they beat on the bottom line. and i'm looking in the release right now to see what does that revenue number represent versus last year? it is shy of where the expectation is. i don't know if it is actually down from the year ago period. that would be interesting to know. then they break out, you know, sales and all the different animal health sales. >> it was 11.7 billion? >> down a billion dollars. >> from a year ago too. >> but, you know, drug companies are notorious in terms of revenue not necessarily -- it's not like -- >> depends on when it comes out. >> patent expiration. >> as we saw yesterday with pfizer, that was a big issue. we'll see where the stock opens, actually just trading right now down by about 20 cents. >> yeah, and probably more

importantly -- >> we also have earnings out from nbc universal's parent comcast. this is interesting. they come in with earnings per share of 51 cents. that's a penny better than the street had been. looks like they were beating on several other metrics, as well. if you look at consolidated free cash flow. the street was only looking for $2.1 billion. also, consolidated revenue, it was up by about 15.3%. >> i don't know how you beat -- >> it was up 3.3%, but they beat by a billion dollars. consolidated free cash flow was an important number that the street tends to look at as it comes to comcast shares. it was up by 7.4%. now, if you run through some of the numbers, obviously cable is a big one of the businesses there. cable revenue increased by 6.4%. apparently they did miss slightly in terms of the video subscriber losses. >> because they did more -- they

expanded how many people, they were raising prices. >> they raised prices on something like 72% of their customer base. >> is universal nbc -- >> are you talking about theme parks? >> theme park's amazing. 12% revenue gain, which is amazing. but nbc universal revenues would have been up if you would exclude the super bowl and the year ago period up 2.4. but operating cash flow. >> i don't get this, 17.2%. >> i don't understand how you -- >> is this chart right? it's actually down marginally. i would have thought off this news. i thought it was pretty good. >> it's just out, though. >> decent number. >> no, i got a widespread. let me just see where it is on comcast, it's -- i have a 40/75 bid and a 41.66. >> off marginally. >> it may be, but -- >> could be revenue. >> there are big numbers in here and as joe mentioned, there are

some changes hard to understand with consolidated free cash flow coming in a billion dollars better than the treat expected. when you look at nbc universal coming up 17.2%. fortunately, we have brian roberts on to talk more about these numbers. >> the video revenue, and part of this is me. >> single handedly? >> no, my kids, we own the dvds, but they're too lazy to go over to the drawer and look for them, so if they want to watch "mulan 2," dad, it's only $2.99. we have it! we own it! >> a special comcastic discounted program in your house. >> but you have to pay for ondemand? >> oh, i guess you don't have it. >> i'm warner. >> you can say it if you want at your own peril if you want to. >> look, if we can get comcastic in manhattan.

>> we own the dvd. and if they like the movie, three times in a week. >> you know what i realize? i didn't realize we own some of the dvds -- >> oh. >> i wasn't doing it on purpose. >> all you do is press a button so you don't walk to the drawer. >> we will talk to brian roberts about a lot of this. he's probably so happy, going to send a gift to my kids. the markets will be looking for any clues of a possible qe exit strategy. i don't know why we'd be looking for that. they're missing on both numbers of the dual mandate. our next guest is richard haass, welcome, great to see you. >> great to be here. >> and martin feldstein, the former chairman of the council of economic advisers. and this, i don't know, it's been occurring to me more, dr. feldstein, that they're missing big on both parts of the dual

mandate. why would they not continue full boor. they seem to be completely justified in this $85 billion. >> well, they certainly have stopped talking about early exits or slowing down. but frankly, i think they're not accomplishing very much and they're adding to the risks in the economy. i think there's good reason, not in the way they think about it, but i think there's good reason to be slowing down in this process. >> don't you think they would point to the new highs in the s&p and how beneficial the wealth effect is and the gain in housing prices yesterday? i'm sure they'd say it's not happening than any other reason than us. nothing else is going well. >> yeah, but there are also some serious, i think, bubbles developing in this economy. when you look at a ten-year treasury bond with a negative real rate according to tips or

1.6%, 1.7% rate. that's not sustainable and i think it has risks. and it's spreading over into things like the stock market. >> yeah. what do you think? you've got bigger things -- you've got the entire world to worry about. but domestically, do you think the fed is doing the right thing here? >> the fed has basically done all they can do given its tools. one day they're going to wake up and the unwinding process is going to be daunting in its complexity. >> they don't think they've done everything they could. >> they're trying to make up for the fact we don't have serious fiscal policy and don't have any of the other drivers of economic growth. we're asking them -- >> they're allowing the fiscal policy to be the mess that it is. >> they are an enabler. if the fed ever announced, you know what, we're nervous about -- and you're on your own. do you work it out? or you're going to be responsible for the real crisis. >> and indeed what they're doing is sending a signal that the fiscal problem isn't so serious.

because the politicians look at the long-term interest rates and say well, there can't be a serious problem. interest rates are as i said a moment ago less than 2% for long-term rates. so i think that's a very bad signal that the fed is causing. >> we've decided that the long-term picture isn't that bad. i mean, i love the left because they -- they love rinehart in terms of everything -- >> you can't blame the rinehart -- >> i didn't even finish what i was saying. they love it when they can say everything happening now is because of the financial crisis. not anything the government's doing right now. but the minute they see one math mistake about the 90% debt thing, it's like, oh, these guys didn't know what they were talking about and we can go to 200% debt. they pick and choose what they love about it. but there are people who say fiscally we've already cut the deficit a lot in discretionary.

and, you know, if we do entitlements down the road, maybe we do it. we're fine right now in terms of rei reining in the deficit. >> what they're missing is not all of the spending is the discretionary spending, most of the spending is the entitlements. >> right. >> we have to find a way of slowing -- >> right away. >> in this environment right now, they would say right now, you look what happened in europe and you see what happens when you try and do it near term and makes it worse. >> i wouldn't do it near term. and in fact, you can't cut benefits for retirees or medicare benefits right away. but you can pass legislation now the way we did back in the reagan years in 1983, they passed legislation saying that after a lag and gradually the retirement age for social security would increase. and i think that's the kind of thing we need to do now so that people will have more confidence

about where the fiscal situation's going. >> the professor is right. these things are like super tankers. you can't turn them quickly, sharply. if you want the long-term entitlement problem to be eased. you basically have to lock it in now. >> that's been simpson/bowles, all the plants put out. they weren't going to change things immediately and gotten so much resistance to changing things 10, 15, 20 years down the road. >> and there's blame to go around. the president brought it into being. right now, we have -- people always complain that we have too little bipartisanship, we've got too much bipartisanship. >> i want to make one comment on it. >> you love them. >> no, you can make it a left argument, but also a right argument, you look at paul ryan, he took that 90%, said that's gospel. >> it still is. the math didn't change that. and it's obvious. the more debt that you're paying

debt service on the less you can invest in growth. it's like a stupid study. we know the higher your debt level is, the worse it is for growth long-term. i don't need a number to know that. but it's giving cover for all these activist government policies that are covering -- >> both sides, though. >> but you pick and choose. they like the stuff that says it's not obama care, it's not regulation. >> pick their own numbers too saying the 90% was right, but by the way, things could have been better if we had -- >> right for a reason. those are the right numbers. anyway, i know you are but what am i? hey, marty, what about infrastructure? people say that we could at this point there are some really useful things that we can do, you know, larry summers, zero interest rates, we've got to eventually build -- what about the internet? what about making things that will make the whole country more productive and add to gdp in the

future? shouldn't we do that? >> so that would be a good thing. first we have to have the fiscal room to do it. we've got to make the changes. changes in the long-term entitlements, changes in the various tax subsidies, which are government spending done through the tax code as simpson and bowles emphasized. if we did that so that the debt to gdp ratio was heading down, not just stabilizing, but heading down, then there would be room for corporate tax reform and for the kind of infrastructure programs that would be both good for productivity and also good for boosting demand. but i think the prerequisite is doing something on the medium and long-term fiscal deficit. >> you going to be doing -- open it up. >> yesterday in the press conference, the president talked about the lack of spending on

airports and noticed how the united states is not even in the top 25. we're not in the top 25 in infrastructure across the board. and here is an opportunity. this is one of those win/win/win situations. you could do something that wouldn't cost a lot of money, setting up a national infrastructure bank. it would be good for jobs. by the way, it would make us more resilient against terrorism. it would help us on the national security front. this is something we ought to do now. a perfect example of how the sequester, whatever the macro effects is just done cutting. it won't cost a whole lot at the federal level. again, the private sector could probably handle 80%, 90% of it. >> you could say we'd be borrowing money from china to build the bridges. >> we could charge the tolls. if we get an infrastructure robust. >> doesn't matter how you do it. >> near term stimulus and wouldn't exacerbate because you'd have user fees. >> you know, they almost taught me, a lot of times professor

feldstein, you wouldn't do it right away, though. >> i would not. well, i would do it right away if it was part of a package that at the same time dealt with the longer term and medium term fiscal issues because i think then doing additional federal spending would not frighten markets, would not act as an even bigger cloud over business investment. >> marty, you understood what i was saying. we had ceo after ceo in the last three years come in and say the uncertainty of obama care regulations, higher taxes is what's causing me not to invest and not to make long-term investments and not to hire. and then we have the other side that has used it the entire time. saying thatter job is to manage through uncertainty. the only reason there's no demand is because we're still suffering the effects of the financial crisis.

they were the gods of every study ever done because of that. but the minute the left got something that showed the other way on the 90%, threw them under the bus. is that not true, dr. feldstein? >> well, it's really been exaggerated. i think the major rinehart study was a major contribution. i think there was a coding mistake in handling the data that they have admitted to. it changes the 90%. >> what about the first study? nothing the government done is responsible for the worst recovery in history. and that part i don't think changed at all. >> we've asked them to come on and explain this. if you read the explanation, it makes a lot of sense. they haven't come on to talk about it. >> do you think government activism has caused this to be a subpar recovery or not? >> well, look, they're basically -- >> i think that they really did -- they did a terrible job,

government did a terrible job with the fiscal stimulus. it was very badly designed. and as a result, it did very little and gave that kind of policy. >> we did obama care for the first 15 months of his presidency instead of jobs and here we are still at 8%. >> the question is not how much government did, it's what it did in this case. and the details in many cases the government got wrong. your point is correct. the 90% cliff thing might be wrong. but the basic argument of the study still holds. >> hey, is debt bad, long-term, if it gets 100% gdp. stick around for the rest of the show. by the way, if you have any comments or questions about anything you see here on "squawk," e-mail us at squawk@cnbc.com. take a look at the futures. things continue to be in the green. dow up by about five points.

we'll be back with more on comcast earnings. stick around.

welcome back, everybody. comcast releasing the first quarter results just moments ago. the cable and entertainment giant and parent company of cnbc earned 51 cents a share. that was 1 cent better than the street had been expected. joining us right now is brian roberts, the chairman and ceo of comcast. >> you've had a lot of metrics. we've been running through trying to figure out which ones were important. you beat on earnings per share, the free cash flow number never jumped out. and that's $1 billion more than the street was expected. what happened? why did you surprise the street so much on that number? >> well, i think some of it's timing early in the year, but it was a really strong quarter across the board, i think, on a lot of metrics, most metrics, and we've been increasing free

cash flow throughout the year. of course, in the second quarter, you pay taxes, you know, in april. so it will settle out throughout the whole year. but the whole year's off to a great start. we grew cash flow 7.4% which is one metric i always dial in on and across nbc and cable both got out of the blocks very fast. >> when you look through some of the businesses, cable, for instance, revenue was up by 6.4%, and video revenue up by 3.7%. but you did see some more video subscriber losses than expected. it was down 60,000 in the quarter. you were raising prices there? >> well, the revenue, you try and get it a right balance. you're right, we raised more rates in the adjusted rates more in the first quarter than we did in the prior couple of years first quarter. and that always has an effect on our balance between customers and rate.

but in the grand total of revenue generating units which is an important metric to look at. we added 583,000 customers between video losses, high-speed data and telephone and video revenue was the best in the last four years in the first quarter. so, you know, we will see throughout the year how that progresses. but our goal is to continue the trend of getting less losses over the year than we did the prior year and, of course, high-speed data continues to be a standout. but, you know, it's a triple play, it's working for us. we had more about 8% more triple play take rate in this quarter than we did last year. and that's over 40% now of all of our customers' take three products and 70% take two products. we're pretty pleased with how that's going. >> also, we were looking through the highlights and the numbers that jumped out. the theme parks saw revenues up better than 12%. that is a really strong sign.

what was really driving the growth there? >> theme parks have been a standout ever since we came together with comcast and nbc universal. i should start by saying i feel really fantastic about the timing of the deal, the structure going back to really 2009 when we first proposed it to the acceleration of the buyout of the other 49% which closed in this first quarter. and since that time, theme parks have been doing fantastically well. we continue to want to invest that business. a little bit of timing in the first quarter helps the numbers because of an extra day this year, an extra weekend day. and things like that. but the trend has been very positive. every single quarter, they're doing a great job. we look forward to opening new attractions in the years ahead that we're investing in now. and nbc universal was up 17%. maybe their best quarter since we've owned the company and a great way to start as the new

comcast nbc universal. >> that number, i guess, also is partly because of the beginning of the year. i guess it's amazing because all of the other things for nbc didn't look like 17%. back to the theme parks and it's not a big part of the business, but did you think when you bought nbc, were you thinking, wow, i want those theme parks. i can't imagine that comcast was thinking i want to get in the theme park business. but it's worth so much more than i think it was valued at. someone gave me details about, i don't know what we bought, comcast bought someone out at and what the cash flow is now indicating. and it's like so much more than what it was valued at at the beginning of the deal, wasn't it? >> you see recent ipos in this space. >> sea world. >> and people putting real attention on these businesses. and to be candid with you, it's one of the pleasant surprises that has come from the acquisition. and i wish i could tell you we knew it at the time. but i'm very pleased the way --

>> butter beer, i think, brian. have you had any butter beer. it's like not beer. it's like a sunday. >> we're investing in harry potter now and taking that incredible growth franchise and expanding it around the world. we've also got other great ideas, the management team is terrific and steve burke has, you know, in his background had worked at euro disney way back when. we're very excited. we've been telling investors about the scenario that we think there's a good runway if we're able to invest and come up with new ip attractions which we can and will. >> what are the implications of the attempt to buy sprint? if that happens, you know, competitively, how do you think about that? >> you know, i haven't focused a lot on that. we have our partnership with verizon wireless, we're very pleased with that. we're seeing some early progress in the sales in some of the verizon stores. we're working on some innovation

together. i do think it, you know, shows the value of broad justice of the peace baroadband. broadband this quarter we added 433,000 customers in this quarter. we continue to want to have the fastest broadband. verizon wireless and also wi-fi, one of the things we're trying to do is redefine in the consumers' expectation what is your broadband experience. and so it's not just, you know, coming into the house, it's transmitting throughout the house that fastest wi-fi experience in the nation, which is one of our new investments we've been making in a claim that we're proud to make. i'm not quite sure what they're up to, but i think it has a lot to do with seeing what else can be done. having more than one product to sell is working really well, as i said a moment ago, some 70% of our customers take at least two

products. so we're pretty focused on comcast and our opportunities and we'll see how that plays out. it does make for interesting reporting. >> hey, brian, if you're looking at your businesses, you've got a good feel of what's happening based on theme park attendance, advertising, the number of subscribers from businesses or consumers, what's your sense of where we stand right now as a country? >> well, i was listening to the conversation before this segment and, you know, i think there is a slow and steady recovery happening. we're certainly seeing demand in all our businesses. we are able to attract more customers. but we all wish it was happening faster. i think outside the united states, there's more questions. we're fortunate to have most of our revenues coming from the united states at this time. there have been times in the past where we wish it was otherwise. but, you know, i don't think there's any great headline of a big change.

but i don't think it's something that we're not planning on growth and investment because we're pretty bullish long-term. some look better than others. the advertising business continues to grow. the nature of the content continues to be and the distribution technologies that we have on all platforms is what advertisers really are seeking to get their message in a more targeted way and broader way. it's a harder time to reach consumers. we're, again, we're coming into that season where we will have numbers to put against later this year and of course next year with the upfront. but we're feeling pretty confident that the economy is rolling along. >> brian, one other thing the last time we saw you, we talked about the concept of content and as a content creator, we don't necessarily want it to be so disintermediated. we lost the suit with areo, new

product that effectively gets rid of retransmission fees. is that something at this point you worry about any more than -- last time we talked, you said not a problem. where are you now? >> well, i think it's one court ruling in new york, i believe it's only for new york in that area. that there was a california ruling that's different than new york ruling. i think you're going to see a lot of legal challenges because there's certainly a strong belief, like a number of companies that it is not legal and it is taking someone's property and redistributing it without their consent. but we'll have to let that play out. we continue to believe in the end that will not be the way most courts see the matter. but we'll have to see how that plays out. >> well, it feels like, you know, we have both our parents back. when it was split between and it was like, you know, you had your father and he was trying to be nice to you and like in a

divorce or something. your mother, you don't know who you want to spend the weekends with, but now -- happy family. >> well, we have nothing but nice things to say about jeff, ge, and how the partnership worked for the number of years and the transition and the ease of the transition. but i will agree with your sentiment that there's something special about us all being one company. i think we were in somewhat of a unique position. and these results today and i think the kind of things we've done with putting the two companies together and promotions back and forth and just innovation and leadership, it's an exciting time, and it's a good start to the year. >> all right. thank you. and the stock is -- >> father roberts. >> it is now actually trading up. i saw 41.33 bid, and closed at 41. thank you for joining us. >> have a good morning. we're going to talk about

the future of media and the internet. the owner of sb nation, a network of local sports sites seeing its business expand rapidly. the company's head disrupter will be joining us in a few minutes. also, a programming note for you. "squawk's" going to be live from omaha on friday. then on monday, we have three hours with warren buffett live. the fund begins on both days at 6:00 eastern. by the way, andrew and i are going to be taking part in the shareholder meeting on saturday on stage asking questions of berkshire's leaders. if you want your question considered, go ahead and e-mail us, my address is berkshi berkshirequestions@cnbc.com. we went out and asked people a simple question:

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that number coming at 8:15 eastern time. we'll bring it to you. president obama also set to make two key nominations today. he's reportedly chosen north carolina democratic congressman to head the finance agency. the regulator that oversees freddie mac and fannie mae. also said to be nominating tom wheeler to head the s.e.c. china manufacturing growth, unexpectedly slowed in april. the purchasing managers index came in at 50.6 in april, below estimates and down from 50.9 in march, that slowdown was led by a job in export. coming up next, much more from the president of the council on foreign relations, richard haass with a new book out. we'll talk about why he thinks the biggest threat from abroad may be in our own backyard. and fed policy makers wrapping up a two-day meeting today. investors will be listening for clues as for when the fed's money policy will end. and a lot more when we return. [ penélope ] i found the best cafe in the world.

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welcome back to "squawk" this morning. richard haass, the president on the council of foreign relations is our guest host this morning and he's got a new book out called foreign policy begins at home. there's the cover. the case for putting america's

house in order. in it, he talked about the challenges facing the u.s. and its ability to remain a superpower. thank you for being here all morning. my question is, you know, we've had lots of conversations about foreign policy for a very long time. the u.s. government spends a lot of money outside of the country on keeping our relations good. this book is really about how to fix things here. should we pull back a lot of money from what we're doing abroad? >> no, but we can pull back some. look, here and elsewhere, you know, how you spend money tends to be a little bit more important than how much. but we can pull back somewhat. not on foreign aid. we don't spend anything on that to begin with. but on defense we can pull back a bit and be safe. we have to continue to spend a lot on intelligence, homeland security. all the problems we've been

talking about are not caused by foreign policy. even the excesses of iraq and afghanistan did not get us where we are. >> we made you the president and you can do it how you want, what would you do right now? we're going to have mr. bowles on. >> two things. the word i used for it is restoration. i want to change some things. i want to put more emphasis on what we spend here at home, what we do here at home, that means dealing with long-term entitlements, doing things to promote economic growth, more trade, infrastructure, immigration reform. i want to do all that here at home. basically put more emphasis here. secondly, overseas, i want to do less in the middle east. >> you often said to me we're not doing enough overseas. >> we're not doing enough of the right thing. we should do more in asia, we want to do more to stabilize that, less to remake societies in the middle east. more in north america. right now you've got this -- >> giving less in egypt? should we be cutting back because we don't see them as our

friends anymore? >> we should be given money conditionally. our goal is not that these guys succeed no matter what. it should be only if they succeed in ways that look after american interests. they have the sovereign right to do what they want, so do we. we ought to have a conditional approach. i think the president was actually right in this new world we live in, countries are not so clearly friends or foes, they're somewhere in between. whether it's an egyptian government or chinese government or anybody else, what we have to do therefore is have much more conditional or situational relationships. it's become harder to do foreign policy now than it was -- >> depends. each situation. >> are we still subsidizing europe's defense? how much do you think we're spending on that? >> well, directly, we've probably come down 75% from where we were at the cold war in terms of the forces we now have in europe. and the forces that are in europe are not really there to protect europe. it's for the rest -- >> where is the biggest issue where we're spending too much on

defense? not on our own defense? >> it's probably on high-ticket items. what are we spending money on defense on? it's personnel. one area we can cut back on are things like health care costs. it's growing tremendously. a health care problem in the civilian society is just as bad in the military. we probably grew the army and marines too much. you know, we're not going to have land wars like iraq and afghanistan. we need to expand some of our air and naval. we can safely cut defense 10%. >> you love drones? >> i like drones, but we only want to use them. you only use them carelessly. >> but they're useful. >> how do you think the foreign view of us has changed given the economic situation we're in right now? >> in the short-term after 2008 and 2009, tremendous anger, what happened here essentially spread. i think there's real concern in the short run over our management of the economy.

it's detracted from our allure. on the other hand, they know they need us. china's slowing down, 6%, 7% growth, europe is flat or negative. if there's a chance the world's going to grow, it's going to come from here and north america. if there's an engine out there, we are it. so the world, whatever its resentments of the united states, whatever it may feel at america's problems, the world knows it needs us. the question is, are we going to put our house in order. just to be clear. i'm not arguing we should withdraw from the world. i'm simply saying if we're going to be in a position to lead this world which can't organize itself without us, we have got to put our own house in order. and that means for the near term, for the next few years focusing a little bit more here in home. >> does that mean ends up slowing the economy by cutting things? i only say because we've had this conversation about austerity raising taxes. >> we've got to be growing twice the rate we're growing at now. close to 1.5% real numbers, is absurd.

and there's so many things we can do. we can create the confidence and the certainty with the budget. we can do things through -- with infrastructure we've talked about. immigration, let's double or triple the number of h1b visas. the tax code. there are things we can and should do. what's frustrating, people know the things we should do, our politics won't let us get from here to there. >> if you could be king of the world for a day, do you view president obama as the king of the world? >> not what was i -- >> was that freudian. you've got people in the control room that give me material. i didn't notice. but you said if you could be -- >> richard haass would be here for the rest of the program. we're going to continue this conversation with richard and also with erskine bowles. both of them can be king of the day. >> you never saw queen for a day. there was. he's too young for that. do you remember that? it was sad. >> richard, i'll try to help you

and myself. >> they would cry. it was so sad. >> why don't we take a look at the futures this morning. right now you're going to see that futures are hanging in there, but just barely. dow futures up by about six points, s&p futures up by over 1.5 points. comcast, reporting 51 cents a share. that was a penny better than expected. and merck, a dow component also reporting the results. came in with an adjusted 85 cents a share. that was yesterday's earnings number. merck, if you're taking a look at those numbers, it is trading down after that earnings report. when we come back, sports, technology, and video games, vox media is one of the fastest growing companies on the web. we'll find out why from dthe ce. and co-chair of the national commission on fiscal responsibility and reform, erskine bowles. he's going to join us to talk

about our debt challenge. "squawk box" will be right back. , just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. [ female announcer ] today cisco is connecting the internet of everything. i'll just press this, and you'll save on both. [bell dings] ladies and gentlemen, boys and girls, llllet's get ready to bundlllllle... [ holding final syllable ] oh, yeah, sorry! let's get ready to bundle and save. now, that's progressive. oh, i think i broke my sn!

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online publishers on sports tech and gaming. three areas our viewers love. the company also named digital publisher. let's meet today's disrupter. he's vox media's ceo, also the former chief programmer for aol. thank you for being here. >> morning. >> let's go through the three sites so everybody knows what we're talking about here. talking about the verge. >> verge and consumer technology and culture. sb nation, which is sports and under sb nation, there are 300 different sites, one for every sports team and topic and games. and each one of those is the fastest growing in the respective categories. >> and you're about to be in the black this year. >> yeah, this year for the full year will be profitable, which is great. we have some mature category or growing category still but have hit profitability like sports and games and investing in advertising. >> let's talk about the model and why you've been able to make this work. >> well, it's a combination of a few things. first of all, we're a technology

driven media company. we invested in a platform that really enables us to scale premium quality digital media at scale. then we get great talent and people who grew up doing this online. and we combine it all in a culture that makes sense with beautiful advertising and quality content. >> when -- i love that your company -- and i think it's a content company, and a lot of content companies now like to think they're digital companies. how much of it is really about the technology versus the actual people creating the content? >> it's both is the answer. and i think in this day in age if you're going to be a modern media company, you have to be technology powered. you have to have a platform to really help you scale and get an advantage. what helps is quality, talent, journalism, design, those are things we spend a lot of time focused on. >> one of the things -- and this is a creation of huffington post. there's not that lot of money being paid to us anymore.

not to say there was to begin with, but it's gotten worse. >> we pay our writers, we have a lot of full-time writers, we also have part-time writers too. we believe in that. to your broader point, we believe in quality. we're ziging where others have zaged. that we have perceived over the past few years. a lot of low-value content, we want to change that. we p love what we used to say in great magazines design, great ads. >> all paid for by advertising? do you have a pay for model? >> all paid for by advertising. and just actually this week, we announced the new division of our company called vox creative that's going to work with advertisers to help leverage our same capabilities to make the advertising great. >> really quick, we're seeing lots of newspapers put up walls. ultimately, does advertising pay for what you're doing long-term? >> we have a model where advertising can provide us healthy margins long-term. we're going to be a profitable

media company based on beautiful ads and great content. >> thank you for coming in, being our disrupter of the morning. >> appreciate it. >> we have stocks to watch this morning and then erskine bowles talks about fixing our nation's debts and the prospects of getting a grand bargain in washington. >> chairman and owner of the chicago cubs, he will join us, as well, "squawk" will be right back.

welcome back, everybody. we've been taking a look at the

futures this morning. and right now, the dow futures up by one point. a big problem this morning may be merck. dow component came out earlier this morning. it was the guidance for the full year that has investors a little concerned. we'll talk more about that later. plus, when we come back, the grand bargain road map. the co-chair of the national commission on fiscal responsibility and reform, erskine bowles will join us to talk about our debt challenge as a nation. "squawk box" will be right back. still to come, jobs in focus. we get private payroll data from adp and reaction from mark zandy. "squawk box" is back right after the break. [ male announcer ] at optionsxpress, our clients really appreciate our powerful,

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he's the destroyer of debt. the admiral of austerity, the deficit doomsayer, erskine bowles will join us with his new plan for a grand bargain on deficit reduction. breaking employment data. we'll get a key read on the job growth in april with the adp private payroll numbers. they hit the tape at 8:15 eastern. and a facelift for wrigley

field. the owner of the chicago cubs filling us in on big changes to the 99-year-old ballpark. the third hour of "squawk" starts right now. welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernan along with becky quick and andrew ross sorkin. richard haass, president on the council of foreign relations. but first, andrew has your morning headlines. >> let's check on the markets right now. equity futures at this hour, got a little bit of mixed bag. slightly off, nasdaq up marginally, up 4 points, s&p 500 up over a point. we are less than 15 minutes away from the adp employment report for april. private payrolls are seen rising by 155,000 last month and we're

going have mark zandi joining us with the numbers and his analysis. also the fomc, they'll be wrapping up a two-day meeting with an announcement. widely expected to maintain the monthly purchases of $85 billion bonds. you can watch the decision and analysis right here on cnbc. and in earnings news this morning, merck reported first quarter earnings up 85 cents. that's x items, six cents higher than expectations. the company also announcing a $15 billion stock repurchase. >> and the most important part of the story, they guided lower for the year, even though it was a 6-cent beat in the first quarter. you've got three quarters left and the range they gave for the year was 10 cents below where the street estimate was. they beat it by six. >> that's trouble ahead. >> that's why the stock is down, why the dow has turned down but the s&p is up. >> let's talk about comcast. nbc universal is the parent of comcast is our parent. we had brian roberts on earlier.

they reported first quarter profit of 51 cents per share, excludeing certain items, one cent above estimates. revenue was slightly short above estimates. and a 12.2% jump in the theme park division. broadcast tv revenue, however, was down 18.5%. and you're seeing that stock up slightly in the premarket. and a big beat for health services provider humana earned $2.69 a share for the first quarter. that was well above estimates of $1.81, also raised the forecast for the year. >> it has been 2 1/2 years since the national commission on fiscal responsibility and reform rolled out its blueprint for reducing the nation's debt. now the former co-chairs have a new road map to a grand bargain. joining us right now is one of the former co-chairs erskine bowles and it's great to see you this morning. >> thank you, becky, great to be with you and joe and andrew.

we've seen a lot of progress has been made. you acknowledged that progress has been made, but you say this is not nearly enough in terms of what we have to tackle over the longer term. >> we've done about $2.7 trillion worth of reduction. we've done politically easy stuff. i mean, how hard is it to cap discretionary spending and not tell anybody what you're going to cut? how hard is it to raise taxes on rich people. that's the easy stuff. and they've also done the stupid stuff, you know, the sequester. what they haven't done is gotten serious and done any of the hard stuff. the hard stuff is reforming the tax code and reducing the spending. we have to reduce in the entitlement programs. >> and in terms of doing something like that, you're right, that is pretty difficult. any time you see any sort progress and step in the direction, seems to get smacked down pretty quickly. how convinced are you? and i have to say i'm skeptical

after what happened the last couple of years any sort of grand bargain could be reached. do you think there's really a chance that could happen? >> i think grand bargains on life support. i think the chances are north of zero. i think we darn well better try. i think waiting for a crisis to come along to force us to do the things all of us know we should do is nuts. what we ought to do is come together, put some of this ultra partisanship aside, pull together rather than pull apart. and make the tough decisions. we made the easy ones. let's make the tough ones. that's what we send these characters to washington to do. >> there's a whole group of thinking, though, there's a whole group of people who have this thinking that because we've made some progress of over $2 trillion in deficit reduction that we've done enough and nothing else needs to get done because we've moved in these small increments that takes away a lot of momentum and push for coming up with a bigger issue, particularly dealing with the

entitlements. >> hey, look, becky, it's clear if we want this economy to grow, we've got to do a couple of things. richard talks a lot about it in his book, but you know, we've got to get smart within. we've got to reform the tax code so we're more globally competitive. we function today in a knowledge based global economy. we've got to slow the rate of growth of health care to the rate of growth of the economy. and people are right, we do need to invest in education and infrastructure and research. but what we ought to do first, we ought to make sure that the money we're currently investing, we're investing wisely. you know, we've got to look at the things we're doing. we've got to get rid some of the things we're doing and we've got to start making new investments. when i was president of the university of north carolina, one of the things i most wanted to do was to do our part to improve k-12. for product coming out of k-12 today is no more globally competitive than flying to the moon.

so what we wanted to do was to do our part, you know, to -- since we produced most of the teachers to produce not just more teachers, but better teachers, more math and science teachers. i turned to our team and said surely there's some federal programs available to improve the quality of teacher education. well, there are. there are 82. we don't need 82 programs, we need two or three good ones. that that's the kind of thing. let's start investing. >> erskine, good to have you here today. question for you, beginning to see a lot more writing about the problems and implementing obama care and the actual difference between the design of the bill and the reality of implementation. is this now going to open that up? and if so, are there any opportunities here to actually begin to cut health care costs without in any way impairing the quality of services? >> yeah, look. i've been as tough on the president as anybody.

but i think the reason i have some hope we can have a grand bargain is some of the things the president has in his current budget. you know, you've got to give him credit for this. he has, you know, gone after things that are dear to the democrats. one of the things he's done is in health care, you know, he's got about $400 billion worth of cuts. those cuts have been on the provider side. if you look at where republicans and democrats normally are, republicans, even when they talk about the same dollar amount of cuts. on the beneficiary side, the democrats are talking about on the provider side. the president has cuts on the beneficiary side. that will help us to get a long-term deal. that combined with things like the changed cpi, which will make social security more sustain bli solvent. that was combined with some reforms. he has in the corporate tax rate, doesn't do anything on the

individual tax rate. but the reforms he has and corporate tax rate can make us more competitive. i think that gives me the hope we can actually get a deal done. >> erskine, we have david walker on a lot and sometimes when he answers a question, and i think, wow, it was like eight years ago, that was the same answer, and he keeps doing it. and i just turn you, he doesn't let it bother him. and we need to reform our tax code, and that is so dead, erskine, and hearing you say it just like it's still something that we're thinking about doing. it's just so off the table. and then i think about the way people talk about austerity now. and they use europe as an example of how it can go wrong and how we can't do it. and i think about the way the president painted the sequester where 2.3% cuts were made to sound like really the world could end on 2.3. and the whole -- the momentum has turned for all of the things

you were trying to do. and i wonder if you feel it. and i wonder, you know, whether you really do believe we're going to get back on track on any of this stuff. i think we've missed the opportunity. >> you know, joe, i've got a friend of mine who was one of the highest ranking officials of treasury under bush. and he told me, erskine, you're just wasting your time. only thing that's going to change this is a crisis. and when a crisis comes, washington will react. and i said, you might be right. you know, 90% you probably are, but we got to try. you know, it's crazy for my generation, whether you're republicans or democrats, we created this problem, and it's our obligation to clean it up. >> but here's part of the problem, erskine, when you think about how difficult it is, we have the head of the aarp who joined us onset and we tried to ask him what he thinks could and should be done. the only solution we got after six or seven minutes with him talking is that he thinks they should raise the cap on fica and

everybody should pay all the way in. no cuts should come at any point. what do you tell someone like that? >> to wake up and -- you know, and look at reality. if we don't make these changes, we're not going to have, you know, enough money to invest in education and infrastructure and research. just look at the amount we're spending today, and today you've been talking about interest rates today and today's artificially low interest rates. we're spending about $230 billion a year. that's more than we spend in the department of commerce, education, energy, homeland security, interior, justice, state, and the court system combined. and if interest rates were at their median level they were in the 1990s over the first decade of this century, we'd be spending over $600 billion on interest. and do nothing and interest rates go back to the median level, by the end of this decade, we'll be spending over

$1 trillion a year on interest. that's $1 trillion we not only can't invest in this country in education or infrastructure or research, it's $1 trillion of it is going to be spent principally in those countries we're borrowing money from to educate their kids, to build their infrastructure. >> when's the last time you spoke to anyone the obama administration? you should be there every week. but do you see any signs whatsoever the tax reform is going to be brought back on the table in the next three years? any whatsoever? >> the answer to your first question is, yesterday, i talked with gene sperling. >> did you make any headway? >> who knows, but it's worth the fight. i'm not going to give this up. >> i felt bad earlier when you were saying -- wow, he's such a well -- how do you get up every morning and do this when it seems like we're spinning our wheels with a lot of this. >> because i'm not going to be the first generation of americans to leave this country worse off.

>> thank you, erskine. i'm very glad you're doing this. i think we need to -- >> got to get it back out. >> we're going to continue this conversation in a couple of minutes. but first, we're a few minutes away from the adp numbers. we'll continue this conversation with erskine. with ideas, with ambition. i'm thinking about china, brazil, india. the world's a big place. i want to be a part of it. ishares international etfs. emerging markets and single countries. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. we went out and asked people a simple question:

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right. right. but you guys -- we are seconds away now from the adp employment report for april. steve liesman as you may have heard is here with us. u.s. equities futures are down because of merck. and he joins us with the number. >> up 119,000 compared to the forecast of 155,000. now the forecast for friday is 148,000. so you might expect some revisions. remember, the adp is predicting just private sector growth and the way things have been running with government, you could expect a negative there. so who knows, maybe around 100,000 would be the total and we'll wait to see as the day goes by if there are revisions. there were declines in growth in the small business and medium whereas the large businesses kept their pace.

mark, are you there? let's get to it, mark. this was interesting news. where was the weakness? and what is it telling us about the economy and the broader job market? >> well, it was across the board. nearly every industry has seen slower growth, certainly since the beginning of the year. and as you pointed out, smaller businesses are experiencing much weaker growth. actually, the big guys, the guys with employees, doing just fine. and a note, we talked about this last month is if you look at companies with around 50 employees, which is a key threshold for health care -- >> yeah, i saw that. >> looks like it's weakening. circumstantial. >> are you saying those in that size slot there are keeping their employment down? do you think because of health care? >> well, you know, this is still circumstantial, not proof positive. but with each money, seems to be suggesting that health care has had an impact. >> i never thought -- you are -- >> thank you. >> in some context, you actually

are fair. and you're -- >> hey, hey, hey. come on. i'm a straight shooter, joe, i tell you how i see it. >> let me get to construction. >> steve, can i say one more thing? >> go ahead. >> to add to the evidence, if you look at the slowing and job growth among small companies, it's mostly in leisure and hospitality. it's retail trade and it's construction. and those are the industries where you would expect to see the health care effects. now, i'm not making any commentary on health care. i actually think there's a lot of good in it, but there are some negatives and i think we're seeing one of the negatives. >> why those industries in particular? >> welm, because those industries have less health care coverage, and they have a lot of small establishment. and those are the ones that will be affected the most. particularly leisure and hospitali hospitality. if you talk to ceos of big travel companies, they think it's going to matter a lot and the data's starting to bear out

that concern. >> let's get to some of the data. construction overall did have a good month, up 15,000. we've been waiting and looking for the construction numbers to follow the housing numbers, like they're doing so. but manufacturing was negative, down 10,000. and those services numbers you see below manufacturing, folks, those look like big numbers, but they're not big numbers, compared to the size of the service industry, service sector in this economy, those numbers need to be quite a bit larger to have strong job growth. what's going on with manufacturing? >> well, you know, i think the biggest weight on the job market and economy more broadly isn't health care, it's the fiscal drag. the tax increases and the spending cuts. and the spending cuts are so far front loaded in defense. and i think the impact on defense spending is starting to filter into the manufacturing base and we're starting to see in manufacturing. and you're right about construction, it is positive. but i'll have to tell you, the gains in construction are less than i would be expecting given all the things that are going on

in the construction sector. so i'm actually a bit disappointed we're not seeing more juice there. and that, again, may be related to the health care effects. the fiscal drag is very significant. >> what are you doing to your forecast for friday? and what is this telling you about the economy right now? is this a serious slowing, you think we're registering here for the second quarter compared to 2.5% gdp in the fourth quarter? >> i think average monthly job growth, distracting from the ups and downs from the data was about 175,000, that's where we were over the past six months, past year, past couple of years. i think we're throttling back down into the 125,000 range. and if you take a strict interpretation of the adp number, that would say on friday, the top line number should be something like 110, you know, 105, somewhere in there. it is clearly weakened, and i think over the next three to six months, we've got more weakening to go because the fiscal drag is only going to intensify. >> mark, is there any way you could -- you throw in the tax

hikes on the high end? or are you just talking about payroll taxes being a head wind here? is there any evidence that -- because we're told that it's money that rich people don't spend anyway. it doesn't really matter. that's 4%, isn't it? in addition to -- >> the high-income growth. >> any evidence that ever becomes a head wind? is it all payroll tax? sooner or later we had to let that thing lapse if we're going to have social security, right? >> you're absolutely right. this is part of the process. i think we're going down the fiscal austerity path too quickly. we still have to go down it, but going down it very quickly. i think the payroll tax hike is doing the most damage. but i do think that the higher taxes on upper income households will have an impact. it'll be small and not nearly to the size of the payroll tax hike. i think most of what we're seeing now is the payroll tax hikes effects. you can see it in the retail sales numbers and now in employment. >> before we let you go, fhfa,

your name was on the list, another guy got the job, what happened? >> well, i've got a great job. i get to talk to you twice a month. >> i wouldn't put you on the spot. i would just -- >> let me say this, congressman watt, he's a very experienced legislator, he's a nice guy and i wish him the best. he's going down a tough path. >> i don't know. it's what? >> mark, you're a good sport. thank you for that. >> it's like a bad conference call. you can't see us. they don't know. tell from the tone of the question. let's get back to one of our favorites. we're talking about fixing the debt this morning. joining us once again. >> erskine knows. >> of the national commission on fiscal responsibility and reform erskine bowles, richard haass still at the table. my question for you, erskine, is this. we all want a grand bargain.

we think we want a grand bargain, but doesn't seem like we're going to get there. if we can't get a grand bargain, is there a way to play a ground game where you can actually start picking off some of the pieces? and if so, where do you start? >> i think this ground game that lots of my friends are for is really tough. i mean, really tough. i can't see the democrats agreeing to, you know, any changes in the entitlement programs unless they get to some revenue and i certainly can't see the republicans agreeing to anything on the revenue side unless we have material changes in the entitlements. look, we've got to join hands. we've got to put the bickering aside and jump off a bridge together. and we've got to quit doing things like this stupid sequester. you saw those numbers that just came out. you know, that's mediocre growth at best. it doesn't even keep up with population. we've got to reform a tax code.

let me talk about the sequester one second. the sequester is stupid. it's three times stupid. it's stupid because, first of all, all those cuts are across the board. no business that i've worked for that i've worked with ever makes a cut across the board. they go there and surgically make the cuts on the areas that have the least adverse effect on productivity. second, all the cuts are in the discretionary budget where arguably you can make the case that we ought to be increasing some of our investments. and thirdly, there are no cuts in the entitlement programs which are growing at a faster rate than gdp where we really need to do something. we've got to wake up and we've got to start fighting for this stuff. >> i agree with everything erskine said, it's stupid and it's lazy. what he's talking about, but what i'd also say on the things we can do outside the budget. two things in particular, one, i would say trade. we ought to accelerate as much as we can the tpp negotiations with asia. the u.s. european negotiations, bring in mexico and canada,

expand nafta, that's one thing. second of all, we should do something on immigration reform. double, triple the number of h1b visas. increase the number of green cards. all that, even if we can't do anything sensible on the budgetary or fiscal front, there are other things to do to perhaps add a little bit to economic growth. >> hey, look, i'm one of the people you're talking about, there's facebook, i'm on the board of facebook. they'll tell you today they're opening up an operation in the uk because they can't get to people here. you know, we ought to expand this h1b visa. it's stupid not to. >> you don't think we could go, for example, after social security? i know it's a hot button. but that's not such a hard one to do and i think you can almost do it individually. am i crazy? >> you weren't here for the aarp. >> i wasn't. >> you're not crazy. absolutely. you think about it. you know, when this -- roosevelt guy put social security in place, you know, average life

expectancy was 63. you got social security at 65, that's a very smart guy to do that. today average life expectancy 79, you get it at 62, we have a math problem. we've got to make some relatively small changes in order to make social security sustainably solvent so it's there for the people who need it. >> it's much more difficult to deal with social security. >> there's got to be issues we can pick off, recognizing that we love a grand bargain. recognizing that there are these sort of -- both sides -- >> corporate tax reforms and others. >> do you think that the republicans would've given the president surgical capabilities on the sequester? that we've heard in the "wall street journal" has talked about it, there's an amendment that harry reid didn't vote on that would've allowed the president to have a much more surgical way to implement the sequester but that, you know, the innuendo was

that he wanted to make sure we learned our lesson. do you have a comment on that? >> hey, look, those kids out there in headstart, those families on food stamps, they're feeling it. >> right. >> i felt it -- >> did he have a chance to do it? what you wanted was a better way to do it. did he say no? did he say no? did he not take a victory from the republicans on that? >> you'll have to ask the people in the white house. i don't know. but if they did, i sure hope he'd take it. >> you know, erskine, i think we're out of time. we'd love to have you back to talk more about this stuff. but before you go, just the numbers you lay out are very straight numbers. what do people say in congress and in the senate when you go to them and say these numbers? how do they then justify not giving you support? >> you know what they say, becky, it breaks your heart. they say save us from ourselves. >> wow. >> this is just like the gun control debate. you've got special interests that are overwhelming, the general interests and that's what we're seeing, whether it's the aarp or the nra.

what we need to have is some pushback, people who will represent the general interest. >> erskine bowles, thank you so much for joining us. >> thank you. >> where's simpson? he gave up i guess, huh? >> no, he's out to denver. he'll be back with me tomorrow. >> erskine -- >> is that your -- is that really your twitter? @erskinebowles. it's got 500 followers. is that really you? >> i don't know what you're talking -- >> it's a fake account. thank you. >> thank you, erskine. coming up, more reaction to the adp payroll data. plus a market's expectation for the fed announcement today. and a 99-year-old ballpark due for an upgrade, the owner of the chicago cubs will tell us what's in store for wrigley field. nespresso. where there is an espresso to match my every mood. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is made at home.

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welcome back. reported quarterly profit of $6.23 a share for the first quarter. that was 5 cents better than the street was expecting. revenue was very slightly short of consensus. mastercard has said in recent

months that the sluggish global economy could impact the revenue growth down by about 1.6%. dow component merck taking a hit in the premarket trading pushing the dow lower. we started out with the dow looking above fair value, now it's not. thanks to merck for that. merck did beat the consensus with the latest quarter. the biggest issue may be the guidance. cut into the sales for the asthma drug. strong dollar overseas hurt sales, but well below what the street had been expecting. and that stock's down by 4.5%. and nbc universal parent comcast earned 51 cents a share for the first quarter when you strip out certain items, a penny better than the street was expecting. revenue also slightly short of estimates, the ceo brian roberts told us earlier that theme parks have been a bright spot. also added customers than analysts anticipated.

more than both at&t and verizon combined. right now, let's get more on the adp numbers. steve liesman back onset and rick santelli. what was your thought? >> no surprise to me. i think spongy jobs fits with spongy policy, i see a lot more of the same down the road. there's going to be fits and starts. i think we're going to go through times where we're going to see better job creation, but i think as a whole if you step back, i think our full potential just cannot be reached. i mean, today especially, fhfa you were talking about it. ed demarco's out. it has to be approved by the senate. i don't think it'll be surprising, he looked into the background that most likely he'll be pushing housing again in the same ways we did in the

early '90s, potentially trying to make two and three speeds, different requirements for different subsets with government guarantees. no surprise. as long as we keep going down the roads of socialistic policies where the government is orchestrating and conducting, forget about it, it isn't going to work. >> steve, i know it's early, but when people, economists look at these adp numbers, do they end up taking their numbers down? >> where are we? >> in general, we were at 148, which was actually down a little bit from before the adp number. i know joe yesterday put out a report lowering his forecast. i wouldn't be surprised if the numbers were brought down. >> from adp? >> yeah, it's not a one for one. i don't know if we have the chart, guys, but adp has done a better job. if you look at the adp versus -- and i compare it to the bls private sector and you can see

that yellow line and really that starts -- >> zandi took over. >> it looks pretty good there. it's been on top of it. the average error has been very minimal. again, we don'ting judge adp on the government sector. >> he took over six months ago, right? >> yeah, it was about november. that's about where -- >> good all along really. >> not been bad. i'm not saying -- whatever methodology changes were there, it looks like a little better and you'd want to judge it over the cycle. i would expect those numbers to come down. and what happens with the unemployment rate forecast which is supposed to be unchanged at 7.6%. and it feels like a here we go again economy where we had the stronger numbers, 240, 250s that we did through november and now it's coming down. the weird thing is the way they calculate these numbers, if there's a persistent error, they have supposed to pick it up,

makes me think not a seasonal adjustment thing. i think mark zandi pointed to what happened with the government spending. my opinion has been we should have a strong plan in place to cut the deficit. and to do what we need to do. we shouldn't implement it until unemployment -- i want the fiscal side of the government to adopt the same metric as the fed and i don't want the fed and the fiscal side of the government to be working at cross purposes. meaks absolutely no sense to have one side of the government saying we need to do everything we can to lower the unemployment rate and the other side say the more important thing is the deficit. you have a plan to have a plan. >> you're playing the market on this, joe. if you have a plan to have a plan, you tell the market. >> if it never gets down to 6 1/2. >> you do what you have to do. you re-examine that after a

fashion. there's uncertainty about how we pay off the deficit, but also -- >> talking about cuts or tax increases? >> i want to roll back to where we were in january. i want to go back to where we were in january when we had somewhat better job growth, gdp growth, and i want the federal government and the fed on the same team. that's all i ask. >> richard, what do you think of that idea? >> great, but you're not going to get it. bernanke feels he's got to do too much because he can't get the others do what they're meant to do. we're not going to do it. the independence of it, we're not going to get the integrated policy we need. >> can i talk about one other thing which is that his comment to the cnbc fed survey specif specifically points out that the fed is doing more because the fiscal side is doik less. what are we doing here? we're taking the burden and placing it over on the fed.

>> richard said earlier that the fed is enabling washington at this point. >> and bernanke doesn't want to do what he's doing. >> he's being asked to carry much more water than he should ever be asked to carry because no one else is willing to do their job. >> why doesn't he say no? >> nobody else is willing to do what? you know, in 2010, this country voted. you know, many people including the president in his press conference yesterday called congress dysfunctional and locked up. it would be like the fed with no constraints at all doing crazy things if there wasn't this push and pull. maybe elected officials were put there for that very reason and the fed through no elected officials is usurping the public will to address issues that half the country wants, half the country doesn't. so therefore locked up is just what we need. >> but, rick, if you have a

government that is taking steps that most economists believe -- >> forget the steps. >> no, no, no, the sequester is real, rick. >> right. right. created by jack lew your treasury secretary. >> your treasury secretary too, rick. hold on, these are steps that were agreed by republicans and democrats as far as i could tell from the sequester. >> and created by mostly the president's people and, yes, voted on by everybody, okay. and it was a bad plan. >> okay. >> if that's what it takes to lower spending, it's a good plan. >> and what i'm trying to say is general agreement, this will reduce gdp growth by 1.5 percentage points and result in 500,000 to 700,000 fewer jobs. >> why is that so important? if you pay for growth by taking and then you stop taking and stop paying, it goes up, it goes down. what you want is some sustained growth we don't have to pay for. >> rick, there's a couple

things. >> we do have a choice. we have a choice, steve. >> when an earthquake happens and a hurricane happens, there's nothing mankind or woman kind can do about that. but sequester. >> right, but $65 billion which is all the contention for every policy. >> i was on vacation last week and i made up my mind i was not going to talk over you, rick. >> that's good. >> i will talk over you. >> that's fine. so my point, rick, is if you have a choice as to whether or not you want to put 500,000 or 700,000 people on the street looking for work the a -- >> you know what, if you want to put those people to work, put pro growth qualities, not socialism in place. that's where you're going down the wrong road. >> my point is, rick, even if i agree with what you're saying and i pretty much do. >> i could care less if you agree. >> it's better to create a job in the private sector than in the government sector. if you have a choice right now over a transition period not to put people on the street to, by the way, compete with the large number of unemployed people and

people coming out of school, why p wouldn't you -- >> the unemployed are going to keep growing if you keep paying for phony growth in the economy. it'll get bigger and bigger and bigger until it pops and then the poor people will be way worse! way worse! >> this was good, rick. you did really well, steve. >> yep. >> do the serenity now if you have to. and we'll play the "seinfeld" sound and we'll celebrate festivus. >> thank you. >> it's my pleasure. >> so much better. i know what you're saying and i know what he's saying and i -- i can make my own decision. you -- you purport, we decide. >> right. >> that's a different network. coming up -- >> an iconic american ballpark getting a major facelift. we'll talk to the owner of the chicago cubs about the deal to renovate wrigley field. and you don't want to miss "squawk" tomorrow. we'll bring you a rare tv interview. >> what? >> ron perelman, companies from

the tech pharmaceutical, financial, entertainment and gaming industries. h he's going to join us on the set for an hour starting at 8:00 a.m. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ge has wired their medical hardware with innovative software to be in many places at the same time.

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[ male announcer ] open an account and get a $150 amazon.com gift card. call 1-888-280-0149 now. optionsxpress by charles schwab. welcome back. the chicago cubs are moving forward with a renovation plan for wrigley field. a $500 facelift for the 99-year-old park that will mean more night games, jobs, joining

us now tom ricketts, the chairman and owner of the chicago cubs. great to see you. thanks for joining us. >> yeah, good morning. how are you guys? >> great. the old ballparks, i like what you're doing. i watch what happened in cincinnati, we had two or three since then. why not just -- why not start over like so many different places, baltimore or over even yankee stadium. why not do it that way? does it make more sense this way? you didn't want to do that in boston, obviously. >> well, there is an economic argument for starting over. just like fixing up an old house. every time you fix up an old house, you realize it would have been cheaper to build a new one. but we don't look at it that way. we look at wrigley field as a real treasure, as some place our fans love coming to. so it's our goal just to, you know, to take her and take the

park and restore it to what it looked like in the day when it was really at its peak. but also to enhance it with the kind of revenues that we need to be competitive. >> and it obviously -- it's in a good part of the -- you want to keep it where it is. and it's going to be a lot of new jobs for the city, as well, and a lot of tax revenue, right? >> yeah. the project is a pretty large project, and particularly in these kind of sideways economic times. it's really a nice boost for the city. we're talking about 2,100 jobs, talking about hundreds of millions of dollars in economic development. we're already the third largest tourist attraction in the state. hopefully we'll maybe get to second if we improve the park a little more. so anyway, you know, it's a great deal for the city's economy and it's a great deal for our fans and great deal for the neighborhood. >> some day, that's what i'm saying. some day, i see it happening. you actually need more money to get better players, and then some day we're going to talk about world championship for -- are we?

can you -- how far out? you don't want to jinx it. boston had trouble for a while. and then it came -- the flood gates open. >> the key is that in order to win the world series, we have to get to the playoffs on a consistent basis. to do that, you have to have the foundation for sustained success on the field. and that's on the baseball side, it's about hiring the right guys which i think we have to make the right player personnel decisions and give them good facilities. and on the business side, it's about growing revenues to be competitive with the large market clubs and give us the flexibility we need to be as competitive as possible. and i think this proposal gets us there. >> you know, we've heard a lot about from mainly from, i guess roger goodell about how great it is to watch sports on tv. and you must have kind of the same problem. so you're going to put a big screen in, as well. so you're going to watch it. you're kind of combining technology in the ballpark so that, you know, people will

still come out. >> well, there's a couple of things. first of all, in coming out to the park. and baseball's a different experience than the other sports. you come to the baseball game to be with people you came with. to be with your family, with your friends, a client. i think coming to the park will be a wonderful experience regardless of the technology that we layer in. but what we find out is if more and more people are looking down the whole time, looking up stats, they're, you know, they're really with their head down and not their head up. and we look at putting out the video board where our fans are telling us, hey, we want more information, the things that other parks have. i think it's time. if you see the way we're doing the restoration, people will be very happy when they get to their seat. the only real substantial change is more information in left field. >> do you get along with rahm okay? the president's not going to be showing up any time soon.

>> i understand he's a white sox fan. >> he'll never be a cubs fan after some of the stuff in the last election, right? >> well, maybe some of that. but the mayor's been great, helpful. everyone understands there's a lot at stake and we want to get a deal that works for everybody. >> welm, i checked the standings. i'm not going to mention that. we need this new ballpark and that'll be better. what was that about -- we're all cubs fans. we all want the cubs eventually to do that. it's a great franchise and we all remember the great players that were on the cubs. and it's a step on the way. >> well, our goal is to win the world series and our goal is to do it in wrigley field. we appreciate it. >> to do it in our lifetime, which -- >> we're working on it. >> in andrew's lifetime.

th thanks. >> we're working on it. coming up, we're going to head down to the new york stock exchange next.

welcome back to "squawk box." futures have gotten worse been the adp report. it will take a while for people to rollize that the fed will stay forever and it will go up by the end of the day. let's go to the new york stock exchange. jim cramer joins us now. you have such a great memory and knowledge, we should go over the dow components that it missed and today it's merck. yesterday it was pfizer and then it was procter & gamble, and then it was ibm and then it was caterpillar. just about every one of them and yet, are aren't we at a few

high, jim? >> we have a plethora of companies that don't forget, intel missed and it did not do what we expected and three weeks later we looked at them and said why didn't we buy them, because in the end, as you mentioned we have weak adp and the fed will not tighten. and would you rather own merck, yielding 3.7, say, or 3.8 or these apple bonds? where the apple bonds to me represent very little value. again, it's up to the fed and the fed is making it so the choice is simple. let the stocks come down ask buy them. >> is that the way it goes though, jim? we know what the fed will say and now you see the adp report and that's yet market ends higher and i don't want to always say -- because we knew long before tepra came out here and don't fight the fed was a much older expression, and it's

the bernanke put. >> it's the marty statement. you know what i love? you basically put it as it is. i don't know if we'll up at the end of the day. the earnings aren't that great, but there are a lot of companies that are pretty much determining how much they want to raise the dividend. if you have a yield that has a pretty good balance sheet and why should bernanke change things and say i'd rather own these stocks and reinvest dividends and do better than i would with bonds have have less risk than a long-term bond and it's a pretty simple equation. >> did you ever get more positive on microsoft? >> there's a big change from microsoft. bernstein does, which is that this is becoming an entertainment device and a new iteration which is very popular.

>> it's more of a growth story. >> suddenly, here we are. we've done it before and if we had a longer term chart you would see it. it's not the first time it's gotten into the 30s after ten years, and it always comes back down. maybe it will be different this time. i don't know. >> if the xboxes blow out and they do a good presentation and they start talking about the and we're starting to monetize skype and there are two different companies and there's the company that generates a lot of cash and then there's the company that takes the cash and we invest it in the future and suddenly we can come up with an answer and next thing you know, you get two companies and microsoft does something financial and why didn't i buy it at 29 when it was disappointing. >> did you ever have butter beer? >> no, but i don't mean to look like erskine bowles with twitter. >> it's harry bpotter.

it's an ice cream with butterscotch flavor to it and i think it's responsible for comcast being up 90 cents. the theme parks are on fire everywhere, but whether it be six flags, whether it be cedar fair or disney. people want to go to theme parks and i think it's fabulous entertainment. >> i do, too. we'll see you in a few minutes. >> when we come back our guest host this morning is richard haas, and we will give him the last word. we'll be right back. bny mellon combines investment management & investment servicing,

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welcome back to "squawk." let's get back to richard haas. their this yois your first book. you've never written a book about the u.s. >> it's the biggest threat in the world. it's not korea, it's not iran, china, it's ourselves. if we can put our house in order we can have the capacity to deal with the challenges and if we don't, we'll be overwhelmed and what happens there does not stay there. the world is not las vegas. it will come here and we better get our house in order.

>> does it start with fiscal responsibility? >> fiscal is the part of it and it's not the end in itself. we have to deal with long-term entitlements and for the future. we all know that. what's so frustrating is we know what we need to do. our politics just aren't doing it. >> that does it for us today. now it's time for "squawk on the street." it is wednesday, the first day of may, and the burning question is do you sell this month as the saying goes? >> good morning. welcome to "squawk on the street." i'm carl quintanilla, david faber at the new york stock exchange. adp did disappoint, ism hits in about an hour. of course, the fed decision later on today. futures are off of their highs. in europe, most of the markets are closed for the may day holiday. the ftse is rising out of manufacturing data out of the